Memorial Health System Group

“Diane rutledge, ph.d., todd wise, and lynne barkmeier, m.d.'s spouse have a business relationship. John blackburn and dean robert, jr have a business relationship. Kevin coakley and dale becker have a business relationship. Richard levi and sergio pecori have a business relationship. Edgar curtis, nina harris, susan koch and sergio pecori have a business relationship.”

“Memorial health system is the sole corporate member of the affiliates reported in this group return excluding springfield residential services, memorial medical center foundation, jacksonville crna's, passavant area hospital foundation and taylorville memorial hospital foundation. Memorial health system corporation contains 103 individual members who elect the board of directors. Springfield residential services has a self-perpetuating board of directors whose membership shall be approved by or be members of the board of directors for mental health centers of central illinois. Memorial medical center foundation's members are its board of directors. Memorial medical center foundation's board of directors contains 15 directors. Jacksonville crna's and passavant area hospital foundation's sole corporate member is passavant memorial area hospital association, which is included in the group return. Tayloville memorial hospital is the sole corporate member of taylorville memorial hospital foundation, which is included in the group return.”

“The corporate member of the corporation elects the board of directors.”

“The bylaws of the corporation require the advance approval of the corporate member for corporate, administrative and operational actions which include, but are not limited to, the borrowing of any sum, the principal of which exceeds $500,000, or which has a stated term of greater than one year, or which is secured by a mortgage of all or any portion of the corporation's real property or the creation of a security interest in the corporation's assets, including personal property and revenues, for the benefit of the lender, lessor or vendor, or the defeasance, advance payment or cancellation of any outstanding debt of the category described herein; any voluntary dissolution, merger, consolidation, sale or transfer of substantially all of the corporation's assets (defined as 10% or more), or any creation of a subsidiary or affiliate corporation of the corporation; any application to the illinois health facilities planning board for a permit or certificate of need for a proposed activity, whether or not involving a capital expenditure; the approval of all annual and long-term capital or operational budgets of the corporation; any amendment to the articles of incorporation or bylaws of the corporation; approval of any new or changes to existing long-term or master institutional plan; the sale of any of the corporation's real property or interest therein or purchases of additional real estate; and the approval of capital expenditures in excess of $1.5 million. Passavant memorial area hospital association's, jacksonville crna's, and passavant area hospital foundation's bylaws state corporate members shall elect the directors of the corporation in conjunction with the board of governors and board of directors. The corporate member will work with the board of directors to elect the president and chief executive officer. The corporate member will approve of the capital and operating budgets, strategic plans, and approve any voluntary dissolution, merger, or consolidation. Corporate members approve any amendment to bylaws or articles of incorporation. In addition, members have the power to remove the president with mutual agreement of the board of directors or the removal of any director with cause. The corporate member has approval power for the capital expenditures over $1,000,000, guaranty of debt greater than $250,000, with or without a mortgage, or other transactions material in nature with affiliate corporations. Corporate members have the power to approve independent auditors, approve contracts to provide healthcare to beneficiaries of managed care contracts and approval of applications to the il health facilities planning board. Members also approve sales/transfers of assets to non-affiliate entities, if assets are over $500,000. Corporate members approve of significant changes in the corporation's insurance and contracts involving goods/services with a value over $1,000,000 for capital or $1,500,000 in aggregate for operating and capital budgets, not previously approved. Corporate members approve of physician service contracts over $400,000, approve real estate transactions, and approve any changes to master or long-term institutional plans.”

“. A draft copy of the mhs group form 990 and all attachments is provided to all of the memorial health system board of directors and a board committee prior to filing. Presentations are made to the affiliate members' boards in the same time frame, although copies of the complete form 990 and all attachments are not provided prior to those meetings, except to board members who request complete copies. All questions and comments arising from these reviews are addressed prior to submission of the return to the appropriate taxing authorities.”

“All officers, directors and key employees of the corporation are required to review the conflict of interest policy and complete a specific disclosure statement which is attached to the policy. Memorial health system and its subordinates monitors and enforces its conflict of interest policy by identifying any potential conflicts at the time each meeting agenda is prepared. Any officer or director who has a conflict is notified of such conflict, as well as their obligation to abstain from the discussion and vote on any conflicted issues(s). Such abstention(s), if required, are documented in the minutes of each meeting. Board members are also required to update their conflict of interest disclosure statements promptly in the event of any change in personal or business activities that would require such disclosure.”

“The memorial health system board of directors has appointed a leadership compensation committee made up of independent members of the board of directors and has delegated to it the responsibility of administering, overseeing and approving all forms of compensation and benefits provided to executive leadership, including the chief executive officer and the chief financial officer. The board has adopted a leadership compensation philosophy statement describing the role and responsibilities of the committee. This philosophy expressly states the committee's intent, on behalf of the corporation, to take all the steps necessary to qualify for the rebuttable presumption of reasonableness under the federal income tax law intermediate sanctions rules. The committee analyzes every element of compensation (including current, incentive and deferred compensation) and benefits (including qualified and non-qualified benefits). The committee conducts its review and approval process at least annually, and approves compensation and benefits only to the extent that the committee has concluded that the compensation and benefits constitute no more than reasonable compensation for each executive. In connection with the most recent review and approval process, the committee received professional advice from an independent consultant and outside legal counsel. The committee consists entirely of disinterested members of the board or disinterested committee members who under state corporate law may serve on such a committee. The committee works with its compensation consultant to prepare and review in advance comprehensive data showing the compensation provided by similarly situated organizations for functionally similar positions. The committee also prepares a timely and thorough written record of its procedural criteria necessary to qualify for the rebuttable presumption of reasonableness under the federal income tax law intermediate sanctions rules.”

“The governing documents of memorial health system and its subordinates, such as articles of incorporation and any amendments thereto, are available to the general public through the illinois secretary of state's office. These governing documents, as well as the bylaws, conflict of interest policy and financial statements, are available upon request. These documents are available for the same period of time as set forth in irc section 6104(d).”

“The number of employees reported on the w-3 is for all memorial health system affiliates. Memorial health system is a common pay agent for all the affiliates and reports all employees under its ein.”

“Physician services: program service expenses 99,732,193. Management and general expenses 1,360,130. Fundraising expenses 0. Total expenses 101,092,323. Contract labor: program service expenses 7,668,901. Management and general expenses 66,692. Fundraising expenses 0. Total expenses 7,735,593. Purchased services: program service expenses 26,118,707. Management and general expenses 7,901,770. Fundraising expenses 0. Total expenses 34,020,477. Professional fees: program service expenses 910,046. Management and general expenses 2,780,918. Fundraising expenses 0. Total expenses 3,690,964.”

“Change in minimum pension liability -17,478,472. Transfers to related organizations -5,469,082. Book/tax difference -440,650. Other -141,259. Nonoperating net period benefit cost -4,872,275. Change in fair value of interest rate swap -1,202,372.”