2025-05-14T10:40:55-04:00 2024-06-30 135565207 KPMG LLP 1735 MARKET STREET PHILADELPHIA PA 19103 990 2023-07-01 232266054 TOWER HEALTH MEDICAL GROUP TOWE 4846284307 PO BOX 16052 READING PA 196126052 MICHAEL STERN CEO TOWER HEALTH 4846284307 2025-05-14 true false PHILLIP E GROFF P01247783 2672567000 2025-05-14 2023 2025-03-06 01:10:19Z MICHAEL STERN PO BOX 16052 READING PA 196126052 217749670 false X WWW.TOWERHEALTH.ORG/THMG X 1983 PA THE REGION'S PREMIER PHYSICIAN-DIRECTED, MULTISPECIALTY GROUP OF HEALTH CARE PROFESSIONALS WHO PARTICIPATE WITH TOWER HEALTH IN MANAGING POPULATION HEALTH AND PROMOTING WELLNESS, AND DELIVERING HEALTH CARE. 10 9 2039 9 0 7537698 58880 211402026 211923039 768613 -33775 5614365 5626679 225322702 217574823 0 0 292777748 287467340 0 0 112627013 91983010 405404761 379450350 -180082059 -161875527 53078225 42348535 78937441 70669772 -25859216 -28321237 X TOWER HEALTH MEDICAL GROUP IS THE REGION'S PREMIER PHYSICIAN-DIRECTED, MULTI-SPECIALTY GROUP OF HEALTH CARE PROFESSIONALS WHO PARTICIPATE WITH TOWER HEALTH IN MANAGING POPULATION HEALTH AND PROMOTING WELLNESS, DELIVERING HEALTH CARE THAT IS READILY ACCESSIBLE, COMPASSIONATE, AND OF THE HIGHEST QUALITY AND VALUE, AND ENGAGING IN CLINICAL RESEARCH AND THE EDUCATION OF HEALTH CARE PROFESSIONALS AND OUR COMMUNITIES. false false 58859251 37808237 OUR PRIMARY CARE PROGRAM IS COMPRISED OF INTERNAL MEDICINE AND FAMILY PRACTICE PHYSICIANS, PHYSICIAN ASSISTANTS, AND NURSE PRACTITIONERS THROUGHOUT 35 LOCATIONS IN BERKS, CHESTER, MONTGOMERY AND PHILADELPHIA COUNTIES. DURING FISCAL YEAR 2024, TOWER HEALTH MEDICAL GROUP'S PRIMARY CARE PROGRAM PROVIDED CARE THROUGH 258,270 PATIENT VISITS TO PATIENTS OF ALL AGES WITH A FOCUS ON WELLNESS AND DISEASE MANAGEMENT. ALL LOCATIONS ACCEPT BOTH MEDICARE AND MEDICAID PATIENTS. 51298520 25368712 OUR ACUTE HOSPITALIST PROGRAM IS COMPRISED LARGELY OF INTERNAL MEDICINE PHYSICIANS ALONG WITH PHYSICIAN ASSISTANTS AND NURSE PRACTITIONERS AT MULTIPLE TOWER HEALTH HOSPITAL LOCATIONS. DURING FISCAL YEAR 2024, TOWER HEALTH MEDICAL GROUP'S ACUTE HOSPITALIST PROGRAM PROVIDED EFFICIENT, HIGH- QUALITY, EVIDENCED-BASED CARE THROUGH 258,913 VISITS TO OUR SYSTEM'S HOSPITALIZED PATIENTS. THIS PROGRAM ACCEPTS BOTH MEDICARE AND MEDICAID PATIENTS. 30943098 13091191 ANESTHESIOLOGISTS AND CERTIFIED REGISTERED NURSE ANESTHETISTS PROVIDED MEDICAL MANAGEMENT AND ANESTHETIC CARE THROUGH 50,599 INPATIENT AND OUTPATIENT SURGICAL, PROCEDURAL AND LABOR AND DELIVERY CASES AT READING HOSPITAL AND THREE LOCAL AMBULATORY SURGERY CENTERS IN FISCAL YEAR 2024. THIS PROGRAM ACCEPTS BOTH MEDICARE AND MEDICAID PATIENTS. 204191459 141218990 EXPENSES INCURRED IN PROVIDING VARIOUS OTHER HEALTHCARE SERVICES TO ALL INDIVIDUALS IN A NON-DISCRIMINATORY MANNER REGARDLESS OF RACE, COLOR, CREED, SEX, NATIONAL ORIGIN, OR ABILITY TO PAY. OTHER PHYSICIAN SERVICES INCLUDE: REVENUE EXPENSE AMBULATORY SPECIALTIES 14,364,878 22,556,634 BEHAVIORAL HEALTH SCIENCES 4,243,474 8,073,375 CARDIOLOGY 18,046,408 30,928,156 EMERGENCY 22,054,715 31,154,381 NEUROSCIENCES 8,506,240 17,443,054 WOMEN'S HEALTHCARE 18,808,504 30,763,603 ONCOLOGY 582,424 1,190,069 ORTHOPEDICS 2,810,259 4,648,047 PATHOLOGY 3,822,965 5,097,124 PEDIATRICS 8,253,472 11,845,874 RADIOLOGY 17,165,968 21,296,302 SUPPORT SERVICES 5,837,294, 19,390,951 SUGICAL SPECIALISTS 13,777,270 26,986,928 TRAUMA 3,044,083 7,051,546 OTHER 56,695 8,595 204191459 141218990 345292328 true true false false false false false false false false true false false true true true false true false false false false false false false false false false false true false false false false false false false false false false false false true true true false false false true X 0 0 2039 true false false false false false false false false false false false false false false X 10 9 false false false false true true true true false false false true true true true true true true true false PA X MIKE EESLEY CFO TOWER HEALTH 4846288000 420 SOUTH 5TH AVENUE WEST READING PA 19611 SUZANNE WENDEROTH EVP/CEO PROV 0.00 52.50 X 0 935298 204225 EARL J HOPE MD PHYSICIAN 50.00 X 1056710 0 30287 BRANDON ROOT MD PHYSICIAN 50.00 X 1029662 0 37320 SHAHIN MANOOCHEHRI MD PHYSICIAN 50.00 X 1033991 0 16248 THOMAS G PSARROS MD PHYSICIAN 50.00 X 1002210 0 30496 HERMAN C LAWSON MD PHYSICIAN 50.00 X 936140 0 14123 MIKE EESLEY TREASURER 7/ 2.00 50.00 X 0 903826 12591 BERNARD BOULANGER MD EVP/CEO PROV 25.00 25.00 X 0 698488 206132 P SUE PERROTTY CEO TOWER HE 2.00 50.00 X X 0 900000 0 ROBERT EHINGER FORMER TREAS 0.00 50.00 X 0 599547 91244 KRISTIN KEARNEY SVP CFO 52.00 X 493517 0 71554 THERESA FINK FORMER SVP C 0.00 0.00 X 392345 0 17586 CLINT MATTHEWS FORMER PRES/ 0.00 0.00 X 0 269231 7912 TRACY DRUCKENMILLER SECRETARY 2.00 38.00 X 0 106105 21812 THEODORE AUMAN BOARD MEMBER 2.00 2.00 X 0 0 0 JIM BOSCOV VICE CHAIR 2.00 4.00 X X 0 0 0 ANGEL HELM BOARD MEMB T 2.00 2.00 X 0 0 0 MARY KARGBO BOARD MEMBER 2.00 2.00 X 0 0 0 BRENT WAGNER MD BOARD MEMBER 2.00 2.00 X 0 0 0 ROBERT BRIGHAM MD BOARD MEMBER 2.00 2.00 X 0 0 0 PETE MOLINARO BOARD MEMBER 2.00 2.00 X 0 0 0 MEG MUELLER CHAIR 2.00 2.00 X X 0 0 0 WILLIAM P THORNTON BOARD MEMBER 2.00 2.00 X 0 0 0 DOUG TIEMAN BOARD MEMBER 2.00 2.00 X 0 0 0 5944575 4412495 761530 811 true true false UNIV OF PENN MEDICAL GROUP 51 N 39TH STREET ROOM 120 PHILADELPHIA PA 19104 MED STAFF SERV 2284198 HELLMAN HEART LLC 603 CARPENTER AVE AUSTIN TX 78753 MED STAFF SERV 688500 TRUSTEES OF THE UNIV OF PENNSYLVANIA PO BOX 7777-W9500 PHILADELPHIA PA 191750905 MED STAFF SERV 389967 SOTOMAYOR MEDICAL PRACTICE 1220 CENTRE AVE READING PA 19601 MED STAFF SERV 261784 JAMES BYERS III 515 WESTMINSTER AVE SWARTHMORE PA 19081 MED STAFF SERV 259000 6 58880 58880 NET PATIENT REVENUE 621300 211570952 211570952 CAPITATION REVENUE 621300 352087 352087 211923039 93072 93072 62588 62588 62588 62588 48000 174847 -126847 -126847 -126847 INSURANCE INCENTIVES 900099 3694938 3694938 HEALTH INS SHARED SAVINGS 900099 935878 935878 OTHER INCOME 900099 933275 933275 5564091 217574823 217487130 28813 467206 467206 196746 196746 246742810 234901583 11841227 6710249 6398497 311752 19352366 16980305 2372061 13997963 13221251 776712 26950692 25286145 1664547 326983 326983 10399278 10007194 392084 63759 46832 16927 75719 75719 1505008 1446086 58922 9041707 9041707 CORPORATE EXP ALLOCATION 14312576 14312576 PHYSICIAN FEES 10862671 10862671 OTHER EXPENSES 9458373 7862595 1595778 DRUGS & PHARMACEUTICALS 5940989 5940989 3045255 2893771 151484 379450350 345292328 34158022 0 10874 9860 12542502 8274331 953666 824701 38012381 24504951 15030081 13507430 24541102 19732213 53078225 42348535 48585315 44753334 30352126 25916438 78937441 70669772 X -25859216 -28321237 -25859216 -28321237 53078225 42348535 X -161875527 159413506 X false true X true false X true RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 400000 400000 10161776 8783514 1378262 13493169 11667778 1825391 13957436 4053659 9903777 13507430 OPERATING LEASE RIGHT-OF-USE ASSETS 19635808 SECURITY DEPOSITS 96405 19732213 OPERATING LEASE OBLIGATION 17044647 OPERATING LEASE CURRENT 3332292 OTHER CURRENT LIABILITIES 3105623 FINANCE LEASE OBLIGATION 1260388 OTHER LONG TERM LIABILITIES 725730 FINANCE LEASE CURRENT 382670 OTHER 457 PLAN 65088 25916438 X SCHEDULE D, PAGE 3, PART X THE ORGANIZATION IS INCLUDED IN TOWER HEALTH AND SUBSIDIARIES CONSOLIDATED FINANCIAL STATEMENTS. THE FOLLOWING TEXT IS FROM THE ASC 740 (FIN 48) FOOTNOTE. THE SYSTEM IS A NOT-FOR-PROFIT CORPORATION AS DESCRIBED IN SECTION 501(C) (3) OF THE INTERNAL REVENUE CODE AND IS EXEMPT FROM FEDERAL INCOME TAXES ON RELATED INCOME PURSUANT TO SECTION 501(A) OF THE CODE. ON SUCH A BASIS, THE EXEMPT ENTITIES DO NOT INCUR LIABILITY FOR FEDERAL INCOME TAXES, EXCEPT IN THE CASE OF UNRELATED BUSINESS INCOME. THE SYSTEM EVALUATES UNCERTAIN TAX POSITIONS USING A TWO-STEP APPROACH FOR RECOGNIZING AND MEASURING TAX BENEFITS TAKEN OR EXPECTED TO BE TAKEN IN AN UNRELATED BUSINESS ACTIVITY TAX RETURN AND DISCLOSURES REGARDING UNCERTAINTIES IN TAX POSITIONS. NO ADJUSTMENTS TO THE CONSOLIDATED FINANCIAL STATEMENTS WERE REQUIRED AS A RESULT OF THIS EVALUATION. true true false false false false false true false SUZANNE WENDEROTH EVP/CEO PROV ENTR 657349 200160 77789 177301 26924 1139523 76047 EARL J HOPE MD PHYSICIAN 727548 180914 148248 11550 18737 1086997 BRANDON ROOT MD PHYSICIAN 645558 42250 341854 11550 25770 1066982 SHAHIN MANOOCHEHRI MD PHYSICIAN 658483 36250 339258 7159 9089 1050239 THOMAS G PSARROS MD PHYSICIAN 712379 6480 283351 11550 18946 1032706 HERMAN C LAWSON MD PHYSICIAN 737042 65417 133681 11550 2573 950263 MIKE EESLEY TREASURER 7/2023 900016 3810 11550 1041 916417 BERNARD BOULANGER MD EVP/CEO PROV ENTR 695020 3468 186308 19824 904620 P SUE PERROTTY CEO TOWER HEALTH 900000 900000 ROBERT EHINGER FORMER TREAS TERM 407472 124057 68018 73579 17665 690791 64208 KRISTIN KEARNEY SVP CFO 339828 102767 50922 61883 9671 565071 49631 THERESA FINK FORMER SVP COO 392345 17586 409931 CLINT MATTHEWS FORMER PRES/CEO 269231 7912 277143 SCHEDULE J, PAGE 1, PART I, LINE 4 SUZANNE WENDEROTH 0 76,047 0 ROBERT EHINGER 0 64,208 0 KRISTIN KEARNEY 0 49,631 0 THERESA FINK 392,345 0 0 CLINT MATTHEWS 269,231 0 0 SCHEDULE J, PAGE 1, PART I, LINE 7 TOWER HEALTH USES RETENTION BONUSES FOR KEY EXECUTIVES AS ONE WAY TO ENSURE CONTINUITY OF LEADERSHIP AS THE HEALTH SYSTEM NAVIGATES ITS ORGANIZATION TURNAROUND AND FULFILLS ITS MISSION IN A CHALLENGING ENVIRONMENT FOR HEALTHCARE PROVIDERS. THE DETAILS OF INDIVIDUAL EXECUTIVE RETENTION BONUSES ARE DEVELOPED WITH OVERSIGHT BY THE TOWER HEALTH BOARD OF DIRECTORS COMPENSATION COMMITTEE AND ARE APPROVED BY THE FULL TOWER HEALTH BOARD. AS IN ALL MATTERS OF EXECUTIVE COMPENSATION, THE BOARD RELIES ON MARKET DATA AND OUTSIDE EXPERTISE TO ENSURE ITS RETENTION BONUS PROGRAM IS CONSISTENT WITH INDUSTRY STANDARDS. SCHEDULE J, PART III SCHEDULE J, PART I, LINE 3 TOP MANAGEMENT COMPENSATION: AS PROVIDED IN THE FORM 990, SCHEDULE J INSTRUCTIONS, SINCE THE ORGANIZATION RELIES ON A RELATED ORGANIZATION WHICH USES ONE OR MORE OF THE METHODS DESCRIBED IN LINE 3 TO ESTABLISH THE TOP MANAGEMENT OFFICIAL'S COMPENSATION, THIS QUESTION HAS BEEN LEFT UNANSWERED. COMPENSATION PROCESS: THIS ORGANIZATION DOES NOT PAY THE COMPENSATION REPORTED FROM RELATED ENTITIES. THE COMPENSATION OF EXECUTIVES IS DETERMINED BY TOWER HEALTH'S BOARD OF DIRECTORS, WHICH HAS DULY APPOINTED AN EXECUTIVE COMPENSATION COMMITTEE (THE "COMMITTEE"), WHICH IS RESPONSIBLE FOR THE REVIEW AND APPROVAL OF ALL COMPENSATION AND BENEFITS PROVIDED TO THE TOWER HEALTH MEDICAL GROUP'S EXECUTIVE MANAGEMENT. THE COMMITTEE HAS ADOPTED A WRITTEN EXECUTIVE COMPENSATION PHILOSOPHY STATEMENT AND AN EXECUTIVE COMPENSATION COMMITTEE CHARTER GOVERNING THE WORK AND REVIEW PROCESS OF THE COMMITTEE. THE COMMITTEE FOLLOWS THE PROCEDURES DESCRIBED IN THE PHILOSOPHY STATEMENT AND THE CHARTER WHEN IT REVIEWS AND APPROVES THE COMPENSATION AND EMPLOYEE BENEFITS PROVIDED TO SENIOR MANAGEMENT, INCLUDING THE CHIEF EXECUTIVE OFFICER AND THE CHIEF FINANCIAL OFFICER. THE COMMITTEE'S REVIEW ANALYZES EVERY ELEMENT OF COMPENSATION, INCLUDING CURRENT 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. THE COMMITTEE CONSISTS ENTIRELY OF DISINTERESTED MEMBERS OF THE BOARD, AND THE COMMITTEE WORKS WITH AN INDEPENDENT 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 DELIBERATIONS AND CONCLUSIONS. AS A RESULT, THE COMMITTEE'S REVIEW PROCESS IS DESIGNED TO SATISFY THE PROCEDURAL CRITERIA NECESSARY TO QUALIFY FOR THE REBUTTABLE PRESUMPTION OF REASONABLENESS UNDER THE FEDERAL INCOME TAX LAW INTERMEDIATE SANCTIONS RULES. SCHEDULE J, PART I, LINE 4B TERMS AND CONDITIONS OF PARTICIPATION IN THE SUPPLEMENTAL NONQUALIFIED RETIREMENT PLAN: THE 457(F) PLAN IS A TAX-DEFERRED RETIREMENT PLAN CONSISTING OF EMPLOYER CONTRIBUTIONS THAT ARE DESIGNED TO HELP SUPPLEMENT THE RETIREMENT SAVINGS FOR KEY EMPLOYEES. THE EMPLOYEE IS IMMEDIATELY ELIGIBLE TO RECEIVE TOWER HEALTH CONTRIBUTIONS TO THE 457(F) DEFERRED COMPENSATION PLAN. THE EMPLOYEE MUST BE EMPLOYED ON DECEMBER 31ST TO RECEIVE THE EMPLOYER CONTRIBUTION FOR THAT PLAN YEAR. THE EMPLOYEE SHALL BECOME 100% VESTED IN THE EMPLOYER CONTRIBUTION FOR THAT PLAN YEAR THREE YEARS AFTER THE CONTRIBUTION HAS BEEN MADE TO THE ACCOUNT. THE EMPLOYEE WILL ALSO BECOME 100% VESTED IN ALL OF THE EMPLOYER CONTRIBUTIONS: 1) UPON ATTAINING THE AGE 65 WHILE STILL EMPLOYED BY TOWER HEALTH 2) DUE TO DEATH OR DISABILITY 3) UPON TERMINATION OF EMPLOYMENT WITHOUT CAUSE FORM 990 - ORGANIZATION'S MISSION TOWER HEALTH MEDICAL GROUP IS THE REGION'S PREMIER PHYSICIAN-DIRECTED, MULTI-SPECIALTY GROUP OF HEALTH CARE PROFESSIONALS WHO PARTICIPATE WITH TOWER HEALTH IN MANAGING POPULATION HEALTH AND PROMOTING WELLNESS, DELIVERING HEALTH CARE THAT IS READILY ACCESSIBLE, COMPASSIONATE, AND OF THE HIGHEST QUALITY AND VALUE, AND ENGAGING IN CLINICAL RESEARCH AND THE EDUCATION OF HEALTH CARE PROFESSIONALS AND OUR COMMUNITIES. FORM 990, PAGE 1, PART I, LINE 6 BOARD MEMBERS WITHOUT COMPENSATION ARE VOLUNTEERS. FORM 990, PAGE 2, PART III, LINE 4D EXPENSES INCURRED IN PROVIDING VARIOUS OTHER HEALTHCARE SERVICES TO ALL INDIVIDUALS IN A NON-DISCRIMINATORY MANNER REGARDLESS OF RACE, COLOR, CREED, SEX, NATIONAL ORIGIN, OR ABILITY TO PAY. OTHER PHYSICIAN SERVICES INCLUDE: REVENUE EXPENSE AMBULATORY SPECIALTIES 14,364,878 22,556,634 BEHAVIORAL HEALTH SCIENCES 4,243,474 8,073,375 CARDIOLOGY 18,046,408 30,928,156 EMERGENCY 22,054,715 31,154,381 NEUROSCIENCES 8,506,240 17,443,054 WOMEN'S HEALTHCARE 18,808,504 30,763,603 ONCOLOGY 582,424 1,190,069 ORTHOPEDICS 2,810,259 4,648,047 PATHOLOGY 3,822,965 5,097,124 PEDIATRICS 8,253,472 11,845,874 RADIOLOGY 17,165,968 21,296,302 SUPPORT SERVICES 5,837,294, 19,390,951 SUGICAL SPECIALISTS 13,777,270 26,986,928 TRAUMA 3,044,083 7,051,546 OTHER 56,695 8,595 FORM 990, PART V THE ORGANIZATION DOES NOT FILE FORM W-2, 1099-MISC OR FORM 1096. THE ORGANIZATION AND ITS RELATED ORGANIZATION, READING HOSPITAL (EIN 23- 1352204), SHARE ADMINISTRATIVE RESPONSIBILITIES. AS SUCH, READING HOSPITAL ADMINISTERS PAYMENTS TO INDEPENDENT CONSULTANTS AND FURNISHES FORM 1099- MISC, AS REQUIRED, AND IS RESPONSIBLE FOR FILING TOWER HEALTH MEDICAL GROUP'S (EIN 23-2266054) FORM 1096 AND W-2 FILINGS. FORM 990, PAGE 6, PART VI, LINE 6 THE SOLE MEMBER OF TOWER HEALTH MEDICAL GROUP IS TOWER HEALTH, A PENNSYLVANIA NONPROFIT 501(C)(3) CORPORATION. FORM 990, PAGE 6, PART VI, LINE 7A THE SOLE MEMBER OF TOWER HEALTH MEDICAL GROUP IS TOWER HEALTH, A PENNSYLVANIA NONPROFIT 501(C)(3) CORPORATION. THE BUSINESS AND AFFAIRS OF THE CORPORATION SHALL BE MANAGED BY THE BOARD OF DIRECTORS OF TOWER HEALTH UNDER THE PURSUANT TO THE PROVISIONS OF THE BYLAWS OF TOWER HEALTH. FORM 990, PAGE 6, PART VI, LINE 7B THE SOLE MEMBER OF TOWER HEALTH MEDICAL GROUP IS TOWER HEALTH, A PENNSYLVANIA NONPROFIT 501(C)(3) CORPORATION. THE BUSINESS AND AFFAIRS OF THE CORPORATION SHALL BE MANAGED BY THE BOARD OF DIRECTORS OF TOWER HEALTH UNDER THE PURSUANT TO THE PROVISIONS OF THE BYLAWS OF TOWER HEALTH. FORM 990, PAGE 6, PART VI, LINE 8B PER THE BYLAWS, NO COMMITTEE OF THE BOARD SHALL EXERCISE ANY OF THE POWERS OR AUTHORITY VESTED BY THE BYLAWS. THE COMMITTEE OF THE BOARD MAY MAKE RECOMMENDATIONS TO THE BOARD CONCERNING THE BOARD'S EXERCISE OF SUCH POWERS AND AUTHORITY. FORM 990, PAGE 6, PART VI, LINE 11B TOWER HEALTH MEDICAL GROUP'S RETURN IS PREPARED BY HOSPITAL STAFF AND REVIEWED BY ITS EXTERNAL TAX ADVISORS. THE TOWER HEALTH MEDICAL GROUP'S RETURN IS THEN POSTED FOR REVIEW BY THE TOWER HEALTH BOARD, WHICH IS THE PARENT CORPORATION, PRIOR TO FILING THE RETURN WITH THE IRS. FORM 990, PAGE 6, PART VI, LINE 12C IT SHALL BE THE POLICY OF THE HOSPITAL AND CORRESPONDINGLY TOWER HEALTH MEDICAL GROUP TO REQUIRE EACH BOARD MEMBER TO SUBMIT IN WRITING TO THE CHIEF EXECUTIVE OFFICER A LIST OF BUSINESS OR OTHER ORGANIZATIONS OF WHICH THE MEMBER OR MEMBER'S SPOUSE IS AN OFFICER, DIRECTOR, MEMBER EMPLOYEE OR OWNER (35% OR GREATER SHARE) WITH WHICH THE COMPANY MIGHT REASONABLY ENTER INTO A RELATIONSHIP OR A TRANSACTION IN WHICH THE BOARD MEMBER WOULD HAVE CONFLICTING INTERESTS. EACH YEAR A COPY OF THE WRITTEN STATEMENT WILL BE SENT TO THE BOARD MEMBER FOR UPDATING AND RESUBMISSION AND BY WHICH THE BOARD MEMBER SHALL CONFIRM HIS AWARENESS OF THIS POLICY. PROCEDURES FOR ADDRESSING A CONFLICT OF INTEREST: A. AFTER THE BOARD OR COMMITTEE HAS DETERMINED THAT A MEMBER IS INDEED CONFLICTED, THE CONFLICTED PERSON MAY BE COUNTED IN DETERMINING WHETHER THERE IS A QUORUM TO ACT, BUT MAY NOT VOTE UPON THE MATTER. THE CONFLICTED MEMBER, OR A CONFLICTED OFFICER WHO IS NOT A MEMBER, MAY NEVERTHELESS MAKE A PRESENTATION TO THE BOARD OR COMMITTEE ON THE MATTER BUT, AFTER THE PRESENTATION, THE CONFLICTED PERSON SHALL LEAVE THE MEETING DURING THE DISCUSSION OF AND VOTE ON THE MATTER. B. THE BOARD OR COMMITTEE CHAIR MAY APPOINT ONE OR MORE DISINTERESTED PERSONS TO INVESTIGATE POSSIBLE RESOLUTIONS OF THE MATTER THAT ARE DEVOID OF THE CONFLICT OF INTEREST. C. THE BOARD OR COMMITTEE SHALL EXERCISE DUE DILIGENCE TO DETERMINE WHETHER THMG CAN ADDRESS THE MATTER MORE ADVANTAGEOUSLY BY MEANS THAT AVOID THE CONFLICT OF INTEREST. D. IF THE MATTER CANNOT BE ADDRESSED MORE ADVANTAGEOUSLY BY MEANS THAT AVOID THE CONFLICT OF INTEREST, OR IF OTHER APPROACHES TO RESOLUTION ARE IMPRACTICAL UNDER THE CIRCUMSTANCES, THE BOARD OR COMMITTEE SHALL DETERMINE WHETHER THE PROPOSED TRANSACTION OR CONTRACT IS IN THMG'S BEST INTERESTS, WHETHER IT IS FAIR AND REASONABLE, AND WHETHER TO ENTER INTO IT. E. IF THE BOARD DETERMINES THAT THERE HAS BEEN A VIOLATION OF THIS POLICY, THE BOARD SHALL TAKE APPROPRIATE DISCIPLINARY AND CORRECTIVE ACTION, WHICH MAY INCLUDE REMOVAL (IF THE INTERESTED PERSON IS A BOARD OR COMMITTEE MEMBER) OR TERMINATION (IF THE INTERESTED PERSON IS AN EMPLOYEE). INTENTIONALLY OR REPEATEDLY FAILING TO ADHERE TO THIS POLICY IS GROUNDS FOR REMOVAL FROM THE BOARD AND ITS COMMITTEES. FORM 990, PAGE 6, PART VI, LINE 15A THE COMPENSATION OF EXECUTIVES AS WELL AS OFFICERS AND KEY EMPLOYEES IS DETERMINED BY TOWER HEALTH'S BOARD OF DIRECTORS, WHICH HAS DULY APPOINTED AN EXECUTIVE COMPENSATION COMMITTEE (THE "COMMITTEE"), WHICH IS RESPONSIBLE FOR THE REVIEW AND APPROVAL OF ALL COMPENSATION AND BENEFITS PROVIDED TO THE TOWER HEALTH MEDICAL GROUP'S EXECUTIVE MANAGEMENT. THE COMMITTEE HAS ADOPTED A WRITTEN EXECUTIVE COMPENSATION PHILOSOPHY STATEMENT AND AN EXECUTIVE COMPENSATION COMMITTEE CHARTER GOVERNING THE WORK AND REVIEW PROCESS OF THE COMMITTEE. THE COMMITTEE FOLLOWS THE PROCEDURES DESCRIBED IN THE PHILOSOPHY STATEMENT AND THE CHARTER WHEN IT REVIEWS AND APPROVES THE COMPENSATION AND EMPLOYEE BENEFITS PROVIDED TO SENIOR MANAGEMENT, INCLUDING THE CHIEF EXECUTIVE OFFICER AND THE CHIEF FINANCIAL OFFICER. THE COMMITTEE'S REVIEW ANALYZES EVERY ELEMENT OF COMPENSATION, INCLUDING CURRENT 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. THE COMMITTEE CONSISTS ENTIRELY OF DISINTERESTED MEMBERS OF THE BOARD, AND THE COMMITTEE WORKS WITH AN INDEPENDENT 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 DELIBERATIONS AND CONCLUSIONS. AS A RESULT, THE COMMITTEE'S REVIEW PROCESS IS DESIGNED TO SATISFY THE PROCEDURAL CRITERIA NECESSARY TO QUALIFY FOR THE REBUTTABLE PRESUMPTION OF REASONABLENESS UNDER THE FEDERAL INCOME TAX LAW INTERMEDIATE SANCTIONS RULES. FORM 990, PAGE 6, PART VI, LINE 15B SAME RESPONSE AS QUESTION 15A WHICH INCLUDES KEY EMPLOYEES. FORM 990, PAGE 6, PART VI, LINE 19 THE ORGANIZATION DOES NOT MAKE ITS GOVERNING DOCUMENTS, CONFLICT OF INTEREST AND FINANCIAL STATEMENTS AVAILABLE TO THE PUBLIC. 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