2019-11-14T15:13:14-06:00 2018-12-31 ERNST & YOUNG US LLP 2 N CENTRAL AVE SUITE 2300 PHOENIX AZ 85004 990 2018-01-01 990289310 SUTTER INSURANCE SERVICES CORPORATION % ANNIE WOO SUTT 9162866665 745 FORT STREET STE 1100 HONOLULU HI 96813 SUSAN BURCHIEL CFO 2019-11-01 true PATRICK SHIELDS P01508556 6023223000 164.57.159.254 68127220193185000029 2019-11-14 P C8EB7D7F4A43AD7C11A3CC780D94EAED606DA475 E896B98FB98B5A3E35CCCF104B19DB8B21B988AC 2018 2020-03-31 21:24:44Z BONNIE GEORGE 745 FORT STREET 1100 HONOLULU HI 96813 62820158 false X WWW.SUTTERHEALTH.ORG X 1992 HI SEE SCHEDULE O 4 0 0 0 179018 66021 0 0 53057975 68760866 15190307 -6119726 143301 179018 68391583 62820158 0 0 0 0 0 0 0 0 0 59851136 47884919 59851136 47884919 8540447 14935239 220593240 229794500 170849966 165115987 49743274 64678513 X SEE SCHEDULE O false false 46757122 0 68760866 SEE SCHEDULE O 46757122 true false false false false false false false false false false false false false true true true 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 false true true true false false true 254 0 true 0 true true false false false false false false false false false false false X 4 0 false false false false true true true true true false false true true true true true true true true false X ANNIE WOO 8085853594 745 FORT STREET SUITE 1100 HONOLULU HI 96813 X FLORENCE DI BENEDETTO SECR SISCO, SVP GEN COUNCIL SH 2.0 40.0 X X 0 1283109 225938 BONNIE GEORGE PRESIDENT/CEO SISCO 2.0 40.0 X X 0 450200 66516 SARAH KREVANS CHAIR SISCO, PRES/CEO SH 2.0 40.0 X X 0 2850301 1935821 JEFF SPRAGUE SVP & CFO SUTTER HEALTH 1.0 40.0 X 0 1204864 519110 SUSAN BURCHIEL CFO SISCO 1.0 40.0 X 0 188286 29449 PATRICK FRY FORMER CHAIR 0.0 0.0 X 0 101841 0 0 6078601 2776834 0 true true false SEDGWICK CLAIMS MANAGEMENT SVCS INC PO BOX 102514 ATLANTA GA 303682514 3RD PARTY ADMIN FEES 2182499 HASSARD BONNINGTON LLP 275 BATTERY STREET STE 1600 SAN FRANCISCO CA 941113993 LEGAL SERVICES 1125419 KEKER VAN NEST AND PETERS LLP 633 BATTERY STREET SAN FRANCISCO CA 941111809 LEGAL SERVICES 986569 SHEUERMAN MARTINI TABARI ZENERE G 1033 WILLOW STREET SAN JOSE CA 951252346 LEGAL SERVICES 820596 KPMG LLP C/O DEPT 0511 PO BOX 120511 DALLAS TX 753120511 LEGAL SERVICES 749780 23 0 PREMIUM REVENUE 524298 68760866 68760866 68760866 -6119726 -6119726 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 UBI MALPRACTICE/D&O INSURANCE 524298 179018 179018 179018 62820158 68760866 179018 -6119726 0 0 0 0 0 0 0 0 0 0 0 10028 10028 36516 36516 0 0 358618 358618 0 0 3333 3333 0 0 0 19094 19094 0 0 0 0 0 55810 55810 LOSS AND LOSS ADJUSTMENT 32966863 32966863 PURCHASED SERVICES 9490299 8843779 646520 INSURED INCENTIVE FEE 3326120 3326120 INCOME TAX EXPENSE 7000 7000 1611238 1601266 9972 47884919 46757122 1127797 0 0 0 2625323 2588549 0 0 0 0 0 0 0 0 0 0 0 0 363858 359225 0 0 214308834 223323822 0 0 0 0 0 0 3295225 3522904 220593240 229794500 145941 125993 0 0 0 0 0 0 0 0 0 0 0 0 0 0 170704025 164989994 170849966 165115987 X 49743274 64678513 0 0 0 0 49743274 64678513 220593240 229794500 14935239 X false true X true false X X 18 SUTTER BAY HOSPITALS 940562680 3 true 0 0 EAST BAY PERINATAL CENTER 510172285 3 true 0 0 SUTTER BAY MEDICAL FOUNDATION 941156581 3 true 0 0 SAMUEL MERRITT UNIVERSITY 942992642 2 true 0 0 SUTTER AUBURN FAITH HOSPITAL FOUNDATION 942594966 7 true 0 0 SUTTER COAST HOSPITAL 942988520 3 true 0 0 SUTTER HEALTH PACIFIC 990298651 3 true 0 0 SUTTER VALLEY HOSPITALS 941156621 3 true 0 0 SUTTER MEDICAL CENTER FOUNDATION 942788906 7 true 0 0 SUTTER ROSEVILLE MEDICAL CENTER FOUNDATION 680040113 7 true 0 0 SUTTER SOLANO CHARITABLE FOUNDATION 942668262 7 true 0 0 SUTTER VISITING NURSES ASSOCIATION AND HOSPICE 946068843 10 true 0 0 BETTER HEALTH EAST BAY FOUNDATION 510160184 7 true 0 0 CALIFORNIA PACIFIC MEDICAL CENTER FOUNDATION 942728423 7 true 0 0 MILLS-PENINSULA HOSPITAL FOUNDATION 237288765 7 true 0 0 SUTTER DAVIS HOSPITAL FOUNDATION 680217870 7 true 0 0 SUTTER VALLEY MEDICAL FOUNDATION 680273974 3 true 0 0 SUTTER EAST BAY HOSPITALS 941196176 3 true 0 0 18 0 0 true false false false true false false false false false false false false false false true true true X true true SCHEDULE A, PART I, LINE 12G THE PRINCIPAL ACTIVITY OF SISCO IS TO PROVIDE INSURANCE AND RISK MANAGEMENT SERVICES AND SERVE AS A REPOSITORY FOR FUNDS PAID IN BY SUTTER HEALTH AND ITS AFFILIATES FOR THE PURPOSE OF SELF-INSURING. SCHEDULE A, PART IV, SECTION A, LINE 5A SUPPORTED ORGANIZATIONS REMOVED ADOLESCENT TREATMENT CENTER, INC. EIN: 68-0088443 DONATED AND TRANSFERRED TO BAY AREA COMMUNITY SERVICES IN 2017. EDEN MEDICAL CENTER EIN: 94-2948100 DISSOLVED IN 2017. SUTTER CENTRAL VALLEY HOSPITALS EIN: 94-1080917 MERGED WITH SUTTER VALLEY HOSPITALS (EIN: 94-1156621) IN 2017. SUTTER EAST BAY MEDICAL FOUNDATION EIN: 94-2690415 MERGED INTO SUTTER BAY MEDICAL FOUNDATION (EIN: 94-1156581) IN 2017. SUTTER WEST BAY MEDICAL FOUNDATION EIN: 94-2948131 MERGED INTO SUTTER BAY MEDICAL FOUNDATION (EIN: 94-1156581) IN 2017. THE ARTICLES OF INCORPORATION STATE, IN ARTICLE III, THAT SISCO IS ORGANIZED AND OPERATED EXCLUSIVELY FOR THE BENEFIT OF OTHER CURRENT OR FORMER SUBSIDIARIES AND AFFILIATES OF SUTTER HEALTH WHO MAY BE INSUREDS OF SISCO. THE ABOVE ENTITIES EITHER MERGED WITH AN EXISTING SUPPORTING ORGANIZATION OR WERE DONATED OR DISSOLVED. SCHEDULE A, PART IV, SECTION D, LINE 3 This organization is an affiliate of Sutter Health, a 501(c)(3) tax-exempt support organization. Sutter Health is the sole member of SISCO with the right to elect and remove at least a majority of the board of directors, and the majority of SISCO's Board of Directors are officers of Sutter Health. In addition, Sutter Health is also the sole member or controls all of the organizations that SISCO supports. The Sutter Health Board of Directors retains certain "reserved powers" which require that certain decisions made by supported organization boards (including SISCO) must be approved by the Sutter Health Board of Directors before being effective. Because of this structure, supported organizations have a significant voice in the operations of SISCO. SCHEDULE A, PART IV, SECTION E, LINE 2A SISCO IS A RISK MANAGEMENT SUPPORT ORGANIZATION THAT ASSISTS SUTTER HEALTH, ITS PARENT, AND AFFILIATES OF SUTTER HEALTH (LISTED IN SCHEDULE A, PART VI) IN PROVIDING INSURANCE AND RISK MANAGEMENT SERVICES, AND SERVING AS A REPOSITORY FOR FUNDS PAID IN BY SUTTER HEALTH AND ITS AFFILIATES FOR THE PURPOSE OF SELF-INSURING. SCHEDULE A, PART IV, SECTION E, LINE 2B PROVIDING INSURANCE AND RISK MANAGEMENT SERVICES IS A NECESSARY PART OF THE ADMINISTRATIVE FUNCTION OF ANY ORGANIZATION, AND THIS IS ESPECIALLY TRUE IN HEALTHCARE. WITH A LARGE HEALTH CARE SYSTEM LIKE SUTTER HEALTH, INSURANCE COSTS ARE SUBSTANTIAL, BUT TO BETTER CONTAIN COSTS AND PROVIDE APPROPRIATE AND TIMELY RISK SERVICES, SUTTER HEALTH PROVIDES SELF-INSURING TO AFFILIATES THROUGH SISCO. SISCO CONTROLS RISK AND COSTS WHICH FREE UP ADDITIONAL FUNDS TO ASSIST THE COMMUNITIES WE SERVE. 0 INSURANCE LIABILITIES 160214902 PAYABLE TO RELATED PARTIES 4775092 164989994 X 60969843 60969843 358618 1491697 1850315 62820158 46034604 46034604 358618 1491697 1850315 47884919 SCHEDULE D, PART X, LINE 2 ASC 740 AUDIT FOOTNOTE: THIS ORGANIZATION WAS PART OF A CONSOLIDATED FINANCIAL SYSTEM AUDIT. THE ASC 740 AUDIT FOOTNOTE DISCLOSURE FOR THE SUTTER SYSTEM IS AS FOLLOWS: SUTTER HEALTH, THE LEGAL ENTITY, AND MANY AFFILIATES HAVE BEEN DETERMINED TO BE EXEMPT ORGANIZATIONS BY THE INTERNAL REVENUE SERVICE AND THE CALIFORNIA FRANCHISE TAX BOARD, AND GENERALLY, ARE NOT SUBJECT TO TAXES ON INCOME. CERTAIN ACTIVITIES OF SUTTER ARE SUBJECT TO INCOME TAXES; HOWEVER, SUCH ACTIVITIES ARE NOT SIGNIFICANT TO THE CONSOLIDATED FINANCIAL STATEMENTS. WITH RESPECT TO ITS TAXABLE ACTIVITIES, SUTTER RECORDS INCOME TAXES USING THE LIABILITY METHOD, UNDER WHICH DEFERRED TAX ASSETS AND LIABILITIES ARE DETERMINED BASED ON THE DIFFERENCES BETWEEN THE FINANCIAL ACCOUNTING AND TAX BASES OF ASSETS AND LIABILITIES. DEFERRED TAX ASSETS OR LIABILITIES AT THE END OF EACH PERIOD ARE DETERMINED USING THE CURRENTLY ENACTED TAX RATE EXPECTED TO APPLY TO TAXABLE INCOME IN THE PERIODS THAT THE DEFERRED TAX ASSET OR LIABILITY IS EXPECTED TO BE REALIZED OR SETTLED. SUTTER RECOGNIZES THE TAX BENEFIT FROM UNCERTAIN TAX POSITIONS ONLY IF IT IS MORE LIKELY THAN NOT THAT THE TAX POSITIONS WILL BE SUSTAINED ON EXAMINATION BY THE TAX AUTHORITIES, BASED ON THE TECHNICAL MERITS OF THE POSITION. THE TAX BENEFIT IS MEASURED BASED ON THE LARGEST BENEFIT THAT HAS A GREATER THAN 50% LIKELIHOOD OF BEING REALIZED UPON ULTIMATE SETTLEMENT. THE STATUTE OF LIMITATIONS FOR TAX YEARS 2015 THROUGH 2017 REMAIN OPEN IN U.S. TAX JURISDICTIONS IN WHICH SUTTER AND ITS AFFILIATES ARE SUBJECT TO TAXATION. SUTTER RECOGNIZES INTEREST AND PENALTIES RELATED TO INCOME TAX MATTERS IN OPERATING EXPENSES. AT DECEMBER 31, 2018 AND 2017, THERE WERE NO SUCH UNCERTAIN TAX POSITIONS. SCHEDULE D, PART XI, LINE 4B REINSURANCE ADD BACK $ 1,491,697 SCHEDULE D, PART XII, LINE 4B REINSURANCE ADD BACK $ 1,491,697 X true true X X X X false true false false false false false true false FLORENCE DI BENEDETTO SECR SISCO, SVP GEN COUNCIL SH 0 685412 0 286253 0 311444 0 213547 0 12391 0 1509047 0 286570 BONNIE GEORGE PRESIDENT/CEO SISCO 0 317461 0 92856 0 39883 0 53493 0 13023 0 516716 0 33795 SARAH KREVANS CHAIR SISCO, PRES/CEO SH 0 1678673 0 842240 0 329388 0 1909372 0 26449 0 4786122 0 300989 JEFF SPRAGUE SVP & CFO SUTTER HEALTH 0 749362 0 269485 0 186017 0 503648 0 15462 0 1723974 0 158762 SUSAN BURCHIEL CFO SISCO 0 185737 0 2054 0 495 0 9528 0 19921 0 217735 0 0 PATRICK FRY FORMER CHAIR 0 0 0 0 0 101841 0 0 0 0 0 101841 0 0 SCHEDULE J, PART I, LINE 1A FIRST-CLASS TRAVEL: CERTAIN OFFICERS AND KEY EMPLOYEES OF SUTTER HEALTH MAY UPGRADE TO FIRST-CLASS TRAVEL AS BUSINESS NEED DICTATES. UPGRADES ARE CONSIDERED A NECESSARY BUSINESS EXPENSE. SCHEDULE J, PART I, LINE 3 SUPPLEMENTAL COMPENSATION INFORMATION: THE CEO OF THIS ORGANIZATION IS AN EMPLOYEE OF SUTTER HEALTH, A RELATED TAX-EXEMPT ORGANIZATION. THE COMPENSATION COMMITTEE OF THE SUTTER HEALTH BOARD OF DIRECTORS RETAINS ULTIMATE DISCRETIONARY AUTHORITY OVER ALL ELEMENTS OF COMPENSATION TO ASSURE THAT ORGANIZATIONAL PURPOSES ARE APPROPRIATELY BEING SERVED. THE COMPENSATION COMMITTEE USES CREDIBLE DATA SOURCES AND MAINTAINS AN OBJECTIVE "ARMS LENGTH" DECISION-MAKING PROCESS, ENSURING THE INTEGRITY OF SUTTER'S EXECUTIVE PROGRAMS AND CONSISTENCY WITH THE ORGANIZATION'S OVERALL MISSION. SEE SCHEDULE O NARRATIVE FOR PART VI, LINE 15 FOR A FULL DESCRIPTION OF THE COMPENSATION APPROVAL PROCESS COMPLETED BY SUTTER HEALTH. SCHEDULE J, PART I, LINE 4B NONQUALIFIED RETIREMENT PLAN: THE PURPOSE OF THE NONQUALIFIED RETIREMENT PLAN IS TO PROVIDE SUTTER HEALTH EXECUTIVES WITH A COMPETITIVE RETIREMENT BENEFIT CONSISTENT WITH SUTTER HEALTH'S OVERALL COMPENSATION PHILOSOPHY FOR ALL EMPLOYEES. CONTRIBUTIONS ARE DESIGNED TAKING INTO CONSIDERATION LOST RETIREMENT BENEFITS THAT WOULD OTHERWISE BE OBTAINED THROUGH THE QUALIFIED PENSION PLAN. SUTTER'S PLANS ARE DESIGNED CONSISTENT WITH COMPETITIVE INDUSTRY PRACTICES. THE RETIREMENT PLAN FOR SUTTER HEALTH EMPLOYEES IS A COMBINATION OF 403(B) EMPLOYER MATCH CONTRIBUTIONS AND QUALIFIED PENSION PLAN BENEFITS. SUTTER HEALTH EXECUTIVES ARE GENERALLY INELIGIBLE FOR EMPLOYER MATCH CONTRIBUTIONS. TO ENSURE A COMPETITIVE RETIREMENT BENEFIT, SUTTER HEALTH MAKES AN ANNUAL CONTRIBUTION TO A NON-QUALIFIED 457(F) PLAN FOR ITS EXECUTIVES. THE FORMULA PROVIDES 6% TO 12% OF BASE SALARY PLUS ANNUAL INCENTIVE PLAN AWARD (COMMENSURATE WITH MANAGEMENT LEVEL). CONTRIBUTIONS ARE ALSO MADE FOR A SMALL GROUP OF SENIOR LEVEL EXECUTIVES WHOSE ESTIMATED RETIREMENT BENEFIT (SOCIAL SECURITY PLUS QUALIFIED PLAN BENEFITS PLUS 457(F)) FALLS BELOW 50% - 65% OF FINAL 4-YEAR AVERAGE BASE SALARY WHEN RETIRING AT AGE 65 WITH 22.5 YEARS OF SERVICE. TARGET BENEFIT LEVELS ARE DISCOUNTED FOR YEARS OF SERVICE LESS THAN 22.5 AT AGE 65. UNLIKE SUTTER HEALTH'S QUALIFIED PENSION PLAN WHERE EMPLOYEE BENEFITS ARE GUARANTEED (I.E., A DEFINED BENEFIT), SUTTER'S NON-QUALIFIED PLAN BENEFITS ARE NOT GUARANTEED BY SUTTER HEALTH. INVESTMENT RISK IS BORNE BY PARTICIPANTS AND BENEFITS ARE NOT PROTECTED SHOULD SUTTER HEALTH BECOME INSOLVENT. SCHEDULE J, PART I, LINE 7 NON-FIXED PAYMENTS: SPOT AWARDS ARE INFREQUENTLY USED TO REWARD EMPLOYEES. THERE ARE NO SPECIFIC GUIDELINES FOR THE AMOUNT OF THE SPOT AWARD BUT THE AMOUNT TENDS TO NOT EXCEED 5% TO 10% OF GROSS ANNUAL SALARY. ANNUAL INCENTIVE PLAN (AIP) THE PURPOSE OF THE PLAN IS TO FOCUS EXECUTIVES ON SPECIFIC, SHORTER-TERM GOALS THAT ARE CRITICAL TO THE ACHIEVEMENT OF AFFILIATE, OPERATING UNIT AND SYSTEM-WIDE OBJECTIVES THAT DRIVE OVERALL ORGANIZATION PERFORMANCE. LONG TERM PERFORMANCE PLANS SUTTER HEALTH ALSO EMPLOYS A LONG TERM PERFORMANCE PLAN WHICH IS DESIGNED TO FOCUS ON LONGER TERM STRATEGIC OBJECTIVES OF THE ORGANIZATION. SUTTER'S LONG TERM PERFORMANCE PLAN APPROACH IS A COMBINATION OF BOTH LONGER TERM MEASURES OF ORGANIZATION SUCCESS AND KEY ORGANIZATION STRATEGIES WHICH REQUIRE THE COMBINED EFFORT OF ALL LEADERSHIP TO ACHIEVE SUCCESS. SUTTER USES A COMMON FATE APPROACH IN THAT ALL LONG TERM PERFORMANCE PLAN PARTICIPANTS ARE MEASURED AGAINST THE SAME, ORGANIZATION-WIDE CRITERIA VS. INDIVIDUAL EFFORTS. THIS FOSTERS A COMMON PURPOSE ACROSS LEADERSHIP AND A SHARED SENSE OF ACCOUNTABILITY FOR THE OVERALL SUCCESS OF SUTTER HEALTH. TO ENSURE THAT EXTRAORDINARY EFFORTS BY INDIVIDUALS CAN BE RECOGNIZED AND THAT ACTIONS OF LEADERSHIP ARE CONSISTENT WITH SUPPORTING SUTTER HEALTH'S OVERALL MISSION, VISION, AND VALUES, SUTTER'S LONG TERM INCENTIVE PLAN APPROACH ALSO INCORPORATES A COMBINATION OF CEO AND SUTTER HEALTH COMPENSATION COMMITTEE DISCRETION. IN SOME CASES, THE SUTTER HEALTH COMPENSATION COMMITTEE HAS DELEGATED AUTHORITY TO THE PRESIDENT & CEO TO MODIFY INDIVIDUAL AWARDS WITHIN LIMITS THAT HAVE BEEN PRE-APPROVED BY THE SUTTER HEALTH COMPENSATION COMMITTEE. THIS INCLUDES BOTH THE REDUCTION AND INCREASE OF AWARD AMOUNTS. SUCH MODIFICATIONS GENERALLY DO NOT EXCEED +/- 20% AND ARE EMPLOYED JUDICIOUSLY. IN ALL CASES, THE COMPENSATION COMMITTEE OF THE BOARD DETERMINES ACHIEVEMENT OF ORGANIZATION GOALS AND MAKES FINAL AWARD DETERMINATION WHICH MAY RESULT IN A REDUCTION OF AWARD IF APPROPRIATE. ALL SENIOR EXECUTIVE AWARDS ARE REVIEWED FOR COMPENSATION REASONABLENESS AND APPROVED BY THE COMPENSATION COMMITTEE PRIOR TO PAYMENT. FORM 990 PART I, LINE 1 AND PART III, LINE 1 MISSION STATEMENT: SUTTER INSURANCE SERVICES INCORPORATION (SISCO) IS A RISK MANAGEMENT SUPPORT ORGANIZATION THAT ASSISTS SUTTER HEALTH AND ITS AFFILIATES IN ACCOMPLISHING THEIR FINANCIAL, PATIENT CARE, AND BUSINESS GOALS AND OBJECTIVES THROUGH SOUND RISK FINANCING AND RISK MANAGEMENT PROGRAMS AND PRACTICES. FORM 990, PART III, LINE 4A PROGRAM SERVICE ACCOMPLISHMENTS: THE PRINCIPAL ACTIVITY OF SUTTER INSURANCE SERVICES CORPORATION (SISCO) IS TO PROVIDE SUPPORT AND BENEFITS TO SUTTER HEALTH AND ITS AFFILIATES. SISCO DOES THIS BY PROVIDING INSURANCE AND RISK MANAGEMENT SERVICES AND SERVING AS A REPOSITORY FOR FUNDS PAID IN BY SUTTER HEALTH AND ITS AFFILIATES FOR THE PURPOSE OF SELF-INSURING. SISCO IS OPERATED AS AN INTEGRAL PART OF AND PERFORMS AN ESSENTIAL FUNCTION FOR SUTTER HEALTH AND ITS AFFILIATES. FORM 990, PART VI, LINES 6 & 7A CLASSES OF PERSONS AND THE NATURE OF THEIR RIGHTS: THIS CORPORATION IS AN AFFILIATE OF SUTTER HEALTH, A CALIFORNIA NONPROFIT PUBLIC BENEFIT CORPORATION. SUTTER HEALTH IS THE SOLE MEMBER WITH THE RIGHT TO ELECT AT LEAST A MAJORITY OF THE MEMBERS OF THE BOARD OF DIRECTORS. FORM 990, PART VI, LINE 7B CLASSES OF PERSONS, DECISIONS REQUIRING APPROVAL & TYPE OF VOTING RIGHTS: SUTTER HEALTH AS THE SOLE MEMBER OF THE ORGANIZATION IS ENTITLED TO EXERCISE FULLY ALL RIGHTS AND PRIVILEGES OF MEMBERS OF NONPROFIT CORPORATIONS UNDER ALL APPLICABLE LAWS. THE MEMBER HAS THE RIGHTS AND POWERS TO APPOINT (AND REMOVE) MEMBERS OF THE CORPORATION'S BOARD OF DIRECTORS, SUBJECT TO THE PROVISIONS OF THE BYLAWS. IN ADDITION, THE MEMBER HAS THE RIGHT TO APPROVE THE FOLLOWING ACTIONS OF THE CORPORATION'S BOARD OF DIRECTORS: (1) MERGER, CONSOLIDATION OR DISSOLUTION OF THE CORPORATION; (2) AMENDMENT/RESTATEMENT OF THE ARTICLES OF INCORPORATION OR THESE BYLAWS; (3) APPROVAL OF OPERATING AND CAPITAL BUDGETS, HOWEVER, THE CORPORATION MAY DEVELOP BUDGETS WITHIN GUIDELINES AS SET BY THE SOLE MEMBER; (4) LONG-TERM OR MATERIAL AGREEMENTS; (5) APPOINTMENT OF AN INDEPENDENT AUDITOR AND THE HIRING OF CORPORATE COUNSEL EXCEPT IN CONFLICT SITUATIONS BETWEEN THE SOLE MEMBER AND THE CORPORATION; (6) THE CREATION OR ACQUISITION OF ANY SUBSIDIARY OR AFFILIATED ENTITY; (7) CONTRACTING WITH AN UNRELATED THIRD PARTY FOR ALL OR SUBSTANTIALLY ALL OF THE MANAGEMENT OF THE ASSETS OR OPERATIONS OF THE CORPORATION OR ANY SUBSIDIARY OR AFFILIATE THEREOF; (8) APPROVAL OF STRATEGIC PLANS OF THE CORPORATION; AND (9) A TRANSACTION BETWEEN THE CORPORATION AND A DIRECTOR OF THE CORPORATION. SOLE MEMBER REVIEW OF MAJOR ACTIVITIES: THE SOLE MEMBER MAY REVIEW MAJOR ACTIVITIES OF THE CORPORATION. "MAJOR ACTIVITIES" ARE MATTERS THAT THE SOLE MEMBER HAS DECLARED MAJOR, BY WRITTEN NOTICE TO THE CORPORATION THAT IDENTIFIES THE MATTER REQUIRING APPROVAL. NOTICES RECEIVED PURSUANT TO THIS SUBSECTION SHALL BE RECORDED IN THE CORPORATE RECORDS OF THE CORPORATION. FORM 990, PART VI, LINE 11B PROCESS USED BY MANAGEMENT &/OR GOVERNING BODY TO REVIEW FORM 990: SUTTER HEALTH HAS A CENTRALIZED TAX DEPARTMENT RESPONSIBLE FOR THE PREPARATION OF THE FORM 990. ANNUALLY THE TAX DEPARTMENT PROVIDEs TRAINING AND EDUCATION TO AFFILIATE PERSONNEL WHO ASSIST THE TAX DEPARTMENT IN COLLECTING AND REVIEWING DATA TO BE REPORTED ON THE FORM 990. THE PREPARATION MATERIAL IS REVIEWED BY VARIOUS DEPARTMENTS INCLUDING TAX, FINANCE, LEGAL, AND HUMAN RESOURCES. A NATIONAL ACCOUNTING FIRM PREPARES AND/OR REVIEWS THE RETURN. A COMPLETED RETURN IS THEN REVIEWED BY THE TAX DEPARTMENT, THE AFFILIATE, AND THE CFO BEFORE THE RETURN IS FILED. FORM 990, PART VI, LINE 12 PROCESS TO MONITOR TRANSACTIONS FOR CONFLICTS OF INTEREST: EMPLOYEES ARE EDUCATED ON THE CONFLICT OF INTEREST POLICY AND THE NEED TO MAKE DISCLOSURE AS PART OF ANNUAL COMPLIANCE EDUCATION. IN ADDITION, ANNUALLY A DISCLOSURE STATEMENT IS COMPLETED BY ALL DIRECTORS, OFFICERS AND KEY EMPLOYEES. ON THIS STATEMENT THE INDIVIDUAL WILL LIST A WIDE RANGE OF INFORMATION WHICH INCLUDES BUSINESS RELATIONSHIPS, EMPLOYMENT RELATIONSHIPS, PROPERTY INTERESTS, AND THOSE OF RELATED PARTIES. IF THERE IS A POTENTIAL CONFLICT OF INTEREST RELATED TO A PARTICULAR TRANSACTION, THE INTERESTED INDIVIDUAL MUST DISCLOSE THE EXISTENCE AND NATURE OF THE RELATIONSHIP. THE BOARD CHAIR MAY APPOINT A DISINTERESTED PERSON OR COMMITTEE TO INVESTIGATE THE CONFLICT. THE BOARD MAY CONSULT WITH THE OFFICE OF THE GENERAL COUNSEL AS NECESSARY. UNTIL THE POTENTIAL CONFLICT IS RESOLVED, THE BOARD CHAIR (OR COMMITTEE CHAIR AS APPLICABLE) MAY REQUEST THE INDIVIDUAL TO NOT PARTICIPATE DURING RELATED PRESENTATIONS AND DISCUSSIONS. IN ALL CIRCUMSTANCES INVOLVING AN ACTUAL CONFLICT, THE INTERESTED INDIVIDUAL SHALL LEAVE THE ROOM PRIOR TO THE BOARD'S FINAL DISCUSSION AND VOTE. FORM 990, PART VI, LINE 15 PROCESS FOR DETERMINING COMPENSATION: THE COMPENSATION COMMITTEE OF THE SUTTER HEALTH BOARD OF DIRECTORS RETAINS ULTIMATE DISCRETIONARY AUTHORITY OVER ALL ELEMENTS OF COMPENSATION TO ASSURE THAT ORGANIZATIONAL PURPOSES ARE APPROPRIATELY BEING SERVED. THE COMPENSATION COMMITTEE USES CREDIBLE DATA SOURCES AND MAINTAINS AN OBJECTIVE "ARMS LENGTH" DECISION-MAKING PROCESS, ENSURING THE INTEGRITY OF SUTTER'S EXECUTIVE PROGRAMS AND CONSISTENCY WITH THE ORGANIZATION'S OVERALL MISSION. IN ORDER TO ENSURE EXTERNAL COMPETITIVENESS, NATIONAL, CALIFORNIA AND LOCAL MARKET AREA COMPENSATION DATA COMPARISONS ARE REVIEWED. COMPETITIVE ANALYSIS INCLUDES: (A) BASE SALARY, (B) TOTAL CASH (BASE SALARY + ANNUAL INCENTIVE), (C) TOTAL DIRECT CASH (BASE SALARY + ANNUAL INCENTIVE + LONG TERM INCENTIVE) AND (D) TOTAL REMUNERATION (BASE SALARY + ANNUAL INCENTIVE + BENEFITS AND LONG TERM INCENTIVE). THIS ANALYSIS INCLUDES COMPARABLE ORGANIZATIONS AND GEOGRAPHIC CONSIDERATIONS. FOR MOST SENIOR EXECUTIVE POSITIONS, NATIONAL COMPARISONS FOR ORGANIZATIONS SIMILAR IN SIZE, SCOPE AND COMPLEXITY AS SUTTER HEALTH ARE MOST APPROPRIATE SINCE IT IS A NATIONAL MARKETPLACE IN WHICH SUTTER COMPETES FOR EXECUTIVE TALENT. ON THE OTHER HAND, BECAUSE CALIFORNIA'S UNDERLYING COMPENSATION STRUCTURE IS HIGHER THAN NATIONAL DATA (ESPECIALLY IN THE BAY AREA), REGIONAL PAY ADJUSTMENTS MAY BE MADE. OFFICERS AND KEY EMPLOYEES OF THIS ORGANIZATION UNDERGO A REVIEW AND COMPENSATION COMMITTEE APPROVAL ANNUALLY, AND SUCH APPROVAL IS RECORDED IN THE MINUTES. THE 2018 EXECUTIVE COMPENSATION APPROVAL WAS COMPLETED IN DECEMBER 2017. FORM 990, PART VI, LINE 19 AVAILABILITY OF GOVERNING DOCUMENTS, COI POLICY & FINANCIAL STATEMENTS: THE SUTTER HEALTH SYSTEM POSTS ITS CURRENT AND PAST AUDITED FINANCIAL STATEMENTS AT SUTTERHEALTH.ORG. OTHER DOCUMENTS ARE ALSO LOCATED AT THIS WEBSITE INCLUDING THE ANNUAL REPORT, MISSION STATEMENT, HISTORY, AND LINKS TO AFFILIATE WEBSITES. THE GOVERNING DOCUMENTS ARE NOT AVAILABLE TO THE PUBLIC AT THIS TIME. FORM 990, PART VII, SECTION A COMPENSATION OF BOARD MEMBERS: THE FOLLOWING BOARD MEMBERS OF THE ORGANIZATION ARE FULL-TIME EMPLOYEES (40 HOURS PER WEEK) OF SUTTER HEALTH AND THEIR SUTTER HEALTH SALARIES ARE REPORTED HEREIN. THESE INDIVIDUALS RECEIVE NO COMPENSATION FOR THEIR SERVICE AS BOARD MEMBERS OF THIS ORGANIZATION. 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