2013-05-15T08:58:50-05:00 2012-06-30 232932984 PARENTEBEARD LLC SUITE 200 221 W PHILADELPHIA ST YORK PA 174012993 990 2011-07-01 251778658 PINNACLE HEALTH SYSTEM PINN 7172318245 409 SOUTH SECOND ST PO BOX 8700 HARRISBURG PA 171058700 WILLIAM H PUGH 7172318245 2013-05-13 1 JULIUS GREEN CPA P00350393 7178467000 2011 2016-02-24 21:20:13Z WILLIAM H PUGH 409 SOUTH SECOND ST PO BOX 8700 HARRISBURG PA 171058700 193568125 0 X WWW.PINNACLEHEALTH.ORG X 1995 PA PROVIDE MANAGEMENT AND CONSULTATIVE SERVICES TO AFFILIATED TAX-EXEMPT ENTITIES. 17 14 84 14 0 0 299249 273854 16764467 18563645 4763261 4866135 56822 35007 21883799 23738641 0 0 0 0 9868318 12162020 0 0 0 7566235 7179679 17434553 19341699 4449246 4396942 175625922 236649761 4221050 4726451 171404872 231923310 X PINNACLE HEALTH SYSTEM IS ENGAGED IN AND CONDUCTS CHARITABLE, EDUCATIONAL, AND SCIENTIFIC ACTIVITIES THROUGH THE SUPPORT AND BENEFIT OF PINNACLE HEALTH FOUNDATION, AND PROVIDES MANAGEMENT AND CONSULTATIVE SERVICES TO AFFILIATED ENTITIES THAT QUALIFY FOR FEDERAL INCOME TAX EXEMPTION UNDER CODE SECTION 501(C)(3).PINNACLE HEALTH SYSTEM IS DEDICATED TO THE HEALTH AND WELL-BEING OF THE PEOPLE WE SERVE AND MAKES A CONCERTED EFFORT TO ESTABLISH ENDURING BONDS BETWEEN THE HEALTH SYSTEM AND THE COMMUNITY. PINNACLE HEALTH SYSTEM OFFERS AN ARRAY OF COMMUNITY SERVICES AND PROGRAMS TO IMPROVE HEALTH AWARENESS AMONG COMMUNITY GROUPS AND ORGANIZATIONS, PROVIDE OPTIMAL AND TIMELY CARE AND TREATMENT FOR TARGET POPULATIONS AND TO ADDRESS DIVERSE COMMUNITY NEEDS. PINNACLE HEALTH PROVIDES VARIOUS TRAINING PROGRAMS AND TRACKS AND EVALUATES THE IMPACT OF ITS SERVICES AND PROGRAMS ON THE OVERALL HEALTH OF THE COMMUNITY. 0 0 14777720 18563645 PINNACLE HEALTH SYSTEM IS ENGAGED IN AND CONDUCTS CHARITABLE, EDUCATIONAL, AND SCIENTIFIC ACTIVITIES THROUGH THE SUPPORT AND BENEFIT OF PINNACLE HEALTH FOUNDATION, AND PROVIDES MANAGEMENT AND CONSULTATIVE SERVICES TO AFFILIATED ENTITIES THAT QUALIFY FOR FEDERAL INCOME TAX EXEMPTION UNDER CODE SECTION 501(C)(3). 14777720 1 1 0 1 0 0 0 0 0 0 1 1 1 1 0 1 0 1 0 1 1 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 1 0 0 0 0 0 1 1 1 0 0 1 X 390 0 1 84 1 0 1 BD 0 0 0 0 0 0 0 0 X 17 14 0 0 0 0 0 0 0 1 1 0 0 1 1 1 1 1 1 1 1 0 PA X WILLIAM H PUGH CFO 7172318245 409 SOUTH SECOND STREET HARRISBURG PA 171058700 X ROBERT L LYON 0.70 X X 0 0 0 GEORGE F GRODE 0.70 X X 0 0 0 JOHN O CAMPBELL 0.70 X 0 0 0 FELIX GUTIERREZ MD 0.30 X 0 351498 31401 M RICHARD KLEIMAN 0.30 X 0 0 0 DEBORAH S MILLER 0.50 X 0 0 0 LARRY L SOLLENBERGER MD 0.70 X 0 0 0 DENNIS WALSH 0.20 X 0 0 0 BONY R DAWOOD 0.70 X 0 0 0 DENISE F HARR MD 0.20 X 0 0 0 GREGORY CAVOLI 0.20 X 0 0 0 DOUGLAS C DYER 0.20 X 0 0 0 STEVEN C KUSIC 0.60 X 0 0 0 KENNETH OKEN MD 0.40 X 0 0 0 MICHAEL L FERNANDEZ MD 0.30 X 0 0 0 JOHN C HICKEY 0.50 X 0 0 0 CAROLYN KREAMER PHD 0.40 X 0 0 0 MICHAEL A YOUNG 28.20 X X 535864 0 5167 CLARENCE ASBURY 0.70 X 0 0 0 WILLIAM H PUGH 5.10 X 401401 0 45360 CHRISTOPHER P MARKLEY ESQ 6.00 X 353696 0 47435 RICHARD C SENECA ESQ 0.10 X 0 278280 0 NANCY HAMMONDS 2.00 X 145331 0 35560 PHILIP GUARNESCHELLI 6.00 X 721099 0 61877 DANA KELLIS MD 8.00 X 431110 0 65860 COREY RIGBERG 10.80 X 282993 0 53677 NIRMAL JOSHI 32.00 X 267582 0 50466 STEVEN ROTH 2.00 X 263388 0 49241 ROGER LONGENDERFER MD 0.00 X 615873 0 254 4018337 629778 446298 25 1 1 0 AMERICAN HEALTHCARE SOLUTIONS 1701 KENNETH AVE ARNOLD PA 15068 HEALTHCARE STAFFING 490544 STUDER GROUP 913 GULF BREEZE PARKWAY GULF BRIDGE FL 32561 HEALTHCARE LEADERSHIP CONSULTING 412200 STANTEC ARCHITECTURE INC 13980 COLLECTIONS CENTER DRIVE CHICAGO IL 60693 ARCHITECTURAL SERVICES 387647 PRICEWATERHOUSECOOPERS LLP PO BOX 7247-8001 PHILADELPHIA PA 191708001 ACCOUNTING 354750 MCNEES WALLACE & NURICK PO BOX 1166 HARRISBURG PA 17108 LEGAL SERVICES 311510 11 273854 273854 MANAGEMENT & SUPPORT 624100 18563645 18563645 18563645 4102862 4102862 170592757 169829484 763273 763273 763273 MISCELLANEOUS INCOME 900099 35007 35007 35007 23738641 18563645 0 4901142 2029059 1521794 507265 597579 448184 149395 7353081 5514811 1838270 691018 414611 276407 973310 583986 389324 517973 388480 129493 506475 506475 314304 314304 142553 142553 348038 348038 3641431 3536423 105008 138879 138879 341102 341102 223094 223094 93273 93273 97478 97478 600760 600760 47112 47112 120323 120323 DUES AND SUBSCRIPTIONS 571296 571296 OTHER EXPENSES -6439 -6439 19341699 14777720 4563979 0 350 350 25012258 24508757 113324 0 527843 428522 1201039 829921 184745 371118 117830482 132987542 24359445 24986071 5079777 27668876 49375 0 2468323 25698525 175625922 236649761 4221050 4726451 4221050 4726451 X 171404872 231923310 171404872 231923310 175625922 236649761 X 4396942 56121496 X X 0 1 1 X 0 X X X 0 0 0 PINNACLE HEALTH HOSPITALS 251778644 3 0 1 1 0 PINNACLE HEALTH MEDICAL SERVICES 251709054 3 0 1 1 0 COMMUNITY LIFE TEAM 231890444 9 0 1 1 0 PINNACLE HEALTH FOUNDATION 222691718 LINE 11, II 0 1 1 0 4 0 SCHEDULE A, PART IV, SUPPLEMENTAL INFORMATION: FORM 990, SCHEDULE A, PART I, LINE 1H, COLUMN (IV) - IS THE ORGANIZATION LISTED IN YOUR GOVERNING DOCUMENT?: THE GOVERNING DOCUMENTS OF PINNACLE HEALTH SYSTEM DO NOT SPECIFICALLY NAME THE ORGANIZATIONS TO WHICH SUPPORT IS PROVIDED; HOWEVER, DO MEET THE REQUIREMENTS OF SECTION 509(A)-4(D)(2)(I) BY DESIGNATING ITS PUBLICLY SUPPORTED ORGANIZATIONS TO BE ANY OTHER ORGANIZATION AFFILIATED WITH THE CORPORATION WHICH QUALIFIES AS AN EXEMPT ORGANIZATION UNDER SECTIONS 501(C)(3), 509(A)(1), OR 509(A)(2). FORM 990, SCHEDULE A, PART I, LINE 1H, COLUMN (VII) - AMOUNT OF SUPPORT: PINNACLE HEALTH SYSTEM DOES NOT PROVIDE MONETARY SUPPORT TO ITS SUPPORTING ORGANIZATIONS. SUPPORT PROVIDED IS IN THE FORM OF MANAGEMENT AND CONSULTATIVE SERVICES TO ITS AFFILIATED ORGANIZATIONS. RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED X 0 0 142553 142553 142553 142553 19199146 719685321 19341699 719827874 1000000 1000000 250000 250000 0 0 0 0 1000000 1000000 1000000 1000000 4000000 6000000 184943 191027 194538 142553 713061 250000 250000 250000 250000 1000000 1500000 945667 761183 184484 255372 68738 186634 371118 INVESTMENT IN UNITED HEALTH RISK, LTD. 10263020 C INVESTMENT IN UNITED CENTRAL PA RECIPROCAL RISK RETENTION GROUP 14723051 C 24986071 INVESTMENT IN QUEST BEHAVIORAL HEALTH 1355 C INVESTMENT IN CENTRAL PENNSYLVANIA ALLIANCE LABORATORIES 348831 C INVESTMENT IN PINNACLE HEALTH CARDIOVASCULAR INSTITUTE -7523774 C INVESTMENT IN PH VENTURES 30759123 C INVESTMENT IN PH MEDICAL GROUP 4083341 C 27668876 CASH SURRENDER VALUE LIFE INSURANCE 128200 DUE FROM RELATED PARTIES 25570325 25698525 23738641 19341699 4396942 -919606 57041102 56121496 60518438 6726204 -919606 -16092831 -17012437 23738641 0 23738641 18888653 0 18888653 348038 105008 453046 19341699 DESCRIPTION OF UNCERTAIN TAX POSITIONS UNDER FIN 48: PART X: THE PINNACLE HEALTH 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. PART XI, LINE 8 - OTHER ADJUSTMENTS: EQUITY METHOD INCOME - INSURANCE SUB FILING FORM 1120-PC (EIN#13-4224033) 95,869. EQUITY METHOD INCOME - UNITED HEALTH RISK LTD -407,335. EQUITY METHOD INCOME - PINNACLE HEALTH CARDIOVASCULAR INSTITUTE -14,563,914. FUND BALANCE TRANSFER - PINNACLE HEALTH HOSPITALS 12,819,636. FUND BALANCE TRANSFER - PINNACLE HEALTH MEDICAL SERVICES 24,206,623. FUND BALANCE TRANSFER - COMMUNITY LIFE TEAM 1,781,931. FUND BALANCE TRANSFER - PINNACLE HEALTH HOME CARE & HOSPICE 5,337,617. FUND BALANCE TRANSFER - PINNACLE PHCVI 20,378,230. FUND BALANCE TRANSFER - PINNACLE PH VENTURES 133. FUND BALANCE TRANSFER - PINNACLE PH IMAGING -1,923,849. FUND BALANCE TRANSFER - PINNACLE MEDICAL GROUP 3,031,422. EQUITY METHOD INCOME - PINNACLE HEALTH VENTURES INC. -191,547. EQUITY METHOD INCOME - PINNACLE HEALTH MEDICAL GROUP -589,004. FUND BALANCE TRANSFER - CARDIOLOGY PRACTICE, INC. 7,065,290. TOTAL TO SCHEDULE D, PART XI, LINE 8: 57,041,102. PART XII, LINE 2D - OTHER ADJUSTMENTS: EQUITY METHOD INCOME - INSURANCE SUB FILING FORM 1120-PC (EIN#13-4224033) 95,869. EQUITY METHOD INCOME - FOREIGN SUB FILING FORM 5471 -512,343. EQUITY METHOD INCOME - PINNACLE HEALTH CARDIOVASCULAR INSTITUTE -14,563,915. INVESTMENT EXPENSE INCLUDED IN INVESTMENT INCOME ON FINANCIALS -348,038. NET ASSETS RELEASED FROM RESTRICTIONS 16,147. EQUITY METHOD INCOME - PINNACLE HEALTH VENTURES -191,547. EQUITY METHOD INCOME - PINNACLE HEALTH MEDICAL GROUP -589,004. PART XIII, LINE 4B - OTHER ADJUSTMENTS: EXPENSES REPORTED BY FOREIGN SUB FILING FORM 5471 105,008. CENTRAL AMERICA AND THE CARIBBEAN - 1 1 INSURANCE COVERAGE N/A 1933447 1 1 0 0 1 1 1933447 0 1933447 0 0 1 0 0 0 METHOD USED TO ACCCOUNT FOR EXPENDITURES: SCHEDULE F, PART I, LINE 3: INSURANCE PREMIUMS PAID BASED ON CLAIMS EXPERIENCE X 1 1 X X X X X 1 1 0 0 0 0 0 1 0 FELIX GUTIERREZ MD 0 301509 0 36891 0 13098 0 22774 0 8627 0 382899 0 0 MICHAEL A YOUNG 310826 0 146255 0 78783 0 0 0 5167 0 541031 0 0 0 WILLIAM H PUGH 339223 0 47600 0 14578 0 14700 0 30660 0 446761 0 0 0 CHRISTOPHER P MARKLEY ESQ 279185 0 46200 0 28311 0 14803 0 32632 0 401131 0 0 0 RICHARD C SENECA ESQ 0 278280 0 0 0 0 0 0 0 0 0 278280 0 0 NANCY HAMMONDS 127097 0 12400 0 5834 0 20947 0 14613 0 180891 0 0 0 PHILIP GUARNESCHELLI 388375 0 280460 0 52264 0 14803 0 47074 0 782976 0 0 0 DANA KELLIS MD 344446 0 58000 0 28664 0 14784 0 51076 0 496970 0 0 0 COREY RIGBERG 243620 0 34500 0 4873 0 14806 0 38871 0 336670 0 0 0 NIRMAL JOSHI 231984 0 32100 0 3498 0 14373 0 36093 0 318048 0 0 0 STEVEN ROTH 221972 0 37600 0 3816 0 13719 0 35522 0 312629 0 0 0 ROGER LONGENDERFER MD 592010 0 17760 0 6103 0 103 0 151 0 616127 0 0 0 PART I, LINE 1A ROGER LONGENDERFER, M.D., A FORMER PRESIDENT AND CEO, RECEIVED A REIMBURSEMENT FOR PERSONAL FINANCIAL SERVICES. THE REIMBURSEMENT WAS INCLUDED IN HIS TAXABLE COMPENSATION. PART I, LINES 4A-B ROGER LONGENDERFER, M.D., A FORMER PRESIDENT AND CEO, WAS PAID SEVERANCE IN THE FORM OF SALARY AND BENEFITS TOTALING $616,127 IN 2011 AS PART OF HIS RETIREMENT PACKAGE. DR FELIX GUTIERREZ IS A MEMBER OF THE BOARD OF DIRECTORS AND IS EMPLOYED AS A CARDIOLOGIST IN A RELATED ENTITY. HE WAS COVERED BY A SUPPLEMENTAL NONQUALIFIED RETIREMENT PLAN IN CALENDAR YEAR 2011 AT A TOTAL COST OF $12,323. PART I, LINE 7 THE COMPENSATION COMMITTEE OF THE BOARD WITH ASSISTANCE FROM AN INDEPENDENT OUTSIDE ADVISOR ESTABLISHES A COMPENSATION PHILOSOPHY TO COMPENSATE LEADERS OF THE ORGANIZATION AT THE MARKET MEDIAN WITH AN INCENTIVE OPPORTUNITY TO REACH THE 75TH PERECENTILE OF THE MARKET FOR THEIR POSITION. THE INCENTIVE OPPORTUNITY IS DIVIDED BETWEEN PERSONAL GOALS AND SYSTEM LEVEL GOALS. ALL GOALS ARE MEASURABLE AND ARE DESIGNED TO IMPROVE QUALITY OF CARE, PATIENT SAFETY, PATIENT EXPERIENCE, AND MANAGEMENT OF RESOURCES. PERFORMANCE IS REWARDED AT THREE LEVELS; THRESHOLD (IMPROVEMENT OVER THE BASELINE) , TARGET (SIGNIFICANT IMPROVEMENT OVER THE PRIOR YEAR) AND OPTIMUM (STRETCH). M&T BANK DIRECTOR,JOHN CAMPBELL IS ADMINISTRATIVE VP OF PERSONAL TRUST WITH M&T BANK 125467 SEE PART V - INVESTMENT MANAGEMENT SERVICES PROVIDED BY M&T BANK 0 RIVERSIDE CARDIOLOGY DIRECTOR, FELIX GUTIERREZ IS A PARTNER IN RIVERSIDE CARDIOLOGY SEE PART V - RENTAL INCOME PAID TO RIVERSIDE BY PINNACLE HEALTH HOSPITALS. PAYMENTS MADE BY THIS ORGANIZATION AND ALL RELATED TAX-EXEMPT ORGANIZATIONS ARE AGGREGATED AND REPORTED ON FORM 990 FOR EACH OF THE TAX-EXEMPT ORGANIZATIONS IF THE THRESHOLD IS MET AT ANY OF THE TAX-EXEMPT ENTITIES. 0 FORM 990, PART V, LINE 1: PINNACLE HEALTH SYSTEM, THE PARENT COMPANY, IS THE COMMON REPORTING AGENT FOR THE GROUP OF RELATED TAX-EXEMPT ORGANIZATIONS AND FILES ALL 1099 FORMS FOR THE FOLLOWING: COMMUNITY LIFE TEAM, PINNACLE HEALTH FOUNDATION, PINNACLE HEALTH HOSPITALS, PINNACLE HEALTH HOME CARE & HOSPICE, AND PINNACLE HEALTH MEDICAL SERVICES. FORM 990, PART VI, SECTION B, LINE 11 THE AUTHORITY AND RESPONSIBILITY FOR REVIEW OF THE FORM 990 FOR PINNACLE HEALTH SYSTEM AND ASSOCIATED SUBSIDIARIES IS DELEGATED TO THE FINANCE AND AUDIT COMMITTEE OF THE SYSTEM BOARD. IN ORDER TO ACCOMPLISH THIS, ALL MEMBERS OF THE FINANCE AND AUDIT COMMITTEE ARE PROVIDED WITH A REASONABLE OPPORTUNITY TO REVIEW AND COMMENT TO EXECUTIVE LEADERSHIP ON THE IRS FORMS 990 OF THE PINNACLE HEALTH SYSTEM AND ITS SUBSIDIARIES, INCLUDING PINNACLE HEALTH HOSPITALS, PINNACLE HEALTH MEDICAL SERVICES, PINNACLE HEALTH FOUNDATION, PINNACLE HEALTH HOME CARE & HOSPICE AND COMMUNITY LIFE TEAM BEFORE THEY ARE FILED WITH THE INTERNAL REVENUE SERVICE. IN ADDITION, EACH MEMBER OF EACH RESPECTIVE BOARD OF DIRECTORS WILL BE GIVEN ACCESS TO VIEW THEIR INDIVIDUAL FORM 990 VIA A SHARED, PASSWORD-PROTECTED WEBSITE. FORM 990, PART VI, SECTION B, LINE 12C IN THE PERFORMANCE OF THEIR DUTIES TO PINNACLE HEALTH SYSTEM AND SUBSIDIARIES (COLLECTIVELY REFERRED TO AS "PHS"), COVERED PERSONS SHALL SEEK TO ACT IN THE BEST INTERESTS OF PHS, AND SHALL EXERCISE GOOD FAITH, LOYALTY, DILIGENCE AND HONESTY. A COVERED PERSON IS ANY INDIVIDUAL WHO SERVES IN A FIDUCIARY CAPACITY TO, OR WHO HAS LEGAL AUTHORITY TO REPRESENT OR OBLIGATE, THE PINNACLE HEALTH SYSTEM OR ANY OF ITS AFFILIATED ORGANIZATIONS INCLUDING, BUT NOT LIMITED TO, DIRECTORS, OFFICERS, EMPLOYEES, AND AGENTS. COVERED PERSONS ALSO INCLUDE A) IMMEDIATE FAMILIES (SPOUSES, CHILDREN, SIBLINGS, PARENTS, OR SPOUSE'S PARENTS), B) ANY ORGANIZATION IN WHICH THEY OR THEIR IMMEDIATE FAMILIES DIRECTLY OR INDIRECTLY I) HAVE A MATERIAL FINANCIAL OR BENEFICIAL INTEREST, OR II) SERVE AS A DIRECTOR, OFFICER, EMPLOYEE, AGENT, ATTORNEY OR SIMILAR CAPACITY. A COVERED PERSON SHALL DISCLOSE ANY BUSINESS OR PERSONAL INTERESTS OR RELATIONSHIPS WHICH MAY BE IN CONFLICT WITH THE INTEREST OF PHS, INCLUDING, BUT NOT LIMITED TO (A) ENGAGING IN OR SEEKING TO BE ENGAGED IN (I) THE DELIVERY OF HEALTH CARE SERVICES OR (II) THE DELIVERY OF GOODS OR SERVICES TO PHS, OR (B) ANY TRANSACTION OR ARRANGEMENT WITH PHS WHICH WOULD RESULT IN BENEFIT TO COVERED PERSONS. THE GOVERNANCE COMMITTEE OF THE PHS BOARD REVIEWS ALL CONFLICT OF INTEREST STATEMENTS AND DETERMINES WHETHER EACH DIRECTOR ON THE BOARD IS INDEPENDENT. COVERED PERSONS WHO ARE DIRECTORS MUST COMPLY WITH THE PINNACLE HEALTH SYSTEM GUIDELINES FOR DETERMINING DIRECTOR INDEPENDENCE AND APPLYING DIRECTOR INDEPENDENCE REQUIREMENTS. COVERED PERSONS WITH A CONFLICT OF INTEREST SHALL NOT VOTE ON THE MATTER, AND THE PHS BOARD OR COMMITTEE MUST APPROVE, AUTHORIZE, OR RATIFY THE TRANSACTION OR ARRANGEMENT BY A MAJORITY VOTE OF THE NON-INTERESTED DIRECTORS OR COMMITTEE MEMBERS PRESENT AT A MEETING THAT HAS A QUORUM. VIOLATIONS OF THIS STATEMENT OF POLICY MAY SUBJECT COVERED PERSONS TO APPROPRIATE SANCTIONS, INCLUDING REMOVAL FROM THEIR POSITIONS WITH PHS. FORM 990, PART VI, SECTION B, LINE 15 THE COMPENSATION COMMITTEE OF THE PINNACLE HEALTH SYSTEM ("PHS") BOARD OF DIRECTORS HAS THE AUTHORITY TO DEVELOP AND MAINTAIN EXECUTIVE AND PHYSICIAN COMPENSATION TO BE APPROVED BY THE PINNACLE HEALTH SYSTEM BOARD. THE COMPENSATION COMMITTEE WILL FOLLOW A DILIGENT PROCESS THAT MEETS REGULATORY REQUIREMENTS FOR A REBUTTABLE PRESUMPTION OF REASONABLENESS AND PROMOTES EFFECTIVE GOVERNANCE OF EXECUTIVE COMPENSATION, CONSISTENT WITH THE PHS COMPENSATION PHILOSOPHY. 1. FOLLOW A PROCESS THAT ESTABLISHES AND MAINTAINS A REBUTTABLE PRESUMPTION OF REASONABLENESS FOR ALL EXECUTIVES AND PHYSICIANS POTENTIALLY SUBJECT TO INTERMEDIATE SANCTIONS. 2. PREPARE MINUTES FOR EACH MEETING TO RECORD THE TERMS OF THE COMMITTEE'S DECISIONS AND THE PROCESS FOLLOWED IN REACHING THOSE DECISIONS. THESE MINUTES MUST INCLUDE INDICATIONS THAT THE COMMITTEE IS FOLLOWING GOOD PRACTICES IN DEALING WITH CONFLICTS OF INTEREST AND IN OBTAINING AND RELYING ON APPROPRIATE COMPARABILITY DATA ON TOTAL COMPENSATION. 3. SELECT AND DIRECTLY ENGAGE AND SUPERVISE ANY CONSULTANT HIRED BY PHS TO ADVISE THE COMMITTEE ON EXECUTIVE AND PHYSICIAN COMPENSATION. 4. PERIODICALLY EVALUATE THE APPROPRIATENESS OF THIS CHARTER AND THE EFFECTIVENESS OF THE PROCESS THE COMMITTEE USES IN GOVERNING EXECUTIVE AND PHYSICIAN COMPENSATION AND REPORT THIS EVALUATION TO THE BOARD. 5. PROVIDE THE BOARD WITH AN ANNUAL REPORT ON THE COMMITTEE'S ACTIONS. 6. MONITOR CHANGES IN LAWS AND REGULATIONS PERTAINING TO EXECUTIVE COMPENSATION AND BENEFITS TO SEE THAT PHS COMPLIES WITH THEM. 7. SEEK OUTSIDE REVIEW OF COMMITTEE OPERATIONS TO ENSURE COMPLIANCE WITH THE IRS REBUTTABLE PRESUMPTION OF REASONABLENESS. 8. REVIEW ACTUAL EXECUTIVE COMPENSATION AND BENEFITS PROVIDED TO CONFIRM CONSISTENCY WITH COMPENSATION AND BENEFITS APPROVED BY THE COMMITTEE. FORM 990, PART VI, SECTION C, LINE 19 THE ORGANIZATION DOES NOT MAKE ITS GOVERNING DOCUMENTS OR CONFLICT OF INTEREST POLICY AVAILABLE FOR PUBLIC INSPECTION AS THIS IS NOT REQUIRED BY FEDERAL OR STATE LAW. THE ORGANIZATION INCLUDES A COPY OF ITS FINANCIAL STATEMENTS WITH THE STATE REGISTRATION FILED WITH THE PENNSYLVANIA DEPARTMENT OF STATE, BUREAU OF CHARITABLE ORGANIZATIONS. THESE DOCUMENTS ARE A MATTER OF PUBLIC RECORD AND CAN BE VIEWED AT THE BUREAU OFFICE. FORM 990, PART VII, SECTION A: THE FOLLOWING OFFICERS, DIRECTORS, KEY EMPLOYEES, AND HIGHLY COMPENSATED EMPLOYEES HAVE WORKED AN AVERAGE OF 40 HOURS PER WEEK FOR PINNACLE HEALTH SYSTEM, THE PARENT COMPANY, AND ALL RELATED ORGANIZATIONS: PHILIP GUARNESCHELLI CHRISTOPHER P. MARKLEY, ESQ. RICHARD C. SENECA, ESQ. WILLIAM H. PUGH DANA KELLIS, MD COREY RIGBERG STEVEN ROTH NIRMAL JOSHI MIKE YOUNG NANCY HAMMONDS THE FOLLOWING DIRECTORS ARE ALSO DIRECTORS OF PINNACLE HEALTH HOSPITAL, A RELATED ORGANIZATION: ROBERT L. LYON GEORGE F. GRODE JOHN O. CAMPBELL FELIX GUTIERREZ, MD M. RICHARD KLEIMAN DEBORAH S. MILLER LARRY L. SOLLENBERGER, MD CLARENCE E. ASBURY DENNIS WALSH BONY R. DAWOOD DENISE F. HARR, MD GREGORY CAVOLI DOUGLAS C. DYER STEVEN C. KUSIC KENNETH OKEN, MD MICHAEL L. FERNANDEZ, MD JOHN C. HICKEY CAROLYN KREAMER, PHD MICHAEL A. YOUNG DIRECTOR M. RICHARD KLEIMAN IS ALSO A DIRECTOR OF PINNACLE HEALTH FOUNDATION, A RELATED ORGANIZATION. DIRECTOR DEBORAH S. MILLER IS ALSO A DIRECTOR OF PINNACLE HEALTH MEDICAL SERVICES, A RELATED ORGANIZATION. CHANGES IN NET ASSETS OR FUND BALANCES: FORM 990, PART XI, LINE 5: NET UNREALIZED LOSSES ON INVESTMENTS: -919,606. EQUITY METHOD INCOME - INSURANCE SUB FILING FORM 1120-PC (EIN#13-4224033) 95,869. EQUITY METHOD INCOME - UNITED HEALTH RISK LTD -407,335. EQUITY METHOD INCOME - PINNACLE HEALTH CARDIOVASCULAR INSTITUTE -14,563,914. FUND BALANCE TRANSFER - PINNACLE HEALTH HOSPITALS 12,819,636. FUND BALANCE TRANSFER - PINNACLE HEALTH MEDICAL SERVICES 24,206,623. FUND BALANCE TRANSFER - COMMUNITY LIFE TEAM 1,781,931. FUND BALANCE TRANSFER - PINNACLE HEALTH HOME CARE & HOSPICE 5,337,617. FUND BALANCE TRANSFER - PINNACLE PHCVI 20,378,230. FUND BALANCE TRANSFER - PINNACLE PH VENTURES 133. FUND BALANCE TRANSFER - PINNACLE PH IMAGING -1,923,849. FUND BALANCE TRANSFER - PINNACLE MEDICAL GROUP 3,031,422. EQUITY METHOD INCOME - PINNACLE HEALTH VENTURES INC. -191,547. EQUITY METHOD INCOME - PINNACLE HEALTH MEDICAL GROUP -589,004. FUND BALANCE TRANSFER - CARDIOLOGY PRACTICE, INC. 7,065,290. TOTAL TO FORM 990, PART XI, LINE 5: 56,121,496. FORM 990, PART XI, LINE 2C: THE FINANCE AND AUDIT COMMITTEE OF THE PINNACLE HEALTH SYSTEM BOARD ASSUMES THE RESPONSIBILITY FOR THE OVERSIGHT OF THE AUDIT AND THE SELECTION OF THE INDEPENDENT ACCOUNTANT. THIS PROCESS HAS NOT CHANGED DURING THE TAX YEAR. PINNACLE HEALTH MEDICAL SERVICES 409 SOUTH SECOND STREET PO BOX 8700 HARRISBURG PA 171058700 251709054 PHYSICIAN SERVICES PA 501(C)(3) LINE 3 PINNACLE HEALTH SYSTEM 1 PINNACLE HEALTH HOME CARE & HOSPICE 409 SOUTH SECOND STREET PO BOX 8700 HARRISBURG PA 171058700 232024121 SKILLED HOMECARE SERVICES AND SERVICES TO THE TERMINALLY ILL PA 501(C)(3) LINE 3 PINNACLE HEALTH HOSPITALS 1 PINNACLE HEALTH HOSPITALS 409 SOUTH SECOND STREET PO BOX 8700 HARRISBURG PA 171058700 251778644 INPATIENT AND OUTPATIENT HEALTHCARE SERVICES PA 501(C)(3) LINE 3 PINNACLE HEALTH SYSTEM 1 PINNACLE HEALTH FOUNDATION 409 SOUTH SECOND STREET PO BOX 8700 HARRISBURG PA 171058700 222691718 INVESTMENT AND FUNDRAISING ACTIVITIES FOR RELATED TAX-EXEMPT ORGANIZATIONS PA 501(C)(3) LINE 11B, II PINNACLE HEALTH SYSTEM 1 COMMUNITY LIFE TEAM 409 SOUTH SECOND STREET PO BOX 8700 HARRISBURG PA 171058700 231890444 MEDICAL TRANSPORT SERVICES PA 501(C)(3) LINE 9 PINNACLE HEALTH SYSTEM 1 WEST SHORE SURGERY CENTER LTD 409 SOUTH SECOND STREET PO BOX 8700 HARRISBURG PA 171058700 251821415 SURGICAL CARE - MEDICAL SERVICES PA N/A UNITED CENTRAL PA RISK RETENTION GROUP 76 ST PAUL ST SUITE 500 BURLINGTON VT 054014477 134224033 CAPTIVE INSURANCE VT N/A C -266320 20177484 1.00000 UNITED HEALTH RISK LTD PO BOX 2450 HAMILTON HM JX BD CAPTIVE INSURANCE BD N/A C 938092 13422187 1.00000 PINNACLE HEALTH CARDIOVASCULAR INSTITUTE PO BOX 8700 HARRISBURG PA 17105 320321362 PHYSICIAN SERVICES PA PINNACLE HEALTH SYSTEM C -7660564 5042910 1.00000 CARDIOLOGY PRACTICE INC PO BOX 8700 HARRISBURG PA 17105 800658616 PHYSICIAN SERVICES PA PINNACLE HEALTH CARDIOVASCULAR INSTITUTE C -6400446 4779356 1.00000 PINNACLE HEALTH MEDICAL GROUP PO BOX 8700 HARRISBURG PA 17105 800771040 PHYSICIAN SERVICES PA PINNACLE HEALTH SYSTEM C -779983 7094354 1.00000 PINNACLE HEALTH VENTURES INC PO BOX 8700 HARRISBURG PA 17105 611677624 HOLDING COMPANY PA PINNACLE HEALTH SYSTEM C -67 30539658 1.00000 PINNACLE HEALTH IMAGING INC PO BOX 8700 HARRISBURG PA 17105 231718571 RADIOLOGY SERVICES PA PINNACLE HEALTH VENTURES INC C 182843 39105446 1.00000 0 1 1 0 0 0 0 0 0 1 1 1 1 1 1 1 1 1 PINNACLE HEALTH HOSPITALS C 12819636 FMV PINNACLE HEALTH MEDICAL SERVICES C 24206623 FMV COMMUNITY LIFE TEAM C 1781931 FMV PINNACLE HEALTH HOME CARE & HOSPICE C 5337617 FMV PINNACLE HEALTH FOUNDATION C 273854 FMV PINNACLE HEALTH CARDIOVASCULAR INSTITUTE C 20378230 FMV PINNACLE HEALTH VENTURES C 133 FMV PINNACLE HEALTH MEDICAL GROUP C 3031422 FMV PINNACLE HEALTH IMAGING B 1923849 FMV CARDIOLOGY PRACTICE INC C 7065290 FMV CARDIOLOGY PRACTICE INC R 4564900 FMV PINNACLE HEALTH CARDIOVASCULAR INSTITUTE R 4517590 FMV PINNACLE HEALTH MEDICAL GROUP R 2386517 FMV PINNACLE HEALTH IMAGING R 7122501 FMV TRANSACTIONS WITH RELATED ORGANIZATIONS PART V, LINE 2 PINNACLE HEALTH SYSTEM CANNOT SEPARATELY STATE AMOUNTS FOR EACH TRANSACTION IDENTIFIED WITH A RELATED ORGANIZATION. ITS ACCOUNTING SYSTEM NETS ALL TRANSACTIONS INTO A SINGLE AMOUNT, WHICH IS REPORTED AS A GIFT, GRANT AND/OR CAPITAL CONTRIBUTION TO OR FROM RELATED ORGANIZATIONS. PINNACLE HEALTH SYSTEM 409 S SECOND STREET PO BOX 8700 HARRISBURG PA 17105 251778658 X 0 142553 142553 19199146 19341699 1000000 250000 0 0 0 PINNACLE HEALTH HOSPITALS 409 S SECOND STREET PO BOX 8700 HARRISBURG PA 17105 251778644 0 0 0 615684505 615684505 1000000 250000 0 0 0 PINNACLE HEALTH HOME CARE & HOSPICE 409 S SECOND STREET PO BOX 8700 HARRISBURG PA 17105 232024121 0 0 0 8099459 8099459 554973 138743 0 0 0 PINNACLE HEALTH MEDICAL SERVICES 409 S SECOND STREET PO BOX 8700 HARRISBURG PA 17105 251709054 0 0 0 68067125 68067125 1000000 250000 0 0 0 PINNACLE HEALTH FOUNDATION 409 S SECOND STREET PO BOX 8700 HARRISBURG PA 17105 222691718 0 0 0 1330369 1330369 208037 52009 0 0 0 COMMUNITY LIFE TEAM 409 S SECOND STREET PO BOX 8700 HARRISBURG PA 17105 231890444 0 0 0 7304717 7304717 515236 128809 0 0 0