2013-11-13T15:08:53-06:00 2012-12-31 990 2012-01-01 540696355 PRINCE WILLIAM HOSPITAL PRIN 3367182803 2085 FRONTIS PLAZA BLVD WINSTON SALEM NC 27103 FRED HARGETT 3367182803 2013-11-13 2012 2016-03-07 17:11:31Z MELISSA ROBSON 2085 FRONTIS PLAZA BLVD WINSTON SALEM NC 27103 263588319 0 X WWW.PWHS.ORG X 1964 VA SEE SCHEDULE O 15 8 1496 673 230186 -49313 0 2500 228388899 232592564 253888 4231666 733244 797463 229376031 237624193 77341 118494 0 0 90654879 86556381 0 0 0 111201599 116711756 201933819 203386631 27442212 34237562 295879968 336600032 116148140 108965284 179731828 227634748 X SEE SCHEDULE O 0 0 190321007 118494 232995514 PRINCE WILLIAM HOSPITAL HAS 170 LICENSED BEDS. DURING 2012,THERE WERE 39,424 PATIENT DAYS, WITH AN AVERAGE LENGTH OF STAY OF 4 DAYS, AND AN AVERAGE DAILY CENSUS OF 108. THERE WERE 10,840 DISCHARGES, 4,451 INPATIENT AND OUTPATIENT SURGERIES, 139,066 OUTPATIENT ENCOUNTERS AND 75,286 EMERGENCY DEPARTMENT VISITS. 190321007 1 0 0 1 0 0 0 0 0 1 1 1 0 0 1 1 1 1 0 0 0 0 0 0 1 0 1 1 1 1 1 0 0 0 0 0 0 1 1 0 0 0 0 0 1 1 1 0 0 1 13 0 1 1496 1 1 1 0 0 0 0 0 0 0 0 0 X 15 8 1 0 0 0 1 1 1 1 1 0 0 1 0 0 0 1 1 1 1 VA X KAREN DAUGHERTY 3367182803 2085 FRONTIS PLAZA BLVD WINSTON SALEM NC 27103 X ARMATOCARL STEVEN 60.00 X 0 1665294 1133054 BELDENRICHARD 2.00 X X 0 788 0 DAILEYMICHAEL 2.00 X 0 1600 0 DANZIGERSTEVEN 2.00 X 0 1872 0 FAIRCHILDWILLIAM 2.00 X 0 0 0 GARYWILLIAM SR 2.00 X 0 0 0 GRZEJKAJOHN 2.00 X 0 1600 0 GUTLIPHJOANNE 2.00 X 0 0 0 HOOVERMICHAEL 2.00 X X 0 0 0 MAGALSKI JRJOSEPH JOHN 2.00 X 0 520675 29690 PARR REXFORD JR 2.00 X X 0 0 0 ROBSONMELISSA L 60.00 X X 626049 0 45313 WALLJOHN DOUGLAS 60.00 X 32061 0 1675 WINEDONOVAN 2.00 X 0 0 0 ZURLOJOSEPH 2.00 X 0 0 0 CHAVEZLAURA J 60.00 X 157468 0 34130 RILEYROBERT W 60.00 X 268668 0 30606 KRENYTZKYSTEPHEN 60.00 X 376486 0 40055 HOLTBEATRICE M 40.00 X 213156 0 21972 KHOTVIKRAM S 40.00 X 238982 0 15313 MURTAZASYED J 40.00 X 213211 0 19959 REDDYSWARNA 40.00 X 210548 0 32023 TIPPLECYNDA M 40.00 X 263120 0 7562 2599749 2191829 1411352 105 0 1 0 BRASFIELD & GORRIE LLC PO BOX 11407 BIRMINGHAM AL 35246 CONTRACTOR 18987609 THE BANK OF NEW YORK PO BOX 19445A NEWARK NJ 07195 INVESTING/CONSULTING 5120495 MASSMUTUAL FINANCIAL GROUP BOX 371368 PITTSBURGH PA 15250 INVESTING/CONSULTING 4633731 PRECYSE SOLUTIONS LLC-NE DEPT 1736 PO BOX 11407 BIRMINGHAM AL 35246 TRANSCRIPTION SERVICES 2847203 MORRISON MANAGEMENT SPECIALISTS PO BOX 102289 ATLANTA GA 30368 FOOD MANAGEMENT SERVICES 2549219 54 2500 2500 NET PATIENT REVENUE 621990 228994455 228994455 CANCER CENTER REVENUE 621990 1902535 1902535 AMBULATORY SURGERY CTR 621990 1695574 1695574 232592564 2840027 2840027 1246042 1914421 -668379 -668379 -668379 24973574 467770 24029517 20188 944057 447582 1391639 1391639 24257 0 24257 24257 188361 0 188361 188361 CAFETERIA 722210 575475 575475 MISCELLANEOUS 900099 402950 402950 FITNESS CENTER 713940 274799 230186 44613 1253224 237624193 232995514 230186 4395993 109994 109994 8500 8500 1612511 1612511 70145373 67416718 2728655 3416904 3283986 132918 5978461 5745899 232562 5403132 5192950 210182 80398 80398 245883 245883 16255063 13121435 3133628 825875 793748 32127 2394314 2301175 93139 1811736 1741259 70477 6205303 5963917 241386 155201 149164 6037 240872 231502 9370 3925629 3772922 152707 10913676 10489134 424542 1041903 1001373 40530 BAD DEBT 32581295 32581295 MEDICAL SUPPLIES 21262154 21262154 DRUGS 5646262 5646262 COLLECTION FEES 5021340 4826010 195330 8104852 4681610 3423242 203386631 190321007 13065624 0 41798187 44263972 10948665 11732887 28572274 28253436 1014006 720216 901849 854149 485022 284628 285106522 159996337 100680435 125110185 78577343 90441337 20492478 24303612 11363611 10615257 1046098 20353 295879968 336600032 11609326 19094410 73575951 71743894 30962863 18126980 116148140 108965284 X 177554074 225456994 2177754 2177754 179731828 227634748 295879968 336600032 X 34237562 6950747 6714611 X 0 1 X 1 0 X 0 0 0 0 0 0 0 0 1 19219 19219 0 PART IV, SUPPLEMENTAL INFORMATION: SCHEDULE C, PART II-B, LINE 1I DUES PAID TO CERTAIN ORGANIZATIONS WHICH INCLUDE A PORTION RELATED TO LOBBYING ACTIVITIES. 2177754 2177754 2177754 2177754 2625927 97648 545821 2177754 2541996 81899 -2032 2625927 3656202 -114206 1000000 2541996 1.00000 0 0 2539817 2539817 1433458 111959593 54224086 59168965 5029128 920072 4109056 403561 109207109 88043328 21567342 92723 54441133 16808851 37725005 125110185 OTHER SECURITIES 24303612 F 24303612 0 PENSION LIABILITY 4775627 DEFERRED COMPENSATION 640161 DUE TO AFFILIATE 12711192 18126980 X 255627153 6950747 9882551 16833298 238793855 -1169662 -1169662 237624193 213287224 10248777 10248777 203038447 245883 102301 348184 203386631 DESCRIPTION OF UNCERTAIN TAX POSITIONS UNDER FIN 48: PART X, LINE 2: LIABILITY UNDER FIN 48(ASC 740) FOOTNOTE THE AUDIT FOR NOVANT HEALTH AND ITS AFFILIATES IS PREPARED ON A CONSOLIDATED BASIS. THE COMPANY WAS REQUIRED TO EVALUATE UNCERTAIN TAX POSITIONS. THIS EVALUATION INCLUDES A QUANTIFICATION OF TAX RISK IN AREAS SUCH AS UNRELATED BUSINESS TAXABLE INCOME AND THE TAXATION OF OUR FOR-PROFIT SUBSIDIARIES. THIS EVALUATION DID NOT HAVE A MATERIAL EFFECT ON THE COMPANY'S STATEMENT OF OPERATIONS FOR THE YEARS ENDED DECEMBER 31, 2012 AND 2011. PART XI, LINE 2D - OTHER ADJUSTMENTS: PARTNERSHIP INCOME: 11,873,172. EXPENSES NETTED WITH INCOME PER BOOKS: -102,301. INVESTMENT EXPENSES: -245,883. OTHER INCOME: 6,975. K-1 ADJUSTMENT -1,649,412. PART XI, LINE 4B - OTHER ADJUSTMENTS: GAIN ON SALE OF EQUIPMENT: 447,582. RENT EXPENSES: -1,914,421. INTERCOMPANY RENT: 297,177. PART XII, LINE 2D - OTHER ADJUSTMENTS: MALPRACTICE INSURANCE: 237,581. RENT EXPENSE: 1,914,421. INTERCOMPANY RENT: -297,177. PARTNERSHIP EXPENSES: 8,835,662. OTHER EXPENSE: 5,872. GAIN ON SALE OF EQUIPMENT: -447,582. PART XII, LINE 4B - OTHER ADJUSTMENTS: K-1ADJUSTMENTS: 102,301. PART V, LINE 4 - INTENDED USES FOR ENDOWMENT FUNDS THE ENDOWMENT FUNDS INTENDED USE IS FOR PATIENT EQUIPMENT AND THE REMAINDER IS THE BENEFICIAL INTEREST IN THE NET ASSETS OF THE PWHS FOUNDATION. FUNDRAISING 24257 0 24257 24257 24257 24257 1 1 X 1 X 1 X 0 1 0 1 1 6667582 0 6667582 0.03280 17442544 13465749 3976795 0.01960 5044348 3465026 1579322 0.00780 29154474 16930775 12223699 0.06020 2817 0 2817 0.00000 0 0 0 0.00000 14776673 9275956 5500717 0.02700 0 0 0 0.00000 6618 0 6618 0.00000 14786108 9275956 5510152 0.02700 43940582 26206731 17733851 0.08720 21631 0 21631 0.00010 21631 0 21631 0.00010 1 32581295 0 36053807 44218099 -8164292 X 1 0 1 PRINCE WILLIAM ASC HEALTHCARE 0.51000 0.03210 0.47790 1 1 PRINCE WILLIAM HOSPITAL

8700 SUDLEY ROAD MANASSAS VA 20110

X X X PRINCE WILLIAM HOSPITAL 1 1 1 200.000000000000 1 201.000000000000 0 1 1 X X X X X X 1 0 1 X 0 0 1 PRINCE WILLIAM AMBULATORY SURGERY CENTER

8650 SUDLEY ROAD SUITE 411 MANASSAS VA 20110

AMBULATORY SURGERY CENTER PART I, LINE 6A: THE ORGANIZATION IS PART OF THE NOVANT HEALTHCARE SYSTEM AND THE COMMUNITY BENEFIT REPORT IS PREPARED BY A RELATED ORGANIZATION. NOVANT HEALTH, INC. PRODUCES ITS OWN COMMUNITY BENEFIT REPORT, WHICH REPRESENTS THE HEALTH SYSTEM AS A WHOLE AND CAN BE FOUND ATHTTP://WWW.NOVANTHEALTH.ORG/GIVEBACK/COMMUNITYBENEFITREPORT.ASPX.PLEASE NOTE THAT THE NUMERIC INFORMATION IN THIS REPORT IS NOT BASED UPON THE FORM 990, SCHEDULE H CRITERIA, BUT RATHER IT HAS BEEN PREPARED IN ACCORDANCE WITH THE NORTH CAROLINA HOSPITAL ASSOCIATION REPORTING GUIDELINES. PART I, LINE 7: COSTS REPORTED IN THE TABLE OF CHARITY CARE AND CERTAIN OTHER COMMUNITY BENEFITS AMOUNTS ARE CALCULATED USING AN ENTITY SPECIFIC COST TO CHARGE RATIO BASED ON WORKSHEET 2 (RCC).PART I, LINE 7, COLUMN (F):THE AMOUNT OF BAD DEBT REMOVED FROM TOTAL EXPENSES (DENOMINATOR) WAS $32,581,295 PART II: NOVANT HEALTH COMMUNITY BUILDING ACTIVITIES IMPACTS THE HEALTH OF OUR COMMUNITY THROUGH PARTNERSHIPS WITH LOCAL AGENCIES DEDICATED TO IMPROVING THE LIVES OF ALL INDIVIDUALS. OUTREACH INCLUDES PROVIDING SUPPORT FOR ORGANIZATIONS SUCH AS HABITAT FOR HUMANITY AND LOCAL CHAMBERS OF COMMERCE, ASSISTING WITH COMMUNITY/COUNTY COALITIONS, PROVIDING EDUCATIONAL SEMINARS AND TRAINING FOR COMMUNITY WORKFORCES, AND SUPPORTING COMMUNITY AGENCIES SUCH AS ROTARY, LIONS CLUBS AND MORE. THROUGH EACH OF THESE PARTNER AGENCIES, NOVANT HEALTH ADDRESSES THE UNDERLYING ISSUES IMPACTING THE HEALTH OF OUR COMMUNITIES AND ENSURES THAT OUR COMMUNITIES GROW FOR YEARS TO COME. PART III, LINE 2: THE ALLOWANCE FOR BAD DEBTS IS DETERMINED BASED ON MANAGEMENT'S ASSESSMENT OF HISTORICAL AND EXPECTED NET COLLECTIONS, BUSINESS AND ECONOMIC CONDITIONS, THE AGE OF THE ACCOUNTS, TRENDS IN FEDERAL AND STATE GOVERNMENTAL HEALTHCARE COVERAGE AND OTHER COLLECTION INDICATORS. PART III, LINE 4: BAD DEBT EXPENSE ONLY REPRESENTS ACCOUNTS FOR WHICH COLLECTION EFFORTS HAVE BEEN MADE BUT NO PAYMENTS HAVE BEEN RECEIVED. DISCOUNTS ARE RECORDED AS EITHER CONTRACTUALS (FOR PATIENTS WHO DO NOT QUALIFY FOR CHARITY) OR AS CHARITY (FOR PATIENTS WHO DO QUALIFY FOR CHARITY). THE TEXT OF THE NOVANT HEALTH, INC. CONSOLIDATED FINANCIAL STATEMENTS READS: "THE ALLOWANCE FOR BAD DEBTS IS DETERMINED BASED ON MANAGEMENT'S ASSESSMENT OF HISTORICAL AND EXPECTED NET COLLECTIONS, BUSINESS AND ECONOMIC CONDITIONS, THE AGE OF THE ACCOUNTS, TRENDS IN FEDERAL AND STATE GOVERNMENTAL HEALTHCARE COVERAGE AND OTHER COLLECTION INDICATORS." PART III, LINE 8: THE METHODOLOGY USED TO DETERMINE THE MEDICARE ALLOWABLE COSTS REPORTED IN THE ORGANIZATION'S MEDICARE COST REPORT AS REFLECTED IN THE AMOUNT REPORTED IN PART III, LINE 6 IS DETERMINED BY FOLLOWING THE MEDICARE PRINCIPLES OF ALLOWABLE COSTS. COST FOR THE OVERHEAD DEPARTMENTS ARE STEPPED DOWN TO THE REMAINING COST CENTERS BASED ON STATISTICS FOR EACH OVERHEAD COST CENTER. ONCE THE STEP-DOWN PROCESS IS COMPLETE, A RATIO OF COST TO CHARGES IS DEVELOPED FOR EACH COST CENTER. THE RCC IS THEN APPLIED TO THE MEDICARE REVENUE BY COST CENTER AND TOTALED.IT SHOULD BE NOTED THAT THE MEDICARE COST REPORTS DO NOT ADDRESS ANY MANAGED CARE MEDICARE REVENUES, COSTS, OR RELATED SHORTFALL. THE TOTAL REVENUES REPORTED AS RECEIVED FROM MEDICARE IN LINE 5 OF SECTION B ARE ONLY REPRESENTATIVE OF MEDICARE FEE FOR SERVICE PAYMENTS RECEIVED. THE ALLOWABLE COSTS ON LINE 6 ARE SIGNIFICANTLY LOWER THAN THE ACTUAL EXPENDITURES. AS SUCH, THE SHORTFALL IS UNDERESTIMATED. EVERY HOSPITAL TREATS MEDICARE PATIENTS. SOME HOSPITALS ARE LOCATED IN HIGH MEDICARE POPULATION AREAS OR OFFER SERVICES DISPROPORTIONATELY USED BY MEDICARE PATIENTS. MEDICARE RATES AND NUMBERS OF MEDICARE PATIENTS ARE NOT NEGOTIATED. AS REIMBURSEMENT RATES DECLINE RELATIVE TO COSTS OF CARE, HOSPITALS CONTINUE TO SERVE THE MEDICARE POPULATION. WITHOUT THIS SERVICE THESE PATIENTS WOULD BECOME AN OBLIGATION TO THE GOVERNMENT. ANY UNREIMBURSED COSTS OF THIS CARE ARE A COMMUNITY BENEFIT PROVIDED BY THE HOSPITAL TO THE COMMUNITY AND GOVERNMENT. PART III, LINE 9B: THE ORGANIZATION'S BILLING AND COLLECTIONS POLICY DOES EXPLAIN ACTIONS AGAINST PATIENTS WHO HAVE OUTSTANDING DELINQUENT AMOUNTS, BUT THE POLICY DOES NOT CONTAIN PROVISIONS FOR COLLECTION PRACTICES AGAINST PATIENTS WHO ARE ELIGIBLE UNDER THE FINANCIAL ASSISTANCE POLICY (FAP). BEFORE ANY DELINQUENT BALANCES ARE REFERRED FOR COLLECTION, THE ORGANIZATION SCREENS THE ACCOUNT TO DETERMINE WHETHER A PATIENT IS FAP ELIGIBLE. PRINCE WILLIAM HOSPITAL PART V, SECTION B, LINE 11: ALL FINANCIAL ASSISTANCE POLICY (FAP) ELIGIBLE PATIENTS RECEIVE THE STANDARD SELF-PAY DISCOUNT OF 35% (WHICH IS THE AVERAGE COMMERCIAL PAYOR DISCOUNT AMOUNT) AND AN ADDITIONAL DISCOUNT BASED ON FEDERAL POVERTY LIMITS AS FOLLOWS: FPL CHARITY W/O %<200% 100%225% 87.5%250% 75.0%275% 62.5%300% 50.0%325% 37.5%350% 25.0%375% 12.5%>400% 0.0% PRINCE WILLIAM HOSPITAL PART V, SECTION B, LINE 18E: WE DID NOT CHECK BOXES FOR QUESTIONS 16, 17 AND 18 BECAUSE WE PROCEED WITH ALL REASONABLE EFFORTS TO DETERMINE ELIGIBILITY FOR FINANCIAL ASSISTANCE PRIOR TO INITIATING ANY COLLECTION ACTIONS. PRINCE WILLIAM HOSPITAL PART V, SECTION B, LINE 20D: ALL FINANCIAL ASSISTANCE POLICY (FAP) ELIGIBLE PATIENTS RECEIVE THE STANDARD SELF-PAY DISCOUNT OF 35% (WHICH IS THE AVERAGE COMMERCIAL PAYOR DISCOUNT AMOUNT) AND AN ADDITIONAL DISCOUNT BASED ON FEDERAL POVERTY LIMITS AS FOLLOWS: FPL CHARITY W/O %<200% 100%225% 87.5%250% 75.0%275% 62.5%300% 50.0%325% 37.5%350% 25.0%375% 12.5%>400% 0.0% PART VI, LINE 2: NEEDS ASSESSMENTTHE ORGANIZATION IS PART OF THE NOVANT HEALTHCARE SYSTEM, WHICH HAS A COMMUNITY BENEFIT COMMITTEE. THE COMMUNITY BENEFIT COMMITTEE IS RESPONSIBLE FOR ASSISTING THE HOSPITALS WITHIN THE HEALTHCARE SYSTEM WITH PREPARING COMMUNITY NEEDS ASSESSMENTS. THE COMMUNITY BENEFIT COMMITTEE IS MADE OF INDIVIDUALS REPRESENTING CORPORATE-WIDE DEPARTMENTS, SUCH AS COMMUNITY RELATIONS, LEGAL, TAX, INTERNAL AUDIT, MARKETING/COMMUNICATIONS, AS WELL AS INDIVIDUALS FROM VARIOUS DEPARTMENTS OF HOSPITAL OPERATIONS AND THE HEALTHCARE SYSTEM'S HOSPITAL FOUNDATIONS. EACH HOSPITAL, WITH THE ASSISTANCE OF THE COMMUNITY BENEFIT COMMITTEE, WILL IDENTIFY ORGANIZATIONS AND RESOURCES WITHIN ITS COMMUNITY TO CONTRIBUTE TO THE HOSPITAL'S COMMUNITY NEEDS ASSESSMENT. THESE ORGANIZATIONS AND RESOURCES INCLUDE LOCAL HEALTH DEPARTMENTS, UNITED WAY, UNIVERSITIES, PUBLIC HEALTH DEPARTMENTS, ETC. THE EXISTING COMMUNITY HEALTH ASSESSMENTS PREPARED BY OTHER ORGANIZATIONS IN THE COMMUNITY WILL BE COMBINED WITH INTERNAL HOSPITAL DATA AND INFORMATION COLLECTED FROM LOCAL AGENCIES TO BECOME THE HOSPITAL'S COMMUNITY NEEDS ASSESSMENT. EACH HOSPITAL HAS ALSO TRADITIONALLY RESPONDED TO REQUESTS FOR CERTAIN COMMUNITY BENEFIT ACTIVITIES OR PROGRAMS FROM PUBLIC AGENCIES OR COMMUNITY GROUPS AND THIS WILL ALSO BE INCLUDED IN THE HOSPITAL'S COMMUNITY NEEDS ASSESSMENT. ONCE THE COMMUNITY NEEDS ASSESSMENT IS COMPLETED, WHICH WILL BE EVERY THREE YEARS, THE HOSPITAL WILL PRIORITIZE THE NEEDS BY DETERMINING WHAT HOSPITAL RESOURCES ARE AVAILABLE TO MEET THE NEEDS AND WHAT OTHER COMMUNITY RESOURCES ARE BEING USED TO MEET A PARTICULAR NEED. THE HOSPITAL WILL DEVELOP A COMMUNITY BENEFIT PLAN, WHICH WILL BE REVIEWED AND UPDATED AS NECESSARY, AT LEAST EVERY THREE YEARS. ALL HOSPITALS' COMMUNITY NEEDS ASSESSMENTS WILL BE MADE AVAILABLE TO THE PUBLIC. PART VI, LINE 3: PATIENT EDUCATION OF ELIGIBILITY FOR ASSISTANCEAS A NOT-FOR-PROFIT ORGANIZATION, NOVANT HEALTH IS COMMITTED TO PROVIDING OUTSTANDING HEALTHCARE TO ALL MEMBERS OF OUR COMMUNITIES, REGARDLESS OF THEIR ABILITY TO PAY. OUR ACUTE CARE FACILITIES PROVIDE CARE IN 35 COUNTIES ACROSS THREE STATES. ADDITIONALLY, OUR PHYSICIANS AND ACUTE CARE FACILITIES OFFER CARE TO NATIONAL AND INTERNATIONAL MISSION PATIENTS. OUR FINANCIAL COUNSELING TEAMS ARE CONSTANTLY WORKING WITH THE PATIENTS WITHIN OUR COMMUNITIES TO UNDERSTAND THEIR NEEDS AND ENSURE THAT OUR POLICIES AND PROCESSES ADDRESS THESE NEEDS. WE ALSO MAINTAIN CONTRACTS WITH MEDICAID ELIGIBILITY VENDORS AND LOCAL DEPARTMENT OF SOCIAL SERVICES TEAMS TO HAVE EMBEDDED CASE WORKERS WITHIN OUR FACILITIES. THESE TEAMS OFFER ADDITIONAL SUPPORT IN PROCESSING AND ASSESSING HOW WE SERVE THE FINANCIAL NEEDS OF OUR PATIENTS. BASED ON THE ASSESSMENTS OF OUR COMMUNITIES, NOVANT HEALTH HAS DEVELOPED FINANCIAL ASSISTANCE POLICIES AND PROGRAMS THAT ADDRESS THE FINANCIAL NEEDS OR OUR PATIENTS. WE PRIDE OURSELVES IN THE TRANSPARENCY OF OUR PROGRAMS AND THE EDUCATION WE OFFER OUR PATIENTS AROUND OUR FINANCIAL ASSISTANCE POLICIES. OUR PROGRAMS ARE DOCUMENTED ON OUR CORPORATE WEBSITE AS WELL AS EACH INDIVIDUAL FACILITY'S WEBSITE, ALONG WITH CONTACT INFORMATION FOR OUR FINANCIAL COUNSELORS. ADDITIONALLY, OUR PROGRAMS ARE DOCUMENTED ON PATIENT FLYERS THROUGHOUT THE NOVANT AFFILIATED FACILITIES AND PHYSICIAN OFFICES. OUR PATIENT ACCESS SPECIALISTS, FINANCIAL COUNSELORS AND BUSINESS OFFICE TEAMS WORK WITH ALL ELIGIBLE PATIENTS TO EDUCATE THEM ON THE VARIOUS OPTIONS AVAILABLE VIA OUR FINANCIAL ASSISTANCE PROGRAMS OR GOVERNMENT SPONSORED CARE. FINALLY, WE WORK WITH LOCAL AREA FREE HEALTH CLINICS AND OTHER CHARITABLE ORGANIZATIONS TO PROVIDE CONTINUATION OF CARE FOR THEIR PATIENTS. IN ADDITION TO OUR FINANCIAL COUNSELING PROCESSES USED TO IDENTIFY CHARITY CARE PATIENTS, OUR COLLECTIONS PROCESSES WITHIN OUR BUSINESS OFFICES ALSO HELP IDENTIFY PATIENTS WHO ARE ALREADY ELIGIBLE FOR CHARITY OR WHO MAY BE ELIGIBLE BASED ON THEIR STATUS WITHIN THE FEDERAL POVERTY GUIDELINES ("FPG"). WE UTILIZE PREVIOUSLY SUBMITTED PATIENT DOCUMENTATION AND CREDIT AGENCY REPORTED FPG FOR DETERMINATION. SUPPORTING DOCUMENTS ARE VALID 6 MONTHS FROM THE DATE OF SUBMISSION. OUR POLICIES ARE CONSIDERED FLUID AND ARE UPDATED FREQUENTLY BASED ON LOCAL AND NATIONAL MARKET STANDARDS AND NATIONAL ECONOMIC CONDITIONS. ANY UPDATES TO OUR POLICIES REQUIRE MULTI-LEVEL LEADERSHIP APPROVAL AND ARE ULTIMATELY APPROVED BY THE NOVANT EXECUTIVE TEAM. PART VI, LINE 4: COMMUNITY INFORMATIONTHE ORGANIZATION DEFINES ITS COMMUNITY BY ITS PRIMARY SERVICE AREA (MANASSAS PSA + HAYMARKET PSA), WHICH IS COMPOSED OF THE FOLLOWING ZIP CODES: 20108 (CITY OF MANASSAS - MANASSAS); 20109 (PRINCE WILLIAM COUNTY - MANASSAS); 20110 (CITY OF MANASSAS - MANASSAS); 20111(PRINCE WILLIAM COUNTY - MANASSAS); 20112 (PRINCE WILLIAM COUNTY - MANASSAS); 20113 (CITY OF MANASSAS - MANASSAS); 20136 (PRINCE WILLIAM COUNTY - BRISTOW); 20137 (FAUQUIER COUNTY - BROAD RUN); 20143 (PRINCE WILLIAM COUNTY - CATHARPIN); 20155 (PRINCE WILLIAM COUNTY - GAINESVILLE); 20156 (PRINCE WILLIAM COUNTY - GAINESVILLE); 20168 (PRINCE WILLIAM COUNTY - HAYMARKET); 20169 (PRINCE WILLIAM COUNTY - HAYMARKET); 20181 (PRINCE WILLIAM COUNTY - NOKESVILLE); 20182 (PRINCE WILLIAM COUNTY - NOKESVILLE); AND 20198 (FAUQUIER COUNTY - THE PLAINS). ACCORDING TO TRUVEN HEALTH DATA, THE SPECIFIC POPULATION GROUPS (ETHNIC AND CULTURAL) ARE AS FOLLOWS: WHITE NON-HISPANIC (131,685) 52.7%; BLACK NON-HISPANIC (29,383) 11.8%; HISPANIC (57,676) 23.1%; ASIAN & PACIFIC ISLAND NON-HISPANIC (21,653) 8.7%; OTHERS (9,388) 3.8%; FOR A TOTAL POPULATION OF 249,785. ACCORDING TO TRUVEN HEALTH DATA, THE MEDIAN HOUSEHOLD INCOME LEVEL WAS $109,841. ACCORDING TO TRUVEN HEALTH DATA, THE AGE BREAKDOWN IS AS FOLLOWS: 0-17 YEARS (71,513) 28.6%; 18-64 YEARS (156,907) 62.8; 65+ YEARS (21,365) 8.6%. PART VI, LINE 5: PROMOTION OF COMMUNITY HEALTHTHE ORGANIZATION FURTHERS ITS EXEMPT PURPOSES BY DOING THE FOLLOWING:1. ADOPTING A CHARITY CARE POLICY, WHICH PROVIDES FREE CARE TO INDIVIDUALS WHOSE INCOME IS AT OR BELOW 200% OF THE FEDERAL POVERTY LEVEL;2. REMAINING CERTIFIED BY THE U.S. DEPARTMENT OF HEALTH AND HUMAN SERVICES TO PROVIDE SERVICES TO ALL BENEFICIARIES OF MEDICARE, MEDICAID, AND OTHER GOVERNMENT PAYMENT PROGRAMS, AND PROVIDING SERVICES IN A NONDISCRIMINATORY MANNER TO SUCH BENEFICIARIES;3. OPERATING A FULL-TIME EMERGENCY ROOM WHICH IS OPEN TO AND ACCEPTS ALL PERSONS, REGARDLESS OF THEIR ABILITY TO PAY;4. MAINTAINING AN OPEN MEDICAL STAFF, SUBJECT TO EXCLUSIVE CONTRACTS FOR HOSPITAL-BASED SERVICES SUCH AS ANESTHESIOLOGY, RADIOLOGY, PATHOLOGY, HOSPITALIST, AND EMERGENCY DEPARTMENT SERVICES, TO THE EXTENT AN EXCLUSIVE CONTRACT FOR THOSE SERVICES IS REQUIRED TO OBTAIN PROPER STAFFING COVERAGE OR TO PERMIT A MORE EFFICIENT DELIVERY OF THOSE SERVICES WITHIN THE HOSPITAL FACILITY;5. MAINTAINING A GOVERNING BOARD CONSISTING PRIMARILY OF A BROAD CROSS-SECTION OF LEADERS IN THE COMMUNITY;6. ADOPTING AND APPLYING A CONFLICT OF INTEREST POLICY, WHICH APPLIES TO THE GOVERNING BOARD AND ORGANIZATION OFFICERS;7. PROVIDING HEALTH EDUCATION LECTURES AND WORKSHOPS. 8. PROVIDING HEALTH FAIRS, EDUCATION ON SPECIFIC DISEASES OR CONDITIONS, AND HEALTH PROMOTION AND WELLNESS PROGRAMS TO THE COMMUNITIES IT SERVES;9. PROVIDING SUPPORT GROUPS AND SELF HELP PROGRAMS TO THE COMMUNITIES IT SERVES;10. PROVIDING COMMUNITY-BASED CLINICAL SERVICES, INCLUDING WITHOUT LIMITATION, HEALTH SCREENINGS AND CLINICS FOR UNINSURED OR UNDERINSURED PERSONS TO THE COMMUNITIES IT SERVES; 11. PROVIDING HEALTHCARE SUPPORT SERVICES, INCLUDING WITHOUT LIMITATION, INFORMATION AND REFERRAL TO COMMUNITY SERVICES, CASE MANAGEMENT OF UNDERINSURED AND UNINSURED PERSONS, TELEPHONE INFORMATION SERVICES AND ASSISTANCE TO ENROLL IN PUBLIC PROGRAMS, SUCH AS SCHIP AND MEDICAID TO THE COMMUNITIES IT SERVES; 12. PROVIDING SUBSIDIZED HEALTH SERVICES AND CLINICAL PROGRAMS TO THE COMMUNITIES IT SERVES; 13. PROVIDING CASH AND IN-KIND CONTRIBUTIONS TO NONPROFIT COMMUNITY HEALTHCARE ORGANIZATIONS IN THE COMMUNITIES IT SERVES; AND14. GENERALLY PROMOTING THE HEALTH, WELLNESS, AND WELFARE OF THE COMMUNITIES IT SERVES BY PROVIDING QUALITY HEALTHCARE SERVICES AT REASONABLE COST.FOR SPECIFIC EXAMPLES OF THIS ORGANIZATION'S COMMUNITY BENEFIT ACTIVITIES, WHICH FURTHER THE ORGANIZATION'S EXEMPT PURPOSES (AND THOSE OF ALL HOSPITALS AND HEALTHCARE FACILITIES IN THE SAME HEALTHCARE SYSTEM), PLEASE SEE THE NOVANT HEALTH COMMUNITY BENEFIT REPORT, LOCATED AT HTTP://WWW.NOVANTHEALTH.ORG/GIVEBACK/COMMUNITYBENEFITREPORT.ASPX.PLEASE NOTE THAT THE NUMERIC INFORMATION IN THIS REPORT IS NOT BASED UPON THE FORM 990, SCHEDULE H CRITERIA, BUT RATHER IT HAS BEEN PREPARED IN ACCORDANCE WITH THE NORTH CAROLINA HOSPITAL ASSOCIATION REPORTING GUIDELINES. PART VI, LINE 6: AFFILIATED HEALTH CARE SYSTEMTHE ORGANIZATION IS AN INTEGRAL PART OF THE NOVANT HEALTH SYSTEM (COLLECTIVELY KNOWN AS "NOVANT HEALTH"), A NOT-FOR-PROFIT INTEGRATED GROUP OF HOSPITALS, PHYSICIAN CLINICS, OUTPATIENT CENTERS AND OTHER HEALTHCARE SERVICE PROVIDERS. NOVANT HEALTH IS RANKED AS ONE OF OUR NATION'S TOP 25 INTEGRATED HEALTHCARE SYSTEMS - CARING FOR PATIENTS AND COMMUNITIES IN NORTH CAROLINA, VIRGINIA AND SOUTH CAROLINA. EACH HOSPITAL PROVIDES SUBSTANTIAL COMMUNITY BENEFIT TO THE COMMUNITY IT SERVES, AS REPORTED INDIVIDUALLY ON EACH HOSPITAL'S FORM 990, SCHEDULE H. THE COMMUNITY BENEFIT OF THE HEALTHCARE SYSTEM AS A WHOLE IS DOCUMENTED IN A SYSTEM-WIDE COMMUNITY BENEFIT REPORT, LOCATED AT HTTP://WWW.NOVANTHEALTH.ORG/GIVEBACK/COMMUNITYBENEFITREPORT.ASPX.PLEASE NOTE THAT THE NUMERIC INFORMATION IN THIS REPORT IS NOT BASED UPON THE FORM 990, SCHEDULE H CRITERIA, BUT RATHER IT HAS BEEN PREPARED IN ACCORDANCE WITH THE NORTH CAROLINA HOSPITAL ASSOCIATION REPORTING GUIDELINES. THE NOVANT HEALTHCARE SYSTEM ALSO INCLUDES AN ORGANIZATION THAT OWNS PHYSICIAN PRACTICES IN VIRGINIA, SOUTH CAROLINA, AND NORTH CAROLINA, WHICH PROVIDE ADDITIONAL COMMUNITY BENEFIT TO THEIR COMMUNITIES, AND FIVE HOSPITAL FOUNDATIONS, WHICH SUPPORT AND ENHANCE THE COMMUNITY BENEFIT ACTIVITIES IN THOSE HOSPITAL'S COMMUNITIES. FURTHER, THE NOVANT HEALTHCARE SYSTEM INCLUDES AMBULATORY SURGERY CENTERS, SKILLED NURSING FACILITIES, REHABILITATION PROGRAMS, AND OTHER OUTPATIENT FACILITIES, WHICH ALSO PROVIDE COMMUNITY BENEFIT TO THEIR COMMUNITIES. THERE ARE SIGNIFICANT COMMUNITY BENEFIT ACTIVITIES WITHIN THE NOVANT HEALTH SYSTEM, WHICH MAY NOT BE REPORTABLE ON A SCHEDULE H BECAUSE THEY ARE NOT CONDUCTED BY AN ENTITY WHICH OWNS OR OPERATES A HOSPITAL. THE HEALTHCARE SYSTEM HAS A COMMUNITY BENEFIT COMMITTEE, WHICH WILL OVERSEE AND ASSIST ALL TAX-EXEMPT HOSPITALS WITHIN NOVANT HEALTH IN PREPARING THEIR COMMUNITY NEEDS ASSESSMENTS AND COMMUNITY BENEFIT PLANS. THE GOAL OF HAVING A SYSTEM-WIDE COMMITTEE IS TO IDENTIFY COMMUNITY BENEFIT ACTIVITIES THAT ARE DUPLICATIVE IN COMMUNITIES AND TO STREAMLINE AND COORDINATE EFFORTS TO RESULT IN BETTER AND MORE EFFICIENT USES OF RESOURCES, WHICH COULD LEAD TO ADDITIONAL RESOURCES TO BE ALLOCATED TO MEET OTHER COMMUNITY NEEDS, AND TO REPLICATE SUCCESSFUL PROGRAMS AND ACTIVITIES IN COMMUNITIES WHERE A SIMILAR NEED IS INDICATED. ALL OF THE TAX-EXEMPT HOSPITALS WITHIN THE NOVANT HEALTHCARE SYSTEM ARE COMMITTED TO IMPROVING THE HEALTH OF THEIR COMMUNITIES AND PROVIDING COMMUNITY BENEFIT ACTIVITIES TO SUPPORT THEIR MISSION. PART VI, LINE 7: STATE FILING OF COMMUNITY BENEFIT REPORT PRINCE WILLIAM HOSPITAL FILES A COMMUNITY BENEFIT REPORT WITH THE VIRGINIA HOSPITAL AND HEALTHCARE ASSOCIATION IN ACCORDANCE WITH THEIR REPORTING GUIDELINES FOR PURPOSES OF ADVOCACY AND THE STATE'S REPORTING REQUIREMENTS. 1 SKILLSOURCE GROUP INC 8330 BOONE BLVD SUITE 450 VIENNA VA 22182 300129320 501(C)(3) 20131 COMMUNITY DEVELOPMENT MISSIONARIES OF OUR LADY OF DIVINE MERCY 8170 FLANNERY CT MANASSAS VA 20109 204572642 501(C)(3) 15000 COMMUNITY DEVELOPMENT PERSONAL CARE SERVICES 2085 FRONTIS PLAZA BLVD WINSTON SALEM NC 27103 541291284 501(C)(3) 64263 COMMUNITY DEVELOPMENT 3 0 EDUCATION SCHOLARSHIPS 4 8500 PART I, LINE 2 - PROCEDURES FOR MONITORING THE USE OF GRANT FUNDS THE ORGANIZATION IS AN AFFILIATE IN AN INTEGRATED HEALTHCARE SYSTEM AND FOLLOWS A SYSTEM-WIDE CORPORATE POLICY WITH STANDARDIZED GUIDELINES THAT ARE TO BE USED IN REVIEWING THE ELIGIBILITY AND SELECTION OF GRANTEES RECEIVING CERTAIN EXEMPT PURPOSE FUNDS. THE ORGANIZATION MAINTAINS DOCUMENTATION OF THE ELIGIBILITY AND SELECTION CRITERIA AND RECORDS OF THE AMOUNTS ARE MAINTAINED VIA THE GENERAL LEDGER. FUNDS ARE GENERALLY NOT TRACKED AFTER BEING GRANTED, AS THE ORIGINAL ELIGIBILITY AND SELECTION CRITERIA HAVE ALREADY BEEN MET. X X X X X X 1 0 1 1 0 0 0 0 0 0 0 ARMATOCARL STEVEN 0 934520 0 686576 0 44198 0 1102500 0 30554 0 2798348 0 0 MAGALSKI JRJOSEPH JOHN 0 307690 0 210773 0 2212 0 15000 0 14690 0 550365 0 0 ROBSONMELISSA L 374011 0 233300 0 18738 0 16106 0 29207 0 671362 0 0 0 CHAVEZLAURA J 135129 0 12844 0 9495 0 8682 0 25448 0 191598 0 0 0 RILEYROBERT W 195054 0 40707 0 32907 0 11908 0 18698 0 299274 0 0 0 KRENYTZKYSTEPHEN 275638 0 90817 0 10031 0 17954 0 22101 0 416541 0 0 0 HOLTBEATRICE M 175017 0 19157 0 18982 0 5425 0 16547 0 235128 0 0 0 KHOTVIKRAM S 192675 0 484 0 45823 0 13554 0 1759 0 254295 0 0 0 MURTAZASYED J 185280 0 0 0 27931 0 12893 0 7066 0 233170 0 0 0 REDDYSWARNA 180470 0 0 0 30078 0 9351 0 22672 0 242571 0 0 0 TIPPLECYNDA M 9537 0 0 0 253583 0 598 0 6964 0 270682 0 0 0 PART I, LINE 1A FRINGE OR EXPENSE EXPLANATION FIRST-CLASS OR CHARTER TRAVEL: FIRST-CLASS OR CHARTER TRAVEL IS NOT A COVERED TRAVEL EXPENSE FOR EXECUTIVES; THEY ARE LIMITED TO BUSINESS OR COACH CLASS FARES COMMERCIAL FLIGHTS. HOWEVER, CHARTER TRAVEL IS AVAILABLE TO CERTAIN EXECUTIVES, BOARD MEMBERS, AND APPROVED BUSINESS PERSONNEL IN LIMITED CIRCUMSTANCES DEEMED TO INVOLVE BUSINESS NECESSITY. TRAVEL FOR COMPANIONS: COMPANIONS ARE ALLOWED ON CERTAIN CHARTER FLIGHTS PAID FOR BY THE ORGANIZATION. IN THAT CASE, THE VALUE OF THE COMPANION'S FLIGHT IS CALCULATED UNDER APPLICABLE TAX LAWS AND THAT AMOUNT IS INCLUDED IN THE EXECUTIVE'S TAXABLE INCOME AS PRESCRIBED BY THE APPLICABLE TAX LAWS. TAX INDEMNIFICATION AND GROSS-UP PAYMENTS: EXECUTIVES WHO PURCHASE SPLIT DOLLAR INSURANCE THROUGH THEIR DISCRETIONARY SPENDING ACCOUNT MAY HAVE THE ADDITIONAL INCOME TAX OWED ON THE PS-58 COSTS PAID BY THE ORGANIZATION. EXECUTIVES WHO RECEIVE TAXABLE RELOCATION INCOME MAY HAVE THE ADDITIONAL INCOME TAX OWED ON THE INCOME PAID BY THE ORGANIZATION. EXECUTIVES MAY RECEIVE AS SEVERANCE BENEFITS CASH PAYMENTS IN LIEU OF PREMIUMS PAID FOR COVERAGE OF CERTAIN GROUP BENEFITS THAT ENDED WITH THE EXECUTIVE'S TERMINATION. THE ORGANIZATION MAY PAY THE ADDITIONAL TAX OWED ON ACCOUNT OF THESE PAYMENTS. DISCRETIONARY SPENDING ACCOUNT: CERTAIN EXECUTIVES RECEIVE A DISCRETIONARY SPENDING ACCOUNT. THE DOLLAR AMOUNT IN THE ACCOUNT IS PRE-APPROVED BY THE COMPENSATION AND LEADERSHIP COMMITTEE OF THE NOVANT HEALTH BOARD. THE ACCOUNT CAN BE USED ONLY FOR AN APPROVED LIST OF EXPENDITURES. ALL OPTIONS OTHER THAN A DEFERRED, AT-RISK, COMPENSATION OPTION ARE CONSIDERED TAXABLE AND ARE INCLUDED IN THE EXECUTIVE'S TAXABLE INCOME AS PRESCRIBED BY THE APPLICABLE TAX LAWS. HOUSING ALLOWANCE OR RESIDENCE FOR PERSONAL USE: WE PROVIDE TEMPORARY HOUSING ALLOWANCES IN CERTAIN EXECUTIVE RECRUITMENT AND RELOCATION PACKAGES. IN THE CASE THAT SUCH EXPENSE IS NOT REIMBURSABLE UNDER THE ACCOUNTABLE PLAN RULES, THE VALUE IS CALCULATED UNDER APPLICABLE TAX LAWS AND THAT AMOUNT IS INCLUDED IN THE EXECUTIVE'S INCOME AS PRESCRIBED BY THE APPLICABLE TAX LAWS. HEALTH OR SOCIAL CLUB DUES OR INITIATION FEES: IN CASES WHERE CORPORATE MEMBERSHIPS ARE NOT AVAILABLE, A MEMBERSHIP MAY BE OBTAINED IN AN EXECUTIVE'S NAME WITH A "BUSINESS USE ONLY" RESTRICTION. AT THIS TIME NOVANT HAS ONE SUCH MEMBERSHIP. PART I, LINE 3 THE FILING ORGANIZATION IS AN AFFILIATE IN AN INTEGRATED HEALTHCARE SYSTEM AND IS SUPPORTED BY A PARENT ORGANIZATION THAT USES THE PROCESS DESCRIBED IN PART VI, LINE 15A OF THIS RETURN TO ESTABLISH THE COMPENSATION OF THE TOP MANAGEMENT OFFICIAL OF THE FILING ORGANIZATION. THIS PROCESS ADHERES TO THE REQUIREMENTS SET FORTH TO SECURE THE REBUTTABLE PRESUMPTION OF REASONABLENESS AND INCLUDES A REVIEW AND APPROVAL BY INDEPENDENT AND DISINTERESTED MEMBERS OF A COMPENSATION COMMITTEE, CONSULTATION WITH INDEPENDENT COMPENSATION CONSULTANTS, THE UTILIZATION OF THIRD-PARTY COMPARABILITY DATA SUCH AS PUBLISHED COMPENSATION SURVEYS, AND CONTEMPORANEOUS SUBSTANTIATION OF THE DELIBERATION AND DECISION. PART I, LINES 4A-B SEVERANCE, NONQUALIFIED, AND EQUITY-BASED PAYMENTS SEVERANCE NONQUALIFIED EQUITY-BASED TIPPLE, CYNDA M. 189,210 0 0 SUPPLEMENTAL INFORMATION PART III PART III - OTHER ADDITIONAL INFORMATION DESCRIPTIONS OF SUPPLEMENTAL EXECUTIVE BENEFITS INCLUDED IN PART VII AND SCHEDULE J: EXECUTIVE ANNUAL INCENTIVE PLAN: AS PART OF THE REPORTED COMPENSATION AMOUNTS, THE REPORTING ORGANIZATION PROVIDES ANNUAL INCENTIVE COMPENSATION TO OFFICERS AND KEY EMPLOYEES UNDER AN EXECUTIVE ANNUAL INCENTIVE PLAN. THE INCENTIVE PLAN IS DESIGNED TO OFFER OPPORTUNITIES FOR ADDITIONAL COMPENSATION, BUT ONLY TO THE EXTENT THAT ELIGIBLE EXECUTIVES HAVE PROVIDED EXTRAORDINARY SERVICES AND ACHIEVED EXTRAORDINARY RESULTS THAT MEET OR EXCEED PREDETERMINED GOALS IN THE AREAS OF QUALITY, PATIENT SATISFACTION, EMPLOYEE SATISFACTION AND FINANCIAL VITALITY. THESE GOALS ARE ESTABLISHED AND APPROVED BY INDEPENDENT AND DISINTERESTED MEMBERS OF THE NOVANT HEALTH BOARD OF TRUSTEES (WHO COMPRISE THE COMPENSATION AND LEADERSHIP COMMITTEE OF THE BOARD). THESE GOALS ARE WEIGHTED EQUALLY. THE ADDITIONAL COMPENSATION CAN RANGE ANYWHERE FROM ZERO TO A MAXIMUM PERCENTAGE OF BASE SALARY THAT DIFFERS BY THE CLASS OF EXECUTIVE; THIS MAXIMUM PERCENTAGE RANGES FROM 30% TO 70% OF BASE SALARY. IN ADDITION, THE INDEPENDENT AND DISINTERESTED MEMBERS OF THE BOARD OF TRUSTEES WHO OVERSEE THE INCENTIVE COMPENSATION PROGRAM APPLY TWO "CIRCUIT BREAKERS," WHICH ARE SUBSTANTIAL LEVELS OF ORGANIZATION-WIDE ACHIEVEMENT THAT MUST BE SATISFIED BEFORE ANY AWARDS ARE PAID TO ANY EXECUTIVE UNDER THE PROGRAM. THE INCENTIVE COMPENSATION AWARDS HAVE BEEN INCLUDED IN THE COMPENSATION AMOUNTS REPORTED IN PART VII AND IN COLUMN (B)(II) OF SCHEDULE J. THEY ARE REPORTED IN THE YEAR PAID. INDEPENDENT AND DISINTERESTED MEMBERS OF THE NOVANT HEALTH BOARD OF TRUSTEES (WHO COMPRISE THE COMPENSATION AND LEADERSHIP COMMITTEE OF THE BOARD) REVIEW, APPROVE, AND OVERSEE ALL ASPECTS AND ALL ELEMENTS OF EXECUTIVE COMPENSATION AND BENEFITS, INCLUDING THE AMOUNTS AWARDED UNDER THIS ANNUAL INCENTIVE PLAN. LONG-TERM INCENTIVE PLAN: THE REPORTING ORGANIZATION OFFERS A LONG-TERM INCENTIVE PLAN (THE "PLAN") TO CERTAIN KEY EXECUTIVES. THE PLAN TIES A KEY EXECUTIVE'S COMPENSATION TO THE ORGANIZATION'S LONG-TERM STRATEGIC PERFORMANCE, PROVIDES A RETENTION INCENTIVE FOR KEY EXECUTIVES, AND ALLOWS THE ORGANIZATION TO COMPETE IN THE MARKETPLACE FOR TOP LEADERSHIP TALENT. THE PLAN OPERATES ON THREE-YEAR PERFORMANCE CYCLES THAT BEGIN EACH YEAR. LONG-TERM STRATEGIC GOALS (IN THE PRINCIPAL AREAS OF QUALITY OF PATIENT CARE AND LONG-TERM FINANCIAL STRENGTH) ARE ESTABLISHED AND APPROVED FOR EACH CYCLE, IN ADVANCE, BY INDEPENDENT AND DISINTERESTED MEMBERS OF THE NOVANT HEALTH BOARD OF TRUSTEES (WHO COMPRISE THE COMPENSATION AND LEADERSHIP COMMITTEE OF THE BOARD). NOVANT HEALTH'S INTERNAL AUDIT DEPARTMENT REVIEWS THE METHODOLOGY AND PROCESS USED TO DETERMINE ACHIEVEMENT OF THE QUALITY METRICS. AWARDS ARE PAYABLE FOR A PARTICULAR THREE-YEAR PERFORMANCE CYCLE ONLY IF THE REQUISITE LEVEL OF COMMUNITY BENEFIT AND CHARITY CARE, ALONG WITH THE REQUIRED LEVEL OF FINANCIAL PERFORMANCE TO DEMONSTRATE LONG-TERM FINANCIAL STRENGTH, HAVE BEEN MET FOR THAT RESPECTIVE THREE-YEAR PERFORMANCE PERIOD. IF AN AWARD IS EARNED AT THE END OF A PERFORMANCE CYCLE, THEN THE INCENTIVE AWARD IS PAID OUT AND IS INCLUDED IN THE COMPENSATION AMOUNTS REPORTED IN PART VII AND IN COLUMN (B)(II) OF SCHEDULE J. THEY ARE REPORTED IN THE YEAR PAID. INDEPENDENT AND DISINTERESTED MEMBERS OF THE NOVANT HEALTH BOARD OF TRUSTEES (WHO COMPRISE THE COMPENSATION AND LEADERSHIP COMMITTEE OF THE BOARD) REVIEW, APPROVE, AND OVERSEE ALL ASPECTS AND ALL ELEMENTS OF EXECUTIVE COMPENSATION AND BENEFITS, INCLUDING THE AMOUNTS AWARDED UNDER THE PLAN. SCHEDULE J PART I LINE 4A - SEVERANCE PLAN: ELIGIBLE EXECUTIVES MAY RECEIVE SEVERANCE PAY THAT IS A SPECIFIED MULTIPLE OF ANNUAL COMPENSATION. THE SEVERANCE PAY WOULD BE PAID ONLY IN THE EVENT OF CERTAIN TYPES OF EMPLOYMENT TERMINATION, AND IS FURTHER CONTINGENT ON THE SATISFACTION OF OTHER CONDITIONS SUCH AS COMPLIANCE WITH A NON-COMPETITION COVENANT. ANY CURRENT YEAR PAYMENTS HAVE BEEN INCLUDED IN THE COMPENSATION AMOUNTS REPORTED IN PART VII AND IN COLUMN (B)(III) OF SCHEDULE J. INDEPENDENT AND DISINTERESTED MEMBERS OF THE NOVANT HEALTH BOARD OF TRUSTEES (WHO COMPRISE THE COMPENSATION AND LEADERSHIP COMMITTEE OF THE BOARD) REVIEW, APPROVE, AND OVERSEE ALL ASPECTS AND ALL ELEMENTS OF EXECUTIVE COMPENSATION AND BENEFITS, INCLUDING THE AMOUNTS AWARDED UNDER THIS SEVERANCE PLAN. SCHEDULE J PART I LINE 4B - SUPPLEMENTAL NONQUALIFIED RETIREMENT PLANS: THE SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN ("SERP") IS INTENDED TO SUPPORT RETENTION OF KEY EXECUTIVES, AND TO OFFER COMPETITIVE TOTAL COMPENSATION. THESE SERP BENEFITS ARE CALCULATED WITH REFERENCE TO A FORMULA THAT TAKES INTO CONSIDERATION THE EXECUTIVE'S TOTAL YEARS OF SERVICE WITH THE ORGANIZATION AND OTHER RETIREMENT INCOME. THESE BENEFITS ARE FULLY AT RISK AND WILL NOT BE PAID UNLESS THE EXECUTIVE PROVIDES SUBSTANTIAL FUTURE SERVICES TO THE ORGANIZATION. UNTIL THOSE REQUIREMENTS ARE SATISFIED, IF EVER, THE EXECUTIVE IS NOT ENTITLED TO ANY SERP BENEFIT. IF THE EXECUTIVE WERE TO HAVE LEFT THE ORGANIZATION VOLUNTARILY DURING THE YEAR FOR WHICH THESE AMOUNTS ARE BEING REPORTED (BEFORE REACHING BOTH AGE 55 AND HAVING FIVE YEARS OF SERVICE WITH THE ORGANIZATION), THE EXECUTIVE'S SERP BENEFIT WOULD HAVE BEEN ENTIRELY FORFEITED. THE SERP BENEFIT IS REDUCED AT THE RATE OF 2 PERCENTAGE POINTS PER YEAR FOR PAYMENTS RECEIVED BETWEEN THE AGES OF 55 AND 62. CURRENT YEAR PAYMENTS OF SERP BENEFITS HAVE BEEN INCLUDED IN THE COMPENSATION AMOUNTS REPORTED IN PART VII AND IN COLUMN (B)(III) OF SCHEDULE J. AN ESTIMATE OF THE ANNUAL INCREASE IN ACTUARIAL VALUE IS REPORTED AS DEFERRED COMPENSATION IN PART VII AND IN COLUMN (C) OF SCHEDULE J FOR ELIGIBLE EXECUTIVES. INDEPENDENT AND DISINTERESTED MEMBERS OF THE NOVANT HEALTH BOARD OF TRUSTEES (WHO COMPRISE THE COMPENSATION AND LEADERSHIP COMMITTEE OF THE BOARD) REVIEW, APPROVE, AND OVERSEE ALL ASPECTS AND ALL ELEMENTS OF EXECUTIVE COMPENSATION AND BENEFITS, INCLUDING THE AMOUNTS AWARDED UNDER THIS SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN. JESSICA BELDEN FAMILY MEMBER OF RICHARD BELDEN, BOARD MEMBER 20792 COMPENSATION PAID BY THE FILING ORGANIZATION TO A FAMILY MEMBER OF THE INTERESTED PERSON. 0 PRINCE WILLIAM OB-GYN (PWOG) ENTITY OWNED > 5% BY JOANNE GUTLIPH, BOARD MEMBER 134703 THE FILING ORGANIZATION HAS A LEASE IN PLACE WITH PWOG 0 ACTIVITES FORM 990, PART I, LINE 1: ORGANIZATION'S MISSION OR MOST SIGNIFICANT IN 2012, PRINCE WILLIAM HOSPITAL, A 170-BED NOVANT HEALTH ACUTE CARE HOSPITAL LOCATED IN MANASSAS, VA, FOCUSED ON PROVIDING COMMUNITY SUPPORT, CONSISTENT QUALITY, EXCELLENT SERVICE AND A REMARKABLE WORK ENVIRONMENT FOR STAFF. OUR HOSPITAL IS COMMITTED TO MEETING THE HEALTHCARE NEEDS OF RESIDENTS OF MANASSAS, MANASSAS PARK AND PRINCE WILLIAM COUNTY, ONE PERSON AT A TIME. THE PRINCE WILLIAM HOSPITAL IS PART OF THE NOVANT HEALTH SYSTEM (COLLECTIVELY KNOWN AS "NOVANT HEALTH"), A NOT-FOR-PROFIT INTEGRATED GROUP OF HOSPITALS, PHYSICIAN CLINICS, OUTPATIENT CENTERS AND OTHER HEALTHCARE SERVICE PROVIDERS. NOVANT HEALTH IS RANKED AS ONE OF OUR NATION'S TOP 25 INTEGRATED HEALTHCARE SYSTEMS - CARING FOR PATIENTS AND COMMUNITIES IN NORTH CAROLINA, VIRGINIA AND SOUTH CAROLINA. THE NOVANT HEALTH SYSTEM REPORTED $3.555 BILLION IN REVENUES IN 2012. WE ARE VERY PROUD OF OUR PATIENT FINANCIAL ASSISTANCE PROGRAM. WE WORK WITH INDIVIDUALS TO HELP QUALIFY THEM FOR PUBLIC ASSISTANCE, ESTABLISH A REASONABLE PAYMENT PLAN, DISCOUNT THEIR BILL OR PROVIDE THEM WITH FREE CHARITY CARE. IN ADDITION TO OUR FINANCIAL ASSISTANCE PROGRAMS, WE ARE PROUD OF THE QUALITY OF OUR SERVICES. THE HOSPITAL IS FULLY ACCREDITED BY THE JOINT COMMISSION, AN INDEPENDENT, NOT-FOR-PROFIT ORGANIZATION THAT ACCREDITS AND CERTIFIES HEALTHCARE ORGANIZATIONS NATIONWIDE THAT MEET CERTAIN PERFORMANCE STANDARDS. WE SUPPORT OTHER ORGANIZATIONS THAT PROVIDE HEALTH SERVICES, EDUCATION AND ASSISTANCE TO THE UNINSURED AND OVERALL COMMUNITY. SOME OF THESE ORGANIZATIONS INCLUDE THE PRINCE WILLIAM AREA FREE CLINIC, MEDICAL MISSIONARIES, MARCH OF DIMES, AMERICAN DIABETES ASSOCIATION AND THE AMERICAN CANCER SOCIETY. PRINCE WILLIAM HOSPITAL ALSO SUPPORTED AND PARTICIPATED IN NUMEROUS COMMUNITY EVENTS SUCH AS THE ANNUAL ROTARY CHILDREN'S WELLNESS FESTIVAL, HAYMARKET DAY AND THE CITY OF MANASSAS HEALTH FAIR. IN THE SPRING, WE PLANNED AND SPONSORED A DIABETES EXPO FOR THE COMMUNITY, OFFERING FREE OR LOW-COST SCREENINGS FOR GLUCOSE, CHOLESTEROL, BODY COMPOSITION, BLOOD PRESSURE AND HEMOGLOBIN A1C AS WELL AS PARTNERING WITH OUR PHYSICIAN SPECIALISTS IN THE FIELDS OF ENDOCRINOLOGY, OPHTHALMOLOGY AND PODIATRY TO PROVIDE QUESTION AND ANSWER SESSIONS FOR PERSONS WITH DIABETES. PRINCE WILLIAM HOSPITAL ALSO OFFERED A SERIES OF FREE EDUCATIONAL PHYSICIAN SEMINARS. THE 2012 PHYSICIAN COMMUNITY PROGRAMS COVERED THE SPECIALTIES OF OTOLARYNGOLOGY, CARDIOLOGY, RHEUMATOLOGY, ORTHOPAEDICS, NEUROSURGERY, PAIN MANAGEMENT, PULMONOLOGY AND SLEEP DISORDERS, AND ENDOCRINOLOGY. IN MAY 1992, PRINCE WILLIAM HOSPITAL, POTOMAC HOSPITAL (NOW SENTARA NORTHERN VIRGINIA MEDICAL CENTER), PRINCE WILLIAM MEDICAL SOCIETY AND THE PRINCE WILLIAM HEALTH DEPARTMENT ESTABLISHED THE PRINCE WILLIAM AREA FREE CLINIC. THE CLINIC, WHICH OPERATES SEVERAL DAYS EACH WEEK IN THREE LOCATIONS, IS A NOT-FOR-PROFIT ORGANIZATION THAT PROVIDES ACUTE AND CHRONIC MEDICAL CARE TO UNINSURED RESIDENTS IN PRINCE WILLIAM COUNTY. BOTH HOSPITALS CONTINUE TO PROVIDE FINANCIAL AND HUMAN RESOURCES TO CARE FOR FREE CLINIC PATIENTS. COMMUNITY BENEFIT REPORT: HTTP://WWW.NOVANTHEALTH.ORG/GIVEBACK/COMMUNITYBENEFITREPORT.ASPX THE COMMUNITY BENEFIT REPORT PREPARED BY NOVANT HEALTH IS A SYSTEM-WIDE REPORT THAT INCLUDES QUALITATIVE AND QUANTITATIVE INFORMATION. IN THIS REPORT, THE NOVANT HEALTH SYSTEM'S COMMUNITY BENEFIT WAS APPROXIMATELY $546,000,000 IN 2012. PLEASE NOTE THAT THE NUMERIC DATA IN THIS REPORT IS NOT BASED UPON THE FORM 990, SCHEDULE H CRITERIA, BUT RATHER IT HAS BEEN PREPARED IN ACCORDANCE WITH THE NORTH CAROLINA HOSPITAL ASSOCIATION REPORTING GUIDELINES. IT SHOULD NOT BE RELIED UPON AS THE ORGANIZATION'S FORM 990, SCHEDULE H COMMUNITY BENEFIT REPORT. FORM 990, PART III, LINE 1: MISSION, VISION AND VALUES MISSION: NOVANT HEALTH EXISTS TO IMPROVE THE HEALTH OF COMMUNITIES, ONE PERSON AT A TIME. VISION: WE, THE EMPLOYEES OF NOVANT AND OUR PHYSICIAN PARTNERS, WILL DELIVER THE MOST REMARKABLE PATIENT EXPERIENCE, IN EVERY DIMENSION, EVERY TIME. VALUES: COMPASSION: WE TREAT OUR CUSTOMERS AND THEIR FAMILIES, STAFF AND OTHER HEALTHCARE PROVIDERS AS FAMILY MEMBERS BY SHOWING THEM KINDNESS, PATIENCE, EMPATHY AND RESPECT. DIVERSITY: WE RECOGNIZE THAT EVERY PERSON IS DIFFERENT, EACH SHAPED BY UNIQUE LIFE EXPERIENCES. THIS ENABLES US TO BETTER UNDERSTAND ONE ANOTHER AND OUR CUSTOMERS. PERSONAL EXCELLENCE: WE STRIVE TO GROW PERSONALLY AND PROFESSIONALLY, AND WE APPROACH EACH SERVICE OPPORTUNITY WITH A POSITIVE, FLEXIBLE ATTITUDE. HONESTY AND PERSONAL INTEGRITY GUIDE ALL THAT WE DO. TEAMWORK: THE NEEDS AND EXPECTATIONS OF ANY ONE CUSTOMER ARE GREATER THAN THAT WHICH ONE PERSON'S SERVICE EFFORTS CAN SATISFY. WE SUPPORT EACH OTHER SO THAT TOGETHER AS A TEAM, WE CAN BE SUCCESSFUL IN THE EYE OF THE CUSTOMER AS A QUALITY SERVICE PROVIDER. FORM 990, PART I, LINE 6: THE NUMBER OF VOLUNTEERS REPORTED INCLUDES THOSE VOLUNTEERS SERVING AS BOARD MEMBERS. FORM 990, PART VI, SECTION A, LINE 2 FAMILY AND/OR BUSINESS RELATIONSHIPS: BUSINESS RELATIONSHIP STEVEN DANZIGER REXFORD PARR FORM 990, PART VI, SECTION A, LINE 6 CLASSES OF MEMBERS OR STOCKHOLDERS THE CORPORATION IS A NONPROFIT CORPORATION WITH MEMBERS (OR A MEMBER). FORM 990, PART VI, SECTION A, LINE 7A ELECTION OF MEMBERS AND THEIR RIGHTS NOVANT HEALTH, INC. APPOINTS ALL BOARD MEMBERS OF PRINCE WILLIAM HOSPITAL. FORM 990, PART VI, SECTION A, LINE 7B DECISIONS SUBJECT TO APPROVAL OF MEMBERS UPON APPROVAL BY NOVANT HEALTH, INC., PRINCE WILLIAM HEALTH SYSTEM APPROVES CERTAIN TRANSACTIONS INCLUDING AMENDMENTS TO THE ARTICLES AND BYLAWS OF THE CORPORATION, AND ADOPTION OF CERTAIN POLICIES TO BE IMPLEMENTED BY THE CORPORATION BOARD. FORM 990, PART VI, SECTION B, LINE 11 ORGANIZATION'S PROCESS TO REVIEW FORM 990 THE BOARD HAS DELEGATED REVIEW OF THE FORM 990 TO NOVANT HEALTH'S AUDIT AND COMPLIANCE COMMITTEE, WHICH OVERSEES TAX MATTERS FOR NOVANT HEALTH. THE AUDIT AND COMPLIANCE COMMITTEE IS THE REVIEW BODY FOR ALL OF THE FORM 990S FILED FOR ORGANIZATIONS WITHIN THE NOVANT HEALTH SYSTEM. THE AUDIT AND COMPLIANCE COMMITTEE MEETS BEFORE THE FORM 990S ARE FILED WITH THE IRS AND AFTER ALL BOARD MEMBERS HAVE RECEIVED A COPY OF THE FORM 990 AND A SUMMARY OF ITS CONTENTS. THE SENIOR DIRECTOR OF TAX AND LEGAL COUNSEL FOR NOVANT HEALTH ATTEND THE MEETING TO ANSWER ANY QUESTIONS AND ADDRESS ANY SIGNIFICANT DISCLOSURES WITHIN THE FORM 990. FORM 990, PART VI, SECTION B, LINE 12 FORM 990, PART VI, SECTION B, LINE 12A: WRITTEN COI POLICY THE ORGANIZATION IS PART OF THE INTEGRATED HEALTHCARE SYSTEM OPERATED BY NOVANT HEALTH, INC. ("NOVANT HEALTH"), THE PARENT ORGANIZATION. NOVANT HEALTH'S BYLAWS AUTHORIZE IT TO ESTABLISH CERTAIN POLICIES FOR ALL OF ITS SUBSIDIARIES WITHIN THE SYSTEM. ALL SUBSIDIARY ORGANIZATIONS FOLLOW ALL APPLICABLE NOVANT HEALTH CORPORATE POLICIES IN THEIR OPERATIONS. NOVANT HEALTH HAS ESTABLISHED A CONFLICT OF INTEREST POLICY, WHICH ALL SUBSIDIARY ORGANIZATIONS IN THE SYSTEM FOLLOW. THE INDIVIDUAL SUBSIDIARY ORGANIZATION'S BOARD OF TRUSTEES DO NOT SPECIFICALLY ADOPT OR APPROVE EACH OPERATING POLICY, AS THERE ARE HUNDREDS OF POLICIES THAT APPLY TO ALL SUBSIDIARY ORGANIZATIONS AND THEY CANNOT PRACTICABLY BE APPROVED BY ALL OF THE INDIVIDUAL BOARDS. FORM 990, PART VI, SECTION B, LINE 12B: COI DISCLOSURE THE ANSWER TO THIS QUESTION IS YES. HOWEVER, BECAUSE THE ANSWER TO 12A IS NO AS A RESULT OF THE ORGANIZATION'S BOARD NOT SPECIFICALLY ADOPTING A CONFLICT OF INTEREST POLICY, THE RETURN PREPARATION SOFTWARE WILL NOT ALLOW A YES ANSWER TO THIS QUESTION. AS NOTED IN THE RESPONSE TO 12A, THE ORGANIZATION FOLLOWS A CONFLICT OF INTEREST POLICY ESTABLISHED BY ITS PARENT ORGANIZATION, NOVANT HEALTH, INC. ("NOVANT HEALTH"), WHICH IS AUTHORIZED BY ITS BYLAWS TO ESTABLISH CERTAIN POLICIES FOR ALL OF ITS SUBSIDIARIES WITHIN THE SYSTEM. ALL SUBSIDIARY ORGANIZATIONS FOLLOW ALL APPLICABLE NOVANT HEALTH CORPORATE POLICIES IN THEIR OPERATIONS. THIS INCLUDES THE CONFLICT OF INTEREST POLICY, WHICH REQUIRES AN ANNUAL DISCLOSURE OF SITUATIONS THAT COULD GIVE RISE TO A CONFLICT. FORM 990, PART VI, SECTION B, LINE 12C: MONITORING AND ENFORCEMENT OF COI THE ANSWER TO THIS QUESTION IS YES. HOWEVER, BECAUSE THE ANSWER TO 12A IS NO AS A RESULT OF THE ORGANIZATION'S BOARD NOT SPECIFICALLY ADOPTING A CONFLICT OF INTEREST POLICY, THE RETURN PREPARATION SOFTWARE WILL NOT ALLOW A YES ANSWER TO THIS QUESTION. AS NOTED IN THE RESPONSE TO 12A, THE ORGANIZATION FOLLOWS A CONFLICT OF INTEREST POLICY ESTABLISHED BY ITS PARENT ORGANIZATION, NOVANT HEALTH, INC. ("NOVANT HEALTH"), WHICH IS AUTHORIZED BY ITS BYLAWS TO ESTABLISH CERTAIN POLICIES FOR ALL OF ITS SUBSIDIARIES WITHIN THE SYSTEM. ALL SUBSIDIARY ORGANIZATIONS FOLLOW ALL APPLICABLE NOVANT HEALTH CORPORATE POLICIES IN THEIR OPERATIONS. THIS INCLUDES THE CONFLICT OF INTEREST POLICY. THE ORGANIZATION'S TRUSTEE CONFLICT OF INTEREST POLICY APPLIES TO ALL TRUSTEES, PRINCIPAL OFFICERS OR MEMBERS OF A COMMITTEE WITH BOARD DELEGATED POWERS INCLUDING ANY APPLICABLE DISREGARDED ENTITIES. ALL TRUSTEES ARE SENT AN ANNUAL DISCLOSURE FORM. ANY POSITIVE ANSWERS ON THE TRUSTEE ANNUAL DISCLOSURE FORM ARE REVIEWED BY THE GENERAL COUNSEL. IF THE RELATIONSHIP DISCLOSED IS DETERMINED NOT TO POSE A POTENTIAL CONFLICT OF INTEREST GENERALLY, THEN NO ACTION IS TAKEN. WITH RESPECT TO PARTICULAR TRANSACTIONS THAT COME BEFORE THE BOARD, THE CONFLICT OF INTEREST POLICY WOULD BE FOLLOWED. THE POTENTIAL CONFLICT OF INTEREST WOULD BE DISCLOSED BY THE BOARD MEMBER BEFORE A VOTE ON THE TRANSACTION AND THE REST OF THE BOARD WOULD DETERMINE WHETHER A CONFLICT OF INTEREST EXISTS. IF THE REST OF THE BOARD DETERMINED THAT A CONFLICT OF INTEREST EXISTED THEN THE BOARD MEMBER WITH THE CONFLICT OF INTEREST WOULD NOT PARTICIPATE IN THE DELIBERATIONS AND VOTE. FORM 990, PART VI, SECTION B, LINE 13: WRITTEN WHISTLEBLOWER POLICY THE ORGANIZATION IS PART OF THE INTEGRATED HEALTHCARE SYSTEM OPERATED BY NOVANT HEALTH, INC. ("NOVANT HEALTH"), THE PARENT ORGANIZATION. NOVANT HEALTH'S BYLAWS AUTHORIZE IT TO ESTABLISH CERTAIN POLICIES FOR ALL OF ITS SUBSIDIARIES WITHIN THE SYSTEM. ALL SUBSIDIARY ORGANIZATIONS FOLLOW ALL APPLICABLE NOVANT HEALTH CORPORATE POLICIES IN THEIR OPERATIONS. NOVANT HEALTH HAS ESTABLISHED A WHISTLEBLOWER POLICY, WHICH ALL SUBSIDIARY ORGANIZATIONS IN THE SYSTEM FOLLOW. THE INDIVIDUAL SUBSIDIARY ORGANIZATION'S BOARD OF TRUSTEES DO NOT SPECIFICALLY ADOPT OR APPROVE EACH OPERATING POLICY, AS THERE ARE HUNDREDS OF POLICIES THAT APPLY TO ALL SUBSIDIARY ORGANIZATIONS AND THEY CANNOT PRACTICABLY BE APPROVED BY ALL OF THE INDIVIDUAL BOARDS. FORM 990, PART VI, SECTION B, LINE 14: WRITTEN DOCUMENT RETENTION AND DESTRUCTION POLICY THE ORGANIZATION IS PART OF THE INTEGRATED HEALTHCARE SYSTEM OPERATED BY NOVANT HEALTH, INC. ("NOVANT HEALTH"), THE PARENT ORGANIZATION. NOVANT HEALTH'S BYLAWS AUTHORIZE IT TO ESTABLISH CERTAIN POLICIES FOR ALL OF ITS SUBSIDIARIES WITHIN THE SYSTEM. ALL SUBSIDIARY ORGANIZATIONS FOLLOW ALL APPLICABLE NOVANT HEALTH CORPORATE POLICIES IN THEIR OPERATIONS. NOVANT HEALTH HAS ESTABLISHED A DOCUMENT RETENTION AND DESTRUCTION POLICY, WHICH ALL SUBSIDIARY ORGANIZATIONS IN THE SYSTEM FOLLOW. THE INDIVIDUAL SUBSIDIARY ORGANIZATION'S BOARD OF TRUSTEES DO NOT SPECIFICALLY ADOPT OR APPROVE EACH OPERATING POLICY, AS THERE ARE HUNDREDS OF POLICIES THAT APPLY TO ALL SUBSIDIARY ORGANIZATIONS AND THEY CANNOT PRACTICABLY BE APPROVED BY ALL OF THE INDIVIDUAL BOARDS. FORM 990, PART VI, SECTION B, LINE 15 FORM 990, PART VI, SECTION B, LINE 15A: COMPENSATION PROCESS FOR TOP OFFICIAL INDEPENDENT AND DISINTERESTED MEMBERS OF THE NOVANT HEALTH BOARD OF TRUSTEES (WHO COMPRISE THE COMPENSATION AND LEADERSHIP COMMITTEE OF THE BOARD) REVIEW, APPROVE, AND OVERSEE ALL ASPECTS OF COMPENSATION AND BENEFITS FOR CERTAIN LEADERS AND EXECUTIVES ("EXECUTIVES") SERVING RELATED OR DISREGARDED ENTITIES. THE COMMITTEE WORKS WITH AN INDEPENDENT COMPENSATION CONSULTANT, USES THIRD PARTY COMPARABILITY DATA FOR FUNCTIONALLY SIMILAR POSITIONS AT SIMILARLY SITUATED ORGANIZATIONS, AND MAKES SURE THAT TOTAL COMPENSATION AND BENEFITS FOR EACH EXECUTIVE DO NOT EXCEED FAIR MARKET VALUE WHEN COMPARED TO THE MARKET DATA FOR SIMILAR POSITIONS. THE COMMITTEE REVIEWS AND APPROVES EXECUTIVE COMPENSATION AND BENEFITS ANNUALLY, CONSISTENT WITH THE WRITTEN EXECUTIVE COMPENSATION PHILOSOPHY OF NOVANT HEALTH, AND IN A MANNER THAT QUALIFIES FOR THE REBUTTABLE PRESUMPTION OF REASONABLENESS, THEREBY ASSURING THAT TOTAL COMPENSATION AND BENEFITS PROVIDED TO EACH EXECUTIVE IS REASONABLE. THE COMMITTEE REVIEWS AND APPROVES EACH ITEM OF THE NOVANT HEALTH SYSTEM CEO'S COMPENSATION AND BENEFITS. FORM 990, PART VI, SECTION B, LINE 15B: COMPENSATION PROCESS FOR OFFICERS INDEPENDENT AND DISINTERESTED MEMBERS OF THE NOVANT HEALTH BOARD OF TRUSTEES (WHO COMPRISE THE COMPENSATION AND LEADERSHIP COMMITTEE OF THE BOARD) REVIEW, APPROVE, AND OVERSEE ALL ASPECTS OF COMPENSATION AND BENEFITS FOR CERTAIN LEADERS AND EXECUTIVES ("EXECUTIVES") SERVING RELATED OR DISREGARDED ENTITIES. THE COMMITTEE WORKS WITH AN INDEPENDENT COMPENSATION CONSULTANT, USES THIRD PARTY COMPARABILITY DATA FOR FUNCTIONALLY SIMILAR POSITIONS AT SIMILARLY SITUATED ORGANIZATIONS, AND MAKES SURE THAT TOTAL COMPENSATION AND BENEFITS FOR EACH EXECUTIVE DO NOT EXCEED FAIR MARKET VALUE WHEN COMPARED TO THE MARKET DATA FOR SIMILAR POSITIONS. THE COMMITTEE REVIEWS AND APPROVES EXECUTIVE COMPENSATION AND BENEFITS ANNUALLY, CONSISTENT WITH THE WRITTEN EXECUTIVE COMPENSATION PHILOSOPHY OF NOVANT HEALTH, AND IN A MANNER THAT QUALIFIES FOR THE REBUTTABLE PRESUMPTION OF REASONABLENESS, THEREBY ASSURING THAT TOTAL COMPENSATION AND BENEFITS PROVIDED TO EACH EXECUTIVE IS REASONABLE. LASTLY, IT REVIEWS AND APPROVES ALL OF THE ELEMENTS AND SPECIFICATIONS INCLUDED IN ALL OTHER EXECUTIVE AND LEADER COMPENSATION PLANS AND PROGRAMS (E.G., INCENTIVE PLAN DESIGN, AWARD OPPORTUNITIES, ETC.). FORM 990, PART VI, SECTION C, LINE 19 GOVERNING DOCUMENTS DISCLOSURE THE AUDITED CONSOLIDATED FINANCIAL STATEMENTS CONTAINING ALL ORGANIZATIONS IN THE NOVANT HEALTH SYSTEM ARE POSTED TO THE NOVANT HEALTH WEBSITE. THE GOVERNING DOCUMENTS AND CONFLICT OF INTEREST POLICY ARE NOT AVAILABLE TO THE PUBLIC. FORM 990, PART VII, SECTION A, COLUMN B: RELATED ORGANIZATIONS THE ORGANIZATION EMPLOYS CERTAIN EXECUTIVES WHOSE ROLES ARE SUCH THAT THEY PROVIDE SERVICES TO NOT ONLY THE ORGANIZATION, BUT ALSO TO SOME OR ALL OF THE OTHER TAX-EXEMPT ORGANIZATIONS WITHIN THE NOVANT HEALTHCARE SYSTEM. FOR EXAMPLE, MANY OF THESE EXECUTIVES' ROLES FOCUS ON PARTICULAR SERVICE LINES WHICH CROSS THE VARIOUS GEOGRAPHIC MARKETS OUR ORGANIZATIONS SERVE, THUS THE SERVICES PROVIDED BY THESE EXECUTIVES MAY BENEFIT AND BE RECEIVED BY MULTIPLE ORGANIZATIONS WITHIN THE SYSTEM. THE EXECUTIVES DO NOT ALLOCATE THEIR HOURS BETWEEN THE VARIOUS ORGANIZATIONS, BUT RATHER THEIR TIME SPENT ON SERVICES TO THE ORGANIZATION IS INCLUSIVE OF SERVICES TO ALL OF THE ORGANIZATIONS THEY SERVE WITHIN THE SYSTEM. CHANGES IN NET ASSETS OR FUND BALANCES: FORM 990, PART XI, LINE 9: AFFILIATE TRANSFERS: -8,976,443. PENSION ADJUSTMENT: 11,222,443. MALPRACTICE INSURANCE: -237,581. K-1 ADJUSTMENTS: -1,649,412. MERGER WITH CONTINUING CARE SERVICES: 6,355,602. ROUNDING: 2. 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