2012-11-13T13:42:23-06:00 2011-12-31 990 2011-01-01 560547479 ROWAN REGIONAL MEDICAL CENTER INC ROWA 3367182803 2085 FRONTIS PLAZA BLVD WINSTON SALEM NC 27103 FRED HARGETT 3367182803 2012-11-13 2011 2016-02-24 21:20:13Z JEFFERY LINDSAY 2085 FRONTIS PLAZA BLVD WINSTON SALEM NC 27103 165437946 0 X WWW.ROWAN.ORG X 1933 NC SEE SCHEDULE O 16 12 1520 227 3063072 822794 168199 261015 160843909 160845915 299533 958266 1193870 1894064 162505511 163959260 75995 160114 0 0 73551381 74811127 0 0 0 94624348 98881715 168251724 173852956 -5746213 -9893696 185666845 183245787 107628876 126455615 78037969 56790172 X SEE SCHEDULE O 0 0 154001984 160114 159196065 CONSISTENT WITH THE ORGANIZATION'S EXEMPT PURPOSE, ROWAN REGIONAL MEDICAL CENTER, INC. (RRMC) PROMOTES THE HEALTH AND WELL-BEING OF THE INHABITANTS OF THE COMMUNITY IN WHICH THE ORGANIZATION OPERATES, SERVING ALL MEMBERS OF THE COMMUNITY REGARDLESS OF THEIR ABILITY TO PAY. DURING 2011, RRMC HAD 268 LICENSED BEDS, 41,460 PATIENT DAYS, AND AN AVERAGE DAILY CENSUS OF 114, WITH AN AVERAGE LENGTH OF STAY OF 4.54 DAYS. THERE WERE 9,137 DISCHARGES, 8,719 SURGERIES, 111,244 OUTPATIENT ENCOUNTERS, AND 54,722 EMERGENCY DEPARTMENT VISITS. 154001984 1 1 0 1 0 0 0 0 0 1 1 0 1 0 1 1 0 1 0 0 0 0 0 0 0 0 1 1 1 0 1 1 1 0 0 0 0 0 0 0 1 0 0 0 0 0 1 1 1 1 0 0 1 16 0 1 1520 1 1 1 0 0 0 0 0 0 0 0 0 X 16 12 0 0 0 0 1 1 1 1 1 0 0 1 1 1 1 0 0 1 1 0 NC X KAREN DAUGHERTY 3367182803 2085 FRONTIS PLAZA BLVD WINSTON SALEM NC 27103 X LINDSAYJEFFERY T 60.00 X X 0 757410 352308 CALDWELLDARISE DAVES 60.00 X X 331048 0 36527 AMINCHETAN 2.00 X 0 0 0 EARNHARDTHAROLD 2.00 X X 0 0 0 FISHERLUKE 2.00 X X 0 0 0 HESTERBENNETT 2.00 X 0 0 0 JOHNSONJAMES C 2.00 X 0 0 0 JONESBRUCE 2.00 X X 0 0 0 KETNERGLENN 2.00 X 0 0 0 KINGALAN 2.00 X 0 0 0 KINGDAVID 2.00 X 0 0 0 MESSINGERELLEN 2.00 X 0 0 0 PATELNILESH 2.00 X 0 0 0 PONDSMARY 2.00 X X 0 0 0 TEMPLETONDAVID 2.00 X 0 0 0 WAGONERE WILLIAM 2.00 X 0 0 0 DECKERMARY LEE 2.00 X 0 210336 12826 WALSHBETSY JEAN 2.00 X 0 268821 46848 TRAHEY IIITHOMAS FRANCIS 60.00 X 264966 12288 38736 DEATLEYRONALD CLARK 40.00 X 185360 0 18128 HUNTERGERALD H 40.00 X 191744 0 16628 JOHNSONRONALD E 40.00 X 210213 0 35879 JORDANJAY D 40.00 X 186940 0 38228 METCALFBEAULISA L 40.00 X 209066 0 27927 ELLIOTT JRCHARLES W 0.00 X 304195 0 0 SMITHDAVID N 0.00 X 175702 0 13599 2059234 1248855 637634 47 1 1 0 MASSMUTUAL FINANCIAL GROUP PO BOX 371368 PITTSBURGH PA 15250 INVESTING/CONSULTING 2657974 MORRISON MANAGEMENT PO BOX 102289 ATLANTA GA 30368 FOOD SERVICES 2594490 NURSEFINDERS INC PO BOX 910738 DALLAS TX 75391 STAFFING 1332266 JOHNSTON ALLISON & HORD PA PO BOX 36469 CHARLOTTE NC 28236 LEGAL SERVICES 1022525 AMERICAN RED CROSS PO BOX 905890 CHARLOTTE NC 28290 BLOOD PROCESSING 895130 34 176102 84913 261015 NET PATIENT REVENUE 621990 158646700 155583628 3063072 ROWAN HOSPICE 621990 2199215 2199215 160845915 543201 543201 46709 46709 527551 0 527551 527551 527551 1732620 114422 1379981 98705 352639 15717 368356 368356 CAFETERIA MEALS 722210 749893 749893 REIMBURSEMENTS & OTHER 900099 609975 609975 DRUG REBATES 621990 6645 6645 1366513 163959260 159196065 3063072 1439108 160114 160114 859770 859770 58498285 55549971 2948314 2483044 2357899 125145 8552654 8121600 431054 4417374 4194738 222636 1000 1000 11231546 8581922 2649624 1034179 982056 52123 1084358 1029706 54652 2173044 2063523 109521 4355401 4135889 219512 122432 116261 6171 23473 22290 1183 4760824 4520878 239946 9755855 9264160 491695 305349 289959 15390 MEDICAL SUPPLIES 21699191 21699191 BAD DEBT 15894897 15894897 CORPORATE ALLOCATION 10963564 10963564 DRUGS 6356141 6356141 9120461 8660789 459672 173852956 154001984 19850972 0 28575 2254536 12954482 13019819 16886352 20232935 2296216 2012317 2946146 2660349 830696 852766 246150319 148912669 103550593 97237650 21842238 22046047 2551328 17428603 17560989 2871581 457450 4031363 2359601 185666845 183245787 21332684 27524147 77635000 75547328 8661192 8137396 0 15246744 107628876 126455615 X 77818703 56570906 19266 19266 200000 200000 78037969 56790172 185666845 183245787 X -9893696 -11354101 X 0 1 1 X 0 X RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 0 0 0 0 0 0 0 0 1 22633 22633 0 EXPLANATION OF LOBBYING ACTIVITIES: PART II-B, LINE 1: DUES PAID TO CERTAIN ORGANIZATIONS WHICH INCLUDE A PORTION RELATED TO LOBBYING ACTIVITIES. 219266 -3577 5000 210689 199362 19904 219266 276568 -69388 7818 199362 0.94930 0.05070 0 0 2577585 2577585 132473227 53187288 79285939 738682 340212 398470 105920322 94266030 11654292 4440503 1119139 3321364 97237650 TAX EXEMPT BOND PROCEEDS 17560989 F 17560989 0 THIRD PARTY PAYMENT ADJUSTMENTS 1313079 DUE TO AFFILIATES 13933665 15246744 DESCRIPTION OF UNCERTAIN TAX POSITIONS UNDER FIN 48: PART X: 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, 2011 AND 2010. PART V, LINE 4 - INTENDED USES FOR ENDOWMENT FUNDS THE ENDOWMENT FUNDS ARE HELD FOR AFFILIATE HOSPITAL SERVICE COSTS RELATED TO VARIOUS CENTERS AT THE ACUTE CARE FACILITIES. 1 1 X 1 X 300.000000000000 0 1 1 0 1 1 6356065 0 6356065 0.03660 20814214 14699658 6114556 0.03520 2807332 2113923 693409 0.00400 29977611 16813581 13164030 0.07580 2312621 690 2311931 0.01330 0 0 0 0.00000 21675923 13002553 8673370 0.04990 0 0 0 0.00000 160114 0 160114 0.00090 24148658 13003243 11145415 0.06410 54126269 29816824 24309445 0.13990 1 15894897 0 45539691 51746367 -6206676 X 1 0 1 1 ROWAN REGIONAL MEDICAL CENTER INC

612 MOCKSVILLE AVENUE SALISBURY NC 28144

X X X ROWAN REGIONAL MEDICAL CENTER INC 1 1 1 300.000000000000 0 0 1 1 X X X X X X 1 0 1 X 0 0 1 ROWAN SURGERY CENTER - JULIAN ROAD

522 CORPORATE CIRCLE SALISBURY NC 28147

AMBULATORY SURGERY CENTER PART I, LINE 3C: ALL UNINSURED PATIENTS RECEIVE A STANDARD DISCOUNT REGARDLESS OF THEIR ABILITY TO PAY. THIS DISCOUNT MIRRORS OUR AVERAGE MANAGED CARE RATE. PATIENTS BELOW 300% OF THE FEDERAL POVERTY GUIDELINES ARE DISCOUNTED AT 100% (3A: FREE CARE). OTHER PATIENTS MAY ALSO BE ELIGIBLE FOR DISCOUNTS FOR BALANCES ABOVE $5,000 (CATASTROPHIC DISCOUNT). PART I, LINE 6A: THE ORGANIZATION IS PART OF THE NOVANT HEALTH CARE 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, L7 COL(F): THE AMOUNT OF BAD DEBT REMOVED FROM TOTAL EXPENSES (DENOMINATOR) WAS $15,894,897. PART II: ALTHOUGH PART II FOR SCHEDULE H HAS BEEN LEFT BLANK, THE ORGANIZATION DOES ENGAGE IN MANY COMMUNITY BUILDING ACTIVITIES, WHICH SUPPORT AND STRENGTHEN THE COMMUNITY IT SERVES. THESE ACTIVITIES ARE IMPORTANT TO THE ORGANIZATION'S MISSION TO IMPROVE THE HEALTH OF THE COMMUNITY. HOWEVER, THE ORGANIZATION HAS NOT TRADITIONALLY MAINTAINED AN INFRASTRUCTURE TO TRACK, MONITOR AND REPORT THESE ACTIVITIES. THE ORGANIZATION IS PART OF THE NOVANT HEALTH CARE SYSTEM, WHICH HAS A COMMUNITY BENEFIT COMMITTEE. THE COMMUNITY BENEFIT COMMITTEE IS CURRENTLY IN THE PROCESS OF ESTABLISHING THE APPROPRIATE INTERNAL MECHANISMS TO TRACK, MONITOR AND REPORT THESE ACTIVITIES. THE ORGANIZATION IS COMMITTED TO CONTINUING TO PROVIDE THE COMMUNITY BUILDING ACTIVITIES NECESSARY TO MAINTAIN A HEALTHY, PRODUCTIVE AND VIABLE COMMUNITY. PART III, LINE 4: THE ORGANIZATION'S BAD DEBT EXPENSE (AT COST) ON LINE 2 IS CALCULATED USING THE SAME METHODOLOGY AS CHARITY CARE AND OTHER COMMUNITY BENEFITS USING AN ENTITY SPECIFIC COST TO CHARGE RATIO (RCC).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 PROVISION 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 HEALTH CARE 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. ROWAN REGIONAL MEDICAL CENTER, INC. PART V, SECTION B, LINE 10: ALL UNINSURED PATIENTS RECEIVE A STANDARD DISCOUNT REGARDLESS OF THEIR ABILITY TO PAY. THIS DISCOUNT MIRRORS OUR AVERAGE MANAGED CARE RATE. PATIENTS BELOW 300% OF THE FEDERAL POVERTY GUIDELINES ARE DISCOUNTED AT 100% (3A: FREE CARE). OTHER PATIENTS MAY ALSO BE ELIGIBLE FOR DISCOUNTS FOR BALANCES ABOVE $5,000 (CATASTROPHIC DISCOUNT). ROWAN REGIONAL MEDICAL CENTER, INC. PART V, SECTION B, LINE 17E: ROWAN REGIONAL MEDICAL CENTER INC.:PART V, SECTION B, LINES 15, 16, AND 17:WE DID NOT CHECK ANYTHING FOR QUESTION 15, 16 AND 17 BECAUSE WE PROCEED WITH ALL REASONABLE EFFORTS TO DETERMINE ELIGIBILITY FOR FINANCIAL ASSISTANCE PRIOR TO INITIATING ANY COLLECTION ACTIONS. ROWAN REGIONAL MEDICAL CENTER, INC. PART V, SECTION B, LINE 19D: THE HOSPITAL FACILITY USED THE AVERAGE OF ITS NEGOTIATED COMMERCIAL INSURANCE RATES WHEN CALCULATING THE MAXIMUM AMOUNTS THAT CAN BE CHARGED. PART VI, LINE 2: NEEDS ASSESSMENTTHE ORGANIZATION IS PART OF THE NOVANT HEALTH CARE SYSTEM, WHICH HAS A COMMUNITY BENEFIT COMMITTEE. THE COMMUNITY BENEFIT COMMITTEE IS RESPONSIBLE FOR ASSISTING THE HOSPITALS WITHIN THE HEALTH CARE 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 HEALTH CARE 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 HEALTH CARE 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. - UNINSURED PATIENTS WITH INCOMES OF UP TO 300% OF THE FEDERAL POVERTY LEVEL ARE ELIGIBLE FOR 100% WRITE-OFF. - UNINSURED PATIENTS WITH INCOME OVER 300% OF THE FEDERAL POVERTY LEVEL ARE ELIGIBLE FOR SELF-PAY DISCOUNTS BASED ON THE PATIENT'S ANNUAL INCOME AND OUTSTANDING MEDICAL BILLS / COSTS. - ANY PATIENT (EVEN WITH HEALTH INSURANCE) WITH A BALANCE OVER $5,000 AND / OR INCOME OVER 300% OF THE FEDERAL POVERTY LEVEL IS ELIGIBLE FOR A CATASTROPHIC DISCOUNT. OUR CATASTROPHIC DISCOUNTS ARE ALSO BASED ON THE PATIENT'S ANNUAL INCOME AND OUTSTANDING MEDICAL BILLS / COSTS.- ANY PATIENT IS ELIGIBLE FOR AN INDIVIDUALIZED PAYMENT PLAN BASED ON THE AMOUNT DUE AND THE PATIENT'S FINANCIAL STATUS, WITH TERMS EXTENDING UP TO FIVE YEARS. NO INTEREST IS CHARGED, UNLESS APPROPRIATE. 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 SELF-PAY PATIENTS AND INSURED PATIENTS WITH HIGH DEDUCTIBLES 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 INFORMATIONROWAN REGIONAL MEDICAL CENTERTHE ORGANIZATION DEFINES ITS COMMUNITY BY ITS PRIMARY SERVICE AREA, WHICH IS ROWAN COUNTY, NORTH CAROLINA. THIS IS A RURAL AREA. THE ORGANIZATION IS THE ONLY HOSPITAL IN THE COMMUNITY. ACCORDING TO THE TRUVEN HEALTH DATA, THE SPECIFIC POPULATION GROUPS (ETHNIC AND CULTURAL) ARE AS FOLLOWS: WHITE NON-HISPANIC (90,891) 72.9%; BLACK NON-HISPANIC (20,851) 16.7%; HISPANIC (9,521) 7.6%; ASIAN AND PACIFIC ISLAND (1,344) 1.1%; OTHERS (2,115) 5.8%; FOR A TOTAL POPULATION OF 124,722. ACCORDING TO TRUVEN HEALTH DATA, THE MEDIAN HOUSEHOLD INCOME LEVEL WAS $43,995.ACCORDING TO TRUVEN HEALTH DATA, THE AGE BREAKDOWN IS AS FOLLOWS: 0-17 YEARS (29,573) 23.7%; 18-64 YEARS (77,091) 61.8%; 65+ YEARS (18,058) 14.5% 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 300% 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 HEALTH CARE 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 HEALTH CARE ORGANIZATIONS IN THE COMMUNITIES IT SERVES; AND14. GENERALLY PROMOTING THE HEALTH, WELLNESS, AND WELFARE OF THE COMMUNITIES IT SERVES BY PROVIDING QUALITY HEALTH CARE 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 HEALTH CARE FACILITIES IN THE SAME HEALTH CARE 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 ONE OF TEN TAX-EXEMPT HOSPITALS IN THE NOVANT HEALTH CARE SYSTEM IN NORTH CAROLINA AND VIRGINIA. 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 HEALTH CARE 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 HEALTH CARE 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 HEALTH CARE 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 HEALTH CARE SYSTEM HAS A COMMUNITY BENEFIT COMMITTEE, WHICH WILL OVERSEE AND ASSIST ALL TAX-EXEMPT HOSPITALS WITHIN NOVANT 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 HEALTH CARE 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 NOVANT HEALTH, INC. FILES A SYSTEM-WIDE COMMUNITY BENEFIT REPORT PREPARED IN ACCORDANCE WITH THE NORTH CAROLINA HOSPITAL ASSOCIATION REPORTING GUIDELINES WITH THE NORTH CAROLINA MEDICAL CARE COMMISSION AS PART OF THE DOCUMENTATION REQUIRED FOR THE ISSUANCE OF TAX EXEMPT BOND FINANCING. 1 YMCA OF ROWAN COUNTY PO BOX 1575 SALISBURY NC 28146 560606313 501(C)(3) 15000 YOUTH SPORTS PROGRAMS AMERICAN CANCER SOCIETY INC 8219 TOWN CENTER DRIVE BALTIMORE NC 21236 580659875 501(C)(3) 10000 TO SUPPORT ROWAN COUNTY'S RELAY FOR LIFE AND HELP FUND CANCER RESEARCH CABARRUS REGIONAL CHAMBER OF COMMERCE 3003 DALE EARNHARDT BLVD KANNAPOLIS NC 28083 560501076 501(C)(6) 18900 TO SUPPORT EVENTS WITH COMMUNITY CHINA GROVE BOARD OF TRADE PO BOX 276 CHINA GROVE NC 28023 561365802 501(C)(3) 7500 TO SUPPORT COMMUNITY OUTREACH EFFORTS IN SOUTH ROWAN AND PROVIDE HEALTH EDUCATION SALISBURY PARKS AND RECREATION PO BOX 4053 SALISBURY NC 28145 560000237 CITY OF SALISBURY 8000 TO SUPPORT COMMUNITY PARKS AND RECREATION ACTIVITIES ROWAN-SALISBURY SCHOOL SYSTEM PO BOX 2349 SALISBURY NC 28145 562113386 ROWAN COUNTY 38500 TO SUPPORT COMMUNITY SCHOOLS 5 1 PROCEDURE FOR MONITORING GRANTS IN THE U.S.: PART I, LINE 2: SCHEDULE I, PART I, LINE 2: THE ORGANIZATION IS AN AFFILIATE IN AN INTEGRATED HEALTH CARE 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 1 1 1 0 0 0 0 0 0 0 LINDSAYJEFFERY T 0 472588 0 245365 0 39457 0 333573 0 18735 0 1109718 0 245365 CALDWELLDARISE DAVES 216927 0 89425 0 24696 0 13467 0 23060 0 367575 0 89425 0 DECKERMARY LEE 0 187000 0 22440 0 896 0 11220 0 1606 0 223162 0 22440 WALSHBETSY JEAN 0 219206 0 44265 0 5350 0 21150 0 25698 0 315669 0 44265 TRAHEY IIITHOMAS FRANCIS 260208 12241 0 0 4758 47 14700 0 23159 877 302825 13165 0 0 DEATLEYRONALD CLARK 132690 0 5360 0 47310 0 10567 0 7561 0 203488 0 0 0 HUNTERGERALD H 157496 0 360 0 33888 0 15287 0 1341 0 208372 0 360 0 JOHNSONRONALD E 159864 0 360 0 49989 0 12722 0 23157 0 246092 0 0 0 JORDANJAY D 151892 0 360 0 34688 0 14216 0 24012 0 225168 0 360 0 METCALFBEAULISA L 168791 0 420 0 39855 0 18583 0 9344 0 236993 0 420 0 ELLIOTT JRCHARLES W 156 0 0 0 304039 0 0 0 0 0 304195 0 0 0 SMITHDAVID N 98173 0 67327 0 10202 0 5938 0 7661 0 189301 0 67327 0 PART I, LINE 1A 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 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. THE ORGANIZATION PROVIDES A TEMPORARY RESIDENCE FOR LIMITED EXECUTIVE USE THAT AT TIMES MAY INCLUDE INCIDENTAL PERSONAL USE. IN THAT CASE, THE VALUE IS CALCULATED UNDER APPLICABLE TAX LAWS AND THAT AMOUNT IS INCLUDED IN THE EXECUTIVE'S TAXABLE 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. SUPPLEMENTAL INFORMATION PART III PART I, LINE 4: SEVERANCE, NONQUALIFIED, AND EQUITY-BASED PAYMENTS SEVERANCE NONQUALIFIED EQUITY-BASED ELLIOTT, CHARLES 304,039 0 0 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 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). A MINIMUM LEVEL OF COMMUNITY BENEFIT AND CHARITY CARE, AS WELL AS A MINIMUM LEVEL OF FINANCIAL PERFORMANCE, IS REQUIRED BEFORE ANY AWARD CAN BE PAID UNDER THE PLAN. 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 THIS LONG-TERM INCENTIVE 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: SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN: THE SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN ("SERP") IS INTENDED TO SUPPORT RETENTION OF KEY EXECUTIVES, AND TO OFFER A COMPETITIVE TOTAL RETIREMENT BENEFIT. 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 RETIREMENT PLAN. NORTH CAROLINA MEDICAL CARE COMMISSION 521309402 657905CN3 2004-08-18 87205543 SEE PART V 0 0 0 9490000 87205543 6507000 4271816 992728 467366 50821655 2008 1 0 1 1 0 0 1 0 0 0.00000 0.00000 0.00000 1 0 0 0 1 WACHOVIA BANK NA 29.000000000000 1 1 0 X SCH K - PURPOSE OF ISSUE DESCRIPTION NORTH CAROLINA MEDICAL CARE COMM (1) REFINANCE 2003 & 1996A POOL LOANS; (2) CONSTRUCTION - ER, ADDITIONAL PATIENT CARE SPACE; (3) PAYMENT OF ISSUANCE COSTS; (4) PAYMENT OF INSURANCE PREMIUMS; AND (5) CREATION OF A REQUIRED RESERVE FUND. FORM 990, SCHEDULE K, PART III THE ORGANIZATION IS PART OF THE NOVANT HEALTH CARE SYSTEM, WHICH HAS A LEGAL DEPARTMENT, MATERIALS MANAGEMENT DEPARTMENT AND A RESEARCH DEPARTMENT. THESE DEPARTMENTS REGULARLY REVIEW MANAGEMENT, SERVICE AND RESEARCH AGREEMENTS RELATED TO TAX-EXEMPT BOND FINANCED PROPERTY. OUTSIDE BOND COUNSEL CONDUCTS ADDITIONAL REVIEW AND DUE DILIGENCE WHEN ENGAGED FOR A BOND ISSUANCE OR REFUNDING PROJECT. KING EMILY FAMILY MEMBER OF DAVID KING, BOARD MEMBER 19187 COMPENSATION GREATER THAN $10,000 WAS PAID BY THE FILING ORGANIZATION TO A FAMILY MEMBER OF A CURRENT OFFICER, BOARD MEMBER, OR KEY EMPLOYEE. 0 ACTIVITIES FORM 990, PART I, LINE 1: ORGANIZATION'S MISSION OR MOST SIGNIFICANT ROWAN REGIONAL MEDICAL CENTER, LOCATED IN SALISBURY, NORTH CAROLINA EXISTS TO IMPROVE THE HEALTH OF THE COMMUNITIES IT SERVES WITH A VISION OF PROVIDING A REMARKABLE PATIENT EXPERIENCE IN EVERY DIMENSION, EVERY TIME. IT IS AN INTEGRAL PART OF THE NOVANT HEALTH SYSTEM (COLLECTIVELY KNOWN AS "NOVANT"), A NOT-FOR-PROFIT INTEGRATED GROUP OF HOSPITALS, PHYSICIAN CLINICS, OUTPATIENT CENTERS AND OTHER HEALTHCARE SERVICE PROVIDERS. NOVANT IS RANKED AS ONE OF OUR NATION'S TOP 25 HEALTHCARE SYSTEMS - CARING FOR PATIENTS AND COMMUNITIES IN NORTH CAROLINA, VIRGINIA AND SOUTH CAROLINA. THE NOVANT HEALTH SYSTEM REPORTED $3.453 BILLION IN REVENUES IN 2011. ROWAN REGIONAL MEDICAL CENTER ACCOMPLISHES ITS MISSION BY PROVIDING EXCELLENT HEALTHCARE SERVICES AND BY SUPPORTING THE CITY OF SALISBURY AND SURROUNDING COMMUNITIES THROUGH PARTNERSHIPS AND OUTREACH. IN ADDITION TO OUR QUALITY OF SERVICES, WE'RE VERY PROUD OF OUR PATIENT FINANCIAL ASSISTANCE PROGRAM. WE WORK WITH UNINSURED INDIVIDUALS TO HELP QUALIFY THEM FOR PUBLIC ASSISTANCE, ESTABLISH A REASONABLE PAYMENT PLAN, DISCOUNT THEIR BILL TO REFLECT THEIR PERSONAL RESOURCES OR PROVIDE THEM WITH FREE CHARITY CARE. WE SUPPORT OTHER ORGANIZATIONS IN OUR COMMUNITIES AS WELL. IN 2011, ROWAN REGIONAL MEDICAL CENTER OFFERED MORE THAN $100,000 IN SUPPORT TO THE LOCAL COMMUNITY ORGANIZATIONS THAT SUPPORT OR PROVIDE HEALTH SERVICES, EDUCATION AND ASSISTANCE TO THE UNINSURED AND OVERALL COMMUNITY. SOME OF OUR PARTNER ORGANIZATIONS INCLUDE COMMUNITY CARE CLINIC OF ROWAN COUNTY, THE UNITED WAY OF ROWAN COUNTY, COMMUNITIES IN SCHOOLS OF ROWAN COUNTY, THE AMERICAN CANCER SOCIETY, THE AMERICAN HEART ASSOCIATION, SALISBURY-ROWAN HISPANIC COALITION AND THE YMCA OF ROWAN COUNTY. IN 2011, ROWAN REGIONAL MEDICAL CENTER PROVIDED A POSITIVE IMPACT ON THE HEALTH OF ROWAN COUNTY RESIDENTS BY PARTICIPATING IN OVER 130 HEALTH-RELATED EVENTS THAT PROVIDED FREE SCREENINGS, EDUCATION AND INFORMATION. COMMUNITY MEMBERS ALSO BENEFITED FROM THE SERVICES OF A REGISTERED NURSE FUNDED BY THE HOSPITAL THAT WORKS AT THE LOCAL YMCA'S OFFERING A VARIETY OF HEALTH PROGRAMS AND HEALTH COACHING TO PROMOTE HEALTHY LIVING. ADDITIONALLY, ROWAN REGIONAL MEDICAL CENTER FUNDED A SALISBURY PARKS & RECREATION YOUTH SPORTS TEAM TO PROMOTE EXERCISE, A SENIOR MEN'S HEALTH CLUB AIMED AT ENGAGING SENIOR MEN IN THEIR HEALTH AND WELLNESS AND A SPECIAL PROGRAM FOR AREA SECOND GRADERS TO TEACH THE CHILDREN AND THEIR FAMILIES HOW TO LIVE HEALTHIER. ROWAN REGIONAL MEDICAL CENTER'S NATIONAL CERTIFICATIONS AND AWARDS RECOGNIZE ITS EXCEPTIONAL EFFORTS TO PROVIDE THE BEST CARE TO THE COMMUNITY. THE HOSPITAL IS FULLY ACCREDITED BY THE JOINT COMMISSION AND HAS BEEN DESIGNATED AS A PRIMARY STROKE CENTER BY THIS SAME ENTITY. THROUGHOUT 2011, ROWAN REGIONAL MEDICAL CENTER CONSISTENTLY RANKED IN THE TOP 10 PERCENT OF ALL HOSPITALS IN NORTH CAROLINA FOR ITS SUPERIOR CLINICAL OUTCOMES IN THE CORE MEASURES PUBLICLY REPORTED BY THE CENTERS FOR MEDICARE SERVICES. THE HOSPITAL WAS ONE OF 405 HOSPITALS IN THE UNITED STATES AND ONE OF 15 IN NORTH CAROLINA TO BE RATED AS "TOP PERFORMER IN KEY QUALITY MEASURES" IN 2011 BY THE JOINT COMMISSION FOR MEETING TWO 95 PERCENT PERFORMANCE THRESHOLDS IN HEART ATTACK CARE, SURGICAL INFECTION PREVENTION, HEART FAILURE AND/OR PNEUMONIA. BLUE CROSS BLUE SHIELD BLUE OF NORTH CAROLINA RECOGNIZED ROWAN REGIONAL MEDICAL CENTER FOR EXCELLENCE AS A DISTINCTION CENTER FOR KNEE AND HIP REPLACEMENT. ROWAN REGIONAL MEDICAL CENTER WAS ALSO RECOGNIZED AS A LEADER IN INFANT SAFE SLEEP PRACTICES BY THE NORTH CAROLINA HEALTHY START FOUNDATION, A GROUP THAT MEASURES HOSPITALS EDUCATION POLICIES AROUND SAFE SLEEP PRACTICES FOR INFANTS. ROWAN REGIONAL MEDICAL CENTER BENEFITED THE COMMUNITY BY BRINGING NEW AND INNOVATIVE SERVICES TO THE SALISBURY COMMUNITY WHICH INCLUDED THE OPENING OF A SPECIALIZED CHEST PAIN UNIT TO MONITOR AND OBSERVE CARDIAC PATIENTS WHO REQUIRE ADDITIONAL TESTING AND CARE, 24/7 ONSITE HEART ATTACK CARE AND ACCESS TO WORLD-CLASS SPECIALISTS VIA TELENEUROLOGY MEDICINE FOR PATIENTS WHO ARE SUFFERING FROM A STROKE OR OTHER NEUROLOGICAL CONDITIONS. ADDITIONALLY, IN CONJUNCTION WITH OUR LOCAL HOSPICE PARTNER, THE HOSPITAL BEGAN CONSTRUCTION ON THE ROWAN HOSPICE HOUSE, A 14-BED INPATIENT HOSPICE FACILITY SET TO OPEN IN THE FALL OF 2012. 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 $567,000,000 IN 2011. 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 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 THE BOARD OF NOVANT HEALTH, INC. ELECTS THE BOARD OF THE ROWAN REGIONAL MEDICAL CENTER, INC. FORM 990, PART VI, SECTION A, LINE 7B DECISIONS SUBJECT TO APPROVAL OF MEMBERS THE BOARD OF NOVANT HEALTH, INC. APPROVES CHANGES TO THE BYLAWS OF ROWAN REGIONAL MEDICAL CENTER, INC. 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 12C MONITORING AND ENFORCEMENT OF COI 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 POTENTIAL CONFLICT OF INTEREST IS DISCLOSED BY THE BOARD MEMBER, GENERALLY IN ADVANCE OF THE MEETING AT WHICH A VOTE IS TO TAKE PLACE, AND LEGAL COUNSEL DISCUSSES THE POTENTIAL CONFLICT OF INTEREST WITH THE BOARD MEMBER. THE BOARD MEMBER IS INSTRUCTED IN ACCORDANCE WITH THE TRUSTEE CONFLICT OF INTEREST POLICY. IF A CONFLICT OF INTEREST IS FOUND TO EXIST, THEN THE BOARD MEMBER WITH THE CONFLICT REFRAINS FROM PARTICIPATION IN THE BOARD'S DELIBERATIONS AND VOTE ON THE TRANSACTION. 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 HEALTH CARE 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 5: NET UNREALIZED LOSSES ON INVESTMENTS: -445,823. MALPRACTICE INSURANCE -643,273. AFFILIATE TRANSFERS -720,361. FASB/ACCT CHANGES -9,544,644. TOTAL TO FORM 990, PART XI, LINE 5: -11,354,101. 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