2011-08-15T12:31:54-05:00 2010-09-30 Plante & Moran PLLC 750 TRADE CENTRE WAY STE 300 PORTAGE MI 49002 990 2009-10-01 381218516 Mount Clemens Regional Medical Center MOUN 5867414282 1000 Harrington Mount Clemens MI 48043 MARK O'HALLA 5867414282 2011-08-11 1 SUSAN R MIENCIER 2695674500 2009 2016-02-24 21:20:13Z MARK O'HALLA 1000 Harrington Mount Clemens MI 48043 320897448 0 X www.mcrmc.org X 1946 MI PROVIDER OF HEALTH CARE SERVICES 13 9 2274 0 3692084 -395662 442964 421635 269823296 278937391 1364822 2635504 6216672 2588063 277847754 284582593 475825 5161374 0 116120361 118366925 0 0 149546134 155730927 266142320 279259226 11705434 5323367 286849050 299463348 213709127 220565719 73139923 78897629 TO BE MICHIGAN'S BEST VALUE IN HEALTH CARE AS DEFINED BY QUALITY OUTCOMES AND COST. 0 0 199868080 5161374 275245307 MOUNT CLEMENS REGIONAL MEDICAL CENTER OBTAINED THE FOLLOWING FIGURES WITHIN FISCAL YEAR 2010: Patient Days 62,835. Outpatient Registrations 85,176. Physician Practice visits 37,984. Emergency Room Visits 56,593. lab courier registrations 145,010. 199868080 1 1 0 1 0 0 0 0 0 1 0 1 0 0 0 0 0 0 0 0 1 1 0 1 0 0 0 0 0 1 1 1 0 0 0 0 0 1 1 0 0 1 263 0 1 2274 1 1 1 0 0 0 0 0 0 0 0 13 9 0 0 0 0 1 1 1 1 1 0 0 0 1 1 1 1 1 1 1 1 1 X mark o'halla 5864938090 1000 HARRINGTON MOUNT CLEMENS MI 48043 Mark O'Halla 40.00 X X 0 625351 53280 Monroe Adams DO 1.00 X 0 0 0 Peter Ajluni DO 1.00 X 33000 0 0 Carolyn Dorian 1.00 X X 0 0 0 James George 1.00 X 0 0 0 Cynthia Housel DO 1.00 X 3140 0 0 Philip Incarnati 1.00 X 0 14617609 520640 James E Johnson DO 1.00 X 70832 0 0 Matthew Moroun 1.00 X 0 0 0 Chris Peyerk 1.00 X 0 0 0 Thomas Schwanitz 1.00 X X 0 0 0 Hon George C Steeh 1.00 X 0 0 0 Ted Wahby 1.00 X 0 0 0 Michael Smith DO 40.00 X 243900 0 12655 Donna Kopinski 40.00 X 188358 0 22036 Susan Durst 40.00 X 178856 0 21497 Kathleen M DeBaker 40.00 X 168572 0 13325 Greg Purtel 40.00 X 159221 0 20417 Sharyl Smith 40.00 X 104256 0 0 Ronald Irwin MD 40.00 X 759675 0 17670 Jeffrey Balazsy 40.00 X 726186 0 5112 David M Viviano 40.00 X 490537 0 0 David R Markiewicz 40.00 X 251442 0 12138 Praveen Dalmia Physicist 40.00 X 306812 0 24064 Janice Cosby 40.00 X 0 0 0 3684787 15242960 722834 88 0 1 0 SODEXO 4880 PAYSHERE CIRCLE CHIcago IL 60674 FOOD SERVICE 6380682 AMERICAN RED CROSS BLOOD SERVICES SOUTH PO BOX 73013 Chicago IL 60673 NURSE SERVICES 1485789 PUBLICOM 333 ALBERT AVE STE 400 EAST LANSING MI 48823 ADVERTISING 1200609 Hema Tech Services Inc PO Box 911 Farmington MI 48332 Dialysis 836690 MLABS UNIVERSITY OF MICHIGAN PO BOX 77000 DEPT 77174 DETROIT MI 48277 LAB TESTING 694427 35 189810 231825 421635 Patient Services 622110 277550849 273858765 3692084 PHARMACY REVENUE 900099 1386542 1386542 278937391 2046380 2046380 1212890 1212890 1212890 1212890 36732469 171510 36143854 171001 588615 509 589124 589124 Miscellaneous 900099 1276963 1276963 Cafeteria Revenue 722210 63178 63178 Research Revenue 541700 35032 35032 1375173 284582593 275245307 3692084 5223567 5161374 5161374 1150135 602722 547413 95199131 85860442 9338689 2112258 1113160 999098 13096093 11624547 1471546 6809308 6142794 666514 1006195 71304 934891 159268 159268 45869996 16858541 29011455 798606 598268 200338 2441258 1664141 777117 7569801 6528129 1041672 50799 29665 21134 141208 44293 96915 7045037 7045037 16007452 14563682 1443770 231880 51167 180713 Medical Supplies 43625056 43579790 45266 Bad Debts 25930189 841151 25089038 EQUIP REPAIR & MAINT 4404484 4229968 174516 Membership Dues 308670 161914 146756 other 141028 141028 279259226 199868080 79391146 0 872053 1128986 27840238 33625817 4032492 4322214 1429230 1244514 366828208 242766530 139806745 124061678 91177328 108952972 19682916 23887233 2008048 2239934 286849050 299463348 37949766 41241012 254699 193500 156640170 150221512 62228 18802264 28909695 213709127 220565719 X 73139923 78653419 244210 73139923 78897629 286849050 299463348 X 0 1 1 X 0 X RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 0 0 0 0 0 0 0 0 1 9265 9265 0 Part II-B, Line 1i: Explanation of Other Lobbying Activities: A PORTION OF DUES PAID TO MICHIGAN HEALTH AND HOSPITAL ASSOCIATION SUPPORT LOBBYING ACTIVITIES. 3489378 3489378 138344081 76299002 62045079 1103164 960076 143088 215030099 160326372 54703727 8861486 5181080 3680406 124061678 Investments In And Advances to Affiliates 23887233 F 23887233 Professional Liability Insurance 8745209 Workers Compensation Insurance 526840 Minimum Pension Liability 1731661 Accrued Pension 12433124 Cost Report Settlements Payable 5472861 28909695 284582593 279259226 5323367 4849675 -4415335 434340 5757707 Part XI, Line 8 - Other Adjustments: UNREALIZED GAIN ON INVESTMENT IN JOINT VENTURES: 1663589. Minimum Pension Liability Adjustment: -5675353. TRANSFER TO PREMIER: -403571. 1 1 X 1 X 1 X 1 1 0 1 0 925629 925629 0.00370 36682106 33476845 3205261 0.01270 33980 7064 26916 0.00010 37641715 33483909 4157806 0.01650 1192256 1192256 0.00470 16159335 4963750 11195585 0.04420 201093 201093 0.00080 120591 120591 0.00050 17673275 4963750 12709525 0.05020 55314990 38447659 16867331 0.06670 13 25 7461 7461 0.00000 3 6595 6595 0.00000 3118 3118 0.00000 2 18 25 17174 17174 1 8313287 449164 81514208 66019324 15494884 X 0 MT CLEMENS REGIONAL MEDICAL CENTER HEALTH PARTNERS LLC MEDICAL OFFICE BUILDING 0.66670 0.33330 MOUNT CLEMENS REGIONAL MEDICAL CENTER

1000 HARRINGTON MOUNT CLEMENS MI 48043

X X X X Part I, Line 3c: INCOME CRITERIA IS BASED UPON 200% OF THE FEDERAL POVERTY GUIDELINES PER THE FEDERAL REGISTER. COLLECTIONS MAY BE CONSIDERED IF THE PATIENT HAS SUFFICIENT LIQUID ASSETS. Part I, Line 6a: OUR PARENT, MCLAREN HEALTH CARE CORPORATION, PREPARES AN ANNUAL REPORT OF ITS MEMBER HOSPITALS. THIS ANNUAL REPORT IS AVAILABLE ON OUR WEBSITE. Part I, Line 7: COSTING METHODOLOGY - USED COST TO CHANGE RATIO PER OUR COST REPORTS. Part I, Line 7f: THE COST OF BAD DEBT FOR THE CORPORATION FOR THE YEARS ENDED SEPTEMBER 30, 2010 AND 2009 WAS APPROXIMATELY $36,738,000 AND $33,586,000, RESPECTIVELY, WHICH IS REFLECTED IN THE CONSOLIDATED STATEMENT OF OPERATIONS AS CHARGES OF $108,817,000 AND $99,816,000, RESPECTIVELY. BAD DEBT EXPENSE AT COST WAS DERIVED USING THE COST TO CHARGE RATIO DERIVED FROM WORKSHEET 2. Part III, Line 4: An allowance for uncollectible accounts is established on an aggregate basis by using historical write-off rate factors applied to unpaid accounts based on aging. Loss rate factors are based on historical loss experience and adjusted for economic conditions and other trends affecting the Corporation's ability to collect outstanding amounts. Uncollectible amounts are written off against the allowance for doubtful accounts in the period they are determined to be uncollectible. An allowance for contractual adjustments and interim payment advances is based on expected payment rates from payors based on current reimbursement methodologies. This amount also includes amounts received as interim payments against unpaid claims from certain payors. WE USED OUR BAD DEBT EXPENSE PER OUR FINANCIAL STATEMENTS AND CONVERTED TO ESTIMATED COST USING OUR OVERALL COST TO CHANGE RATIO. lINE 3 WAS ESTIMATED BASED ON SAMPLES OF ACCOUNTS. FOOTNOTE FROM AUDIT REPORT. Part III, Line 8: COST TO CHARGE RATIO WAS DERIVED FROM WORKSHEET 2. Part III, Line 9b: AT THIS TIME WE DO NOT HAVE A FORMAL DEBT COLLECTION POLICY BUT WILL BE ATTEMPTING TO DEVELOP A FORMAL PLOICY. CURRENTLY OUR PROCESS INCLUDES SELF AND PRIVATE PAY PATIENT ACTIVITY IS SENT TO A VENDOR FOR ASSISTANCE. SELF PAY PATIENTS REQUESTING FINANCIAL ASSISTANCE AT REGISTRATION AND GIVEN A FINANCIAL ASSISTANCE APPLICATION WHICH IS EVALUATED TO DETERMINE IF CHARITY CARE IS APPLICABLE AND AN ATTEMPT IS ALSO MADE TO ASSIST PATIENTS FOR MEDICAL ELIGIBILITY. Part VI, Line 2: Primary and secondary market research is conducted by and through community-based health coalitions, academic institutions, third party data analytics organizations, health needs assessments and surveys, historic health services utilization patterns, demographic analysis and population-based health care services utilization forecasts. Part VI, Line 3: Availability of financial assistance information and education is provided at all inpatient and outpatient registration points-of-service. Information and education is also available through the organizations website(s). Financial and application forms are available at all inpatient and outpatient points-of-service, including providing assistance in completing the application. Organization and its subsidiaries/affiliates also provide specially-trained counselors to assist patients and review eligibility for federal, state and other government programs, including, but not limited to, Medicaid, disability, Social Security, and any other forms of third party payment. Part VI, Line 4: The service area of Mount Clemens Regional Medical Center is composed of 29 ZIP codes and is centered principally on the city of Mt. Clemens, MI in the county of Macomb. The primary service area, accounting for 83% of annual inpatient discharges, is composed of 14 ZIP codes and can be characterized as largely urban in nature. The secondary service area, accounting for 17% of annual inpatient discharges, is composed of 15 ZIP codes and can be characterized as largely urban in nature. Primary Service Area Demographic DistributionsAge Distribution0 - 14 19.8%15 - 17 4.2%18 - 24 8.5%25 - 34 12.8%35 - 54 30.7%55 - 64 11.6%65+ 12.4%Education LevelLess than High School 3.2%Some High School 8.3%High School Degree 32.7%Some College/Assoc. Degree 36.4%Bachelors Degree or Greater 19.4%Household Income Distribution<$15K 9.0%$15 25K 8.9%$25 50K 25.5%$50 75K 21.3%$75 100K 15.5%Over $100K 19.8%Race/EthnicityWhite Non-Hispanic 85.0%Black Non-Hispanic 9.0%Hispanic 2.3%Asian & Pacific Is. Non-Hispanic 1.5%All Others 2.2% Part VI, Line 5: Community-building activities are designed and implemented based on community needs assessments and input from community-based organizations and other community stakeholders, including business vendors, religious organizations and political leaders. Each organization defines annual community-building and outreach activity plans. These plans are designed to address the specific health prevention, education, diagnosis, treatment and follow-up care requirements of unique disease, demographic and geographic communities identified by ongoing needs assessments described above. Part VI, Line 6: The parent organization and each of its subsidiary/affiliate members maintain a local community-based board with powers, responsibilities and accountabilities for the oversight of the operation of their respective organizations. Each subsidiary/affiliate organization maintains an open medical staff allowing any physician or other care provider with proper credentials to join the staff and provide approved care. The organization funds and maintains over 500 medical residency and fellowship programs to train future generations of physicians; organization funds, operates and maintains numerous health care education programs at the high school, community college, university and post-graduate levels of education. Organization provides sponsorship (financial and in-kind resources) support to community-level activities (health walks and races, fitness training, disease awareness events, cultural events and other health-related non-profit activities, events and organizations). Organization also directs, funds, supports and participates in fundraising activities that support health prevention/education, diagnosis and treatment provided by other non-profit community organizations. Part VI, Line 7: The role of the parent organization is to set the vision and strategic direction for the organization as a whole. This includes the development of the annual Strategic Plan which defines the strategic priorities for the organization and its members, the metrics to be measured for each strategic programs and the benchmark or target/goals for each metric. Strategic priorities directly address and measure (at a subsidiary level) clinical quality and clinical outcomes; patient, physician, employee and community satisfaction with the organization and its subsidiary/affiliate members; and development of new services to improve access to, quality of, and cost of health services.The role of the organizations subsidiaries/affiliates is the development and implementation of annual strategic and operational plans that support and advance the strategic plan of the parent organization. All local plans are developed and designed to reflect the unique population-based health care needs and requirements of the communities served by the subsidiary/affiliate organization.All local subsidiaries/affiliates have full authority and decision-making powers to define and execute the strategic and operational plans intended to improve the health and welfare of the communities they serve. MI 0 MCLAREN MEDICAL MANAGEMENT INC 401 S BALLENGER HWY FLINT MI 48532 382988086 501(C)(3) 5150574 0 N/A N/A GENERAL SUPPORT MOUNT CLEMENS REGIONAL HEALTH CARE FOUNDATION PO BOX 326 MOUNT CLEMENS MI 48046 382578873 501(C)(3) 10800 0 N/A N/A GENERAL SUPPORT 0 1 0 0 0 0 0 0 0 Mark O'Halla 0 448577 0 123750 0 53024 0 33650 0 19630 0 678631 0 0 Philip Incarnati 0 1247074 0 1119378 0 12251157 0 507159 0 13481 0 15138249 0 2998959 Michael Smith DO 243900 0 0 0 0 0 0 0 12655 0 256555 0 0 0 Donna Kopinski 167678 0 20680 0 0 0 9539 0 12497 0 210394 0 0 0 Susan Durst 161029 0 17827 0 0 0 9016 0 12481 0 200353 0 0 0 Kathleen M DeBaker 151712 0 16860 0 0 0 8444 0 4881 0 181897 0 0 0 Greg Purtel 141323 0 17898 0 0 0 8086 0 12331 0 179638 0 0 0 Ronald Irwin MD 749620 0 0 0 10055 0 4900 0 12770 0 777345 0 0 0 Jeffrey Balazsy 700521 0 0 0 25665 0 0 0 5112 0 731298 0 0 0 David M Viviano 488737 0 0 0 1800 0 0 0 0 0 490537 0 0 0 David R Markiewicz 241442 0 0 0 10000 0 12138 0 0 0 263580 0 0 0 Praveen Dalmia Physicist 278812 0 0 0 28000 0 12250 0 11814 0 330876 0 0 0 Part I, Line 1a THE CORPORATE CEO, SUBSIDIARY CEO'S AND CORPORATE VICE-PRESIDENTS IN SOME INSTANCES HAVE RECEIVED TAX INDEMNIFICATION FOR THE FOLLOWING BENEFITS: VEHICLE COSTS, GROUP TERM LIFE INSURANCE, SUPPLEMENTAL NONQUALIFIED RETIREMENT PLANS, AND HEALTH CLUB OR SOCIAL DUES. THESE BENEFITS HAVE BEEN INCLUDED IN TAXABLE COMPENSATION. THE FOLLOWING INDIVIDUAL HAS RECEIVED THESE BENEFITS: MARK O'HALLA AND PHILIP INCARNATI. Part I, Line 4b: MCLAREN MAINTAINS TWO SUPPLEMENTAL NONQUALIFIED RETIREMENT PLANS FOR A SELECT GROUP OF MANAGEMENT OR HIGHLY COMPENSATED EMPLOYEES (THE "SERPS"). THE OLD SERP WAS CLOSED TO NEW PARTICIPANTS ON OCTOBER 1, 2006, AND THE NEW SERP BECAME EFFECTIVE AS OF JANUARY 1, 2007. NO EMPLOYEE MAY PARTICIPATE IN BOTH OF THE SERPS. THE OLD SERP IS STRUCTURED AS A DEFINED BENEFIT PLAN THAT ESSENTIALLY REPLACES THE BENEFITS THE PARTICIPANT IS NOT PERMITTED TO RECEIVE UNDER MCLAREN'S QUALIFIED RETIREMENT PLAN DUE TO IRS LIMITATIONS APPLICABLE TO QUALIFIED PLANS. THE BENEFIT UNDER THE OLD SERP IS PAYABLE IN EITHER THE FORM OF A SINGLE SUM DISTRIBUTION OR IN MONTHLY PAYMENTS EQUAL TO THE ACTUARIAL EQUIVALENT OF THE PARTICIPANT'S ACCRUED BENEFIT. THE BENEFIT IS PAID AT AGE 55, AND IF THE PARTICIPANT REMAINS EMPLOYED, THE BENEFIT IS PAID UPON TERMINATION OF EMPLOYMENT, REDUCED TO TAKE INTO ACCOUNT THE BENEFIT PREVIOUSLY PAID. THE NEW SERP IS STRUCTURED AS A DEFINED CONTRIBUTION PLAN, AND MCLAREN CONTRIBUTES 15 PERCENT OF EACH PARTICIPANT'S COMPENSATION TO THE PLAN EACH YEAR FOR ALLOCATION TO THE PARTICIPANT'S ACCOUNT. PARTICIPANTS IN THE NEW SERP BECOME VESTED IN THEIR ACCOUNTS UPON THE EARLIER OF FIVE YEARS OF PARTICIPATION IN THE PLAN OR ATTAINMENT OF AGE 60. PARTICIPANTS IN THE NEW SERP SELF-DIRECT THE INVESTMENT OF THEIR ACCOUNTS AND HAVE THE ACTUAL INVESTMENT RETURN CREDITED OR DEBITED TO THEIR ACCOUNTS. THE BENEFIT UNDER THE NEW SERP IS EQUAL TO THE PARTICIPANT'S ACCOUNT BALANCE, AND THE BENEFIT IS PAID IN A SINGLE SUM WITHIN 60 DAYS OF THE PARTICIPANT'S TERMINATION DATE. BENEFITS UNDER BOTH SERPS ARE PROVIDED ON A TAX-NEUTRAL BASIS. BOTH SERPS ARE DESIGNED TO COMPLY WITH INTERNAL REVENUE CODE SECTIONS 457(F) AND 409A. THE INDIVIDUAL LISTED IN PART VII WHO PARTICIPATED IN THE OLD SERP IS PHILIP INCARNATI. THE INDIVIDUAL LISTED IN PART VII WHO PARTICIPATED IN THE NEW SERP IS MARK O'HALLA. Part I, Line 6 MCLAREN HEALTH CARE CORPORATION (MHCC) HAS A LEADERSHIP INCENTIVE PROGRAM FOR LEADERS OF THE CORPORATION, SUBSIDIARY EXECUTIVES AND DIRECTORS, AND CORPORATE MANAGERS. THE PURPOSE OF THE PLAN IS TO ENHANCE THE ORGANIZATION'S ABILITY TO ACHIEVE ITS GOALS BY PROVIDING TOP OFFICIALS AND THE BOARD OF DIRECTORS WITH A TOOL FOR (A) CLEARLY COMMUNICATING PERFORMANCE ON THE PART OF KEY LEADERS, (B) STIMULATING AND REWARDING SUPERIOR LEVELS OF PERFORMANCE ON THE PART OF KEY LEADERS WHICH WILL ULTIMATELY BENEFIT THE COMMUNITIES MHCC SERVES, AND (C) PROTECTING MHCC'S ABILITY TO COMPETE WITH OTHER EMPLOYERS FOR HIGH-TALENT LEADERS. Supplemental Information Part III SCH J, PART I, LINE 3: THE CEO/EXECUTIVE DIRECTOR WAS COMPENSATED BY A RELATED ORGANIZATION, AND THEREFORE NONE OF THE LINE 3 BOXES HAVE BEEN CHECKED. THE RELATED ORGANIZATION USED THE FOLLOWING METHODOLOGIES TO ESTABLISH THE COMPENSATION OF THE CEO/EXECUTIVE DIRECTOR OF THE FILING ORGANIZATION: COMPENSATION COMMITTEE, INDEPENDENT COMPENSATION CONSULTANT, FORM 990 OF OTHER ORGANIZATIONS, WRITTEN EMPLOYMENT CONTRACT, COMPENSATION SURVEY OR STUDY, AND APPROVAL BY THE BOARD OR COMPENSATION COMMITTEE. PHNS PHILIP INCARNATI, BOARD MEMBER AND OWNER OF PHNS 2323330 MHCC is the co-founder and has a minority interest in PHNS. As part of the agreement MHCC is entitled to appoint two directors to the PNHS board. MHCC appointed Philip Incarnati to hold one these positions. 0 MARIJEAN SMITH SPOUSE OF OFFICER AND GIFT SHOP EMPLOYEE 25261 PART-TIME EMPLOYEE OF ORGANIZATION 0 Form 990, Part VI, Section A, line 6 THE SOLE MEMBER OF THIS ORGANIZATION IS MCLAREN HEALTH CARE CORPORATION. Form 990, Part VI, Section A, line 7a THE MEMBER SHALL HAVE THE EXCLUSIVE RIGHT TO ELECT OR APPOINT THE DIRECTORS OF THE CORPORATION. Form 990, Part VI, Section A, line 7b DECISIONS BY THE GOVERNING BODY ARE SUBJECT TO THE POWERS OF THE MEMBER. Form 990, Part VI, Section B, line 11 THE FORM 990 DATA IS PREPARED INTERNALLY AND SUBMITTED TO OUR AUDITING FIRM FOR RETURN PREPARATION. ONCE THE RETURNS HAVE BEEN COMPLETED, THE FORMS ARE REVIEWED BY THE CORPORATE DIRECTOR OF BUDGET, THE CORPORATE SENIOR VICE PRESIDENT AND CFO OF MCLAREN HEALTH CARE CORPORATION (MHCC). COPIES OF THE RETURNS ARE MADE AVAILABLE TO THE MHCC BOARD MEMBERS, WHO SERVE AS THE OVERALL GOVERNING BOARD. RETURNS ARE AVAILABLE FOR ALL CORPORATIONS OF WHICH MHCC IS THE SOLE MEMBER AS WELL AS OTHER RELATED ENTITIES OF THOSE CORPORATIONS FOR REVIEW RATHER THAN HAVING THE LOCAL BOARDS REVIEW THE RETURNS. THE BOARD OF MHCC IS THE ULTIMATE ACCOUNTABLE ORGANIZATION FOR THE SYSTEM; AS SUCH IT IS THE OVERALL GOVERNING BOARD OF OUR SYSTEM WHOSE RESPONSIBILITIES INCLUDES BUT ARE NOT LIMITED TO: APPROVING ALL SUBSIDIARY BOARD MEMBERS, FINANCIAL BUDGETS, AND ISSUANCE OF DEBT. Form 990, Part VI, Section B, line 12c THE CORPORATE COMPLIANCE DEPARTMENT, IN ACCORDANCE WITH THE MCLAREN HEALTH CARE (MHC) BOARD CONFLICT OF INTEREST POLICY, ANNUALLY DISTRIBUTES THE CONFLICT OF INTEREST DISCLOSURE SURVEY TO ALL MHC CORPORATE AND SUBSIDIARY ORGANIZATION BOARD MEMBERS, EXECUTIVES AND OTHER LEADERSHIP EMPLOYEES. THE CORPORATE COMPLIANCE DEPARTMENT, THROUGH THE GOVERNANCE COMMITTEE, COMPILES AND ANALYZES SURVEY DATA BY ORGANIZATION, INVESTIGATES, AND REVIEWS POTENTIAL CONFLICTS WITH THE ORGANIZATION'S CEO AND BOARD CHAIR, AND WHEN NECESSARY, RECOMMENDS ACTIONS TO BE TAKEN TO RESOLVE IDENTIFIED CONFLICTS. A COMPLETE REPORT OF ALL CORPORATE AND SUBSIDIARY BOARD MEMBER AND EXECUTIVE DISCLOSURES, CONFLICTS IDENTIFIED AND ACTIONS TAKEN IS REVIEWED BY THE MHC GOVERNANCE COMMITTEE AND EACH SUBSIDIARY CEO AND BOARD CHAIR RECEIVES A REPORT SPECIFIC TO THEIR ORGANIZATION'S BOARD MEMBERS AND EXECUTIVES. CONFLICTS ARE DISCLOSED TO THE FULL BOARD AND BOARD COMMITTEES SO APPROPRIATE ACTIONS CAN BE TAKEN. ACTIONS MAY INCLUDE PROHIBITING A BOARD MEMBER FROM PARTICIPATING IN DELIBERATIONS INVOLVING TRANSACTIONS WITH A COMPANY WITH WHICH THEY CONDUCT FINANCIAL TRANSACTIONS; BOARD MEMBERS FAILING TO COMPLETE A DISCLOSURE SURVEY OR INTENTIONALLY FAILING TO REPORT A KNOWN CONFLICT OF INTEREST ARE ASKED TO RESIGN. Form 990, Part VI, Section B, line 15 THE COMPENSATION OF THE CEO IS DETERMINED BY THE COMPENSATION COMMITTEE OF MCLAREN HEALTH CARE CORPORATION BASED UPON THE PERFORMANCE OF THE CEO. THE COMPENSATION OF THE CEO IS WITHIN THE SALARY RANGES DETERMINED BY THE COMPENSATION COMMITTEE OF MCLAREN HEALTH CARE CORPORATION. THE PROCESS OF THE COMPENSATION COMMITTEE IS AS FOLLOWS: THE COMPENSATION COMMITTEE IS APPOINTED BY THE BOARD OF DIRECTORS TO REVIEW THE PERFORMANCE AND RECOMMEND THE TOTAL COMPENSATION PACKAGE OF MCLAREN HEALTH CARE CORPORATION'S CEO TO THE BOARD. FURTHER THE COMMITTEE ESTABLISHES THE SALARY RANGES AND PREREQUISITES OF THE CORPORATION'S OTHER MOST HIGHLY COMPENSATED OFFICERS (MHC VICE-PRESIDENTS AND MHC HOSPITAL/SUBSIDIARIES CEO'S) TO THE BOARD. THE MEMBERS OF THE COMMITTEE MUST MEET THE INDEPENDENCE REQUIREMENTS OF THE APPLICABLE PROVISIONS OF SECTION 4958 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED AND FINAL TREASURY REGULATIONS SECTION 53.4956-6(C)(1)(III). THE COMMITTEE RETAINS THE SERVICES OF AN INDEPENDENT FIRM WITH SIGNIFICANT QUALIFICATIONS AND EXPERIENCE TO CONDUCT A REVIEW OF THE CORPORATION'S EXECUTIVE COMPENSATION PROGRAM. THE RETAINED FIRM UTILIZES APPROPRIATE COMPENSATION COMPARABILITY DATA. THE RETAINED FIRM CONDUCTS ANALYSIS OF THE COMPETITIVENESS OF THESE PROGRAMS AND EXPRESSES AN OPINION AS TO THE REASONABLENESS OF THESE COMPENSATION PROGRAMS. ALL DATA UTILIZED BY THE COMMITTEE, DELIBERATIONS OF THE COMMITTEE, AND FINAL COMPENSATION DECISIONS BY THE COMMITTEE ARE DOCUMENTED IN FORMAL REPORTS AND MINUTES. THE CORPORATE COMPENSATION COMMITTEE WORKS UNDER AND PERIODICALLY RENEWS THE MCLAREN HEALTH CARE CORPORATION COMPENSATION COMMITTEE CHARTER AND MCLAREN HEALTH CARE CORPORATION COMPENSATION PHILOSOPHY. FOR SUBSIDIARY VICE PRESIDENTS AND DIRECTORS, THE CORPORATE HUMAN RESOURCES COMMITTEE COORDINATES THE GATHERING OF MARKET INFORMATION FROM A NUMBER OF INDEPENDENT SOURCES. THIS DATA IS ANALYZED ALONG WITH EXPECTED BUDGETARY GUIDELINES. THE CORPORATE VICE PRESIDENT OF HUMAN RESOURCES DETERMINES THE AMOUNT, IF ANY, THAT PAY RANGES INCREASE. THE MOST RECENT YEAR THIS PROCESS WAS UNDERTAKEN WAS 2010. Form 990, Part VI, Section C, line 19 DOCUMENTS ARE MADE AVAILABLE UPON REQUEST. FORM 990, PART VII: MARK O'HALLA AND PHILIP INCARNATI EACH WORKED AN AVERAGE OF AT LEAST 40 HOURS PER WEEK AT MCLAREN HEALTH CARE CORPORATION. FORM 990, PART XI, LINE 2C: THERE HAS BEEN NO CHANGE IN PROCESS FROM PRIOR YEAR. 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