2011-05-13T15:36:32-05:00 2010-06-30 Deloitte Tax LLP 50 South Sixth Street Suite 2800 Minneapolis MN 55402 990 2009-07-01 261530302 MeritCare Minnesota MERI 7012342000 1720 South Highway 59 Thief River Falls MN 56701 Lisa M Carlson 7012344811 2011-05-13 1 6123974000 2011-05-13 2009 2016-02-24 21:20:13Z Kelby K Krabbenhoft 1305 W 18TH ST Sioux Falls SD 57117 63372 0 X WWW.sanfordhealth.org X 2007 MN Dedicated to the Work of Health and Healing X 15 10 0 0 0 0 0 3284947 52432 0 10940 3284947 63372 0 0 0 0 0 1859611 0 1859611 0 1425336 63372 1636916 0 41662 0 1595254 0 The Mission of Sanford, "Dedicated to the Work of Health and healing" and the Vision, "Improving the Human Condition Through Exceptional Care, Innovation and Discovery", are the constant force that drive the organization's plans, decisions and actions. 0 1 0 63372 As part of the Sanford integrated delivery system, MeritCare Minnesota operates an ambulatory surgical center called MeritCare Thief River Falls Southeast Surgery Center in Thief River Falls, Minnesota. 1 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 1 0 0 0 0 0 0 0 0 0 0 0 1 0 1 1 0 0 1 0 0 0 0 0 0 0 0 0 0 0 0 15 10 1 0 1 0 1 1 1 1 1 0 0 0 1 1 1 1 1 1 1 0 MN X Les Wietstock 7012342000 PO Box 2010 Fargo ND 58122 X Kelby Krabbenhoft 60.00 X X 0 1123846 748719 Ronald Moquist 0.50 X X 0 0 0 Lauris Molbert 0.50 X X 0 0 0 Barbara Stork 0.50 X X 0 0 0 David Bieto 0.50 X X 0 0 0 Roger Gilbertson MD 60.00 X X 0 1004743 989160 Douglas Vang 60.00 X X 0 285002 48657 Paul Richard 60.00 X X 0 286282 49603 Terry Baloun 0.50 X 0 0 0 Michael Olson MD 60.00 X 0 561750 53780 Pamela Anderson 0.50 X 0 0 0 Terrence Grimm MD 60.00 X 0 607209 41089 Barry Martin 0.50 X 0 0 0 John Jambois 0.50 X 0 0 0 James Entenman 0.50 X 0 0 0 John Vander Woude Jr MD 60.00 X 0 2134556 29404 Jerome Feder 0.50 X 0 0 0 Mark Paulson MD 60.00 X 0 225981 43832 Bruce Pitts MD 60.00 X 0 439889 49257 Lisa Carlson 60.00 X 0 294054 49603 Michael Gibbs 60.00 X 0 259344 13836 Jeffrey Hoss 60.00 X 0 255549 50245 Linda O'Halloran 60.00 X 0 258830 5116 0 7737035 2172301 0 0 1 0 0 Patient Services 621400 52432 52432 52432 Bad Debt Recoveries 900099 10940 10940 10940 63372 63372 0 0 0 0 0 0 413884 343051 879981 0 1636916 0 41662 41662 0 X 1595254 0 1595254 0 1636916 0 X 0 1 1 X 0 X 0 The operations of MeritCare Minnesota were combined with Sanford Medical Center Thief River Falls (Northwest Medical Center) on July 1, 2009. MeritCare TRF Southeast Surgery Center

1720 South Highway 59 Thief River Falls MN 56701

X X Ambulatory surgery center The operations of MeritCare Minnesota were combined with Sanford Medical Center Thief River Falls (Northwest Medical Center) on July 1, 2009. 1 1 1 0 0 0 1 0 0 Kelby Krabbenhoft 0 746924 0 0 0 376922 0 730587 0 18132 0 1872565 0 79234 Roger Gilbertson MD 0 567216 0 0 0 437527 0 973515 0 15645 0 1993903 0 48624 Douglas Vang 0 281769 0 0 0 3233 0 32720 0 15937 0 333659 0 0 Paul Richard 0 285250 0 0 0 1032 0 32720 0 16883 0 335885 0 0 Michael Olson MD 0 535584 0 1456 0 24710 0 39748 0 14032 0 615530 0 15838 Terrence Grimm MD 0 497424 0 108201 0 1584 0 32720 0 8369 0 648298 0 0 John Vander Woude Jr MD 0 1038461 0 0 0 1096095 0 7350 0 22054 0 2163960 0 920379 Mark Paulson MD 0 180376 0 45053 0 552 0 28836 0 14996 0 269813 0 0 Bruce Pitts MD 0 434319 0 0 0 5570 0 32720 0 16537 0 489146 0 0 Lisa Carlson 0 292197 0 0 0 1857 0 32720 0 16883 0 343657 0 0 Michael Gibbs 0 256916 0 0 0 2428 0 0 0 13836 0 273180 0 0 Jeffrey Hoss 0 253328 0 0 0 2221 0 32720 0 17525 0 305794 0 0 Linda O'Halloran 0 257798 0 0 0 1032 0 0 0 5116 0 263946 0 0 Part I, Line 1a On Part I, Questions Regarding Compensation, Sanford checked several of the items as provided to listed persons: First Class or Charter Travel - Charter travel for business purposes is provided for individuals as needed and as cost appropriate. These costs are not included in the W-2's of the individuals as they meet the business purpose of Sanford. Travel for Companions - Limited travel for companions is required for an annual meeting. These costs are not included in the W-2's of the individuals as they meet the business purpose of Sanford. Tax Indemnification and gross-up payments - Compensation may be grossed up to include appropriate tax amounts in certain circumstances. Health or social club dues or initiation fees - All Sanford employees are eligible for discounted wellness memberships, a portion of these discounts and other club dues are taxed as fringe benefits. Personal services - Individuals may have benefits which include tax preparation or planning, this benefit is included in income and taxed. Part I, Line 3: The Sanford Board of Trustees directly engages a nationally recognized independent compensation consulting firm to annually review the total compensation of arrangements of the officers of the organization, and to report findings and recommendations to the Sanford Board of Trustees for deliberation and action. The most recent study was completed in 2010. Part I, Line 4a Part I, Line 4a: To be in compliance with the IRS regulatory environment, listed individuals compensation includes a one-time payment of deferred compensation; this compensation was earned over multiple periods, and should be treated as earned over that length of time in exchange for services provided. These amounts were already reported in previous years as compensation. Distributions were paid to the following individuals: Kelby Krabbenhoft $79,234 Michael Olson, MD $15,838 Dr. Roger Gilbertson was President and CEO of MeritCare Health System. MeritCare and Sanford Health merged on November 2, 2009 at which time Dr. Gilbertson retired. Upon retirement Dr. Gilbertson received a separation payment of $1,000,920 of which $48,624 was paid during the calendar year and $952,295 was accrued to be paid monthly through November 1, 2011. The payment was consistent with the President's Employment Agreement effective January 1, 2007. Part I, Line 4b/Schedule J, Part II, Column C: In addition to employer contributions to pension plans, amounts representing increases and decreases in actuarial value (actuarial value factors include age, tenure and salary) of defined contribution and defined benefit SERP Plans are included in Column C. Participants and changes in values include: Kelby Krabbenhoft $706,194 Roger Gilbertson, MD $ 94,324 Part I, Line 4c: Several listed individuals received payment distributions from a benefit plan that falls within the definition of an "equity based" compensation plan. These amounts were deferred over multiple year periods, and were included in compensation in those periods. Distributions were paid to: John Vander Woude, MD $920,379 Part I, Line 6 Sanford physicians are compensated based on the professional services they perform within the clinic in which they provide care. Generally, the model is revenues less expenses. Physicians listed that were paid on this model include: Michael Olson, MD Supplemental Information Part III Compensation reported on Schedule J includes: (B)(i) Base compensation - salaries are based on the experience and performance of each executive and bench-marked using independent compensation survey information. (B)(ii) - Bonus & incentive compensation - as part of executive compensation, individuals may be eligible for incentive performance compensation, however if the organization does not make its financial budget, the Executive does not receive an incentive payment regardless of performance. (B)(iii) Other Reportable Compensation - generally includes taxable executive benefits. It also includes the one-time payout of previously deferred compensation (which was also reported as compensation in the earned period). To be in compliance with the IRS regulatory environment, listed individuals compensation includes a one-time payment of deferred compensation; this compensation was earned over multiple periods, and should be treated as earned over that length of time in exchange for services provided. (C) Deferred Compensation includes employer contributions to pension plans and the increase (or decrease) in the actuarial value (actuarial value factors include age, tenure and salary) of the benefit plans. (D) Nontaxable Benefits generally includes health insurance premiums. Supplemental Information Part III A memo regarding executive compensation, written by the Chairman of the Sanford Board of Trustees, is on file and available upon request. Supplemental Information Part III The total compensation paid to Kelby Krabbenhoft of $1,123,846 is comprised of Base salary of $746,924, the one-time payment of previously deferred compensation of $79,234 (see also explanation above) and Other Taxable Earning of $297,688. All Net Assets 2010-04-30 1658626 Book Value 450226909 SANFORD MEDICAL CENTER FARGO 801 BROADWAY NORTH FARGO ND 58122 501(C)(3) 1 1 0 0 Part II, Line 2e: Roger Gilbertson, Douglas Vang, Lisa Carlson, Paul Richard were and are Trustees / Board members pre and post transfer of assets.Trustees are employees of Sanford, a related organization Form 990, Part III, line 3 Changes in Program Services As a part of the Sanford Delivery System, MeritCare Minnesota operated an ambulatory surgery center in Thief River Falls, MN called MeritCare Thief River Falls Southeast Surgery Center. During the tax year, the operations of this business were moved to Sanford Medical Center Thief River Falls (a related organization). Form 990, Part VI, Section A, line 2 Pamela Anderson, Trustee and Lisa Carlson, CFO, have a business relationship. Form 990, Part VI, Section A, line 4 The number and composition of the Board of Directors of MeritCare Minnesota has changed in the past fiscal year. The number of individuals who are members of the Board of Directors was amended to the members shall consist of those individuals who from time to time serve as members of the Board of Trustees for Sanford North. The new Bylaws state the officers of MeritCare Minnesota consist of the President and CEO of Sanford North and those persons serving from time to time as officers of the Board of Trustees of Sanford North. Officers of the Board of Directors shall consist of a Chair, Vice Chair and Secretary / Treasurer. Form 990, Part VI, Section A, line 6 Sanford North is the sole corporate member of MeritCare Minnesota. Sanford North's members are its Trustees. The Trustees of Sanford North are also the Trustees of MeritCare Minnesota and approve the actions of both organizations. Form 990, Part VI, Section A, line 7a The Trustees of Sanford North are also the Trustees of MeritCare Minnesota and approve the actions of both organizations. Form 990, Part VI, Section A, line 7b The Trustees of Sanford North approve the actions by MeritCare Minnesota. Form 990, Part VI, Section B, line 11 The Form 990 is prepared internally by the finance department and reviewed by executive management, including both the System CEO and CFO. An external accounting firm reviews the return prior to filing and presents return highlights and key disclosures to the Board of Trustees at the meeting immediately following the return filing date. After the return is filed, a complete copy is made available to the current trustees. Form 990, Part VI, Section B, line 12c The annual Conflict of Interest disclosure process is managed by the Chief Compliance Officer (CCO). The CCO is responsible for assuring that all completed forms are returned in a timely and complete manner. Conflict of Interest questionnaires are sent to Sanford Trustees, members of the governing boards for subsidiary entities, officers, and key employees. The disclosures are summarized for review by the executive committee of the Board of Trustees, pursuant to policy. This review allows: 1) The Board to acquire an awareness of financial relationships of board members and key management employees and can invoke the recusal process on a case-by-case basis when potential conflicts are implicated in Board decisions and deliberations, and, 2) Gives the Board the opportunity to seek additional information and clarification about disclosures to determine potential conflicts of interest and how to manage such. Form 990, Part VI, Section B, line 15 The Sanford Board of Trustees directly engages a nationally recognized independent compensation consulting firm to annually review the total compensation arrangements of the officers and operating unit executives of the organization, including the CEO, and to report the findings and recommendations to them for deliberation and action. The deliberations and actions are recorded in the minutes of the Sanford Board of Trustees. The most recent study was completed in 2010. Form 990, Part VI, Section C, line 19 Although the organization does not maintain a website where the public can access these documents, it would respond individually to any requests or inquiries from the public for these documents. Form 990, Part VII Board members of Sanford provide services to Sanford subsidiaries. Hours reported for each individual reflect the time spent on work related to either the filing organization or related organization. Sanford Board of Trustees has ultimate governance responsibilities for each entity within the Sanford system. In addition, a Board of Directors is established for each entity, which has specific delegated responsibilities from the Board of Trustees related to the oversight of day to day operations of that entity. Form 990, Schedule R, Part V Costing Method for Related Party Transactions The transfer of assets to Sanford Medical Center Fargo was recored at cost. Sanford North PO Box 2010 Fargo ND 58122 450385890 Supporting Organization ND 501(c)(3) 11-II Sanford Sanford Clinic North PO Box 2010 Fargo ND 58122 911770748 Clinic ND 501(c)(3) 9 Sanford North Sanford Medical Center Fargo PO Box 2010 Fargo ND 58122 450226909 Hospital ND 501(c)(3) 3 Sanford North Sanford Health Foundation North PO Box 2010 Fargo ND 58122 450398104 Supporting Organization ND 501(c)(3) 7 Sanford North Sanford Health Network North PO Box 2010 Fargo ND 58122 450409348 Hospitals / Clinics ND 501(c)(3) 11-II Sanford North MeritCare Health EnterprisesInc PO Box 2010 Fargo ND 58122 450359785 Sales of prescription drugs ND 501(c)(4) Sanford North F-M Ambulance Service 2215 18th St South Fargo ND 58103 450344371 Emergency Medical Transport Services ND 501(c)(4) Sanford North Sanford Medical Center Thief River Falls 120 Labree Ave S Thief River Falls MN 56701 410709579 Hospital MN 501(c)(3) 3 Sanford North Sanford Medical Center Mayville 42 6th Ave SE Mayville ND 58257 450228899 Hospital ND 501(c)(3) 3 Sanford North Agassiz Assurance Company 100 Bank Street610 Burlington VT 05401 743121855 Malpractice Insurance VT 501(c)(3) 11-II Sanford North Sanford Medical Center Wheaton 401 12th St N Wheaton MN 56296 272042143 Hospitals / Clinics MN 501(c)(3) 3 Sanford North Sanford Health 1305 W 18th St PO Box 5039 Sioux Falls SD 571175039 311527032 Supporting Organization SD 501(c)(3) 11-III Sanford Sanford USD Medical Center 1305 W 18th St PO Box 5039 Sioux Falls SD 571175039 460227855 Hospital SD 501(c)(3) 3 Sanford Health Sanford Clinic 1305 W 18th St PO Box 5039 Sioux Falls SD 571175039 460447693 Clinic SD 501(c)(3) 3 Sanford Health Sanford Health Network 1305 W 18th St PO Box 5039 Sioux Falls SD 571175039 460388596 Hospitals / Clinics SD 501(c)(3) 11-I Sanford Health Sanford Home Health 1305 W 18th St PO Box 5039 Sioux Falls SD 571175039 460282134 Home Health Services SD 501(c)(3) 9 Sanford Health Sanford Health Foundation 1305 W 18th St PO Box 5039 Sioux Falls SD 571175039 363297853 Supporting Organization SD 501(c)(3) 11-I Sanford Health Sanford Research USD 1305 W 18th St PO Box 5039 Sioux Falls SD 571175039 460450378 Research SD 501(c)(3) 4 Sanford Health Sanford World Clinics 1305 W 18th St PO Box 5039 Sioux Falls SD 571175039 262707628 Healthcare SD 501(c)(3) 3 Sanford Health Sanford 801 N Broadway Drive Fargo ND 58122 271218956 Supporting Organization ND 501(c)(3) 11-II SHM-MeritCare 801 N Broadway Drive Fargo ND 58122 271213717 Supporting Organization ND 501(c)(3) 11-II SHM-Sanford 1305 W 18th St PO Box 5039 Sioux Falls SD 571175039 271213769 Supporting Organization SD 501(c)(3) 11-II National Student Housing - South Dakota LLC 100 S Phillips Ave Sioux Falls SD 57104 202129839 Investment SD Sanford Related 0 0 RAC Rentals LLC 100 S Phillips Ave Sioux Falls SD 57104 261961077 Investment SD Sanford Related 0 0 Healthcare Environmental Services Inc 1420 40th St NW Fargo ND 58102 450336598 Laundry & Incineration Services ND Sanford North C Heart Partners at Sanford 1305 West 18th St Sioux Falls SD 57117 460449572 Healthcare SD Sanford Health C Sanford Home Medical Equipment Inc 2710 West 12th Street Sioux Falls SD 571043701 460388597 Healthcare Equipment SD Sanford Health C Sanford Health Plan 300 Cherapa Place 201 Sioux Falls SD 57103 911842494 Insurance SD Sanford Health C Sanford Health Plan of Minnesota 301 Cherapa Place 201 Sioux Falls SD 57103 460445852 Insurance MN Sanford Health C 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 1 0 Sanford Medical Center Fargo Q 1658626