2015-05-08T06:58:11-05:00 2014-06-30 390859910 BAKER TILLY VIRCHOW KRAUSE LLP 1650 MARKET STREET SUITE 4500 PHILADELPHIA PA 19103 990 2013-07-01 232216041 GOOD SHEPHERD REHABILITATION NETWORK GOOD 6107763228 GOOD SHEPHERD PLAZA 850 S 5TH ST ALLENTOWN PA 18103 RONALD J PETULA SVP OF FINANCE & CFO 6107763228 2015-05-04 1 JULIUS C GREEN CPA JD P00350393 2159720701 2013 2016-02-25 16:41:14Z RONALD J PETULA GOOD SHEPHERD PLAZA 850 S 5TH ST ALLENTOWN PA 18103 110566345 0 X WWW.GOODSHEPHERDREHAB.ORG X 1908 PA TO ENHANCE LIVES, MAXIMIZE FUNCTION, INSPIRE HOPE, AND PROMOTE DIGNITY AND WELL-BEING. 18 16 1523 227 246890 245390 4971002 6568155 46453509 46215153 8885525 9535596 1447670 1504255 61757706 63823159 1825893 2088197 0 0 30652209 31027996 39000 39000 2140265 24981567 20534070 57498669 53689263 4259037 10133896 316871170 360789536 157213798 153987485 159657372 206802051 X GOOD SHEPHERD'S MISSION IS: "MOTIVATED BY THE DIVINE GOOD SHEPHERD AND THE PHYSICAL AND COGNITIVE REHABILITATION NEEDS OF OUR COMMUNITIES, OUR MISSION IS TO ENHANCE LIVES, MAXIMIZE FUNCTION, INSPIRE HOPE, AND PROMOTE DIGNITY AND WELL-BEING WITH EXPERTISE AND COMPASSION." 0 0 36342670 2088197 46215153 GOOD SHEPHERD REHABILITATION NETWORK ("GSRN"), BASED IN ALLENTOWN,PENNSYLVANIA IS A NATIONALLY RECOGNIZED REHABILITATION LEADER, OFFERING A CONTINUUM OF CARE FOR PEOPLE WITH PHYSICAL AND COGNITIVE DISABILITIES AND SPECIALIZING IN ASSISTIVE AND REHABILITATION TECHNOLOGY. SPECIALIZED INPATIENT AND OUTPATIENT POST-ACUTE CARE PROGRAMS OFFERED BY GSRN INCLUDE: STROKE, ORTHOPEDICS, BRAIN INJURY, SPINE AND JOINT PAIN, SPINAL CORD INJURY, PEDIATRICS, MULTIPLE SCLEROSIS, AND AMPUTATION. GOOD SHEPHERD OPERATES: 32 OUTPATIENT SITES; 5 INPATIENT SITES; A LONG-TERM ACUTE CARE HOSPITAL; 2 LONG-TERM CARE HOMES FOR PEOPLE WITH SEVERE DISABILITIES; AND AN INDEPENDENT LIVING FACILITY. GOOD SHEPHERD ALSO IS THE MAJORITY OWNER OF A JOINT VENTURE WITH PENN MEDICINE IN PHILADELPHIA, PENNSYLVANIA. GOOD SHEPHERD PENN PARTNERS ("GSPP") PROVIDES THE PHILADELPHIA REGION WITH A CONTINUUM OF POST-ACUTE CARE THAT INCLUDES INPATIENT AND OUTPATIENT REHABILITATION AND LONG-TERM ACUTE CARE. THIRTEEN GSPP PENN THERAPY & FITNESS LOCATIONS PROVIDE OUTPATIENT REHABILITATION SERVICES THROUGHOUT THE GREATER PHILADELPHIA AREA, WHILE PHYSICAL, OCCUPATIONAL, AND SPEECH THERAPY SERVICES ARE PROVIDED WITHIN PENN MEDICINE'S THREE ACUTE-CARE HOSPITALS. GSRN WAS FOUNDED IN 1908 WHEN THE REV. JOHN AND ESTELLA RAKER INVITED A DISABLED ORPHAN NAMED VIOLA INTO THEIR ALLENTOWN, PENNSYLVANIA HOME. GSRN IS AFFILIATED WITH THE EVANGELICAL LUTHERAN CHURCH IN AMERICA AND PROVIDES REHABILITATION SERVICES AT MORE THAN 30 LOCATIONS IN 8 EASTERN PENNSYLVANIA COUNTIES. GOOD SHEPHERD'S MISSION IS: "MOTIVATED BY THE DIVINE GOOD SHEPHERD AND THE PHYSICAL AND COGNITIVE REHABILITATION NEEDS OF OUR COMMUNITIES, OUR MISSION IS TO ENHANCE LIVES, MAXIMIZE FUNCTION, INSPIRE HOPE, AND PROMOTE DIGNITY AND WELL-BEING WITH EXPERTISE AND COMPASSION."GSRN IS THE PARENT ORGANIZATION OF 5 TAX-EXEMPT AFFILIATES THAT OFFER MANY LEVELS OF REHABILITATION CARE. GSRN IS ALSO THE PARENT ORGANIZATION OF ONE TAXABLE AFFILIATE THAT IS A SELF-INSURANCE COMPANY. AS THE PARENT ORGANIZATION, GSRN OPERATES ALL CORPORATE ADMINISTRATIVE FUNCTIONS FOR THE GOOD SHEPHERD AFFILIATES, INCLUDING BUT NOT LIMITED TO ADMINISTRATION, DIETARY, FINANCE, FUNDRAISING, HUMAN RESOURCES, INFORMATION SYSTEMS, MAINTENANCE, MARKETING, AND PASTORAL CARE. 36342670 1 1 0 0 0 0 0 0 0 1 1 1 0 1 1 1 0 1 0 0 0 0 0 1 0 0 0 1 0 1 1 0 1 0 0 0 0 0 0 0 0 0 0 0 0 1 1 1 0 0 0 1 X 272 0 1 1523 1 1 1 0 0 0 0 0 0 0 0 0 X 18 16 0 0 0 0 0 1 1 1 1 0 0 1 1 1 1 1 1 1 1 0 PA FL MN X RONALD J PETULA SVP OF FINANCE 6107763228 GOOD SHEPHERD PLAZA 850 SOUTH 5TH ALLENTOWN PA 18103 X KRISTEL JOHN PRESIDENT/CEO 30.50 29.50 X X 345121 0 17831 DECAMPLI DAVID G CHAIR 0.70 2.10 X X 0 0 0 JARVA WEISS SANDRA ESQ VICE CHAIR 0.20 0.60 X X 0 0 0 STEWART LAURIE TREASURER 0.30 0.90 X X 0 0 0 BAKER SCOTT A SECRETARY 0.30 0.90 X X 0 0 0 BRENNAN PATRICK J MD TRUSTEE 0.30 0.90 X 0 0 0 DIAZ ALVARO TRUSTEE 0.30 0.90 X 0 0 0 GADOMSKI ROBERT E TRUSTEE 0.30 0.90 X 0 0 0 GUMZ F MARK TRUSTEE 0.30 0.90 X 0 0 0 HAYMON ELSBETH G TRUSTEE 0.30 0.90 X 0 0 0 HILGERT KATHERINE E TRUSTEE 0.20 0.60 X 0 0 0 NAKTIN JAAN PETER MD TRUSTEE 0.20 0.90 X 0 0 0 PETRUCCI ROSALIN TRUSTEE 0.20 0.60 X 0 0 0 SCHMIDT GARY R TRUSTEE 0.20 0.60 X 0 0 0 SENFT KAREN TRUSTEE 0.20 0.60 X 0 133176 9114 SNYDER DONALD TRUSTEE 0.20 0.60 X 0 0 0 STROBEL THE REV DAVID R TRUSTEE 0.20 0.60 X 0 0 0 WILSON DANIEL J PHD TRUSTEE 0.30 0.90 X 0 0 0 GAMMON SARA T PRESIDENT/CEO (UNTIL 7/18/13) 30.60 9.40 X 1037018 0 37472 CONFALONE DANIEL C SVP & CFO (UNTIL 11/1/13) 26.00 34.00 X 355847 0 25255 MIRANDA JR SAMUEL A SVP & CNO 10.00 50.00 X 219436 0 53224 PETULA RONALD SVP & CFO 26.00 34.00 X 159857 0 16515 TING HAROLD M SVP STRATEGIC PLAN 40.00 X 201756 0 15382 SHAW-PORTER LAURA M VP HUMAN RESOURCES 40.00 X 188306 0 20133 LYONS DAVID F VP DEVELOPMENT 40.00 X 158791 0 21559 HYLAND FRANK J VP REHAB SVCS 40.00 X 154029 0 14856 BONNER MICHAEL A VP NEUROSCIENCES 40.00 X 137271 0 22718 2957432 133176 254059 10 0 1 0 ONDRA HUYETT ASSOCIATES 7584 MORRIS COURT SUITE 210 ALLENTOWN PA 18106 CONTRACTING SERVICES 703947 SODEXHO OPERATIONS LLC 4880 PAYSPHERE CIRCLE CHICAGO IL 60674 DIETARY/FOOD SERVICES 540360 HT LYONS 7165 AMBASSADOR DRIVE ALLENTOWN PA 18106 CONTRACTING SERVICES 107445 3 6568155 6568155 MANAGEMENT FEES 561000 46215153 46215153 46215153 6622130 6622130 246177 269223 -23046 -23046 -90945 67899 49387429 46473963 2913466 2913466 2913466 EXPENSE REIMBURSEMENT 900099 1150457 1150457 HEALTH NETWORK LABS REV 621500 337835 337835 TRANSPORTATION 900099 4525 4525 34484 34484 1527301 63823159 46215153 246890 10792961 X 2088197 2088197 2910725 272660 2638065 14319588 7514573 5975700 829315 2690345 2655012 35333 9982169 8904042 975102 103025 1125169 566862 505942 52365 119134 111993 7141 145554 145554 39000 39000 679961 679961 7070974 4191270 2747813 131891 536877 13641 523236 1620665 1043842 338924 237899 1228343 1228343 141460 43216 87187 11057 650 650 5028808 5028808 2180781 2106447 74334 237238 237238 UBIT TAX -22243 -22243 CORPORATE ALLOCATIONS 599083 19321 579762 REPAIRS & MAINTENANCE 498495 493613 4882 DUES & SUBSCRIPTIONS 159487 24239 130040 5208 308803 148584 126284 33935 53689263 36342670 15206328 2140265 1690044 8273762 1542690 1436279 292950 1669892 1342330 1199341 238554 130341 27842787 18781342 9352161 9061445 188844273 218466600 89874839 97876112 23693329 22675764 316871170 360789536 5626891 7412382 113911721 111301206 1844002 0 35831184 35273897 157213798 153987485 X 121258620 163576715 10481046 13851866 27917706 29373470 159657372 206802051 316871170 360789536 X 10133896 29291857 7718926 X X 0 1 X 1 0 X 4688896 3468259 5046851 4971002 6568155 24743163 4688896 3468259 5046851 4971002 6568155 24743163 24743163 4783360 5506148 4761968 6051339 6690029 27792844 277503 210099 119980 215788 245390 1068760 1280505 1428321 1264842 1230383 1189466 6393517 59998284 226309607 0.41240 0.39300 X RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 21857579 357470 2655570 1023942 23846677 20369987 843128 1601840 957376 21857579 20129443 754521 368887 882864 20369987 18523874 229597 2262789 886817 20129443 17900332 643738 913701 933897 18523874 0.06000 0.94000 0 0 845318 845318 5654565 2717984 2936581 168169 134636 33533 20465299 15545209 4920090 709436 383513 325923 9061445 50401395 C ALTERNATIVE INVESTMENTS, AT COST 22637479 C ALTERNATIVE INVESTMENTS, ABSOLUTE RETURN 24837238 F 97876112 BENEFICIAL INTEREST IN PERPETUAL TRUSTS 11583135 BENEFICIAL INTEREST IN CHARITABLE REMAINDER TRUSTS 8969628 DEFERRED FINANCING COSTS, NET 2123001 22675764 CHARITABLE GIFT ANNUITIES 1619994 WORKERS' COMPENSATION 1876910 ANNUITIES PAYABLE 71521 DEFINED CONTRIBUTION PLAN LIABILITY 557323 AMOUNTS DUE TO AFFILIATES 26509109 DERIVATIVE FINANCIAL INSTRUMENT 4639040 35273897 X 100423204 29291857 8056761 37348618 63074586 679961 68612 748573 63823159 53278525 269223 269223 53009302 679961 679961 53689263 PART V, LINE 4: GOOD SHEPHERD'S ENDOWMENTS PROVIDE INCOME IN PERPETUITY FOR PROGRAMS AND SERVICES, INCLUDING: RESEARCH, TECHNOLOGY, PEDIATRICS, LONG TERM CARE OPERATIONS AND RECREATION, EDUCATION, GENERAL AND NEUROREHABILITATION PROGRAMS, AND FOR THE GENERAL SUPPORT OF GOOD SHEPHERD'S OPERATIONS. PART X, LINE 2: GOOD SHEPHERD PRESCRIBES A RECOGNITION THRESHOLD OF MORE-LIKELY-THAN-NOT TO BE SUSTAINED UPON EXAMINATION BY THE APPROPRIATE TAXING AUTHORITY IN RECORDING TAX LIABILITIES IN THE FINANCIAL STATEMENTS. MEASUREMENT AND RECOGNITION OF THE TAX UNCERTAINTY OCCURS IF THE RECOGNITION THRESHOLD HAS BEEN MET. GOOD SHEPHERD'S POLICY IS TO RECOGNIZE INTEREST RELATED TO UNRECOGNIZED TAX BENEFITS IN INTEREST EXPENSE AND PENALTIES IN OPERATING EXPENSES. GOOD SHEPHERD'S FEDERAL INCOME TAX RETURNS FOR THE YEARS ENDED PRIOR TO JUNE 30, 2011 NO LONGER REMAIN SUBJECT TO EXAMINATION BY THE INTERNAL REVENUE SERVICE. PART XI, LINE 2D - OTHER ADJUSTMENTS: INCOME ON INVESTMENT IN UNCONSOLIDATED SUBSIDIARY 6,665,750. CHANGE IN FAIR VALUE OF DERIVATIVE FINANCIAL INSTRUMENTS -211,194. PENSION LIABILITIY ADJUSTMENT - UNCONSOLIDATED SUBSIDIARY -207,606. CHANGE IN VALUE OF SPLIT-INTEREST AGREEMENTS 721,518. VALUATION GAIN, BENEFICIAL INTEREST IN PERPETUAL TRUSTS 1,088,293. PART XI, LINE 4B - OTHER ADJUSTMENTS: RENTAL EXPENSES -269,223. HEALTH NETWORK LABS REV 337,835. PART XII, LINE 2D - OTHER ADJUSTMENTS: RENTAL EXPENSES 269,223. X X X X 1 SCHULTZ AND WILLIAMS 325 CHESTNUT STREET SUITE 700 PHILADELPHIA PA 19106 DIRECT MAIL CONSULTING 0 0 39000 -39000 39000 -39000 PA FL MN SCHEDULE G, PART I, LINE 2B, COLUMN (V) THE TOTAL AMOUNT PAID TO SCHULTZ AND WILLIAMS FOR FISCAL YEAR JUNE 30, 2014 WAS $39,000. THE $39,000 REPORTED IN SCHEDULE G, PART I RELATES TO DIRECT MAIL CONSULTING. THE AMOUNT OF CONTRIBUTIONS RECEIVED AS A RESULT OF THIS CONSULTING COULD NOT BE EASILY DETERMINED. 1 GOOD SHEPHERD HOME LONG-TERM CARE FACILITY INC GOOD SHEPHERD PLAZA 850 SOUTH 5TH STREET ALLENTOWN PA 18103 232215800 501(C)(3) 507161 N/A N/A CHARITABLE ACTIVITIES GOOD SHEPHERD REHABILITATION HOSPITAL GOOD SHEPHERD PLAZA 850 SOUTH 5TH STREET ALLENTOWN PA 18103 231371947 501(C)(3) 1580260 N/A N/A CHARITABLE ACTIVITIES 2 0 PART I, LINE 2: ALL RECIPIENTS ARE AFFILIATED TAX-EXEMPT ORGANIZATIONS. GSRN SERVES AS THE PARENT ENTITY AND IS AWARE OF THE OPERATIONS AND USE OF FUNDS RECEIVED. X 1 1 X X X X X X 1 1 0 0 0 0 0 1 0 KRISTEL JOHN PRESIDENT/CEO 272797 0 72324 0 0 0 10292 0 7539 0 362952 0 0 0 GAMMON SARA T PRESIDENT/CEO (UNTIL 7/18/13) 393870 0 0 0 643148 0 34535 0 2937 0 1074490 0 482490 0 CONFALONE DANIEL C SVP & CFO (UNTIL 11/1/13) 313710 0 0 0 42137 0 11851 0 13404 0 381102 0 0 0 MIRANDA JR SAMUEL A SVP & CNO 219436 0 0 0 0 0 43328 0 9896 0 272660 0 0 0 PETULA RONALD SVP & CFO 150573 0 9284 0 0 0 5324 0 11191 0 176372 0 0 0 TING HAROLD M SVP STRATEGIC PLAN 201756 0 0 0 0 0 6719 0 8663 0 217138 0 0 0 SHAW-PORTER LAURA M VP HUMAN RESOURCES 188306 0 0 0 0 0 7702 0 12431 0 208439 0 0 0 LYONS DAVID F VP DEVELOPMENT 158791 0 0 0 0 0 8411 0 13148 0 180350 0 0 0 HYLAND FRANK J VP REHAB SVCS 154029 0 0 0 0 0 5130 0 9726 0 168885 0 0 0 BONNER MICHAEL A VP NEUROSCIENCES 135111 0 2160 0 0 0 10180 0 12538 0 159989 0 0 0 PART I, LINE 1A GOOD SHEPHERD DOES NOT PAY ANY DUES ON BEHALF OF CEO, SARA GAMMON, DIRECTLY TO A SOCIAL CLUB. GOOD SHEPHERD REIMBURSES THE CEO FOR CERTAIN SOCIAL CLUB DUES RELEVANT IN PURSUING THE OVERALL MISSION OF GOOD SHEPHERD. THESE EXPENSES ARE ACCOUNTED FOR UNDER AN ACCOUNTABLE REIMBURSEMENT PLAN. THE AMOUNT OF THIS REIMBURSEMENT IS INCLUDED IN MS. GAMMON'S TAXABLE COMPENSATION. PART I, LINES 4A-B DANIEL CONFALONE - $42,137 SEVERANCE AND $1,527. STIPEND PAID IN CY13. 6 WEEKS OF A 52 WEEK TOTAL. DANIEL CONFALONE - $224,732 SEVERANCE AND $8,144. STIPEND PAID IN FY14. 32 WEEKS OF A 52 WEEK TOTAL. SARA GAMMON - $643,148 DISTRIBUTION FROM A 457F PLAN. PART I, LINE 7 GSRN HAS A PERFORMANCE COMPENSATION PROGRAM IN PLACE WHICH IS APPROVED BY THE BOARD. CERTAIN MEMBERS OF MANAGEMENT CAN RECEIVE AN ANNUAL PERFORMANCE PAYMENT ONLY WHEN PRE-DEFINED AND PRE-APPROVED FINANCIAL AND NON-FINANCIAL GOALS ARE ACHIEVED. FOR FISCAL YEAR 2014, A PERFORMANCE PAYMENT WAS ACHIEVED. THE ACTUAL PAYMENT OCCURS IN NOVEMBER OF THE FOLLOWING FISCAL YEAR. THIS IS NOT GUARANTEED EACH YEAR. A LEHIGH COUNTY GENERAL PURPOSE AUTHORITY 911886539 52480RCE8 2012-12-20 32511568 SEE PART VI 0 0 0 B LEHIGH COUNTY GENERAL PURPOSE AUTHORITY 911886539 5248058S0 2007-11-15 51367939 SEE PART VI 0 0 0 C LEHIGH COUNTY GENERAL PURPOSE AUTHORITY 911886539 52480RAZ3 2011-12-01 34840000 SEE PART VI 0 0 0 A 160000 32511568 27968861 495514 1960044 2087149 0 1 0 1 B 4050000 51367939 4014025 1597399 45756515 2009 1 0 1 1 C 8440000 34840000 34840000 2011 1 0 1 1 A 0 0 1 1 0 0.00000 0.00000 0.00000 0 0 1 B 0 0 1 1 0 0.00000 0.00000 0.00000 0 0 1 C 0 0 1 1 0 0.00000 0.00000 0.00000 0 0 1 A 0 1 0 0 1 0 0 1 1 B 0 0 0 1 1 1 MERRILL LYNCH CAPITAL SERVICES 20.900000000000 0 0 0 0 1 C 0 0 1 0 1 1 MERRILL LYNCH CAPITAL SERVICES 26.500000000000 0 0 0 0 1 A 1 B 1 C 1 DATE REBATE COMPUTATION PERFORMED ISSUER NAME: LEHIGH COUNTY GENERAL PURPOSE AUTHORITY DATE THE REBATE COMPUTATION WAS PERFORMED: 10/02/2012 PART I, COLUMN F: DESCRIPTION OF PURPOSE: BOND ISSUE A: ADVANCE REFUNDING OF 2004 BONDS, CAPITAL PROJECTS, AND ISSUANCE COSTS BOND ISSUE B: FINANCE CAPITAL INVESTMENTS BOND ISSUE C: TO REFUND THE 2007B AND 2008A BONDS PART IV LINE 6A: THE ESCROW FUND HAS BEEN INVESTED BEYOND THE TEMPORARY PERIOD BUT AT A YIELD BELOW THE YIELD OF THE BONDS. FORM 990, PART V, LINE 2: THE SALARY AND BENEFIT EXPENSES REPORTED ON FORM 990, PART IX, AND THE EMPLOYEE INFORMATION REPORTED ON FORM 990, PART VII, ARE THE GOOD SHEPHERD REHABILITATION NETWORK'S ("GSRN") ALLOCATED PAYROLL COSTS BASED ON TIME SPENT. ALL INDIVIDUALS WORKING AT GSRN ARE EMPLOYEES OF THE GOOD SHEPHERD REHABILITATION HOSPITAL ("GSRH") AND ARE REPORTED ON ITS FORM W-3 UNDER EIN: 23-1371947. GSRH IS AN AFFILIATED TAX-EXEMPT ORGANIZATION. FORM 990, PART VI, SECTION A, LINE 7A TWO-THIRDS OF THE ORGANIZATION'S TRUSTEES SHALL BE ELECTED BY THE SYNOD COUNCIL OF THE NORTHEASTERN PENNSYLVANIA SYNOD OF THE EVANGELICAL CHURCH IN AMERICA. FORM 990, PART VI, SECTION A, LINE 7B THE ORGANIZATION'S BYLAWS MAY BE ALTERED, AMENDED, OR REPEALED BY THE BOARD. IN ADDITION, THE AMENDMENT SHALL BE APPROVED BY THE SYNOD COUNCIL OF THE NORTHEASTERN PENNSYLVANIA SYNOD OF THE EVANGELICAL CHURCH IN AMERICA BEFORE TAKING EFFECT. FORM 990, PART VI, SECTION B, LINE 11 THE IRS FORM 990 IS PREPARED USING INFORMATION SOLICITED FROM OFFICERS, DIRECTORS, TRUSTEES, BOARD COMMITTEE MEMBERS, AND MANAGEMENT. THIS GROUP OF INDIVIDUALS IS PROVIDED A DRAFT RETURN BEFORE THE FINAL RETURN IS FILED. QUESTIONS, COMMENTS, AND ADDITIONAL INFORMATION PROVIDED BY THIS GROUP ARE INCORPORATED INTO THE FINAL RETURN. THE FINAL RETURN IS REVIEWED AT A COMMITTEE LEVEL OF THE BOARD PRIOR TO IT BEING FILED. FORM 990, PART VI, SECTION B, LINE 12C THERE IS A SYSTEMATIC PROCESS COORDINATED THROUGH THE GOVERNANCE COMMITTEE WHERE THE CONFLICT OF INTEREST STATEMENTS COMPLETED ANNUALLY BY BOARD MEMBERS AND THE SENIOR LEADERSHIP TEAM MEMBERS ARE REVIEWED BY THE GOVERNANCE COMMITTEE. WHENEVER THE COMMITTEE FEELS THE CONFLICT STATEMENT IS EITHER INCOMPLETE OR FEELS SOMETHING MAY BE MISSING, THE COMMITTEE WILL ASK MANAGEMENT TO PURSUE FURTHER DUE DILIGENCE. WHEN A BOARD MEMBER DOES HAVE AN INHERENT CONFLICT, THE TRUSTEE IS ASKED TO EITHER ABSTAIN FROM VOTING OR EXCUSE HIMSELF FROM THE ROOM DURING THE DISCUSSION AND VOTING. FORM 990, PART VI, SECTION B, LINE 15 THE BOARD OF TRUSTEES OF GOOD SHEPHERD REHABILITATION NETWORK (GSRN) DELEGATES RESPONSIBILITY FOR FOLLOWING ALL LEGAL AND REGULATORY REQUIREMENTS AFFECTING EXECUTIVE COMPENSATION TO THE HUMAN RESOURCES/COMPENSATION COMMITTEE OF THE BOARD (THE COMMITTEE). THE BOARD DELEGATES RESPONSIBILITY TO ENGAGE EXTERNAL RESOURCES AS NECESSARY TO THE COMMITTEE TO SUPPORT DELIBERATIONS AND DECISION MAKING RELATED TO EXECUTIVE COMPENSATION. THE COMMITTEE SELECTED AND UTILIZES AN INDEPENDENT COMPENSATION CONSULTANT, MERCER - A MARSH & MCCLENNAN COMPANY, (THE "CONSULTANT") AS A RESOURCE TO ASSIST WITH DECISIONS RELATED TO EXECUTIVE COMPENSATION. ACCORDING WITH THE COMMITTEE'S ANNUAL WORK PLAN, THE CONSULTANT PRESENTED A REASONABLENESS OPINION FOR 2014 ON JUNE 5, 2014 AND FOUND THE FOLLOWING: "MERCER (US), INC. CERTIFIES THAT IT (1) IS A COMPENSATION-CONSULTING FIRM, (2) PERFORMS COMPENSATION VALUATION STUDIES OF THIS TYPE ON A REGULAR BASIS, AND (3) IS QUALIFIED TO PERFORM THE VALUATIONS OF THE TYPE OF PROPERTY OR SERVICES INVOLVED. IN OUR OPINION, THE TOTAL REMUNERATION WE HAVE REVIEWED FALLS WITHIN THE REASONABLE RANGE OF COMPETITIVE MARKET PRACTICES APPLICABLE TO LIKE POSITIONS AMONG LIKE ORGANIZATIONS UNDER LIKE CIRCUMSTANCES." THE REASONABLENESS OPINION WAS REVIEWED WITH THE COMMITTEE AT THEIR JUNE 2014 MEETING. ALL OF THE COMPENSATION MEETINGS ARE FORMALLY DOCUMENTED CONSISTENT WITH BEST GOVERNANCE PRACTICES. FORM 990, PART VI, SECTION C, LINE 19 FINANCIAL STATEMENTS ARE PUBLISHED TO THE ORGANIZATION'S WEBSITE AT LEAST ANNUALLY. THE GOVERNING DOCUMENTS AND POLICIES ARE AVAILABLE UPON REQUEST. FORM 990, PART VI, LINE 1: THE EXECUTIVE COMMITTEE IS COMPRISED OF THE CHAIRS OF ALL THE BOARD COMMITTEES AS WELL AS THE CHAIR AND VICE CHAIR OF THE BOARD. ALL EXECUTIVE COMMITTEE MEMBERS ARE MEMBERS OF THE BOARD OF TRUSTEES. THE EXECUTIVE COMMITTEE CAN ACT ON BEHALF OF THE BOARD OF TRUSTEES IN MOST CASES. ANY FUNDAMENTAL CHANGES WILL GO TO THE FULL BOARD. FORM 990, PART IX, LINE 11G CONSULTANTS: PROGRAM SERVICE EXPENSES 4,191,270. MANAGEMENT AND GENERAL EXPENSES 2,747,813. FUNDRAISING EXPENSES 131,891. TOTAL EXPENSES 7,070,974. FORM 990, PART XI, LINE 9: INCOME ON INVESTMENT IN UNCONSOLIDATED SUBSIDIARY 6,665,750. CHANGE IN FAIR VALUE OF DERIVATIVE FINANCIAL INSTRUMENTS -211,194. PENSION LIABILITY ADJUSTMENT - UNCONSOLIDATED SUBSIDIARY -207,606. CHANGE IN VALUE OF SPLIT-INTEREST AGREEMENTS 721,518. VALUATION GAIN, BENEFICIAL INTEREST IN PERPETUAL TRUSTS 1,088,293. REDUCTION IN EQUITY TO REPORT HEALTH NETWORK LABS REVENUE -337,835. FORM 990, PART XI, LINE 2C: THE PROCESSES USED BY THE COMMITTEE THAT ASSUMES RESPONSIBILITY FOR OVERSIGHT OF THE AUDIT OF THE ORGANIZATION'S FINANCIAL STATEMENTS AND THE SELECTION OF AN INDEPENDENT ACCOUNTANT HAVE NOT CHANGED FROM THE PRIOR YEAR. GOOD SHEPHERD GROUP LLC GOOD SHEPHERD PLAZA 850 SOUTH 5TH S ALLENTOWN PA 18103 201289638 REHABILITATION PRODUCT DEVELOPMENT PA -9669 3700 GOOD SHEPHERD REHABILITATION NETWORK GOOD SHEPHERD HOME LONG-TERM CARE FACILITY INC GOOD SHEPHERD PLAZA 850 SOUTH 5TH S ALLENTOWN PA 18103 232215800 OPERATES TWO SKILLED NURSING FACILITIES FOR THE SEVERELY DISABLED PA 501(C)(3) LINE 3 GOOD SHEPHERD REHABILITATION NETWORK 1 GOOD SHEPHERD HOUSING DEVELOPMENT CORPORATION GOOD SHEPHERD PLAZA 850 SOUTH 5TH S ALLENTOWN PA 18103 233073390 PROVIDES INDEPENDENT LIVING APTS FOR DISABLED, LOW-INCOME ADULTS PA 501(C)(3) LINE 9 GOOD SHEPHERD REHABILITATION NETWORK 1 PHILADELPHIA POST-ACUTE PARTNERS LLC 1800 LOMBARD STREET PHILADELPHIA PA 19146 208283421 OPERATES INPATIENT REHAB HOSP, ACUTE CARE HOSP & 8 OUTPATIENT FACILITIES PA 501(C)(3) LINE 3 GOOD SHEPHERD REHABILITATION NETWORK 1 THE ALLENTOWN SPECIALTY HOSPITAL INC GOOD SHEPHERD PLAZA 850 SOUTH 5TH S ALLENTOWN PA 18103 233009874 PROVIDES INPATIENT SVCS THROUGH OPERATION OF A LONG-TERM ACUTE CARE HOSP PA 501(C)(3) LINE 3 GOOD SHEPHERD REHABILITATION NETWORK 1 THE GOOD SHEPHERD REHABILITATION HOSPITAL GOOD SHEPHERD PLAZA 850 SOUTH 5TH S ALLENTOWN PA 18103 231371947 PROVIDES COMPREHENSIVE INPATIENT AND OUTPATIENT REHABILITATION SERVICES PA 501(C)(3) LINE 3 GOOD SHEPHERD REHABILITATION NETWORK 1 GOOD SHEPHERD RECIPROCAL RISK RENTENTION GROUP 7301 RIVERS AVENUE SUITE 230 NORTH CHARLESTON SC 29406 204065112 RISK RETENTION GROUP SC GOOD SHEPHERD REHABILITATION NETWORK C 7088679 1.00000 1 0 1 1 0 0 1 0 0 1 0 0 1 0 0 1 0 1 1 1 THE GOOD SHEPHERD REHABILITATION HOSPITAL B 1580260 COST THE GOOD SHEPHERD REHABILITATION HOSPITAL I 638158 COST THE GOOD SHEPHERD REHABILITATION HOSPITAL L 25036835 COST THE GOOD SHEPHERD REHABILITATION HOSPITAL O 7457008 COST THE GOOD SHEPHERD REHABILITATION HOSPITAL Q 12103787 COST THE GOOD SHEPHERD REHABILITATION HOSPITAL R 50254594 COST THE ALLENTOWN SPECIALTY HOSPITAL INC L 3454352 COST THE ALLENTOWN SPECIALTY HOSPITAL INC O 1090324 COST THE ALLENTOWN SPECIALTY HOSPITAL INC Q 2640117 COST THE ALLENTOWN SPECIALTY HOSPITAL INC R 1596322 COST GOOD SHEPHERD HOME LONG-TERM CARE FACILITY INC B 507161 COST GOOD SHEPHERD HOME LONG-TERM CARE FACILITY INC L 6388227 COST GOOD SHEPHERD HOME LONG-TERM CARE FACILITY INC O 2320239 COST GOOD SHEPHERD HOME LONG-TERM CARE FACILITY INC Q 2506614 COST GOOD SHEPHERD HOME LONG-TERM CARE FACILITY INC R 736427 COST PHILADELPHIA POST-ACUTE PARTNERS LLC F 4809000 COST PHILADELPHIA POST-ACUTE PARTNERS LLC L 713230 COST PHILADELPHIA POST-ACUTE PARTNERS LLC Q 13432790 COST GOOD SHEPHERD RECIPROCAL RISK RENTENTION GROUP S 777858 COST