2011-10-18T11:10:57-04:00 2010-12-31 ERNST & YOUNG US LLP 178 S RIO GRANDE STREET SUITE 400 SALT LAKE CITY UT 84101 990 2010-01-01 942948131 SUTTER WEST BAY MEDICAL FOUNDATION SUTT 9162866665 2015 STEINER STREET 1ST FLOOR SAN FRANCISCO CA 94115 JOHN GATES 9162866665 2011-10-10 8013503300 2010 2016-03-07 17:11:31Z MARTIN BROTMAN MD 2015 STEINER STREET SAN FRANCISCO CA 94115 155698169 false X WWW.SUTTERHEALTH.ORG X 1984 CA SEE SCHEDULE O 31 29 614 0 0 0 1188361 1654200 64546130 153873734 32774 35879 138376 0 65905641 155563813 35417 83217 0 0 23128361 44543797 0 0 0 64288695 137859192 87452473 182486206 -21546832 -26922393 17480767 40277335 9161107 11736389 8319660 28540946 X SEE SCHEDULE O false false 180813342 83217 153873734 SEE SCHEDULE O 180813342 true true false false false false false false false true false true true true false false true false false false false false false false false false true false true false false false false false false false true false false false false false true false false false false true 254 0 true 614 true false false false false false false false false false false X 31 29 false false false false true true true true true false false true true true true true true true true false CA X JAMES VAUGHN 4156004262 2015 STEINER STREET SAN FRANCISCO CA 94115 X REVEREND MARC ANDRUS 10.0 X 0 0 0 MARTIN BROTMAN MD 10.0 X X 0 2535924 1751747 BILL BRUNETTI 10.0 X 0 0 0 THEODORE DEIKEL 10.0 X 0 0 0 THOMAS JOHN DIETZ PHD 10.0 X 0 0 0 ROY EISENHARDT 10.0 X 0 0 0 PATRICK FRY 10.0 X 0 2699636 2088912 PETER FULCHIRON 10.0 X X 0 0 0 FRANK HERRINGER 10.0 X 0 0 0 PETER JACOBI 10.0 X 0 0 0 JOAN KAHR 10.0 X 0 0 0 STEVEN KATZNELSON MD 10.0 X 0 0 0 RON KAUFMAN 10.0 X 0 0 0 STEVEN LEVENBERG DO 10.0 X 0 0 0 TOM LINCOLN 10.0 X 0 0 0 ALASTAIR MACTAGGART 10.0 X 0 0 0 ANTHONY W MILES 10.0 X 0 0 0 SCOTT MINICK 10.0 X 0 0 0 CYNTHIA NESTLE 10.0 X 0 0 0 DENNIS O'CONNELL 10.0 X 0 0 0 STEVEN OLIVER 10.0 X 0 0 0 ROBERT OSORIO MD 10.0 X 0 0 0 JAMES PALLESCHI MD 10.0 X 0 0 0 ROBERT ROSENSFELD 10.0 X 0 0 0 AMY SHAW MD 10.0 X 0 0 0 LEO SOONG 10.0 X X 0 0 0 ROSS E STROMBERG JD 10.0 X 0 0 0 ROBERT TOMASELLO 10.0 X X 0 0 0 MICHAEL VALAN MD 10.0 X 0 0 0 ANTHONY G WAGNER 10.0 X 0 0 0 DEBORAH WYATT MD 10.0 X 0 0 0 MICHAEL DUNCHEON 10.0 X 0 265434 86707 JOHN GATES 40.0 X 0 728158 399937 TONI BRAYER 10.0 X 0 576844 174182 MORRIS FLAUM MD 10.0 X 0 944907 268722 ANABEL ANDERSON IMBERT MD 40.0 X 0 488122 121752 MARC LAMONICA 40.0 X 253546 0 31324 CHISTOPHER E ROGERS 40.0 X 0 275816 90616 LYNN TROMBLE 40.0 X 0 316834 77019 MARGARET E DRACKER 40.0 X 174183 0 30954 RODNEY D SHILLINGER 40.0 X 169744 0 21828 CLAIRE TAMO 40.0 X 157605 0 13404 KAREN THOMPSON 40.0 X 143514 0 13082 DOUGLAS WONG 40.0 X 166679 0 21164 ED BERDICK X 0 1403417 648513 1065271 10235092 5839863 42 true true false PHYSICIAN FOUNDATION MEDICAL ASSOCI 2015 STEINER ST SAN FRANCISCO CA 94115 MEDICAL SERVICES 44818590 MARIN HEADLANDS MED GROUP INC 2015 STEINER ST SAN FRANCISCO CA 94115 MEDICAL SERVICES 3084902 URDANG SEQUOIA CREEK HOLDING 1050 ROLSTON AVE BELMONT CA 94002 MGMT SERVICES 1717402 RESOURCE AND DESIGN INC 747 FRONT ST SAN FRANCISCO CA 94111 OFFICE DESIGN 767847 SUTTER MEDICAL GROUP OF THE REDWOOD 3883 AIRWAY DRIVE SANTA ROSA CA 95403 MEDICAL SERVICES 28055929 48 1654200 1654200 PATIENT SERVICE REVENUE 900099 151755248 151755248 NORTH BAY K-1 ORDINARY INCOME 900099 775868 775868 ASC OPERATORS ORDINARY INCOME 900099 1342618 1342618 153873734 35814 35814 0 0 134356 134356 65 0 65 65 65 0 0 0 0 155563813 153873734 35879 83217 83217 0 0 0 0 0 0 253546 0 253546 0 5062596 4224620 837976 0 25842535 25842535 0 0 953504 953504 0 0 12431616 11887356 544260 0 0 0 0 0 7769013 7769013 0 0 671518 671518 0 0 16600 16600 0 0 0 0 0 0 0 0 37082 0 37082 0 1899907 1899907 0 0 380637 380637 0 0 0 0 0 0 4357002 4357002 0 0 0 0 0 0 7443005 7443005 0 0 443533 443533 0 0 0 0 0 0 0 0 0 0 644855 644855 0 0 0 0 0 0 3382383 3382383 0 0 1743304 1743304 0 0 MEDICAL GROUP COMPENSATION 74236480 74236480 0 0 PROFESSIONAL FEES 24367436 24367436 0 0 SUPPLIES 6940219 6940219 0 0 BAD DEBT EXPENSE 2253999 2253999 0 0 UTILITIES 1062131 1062131 0 0 210088 210088 0 0 182486206 180813342 1672864 0 2656929 5532573 7374829 14004400 0 3374 176472 891683 23687182 10132532 2669113 13554650 0 3192241 4603424 3098414 17480767 40277335 9058278 11477898 102829 258491 9161107 11736389 X 8303980 28521048 15680 19898 8319660 28540946 17480767 40277335 X -26922393 47143679 X X false true true X X RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED RESTRICTED 9133095 1964373 7168722 14409189 8168158 6241031 144897 144897 13554650 NB SURGERY CTR LLC 1608332 C ASC SANTA ROSA LLC 1583909 C 3192241 INTERCOMPANY RECEIVABLES 1918582 OTHER RECEIVABLES 1057664 OTHER ASSETS 65391 CAPITATION RECEIVABLES 56777 3098414 0 INSURANCE LIABILITIES 38508 CAPITAL LEASES 85760 OTHER LIABILITIES 134223 258491 FIN48 (ASC 740) FOOTNOTE FROM AUDIT PART XIV This organization was part of a consolidated financial system audit. The ASC 740 audit footnote disclosure for the Sutter system is as follows: Deferred income tax assets, which as of December 31, 2010 and 2009 were fully reserved, reflect the net tax effect of temporary differences between the carrying amounts of assets and the liabilities for financial reporting and the amounts used for income tax purposes. As of December 31, 2010 and 2009, Sutter had deferred tax assets of $13 (million) relating principally to net operating loss carryovers. As of December 31, 2010 and 2009, such deferred tax assets were offset by a valuation allowance of $13 (million). The valuation allowance did not change in 2010 or 2009. Federal net operating loss carryovers totaled $32 (million) at December 31, 2010 and will expire between 2015 and 2030. true LUCILE PACKARD FDN FOR CHILDREN HEALTH 400 HAMILTON AVE PALO ALTO CA 94301 770440090 501(C)(3) 77917 DONATION 1 0 Grants Schedule I, Part I, Q1 THE SUTTER HEALTH SYSTEM HAS AN OVERLAP IN LEADERSHIP WHICH MONITORS THE USE OF GRANTS BETWEEN AFFILIATES. X X X true true X X X X false true false false false false false true false ED BERDICK 0 804437 0 581230 0 17750 0 630154 0 18359 0 2051930 0 493734 TONI BRAYER 0 423512 0 151767 0 1565 0 157508 0 16674 0 751026 0 152905 MARTIN BROTMAN MD 0 1517694 0 1006400 0 11830 0 1734000 0 17747 0 4287671 0 667161 MARGARET E DRACKER 160583 0 13600 0 0 0 7821 0 23133 0 205137 0 0 0 MICHAEL DUNCHEON 0 220105 0 41911 0 3418 0 75667 0 11040 0 352141 0 0 MORRIS FLAUM MD 0 582408 0 349437 0 13062 0 245445 0 23277 0 1213629 0 249898 PATRICK FRY 0 1450576 0 1233950 0 15110 0 2058620 0 30292 0 4788548 0 973771 JOHN GATES 0 507458 0 172170 0 48530 0 386982 0 12955 0 1128095 0 0 ANABEL ANDERSON IMBERT MD 0 400842 0 84200 0 3080 0 120883 0 869 0 609874 0 84673 MARC LAMONICA 212626 0 35420 0 5500 0 11005 0 20319 0 284870 0 0 0 CHISTOPHER E ROGERS 0 221673 0 53800 0 343 0 74188 0 16428 0 366432 0 39140 RODNEY D SHILLINGER 154244 0 15500 0 0 0 7622 0 14206 0 191572 0 0 0 CLAIRE TAMO 157605 0 0 0 0 0 7076 0 6328 0 171009 0 0 0 KAREN THOMPSON 137740 0 5774 0 0 0 6442 0 6640 0 156596 0 0 0 LYNN TROMBLE 0 233489 0 52000 0 31345 0 70622 0 6397 0 393853 0 39520 DOUGLAS WONG 155311 0 11368 0 0 0 7484 0 13680 0 187843 0 0 0 RELEVANT INFORMATION REGARDING COMPENSATION ITEMS PART I, QUESTION 1A FIRST-CLASS TRAVEL: OFFICERS PAID BY SUTTER HEALTH MAY UPGRADE TO FIRST-CLASS TRAVEL FOR FLIGHTS GREATER THAN FOUR HOURS IN DURATION. TRAVEL FOR COMPANIONS: OFFICERS AND KEY EMPLOYEES PAID BY SUTTER HEALTH ARE ELIGIBLE TO BRING A COMPANION ON ONE BUSINESS TRIP PER CALENDAR YEAR AND HAVE THE COST OF THE AIRFARE AND MEALS PAID FOR BY SUTTER HEALTH. THE COST IS ADDED TO EMPLOYEE'S WAGES. TAX INDEMNIFICATION: STANDARD POLICY FOR ALL SUTTER HEALTH EMPLOYEES IS THAT NON-CASH GIFTS AND AWARDS ARE GROSSED-UP FOR TAX PURPOSES. THE AMOUNT OF THE GROSS-UP IS ADDED TO THE EMPLOYEE'S WAGES. SUPPLEMENTAL COMPENSATION INFORMATION PART I, QUESTION 3 THE COMPENSATION COMMITTEE OF THE SUTTER HEALTH BOARD OF DIRECTORS RETAINS ULTIMATE DISCRETIONARY AUTHORITY OVER ALL ELEMENTS OF COMPENSATION TO ASSURE THAT ORGANIZATIONAL PURPOSES ARE APPROPRIATELY BEING SERVED. THE COMPENSATION COMMITTEE USES CREDIBLE DATA SOURCES AND MAINTAINS AN OBJECTIVE "ARMS LENGTH" DECISION-MAKING PROCESS, ENSURING THE INTEGRITY OF SUTTER'S EXECUTIVE PROGRAMS AND CONSISTENCY WITH THE ORGANIZATION'S OVERALL MISSION. IN ORDER TO ENSURE EXTERNAL COMPETITIVENESS, NATIONAL, CALIFORNIA AND LOCAL MARKET AREA COMPENSATION DATA COMPARISONS ARE REVIEWED. COMPETITIVE ANALYSIS INCLUDES: (A) BASE SALARY, (B) TOTAL CASH (BASE SALARY + ANNUAL INCENTIVE) AND (C) TOTAL REMUNERATION (BASE SALARY + ANNUAL INCENTIVE + BENEFITS AND LONG TERM INCENTIVE). THIS ANALYSIS INCLUDES COMPARABLE ORGANIZATIONS AND GEOGRAPHIC CONSIDERATIONS. FOR THE MOST SENIOR EXECUTIVE POSITIONS, NATIONAL COMPARISONS FOR ORGANIZATIONS SIMILAR IN SIZE, SCOPE AND COMPLEXITY AS SUTTER HEALTH ARE MOST APPROPRIATE SINCE IT IS A NATIONAL MARKETPLACE IN WHICH SUTTER COMPETES FOR EXECUTIVE TALENT. ON THE OTHER HAND, BECAUSE CALIFORNIA'S UNDERLYING COMPENSATION STRUCTURE IS HIGHER THAN NATIONAL DATA (ESPECIALLY IN THE BAY AREA), REGIONAL PAY COMPARISONS AND ADJUSTMENTS ARE MADE. ALL OFFICERS OF THE ORGANIZATION (I.E., CEO, CFO, COO) UNDERGO A REVIEW AND COMPENSATION COMMITTEE APPROVAL ANNUALLY. KEY EMPLOYEES AND OTHER EXECUTIVES OF SUTTER HEALTH WHO ARE CONSIDERED DISQUALIFIED PERSONS FOR FORM 990 REPORTING PURPOSES ARE HANDLED IN THE SAME MANNER. NONQUALIFIED RETIREMENT PLAN PART I, QUESTION 4B THE PURPOSE OF THE NONQUALIFIED RETIREMENT PLAN IS TO PROVIDE ADDITIONAL DEFERRED COMPENSATION BENEFITS TO THE PARTICIPANTS, WHO ARE MEMBERS OF A SELECT GROUP OF MANAGEMENT OR HIGHLY COMPENSATED EMPLOYEES, BY PROVIDING FOR THE PAYMENT OF DEFERRED COMPENSATION AFTER THE COMPLETION OF THE SPECIFIED NUMBER OF YEARS OF SERVICE. ANNUALLY, SUTTER HEALTH MAKES A CONTRIBUTION TO EACH PARTICIPANT'S ACCOUNT BASED ON 4% OF BASE PAY. THERE IS AN ADDITIONAL CONTRIBUTION FOR EXECUTIVES WHOSE PENSION ELIGIBLE EARNINGS WERE GREATER THAN THE PENSION PAY CAP IN THE PREVIOUS YEAR. THE CALCULATION IS AS FOLLOWS: - PENSION ELIGIBLE EARNINGS - LESS PENSION PAYCAP AMOUNT - TIMES A SPECIFIC % BASED ON YEARS OF SERVICE THE PENSION RESTORATION PLAN IS DESIGNED TO HELP MAXIMIZE EACH PARTICIPANT'S RETIREMENT POTENTIAL BY PROVIDING A TARGETED BENEFIT THAT, ALONG WITH EACH PARTICIPANT'S OTHER RETIREMENT INCOME, PROVIDES: - 65% OF FINAL 4-YEAR AVERAGE SALARY IF PARTICIPANT RETIRES AT AGE 65 WITH 22.5 YEARS OF SERVICE. - 50% OF FINAL 4-YEAR AVERAGE SALARY IF PARTICIPANT RETIRES AT AGE 65 WITH 15 YEARS OF SERVICE. SINCE IT IS A TARGETED BENEFIT, ANNUAL CONTRIBUTION AMOUNTS VARY BASED ON ASSUMPTIONS MADE TAKING INTO ACCOUNT EACH PARTICIPANTS' AGE, YEARS OF SERVICE, AND OTHER RETIREMENT ACCOUNT BALANCES. NAME AND AMOUNT ED BERDICK $ 217,500 TONI BRAYER $ 26,900 MARTIN BROTMAN $ 1,370,936 MORRIS FLAUM, MD $ 47,900 PATRICK FRY $ 1,127,856 JOHN GATES $ 267,700 ANABEL ANDERSON IMBERT, MD $ 21,700 CHRISTOPHER E. ROGERS $ 8,300 LYNN TROMBLE $ 8,400 NON-FIXED PAYMENTS PART I, QUESTION 7 SPOT AWARDS ARE INFREQUENTLY USED TO REWARD EMPLOYEES. THERE ARE NO SPECIFIC GUIDELINES FOR THE AMOUNT OF THE SPOT AWARD BUT THE AMOUNT TENDS TO NOT EXCEED 5% OF GROSS PAY. ANNUAL INCENTIVE PLAN (AIP) THE PURPOSE OF THE PLAN IS TO FOCUS EXECUTIVES ON SPECIFIC, SHORTER-TERM GOALS THAT ARE CRITICAL TO THE ACHIEVEMENT OF AFFILIATE, REGION, AND SYSTEM-WIDE OBJECTIVES THAT DRIVE OVERALL ORGANIZATION PERFORMANCE. A PORTION OF THE PLAN AWARD IS DISCRETIONARY IN THAT THE SUPERVISOR MAY ADD +/- 5% TO THE AWARD PROVIDED THE TOTAL AWARD (FORMULA PORTION PLUS DISCRETIONARY) DOES NOT EXCEED THE MAXIMUM ESTABLISHED FOR ANY GIVEN EXECUTIVE. LONG TERM PERFORMANCE PLAN (LTPP) Sutter Health also employs long term performance plans which are designed to focus on longer term strategic objectives of the organization. Sutters long term performance plan approach is a combination of both longer term measures of organization success and key organization strategies which require the combined effort of all leadership to achieve success. Sutter uses a common fate approach in that all plan participants are measured against the same, organization wide criteria vs. individual efforts. This fosters a common purpose across leadership and a shared sense of accountability for the overall success of Sutter Health. To ensure that extraordinary efforts by individuals can be recognized and that actions of leadership are consistent with supporting Sutter Healths overall Mission, Vision, and Values, Sutters long term incentive plan approach also incorporates a CEO discretionary component. This unique feature allows the President & CEO the ability to modify individual awards within limits that have been pre-approved by the Sutter Health Compensation Committee. This includes both the reduction and increase of award amounts. Such modifications generally do not exceed +/- 20% and are employed judiciously and are reviewed by the Compensation Committee. MICHAEL VALAN MD TRUSTEE 3084902 SEE PART V false MICHAEL VALAN MD TRUSTEE 44818590 SEE PART V false BROTMAN OSORIO VALAN TRUSTEE 159447 SEE PART V false BUSINESS TRANSACTIONS WITH INTERESTED PERSONS PART IV, COLUMN D 1)MICHAEL VALAN, MD, A TRUSTEE OF SUTTER WEST BAY MEDICAL FOUNDATION (SWBMF)IS MARRIED TO A PHYSICIAN EMPLOYED WITH MARIN HEADLAND MEDICAL GROUP (MHMG). MHMG PROVIDED MEDICAL SERVICES TO SWBMF VIA A PHYSICIAN SERVICES AGREEMENT. 2)MICHAEL VALAN, MD, A TRUSTEE OF SUTTER WEST BAY MEDICAL FOUNDATION (SWBMF), IS ALSO A SHAREHOLDER AND BOARD MEMBER OF PHYSICIAN FOUNDATION MEDICAL ASSOCIATES, INC. (PFMA). DURING THE YEAR, PFMA PROVIDED MEDICAL SERVICES TO SWBMF VIA A PHYSICIAN SERVICES AGREEMENT. 3)MARTIN BROTMAN, MD, ROBERT OSORIO, MD, AND MICHAEL VALAN, MD ARE TRUSTEES OF SWBMF AND ARE ALSO MEMBERS OF BROWN TOLAND MEDICAL GROUP (BTMG). DURING THE YEAR, BTMG PROVIDED MEDICAL SERVICES TO SWBMF VIA A PHYSICIAN SERVICES AGREEMENT. MISSION STATEMENT & EXEMPT PURPOSE ACHIEVEMENTS 990 PART I, LINE 1, AND PART III, LINE 1 AND LINE 4A SUTTER WEST BAY MEDICAL FOUNDATION IS COMMITTED TO THE FOLLOWING MISSION: 1. PROMOTE COMMUNITY HEALTH THROUGH THE PROVISION OF HEALTH CARE SERVICES TO THE SICK, INJURED AND DISABLED. 2. ESTABLISH, EQUIP AND MAINTAIN OUTPATIENT LOCATIONS THROUGHOUT NORTHERN CALIFORNIA FOR THE PROVISION OF HEALTH CARE SERVICES. THESE SERVICES ARE PARTICULARLY FOCUSED ON MEDICAL SERVICES INVOLVING ORGAN TRANSPLANTATION, CHILDREN WITH SPECIAL MEDICAL NEEDS, AND WOMEN IN ADVANCED STAGE OF HIGH-RISK PREGNANCY. 3. ACQUIRE, EQUIP, OWN AND OPERATE FACILITIES FOR THE CARE, DIAGNOSIS AND MEDICAL TREATMENT FOR PERSONS SUFFERING FROM MENTAL OR PHYSICAL ILLNESS, DISEASE OR DISABILITY, INCLUDING SUCH PERSONS WHO ARE FINANCIALLY UNABLE TO PAY ALL OR PART OF THE COST OF SUCH. 4. PROMOTE AND CARRY ON EDUCATIONAL ACTIVITIES RELATED TO THE CARE OF THE SICK, INJURED AND DISABLED, OR TO THE PROMOTION OF HEALTH. 5. SUPPORT MEDICAL EDUCATION OF RESIDENTS AND FELLOWS THROUGH CLASSROOM LECTURES, MEDICAL ROUNDS, AND "HANDS ON" TEACHING IN THE OUTPATIENT CLINICS. 6. PROMOTE AND CARRY ON SCIENTIFIC AND MEDICAL RESEARCH AS MAY BE DEEMED ADVISABLE FOR THE BETTERMENT OF THE GENERAL HEALTH OF THE COMMUNITY SERVED. 7. PROVIDE MEDICAL RESEARCH DATA TO ORGANIZATIONS SUCH AS THE MUSCULAR DYSTROPHY ASSOCIATION AND VARIOUS ORGAN PROCUREMENT ORGANIZATIONS. 8. SERVE AS PROFESSIONAL REVIEWERS OF MEDICAL JOURNALS. 9. PROMOTE AND CARRY ON SUCH OTHER ACTIVITIES AS MAY BE DEEMED ADVISABLE FOR THE BETTERMENT OF THE GENERAL HEALTH OF THE COMMUNITY SERVED. 10. IMPROVE ACCESS TO HEALTH CARE SERVICES FOR INDIVIDUALS WHO ARE UNABLE TO AFFORD THEM, AND PARTICIPATE IN PROGRAMS OPERATED PURSUANT TO TITLES XVIII AND XIX OF THE SOCIAL SECURITY ACT. 11. CONTRIBUTE TO THE GROWTH AND DEVELOPMENT, AND FINANCIAL STRENGTH OF SUTTER HEALTH, A CALIFORNIA NONPROFIT PUBLIC BENEFIT CORPORATION, AND ALL ITS AFFILIATED CORPORATIONS THAT COMPRISE A MULTI-INSTITUTIONAL, MULTI-SERVICE INTEGRATED HEALTH CARE SYSTEM. DESCRIPTION OF CLASSES OF PERSONS AND THE NATURE OF THEIR RIGHTS FORM 990, PART VI, QUESTIONS 6 & 7A THIS CORPORATION IS AN AFFILIATE OF SUTTER HEALTH, A CALIFORNIA NONPROFIT PUBLIC BENEFIT CORPORATION. SUTTER HEALTH IS THE SOLE MEMBER WITH THE RIGHT TO ELECT AT LEAST A MAJORITY OF THE MEMBERS OF THE BOARD OF DIRECTORS. DESCR CLASSES OF PERSONS, DECISIONS REQUIRING APPR & TYPE OF VOTING RIGHTS FORM 990, PART VI, QUESTION 7B SUTTER HEALTH AS THE SOLE MEMBER OF THE ORGANIZATION IS ENTITLED TO EXERCISE FULLY ALL RIGHTS AND PRIVILEGES OF MEMBERS OF NONPROFIT CORPORATIONS UNDER THE CALIFORNIA NONPROFIT PUBLIC BENEFIT CORPORATION LAW, AND ALL OTHER APPLICABLE LAWS. THE MEMBER HAS THE RIGHTS AND POWERS TO APPOINT (AND REMOVE) MEMBERS OF THE CORPORATION'S BOARD OF DIRECTORS, SUBJECT TO THE PROVISIONS OF THE BYLAWS, IN ADDITION, THE MEMBER HAS THE RIGHT TO APPROVE THE FOLLOWING ACTIONS OF THE CORPORATION'S BOARD OR DIRECTORS: A. MERGER, CONSOLIDATION, REORGANIZATION, OR DISSOLUTION OF THE CORPORATION OR ANY SUBSIDIARY OR AFFILIATE ENTITY; B. AMENDMENT OR RESTATEMENT OF THE ARTICLES OF INCORPORATION OR THE BYLAWS OF THE CORPORATION OR ANY SUBSIDIARY OR AFFILIATE ENTITY; C. ADOPTION OF OPERATING BUDGETS OF THE CORPORATION OR ANY SUBSIDIARY OR AFFILIATE ENTITY, INCLUDING CONSOLIDATED OR COMBINED BUDGETS OF THE CORPORATION AND ALL SUBSIDIARY ORGANIZATIONS OF THE CORPORATION; D. ADOPTION OF CAPITAL BUDGETS OF THE CORPORATION OR ANY SUBSIDIARY OR AFFILIATE ENTITY; E. AGGREGATE OPERATING OR CAPITAL EXPENDITURES ON AN ANNUAL BASIS THAT EXCEED APPROVED OPERATING OR CAPITAL BUDGETS BY A SPECIFIED DOLLAR AMOUNT TO BE DETERMINED FROM TIME TO TIME BY THE GENERAL MEMBER; F. LONG-TERM OR MATERIAL AGREEMENTS INCLUDING, BUT NOT LIMITED TO, BORROWINGS, EQUITY FINANCINGS, CAPITALIZED LEASES AND INSTALLMENT CONTRACTS; AND PURCHASE, SALE, LEASE, DISPOSITION, HYPOTHECATION, EXCHANGE, GIFT, PLEDGE, OR ENCUMBRANCE OF ANY ASSET, REAL OR PERSONAL, WITH A FAIR MARKET VALUE IN EXCESS OF A DOLLAR AMOUNT TO BE DETERMINED FROM TIME TO TIME BY THE DIRECTORS OF THE GENERAL MEMBER, WHICH SHALL NOT BE LESS THAN 10% OF THE TOTAL ANNUAL CAPITAL BUDGET OF THE CORPORATION; G. APPOINTMENT OF AN INDEPENDENT AUDITOR AND HIRING OF INDEPENDENT COUNSEL EXCEPT IN CONFLICT SITUATIONS BETWEEN THE GENERAL MEMBER AND THE CORPORATION OR ANY SUBSIDIARY OR AFFILIATE ENTITY; H. THE CREATION OR ACQUISITION OF ANY SUBSIDIARY OR AFFILIATE ENTITY; I. CONTRACTING WITH AN UNRELATED THIRD PARTY FOR ALL OR SUBSTANTIALLY ALL OF THE MANAGEMENT OF THE ASSETS OR OPERATIONS OF THE CORPORATION OR ANY SUBSIDIARY OR AFFILIATE ENTITY; J. APPROVAL OF MAJOR NEW PROGRAMS AND CLINICAL SERVICES OF THE CORPORATION OR ANY SUBSIDIARY OR AFFILIATE ENTITY. THE GENERAL MEMBER SHALL FROM TIME TO TIME DEFINE THE TERM "MAJOR" IN THIS CONTEXT; K. APPROVAL OF STRATEGIC PLANS OF THE CORPORATION OR ANY SUBSIDIARY OR AFFILIATE ENTITY; L. ADOPTION OF QUALITY ASSURANCE POLICIES NOT IN CONFORMITY WITH POLICIES ESTABLISHED BY THE GENERAL MEMBER; M. ANY TRANSACTION BETWEEN THE CORPORATION, A SUBSIDIARY OR AFFILIATE AND A DIRECTOR OF THE CORPORATION OR AN AFFILIATE OF SUCH DIRECTOR. IN ADDITION, THE GENERAL MEMBER SHALL HAVE THE AUTHORITY (BY A VOTE OF NOT LESS THAN TWO-THIRDS (2/3) OF ITS BOARD), TO DECLARE A MAJOR ACTIVITY REQUIRING APPROVAL. DESCRIBE THE PROCESS USED BY MGMT &/OR GOVERNING BODY TO REVIEW FORM 990 FORM 990, PART VI, QUESTION 11A SUTTER HEALTH HAS A CENTRALIZED TAX DEPARTMENT RESPONSIBLE FOR THE PREPARATION OF THE FORM 990. ANNUALLY THE TAX DEPARTMENT PROVIDES TRAINING AND EDUCATION TO AFFILIATE PERSONNEL WHO ASSIST THE TAX DEPARTMENT IN COLLECTING AND REVIEWING DATA TO BE REPORTED ON THE FORM 990. THE PREPARATION MATERIAL IS REVIEWED BY VARIOUS DEPARTMENTS INCLUDING TAX, FINANCE, LEGAL, AND HUMAN RESOURCES. ADDITIONALLY, THE CHIEF FINANCIAL OFFICER SIGNS OFF ON THIS DATA BEFORE THE RETURN GOES TO THE PREPARATION STAGE. A NATIONAL ACCOUNTING FIRM PREPARES AND/OR REVIEWS THE RETURN. A COMPLETED RETURN IS THEN REVIEWED BY THE TAX DEPARTMENT AND THE AFFILIATE WITH THE CHIEF FINANCIAL OFFICER GIVING HIS/HER APPROVAL BEFORE THE RETURN IS FILED. DESCRIPTION OF PROCESS TO MONITOR TRANSACTIONS FOR CONFLICTS OF INTEREST FORM 990, PART VI, QUESTION 12 EACH INDIVIDUAL BOARD MEMBER AND OFFICER HAS TO SIGN AN ACKNOWLEDGEMENT FORM THAT THEY HAVE READ THE POLICY. ANNUALLY A DISCLOSURE STATEMENT IS COMPLETED BY ALL OFFICERS AND BOARD MEMBERS. ON THIS STATEMENT THE INDIVIDUAL WILL LIST A WIDE RANGE OF INFORMATION WHICH INCLUDES BUSINESS RELATIONSHIPS, EMPLOYMENT RELATIONSHIPS, PROPERTY INTERESTS, AND THOSE OF RELATED PARTIES. THE CEO AND BOARD CHAIR WILL REVIEW THE STATEMENTS AND MONITOR SITUATIONS THAT MAY POSE A POTENTIAL CONFLICT OF INTEREST. THE CEO AND BOARD CHAIR MAY CONSULT WITH THE OFFICE OF THE GENERAL COUNSEL AS NECESSARY. IF THERE IS A POTENTIAL CONFLICT OF INTEREST RELATED TO A PARTICULAR TRANSACTION, THE INTERESTED TRUSTEE MUST DISCLOSE THE EXISTENCE AND NATURE OF THE RELATIONSHIP. THE BOARD CHAIR MAY APPOINT A DISINTERESTED PERSON OR COMMITTEE TO INVESTIGATE THE CONFLICT. UNTIL THE POTENTIAL CONFLICT IS RESOLVED, THE BOARD CHAIR MAY REQUEST THE TRUSTEE TO LEAVE THE ROOM OR NOT PARTICIPATE DURING RELATED PRESENTATIONS AND DISCUSSIONS. IN ALL CIRCUMSTANCES INVOLVING AN ACTUAL CONFLICT, THE INTERESTED TRUSTEE SHALL REFRAIN FROM VOTING ON ANY MATTER RELATED TO THE TRANSACTION. PROCESS FOR DETERMINING COMPENSATION FORM 990, PART VI, QUESTION 15 THE COMPENSATION COMMITTEE OF THE SUTTER HEALTH BOARD OF DIRECTORS RETAINS ULTIMATE DISCRETIONARY AUTHORITY OVER ALL ELEMENTS OF COMPENSATION TO ASSURE THAT ORGANIZATIONAL PURPOSES ARE APPROPRIATELY BEING SERVED. THE COMPENSATION COMMITTEE USES CREDIBLE DATA SOURCES AND MAINTAINS AN OBJECTIVE "ARMS LENGTH" DECISION-MAKING PROCESS, ENSURING THE INTEGRITY OF SUTTER'S EXECUTIVE PROGRAMS AND CONSISTENCY WITH THE ORGANIZATION'S OVERALL MISSION. IN ORDER TO ENSURE EXTERNAL COMPETITIVENESS, NATIONAL, CALIFORNIA AND LOCAL MARKET AREA COMPENSATION DATA COMPARISONS ARE REVIEWED. COMPETITIVE ANALYSIS INCLUDES: (A) BASE SALARY, (B) TOTAL CASH (BASE SALARY + ANNUAL INCENTIVE) AND (C) TOTAL REMUNERATION (BASE SALARY + ANNUAL INCENTIVE + BENEFITS AND LONG TERM INCENTIVE). THIS ANALYSIS INCLUDES COMPARABLE ORGANIZATIONS AND GEOGRAPHIC CONSIDERATIONS. FOR THE MOST SENIOR EXECUTIVE POSITIONS, NATIONAL COMPARISONS FOR ORGANIZATIONS SIMILAR IN SIZE, SCOPE AND COMPLEXITY AS SUTTER HEALTH ARE MOST APPROPRIATE SINCE IT IS A NATIONAL MARKETPLACE IN WHICH SUTTER COMPETES FOR EXECUTIVE TALENT. ON THE OTHER HAND, BECAUSE CALIFORNIA'S UNDERLYING COMPENSATION STRUCTURE IS HIGHER THAN NATIONAL DATA (ESPECIALLY IN THE BAY AREA), REGIONAL PAY COMPARISONS AND ADJUSTMENTS ARE MADE. ALL OFFICERS OF THE ORGANIZATION (I.E., CEO, CFO, COO) UNDERGO A REVIEW AND COMPENSATION COMMITTEE APPROVAL ANNUALLY. KEY EMPLOYEES AND OTHER EXECUTIVES OF SUTTER HEALTH WHO ARE CONSIDERED DISQUALIFIED PERSONS FOR FORM 990 REPORTING PURPOSES ARE HANDLED IN THE SAME MANNER. AVAIL OF GOV DOCS, CONFLICT OF INTEREST POLICY, & FIN STMTS TO GEN PUBLIC FORM 990, PART VI, QUESTION 19 THE SUTTER HEALTH SYSTEM POSTS ITS CURRENT AND PAST AUDITED FINANCIAL STATEMENTS AT SUTTERHEALTH.ORG. OTHER DOCUMENTS ARE ALSO LOCATED AT THIS WEBSITE INCLUDING THE ANNUAL REPORT, MISSION STATEMENT, HISTORY, AND LINKS TO AFFILIATE WEBSITES. COMPENSATION, HOURS PER WEEK RELATED ORGANIZATION FORM 990, PART VII THE FOLLOWING BOARD MEMBERS/OFFICERS OF THE ORGANIZATION ARE FULL-TIME (40-HOURS) EMPLOYEES OF SUTTER HEALTH AND THEIR SUTTER HEALTH SALARIES ARE REPORTED HEREIN. THESE INDIVIDUALS RECEIVE NO COMPENSATION FOR THEIR SERVICE AS BOARD MEMBERS/OFFICERS OF THIS ORGANIZATION. TONI BRAYER MARTIN BROTMAN MICHAEL BUNCHEON PATRICK FRY COMPILATION, REVIEW AND AUDIT OF INDEPENDENT ACCOUNTANT FORM 990, PART XI, QUESTION 2 ANNUALLY THE SUTTER HEALTH SYSTEM HAS AN AUDIT OF COMBINED BALANCE SHEETS AND STATEMENTS OF OPERATIONS PERFORMED BY INDEPENDENT AUDITORS. AN AUDIT COMMITTEE SELECTS THE AUDITORS AND REVIEWS RESULTS. OTHER CHANGES IN NET ASSETS OR FUND BALANCE PART XI, LINE 5 PARTNERSHIP INVESTMENT ON BOOKS $ 2,191,298 K-1 ORDINARY INCOME $ (2,118,486) K-1 INTEREST INCOME $ (150) K-1 SECTION 1231 GAIN $ (65) EQUITY TRANSFER $ 47,064,258 CHANGE IN UNREALIZED GAIN/(LOSS)ON INVESTMENTS $ 6,824 TOTAL $ 47,143,679 FINANCIAL STATEMENT AND REPORTING FORM 990, PART XII, QUESTION 2 ANNUALLY THE SUTTER HEALTH SYSTEM HAS AN AUDIT OF COMBINED BALANCE SHEETS AND STATEMENTS OF OPERATIONS PERFORMED BY INDEPENDENT AUDITORS. AN AUDIT COMMITTEE SELECTS THE AUDITORS AND REVIEWS RESULTS. 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