Return of Organization Exempt From Income Tax 0109N. …990s.foundationcenter.org/990_pdf_archive/581/581454711/581454711_200212_990.pdf · f t r s 990 Return of Organization Exempt

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990 Return of Organization Exempt From Income Tax 0109N . ,5.s00 ., Form Under section 501(c), 527, or 4947(a)(l) of tie Internal Revenue Code (except black lung 2002 Department of one Treasury

benefit trust or private foundation) Opan to Punlle ��,m� r~�~ ��,S��,e, " The organization may have to use a copy of this return to satisfy state reporting requirements A For the 2002 calendar year, or tax year period beginning and ending 8 cn«w a P~~~ C Name of organization D Employer Identification number

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"°""" P'a;o; o~~ ETHODIST HEALTHCARE 58-1454711 ~"u': ~ ~ Number and street (or P 0 box A mail is not delivered is street address) RooMSwle E Telephone number O~e~Nm Speafic 1211 UNION AVENUE 700 901 516-543

Instruc .,mm m`, . City or town state or country, and ZIP i 4 F eawnuo,,emoa Cl can O ~m ; m'°°° EMPHIS TN 38104 ~ °`"°

' =~P'a'~ o°°^ 0 Section 507(c)(3) organizations and 49<1(a)(1 ) nonexempt charitable trusts H end I are not applicable to section 527 organizations must gnash a completed Schedule A (Farm 990 or 990-EZ) H(a) Is this a group return for affiliates? =Yes OX No

G We6sne "WWW .METHOD ISTHEALTH .ORG H(6) It Yes; enter number ofaffiliates " J Organization type cdaxmivmel" OX 501c)(3 )1Pns«+no104947(a)(1) or0 527 His) Are all affiliates included? N/A = Yes No K Check here " [=1 it the organization's gross receipts are normally not mare than $25,000 The (1f -NO,' attach a list )

H(0) Is this a separate return "'ad

by an oorpaniution need not file a return with the IRS, but A the organization received a Forth 990 Package anization covered b a grou p ruling; 0 Yes 0 No

in the mail, it should file a return without financial data Soma states require a complete return I Enter 4-dig it GEN M Check " M d the organization is not required to attach

L Gross receipts Add lines 6b, Bb, 9b, and tOh to line 12 . 65 , 598 , 314 . Sch B (Forth 990, 990-EZ or 990-PF) Part E Revenue Expenses, and Changes in Net Assets or Fund Balances

1 Contributions, grits, grants, and similar amounts received a Direct public support la 6 Indirect public support 1 D o Government contnbutions(grants) 1e d Total (add lines 1a through 7c) (cash $ noncash E ) 10 0 .

2 Program service revenue including government fees and contracts (from Part VII line 93) 2 57 , 951 , 192 . _ 3 Membership dues and assessments 3 4 Interest on savings and temporary cash investments a 863,079 .

.{) 5 Dividends and interest from securities 5 6a Gross rents SEE STATEMENT 1 6a 1 , 061 , 406 . b Less rental expenses 6h

X71 s Net rental income or (loss) (subtract line 6b from line 6a) 6c 1 061,406 . 7 Other investment income (describe " 7

c: 8 a Gross amount from sale at assets other (A) Securities (B) Other C"

I R- Z than inventory 855,987 . Be 2,905,982 .1 cc b Less cost or other basis anasales expenses Bb 840 666 .

e Gain or(ioss)(anachscheaWe) 855 987 . se 2 , 065 , 316 . d Net pain or (loss) (combine line 8c, columns (A) and (B)) STMT 2 STMT 3 ed 2 , 921 , 303 .

9 Special events and activities (attach schedule) a Gross revenue (not including $ of contributions

reported on line 1a) 9a b Less direct expenses other than fundraising expenses 9h e Net income or (loss) from special events (subtract line 9D from tine 9a) C i ~~~~ ~, 9e

10 a Gross sales of inventory less returns and allowances ~ 1Da~-~'I V ~ ` b Less cost of goods sold 10b e Gross profit or (lass) from sales of inventory (attach schedule) (subtract tin ~~SO frbr21da)4 LU UJ If",

71 Other revenue (from Part VII, line 703) ~ 11 1 , -96-0- f 6-68 . 12 Total revenue (add lines 10 2 3 4 5 tic 7 8d 9c 10c and 11 ~ rn~ L E"`~ 12 64 757, 648 . 13 Program services (fromline 44,column (B)) 13 70 Management and general (framline 44,column (C)) ~- 10 71 064 490 . 15 Fundraising (from line 44, column (D)) 15 16 Payments to affiliates (attach schedule) 16 17 Total expenses a0dlines i6 and44 column n 17 71 064 490 . to Excess or(deficit)tortneyear (subtactline 77from line i2) ~g <6 306 842 .>

15 16 19 Net assets or fund balances at beginning of year (from line 73, column (A)) 12

32 5 6 6 , 00 0 . 20 Other changes in net assets orfund balances (attachezplanation) SEE STATEMENT 4 20 11 592 842 . 21 Net assets orfund balances atendof year comDinelines 1819,and20 21 37 852 000 .

o 3z°z°-m L1V+ For Paperwork Reduction Act Notice, sea the separate Instructions Form 990 (2002)

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22 Grants and allocations (attach schedule)

Mn $ nencasn $

23 Specific assistance to individuals (attach schedule) 24 Benefits paid to or for members (attach schedule) 25 Compensation of officers directors, etc 26 Other salaries and wages 27 Pension plan contributions 28 Other employee benefits 29 Payroll axes 30 Professional fundraising fees 31 Accounting tees 32 Legal fees 33 Supplies 34 Telephone 35 Postage and shipping 36 Occupancy 37 Equipment rental and maintenance 38 Printing and publications 39 Travel 40 Conferences, conventions, and meebngs 41 Interest 42 Depreciation, depletion, etc (attach schedule) 43 Other expenses not covered above (Itemize) a e

a e SEE STATEMENT 5

Form 990 (2002)

~E bcatemem of an I 0 Functional Excenses and

ustComplete Column (a) Golumns(fi),(L),and(u)arerequired torsection 5Ui(c)(3) Page p ns and section 4947(a)(1) nonexempt charitable trusts but optional for others

(A) Total (8) Program jC) Management (0) Fundraising services and eneral

Joint Costs Check " U d you are following SOP 98-2 Are any point costs from a combined educational campaign and fundraising solicdabon reported in (B) Program services? " 0 Yes 0 No II Yes; enter (I) the aggregate amount of these point costs $ . (if) the amount allocated to Program services $

What is the organization s primary exempt purpose? W SEE ATTACHED STMT Pro gram Service M organ~oM mat aescilee may e,aarwt wmo...~iaa,~a,d in . door and wnc+a mmos State m. nu~ of aie,u .ervea wdicaoon . isat,ea ~ oi. Bnses srJ~lws~r~b Net are not n~urabla (SacCm 501(c)(J) and (4) organizations end 4947(a)(1) nona~sn0t ON~e bu:b mat Nao site Na vnounl of pren6 and ~~~~ for 701(cp~ e /4) orpa and <917(ql( allocation. to on..) truab but opMOnel br oV

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Form 990(2002) METHODIST HEALTHCARE 58-1454711 Papa 3

Part IV Balance Sheets

Note Where required, attached schedules end amounts within the description column (A) (B) should be for end-of-year amounts only Beginning of year End of year

45 Cash -non-interest-beanng 93 795,000 . a5 49 567,000 .

45 Savings anetemporary cash investments 128 189 000 . 46 256 263,000 .

47 a Accounts receivable 47a 28 , 62 1 , 000 .

e Less allowance tordoubtful accounts a7h 19 800 000 . 47e 28 621,000 .

48 a Pledges receivable 48a h Less allowance for doubtful accounts 48h OBs

49 Grants receivable 49 50 Recervables tram officers, directors, trustees,

and key employees 50 x m 51 a Other notes and loans receivable 51a N

D Less allowance for doubtful accounts 51b 51c 52 Inventories for sale or use 52 53 Prepaid expenses anOdeterred charges 5 , 843 , 000 . 53 2 , 440,000 .

50 Investments -securities 1 E:1 Cost ~ FMV 54 55 a Investments -land buildings, and

equipment basis 55a

h Lass accumulated depreciation 55b 55c 56 Investments - other 56 57a Land,bwldinqs,andequipment basis 57a 52 586 000 .

D Less accumulated depreciation 57u 9 1 417 , 000 . 28 824,000 . 57s 43 169,000 . 58 Other assets (descnbe " SEE STATEMENT 6 ) 69 298 000 . 58 119 425 000 .

59 Total asseu adeonesa5throu n58 mustequal line 74 345 749 000 . 59 499 485 000 .

60 Accounts payable andaccrued expenses 31 679 000 . 60 33 205 000 .

61 Grants payable 61 82 Deferred revenue 62

m 63 Loans from officers, directors, trustees, and key employees 63 a 6a a rax-exemntbond liabilities 241 292 000 . 6ea 351 704 000 .

j D Mortgages and other notes payable 64C 65 Other liabilities (descnbe " SEE STATEMENT 7 ) 40 212 000 . 65 76 724 000 .

66 Total liabilities adAlines sothrou gh 6s 313 183 000 . Isis 461 633 000 . Organization : that follow SFAS 117, check here ~ 0 and complete hoes 67 through

69 and lines 73 and 74 67 Unrestricted 32 566 000 . 67 37 852 000 .

c 68 Temporarily restricted 68 co 59 Permanently restricted 69 °c Organizations that 0o not totter SFAS 117, check here " 0 and complete hoes

70 through 74 ,°, 70 Capital stock, trust principal, or current lands ^70

71 Paid-in or capital surplus, or land, building, and equipment land 71 72 Retained earnings, endowment, accumulated income, or other funds 72 73 Total net assets or fund balances (add lines 67 through 69 or lines 70 through 72 .

column (A)must equal line i9,column (B)must equal line 21) 32 566 000 . 79 37 852 000 . 170 Total liabilities anOnetassets /fund balances (auelines 66ane73) 345,749,000 .E 74 ~ 499,485,000 .

Form 990 is available for public Inspection and, for some people, serves as the primary or sole source of information about a particular organization How the public perceives an organization in such roses maybe determined by tie information presented on its return Therefore, please make sure tie return is complete and accurate and fully describes, in Part III, the organization's programs and accomplishments

1 1`

Form 990 2002 METHODIST HEALTHCARE SB-1454711 Page 4 Part IV-A Reconciliation of Revenue per Audited Part IV-B Reconciliation of Expenses per Audited

Financial Statements with Revenue per Financial Statements with Expenses per Return Return

a Total revenue, gains and other support a Total expenses and losses per per audited financial statements " a 4 , 216,000 . audited financial statements " a 12403000 .

6 Amounts included on line a but not on D Amounts included on line a but not an line 17, Form 990

line 12, Form 990 (1) Donated services (1) Net unrealized gains and use of facilities $

on investments $ (2) Pnor year adjustments (2) Donated services reported on line 20,

and use of facilities $ Form 990 Z (3) Recavenes a1 prior 13) Losses reported on

year grants $ line 20, Form 990 (4) Other (specify) (4) Other (specify)

S S Add amounts on lines (1) through (4) " h 0 . Ado amounts on lines (1) through (4) " 6 0 .

e Line aminus line h " c 4 216,000 . c Line aminus line b " c 12403000 . d Amounts included on line 12, Form ~ d Amounts included on line 17, Form

990 Gut not on line a 990 but not on line a

(1) Investment expenses (1) Investment expenses not included on not included on line 6b, Form 990 $ line 6b, Form 990 $

(2) Other (specify) (2) Other (specify) STMT 8 s 60541648 . STMT 9 = 58661490 . -

Addamounts onlines (t) and (2) " e 60541648 . Add amounts anlines (t)and(2) " x 58661490 . e Total revenue per line 12, Form 990 e Total expenses par line 17 Form 990

linecpluslined) ill e , 64757648 . (unecplus line U) " e 71064490 . Part V List of Officers, Directors, Trustees, and Key Employees (List each one even d not compensated)

(B) Title and average hours (C) Compensation (D)Cnbbu4ona b (E) Expense (A) Name and address per week devote0 to (II not p3I , enter account and

osition -0- oom ,.nor other allowances GARY S . SHORB RESIDENT/CE

--------------------------------- MEMPHIS TN 40 618 184 . 75 , 553 . 4 , 997 . CAMERON J . WELTON 00

--------------------------------- MEMPHIS TN 40 471 984 . 60,756 . 5 , 614 . CHRISTOPHER MCLEAN VP-FINANCE 6 CFO

--------------------------------- MEMPHIS TN 40 292 344 . 40 , 675 . 0 . W . -STEVEN-WEST VP-LEGAL AFFAIRS

--------------------------------- MEMPHIS TN 40 317 638 . 39 , 999 . 4 , 997 . LARRY D . SPRATLIN TREASURER

--------------------------------- MEMPHIS TN 40 190 091 . 28 , 388 . 0 . SEE ATTACHED LIST

--------------------------------- 0 . 0 . 0 .

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75 Did any officer. director, trustee, or key employee receive aggregate compensation of more than $700,000 from your organization and all rotated organizations . of which more than E70,000 was provided by the related organizations If Yes; attach schedu l e 1 EX] Yes =No Form 990 120021

223031 01-22-03

76 Did the organization engage in any activity not previously reported to the IRS It 'Yes,' attach a detailed description of each activity 76 X 77 Were any changes made in the organizing or governing documents but not reported to the IRS 77 X

II Y95,' attach a conformed copy of the changes 78 a Did the organization have unrelated business gross income of $7,000 or more during the year covered 6y this returns 7Ba X

h It Yes; has it filed a tax return on Form 990-T for this years 78b X 79 Was there a liquidation, dissolution, termination, or substantial contraction during the yea( 79 X

If Yes; attach a statement 80 a Is the organization related (other than by association with a statewide or nationwide organization) through common membership,

governing bodies, trustees, officers, etc , to any other exempt or nonexempt organization? BOa X h ItYes'enterthename oftheorganization " SEE ATTACHMENT

and check whether it is OX exempt or 0 nonexempt 81 a Enter direct or indirect political expenditures See line 81 instructions 81a 0,

6 Did the organization file Form 1120-POL for this year 82 a Did the organization receive Gonate0 services or the use of materials, equipment, or facilities at no charge or at substantially less than

fair rental value) D If Yes; you may indicate the value of these items here Do not include this amount as revenue in Part I or as an

expense in Part II (See instructions in Part III ) I B26 ~ N/A 83 a Did the organization compy wrtli the public inspection requirements for returns and exemption applications

D did the organization comply with the disclosure requirements relating to quid pro quo contributions? 84 a Did the organization solicit any contributions or gifts that were not tax deductible?

D It Yes; did the organization include with every solicitation an express statement that such contributions or gifts were not tax deductible? N / A

85 501(c)(4), (5), or (6) organizations a Were substantially all dues nondeductible by members? N/A b Did the organization make only in-house lobbying expenditures of E2,000 or less N/A

If 'Yes' was answered to either BSa or BSb, do not complete BSc through BSh below unless the organization received a waiver for proxy tax owed for the prior year

c Dues, assessments, and similar amounts from members 85s N/A d Section 162(e) lobbying and political expenditures 85d N/A e Aggregate nondeductible amount of section 6033(a)(1)(A) dues notices 85e N/A f Taxable amount of lobbying and political expenditures (line 85d less BSe) ~ &51 ~ N/A p Does the organization elect to pay the section 6033(e) tax on the amount on line 851 N/A h It section 6033(e)(1)(A) dues notices were sent, does the organization agree to add the amount an line BSf to its reasonable estimate of dues

allocable to nondeductible lobbying and political expenditures for the following tax year? N/A 86 501(c)(7) organizations Enter a Initiation fees and capital contributions included on line 12 B6a N/A

O Gross receipts, included online 12, for public use of club facilities 8611) N/A 87 501(c)(12) organizations Enter a Gross income from members or shareholders 87a N/A

6 Gross income from other sources (DO not net amounts due or paid to other sources against amounts due or received from them ) 87b N/A

88 At any time during the year, did the organization own a 50% or greater interest in a taxable corporation or partnership, or an entity disregarded as separate from the organization under Reputations sections 3017701-2 and 3017701-3? If Yes; complete Part IX

89 a 501(c)(3) organizations Enter Amount of tax imposed on the organization during the year under section 491111- 0 . , section 4912 . 0 . , section 4955 . 0 .-

to 501(c)(3) and 501(c)(4) organizations Did the organization engage in any section 4958 excess benefit transaction during the year or did rt become aware of an excess benefit transaction from a poor yeah If 'Yes ' attach a statement explaining each transaction

c Enter Amount of tax imposed on the organization managers or disqualrhe0 persons during the year under

Form 990 (2002)

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Form 990(2002) METHODIST HEALTHCARE 58-1454711 Paaes

o X

a X

a X

X

sections 4912, 4955, and 4958 . 0 . d Enter Amount o1 tax on line 89c, above, reimbursed by the organization 1111. 0 .

90 a List the sates with which a copy of tots return is filed 111~ CALIFORNIA b Number of employees employed in the pay period that includes March 12, 2002 ~ 90D ~ 529'

97 inebooksareincaroot No- SUE WAUGH Telephoneno " (901) 516-06 56

Locatedat b' MEMPHIS, TN zIP+4 . 38104

92 Section 4947(e)(i) nonexempt charitable trusts (long Form 990 in lieu of Form 1041- Check here 1i ED

Note Enter gross amounts unless otherwise ""'°'°`°° """"°" "1n,""'° "°uaW .^

." . . ., ., o" indicated (A) (B) ~d~101 Related or exempt Business Amount ,~o~ Amount 93 Program service revenue code ,p� function income

a SEE STATEMENT 10 57 951 1i h e a a 1 Medicare/Medicaid payments q Fees and contracts from government agencies

94 Membership dues and assessments 95 Interest on savings and temporary cash investments 14 863,079 . 96 Dividends and interest from securities 97 Net rental income or (loss) from real estate

a debt-financed property b not debt-financed property 16 1 , 061,406 .

98 Net rental income or (loss) from personal property 99 Other investment income 100 Gain or (loss) from sales o1 assets

other than inventory 01 2,921,303 . 101 Net income or (loss) from special events 102 Gross profit or (loss) from sales of inventory 103 Other revenue

a MISC INCOME (LOSS) 101 801,278 . b PASS-THROUGH ACTIVITY 423000 <12,997 .~>01 1,268,881 . c PASS-THROUGH ACTIVITY 25990 24 161 . 01 <5,065 . o PASS-THROUGH ACTIVITY C 01 <102,37 e PASS-THROUGH ACTIVITY I I OlI <13,211 .

104 Subtotal (addcolumns (e),(o),and(e)) 11 , 164 . 6,897,671 . 57,848, B1 105 Total (add line 104, columns (B), (D), and (E)) " 64,757,6 9 Note Line 105 plus line lo, Part/, should ual the amount on line 12, Pert I pwt ypuRelationship of Activities to the Accomplishment of Exempt Purposes (Seepage 320t the instructions) Line No Explain how each activity for which Income is reported in column (E) of Part VII contributed importantly to the accomplishment of the organization's

exempt purposes (other than by providing funds for such purposes)

on page

of I Nature of activities of

(a) Did the organisation, during the year, receive any lands, directly or indirectly, to (6) Did the organization, during the year, pay premiums, directly or indirectly, on a I

Please ooin~,,m~.aoo°` Sign Here 1 Signature

Paid Preparers' signature

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0 POPLAR AVENUE,

Form 990l20021 METHODIST HEALTHCARE 58- 6

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SCHEDULER Organization Exempt Under Section 501(c)(3) OMB No 1545-0017

(Form 990 or 9D0-EZ) (Except Private Foundation) and Section 501(e), 507(1), 501(k), 501(n), or Section 4947(a)(1 ) Nonexempt Charitable Trust

o.a.~mw,t ortne r~.un Supplementary Information-(See separate instructions.) In1emN Revenue s«.la Is, MUST be completed by the above organizations and attached In their Form 990 0r 990-EZ Name of the organization Employer identification number

METHODIST HEALTHCARE 58 1454711 Pi't t Compensation of the Five Highest Paid Employees Other Than Offices, Directors, and Trustees

(See page 1 of tie instructions List each one It there are none, enter 'None ') (a) Name and address of each employee paid (6) Trtle and average hours cd~mPioY~~enm (e) Ex ense

than $50,000 per week devoted to (c) Compensation PT,~~ ~, ae~ account and of more nnSlhnn m~wn ..n~~ allnwanrne

EMERITUS

MEMPHISB,NTN-----------------------140 323,632 .143 .8

ARMSTRONG ALLEN

SERVICES 784 313 .

SERVICES 366 449 .

SIONAL ES 291 400 .

SIONAL ES 221 000 .

ISIONAL ES 210 000 .

Schedule A (Form 990 or 990-EZ) 2002

Total number of others recervinq over 150,000 for processional services " l 14 naioiAi xa-oa LHA For Paperwork Reduction Ad Notice, fee the Instructions for Form 990 and Form 990-EZ

t

MAURICE W . ELLIOT

TN 140

ROBERT N . TRUMPIS

MEMPHIS . TN

RONALD D ._ LAWSON _ MD ASV --------------1

MEMPHIS . TN I40

547,121 .1 204958 .1 7 .577 .

IRED 1401 .256 .1163733

334,426 .1 82 .24

CATO JOHNSON VP

MEMPHIS TN 40 253 422 . 63,366 . 1 , 710 . Total number of other employees paid over S5o,ooo " 189

Compensation of the Five Highest Paid Independent Contractors for Professional Services (See gape 2 of the instructions List each one whether indrvi0uals or firms) If there are none, enter'NOne')

(a) Name and address of each independent contractor gab more than $50,000 (b) Type of service (c) Compensation

SMITH, SABBATINI & MCLEARLY PLLC

MEMPHIS, TN

PRICEWATERHOUSECOOPERS LLP

BEN C . PETERNELL

HAROLD FORD 6 COMPANY, LLC

58- Schedule n (Form 990 or 990-EZ) 2002 METHOD I ST HEALTHCARE

Statements About Activities (Sea page 2 of the instructions) No

3 Does the organization make grants for scholarships, fellowships, student loans, etc 9 (See Note below ) 3 X 4 Do you have a section 403(b) annuity plan for your employees a X Note Attach a statement to explan how the organization determines that indmduals or organizations receiving grants or loans from it in furtherance o! its charitable programs 'quality' to receive payments

I`/ ~ Reason for Non-Private Foundation Status (See pages 3 through 5 of the instructions ) The organization is nod a private foundation because it is (Please check only ONE applicable box )

5 0 A church, convention of churches, or association of churches Section 170(b)(1)(A)(i) 6 0 A school Section 170(b)(1)(A)(n) (Also complete Part V ) 7 0 A hospital or a cooperative hospital service organization Section 170(b)(1)(A)(ni) B 0 AFederal,state or local government or governmental unit Section 170(b)(1)(A)(v) 9 0 A medical research organization operated in conjunction with a hospital Section 170(b)(1)(A)(w) Enter the hospital's name, city,

and state 10 ~ An organization operated for the benefit of a college or university owned or operated by a governmental unit Section 170(D)(1)(A)(rv)

(Also complete the Support Schedule in Part IV-A ) 11 a 0 An organization that normally receives a substantial part of its support from a governmental unit or from the general public

Section 170(D)(1)(A)(vi) (Also complete the Support Schedule in Part IV-A ) tth ~ A community trust Section 170(b)(1)(A)(vi) (Also complete the Support Schedule in Part IV-A 12 ~ An organization that normally receives (1) more than 331/d% of it support from contributions, membership fees, and gross

receipts from activities related to it charitable, etc , functions -suDject to certain exceptions, and (2) no more than 331/d% of it support from grass investment income and unrelated business taxable income (less section 511 tax) from businesses acquired by the organization after June 30, 1975 Sea section 509(a)(2) (Also complete tie Support Schedule in Part IV-A )

13 OX An organization that is not controlled by any disqualified persons (other than foundation managers) and supports organizations described in

(U) tine number from above (a) Name(s) of supported organization(s)

Schedule A (Farm 990 or 990-EZ) 2002

223111 01 u-OJ

1 During the year, has the organization attempted to influence national, state, or local legislation, including any attempt to influence public opinion on a legislative matter or referendum? If 'Yes,* enter the total expenses paid or incurred in connection with the lobbying activities 1 E $ 364 , 662 . (Must equal amounts on line 38, Part VI-A, orline iotPart Vl-B) VI-B, LINE I Organizations that made an election under section 501(h) by filing Forth 5768 must complete Pail VI-A Other organizations checking 'Yes,' must complete Part VI-B AND attach a statement giving a detailed description of the lobbying activities

2 During the year, has the organization, either directly or indirectly, engaged in any of the following acts with any substantial contributors, , trustees directors officers creators, key employees, or members o1 their families, or with any taxable organization with which any such person is affiliated as an officer, director, trustee, majority owner, or principal beneficiary? (I/ the answer to any question is 'Yes,' attach e detailed statement explaining the transactions)

a Sale, exchange, or leasing of property? 2a X ,

h Lending of money or other extension of credits

c Furnishing of goods, services, or facilities? I 2c I I

E Payment of compensation (or payment or reimbursement of expenses d more than E7,000)7 2d I X

e Transfer o1 any part of ids income or assets

Provide

SEE STATEMENT 12

5 of the instructions

5 of tie instructions

28 Unusual Grants For an organization described in line 10, 11, or 12 that received any unusual grants during 1998 through 2001, prepare a list for your, records to show, for each year, the name of the contributor, tea date and amount of the grant and a brief description of the nature of the grant Do not Ills Ihia Ilst with your return Do nod include these grants in line 15

223121 01-n-00 9cneCUls A (Form B9D a 990-EE) 200t

Schedule n(FOrm990or990-EZ) 2002 METHODIST HEALTHCARE 58-1454711 Page 3 ( IV. ASupport Schedule (Complete only d you checked a box on line 10, 11, or 12 ) Use cash method of accounting NBA

Note You ma use the worksheet in the inshuctions for converting from the accrual to the cash method of accounting Calenaaryear'orfiscal year 6e Inning In " (a) 2001 (h) 2000 (c) 1999 (0) 1998 (e) Total 15 Gifls,granis,andcontributions

received (Do not include unusual rants See line 28

16 Membership fees received 17 Gross receipts from admissions,

merchandise sold or services performed, or tumishing of facilities in any activity that is related to the organization's charitable, etc , purpose

18 Gross income from interest, dividends, amounts received from payments on securities loans (section 512(a)(5)), rams, royalties, and unrelated business taxable income ' (less section 511 taxes) from businesses acquired by the organization after June 30, 1975

19 Net income from unrelated business activities net included in line 18

pp Tax revenues leered for the organization's benefit and either paid to it or expended on its behalf

21 Tie value of services or facilities furnished to the organization by a governmental unit without charge Do not include tie value of services or facilities generally furnished to the public without charge

pp Other income Attach a schedule Do not include pain or (loss) from sale of capital assets

23 Total of lines 15 through 22 0 . 0 .1 0 .1 0 . -0 . 24 Line 23 minus line 17 25 Enter i% of line 23 26 Organizations described on lines 10 or 11 a Enter 2% of amount in column (e), line 24 1 26a N/A

b Prepare a list for your records to show the name of and amount contributed by each person (other than a governmental unit or publicly supported organization) whose total gifts for 1998 through 2001 exceeded the amount shown in line 26a Do not file this list with your return Enter the sum of all these excess amounts 1 26b N/A

c Total support for section 509(a)(1) test Enter line 24, column (a) 1110- 26c N/A d A00 Amounts from column (e) for lines 18 19 ,

22 26b 10- 26a ` NBA e Public support (line 26c minus line 26d total) 1 26e N/A 1 Public support percentage (line 26e (numerator) divided 6r line 26c (denominator)) " 261 N/A y,

27 Organizations described on line 12 a For amounts included in lines 15, 16, and 11 that were received from a'disQualrfied person .' prepare a list for your records to show the name of. and total amounts received in each year from, each 'disqualified person' Do not 111e this list with your return Enter the sum of such amounts for each year (2001) (2000) (1999) (1998)

b For any amount included in line 17 Nat was received from each person (other than *disqualified persons'), prepare a list for your records to show tie name of, and amount received for each year, that was more than the larger of (1) the amount on line 25 for the year or (2) $5,000 (Include in the list organizations described in lines 5 through 11, as well as individuals ) Do not file this list with your return After computing the difference between the amount received and the larger amount described in (1) or (2), enter the sum of these differences (tie excess amounts) for each year (2001) (2000) (1999) (1998)

c Add Amounts from column (e) for lines 15 16 17 20 21 . 27c N/A

d Add une 27a total and line 27U total " 270 N/A e Public support (line 27c total minus line 27d total) " ~27e N/A I Total support for section 509(a)(2) test Enter amount on line 23, column (e) 1 I 271 I NBA p Public support percentage (line 27e (numerator) divided by line 27f (denominator)) I 27 N/A %

31 a Dbes the organization receive any financial aid or assistance from a governmental apency7 h Has the organization's right to such aid ever been revoked or suspended

If you answered -Yes' to either 34a or b please explain using an attached statement 35 Does the organization certify that R has complied with the applicable requirements of sections 4 01 through 4 OS of Rev Proc 75-50,

1975-2 C B 587 covenng racial nondiscrimination? If'NO; attach an explanation


337171 O1-32-W

Schedule A(FOrm990or990-EZ)2002 METHODIST HEALTHCARE 58-1454711 Pagea ~Pnvate School Questionnaire (See page 7 of the instructions N/A

(To be completed ONLY by schools that checked the box on line 6 in Part IV)

29 Does the organization have a racially nondiscriminatory policy toward students by statement in it charter, bylaws, other governing Yes No

instrument, or in a resolution of its governing body? 29 30 Does the organization include a statement of its racially nondiscriminatory policy toward students in all its brochures, catalogues,

and other written communications with the public dealing with student admissions, programs, and scholarships? 30 31 Has the organization publicized its racially nondiscriminatory policy through newspaper or broadcast media dunng the period of

solicitation for students, or during the registration penod d R has no solicitation program, in a way teal makes the policy known to all parts o1 the general community it serves 31 It Yes,' please descnbe, it *No,* please explain (If you need more space, attach a separate statement )

32 Does the organization maintain the following a Records indicating the racial composition of the student body, faculty, and administrative staff? 0 Records documenting that scholarships and other financial assistance are awarded on a racialy nondiscnminatory basis e Copies of all catalogues, brochures, announcements, and other written communications to the public dealing with student

admissions, programs, and scholarships d Copies of all matenal used by the organization or on its behalf to solicit contributions?

Ii you answered 'NO'to any of the above, please explain (If you need more space, attach a separate statement

33 Does the organization discriminate by race in any way with respect to a Students' rights or privileges? b Admissions poliaes7 o Employment of faculty or administrative staff? d Scholarships or other financial assislance7 e Educational policies I Use of facilities) g Athletic programs? h Other extracurricular actwities?

If you answered 'Yes' to any of the above please explain (If you need more space, attach a separate statement )

Schedule A (Form 990 or 990-EZ) 2002 METHODIST HEALTHCARE 58-1454711 Page 5 Part VI-A Lobbying Expenditures by Electing Public Charities (see page 9 0f the instructions) N/A

(TO De completed ONLY by an eligible organization that filed Form 5768)

36 Total lobbying expenditures to influence public opinion (grassroots lobbying) 37 Total lobbying expenditures to influence a legislative body (direct lobbying) 38 Total lobbying expenditures (add lines 36 and 37) 39 Other exempt purpose expenditures 00 Total exempt purpose expenditures (add lines 38 and 39) 41 Lobbying nontaxable amount Enter the amount from the following table

II the amount on line 40 Is - The lobbying nontaxable amount is

Not Mile 5500000 20% of Na errwnt m tins 40

OvsS5000Wbutnotwa51000,000 3100 000 plus 15% of Me e,icess M"500 000

O+erS1000,000but notwp315pp000 f173,000plus 10%alMemmawa51,000000

Ovs57,500,00pbutnolweS17000000 S225,000 plus 5% of Me booses over $1,500 ODD

Cline $17 000 000 S1,000000 42 Grassroots nontaxable amount (enter 25% of line 41) 43 Subtract tine 42 from line 36 Enter-0-it line 42 is more than line 36 44 Subtract line 41 from line 38 Enter -0-it line 41 is more than line 38

Caution I/ there is an amount on ether line 43 or fine 44, you must (la Form 4720

4-Year Averaging Period Under Section 501(h) (Some organizations that made a section 501(h) election do not have to complete all of the five columns

below See the instructions for lines 45 through 50 on page 11 of the instructions )

N/A (e) Total

0 .

0 .

0 .

0 . 09 Grassroots ceiling amount

50 Grassroots lobbying expenditures I I I I I 0 .

Paa't YI-B Lobbying Activity by Nonelectmg Public Charities (For reporting only by organizations that did not complete Part VI-A) (See page 11 of the instructions )

During the year, did the organization attempt to influence national, slate or local legislation, including any attempt to influence public opinion an a legislative matter or referendum, through the use of

Yes No Amount

a Volunteers X D Paid staff or management (Include compensation in expenses reported on lines c trough h ) X c Media advertisements X d Mailings to members legislators, or the public X e Publications, or published or broadcast statements X 1 Gents to other organizations for lobbying purposes X q Direct contact with legislators, their stem . government officials, or a legislative bony X 364 , 662 . h Rallies demonstrations, seminars, conventions, speeches, lectures, or any other means X I Total lobbying expenditures (Add lines e through In 1 364,662 .

If 'Ves'to any of tie above, also attach a statement giving a detailed description of the lobbying activities o~u-w Schedule A (Form 990 or 990-EZ) 2002

f

Limits on Lobbying Expenditures

term 'expenditures' means amounts paid or incurred

(a) (h) Affiliated group To be completes for ALL

totals electing organizations

N/A

Calendar year (or (a) fiscal year beginning in) 1 2002

OS Lobbying nontaxable

46 Lobbying ceiling amount

47 Total lobbying

48 Grassroots nontaxable

Lobbying Expenditures During 4-Year Averaging Period

(h) (c) (d) 2001 2000 1999

Schedule n(FOrm990or990-EZ)2002 METHODIST HEALTHCARE 58-1454711 Page 6

Part VII Information Regarding Transfers To and Transactions and Relationships With Nonchantable

Exempt Organizations (See page 12 of the instructions )

51 Did the reporting organization directly or indirectly engage in any of tie following with any other organization described m section

501(c) of the Code (other than section 501(c)(3) organizations) or in section 527, relating to political orpaniza6ons7

a Transfers from the reporting organization to a nonchantable exempt organization of Yes No

Slap) X (I) Cash (II) Other assets all) X

b Other transactions

(I) Sales or exchanges of assets with a nonchantabte exempt organization 6(i) X

(II) Purchases of assets from anonchantableexempt organization bill) X

(id) Rental of facilities, equipment, or other assets b(iii) X

(Iv) Reimbursement arrangements b(iv) X

(v) Loans or loan guarantees h(v/ X

(vi) Performance of services or membership or fundraising solicitations G(vi) X

c Sharing of facilities, equipment, mailing lists, other assets, or paid employees c X

d If the answer to any of the above is Yes ; complete the following schedule Column (b) should always show the fair market value of the goods, other asses, or services given by the reporting organization It the organization received less than fair market value in any

transaction or sharing arrangement, show in column (d) tie value of the goods, other assets, or semces received N/A

(a) (6~ (o) (d) Line no Amount involved Name of nonchantaDle exempt organization Description of transfers, transactions, and sharing arrangements

52 a Is the organization directly or indirectly affiliated with, or related to, one or more tax-exempt organizations described in section 501(c) of the Code (other than section SOt(c)(3)) or in section 527 " E::] Yes M No

M Type o1 organization

(a) Name of organization


(c) Description o1 relationship

METHODIST HEALTHCARE 58-1454711

FORM 990 RENTAL INCOME STATEMENT 1

ACTIVITY GROSS KIND AND LOCATION OF PROPERTY NUMBER RENTAL INCOME

TOTAL TO FORM 990, PART I, LINE 6A

STATEMENT S) 1

PROFESSIONAL OFFICE BUILDING 1 1,061,406 .

1,061,406 .

METHObIST HEALTHCARE 58-1454711

FORM 990 GAIN (LOSS) FROM PUBLICLY TRADED SECURITIES STATEMENT 2

GROSS COST OR SALES PRICE OTHER BASIS

855,987 . 0 .

855,987 . 0 .

NET GAIN OR (LOSS)

855,987 .

855,987 .

EXPENSE OF SALE

0 .

0 . TO FORM 990, PART I, LINE B

STATEMENT S) 2

DESCRIPTION

GAIN - DERIVATIVES


FORM 990 GAIN (LOSS) FROM SALE OF OTHER ASSETS STATEMENT 3

DATE DATE ACQUIRED SOLD DESCRIPTION

LAND SALES

GROSS COST OR EXPENSE NAME OF BUYER SALES PRICE OTHER BASIS OF SALE

2,905,982 . 840,666 . 0 .

TO FM 990, PART I, LN B 2,905,982 . 840,666 . 0 .

STATEMENT S) 3

METHOD ACQUIRED

PURCHASED

NET GAIN DEPREC OR (LOSS)

0 . 2065316 .

0 . 2065316 .


FORM 990 OTHER CHANGES IN NET ASSETS OR FUND BALANCES STATEMENT 4

TOTAL TO FORM 990, PART I, LINE 20

STATEMENT S) 4

DESCRIPTION

CONTRIBUTIONS FROM AFFILIATED SUPPORTED ENTITIES CHANGE IN NET UNREALIZED GAINS & LOSSES ON OTHER THAN TRADING SECURITIES ROUNDING CUMMULATIVE EFFECT FROM PASS-THROUGH ENTITIES MINIMUM PENSION LIABILITY

AMOUNT

47,664,000 .

<3,988,000 .> 1,438 .

<1,881,596 .> <30,203,000 .>

11,592,842 .


FORM 990 OTHER EXPENSES STATEMENT 5

FUNDRAISING

TOTAL TO FM 990, LN 43 21,572,460 . 21,572,460 .

STATEMENT S) 5

(A) (B) (C) PROGRAM MANAGEMENT

DESCRIPTION TOTAL SERVICES AND GENERAL

OPERATING LEASES 3,348,955 . 3,348,955 . REPAIRS 6 MAINTENANCE 1,507,833 . 1,507,833 . EDUCATION & TRAVEL 821,920 . 821,920 . DUES & SUBSCRIPTIONS 213,669 . 213,669 . INSURANCE 398,636 . 398,636 . ACCT'G/LEGAL/CONSULT NG 4,237,984 . 4,237,984 . ADVERTISING 2,320,894 . 2,320,894 . OTHER EXPENSES 5,649,355 . 5,649,355 . CONTRACT LABOR 883,798 . 883,798 . CONTRACT SERVICES 37,134 . 37,134 . UTILITIES 47,141 . 47,141 . LOSS ON EARLY DEBT RETIREMENT 2,105,141 . 2,105,141 .

(D)


FORM 990 OTHER ASSETS STATEMENT 6

TOTAL TO FORM 990, PART IV, LINE 58, COLUMN B

STATEMENT S) 6

DESCRIPTION

ADVANCES TO AFFILIATES OTHER ASSETS ASSETS LTD AS TO USE-CURRENT PORTION ASSETS LTD AS TO USE-NON CURRENT PORTION UNAMORTIZED DEBT ISSUE COSTS

AMOUNT

22,160,000 . 16,355,000 . 45,575,000 . 30,887,000 . 4,448,000 .

119,425,000 .


FORM 990 OTHER LIABILITIES STATEMENT 7

TOTAL TO FORM 990, PART IV, LINE 65, COLUMN B

STATEMENT S) 7

DESCRIPTION

ACCRUED PENSION EXPENSE ADVANCES FROM AFFILIATES

AMOUNT

77,265,000 . <541,000 .>

76,724,000 .


FORM 990 OTHER REVENUE INCLUDED ON FORM 990 STATEMENT 8

TOTAL TO FORM 990, PART IV-A

STATEMENT S) 8

DESCRIPTION

INCOME FROM PASS-THROUGH ENTITES RECLASSIFICATIONS / ROUNDING

AMOUNT

2,590,816 . 57,950,832 .

60,541,648 .


FORM 990 OTHER EXPENSES INCLUDED ON FORM 990 STATEMENT 9

TOTAL TO FORM 990, PART IV-B

STATEMENT S) 9

DESCRIPTION

RECLASSIFICATIONS / ROUNDING INCOME / EXPENSES FROM PASS-THOUGH ENTITIES

AMOUNT

57,952,270 . 709,220 .

58,661,490 .


FORM 990 PROGRAM SERVICE REVENUE STATEMENT 10

BUS UNRELATED EXCL EXCLUDED CODE BUSINESS INC CODE AMOUNT

BROWNSVILLE LAS ALLIANCE HEALTH SVCS MCKENZIE HOSPITAL MH-MEMPHIS HOSPITALS DYERSBURG HOSPITAL FAYETTE HOSPITAL MARTIN SPECIALTY CLINIC HOME HEALTH VOLUNTEER HOSPITAL COMMUNITY HEALTHCARE EXTENDED CARE HOSPITAL JACKSON, TN MED LAB MCNAIRY HOSPITAL WEST TN MEDICAL ASSOCS LEXINGTON HOSPITAL FOUNDATION

57,951,192 . TO FORM 990, PART VII, LINE 93

STATEMENT(5) 10

DESCRIPTION

RELATED OR EXEMPT FUNC-TION INCOME

441,840 . 208,068 . 477,840 . 428,400 .

47,068,812 . 2,054,160 .

595,020 . 86,469 .

657,300 . 932,580 . 359,712 . 375,000 .

3,033,960 . 101,400 . 221,580 . 75,891 . 664,680 . 168,480 .


STATEMENT S) 11

FORM 990 PART IX STATEMENT 11 INFORMATION REGARDING TAXABLE SUBSIDIARIES

NAME, ADDRESS 6 ID NUMBER PCT NATURE OF TOTAL END-OF-YEAR OF CORP OR PARTNERSHIP OWN BUSINESS INCOME ASSETS

HEALTH CHOICE, LLC, MEMPHIS, TN ; 62-1681198 50 .00$ HEALTH CARE <123,846 .> 1,329,590 . CHILD HEALTH ALLIANCE OF THE MID-SOUTH, INC, MEMPHIS, TN ; 62-1554238 50 .00$ CHILD HEALTH

CARE 96,973 . 317,686 .

METHObIST HEALTHCARE SB-1454711

SCHEDULE A SUPPORTED ORGANIZATIONS - PART IV, LINE 13 STATEMENT 12

METHODIST HEALTHCARE-MEMPHIS HOSPITALS METHODIST LEBONHEUR HEALTHCARE FOUNDATION METHODIST HEALTHCARE-FAYETTE HOSPITAL METHODIST HEALTHCARE-LEXINGTON HOSPITAL METHODIST HEALTHCARE-MCKENZIE HOSPITAL METHODIST HEALTHCARE-BROWNSVILLE HOSPITAL METHODIST HEALTHCARE COMMUNITY CARE ASSOCIATES METHODIST HEALTHCARE-JONESBORO HOSPITAL METHODIST HEALTHCARE-MIDDLE MISSISSIPPI HOSPITAL METHODIST HEALTHCARE-JACKSON HOSPITALS METHODIST HEALTHCARE-DYERSBURG HOSPITAL METHODIST HEALTHCARE PRIMARY CARE ASSOCIATES ALLIANCE HEALTH SERVICES, INC . METHODIST HEALTHCARE CENTRAL MS MEDICAL ASSOCIATES METHODIST HEALTHCARE WEST TN MEDICAL ASSOCIATES METHODIST LEBONHEUR HEALTHCARE-JACKSON HOSPITAL METHODIST HEALTHCARE-MCNAIRY HOSPITAL METHODIST HEALTHCARE-VOLUNTEER HOSPITAL METHODIST HEALTHCARE-MARTIN SPECIALTY CLINIC LEBONHEUR CENTER FOR CHILDREN 6 PARENTS METHODIST EXTENDED CARE HOSPITAL, INC

STATEMENT S) 12

NAME OF SUPPORTED ORGANIZATION LINE NO .

7 13 7 7 7 7 7 7 7 7 7 13 7 13 7 7 7 7 7 7 7

The Community Service Review and Accomplishments of Methodist Healthcare and it related companies for the Year 2002 are attached hereto

Methodist Healthcare

58-1454711

Part III, Page 2, Statement of Program Service Accomplishments

The mission and value statement of Methodist Healthcare and its related companies are the following

OPERATING MISSION

Methodist Healthcare, m partnership with it medical staffs, will be the leader m providing high quality, cost effective health care to benefit the communities we serve

Services will be provided m a manner which supports the health mimstnes and Social Pnnciples of The United Methodist Church

VALUE STATEMENT

The Methodist Way

QUALITY -in everything we do

FAIRNESS -with all we serve

SERVICE -exceeding expectations

INTEGRITY -in all our dealings

CONTINUOUS IMPROVEMENT PROCESS

Community Health Screenings and Education " 11,497 people screened at 179 screening events " Say Yes Mamm, an inreach mammography referral visitation

program, resulted in 765 scheduled mammograms 104 speaker's bureau engagements reaching 6,129 people

" 8 church speaker's bureau engagements reaching 1,225 people

Community Service

Community Service Review 2002

Care to the Underserved, Including . $366,054,000 MedicaldlTennCare Arkansas $11 .437,586 Mississippi $16,388,017 Tennessee $220,402,291 Other $3,475,106 Total $251,703,000 Uncompensated Care $114,351,000

Note Uncompensated Care includes all Bad Debt and Charity

Methodist Le Bonheur Healthcare Foundation Funding' $438,988 Clinical Research Projects $263,500 Medical/Health Scholarships $175,488

Community Clinic and Community Support including (360,725 Church Health Center $2,000 Germantown Parish Nurse $300 Germantown Health Fairs $7720 Mid South Lions $15,000 Lifestyles Clinic $500 Medical Mission Trips $5,200 CBU Health Fair $200 Responsible Father Program $40,000 Teen Pregnancy Prevention Program $20,000 Child Abuse Evaluation Program $130,000 Parent Pathway Program $20,000 Healthy Families Program $15,000 Church Health Center-Clinic $2,000 Heart Gala $5,000 Holy Rosary Italian Festival $200 Knlvanis $250 National Youth Leadership $250 Fayette County Ambulance Shelter $170,256 Christ the Rock Health Fair $1,000 Adopt-a-School $2,200 Maternal League $750 Wesley Meadows Retirement Home $10,000 Lifeblood $25,000 Mid-South Shnners $500

Methodist Healthcare 12-31-02

58-1454711

FORM 990. PART V. Line 75 Officer, Director, Trustee or Key Employees Aggregate Compensation More Than $100,000

(e)Expense Account & Other

Allowances

(d)Contributions To Employee Benefit Plans Name (c)Compensation

D G Baytos 207,002 26,522 0 M A Blome' 106,688 10,815 0 J R Borden 130,334 17,512 0 P Campbell 243,247 6,369 0 L J Coleman 184,007 28,812 0 M B Collis 724,210 21,667 0 E Davis 162,807 29,139 720 T C Deaton 217,765 27,819 0 R D Delffs 145,298 31,697 0 M Demster 169,828 25,864 0 F B Drews 130,403 17,960 1,284 L M Fogerty 146,746 21,180 0 R C Foss 168,423 19,586 0 A Fowler 175,006 32,088 0 M L Gwnle 179,888 21,125 1,470 K E Hopper 175,081 31,061 0 P Jacobson 174,519 23,857 0 L Llewellyn 225,990 58,774 0 J E Marks 135,013 22,907 0 D Martin 137,508 41,088 0 R M McCormick 228,643 40,054 3,719 D Neely 112,951 18,362 0 M Nesbit 153,732 19,387 0 P Peppier 169,414 34,021 0 A E Ragghianti 154,192 31,613 0 C Ross-Spang 209,614 34,247 0 C Sawyer 239,514 29,676 0 J Shmerling 231,710 55,805 762 P A Turner 153,580 16,703 0 J Webb 185,270 26,795 0 S L Welker 191,984 27,791 0

METHODIST HEALTHCARE BOARD OF DIRECTORS 1211 Union Avenue Memphis, TN 38104

12-31-02

Mr Shelton Wilder 4775 Highway 59 Mason, TN 38049

Reverend Clarence Hare 118 Country Lane Brownsville . TN 38012

TERMS EXPIRING 6103 David Beckley, Ph D 150 E Rust Avenue Holly Springs, MS 38635

Mr Frank Jemison, Jr 35 Union Avenue, Suite 200 Memphis, TN 38103

TERMS EXPIRING 6104 Mr Eugene Cashman 1000 Ridgeway Loop Road Memphis, TN 38120

Richard Hollis, M D (Vice Chair) 60431 Cotton Gin Port Road Amory, MS 38821

TERMS EXPIRING 6/05 Ms Melissa Pierce 411 North Avalon West Memphis, AR 72301

Mr David Peck (Secretary) 1715 Aaron Brenner, Suite 500 Memphis, TN 38120

Mr Keith Ingram 1707 Eagle Drive West Memphis, AR 72301

Mr William Johnson (Chair) 205 South Redding West Memphis, AR 72301

EX-OFFICIO MEMBERS Mr Gary Shorb President/CEO Methodist Healthcare 1211 Union Avenue, Suite 700 Memphis, TN 38104

TERMS EXPIRING 6106 Scott Ferguson, M D Mr Walker Sturdrvant 200 South Rhodes, Suite B P O Box 340 West Memphis, AR 72301 Glendora, MS 38928

TERM EXPIRING 6/07 Russell Chesney, M D 50 North Dunlap, #306 Memphis, TN 38103

TERMS tXF'IFt11VG slyly Marie Milam, Ed D Mr John Sherard, V 3787 Neely Road P O Box 75 Memphis, TN 38109 Sherard, MS 38669-0075

TERMS EXPIRING 6/10 Mr Allen Bush Reverend John Moore P 0 Box 246 P 0 Box 220 Blytheville, AR 72316 Senatobia, MS 38668

Mr Ed Roberson 813 Ridgelake Boulevard Memphis, TN 38120

John Buttross, M D Medical Staff Representative (Past Chief of Staff 1068 Cresthaven Road, Suite 360 Memphis, TN 38119

Michael McSwain, M D Chief of Staff 1325 Eastmoreland, Suite 360 Memphis, TN 38104

Edward Lazar, M D President, Medical Staff 6027 Walnut Grove Road, Suite 317 Memphis, TN 38120

Mr Bill Rice, Chancellor University of Tennessee, Memphis 62 South Uunlap, #L1J Memphis, TN 38163

Mr Cam Welton Executive Vice President/COO Methodist Healthcare 1211 Union Avenue, Suite 700 Memphis, TN 38104

Ambulatory Operations, Inc L.eBonheur Ambulatory Services, Inc Med Lab, Inc Integrity Health Plan of Mississippi, Inc Memphis Professional Building, Inc Haywood Park, Inc

Methodist Healthcarc 58-1454711

Part V1, Page 5 . Line 80b

Methodist Healthcare is related to the following Exempt and Non-Exempt Organizations

EXEMPT

Alliance Health Services, Inc Methodist Healthcare Foundation Methodist Healthcare Community Care Associates Methodist Healthcare West TN Medical Associates Methodist Healthcare-Jonesboro Hospital Methodist i-ieehhcare-'voiunLeer Hospital Methodist Healthcare-Fayette Hospital Methodist Healthcare-McNairy Hospital Methodist Healthcare-Dyersburg Hospital Methodist Extended Care Hospital, Inc Methodist L.eBonheur Heal thcare-Jackson Hospital Methodist Healthcare Central MS Medical Associates Methodist Heal thcare-Memphis Hospitals Methodist Heal thcare-L.exi ngton Hospital Methodist Healthcare-Brownsvi lle Hospital L.eBonheur Center for Children and Parents Methodist Healthcare Primary Care Associates Methodist Heal thcare-Jackson Hospitals Methodist Healthcare-Middle Mississippi Hospital Methodist Heal thcare-McKenzie Hospital LeBonheur Children's Medical Center Foundation Methodist Healthcare Transplant Program, LLC Methodist Heal thcare-Martin Specialty Clinics

NON-EXEMPT

DATE August 28, 2002

SUBJECT Minutes

COMMITTEE Methodist Healthcare Board of Trustees

ATTENDING See Attendance List (Attached)

MINUTES CALL TO ORDER AND INVOCATION

A called meeting of the Methodist Healthcare Board of Trustees was held Wed , August 28, 2002, in the Medical Staff Auditorium at Methodist Healthcare-University Hospital, In Memphis, TN Mrs Melissa Pierce, Chair, called the meeting to order et 8 30 a m Chaplain Elvernice "Sonny" Davis gave the invocation Bishop Clay Lee, Mississippi Conference, and Mr. Gene Cashman III, Healthcare Administration Intern, were introduced as guests at today's meeting

APPROVAL OF MINUTES

Mrs Pierce called for any corrections to the March 27, April 24, April 26 and May 16, 2002, Meeting Reports A moon was duly made, seconded and approved to accept the minutes as written

RECOGNITION

Mrs Pierce recognized Mr Dirk Noteboom, Systems Manager, Food and Nutrition Services, for the wonderful meals they have prepared for the Board of Trustees She thanked him and asked that he relay the compliments and appreciation of the trustees to his staff

PRESENTATION

Mrs Pierce presented David Beckley, Ph D with a plaque from the Board of Trustees, In appreciation for his service to Methodist Healthcare Dr Beckley's term on the Board of Trustees has expired, but he will continue to serve on the Board of Directors Mr Gary Shorb will present plaques at a later date to Mrs Mary Carolyn Tindall end Mrs Joan Gibson who were not at today's meeting

Meth~rdis=M Healthcare

There being no further business, the meeting adjourned at 9 00 a m

Respectfully su tied,

lissa Pierce hair

Methodist Healthcare Board of Trustees

Ann Willis Recording Secretary Methodist Healthcere Board of Trustees

J

u

Methodist Healthcare Board of Trustees August 28, 2002 Page 2

PROPOSED REVISION$10 METHODIST HEALTHCARE CHARTER AND BYLAWS

Mr Maunce Elliott presented an update of proposed changes A sale, merger or dissolution of the system would only occur upon the recommendation of the Board of Directors and unanimously approved by each of the three conferences The dissolution clause was rewritten to clarify that any net assets remaining In the event of dissolution of the system would be distributed evenly to the three conferences .

Nine directors will be appointed to the Board of Directors by the three conferences . The Bishop of each conference will appoint one clergy and two lay persons These appointees, along with the CEO of the system will serve on the Bylaws Committee The Nominating Committee will include the three bishops as ex-officio members, without vote or attendance requirements

Board membership will consist of current Board of Trustees and Board of Directors until their terms expire, at which time they will rotate off The only board members who have chosen not to serve are Mrs Joan Glbson thr Rev Don NAonrnhoa.! _- ;;dft qa~ ~ prin ;, ;u ; ;vy Mrs Mary Larolyn Tlndell's term has expired Through attrition over three years, we will get back to our current size recommendation of 18-30 board members The Board of Directors chair's term will change to serve one two-year term

A motion was made and duly seconded to adopt the proposed revisions to the Charter and Bylaws of Methodist Healthcare The motion passed unanimously

ADJOURNMENT

G 10A7AVyhWESTVAEMO$4M py7ews memo Ooc

Methodist. Le Bonheur Healfhcare

Legal Department 1211 Union Avenue, Suite 700 Memphis, TN 38014 Phone (901) 516-0560 Fax (901) 516-0569

TO: Gary Shorb, Maurice Elliott, Cam Welton, Larry Spratfin, Mac Lewes

FROM: Steve West

SUBJECT: Methodist Healthcare Charter and Bylaws

DATE: September 3, 2002

Please find attached a copy of the Amended and Restated Charter, along with the [3V/a WC Inihii`h aura arrrn;iaVl h~ Fhc R~Yrr! ~iTr4~~fe~~ ~~ fti~ ". n . . .. . . . .a no . __ ~~~c~~ r,uyuoi cv ~iiccuuy The Charter has been filed with the Tennessee Secretary of State I will revise the Bylaws of MHMH to be consistent with these Bylaws and distrlbute them in the near future

Please call if any questions

enclosure

cc MH Legal Department staff files

(a) To be a supporting organization (within the meaning of Section 509(a) (3) of the Internal Revenue Code of 1986 or the corresponding provision of any future United States Internal Revenue law) to one or more of the Annual

AMENDED AND RESTATED CHARTER OF

METHODIST HEALTHCARE

Pursuant to the provisions of Tennessee Code Annotated Section 48-60-106, Methodist Healthcare adopts the following Amended and Restated Charter

1 The name of the corporation is


2 . The text of the Amended and Restated Charter is as follows

The name of use corporation is


2 The duration of the corporation is perpetual

3 (a) The complete address of the corporation's principal office is

1211 Union Avenue, Suite 700 Memphis, Tennessee 38104, County of Shelby

(b) The complete address of the corporation's initial registered office m Tennessee is

1211 Union Avenue, Suite 700 Memphis, Tennessee 38104, County of Shelby

(c) The name of the initial registered agent to be located at the address in 3 (b) is W Steven West

4 (a) This corporation is a non-profit corporation

(b) This corporation is a public benefit corporation

5 The purposes for which the corporation is organized are

(fl Notwithstanding any other provision of the Charter, this corporation shall riot carry on any activity not permitted to be canned on by (i) a corporation exempt from federal income tax under Section 501(c) (3) of the Internal Revenue Code of

Conferences of The United Methodist Church in the mid-south area which are organizations classified under Section 509(a) (1) or (2) of said Internal Revenue Code, the purpose of this Corporation is to further the health and welfare ministries of the foregoing supported organizations by receiving and administering funds or other property In furtherance of its said purpose this corporation may provide funds, property or other benefits to the following beneficiaries (i) hospitals, (ii) other organizations which conduct affairs in the health care area; (iii) the foregoing supported organizations as well as any other Annual Conference of The United Methodist Church, provided that, any said beneficiary is an organization described in Section 509(a) (1) or (2) of the Internal Revenue Code of 1986 or the

rnrAmwi corresponding provision of any future T_in_trP .i crarP-s Revenue law

(b) This corporation is organized and shall be operated exclusively for charitable, scientific, literary, religious and educational purposes, no part of the earnings shall inure to the benefit of any individual, no substantial part of the activities shall carry on propaganda, or otherwise attempt to influence legislation, and the corporation shall not participate, or intervene in (including the publishing or distributing statements), any political campaign

(c) To engage in any activities which are appropriate to carry out and fulfill any or all of the foregoing purposes

(d) To have and exercise all of the powers as are permitted by the Tennessee Nonprofit Corporation Act,

(e) To have the power to carry out the purposes hereinabove set forth in any state of the United States to the extent that such purposes are not forbidden by law of such state and, in the case of any state in which one or more such purposes are forbidden by the law, to limit the purpose or purposes which the corporation proposes to carry on in such state to such purpose or purposes as are not forbidden by law thereof in any certificate or any application to do business in such state

(b) After this transition period, the Board of Directors would he reduced in size to not less than 18 and not more than 30 voting members, plus the three Conference Bishops who shall be non-voting members Nine (9) members of the Board of Directors shall be elected by the Conferences (three (3) from each), using the Board membership guidelines established for all Board members The other Board members shall be elected by the Board itself upon the recommendation of the

1986 or the corresponding provision of any future United States Internal Revenue law; or (a) a corporation, contributions to which are deductible under Section 170(c) (2) of the Internal Revenue Code of 1986 or any other corresponding provision of any future United States Internal Revenue law

6 This corporation shall no longer have members effective with the filing of this Amended and Restated Charter with the Secretary of State of Tennessee The Memphis, Mississippi, and North Arkansas Annual Conferences of The United Methodist Church shall have the reserved power to approve

(a) The sale of all, or a majority of the system combined assets,

(b) Merger with another entity if such merger results in the Board of Directors not having a requirement that 60% of the Board must be members of The United Methodist Church, and

(c) The winding up or dissolution of the system .

Requests for Conference approval for any of the above items would only occur after a recommendation by the Board of Directors with a vote of at least two-thirds (2/3) of the Board.

7 The governing body of this organization shall be its Board of Directors who shall be elected as follows

(a) Over a transition period, not to exceed three years, the Board of Directors will be comprised of the former members of the Board of Trustees selecting to be Directors, along with the current members of the Board of Directors

5 Additional approval for the Amended and Restated Charter was not required

Nominating Committee and as provided for further in the bylaws of the corporation .

The bylaws of this corporation shall also provide for the process for removal, length of term of Directors, and the process for the filling of any vacancies

8 In the event of dissolution, the residual assets of the corporation will be turned over to the North Arkansas, the Mississippi and the Memphis Annual Conferences of The United Methodist Church, or their successors, one third to each, which Conferences are organizations classified under Section 501(c) (3) of the Internal Revenue Code of 1986 or corresponding sections of any further Internal Revenue Code, or, in the event said Conferences or their successors are no longer classified as exempt organizations, to some other corporation or organization related to The United Methodist Church pursuant to The Book of Discipline of the United Methodist Church

9 A director of this corporation shall not be personally liable to the corporation nor its members for monetary damages for breach of fiduciary duty as a director, except

(a) For any breach of the director's duty of loyalty to the corporation or its members,

(b) For acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law, or

(c) For liability for unlawful distributions under Section 48-58-601 of the Tennessee Nonprofit Corporation Act

"Nothing herein is intended to alter or in any way affect the immunity from suit provided directors under Section 48-58-601 of the Tennessee Nonprofit Corporation Act "

3 The date the original charter of the corporation vas filed by the Secretary of State was May 1, 1981

4 The foregoing Amended and Restated Charter was duly adopted on August 28, 2002 by the then members (Trustees) of the corporation and by its Board of Directors

G \DATA\Igl\6YUW5\RESTATED AND AMENDED CHARTER 071702 Final Eoc APVmrM

The foregoing Amended and Restated Charter is to be effective upon filing by the Secretary of State of Tennessee

Dated August 28, 2002


By- I ftl W-1 Gary Shorb President and CEO

The Corporation shall have no seal

BYLAWS OF


ARTICLE 1

OBJECTWES OF METHODIST HEALTHCARE AS A NOT-FOR-PROFIT CORPORATION

1 l The purpose of this organization is to further the health and welfare muustnes of the Memp}us, Mississippi and North Arkansas Annual Conferences of The United Methodist Church by receiving and adrrurustenng funds or other property In furtherance of it said purpose this organization may provide funds, property or other benefits to the following beneficiaries (i)

Memphis, ̀ Mississippi and North Arkansas Annual Conferences of The United Methodist Church as well as any other Annual Conference of The United Methodist Church, provided that, any said beneficiary is an orgaruzation classified under Section 501(c)(3) of the Internal Revenue Code of 1986 or the corresponding provision of any future United States Internal Revenue law

1 2 In the event of a dissolution, the residual assets of the Corporation wdl be fumed over to the Memphis, the Mississippi and the North Arkansas Annual Conferences of The United Methodist Church, or their successors, one third to each, which Conferences are organizations classified under Section 501 (c) (3) of the Internal Revenue Code of 1986 or corresponding sections of any future Internal Revenue Code, or, m the event said Conferences or their successors are no longer classified as exempt organizations, to some other corporation or organization related to The United Methodist Church pursuant to The Book of Discipline of the United Methodist Church

1 3 This Corporation is organized and shall be operated exclusively for charitable, scientific, literary, religious and educational purposes, no part of the earnings shall inure to the benefit of any individual, no substantial part of the activities shall be to carry on propaganda, or otherwise attempt to influence legislation, and the Corporation shall not participate m, or intervene m (including the publistung or distributing of statements), any political campaign Further, this Corporation shall be operated m accordance with the Social Principles of The United Methodist Church

ARTICLE 2

CORPORATION SEAL

Nffi Bylaws Page 2 of 13

As of August 2002, over a transition period, not to exceed three (3) years, the Board of Directors shall consist of the former members of the Board of Trustees selecting to be on the Board of Directors, along with the current members of the Board of Directors whose current terms have not expired During the transition penod, the size of the Board will be reduced by not replacing members as their terms expire After the transition period, the Board would consist of not less than 18 and not more than 30 voting members, plus the three Conference Bishops, who shall be non-voting members and excused from the attendance requirement m Section 5 3 Nine (9) members of the Board of Directors shall be selected by the Conferences, three (3) from each (one (1) clergy and two (2) lay persons), using the Board membership criteria estabLshed for all members and in consultation with the Bishops of each Conference and the Chief Executive Officer The other Board members shall be elected by the Board itself upon the recommendation of the Nominating Committee, as provided further m Section 8 3 The Board members shall include by virtue of their office the three (3) Conference Bishops (who shall be non-voting members and excused from the attendance requirement m Section 5 3), the Chief Executive Officer/President and the Executive Vice President/Chef Operating Officer of the Corporation, the CtueF of the Medical Staff and the President of the Medical Staff of Methodist HeaJthcare - Memphis Hospitals, and a physician who shall be reconunended by the Methodist Healthcare - Memphis Hospitals Medical Staff's Executive Committee on an annual basis For a period concurrent ,tiith the term of the Master Affiliation Agreement with The Uruversity of Tennessee Health Science Center (UTHSC), which commenced February 2002, the directors shall also include either the Chancellor or the Dean of the College of Medicine, as designated by iJTHSC At least three-fifths (3/5) of the members of the Board of Directors must be members of The United Methodist Church

ARTICLE 3

ANNUAL CONFERENCES RESERVED POWERS

The Annual Conferences shall have the reserved power to approve the sale of all, or a majority of, the Corporation's combined assets, the Corporation merger with another entity, if such merger, results m the Board of Directors not having a requirement that sixty percent (60%) of the members must be members of The United Methodist Church, and the winding-up or dissolution of the system All three (3) Conferences must vote to approve the above referred to sale, merger or dissolution

ARTICLE 4

BOARD OF DIRECTORS

Section 4 1 Membership

Any director may be removed at any tune, with or without cause, by the affirmative vote of at least two-thirds (2/3) of the members of the Board of Directors

ME Bylaws Page 3 0( 13

Section 4 2 Term Term Limit

After the transition period, the members of the Board of Directors (except for ex-officio directors listed herein below) shall be elected for staggered initial terms of one (1), two (2) and three (3) years and thereafter for a term of three (3) years Vacancies occurring on the Board of Directors due to death, resignation, retirement, or cause other than expiration of the term may be filled by election by the members of the Board of Directors, unless the vacancy is a member appointed by one of the Annual Conferences, m which case that vacancy will be filled by the respective Conference Directors so elected to sir unexpired terms shall hold office for the remainder of the term of the director by whom the vacancy was created No director shall serve more than three (3) successive terms, except for those directors who are directors by virtue of their office as the three (3) Conference Bishops, the CEO/President, the Executive Vice PresidenUCluef Operating Officer of the Corporation, the iJT'HSC appointee, the Ctuet of the Memphis Medical Staff the President of the Medical Staff and the physician who shall be recommended by the Memphis Medical Staffs Executive Comrruttee Additionally if a director is elected to serve as Char of the Board of Directors that director may complete the two (2) year term as Chair notwithstanding the term hrtut

Section 4 3 Officers . Record of Proceedmes

The Board of Directors shall organize, electing a Char, Vice Char of the Board of Directors, a CEO/President and a Secretary and persons to serve on Board committees, together with such other officers as the Board may deem desirable The officers, (other than the officers employed by the Corporation) and all committees of the Board of Directors, shall serve for one (1) year unless otherwise speafied herein the bylaws, or until their successors are elected The Board of Directors shall keep a complete and accurate record of its actions as a Board and shall furnish reports to the Conference Bishops as may be called for or required

Section 4 4 Powers

The Board of Directors shall be the governing body of the Corporation, managing it business and affairs The Board of Directors shall not have the power to do those [lungs reserved to the Annual Conferences m Article 3, nor shall the Board of Directors have the power to change the Annual Conferences reserved powers by Charter and/or Bylaws amendment(s)

Section 4 5 Removal

MEETINGS

At all meetings of the Board of Directors a majority of the members then m office shall be necessary and sufficient to constitute a quorum for the transaction of business with attendance to be either in person or by telephonic conference, and the act of the majority of the members present at any meeting at wtuch there is a quorum shall be the act of the Board of Directors, except for action approving any Charter and/or Bylaws amendment(s) or action on a recommendation relative to a matter, requiring the Annual Conferences approval (see Article 3) which action(s) shall require favorable vote of at least two-t}urds (2/3) of the Board membership

Mf{ Bylaws Page 4 of 13

Section 5 1 Date of Meetin gs

The Board of Directors shall meet monthly or as otherwise determined by the Board Special meetings of the Board may be called by the Chair, the President, or by a majority of the members of the Board of Directors The June meeting will be considered the annual meeting, unless otherwise determined by the Board of Directors

Section 5 2 Notice

Nonce of the time and place of the meetings of the Board of Directors shall be given by any usual means of communication not less than five (5) days before the meeting The notice may, but need not, specify the business to be transacted at any regular meeting The business transacted at any special meeting shall be confined to the matters stated m the nonce

Section 5 3 Attendance

Each director shall be required to attend at least two-thirds (2/3) of all meetings per year of the Board, unless absence is excused by the Executive Committee upon the written request of the director Any director who fails to meet this rrurumum requirement shall be deemed to have resigned

ARTICLE 6

QUORUM

ARTICLE 5

ARTICLE 7

The Chief Executive Officer/President shall have the authority to name the Executive Vice President(s), Senior Vice Presidents and Vice Presidents for the Corporation The Senior Vice President of Health and Welfare Atirustnes shall be appointed by the Cluef Executive Ofticer/President m consultation with,

NM Bylaws Page 5 of 13

OFFICERS

Section 7 1 Char and Vice Char of the Board of Directors The Chair shall be elected to once for a two (2) year term, and shall not serve a second term without a break m service It shall be the duty of the Char of the Board of Directors to preside at all meetings of the Board of Directors Except as otherwise provided, the Char shall have the authority to appoint all committees of the Board of Directors He/she may also name the Chairs of the committees so appointed by Fum/her The Vice Char shall perform the dirges of the Char m tus/her absence

Section 7 2 Cliief Executive Officer/President

The Chief Executive ORicer/President of the Corporation will have general overall supervision of all of the business and affairs of the Corporation and m general, the Chief Executive Officer/President shall perform all dirges incident to the office and such other duties as may be prescribed by the Board of Directors from time to time, including compliance with all applicable governmental laws, rules, and regulations, and collaboration with leaderstup of the various subsidiary corporations and their medical staffs The Chief Executive Officer/President shall be selected by the Board of Directors on the bass of the following criteria

7 2 1 Ability to establish corporate rrussior~ with clear direction, goals, and culture, and to define strategic and short-term plans consistent with the rrussion

722 Ability to define responsibility and accountabiLty of staff

723 Ability to direct, develop, and implement marketing plans and programs for the health care services to be offered by the Corporation

724 Ability to prepare and maintain annual expense and capital budgets, and prepare human resource utilization plans based on customer needs and staff qualifications

725 Ability to communicate a vision of orgarvzational values, vision, and rrussion, and to promote the flow of information through effective commumcahon systems

726 Ability to communicate and collaborate with the medical staff to develop and implement patent care goals and standards that result m a safe, patient centered environment of care

The Senior Vice Presidents of the Corporation shall discharge such other dunes as generally pertain to then respective offices, or such duties as may be prescribed by the Board of Directors and/or the CEOIPresident

IAN Bylaws Page 6 of 13

and approval by, the Bishops of the Memphis, Mississippi and North Arkansas Annual Conferences

Section 7 3 Executive Vice PresidendCtuefOperating Officer and Senior Vice Presidents

The Corporation shall have a Executive Vice President/Chief Operating Officer, Senior Vice President - Finance and Treasurer, a Senior Vice President - Legal Affairs/General Counsel and Assistant Secretary, a Senior Vice President - Health and Welfare Ministries, and such other Senior Vice Presidents as the Board of Directors may from time to time designate The duties of the Senior Vice Presidents of the Corporation shall be as follows

7 3 1 Executive Vice President/ and Chief Operating Officer The Executive Vice President and Ctuef Operating Officer shall perform all the duties incident to the office and such other dunes as may be prescribed by the Chief Executive Officer/President from tune to time

732 Senior Vice President - Finance and Treasurer The Senior Vice President for Finance shall be the treasurer and chief financial officer of the Corporation unless any of these duties are delegated as provided in section 7 5 He/she shall be responsible for development of corporate operating and strategic financial plans, for analysis and reporting of the Corporation's financial performance, for the implementation of a corporate cash management program and for the development and maintenance of strong relationships with banks, underwriters and other financial institutions The Senior Vice President for Finance and Treasurer shall receive and account for all funds of the Corporation and shall deposit the same m such bank or banks designated by the Board of Directors He/she shall male a report of the financial condition of the Corporation at each meeting of the Board of Directors and at such other tunes as designated by the Board

7 3 3 Senior Vice President - Legal Affairs/General Counsel and Assistant Secretary The Senior Vice President for Legal Affairs shall be the Corporation's general counsel and shall be responsible for guidance and representation of the Corporation m all legal matters

734 Senior Vice President - Health & Welfare Ministries The Senior Vice President for Health & Welfare Ministries shall be responsible for the Chaplauicy Program set forth m Article 12 and to report to the Board of Directors on matters referred to m Section 8 7 The Senior Vice President for Health and Welfare Ministries shall act as the haison to the Health and Welfare Ministries Committee and shall be responsible for church and conference relations

Comrruttees of the Board of Directors shall be Standing and Special The Standing Committees shall be the Bylaws Comrmttee, the Nominating Comrruttee, the Executive Committee, the Finance Committee, the Audit and Compliance Committee, the QuaLty Management Committee, the Compensation Committee, and the Health and Welfare Ministries Committee, and such other conuruttees as the Board shall authorize the Char to appoint Eligibility for committee membership, with the exception of the Quality Management Committee and the Health and Welfare Muustnes Committee, shall be confined to members of the Board of Directors h shall be the responsibility of the Chairs of the various committees to call meetings of their committees as often as may be required, but not less than annually, for the accomplishment of their rmssions, tasks, and responsibLLties IvLnutes of the activities of the committees shall be recorded and presented to the Board of Directors Unless otherwise speafied in these Bylaws, the term of each comrruttee member shall be one (1) year (from June to June), except m the case of an election or appointment to fill a vacancy occurring during a term, m which event the election or appointment shall be for the unexpired portion of the original term

MI-I Bylaws Page 7 of 1 3

Section 7 4 Secretary

It shall be the duty of the Secretary to keep a record of all proceedings of the Board of Directors He/she shall give the required notice of all meetings of the Board of Directors and shall generally discharge all such other dunes as pertain to his/her office, or such as may be prescribed by the Board of Directors and/or the CEO/President

Section 7 5 Delegation of Duties of Officers

The powers or duties of any officer of the Corporation, m case of his/her absence or for any reason, may be delegated, for the time being, by the Board of Directors and/or by the CEO/President to any other officer

Section 7 6 Resignation and Removal

My officer of the Corporation may resign at any time by giving written notice to the CEO/President or to the Secretary, and, unless otherwise specified therein, the acceptance of such resignation shall not be necessary to make it effective Any officer, other than officers employed by the Corporation, may be removed by the Board of Directors whenever m its judgment the best interests of the Corporation would be served thereby Any officer who is discharged or resigns as an employee of the Corporation is simultaneously terminated as an officer

ARTICLE 8

COMMITTEES OF THE BOARD OF DIRECTORS

Section 8 1 Committees . Meetings and Reports

The Executive Conumttee shall consist of at least the Char and the Vice Char of the Boards of Directors, the Chars of the standing comrruttees, the Cluef of the Medical Staff of Methodist Healthcare - Memphis Hospitals, the Chief Executive Officer/President and Ctuef Operating Officer of the Corporation Ttvs Conuruttee shall act as an advisory committee to the Board of Directors and to the other officers of the Corporation except that it shall have the power to act when the Board is not in session, and it shall perform such functions and duties that may be delegated to it by the Board of Directors The Committee shall report any action taken at the next meeting of the Board of Directors

bII-1 Bylaws Page 8 of 13

Section 8 2 Bylaws Committee

As a August 2002, and during the transition period, not to exceed three years, the Bylaws Committee shall consist of rune (9) members (two (2) lay members and one (1) clergy from each of the throe Annual Conferences) appointed by the Bishops from the membership of the former Board of Trustees, along with the CEO/President who shall char the Comnuttee and is a voting member After the transition, the Bylaws Committee shall consist of rune (9) directors elected by the three (3) Annual Conferences, along with the Chief Executive Officer/President who shall char the Committee and is a voting member A two-thirds (2/3) favorable vote (7 members of the Committee) is required to recommend change(s) to the Bylaws to the Board of Directors, however, in the event the Bylaws Committee fails to act or acts negatively, the Board of Directors by a two-thirds (2/3) vote, can uuuate consideration of a Bylaw change and such change may be approved m the manner described m Article 13

Section 8 3 NorrunatmQ Comrruttee

The Norrunatmg Comrruttee shall consist of the three Conference Bishops, three other members of the Board of Directors, who are not employed by the Corporation, along with the CEO/President, who wdl chair the Comnuttee and is a voting member Pursuant to the established Board memberstup guidelines, the Norrunating Comnuttee shall present nortunations for appointments of the Board of Directors (other than 9 members elected by the three Annual Conferences), nominations for officers of the Board of Directors, and for appointments to the Boards of Directors of the Corporation's subsidiary or auxiliary organizations

It shall be the responsibihty of the Nominating Committee to assure that appointments to all subsidiary hospital Boards of Directors and the Methodist Healthcare Foundation Board of Directors comply with the Book of Discipline of The United Methodist Church as to the percentage of United Methodist members}up on the Boards Where feasible and practicable, other than Le Bonheur Children's Medical Center Foundation, all other subsidiary Boards shall have the United Methodist representation in accordance with the Book of Discipline

Section 8 4 Executive Comrtuttee

The purposes and functions of the Conuiuttee shall be to recommend to the Board all rrumstenal affairs programs and all volunteer services programs The Conuruttec shall also provide advice on conference relationships, and reconunend health and welfare programs in accordance with the Social Principles of The United Methodist Church

ME Bylaws Page 9 of 13

Section 8 5 Finance Committee

The Comrruttee shall be responsible for appropriate recommendations to the Board with respect to all the financial affairs of Methodist Healthcare, including, but not lirruted to, recommendations for a three (3) year capital budget, and annual system budgets for all corporations, establishing an indebtedness policy, joint ventures policy, assets and cash management, investment policy, and spending limits, providing timely financial statements, and recommending insurance coverage lnuts for the system

Section 8 6 Audit and Compliance Committee

The Audit and Compliance Committee shall be an investigating and recommending committee reporting to the Board of Directors The purposes and functions of the Comnuttee shall be

8 6 1 To review, coordinate and make recommendations concerning the audit function performed by the Independent Auditors, and specifically with respect to

8 6 I I Reviewing the scope of audits that are to be performed, and

8 6 1 2 Reviewing the financial and operational results of the Annual Hospital Audit and the Pension Plan audit prior to the release to the full Board together with administration's response to the auditors comments

862 To review and make recommendations relative to the audit function performed by the Internal Auditors

863 To investigate and recommend annually to the Board the independent audit firm to be engaged

864 To perform the above functions (8 6 1-8 6 3) in all subsidiary or auxiliary corporations unless such subsidiary or auxiliary corporations have their own audit committee, m which event the Audit Comnuttee of Methodist Healthcare shall review the actions of the subsidiary's audit comiruttee and make such independent investigations as it deems advisable

865 To develop, implement and oversee systerruc compliance and ethics standards to ensure that the Corporation complies with all applicable federal and state laws and regulations and to otherwise ensure the subrrussion of consistently accurate clams to federal and state programs

Section 8 7 Health and Welfare Ministries Committee

All checks, drafts, or other orders for the payment of money, notes or other evidences of indebtedness issued in the name of the Corporation shall be signed by such officer or officers or agent or agents of

NW Bylaws Page 10 of 13

Section 8 8 Quality Management Comrruttee

This Committee shall be the liaison group which %vill discuss medical administrative and performance improvement matters, to serve as liaison between the Board of Directors, the Executive Vice President/Chief Operating Officer, the IvII-QME Medical Staff, and the various operating units within Methodist Healthcare The purpose and function of the Committee shall include, but not be lirruted to, recommending to the Board of Directors appropriate rules and regulations to assure the proper quality of care and safety of MH patients The Comiruttee shall renew and make recommendations regarding proper utilization of facilities and services of Methodist Healthcare by physicians, associates and patients It shall also renew and make recommendations concerning actions to be taken to assist all facilities to conform, as fully and completely as possible, to all requirements or recommendations of the Joint Commission on the Accreditation of Healthcare Organizations and other regulatory. Iicensine or accrediting agencies In addition, the Committee shall review and make recommendations on Medical Staff medical care evaluation studies and/or other quality assurance and performance improvement activities for all Methodist Healthcare facilities, with the primary objective of improving the quality of patient care To the fullest extent allowable, it is the intention that this Committee shall operate vnttun the purview of TCA 63-6-219, The Tennessee Peer Review Law

Section 8 9 Compensation Committee

The purpose and function of the Conuruttee shall be to advise the CEO/President on compensation and benefits for senior management The Committee shall meet at least annually for discussions, review and documentation of data relative to such matters The Comrruttee shall consist of at least the Chair and Vice Char of the Board of Directors, the immediate past Chair of the Board of Directors, the Secretary of the Board of Directors, and at least one additional at-large member of the Board of Directors who is not employed by the Corporation

ARTICLE 9

FISCAL MATTERS

Section 9 1 Banlane

The Board of Directors shall select the banking institutions m which the funds of the Corporation are to be deposited

Section 9 2 Checks

Nothing herein provided shall lirrut or otherwise affect the power of the Corporation to maintain self-insurance or purchase insurance on behalf of any person who is or was an officer, member of the Board of Directors, employee or agent of the Corporation or is or was serving at the request of the Corporation, against any liability asserted against hum/her and incurred by liar/her in any such capacity or arising out of his/her status as such, whether or not the Corporation would have the power or would be required to indemnify hum/her against such liabihty under the provisions of this Article 12 or any applicable law To the extent such insurance operates to protect any person against liability, the Corporation's obligation to mdemmfy shall be deemed satisfied

bU-i Bylaws Page I 1 of 13

the Corporation, and m such manner as shall be determined by the Board

Section 9 3 Bonding

The Chief Executive Officer/President, Executive Vice President/Chef Operating Officer, Senior Vice President - Finance and Treasurer of the Corporation, Controller, and all other persons handling funds of the Corporation shall be covered by good and sufficient bonds, or a blanket bond, for the faithful performance of their respective dunes, and it shall be the duty of the Board of Directors to approve any such bond or bonds and fix the amount or amounts thereof

ARTICLE 10

INDEMNIFICATION

Section 10 1 Indemnification of Officers, and Members of the Board of Directors

The Corporation shall indemnify its officers and members of the Board of Directors (including former trustees, officers and members of the Board of Directors) whenever and to the maximum extent pernutted by provisions of the Tennessee General Corporation Act, including Tennessee Code Annotated Section 48-1-406 through Section 48-1-411, as same may be from time to time amended or any similar statutory provisions by which same may be superseded Nothing herein provided shall be construed as prohibiting the Corporation from mdemrufjnng it officers, members of the Board of Directors, agents, and employees m other circumstances, to the extent such indemnity is not prolubited by law

Section 10 2 Insurance

N41 Bylaws Page 12 of 13

There shall be a Senior Vice President of Health and Welfare Muustnes who shall be an ordained clergy of The United Methodist Church and, after appointment, hold membership m either the Memphis, Mississippi or North Arkansas Annual Conferences

ARTICLE 11

MISCELLANEOUS PROVISIONS

Section 1 1 1 Revocability of Authonzatio

No authorization, assignment, referral or delegation of authority by the Board of Directors to any comrruttee, officer, agent or other official of the Corporation, the employed staff, or any other organzation or the Medical Staff of any organization which is auxiliary to, associated or affiliated with, or conducted under the auspices of the Corporation shall preclude the Board from exercising the authority required to meet their responsibilities for the conduct of the activities of the Corporation The Board shall retain the night to rescind anv such authorization- assignment referral or deleeation in their sole discretion

Section 11 2 Duality of Interests -

Any transaction of this Corporation in which a director or officer has a personal or adverse interest shall be governed by the Tennessee Code Annotated and the Corporation's conflict of interest policy

Section 11 3 Voting of Shares Owned by the Corporation

The Board of Directors shall instruct it designee how to vote and exercise this Corporation's rights as a shareholder or member in any other corporation

ARTICLE 12

CHAPLAINCY PROGRAM

Section 12 1 Program

The Board of Directors shall provide for a Chaplaincy Program for Methodist Healthcare that is guided by standards and recommendations as set by appropriate accrediting agencies for hospital chaplaincy programs, including the American Association of Clinical Pastoral Education, Inc, the Association of Professional Chaplains, Inc, the Joint Commission for Accreditation of Healthcare Organizations and the Joint Comrrussion for Accreditation for Pastoral Services

Section 12 2 Director of Health and Welfare Ministries

ME Bylaws Page 13 of 13

Approved by the Board of Directors 08/28/02

ARTICLE 13

AMENDMENTS TO BYLAWS

These Bylaws may be amended, pursuant to Section 8 2 Bylaws Committee, by the affirmative vote of two-thirds of the members of the Board of Directors present at a meeting, provided, notice containing the proposed amendment or amendments, or a summary thereof, shall have been mailed to each member of the Board at least thirty (30) days in advance of the meeting date

G \DA7AVgI\BYLAWSUIH BYLAWS APPROVED 082802 doc

c Balance Due Subtract line 8b from line Ba Include your payment with this form, or, d required, depose with FTD coupon or . R required . by using EFfPS (Electronic Federal Tax Payment System) See instructions $ N/A

Signature and Verification Under penalties of penury, I declare that I have examined this torn, including accompanying schedules and statements, and to the best of my knowledge and belief, R is true correct, and complyte a4 thatAmlotltonzed to prepare this form

v

By Director Date Alternate Mailing Address - Enter the address if you want the copy of this application for an additional 3 month extension returned to an address different than the one entered above

Name THOMPSON

Type Number and street Include suite, room, or apt no ) Or a P O box number arprlnt 5100 POPLAR AVENUE, SUITE 1900

City or town, province or state, and country (including postal or LP code) MEMPHIS, TN 38137

Form 8868 (12-2000)

Forth BBBB (12-4000) P+ae 2 * II you are filing for an Additional (not automatic) 3-Month Extension, complete only Part II end check this box Note* Only complete Pert II N you have already bean granted an automatic 3-month extension on a previously filed Form 8888 0 H you ere filing for an Automatic 3-Month Extension . complete only Part I (on pace 1)

Type or Name of Exempt Organization Employer Identification number

METHODIST HEALTHCARE 58-1454711 Y Ps Number, street . and room or suMe no II e P O box, see Instructions - For IRS use only YNnUlE

au.o.tero.1211 UNION AVENUE NO . 700 MIN a. ne~m se. City, town or post office, state, end ZIP code For a foreign address, see instructions - ~- "'°""'°"' MEMPHIS , TN 38104 Cheek type of velum to be filed (File a separate application for each return)

Forth 990 0 Forth 990~EZ ~ Forth 990~T (sec 401(a)or 408(a) trust) OForm 1047 ~A 0 Form 5227 0 Forth 8870 Forth 990 BL EJ Form 99o-PF ~ Forth 990-T (trust other than above) = Forth 4720 = Form 6069

STOP Do not complete Part II N you were not a lready granted an automate 3-month extens ion on a preaousy filed Forth 8888 .

" It the organization does not have an office a place of business In the Untied States, check this box " 0 " I( this Is for a Group Return, enter the organization's four digit Group Exemption Number (GEM If this is for the whole group, check this box " = II h is for part of the group, check this box " = and attach a list with the names and EINS of all members the extension is for

r I request an additional 3 month extension of time until NOVEMBER 17 , 2003 5 For calendar year 2 0 0 2 , or other tax year beginning end ending 6 Ii this tax year is for less than 12 months, check reason ~ Initial velum 0 Final return 0 Change in accounting period 7 State in decal why you need the extension

TAXPAYER PENDING THIRD PARTY INFORMATION NEEDED TO FILE A COMPLETE AND ACCURATE RETURN .

8a II this application is for Forth 990-BL. 990-PF, 990-T, 4720 or 6069, enter the tentative tax, less any nonrefundable credits See instructions

b II this application is for Form 99o-PF, 990-T, 4720, or 6069 . enter any refundable credits and estimated tax payments made Include any prior year overpayment allowed as a credo and any amount paid previously with Form 8868

UNotice to Applicant - To Be Completed by the IRS We have approved this application Please attach this form to the organization's velum We have not approved this application However, we have granted a 10-day grace period from the later of the date shown below or the due date of the organization's velum Including any prior extensions) This grace period is considered to be a valid extension of time for elections otherwise required to be made on a timely velum Please attach this form to the organization's velum

D We have not approved this application After considering the reasons stated in Item 7, we cannot grant your request for an extension of lime to (ire We are not granting the 10-day grace period

0 We cannot consider this application because it was filed after the due date of the return for which an extension was requested Other

" II you are filing for an Automates 3-Month Extension, complete only Pert I and check this box " ~X " II you are filing for an Additional (not automatic) 3-Month Extension, complete only Part II (on page 2 0l this loan) Note Do not complete Pert II unless you have already been granted an automatic 3-month extension on a previously filed Form 8888

Part l Automatic 3-Month Extension of Time - only suborn original (no copies needed)

Note Form 990-T corporations requesting en automatic 6-month extension - check this box end complete Part I only " 0 All other corporations (including Form 990-C filers) must use Form 7004 to request an extension of time to (rte income tax returns Partnerships REMICs end (rusts must use Form 8736 to request an extension of time to file Form 1065, 1066, or 1041

METHODIST HEALTHCARE Number, street, and room or suite no II a P O box, see instructions

1454711 F110 by the aue date br thing your mum See Inatrvcuons City, town or post office, state, and ZIP code For a foreign address, see instructions

MEMPHIS . TN 38104

3a If this application is for Form 990 BL, 990 PF, 990 T, 4720, or 6069, enter the tentative tax, less any nonrefundable credits See instructions

b If this application is for Form 990 PF or 99P7, enter any refundable credits and estimated tax payments made Include any poor year overpayment allowed as a credit E

223831 05 01 02

', 1 I

Form 8868 Application for Extension of Time To File an (December zooo) Exempt Organization Return I OMB No ,s<s~,7os D~~ of use Treasury mter,u awmu, sank. I " File a separate application for each return

Type or

pilot

Name o1 Exempt Organization Employer identification number

Check type of return to be filed((ile a separate application for each return)

OX Form 990 ID Form 990 T (corporation) 0 Form 4720 Form 990 BL C] Form 990 T (sec 401(x) or 408(x) trust) E:] Form 5227 Form 990 EZ E --]F.,. 990 T (trust other than above) EDForm 6069 Form 990 PF EJ Form 1041 A 0 Form 8870

" II the organization does not have an office or place of business in the United States, check this box II this is for a Group Return, enter the organization's four digit Group Exemption Number (GEN) I( this is for the whole group, check this

box " [D If it is for part of the group check this box " I--] and attach a list with the names and EINs of all members the extension will cover

7 I request an automatic 3 month (6 month, for 990-T corporation ) extension of time until AUGUST 15, 2003 to file the exempt organization return for the organization named above The extension is for the organization's return for " OX calendar year 2 0 0 2 or ~ ED fax year beginning , and ending

2 II this tax year is for less than 72 months, check reason EJ Initial return 0 Final return 0 Change in accounting period

c Balance Due Subtract line 3b from line 3a Include your payment with this form or, if required . deposit with FTD coupon or . A required, by using EFTPS (Electronic Federal Tax Payment System) See instructions $ NBA

Signature and Verification

Under penalties of penury I declare that I have examined this loan including accompanying schedules and statements and to the best of my knowledge and ballet it is true correct, and comple e, and that I am authorized to prepare this form

mature " ' ~) Title " C17 Date " ~ 0 W " lL l .,~ LHA For Paperwork Reduction Act lice, see instruction Form 8868 (12-2000)

Documents

Return of Organization Exempt From Income Tax 0109N. …990s.foundationcenter.org/990_pdf_archive/581/581454711/581454711_200212_990.pdf · f t r s 990 Return of Organization Exempt