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HARNETT COUNTY BOARD OF COMMISSIONERS Minutes of Regular Meeting January 10, 2011 The Harnett County Board of Commissioners met in regular session on Monday, January 10, 2011, in the Commissioners Meeting Room, County Administration Building, 102 East Front Street, Lillington, North Carolina. Members present: Staff present: Timothy B. McNeill, Chairman Beatrice B. Hill, Vice - Chairman Dan B. Andrews, Commissioner Gary House, Commissioner Jim Burgin, Commissioner Scott Sauer, County Manager Tony Wilder, Deputy County Manager Dwight Snow, County Attorney Sylvia Blinson, Finance Office Gina Wheeler, Clerk Chairman McNeill called the meeting to order at 9:00 a.m. Commissioner Burgin led the pledge and invocation. Chairman McNeill called for additions and deletions to the published agenda. Chaiiinan McNeill announced that due to the weather, Victoria Whitt would not be able to attend the meeting and would present the Sandhills Center's Annual and Quarterly Reports to the Board at a later date. Work session items including legislative goals, project updates, and planning session were also postponed. Commissioner Andrews moved to approve the agenda as amended. Vice Chairman Hill seconded the motion which passed unanimously. Vice Chairman Hill moved to approve the items on the consent agenda. Commissioner Andrews seconded the motion and the Board unanimously approved the following items on the consent agenda: 1. Minutes: November 15, 2010 Regular Meeting December 6, 2010 Regular Meeting 2. Tax refunds, rebates and releases (Attachment 1) 3. Planning Services requested approval of the contract with Talbert & Bright, Inc. for Professional Resident Engineer services for the Harnett Regional Jetport for the next five years. The NC DOT Division of Aviation requires airport owners to go through a Request for Qualifications (RFQ) every five years for professional services. An RFQ process was begun and a selection committee was formed to evaluate respondents who January 10, 2011 Regular Meeting Minutes Harnett County Board of Commissioners Page 1 of 4 answered the request. The Engineering/Airport Planning Services Section Committee recommended Talbert & Bright, Inc. 4. Human Resources and the Health Department requested approval to reclassify 3 positions due to the retirement of a long -time employee and supervisor. The vacant supervisor position will be downgraded from a Grade 61 to Grade 59 and two lead workers positions have been assigned additional responsibilities which warrant an upgrade from Grade 59 to Grade 61. These positions are subject to State Personnel Act and the job descriptions have been reviewed by Office of State Personnel which also recommended the reclassification. No additional funds are required to implement the changes which are requested effective January 1, 2011. 5. General Services requested approval of the HARTS FTA Procurement Policy as an attachment to the County's Procurement Policy. This policy will close out the final deficiency of the federal compliance review. HARTS FTA Procurement Policy is applicable only when federal and state grant funds are used in making purchases. 6. Emergency Services requested permission to apply for the 2011 Emergency Management Performance Grant. This is a federal grant administered by the State that is available to local governments to assist in the cost of developing and maintaining a comprehensive emergency management program. These are funds that are received annually and are included as part of the operating budget. 7. Emergency Services requested approval of resolution acknowledging the district line changes to: Spout Springs Fire District, Benhaven Fire District, FlatBranch Fire District, Bunnlevel Fire District and Westarea Fire District. These District line changes are necessary to assist our citizens with Fire Insurance Coverage needed for their property. It was noted that the Linden Fire District merged with the Westarea Fire District and will now be identified as Westarea Fire District. The merge was due to a recent Insurance survey by the Department of Insurance merging the two districts. (Attachment 2) 8. The Sheriff's Office requested permission to pay the $8,000 lien owed to JP Morgan Chase Auto Finance on a forfeiture vehicle. This vehicle will be place in use by the Harnett County Sheriffs Office. The Sheriffs Office has the funds available in its Capital Outlay line to pay the lien. Chairman McNeill opened the floor for informal comments by the public, allowing up to 3 minutes for each presentation up to 30 minutes. - Mark Hornsby of Lillington talked about the programs offered through the Harnett United Police Athletic Program (PAL). He thanked the commissioners for their support and requested assistance in arranging to use the old Boone Trail School gym for the program, particularly to build a small boxing ring. Commissioner House offered to prepare the 501 c3 documentation for this program free of charge. Mr. Sauer said staff January 10, 2011 Regular Meeting Minutes Harnett County Board of Commissioners Page 2 of 4 would work with Mr. Hornsby, Harnett County Schools and CCCC regarding this request. - Cornell Robinson of Dunn spoke in support of the PAL programs. Mr. Robinson also voiced concerns about the Harnett County Board of Elections regarding the handling of a recent appeal by Carolyn McDougald, potential voting irregularities, integrity of the voting process and the desire for district representation on the board. Vice Chaiiuian Hill moved to approve the appointments listed below. Commissioner House seconded the motion which passed unanimously. HARNETT COUNTY BOARD OF ADJUSTMENTS Andrew S. Ruhland (nominated by Commissioner House) was reappointed to serve on this board for a tend of 3 years ending November 30, 2013. HARNETT COUNTY BOARD OF HEALTH Sherrie Byrd (nominated by Commissioner Andrews) was reappointed to serve on this board for a term of 3 years ending December 31, 2013 Judy Herrin as Pharmacist Member and Greg Stevens as Professional Engineer Member (nominated by Commissioner Andrews) were appointed to serve on this board for a term of 3 years ending December 31, 2013. TOWN OF ERWIN PLANNING BOARD /BOARD OF ADJUSTMENTS — EXTRATERRITORIAL JURISDICTION Dale Ryals and Patrick Shackelford (nominated by Vice Chairman Hill) were reappointed to serve on the Erwin Planning/Board of Adjustments as Extraterritorial Jurisdiction members for a term of 4 years ending February 7, 2014. TOWN OF ANGIER PLANNING BOARD - EXTRATERRITORIAL JURISDICTION Lee Marshall and Kenneth Edwards (nominated by Commissioner Andrews) were reappointed to serve on the Angier Planning Board as Extraterritorial Jurisdiction members for a term of 2 years ending December 31, 2012. SOCIAL SERVICES BOARD Vice Chairman Hill replaced Chairman McNeill on this board. Mr. Snow presented resolutions for approval approving Harnett Health Systems, Inc. Merger. Mr. Snow noted the Board had requested modifications during an earlier review of the documents. Mr. Snow gave an overview of the requested changes which were included in the final documents. Commissioner House asked if there was any way that anybody could come back to the county for money. He said he is a big proponent of expanded health care in the county and is very excited this is happening however stressed that they are putting lots of faith in this 13 member Board. Commissioner House moved to approve the resolutions as presented. Commissioner Burgin seconded the motion which passed unanimously. (Attachment 3) January 10, 2011 Regular Meeting Minutes Harnett County Board of Commissioners Page 3 of 4 L. Richie Hines, Jr. P.E., District Engineer with NC DOT, presentation the NC Department of Transportation's Proposed Secondary Road Program for Harnett County. Vice Chairman Hill inquired about Ernest Lane and Commissioner Andrews about Gardner Road. Mr. Hines noted there is approximately 25.5 miles of unpaved roads in Harnett County. Commissioner Andrews moved to adopt resolution approving FY 2010 -2011 Secondary Road Program as presented. The motion was seconded by Commissioner Burgin and passed unanimously. (Attachment 4) It was noted that Mr. Greg Burns, NC DOT, would join the Board at their upcoming February 1, 2011, work session to discuss plans for the intersection of McDonalds at Hwy 210 /Hwy 401. Mr. Sauer presented the following report: • Soil and Water Conservation District Annual Report • Planning Services Report November 2010 • Department of Public Health Activities Summary • Landfill Billing Report December 2010 • Veteran Affairs Activities Report Mr. Sauer mentioned exciting program activities at Campbell University, progress on the new First Choice facility as well as Good Hopes Inpatient Psychiatric facility and ECU's dental announcement. Mr. Sauer noted the Proclamation for County State of Emergency would go in to affect at 4:00 pm in case any resources are needed from the state. Vice Chairman Hill moved that the Board go in to closed session to discuss certain personnel matters, including but not limited to the EEOC claim of Tino Medina. This motion is made pursuant to N.C. General Statute Section 143- 318.11(a)(6). Commissioner Andrews seconded the motion which passed unanimously. Commissioner Burgin moved that the Board come out of closed session. Commissioner Andrews seconded the motion which passed unanimously. There was no new business. Commissioner Andrews moved to adjourn the meeting at 9:57 am. Commissioner Burgin seconded the motion which passed unanimously. cNeill, Chairman t Regina Wheeler, Clerk January 10, 2011 Regular Meeting Minutes Harnett County Board of Commissioners Page 4 of 4 ATTACHMENT 1 Approved by the Harnett 4„oUnty Board of Commissioner Board Report; Date : 01/10/2011 Approved By: 14ac TO : HARNETT COUNTY BOARD OF COMMISSIONERS RE: CONSIDERATION OF REFUND FOR TAXES, INTEREST AND PENALTIES FOR ALL MUNICIPALITIES Name of Tax Payer '� VIII , y v 1 a; interests ind .A_ 1 1 BLACK RIVER VILLAGE LTD PO BOX 1567 DUNN NC, 28335 - 0000 2 GREENFIELD VILLAGE LIMITED PARTNERSHIP P 0 BOX 1567 DUNN NC, 28335 - 0000 3 HOWARD, EVELYN B 723 QUEENS AVENUE DUNN NC, 28334 - 0000 4 LAMER, C WAYNE LANIER, K LARRY 1690 MCNEILL HOBBS RD BUNNLEVEL NC, 28323 - 0000 5 LANIER, C WAYNE LANIER, K LARRY 1690 MCNEILL HOBBS RD BUNNLEVEL NC, 28323 - 0000 6 OAKDALE II ASSOCIATES LIM PO BOX 1567 DUNN NC, 28335 - 0000 7 RAINES, CATHERINE E C/O BETTYE ALDRIDGE P 0 BOX 1945 DUNN NC, 28335 8 SILLS, CLARA JACKSON 3177 ASHE AVENUE DUNN NC 283340000 DUNN NC, 28334 - 0000 9 TILGHMAN SQUARE II LIMITED PO BOX 1567 DUNN NC, 28335 - 0000 10 TILGHMAN SQUARE LIMITED PARTNERSHIP PO BOX 1567 DUNN NC, 28335 - 1567 11 WOODLAWN LIMITED PARTNERSHIP P 0 BOX 1567 DUNN NC, 28335 - 0000 WM. A. TONY WILDER Revenue Administrator CC: WM. A. TONY WILDER 0000004924 - 2009 -2009- 000000 0000020803- 2009- 2009- 000000 0000025417- 2010- 2010- 000000 0000030263 - 2010 -2010- 000000 0000030264 -2010- 2010 - 000000 0000040103- 2009- 2009- 000000 0000044124- 2009- 2009- 000000 0000048102- 2010- 2010- 000000 0000054418- 2009- 2009- 000000 0000054419- 2009- 2009- 000000 0000061040- 2009- 2009- 000000 City(C104) 2,520.53 County 3,780.79 City 0.00 County 7,558.99 City 0.00 County 763.10 City 0.00 County 1,091.84 City 0.00 County 645.75 City 0.00 County 2,523.33 City 0.00 County 687.45 City 0.00 County 594.26 City 0.00 County 3,770.12 City 0.00 County 3,919.54 City(CI04) 2,362.03 County 3,543.04 City Total County Total Total to be Refunded I \ r Statu5'r, 6,301.32 Refund 7,558.99 Refund Reason Value Decrease Value Decrease Elderly 763.10 Refund Exemption 1,091.84 Refund 645.75 Refund 2,523.33 Refund Value Decrease Value Decrease Value Decrease Value 687.45 Refund Decrease Elderly 594.26 Refund Exemption 3,770.12 Refund 3,919.54 Refund 5,905.07 Refund 4,882.56 28,878.21 33,760.77 Value Decrease Value Decrease Value Decrease ATTACHMENT 2 RESOLUTION FOR APPROVAL OF INSURANCE DISTRICT BOUNDARIES STATE OF NORTH CAROLINA COUNTY OF HARNETT WHEREAS, the laws of the State of North Carolina, and in particular North Carolina General Statute 153A -233, authorize County of Harnett to designate the boundaries of fire insurance districts for the purpose of insurance grading; and WHEREAS, the Board of Commissioners of the County of Harnett has determined that protection of the health, safety and welfare of the citizens of County of Harnett would be enhanced and promoted by changes in the boundary lines of fire insurance districts within County of Harnett; and WHEREAS, the maps attached hereto and created using GIS as Attachment #A Spout Springs Fire District 6 Mile Insurance District, Attachment #B Benhaven Fire District 6 Mile Insurance District, Attachment #C Flatbranch Fire District 6 Mile Insurance District, Attachment #D Bunnlevel Fire District 6 Mile Insurance District, and Attachment #E West Area Fire District Station 15, 20 & 25 6 Mile Insurance District, which includes the areas to be incorporated into such rated fire insurance districts has been prepared and is made a part of this resolution by reference; NOW THEREFORE, BE IT RESOLVED that the Board of Commissioners of the County of Harnett approve the boundary lines of the fire insurance districts in County of Harnett in accordance with the maps attached hereto created using GIS as Attachment #A Spout Springs Fire District 6 Mile Insurance District, Attachment #B Benhaven Fire District 6 Mile Insurance District, Attachment #C Flatbranch Fire District 6 Mile 1 Insurance District, Attachment #D Bunnlevel Fire District 6 Mile Insurance District, and Attachment #E West Area Fire District Station 15, 20 & 25 6 Mile Insurance District, as if set forth fully herein, filed this date with the Board of County Commissioners and recorded in the minutes of said meeting, and that said rated insurance districts from and after the adoption of this resolution shall be as set forth in Attachment #A Spout Springs Fire District 6 Mile Insurance District, Attachment #B Benhaven Fire District 6 Mile Insurance District, Attachment #C Flatbranch Fire District 6 Mile Insurance District, Attachment #D Bunnlevel Fire District 6 Mile Insurance District, and Attachment #E West Area Fire District Station 15, 20 & 25 6 Mile Insurance District, all of which are attached hereto and incorporated by reference as if set forth fully herein. ADOPTED this the 10 day of January, 2011. CHAIRMA'F THE HARNETT COUNTY BOARD 0 •MMISSIONERS 2 Spout Springs Fire District 6 Mile Insurance District Proposed Changes w N s E Legend * Fire Station -- Spout Springs 5 mile Service District Spout Spnngs 6 mile Service District Rivers/Streams - Roads F'.71 Fee Insurance District- 6 mile Parcels USAproperty Spout Springs_proposed ATTACHMENT #A 1 inch = 1,750 feet Map Prepared by Harnett County GIS December 10, 2010 Benhaven Fire District 6 Mile Insurance District Proposed Changes WE Legend * Fire Station - Benhaven 5 rrvle Seneee District • Benhaven 6 mile Service Oishicts Rivers/Streams - Roads f---1 Fire Insurance Odrict- 6 mile Parcels Benhaven_2011 ATTACHMENT #B 1 inch = 1,750 feet Map Prepared by Harnett County GIS December 10 2010 Flatbranch Fire District 6 mile Insurance Proposed Changes WE Legend * Fire Station Flatbranch 5 mile service district FlatBranch 0 mils service distact Rivers/Slreama - Roads 1 Fire Insurance Distnct- 6 mile Parcels Flatbranch Fire District ATTACHMENT # C 1 inch = 1,500 feel Map Prepared by Harnett County GIS December 10, 2010 Bunn level Fire District 6 Mile Insurance Proposed Changes WE Legend * Fire Station Bunn level 5 nele Seneca District &Wave! mile Sena. 1:%stnct Rivers/Streams Roads Fire Insurance Distrmt- 5 mile Parcels Bunn level Fire District ATTACHMENT # D 1 inch = 1,500 feet Map Prepared by Harnett County GIS December 10, 2010 West Area Fire District Station 15, 20 & 25 6 Mile Insurance District Proposed Changes N S E Legend * Fire Stations -- West Area Stales, 15 - 5 mile Service Distnct West Area Station 15 - 6 mile Service District West Area Station 20 - 5 mile Service District West Ares Stem 20 - 6 mile Service Distract West Area Station 25 - 5851,, Service District WestAree Station 25 - 6 Mile Service District Rivers/Streems Roads Fire Insurance District- 6 mile Parcels WestAree Fire District ATTACHMENT #E 1 inch = 1,850 feet Map Prepared by Harnett County GS December 15, 2010 Attachment 3 RESOLUTIONS OF THE BOARD OF COMMISSIONERS OF HARNETT COUNTY NORTH CAROLINA The undersigned hereby certifies that the following resolutions were adopted by the Board of Commissioners of Harnett County, North Carolina ( "Board of Commissioners ") in a meeting duly convened and with a quorum present on January /o , 2011. RECONSTRUCTION OF THE BOARD OF TRUSTEES OF THE SYSTEM WHEREAS, Harnett County, North Carolina, (the "County "), the City of Dunn, North Carolina (the "City "), Harnett Health System, Inc., formerly known as Betsy Johnson Health Care Systems, Incorporated (the "System "), Betsy Johnson Hospital Authority (the "Hospital Authority ") (the County, City, System and Hospital Authority are hereinafter collectively referred to as the "Merger Participants "), and WakeMed ( "WakeMed ") have entered into that certain Memorandum of Understanding Relating to a Nonprofit Health Care System for Harnett County, dated August 10, 2005 ( "MOU "), a copy of which is attached hereto as Exhibit A: WHEREAS, the MOU provides among other things that the System will operate Betsy Johnson Regional Hospital and a new hospital, both in Harnett County; WHEREAS, the MOU provides that, the Board of Trustees of the System shall be re- constructed to have thirteen (13) total members; WHEREAS, in accordance with the MOU, the Board of Commissioners of the County shall appoint seven (7) of the thirteen (13) members of the Board of Trustees of the System (such seven (7) members, the "County Appointees "), with one (1) of the County Appointees being appointed from each of the five (5) County Commissioners Districts and the remaining two (2) County Appointees being residents of Harnett County; WHEREAS, the County Appointees will be derived from a list of nominees submitted by the Board of Trustees of the System, which nominees the Commissioners of the County may accept or reject; WHEREAS, in connection with such reconstruction of the Board of Trustees of the System, the Articles of Incorporation and Bylaws of the System, by action of the Board of Trustees of the System, will be amended to reflect such reconstruction effective as of the time of the merger of the Hospital Authority into the System (as described below); 20502.3 - 568404 v3 1 WHEREAS, the Board of Commissioners deems it to be in the best interest of Harnett County to approve the reconstruction of the Board of Trustees of the System, including, without limitation, the role of the Board of Commissioners in appointing the County Appointees; and WHEREAS, the adoption by all of the Merger Participants of resolutions similar to the Resolutions set forth herein is a condition of the effectiveness of the Resolutions set forth herein. NOW THEREFORE, BE IT RESOLVED, subject to satisfaction of the conditions set forth herein, that the Board of Commissioners hereby approves in all respects the reconstruction of the Board of Trustees of the System, including without limitation the role of the Board of Commissioners in appointing the County Appointees. APPROVAL OF MERGER WHEREAS, in furtherance of the terms and conditions of the MOU, the parties thereto have agreed that the Hospital Authority will merge with and into the System effective at the time the Board of Trustees of the System determines that financing is in place for (i) the construction of the System's new hospital in Lillington, North Carolina and (ii) additions and renovations at Betsy Johnson Regional Hospital (the "Effective Time "); WHEREAS, officers of the System and of the Hospital Authority have negotiated the terms and conditions of such merger, which are reflected in the terms and conditions of the Agreement and Plan of Merger ( "Plan of Merger ") substantially in the form attached hereto as Exhibit B; WHEREAS, the Board of Commissioners deems it advisable and in the best interest of Harnett County to approve the merger of the Hospital Authority with and into the System at the Effective Time and to approve the terms of the Plan of Merger and for the merger to be consummated by the System's filing Articles of Merger with the North Carolina Secretary of State at the Effective Time; and WHEREAS, the adoption by all of the Merger Participants of resolutions similar to the Resolutions set forth herein is a condition of the effectiveness of the Resolutions set forth herein. NOW, THEREFORE, BE IT RESOLVED, subject to satisfaction of the conditions set forth herein, that the Board of Commissioners hereby authorizes and approves the merger of the Hospital Authority with and into the System at the Effective Time pursuant to the terms and conditions of the Plan of Merger and authorizes and approves the System's filing of Articles of Merger with the North Carolina Secretary of State at the Effective Time. RESOLVED FURTHER, that the MOU previously entered into by the Board of Commissioners is hereby ratified in all respects as an action of the County effective as of the date such action was taken. RESOLVED FURTHER, that the County Manager be, and hereby is, authorized and empowered, for and on behalf of Harnett County, to execute and deliver all such additional 20502.3 - 568404 v3 2 documents after review by the County Attorney as he determines to be appropriate or necessary in connection with the foregoing resolutions and the transactions contemplated thereby, the appropriateness or necessity thereof to be conclusively evidenced by the execution and delivery of such documents; and the County Manager be, and hereby is, authorized and directed to execute on behalf of the County after review by the County Attorney, any and all documents that are deemed necessary or desirable to carry out the purposes of the foregoing resolutions. RESOLVED FURTHER, that the foregoing resolutions be adopted and shall be filed with the records of the County. The undersigned hereby certifies the foregoing to be a true, correct and complete copy of the Resolutions adopted by the Board of Commissioners on January jfJ, 2011. This, the Jo day of January, 2011. ATTEST: Mar Co aret •egin Ile t')hee,�er ty Clerk 20502.3 - 568404 v3 3 Timothy B. i cNeill Chairman o the Board of Commissioners Exhibit A Memorandum of Understanding August ic, 2005 MEMORANDUM OF UNDERSTANDTNG RELATING TO A NONPROFIT HEALTH CARE SYSTEM FOR HARNETT COUNTY The parties to this Memorandum of Understanding ( "MOU ") are Harnett County, North Carolina (the "County "), the City of Dunn, North Carolina (the "City "), Betsy Johnson Health Care Systems, Incorporated (the "Hospital Corporation "), Betsy Johnson Hospital Authority (the "Hospital Authority ") and WalceMed (collectively, the "Parties "; individually, a "Party "). There are two hospitals in Harnett County, Good Hope Hospital and Betsy Johnson Regional Hospital. In December 2004, the Governor amended the 2005 State Medical Facilities Plan to add a "need determination" for a new hospital with not more than fifty (50) beds and three (3) operating rooms in the central part of Harnett County (the "New Hospital "). The Parties agree that there should be a single, nonprofit health care system (the "System ") in Harnett County and that the System should be managed by WakeMed. The structure of the System is outlined in this MOU_ The Parties will develop and file an application for a Certificate of Need ( "CON ") for the New Hospital. The filing deadline is August l 5, 2005. Each Party agrees that it will not participate in the development of a competing CON application. Section 1. Goals of the System. 1.01 The System will be a single health care system with two (2) campuses in the County. (a) The System will be operated by a single nonprofit entity; (b) It will be managed by WakeMed; and (c) It will be operated and managed primarily for the benefit of the residents of Harnett County. 1.02 The System will consist of two hospital facilities, the Betsy Johnson Regional Hospital campus in Dunn and a new hospital campus in the central part of Harnett County. 10: :',91=03152v12 20502.3 - 568404 v3 (a) The hospital facilities will be operated and maintained together as a Community General Hospital, as defined in G.S. 131E -6, 1 Exhibit A providing the same or similar services as are provided by like Community General Hospitals in the state. (b) The hospital facilities will be operated as branches of a single hospital, and will operate under one Medicare provider number. (c) There will be a single medical staff, but clinical privileges will be specific to each hospital facility; i.e. privileges will be granted based on the physician's credentials and the services offered by each hospital facility. 1.03 The System will be organized and operated as a charitable. tax - exempt, 501(c) (3) corporation. The Parties agree that the System will be converted to a private nonprofit corporation. 1.04 The System will provide care to all persons, without regard to ability to pay. 1.05 The System will add and expand facilities and services so as to optimize access to health care for the residents of the County. 1 U_ 621 - 463152 v12 20502.3 - 568404 v3 [The remainder of this page was intentionally left blank) 2 Exhibit A Section 2. Ownership and Operation of Betsy Johnson Regional Hospital ( "BJRH "). 2.01 BJR1-1 is a licensed acute care hospital located in Dunn. NC. (a) BJRH is licensed for one hundred and one (101) acute care beds. (b) 13JRI-1 is owned by Betsy Johnson Hospital Authority (the "Hospital Authority ") and operated by Hospital Corporation, a North Carolina nonprofit corporation, pursuant to a lease and operating agreement dated September 24, 2003 (the "2003 Lease "). (c) The Hospital Authority was created by the City of Dunn (the "City"). The Hospital Authority is a component unit of a political subdivision of the State of North Carolina pursuant to G.S. 131E- 15 et, seq. and G.S. 159 -39 (a). (i) The City appoints all six (6) members of the governing board of the Hospital Authority. (ii) The City appoints five (5) of the eleven (1 I) members of the governing board of the Hospital Corporation. (iii) The Hospital Authority appoints six (6) of the eleven (11) members of the governing board of the Hospital Corporation. (iv) Six (6) of the eleven (l 1) members of the governing board of the Hospital Corporation must be residents of Averasboro Township, Harnett County. 2.02 BJRH is owned by the Hospital Authority. (a) BJRH was conveyed to the Hospital Authority by the City by deed in dated September 22, 2003 and recorded in Book 1832, Page 248, Harnett County Registry. (b) BJR1-1 is subject to certain restrictions and conditions on its use, as set forth in the Declaration of Covenants, Restrictions and Conditions (the "Declaration of Restrictions and Covenants "), dated September 22, 2003 and recorded in Book l 832, Page 239, Harnett County Registry. (c) The violation of these restrictions and conditions could cause ownership of BJRH to revert to the City. 2.03 BJRH is leased by the Hospital Authority to the Hospital Corporation pursuant to the 2003 Lease. 19369 1-403152 v12 20502.3 - 568404 v3 (a) The term of the 2003 Lease is fifty (50) years, beginning September 24, 2003. 3 Exhibit A (b) The 2003 Lease contains restrictions and conditions on the use of BJRH that are similar to the covenants and conditions in the Declaration of Restrictions and Conditions. (c) The violation of these restrictions and conditions could result in the termination of the 2003 Lease. (d) The 2003 Lease requires the Hospital Corporation to pay an amount of money to the City as reimbursement for municipal services provided by the City to BJRH. 2.04 The Hospital Corporation's leasehold interest in BJRH is mortgaged as security for a loan (the "Loan") incurred by the Hospital Corporation in September 2003. (a) The Loan proceeds were used to renovate BJRH. (b) The lender is the North Carolina Medical Care Commission. (c) The Loan was funded with the proceeds from the sale of Medical Care Commission bonds. (d) The obligation of the Hospital Corporation to repay the Loan is secured by a mortgage on the Hospital Corporation's leasehold interest in BJRH. (e) The Hospital Corporation's obligation to repay the Loan is insured by the U.S. Department of Housing and Urban Development ( "HUD ") pursuant to a mortgage insurance policy issued by the Federal Housing Administration ( "FHA "), pursuant to the 1-1UD - 242 program. 2.05 In summary, BJRH is owned by the Hospital Authority and operated by the Hospital Corporation pursuant to the 2003 Lease. The City appoints the governing board of the Hospital Authority and the City and the Hospital Authority appoint the governing board of the Hospital Corporation. The Hospital Corporation's leasehold interest in BJRH is mortgaged as security for the Loan. I1'69.1 .103152 vI2 20502.3 - 568404 v3 [The remainder of this page was intentionally left blank] 4 Exhibit A Section 3. Organization and Ownership of the 1Iarnett Health System 3.01 The Parties will create a new county -wide health care system (the "Harnett Health System" or the "System "), pursuant to the steps described in this Section 3. The System will include both the existing BJRH and the New Hospital and will be owned and governed by the Hospital Corporation, which will change its name to IHlarnett Health System. 3.02 The Articles of Incorporation and Bylaws of the Hospital Corporation will be amended: !033.1- 3'1±15: ♦12 20502.3 - 568404 v3 (a) to change the name of the Hospital Corporation to "Harnett Health System "; and (b) to provide that the governing board (the "Board ") of the Hospital Corporation will consist of thirteen (13) members (1) Seven (7) members (the "Appointed Members ") will be appointed by the Board of County Commissioners from nominees submitted by the Board of-the Hospital Corporation. (ii) The Appointed Members shall include one person from each of the five (5) County Commissioner Districts and two other persons who are residents of the County. (iii) The Board of County commissioners shall have the right to reject any or all nominees for Appointed Members and to require the Board of the Hospital Corporation to submit additional nominees. (iv) Six (6) members (the "Elected Members ") of the Board will he elected by the Board. (v) The terns of the Board members will be staggered. (vi) If WakeMed guaranties or otherwise enhances the credit of, or incurs any debt on behalf of, orif WakeMed directly subsidizes the operations of the Hospital Corporation, WakeMed will be entitled to appoint one (1) or more members of the Board of the Hospital Corporation; the exact number to be established by negotiation, taking into account the amount of equity funds provided by WakeMed and the amount of liability assumed by WakeMed. (vii) The number of Elected Members will be reduced by the number of Board members appointed by WakeMed pursuant to paragraph 3.05(b) (vi). (c) Notwithstanding the provisions of the foregoing paragraph (h), the entire initial board of the Hospital Corporation will be appointed by the Board of County Commissioners, from a list of nominees provided by a nominating committee. 5 Exhibit A •1 20502.3 - 568404 v3 (i) The nominating committee will be composed of eight (8) persons, four (4) designated by the City and four (4) designated by the County. (ii) The nominees for the Appointed Members shall include one person from each of the five (5) County Commissioner Districts and two (2) other persons who are residents of the County. (iii) The Board of County Commissioners shall have the right to reject any or all nominees and to require the nominating committee to submit additional nominees. (iv) After the appointment of the initial governing board, vacancies on the Hospital Corporation board among the Appointed Members will be filled by the Board of County Commissioners by appointment as provided in Section 3.05 hereof. (v) The terms of the board members will be staggered. 3.03 The Loan described in Section 2.04 will be defeased. 3.04 The Hospital Corporation will become the owner of BJRH by merger. (a) The Hospital Authority and the Hospital Corporation will merge and the Hospital Corporation will be the surviving entity. (b) The 2003 Lease from the Hospital Authority to the Hospital Corporation will terminate and the Hospital Corporation will own BJRH by operation of law. (c) The ownership of BJRN by the Hospital Corporation will be subject to the Declaration of Restrictions and Covenants described' in Section 2.02(b) hereof. (d) The Parties will support any legislation authorizing the merger contemplated by this Section 3.04. 3.05 The Hospital Corporation will develop, plan, finance, construct and equip and own the New Hospital. 10369 1- 493t52vt2 (a) The Hospital Corporation will finance the construction of the New Hospital with a loan from the North Carolina Medical Care Commission derived from the proceeds of the sale of tax - exempt bonds by the Commission. (b) WakeMed will enhance the credit of the Hospital Corporation to enable the Hospital Corporation to secure bond financing to build the New Hospital. WakeMed will also enhance the credit of the Hospital Corporation, and/or provide a line of credit, to cover start- up expenses for the New Hospital at a pre - determined rate. The length of term of such extension or enhancement and the other terms and conditions of such extension or enhancement of credit 6 Exhibit A will be memorialized in an appropriate agreement or agreements between WakeMed and the Hospital Corporation, which will contain such covenants and representations as are customary for North Carolina hospital corporations. Harnett Health's ability to borrow under the line of credit from WakeMed will expire eighteen (18) months after patients are first treated at the New Hospital. 3.06 In summary, when the steps described in this Section 3 have been completed, both the New Hospital and BJRH will be owned by the Hospital Corporation. 1061- 103152v12 20502.3 - 568404 v3 (a) The Hospital Corporation will be a private, nonprofit corporation. (b) The name of the Hospital Corporation will be Harnett Health System (hereinafter, the Hospital Corporation will be referred to as "Harnett Health" or the "System "). (c) A majority of the governing board of Harnett Health will be appointed by the County. (d) The BJRH property will be subject to a reversionary interest in favor of the City. (e) The New Hospital property will be subject to a reversionary interest in favor of the County, as described in Section 5.02. [The remainder of this page was intentionally left blank] 7 Exhibit A Section 4. Governance and Operation of the Harnett Health System 4.01 The Board of Harnett Health will govern the System. 4.02 WakeMed will operate the System pursuant to a management agreement. The Management Agreement will set forth certain retained powers of Harnett Health which are summarized on "Exhibit A" attached hereto. The Management Agreement will be substantially in the form attached to the Certificate of Need Application for the New Hospital. 103,9 1-03152 v12 20502.3 - 568404 v3 [The remainder of this page was intentionally Left blank] 8 Exhibit A Section 6. Contingencies; Further Agreements 6.01 The obligations and agreements ofthe Parties hereunder are contingent on the occurrence of all of the following: (a) The approval of this MOU by the governing body of each Party. (b) The issuance of a Cenificate of Need by the Certificate of Need Section of the North Carolina Department of Health and Human Resources. (c) Any other regulatory approvals needed to complete the transactions contemplated in this MOU. (d) There will have been no material adverse change in the business, financial condition or prospects of the System. 6.02 Withdrawal of County from Certain Pending Lawsuits. As soon after the execution of this Memorandum of Understanding by all parties as practicable, the County will notify the North Carolina Court of Appeals that it withdraws its amicus curiae briefs in Good Hope Hospital, et al. v. North Carolina Dep't of Health and Human Services, et al., Case No. COA 05 -183 and Good Hope Hospital, Inc., et al. v. North Carolina Dep't of Health and Human Services, et al., Case No. COA 05 -123. 6.03 Counterparts. 1 9 : -003152 v12 This Memorandum of Understanding may be executed in two or more counterparts, each of which may be deemed an original and all of which together shall constitute one and the same instrument. [The remainder of this page was intentionally Left blank] I0 20502.3 - 568404 v3 Exhibit A The Parties hereby execute this Memorandum of Understanding as of the j day of August 10, 2005. County of Harnett North Carolina , ommjssloner, Board of Commissioners W Med William K. Atkinson, PhD. President and CEO 1C7!.9.! -03152 v12 205023- 568404 v3 Betsy Johnson Health Care Systems, Incorporated Ray • .1V s, Chair, Board of Trustees Betsy Johnson Hospital Authority Ray A. ks, Chair, Board of Commissioners 11 Exhibit A F. CRIBIT A Subject to and in accordance with the terms of the Management Agreement, the System shall appoint WakeMed as the sole and exclusive manager of the System hospitals and grants to WakeMed the authority and responsibility to supervise and manage the day - to-day operations of the System hospitals, including all revenue and non- revenue producing activities. By entering into the Management Agreement, the System shall not delegate to WakeMed any of the powers customarily vested in the Board of Trustees (the `Board ") of the System by law or by the System's Articles of Incorporation or Bylaws. The Board of Trustees of the System shall be and shall remain responsible for the business and affairs of the System. Notwithstanding the foregoing sentence, during the term of the Management Agreement, the System shall not amend its Articles of Incorporation or Bylaws in any manner that will have a material adverse effect on WakeMed's ability to perform its obligations under the Management Agreement. WakeMed shall consult with and obtain the approval of the Board (which approval shall not be unreasonably withheld) regarding matters of more than routine significance, including without limitation, the following matters: 1. Strategic plans; 2. Review and adopt Budgets (as that term is defined in the Management Agreement), including setting rates and fees; 3. The addition and deletion of clinical programs and services or any material components thereof; 4. Adopting and amending Medical Staff Bylaws and Rules and Regulations, acting on recommendations for granting clinical privileges and appointing and reappointing members of the Medical Staff and reviewing quality improvement activities of the Medical Staff, including without limitation, peer review and disciplinary activities, and acting on Medical Staff recommendations in respect thereto; 5. Participating in the appointment, retention and evaluation of the System's CEO, as provided in the Management Agreement; 6. Receiving reports and acting on recommendations regarding quality assurance and risk management activities; 7. Marketing and public relations programs, as part of and consistent with the strategic plan; 8. Significant System policies and procedures developed by WakeMed; 9. Appointing the independent auditors; and 10. Incurring material indebtedness. 10369 I - 403152 v12 20502.3 - 568404 v3 12 Exhibit A Exhibit B Agreement and Plan of Merger See attached. AGREEMENT AND PLAN OF MERGER OF BETSY JOHNSON HOSPITAL AUTHORITY WITH AND INTO HARNETT HEALTH SYSTEM, INC. This Agreement and Plan of Merger (this "Plan ") is made and entered into as of , 2011 between HARNETT HEALTH SYSTEM, INC., a North Carolina nonprofit corporation ( "Harnett Health System ") and BETSY JOHNSON HOSPITAL AUTHORITY, a North Carolina hospital authority ( "Hospital Authority "). ARTICLE I THE MERGER 1.1 Merger. Subject to the terms and conditions of this Plan and in accordance with the North Carolina Nonprofit Corporation Act (the "Act ") and the North Carolina Hospital Authorities Act (the "Hospital Authorities Act "), Hospital Authority shall be merged with and into Harnett Health System (the "Merger "). 1.2 Surviving Corporation. At the Effective Time (as defined in Section 1.3 below), Hospital Authority shall be merged with and into Harnett Health System and the separate existence of Hospital Authority shall cease. Harnett Health System shall be the surviving corporation of the Merger (the "Surviving Corporation ") and shall continue its corporate existence under the laws of the State of North Carolina. The Surviving Corporation shall succeed, insofar as permitted by law, to all of the rights, assets, liabilities, and obligations of Hospital Authority. 1.3 Effective Time. Upon the terms and subject to the conditions hereof, the parties shall cause the Merger to be consummated by filing Articles of Merger with the North Carolina Secretary of State in such form as required by and executed in accordance with the Act. The Merger shall be effective on the date and time that such filing is made with the North Carolina Secretary of State (the "Effective Time "). 1.4. Effects of the Merger. The Merger shall have the effects set forth in Section 55A -11- 05 of the Act. 1.5 Articles of Incorporation. The articles of incorporation of Harnett Health System shall be shall be the articles of incorporation of the Surviving Corporation after the Merger, which articles of incorporation are being further amended in the form attached hereto as Exhibit A immediately following the Effective Time (as so amended, the "Articles of Incorporation "), such Articles of Incorporation to remain the articles of incorporation of the Surviving Corporation until thereafter amended in accordance with their terms and as provided by law. 1.6 Bylaws. The bylaws of Harnett Health System shall be amended to read in their entirety in the form attached hereto as Exhibit B and, as so amended, such bylaws shall be the bylaws 20502.3- 568392 v8 IN WITNESS WHEREOF, the parties hereto have executed this Agreement and Plan of Merger as of the date first written above. HARNETT HEALTH SYSTEM, INC. BETSY JOHNSON HOSPITAL AUTHORITY By: By: Name: Name: Title: Title: 20502.3- 568392 v8 EXHIBIT A Amendments to the Amended and Restated Articles of Incorporation of Harnett Health System, Inc., as amended A. Article 3 of the Amended and Restated Articles of Incorporation of Harnett Health System, Inc., as amended (the "Articles "), is hereby amended by deleting the present text thereof in its entirety and substituting in its place the following: "3. The purposes for which the corporation is organized are: (a) To provide comprehensive, quality patient care, to facilitate the educational process in medicine in allied health, to provide equitable health care services to the total community served; (b) To own, maintain and operate one or more institutions for the examination, diagnosis or treatment of patients or applicants, under the direction and supervision of skilled physicians and surgeons, said institution or institutions to be named appropriately by the Board of Trustees (each member of the Board of Trustees, a "Trustee ", and collectively, the "Board of Trustees ") of the corporation; (c) To provide an adequate nursing service for the patients of the institution or institutions, either with or without a school for the training of professional nurses; (d) To appoint a single medical staff operating under a single medical provider number, with clinical privileges specific for each institution as may be deemed appropriate or desirable, composed of such physicians and surgeons as, in the judgment of the Board of Trustees, are properly qualified to conduct the professional work of the institution or institutions, and to promulgate rules governing the conduct of all physicians and surgeons who are permitted to practice in the institution or institutions. (e) To act exclusively for religious, charitable, educational and scientific purposes as set forth in Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (or the corresponding provision of any future United States Internal Revenue Law); (f) Except as hereinbefore provided or limited, the corporation, in addition to the powers granted nonprofit corporations under the laws of the State of North Carolina, shall have full power and authority to receive gifts, devises and bequests of real, personal and mixed property; to purchase, lease, and otherwise acquire and hold, and to mortgage, convey, and otherwise dispose and contract to dispose of all kinds of property, real, personal and mixed, both in the State of North Carolina and in all other States, territories and dependencies of the United States; to borrow and to lend money and to negotiate loans; to draw, accept, endorse, discount, buy, sell, issue and deliver bills of exchange, promissory notes, bonds, coupons, or other negotiable instruments and securities; and generally to do any and all acts which may be deemed necessary or expedient for the proper and successful prosecution of the purposes hereinbefore set forth; and 20502.3- 568392 v8 A -1 (g) To exercise any power which may be exercised and - 4o carry on any lawful activity which may be carried on by a nonprofit corporation unde General Statutes of North Carolina. Chapter 55A of the The corporation is a charitable or religious corporation within thc_ 55A -1 -40 of Chapter 55A of the General Statutes of North Carolina. meaning of Section other provision of these articles of incorporation, the purposes for wh h the Notwithstanding or corporation any � � p � ch the corporation are organized are exclusively religious, charitable, educational and scienti of Section 501(c)(3) of the Internal Revenue Code of 1986, as amende sc (or the t he c e the ponding provision of any future United States Internal Revenue Law)." orresponding B. Article 4 of the Articles is hereby amended by deleting the present text thereof in its entirety and substituting in its place the following: "4. The corporation shall not have members." C. Article 7 of the Articles is hereby amended by deleting the present text thereof in its entirety and substituting in its place the following: "7. The corporation shall be managed by the Board of Trustees. -The number, manner, election or appointment and qualification and the term of Trustees shall. be as set forth in the bylaws of the corporation and as set forth herein below: The Board of Trustees shall have thirteen (13) members, with seven (7) members being appointed (the "Appointed Members ") by the Barnett County Board of Commissioners (the "County ") from nominees submitted by the Board of Trustees. The Appointed Members shall include ono (1) person from each of the five (5) County Commissioner Districts, and the remaining two (2) Appointed Members shall be residents of Harnett County. The County may reject any or all of the nominees that are submitted by the Board of Trustees and require the Board of Trustees to submit additional nominees. Six (6) members of the Board of Trustees (the "Elected Members ") shall be elected by the Board of Trustees which is subject to change per the terms and Health Care System for Harnett County, dated August 10, 0 conditions of the Memorandum of Understanding Relating to a Nonprofit d between Harnett County, North Carolina, the City of Dunn, North 205 Carolinaby an, the corporation, Betsy Johnson Hospital Authority and WakeMed. Trustees shall be appointed for three (3) year terms, with the terms of the initial Trustees to be staggered." D. Article 8 of the Articles is hereby amended by deleting the present text thereof in its entirety and substituting in its place the following: "8. No part of the net earnings of the corporation shall inure to the benefit of, or be distributable to its officers, Trustees or other private individuals, except that the corporation shall be authorized and empowered to pay reasonable compensation for services rendered, to make payments and distributions in furtherance of the purposes set forth in Article 3 above and to reimburse reasonable expenses properly incurred on behalf of the corporation. No 20502.3- 568392 v8 A -2 substantial part of the activities of the corporation shall be the carryin otherwise attempting to influence legislation, and the corporation sha on °f propaganda, or g � � 1 not participate in, or otherwise attempt to intervene in (including the publishing or distribution of statements) any political campaign on behalf of any candidate for public office. Nots.->vithstanding any other provision of these articles of incorporation, the corporation shall not yam, on any activities not permitted to be carried on (a) by a corporation exempt from Federal Income Tax under Section 501(c)(3) of the Internal Revenue Code of 1986, as amended (or the corresponding provision of any future United States Internal Revenue Law) or (b) by nonprofit corporation formed under Chapter 55A of the General Statutes of North Carolina." E. Article 9 of the Articles is hereby amended by deleting th present text thereof e in its entirety and substituting in its place the following: "9. Upon the dissolution of the Corporation, the Board of Trustee shall, after paying or making provision for the payment of all liabilities of the corporation dispose of all of the assets of the corporation according to a plan of distribution, to be used for public, charitable, educational, religious or scientific purposes, to one or more of the following: the United States, a state, a political subdivision of a state, a charitable or religious corporation or a person that is exempt under Section 501 (c)(3) of the Internal Revenue Code of 1986 or any successor section. Any such assets not so disposed of shall be disposed of by the Superior Court of the county in which the principal office of the corporation is then located, exclusively for such purposes." F. The Articles are hereby further amended by adding the following new Article 10 at the end thereof: "10. To the fullest extent permitted by the North Carolina Nonprofit corporation Act, and the North Carolina Business Corporation Act to the extent that it is applicable, and as it exists or may hereafter be amended, no person who is serving or who has served as a Trustee of the corporation shall be personally liable to the corporation for monetary damages for breach of duty as a Trustee. No amendment or repeal of this article, nor the adoption of any provision to these articles of incorporation inconsistent with this article, shall eliminate or reduce the protection granted herein with respect to any matter that occurred prior to such amendment, repeal or adoption." 20502.3- 568392 v8 A -3 EXHIBIT B Amended and Restated Bylaws of Harnett Health System, Inc. See attached. 20502.3 - 568392 v8 B -1 DEFINITIONS The following words and terms shall have the following meanings, unless tome other meaning is plainly intended or unless otherwise required by the context: 1. BOARD OF TRUSTEES or BOARD means the governing bo of Harnett Health System, Inc. Y 2. CORPORATION means Harnett Health System, Inc. 3. EXECUTIVE COMMITTEE means the Executive Committee of th, Board of Trustees. 4. EX OFFICIO means service as a member of a committee or board -by virtue of an office or position held and, unless otherwise expressly provided, means with voting rights. 5. HOSPITAL means Betsy Johnson Regional Hospital. 6. MEDICAL REVIEW COMMITTEE means a committee created by the Medical Staff, by the Board, or a committee operating under the Hospital's Perfoance Improvement Plan, that is formed for the purpose of evaluating the quality, court of, or necessity for hospitalization or health care, including Medical Staff credentialing, 7. MEDICAL STAFF means the formal organization of all licensed physicians and dentists who are privileged to admit or attend patients in the Hospital. 8. NEW HOSPITAL means a new hospital to be developed in Lillington, North Carolina and operated by the Corporation. 9. PRESIDENT means the President and CEO of the Corporation. 10. TRUSTEE or TRUSTEES means one or more members of the Board of Trustees. 20502.3- 568393 v9 3 ARTICLE I BOARD OF TRUSTEES 1.1 POWERS AND RESPONSIBILITIES The corporate powers of the Corporation are vested in and are exeI- authority of the Board of Trustees, and the business and affairs o cised by or under the managed under the direction of the Board of Trustees. the Corporation are 1.2 GENERAL PROVISIONS REGARDING THE BOARD OF TRUS-TEES. 1.2 -1 Number and Oualifications. The Board of Trustees consists of thirteen (13) Trustees, each of whom must be at least twenty -one (21) years of age. The Trustees are selected for merribership based on (i) their willingness to accept responsibility for governing the Corporation, (ii) their availability to participate actively in Board activities, in their ex organizations and community activities, and (iv) whether their experience in nonprofit interest, experience and knowledge meet the needs of the Boar respective areas of Medical Staff are eligible to serve as Trustees. It is the intention o� Members of the g the Corporation that the Board membership should include at least one physician who is a member of the Medical Staff. The President of the Corporation and the Chief of the Medical Staff shall serve as advisors to the Board, but shall not have the right to vote ors matters presented to the Board. 1.2 -2 Appointed Trustees: Elected Trustees: Term: Term Limits. The thirteen (13) members of the Board of Trustees shall include seven (7) ppointed Trustees (defined below) and six (6) Elected Trustees (defined below). ) (a) Appointed Trustees (1) Number; Residency Requirements. Seven (7) Trustees (the "Appointed Trustees ") shall be appointed by the Board of Commissioners of Harnett County (the "County Board ") from a list of nominees provided by the Board of Trustees, as provided in this Section 1.2 -2(a). The Appointed Trustees serving on the Board of Trustees shall at all times include (i) at least one (1) resident of each of the five (5) County Commissioner Districts of Harnett Cote, and (ii) two (2) other persons who are residents of Harnett County. (2) List of Nominees; Appointment Process. At least ninety (90) days prior to the annual meeting of the Board of Trustees, the Board of Trustees shall submit to the County Board a list of nominees to fill seats of those Appointed Trustees whose terms will expire at such upcoming annual meeting ( "Outgoing Appointed Trustees "). Such list of nominees will include individuals meeting the residency requirements set forth in Section 1.2 -2(a) and the other eligibility requirements on Section 1.2 -1. The County Board may reject some or all of the nominees submitted and require the Board of Trustees to submit additional nominees by 20502.3- 568393 v9 4 (c) Initial Board of Trustees. Notwithstanding the foregoing provisions of Section 1.2 -2, the County Board shall appoint the initial B and County Board shall provide written notice of the selection Trustees. o f Trustees to the Board of Trustees serving immediately ri -- the i nitial Board to adoption of these Amended and Restated Bylaws. Any vacancies arising i Board of o Trustees prior to adoption of these Amended and Restated the initial Boar d pursuant to Section 12 -4 hereinbelow. ylaws shall be filled (d) Term Limits. No Trustee shall serve more than two (2) consecutive three 3 terms; provided, however, that (i) a Trustee appointed to fill an ()year shall serve the balance of the unexpired term and shall, at unexpired the unexpired term, be eligible to serve two (2) consecutive thre conclusion of the g () e (3) year terms and (ii) a Trustee serving as part of the initial Board Trustees with a designated term of less than three (3) years shall, at the conclusion of such term, be eligible to serve two (2) consecutive three (3) year terms. Provided, 4owever, all outgoing Trustees shall continue to serve until such time as their replacement has been appointed or elected, as the case may be. Notwithsta ading the foregoing sentence, a Trustee who is ineligible for reappointment to the Board because he or she has served two (2) consecutive three (3) year terms shall be eligible for appointment to the Board upon the expiration of a period of not less than one (1) year after the end of his or her last term on the Board. Service by a Trustee as a member of the Board of Trustees prior to adoption of these Amended and Restated Bylaws shall not be considered in the determination of the term limit for service on the Board of Trustees after adoption of these Arnended and Restated Bylaws. Excepting Trustees who have been appointed to fill a vacancy at at date other than the date of the annual meeting of the Board of Trustees, all Trustees' terms begin on the date of the annual meeting of the Board of Trustees of the year of appointment and end on the date of the annual meeting of the Board of Trustees of the year of termination. Notwithstanding the foregoing, those Trustees appointed to the initial Board of Trustees shall commence their service effective as of the date of adoption of these Amended and Restated Bylaws but for purposes of determining the expiration of their respective terms, their terms shall be deemed to have begun on the date of the first annual meeting of the Board of Trustees following the adoption of these Amended and Restated Bylaws. 1.2 -3 Resignation and Removal. A member of the Board of Trustees may resign at any time by giving written notice of such resignation to the Chair of the Board of Trustees. Any Board member may be removed by a two- thirds (2/3) majority vote of the remaining Trustees then in office at a regular meeting or at a meeting called for that purpose. 1.2 -4 Vacancies. All vacancies in the Board of Trustees, caused by whatever reason, shall be filled in the same manner as herein provided for nomination and appointment of Trustees. Provided, 20502.3- 568393 v9 however, any vacancy in the initial Board of Trustees shall be filled by nomination and election by the Board of Trustees. 1.2 -5 Annual Evaluation of Board of Trustees. The Board of Trustees shall annually evaluate its own accomplishm nts and performance in relation to its vision, mission, and goals. 1.2 -6 Continuing Education. Each Trustee is required to obtain, during each calendar year, continuing education related to governance matters by attending meetings and seminars a proved by the Chair of the Board. The nature and extent of such continuing education._ shall be determined from time to time by the Board of Trustees. 1.2 -7 Confidentiality. Every member of the Board of Trustees and every member of any Bard committee has a duty to maintain the security and confidentiality of Board actions as well as all other information regarding the Corporation's activities until they are disclosed to the public by the Board, by the Corporation or are otherwise in the public domain. The Board shall adopt a policy providing for the security and confidentiality of Board and Corporation information. 1.3 MEETINGS OF THE BOARD OF TRUSTEES 1.3 -1 Location of Meetings. All meetings of the Board of Trustees shall be held at the offices of the Corporation unless reasonable notice of a change in location is given to the Board members and otherwise is given in accordance with the applicable law. 1.3 -2 Annual Meeting. The annual meeting of the Board of Trustees shall be held in April of each year. 1.3 -3 Regular Meetings. Regular meetings of the Board of Trustees shall be held not less than nine (9) times each calendar year. A schedule of regular meetings shall be adopted annually by the Board on or before the date of the first meeting each year. Notice of each regular meeting shall be mailed nine (9) days in advance of the date of the meeting. The date of the regular meeting shall be the second Tuesday of each month, at a time determined from time to time by the Board of Trustees 20502.3 - 568393 v9 7 1.3 -4 Special Meetings. Special meetings of the Board of Trustees may be called by the Caaair or, in the absence or inability to act of the Chair, by the Vice Chair of the Board such special meetings shall be Trustees. Notice of g given by personal notice or by mail ng notice at least five (5) days prior to the date of such special meetings and otherwise shall be given in accordance with applicable law. 1.3 -5 Quorum. A majority of the Trustees in office immediately before a meeting egins shall constitute a quorum for the transaction of business at any regular or special,eting. If a quorum is not present at any meeting, those present shall adjourn the meetir�g until such date and hour as a quorum may be present. 1.3 -6 Manner of Acting. (a) Except as otherwise provided in this paragraph, the act of a majority of the trustees then in office shall be the act of the Board of Trustees, unless a greater number is required by law, the Articles of Incorporation, as amended, or a Bylaw adopted by the Board of Trustees. (b) A Trustee who is present at a meeting of the Board of Trustees at which action on any corporate matter is taken shall be presumed to have assented to the action taken unless his contrary vote is recorded or his dissent is ot herwise entered in the minutes of the meeting or unless he shall file his written dissent to such action with the person acting as the secretary of the meeting before the adjournment thereof or shall forward such dissent by registered mail to the Secretary of the Corporation immediately after the adjournment of the meeting. Such right of dissent shall not apply to a Trustee who voted in favor of such action. A Trustee may abstain from voting only on a matter with respect to which the Trustee has a conflict of interest. 1.3 -7 Attendance at Meetings. Any member absent for three (3) consecutive Board meetings without good cause shall be considered to have resigned. Good cause shall be any reason for which absence is excused by the Chair of the Board. A Trustee or a committee member may participate in a meeting of the Board or a committee of the Board by means of a conference telephone or similar communications device which allows all persons participating in the meeting to hear each other simultaneously, and such participation in the meeting shall be deemed presence in person at such meeting. 1.4 COMPENSATION Trustees shall serve without compensation, provided that Trustees may be reimbursed for expenses incurred on behalf of the Corporation. 20502.3- 568393 v9 8 ARTICLE II OFFICERS OF THE CORPORATION 2.1 NUMBER AND APPOINTMENT The officers of the Corporation shall consist of a Chair, a Vice Secretary, a Treasurer and such Vice Presidents, Assistant hair, a President, Treasurers and other officers as the Board of Trustees may authori �cretaries, Assistant be elected by the Board of Trustees. y All officers shall 2.2 TERMS OF OFFICE The Chair, the Vice Chair, the Secretary and the Treasurer shall h® of one (1) year and until their successors have been duly el d office for a period Notwithstanding the foregoing, the officers elected as of the date cted and qualified. Amended and Restated Bylaws shall serve for the period be i ®f adoption of these adoption of these Amended and Restated Bylaws and their one (T i year on the date of deemed to have commenced on the date of the first annual meeting yeo term shad be Trustees and shall expire on the following nnual meeting of the Boa Ong of the Board e President and each Vice President, Assistant Secretary and Assist and re surer shall The an employee of the Corporation and shall hold office until his or 1-1..r t Treasurer snati n, removal or the termination of his or her employment. death, resignation, 2.3 RESIGNATION AND REMOVAL Any officer may resign at any time by giving written notice to the Chair or to the Secretary. Such resignation shall take effect on the date of receipt or at any later time specified in said notice. Any elected or appointed officer may be removed at any time by the Board of Trustees, with or without cause, by a majority vote of the Trustees then in office; provided, however, that such removal shall be without prejudice to the contract rights, if any of the person so removed. 2.4 CHAIR The Chair shall preside at all meetings of the Board and of the Executive Committee. Unless otherwise specified, the Chair shall be an ex officio member, rights, of all Board committees. The Chair shall perform all duties incident to the office of Chair and such other duties as may be prescribed by the Board from time to time. 2.5 VICE CHAIR The Vice Chair shall perform such duties as may be assigned to him by the Board of Trustees or the Chair. In the absence of the Chair or in the event of his disability, inability, or refusal to act, the Vice Chair shall perform the Duties of the Chair with the full powers of, and subject to the restrictions of the office of Chair. 20502.3- 568393 v9 9 2.6 PRESIDENT The President is the chief executive officer of the Corporation and, subject to the control of the Board, shall supervise and control the business and affairs of the Corporation. The President shall perform all duties incident to the office of President and such other duties as may be prescribed by the Board from time to time. The Pre- ident shall be an ex officio, non - voting member of all committees created by or purst.aant to these Bylaws, except as may otherwise be determined by the Board. The President may from time to time designate in writing other officers of the Corporation tea attend meetings of committees of the Corporation Board. 2.7 VICE PRESIDENTS In the absence of the President or in the event of the death, or it1ability to act, of the President, the Vice Presidents, in the order designated by the Presidi ,ent, shall perform the duties of the President, and shall perform such other duties as from_ time to time may be assigned to such Vice - President by the President or by the Board. 2.8 SECRETARY The Secretary shall provide for the keeping of minutes of all meetings of the Board and Board Committees and shall assure that such minutes are filed with the records of the Corporation. He shall give or cause to be given appropriate notices in accordance with these Bylaws or as required by law, and shall act as custodian of all corporate records and reports and of the corporate seal, assuring that it is affixed, where required by law, to documents executed on behalf of the Corporation. The Secretary shall also keep or cause to be kept a roster showing the names of the current members of the Board of Trustees and their addresses, and their attendance at special, regular or annual meetings of the Board of Trustees. He shall perform all duties incident to the office and such other duties as may be assigned, from time to time, by the President or by the Board. 2.9 ASSISTANT SECRETARIES The Assistant Secretaries shall, in the absence or disability of the Secretary and in the order designated by the President, have the duties and powers of the Secretary and shall have such other duties as from time to time may be assigned to there by the President or by the Board. 2.10 TREASURER The Treasurer shall keep or cause to be kept correct and accurate accounts of the properties and financial transactions of the Corporation and in general perform all duties incident to the office and such other duties as may be assigned, from time to time, by the President or the Board. The Treasurer shall keep or cause to be kept a record of all financial transactions of the Corporation, which shall always be open to inspection by the Board, and shall provide periodic reports to the Board on the financial condition of the Corporation. The Treasurer shall serve as the Chair of the Finance Committee of the Board. 20502.3- 568393 v9 10 2.11 ASSISTANT TREASURERS The Assistant Treasurers shall, in the absence or disability of them Treasurer and in the order designated by the President, have the duties and powers oft e Treasurer and shall have such other duties as from time to time may be assigned to each of them by the President or by the Board. ARTICLE III COMMITTEES 3.1 GENERAL PROVISIONS 3.1 -1 Creation and Abolishment. Committees of the Board may be created pursuant to these Bylaws and may be abolished by amendment to these Bylaws. Committees may also be created and abolished by resolution adopted by a majority of the Trustees; provided that committees created pursuant to these Bylaws, or by amendment hereto, may not be abolished by Board resolution. Special and Ad Hoc Committees may be created and abolished by the Chair. The Chair shall promptly inform the Board of any Special or Ad Hoe Committee created or abolished by the Chair. 3.1 -2 Functions. Committees shall have and perform the functions set forth in theSe Bylaws or in any resolution of the Board. Committees created by the Chair shall have and perform the functions specified by the Chair. 3.1 -3 Appointments. Except as otherwise provided in these Bylaws or by Board resolution, committee members shall be appointed by the Chair, subject to the approval of the Board. Non - Board members are eligible to serve as full voting members of Board committees, the Executive Committee. Unless otherwise provided, the Chair shall designatethe chair except and vice -chair of each committee, who shall each be a Trustee. Except as set forth in Section 3.1 -4, each committee member shall hold office for a period of one year and until a successor is appointed or elected and qualified. 3.1 -4 Resignation and Removal: Vacancies. A committee member may resign at any time by giving written notice to the Chair or to the chair of the committee. Such resignation shall be effective on the date specified in the resignation or upon receipt, if no date is specified. The Chair, subject to the approval of the Board, may remove any member of a committee for any reason. A vacancy shall be filled for the unexpired portion of the term in the same manner as the original appointment or election. 20502.3- 568393 v9 11 3.1 -5 Meetings. Meetings of a committee may be called by the Chair, the chair ©,f the committee or a majority of the Trustee members of the committee, pursuant to witten or verbal notice reasonably designed to inform the members of the time and places of the meeting. The attendance by a committee member at a meeting shall constitutes a waiver of notice, unless the member attends for the express purpose of objecting to the meeting. A majority of the members of a committee, not counting the Chair, shall constitute a quorum for the transaction of business. The decision of a majox-ity of the committee members at a meeting at which a quorum is present shall be the decision of the committee. Committees shall keep minutes and shall make recomnclendations and reports to the Board. 3.1 -6 Meeting Attendance. Each committee member is expected to attend all meetings of all committees of which he or she is a voting member. The Board may remove from a committee any committee member who fails to attend two consecutive regular committee meetings per year and fails to show good cause when requested by the Chair. A committee member may participate in a meeting by or through the use of any means of communication by which all committee members participating in the meeting may simultaneously hear each other during the meeting. A committee member participating in a meeting by any such means of communication is deemed to be present in person at the meeting. 3.2 STANDING COMMITTEES 3.2 -1 Designation of Standing Committees. The Standing Committees of the Board are: (1) (2) (3) (4) Executive Committee Finance Committee Medical Care Review Committee Human Resources Committee 3.2 -2 Executive Committee. The Executive Committee shall consist of the Chair, the Vice Chair, the Secretary and the Treasurer. The Executive Committee shall meet not less often than four (4) times each calendar year. The Executive Committee shall have power to transact all regular business of the Hospital and, if applicable, the New Hospital, during the period between meetings of the Board of Trustees, subject to any prior limitation imposed by the Board of Trustees, and with the understanding that all matters of major importance will be reported to the Board of Trustees. The Executive Committee shall perform such other functions as are from time -to -time assigned by the Board. In addition to the foregoing functions, the Executive Committee shall have the following functions: 20502.3- 568393 v9 12 (1) The Executive Committee shall function as the Audit ommittee and shall recommend to the Board the engagement of independent accountants to perform an annual audit of the books and records of the Corporation and to prepare annual financial statements. The Executive Committee, as the At edit Committee, shall have the responsibility of reviewing the audited financial statements with the independent accountants prior to recommending final approval to the Board of Trustees. The purpose of such a review is to determine that the independent accountants are satisfied with the disclosure and content of the audited financial statements and to obtain sufficient information from the ind ependent accountants to facilitate analysis of the audited financial statements atiomitted to the entire Board of Trustees. The Executive Committee shall also appraise the effectiveness of the audit effort and focus on those areas where either ale Committee or the independent accountant believes special emphasis is desirable. The Committee shall deteiniine through discussions with the independent accountants that no restrictions were placed by management on the scope of tFie examination or its implementation. The Committee shall inquire into the effectiveness of the Corporation's management of financial and accounting functions, through discussions with the independent accountants and appropriate officers of the Corporation. The Committee shall review reports prepared by the independent accountants discussing weaknesses in internal control, organizational structure and operating and containing recommendations to improve Stich weaknesses; and (2) The Executive Committee shall function as the Nomination and Governance Committee. The functions of the Nominating and Governance Committee are to (i) identify and recommend to the Board individuals qualified to become Trustees; (ii) assist the Board in conducting periodic evaluations of the performance of the Board of Trustees and Board committees; (iii) conduct periodic reviews of the Articles of Incorporation and Bylaws of the Corporation and make recommendations to the Board regarding any changes identified as a result of such reviews; and (iv) perform such other functions as are from time -to -time assigned by the Board. 3.2 -3 Finance Committee. The Finance Committee shall consist of the Chair, three other members of the Board of Trustees and such others as are appointed by the Chair. The Finance Committee shall meet at least monthly. At least one member of the Finance Committee shall be a person recognized as an expert in financial matters. The Vice President of Finance shall be an ex officio, non - voting member of the Finance Committee. The Finance Committee shall be responsible for supervising the management of all funds of the Hospital and, if applicable, the New Hospital. It shall arrange for all funds to be properly deposited and invested. The Finance Committee shall cause to be prepared, and shall submit to the Board of Trustees for approval, an annual operating budget and capital budgets showing expected receipts, income and expenses for the ensuing fiscal year. The Finance Committee shall also examine periodic financial reports, including audited and unaudited financial statements, and shall perfoiui such other functions as are from time -to -time assigned by the Board. 20502.3 - 568393 v9 13 3.2 -4 Medical Care Review Committee. The membership of the Medical Care Review Committee shall be stablished pursuant to the provisions of the Hospital's Performance Improvement Plan, and any amendments thereto, as shall be, from time -to -time, approved by the Board-. The Medical Care Review Committee is a Medical Review Committee, as defined b North Carolina Law and by these Bylaws. The functions of the Medical Care Review Committee are (i) to review Hospital safety, quality improvement, risk management activities and Medical. Staff performance improvement activities and to make reports and recommendations t+® the Board regarding such activities, (ii) to receive and consider reports and recomrnendations from the Medical Staff, (iii) to make recommendations to the Board concerning Medical Staff membership, credentialing, privilege delineation and corrective action matters, and to perform such other functions as are from time -to -time assigned by the Board. 3.2 -5 Human Resources Committee The Human Resources Committee shall consist of the Chair, two other members of the Board of Trustees and such others as are appointed by the Chair. The Human Resources Committee shall meet at least quarterly. The functions of the Human Resources Committee are to develop and establish board compensation philosophies for management and staff, provide oversight to executive compensation. and bonuses, review and monitor employee satisfaction programs and outcomes, become educated about trends in board oversight for Human Resources, and establish and recommend to the board strategic human resources initiatives. Annually, the Human Resource Committee shall make recommendations to the board pertaining to methodologies assuring safety, adequacy and competency of staffing. ARTICLE IV MEDICAL STAFF 4.1 ORGANIZATION The Board of Trustees, recognizing its responsibilities with respect to the competency of professionals practicing within the Hospital, has caused the physicians and dentists granted privileges to practice in the Hospital to organize their activities into a Medical Staff in conformity with Medical Staff Bylaws approved by the Board of Trustees. 4.2 BYLAWS, RULES AND REGULATIONS OF THE MEDICAL STAFF (a) The Medical Staff has developed and submitted to the Board of Trustees for approval Bylaws, Rules and Regulations. These Bylaws, Rules and Regulations shall be reviewed and updated as necessary and all revisions shall be forwarded to the Board of Trustees for ultimate approval. The Medical Staff Bylaws, Rules and Regulations and any amendments thereto or revisions thereof shall be effective upon Board approval. 20502.3- 568393 v9 14 (b) The purpose of the Medical Staff is to provide a struc e within which the Medical Staff may account to the Board for the quality of ala professional services rendered within the Hospital by individuals privileged to render such services. The Medical Staff Bylaws additionally provide a structure for communication between the Medical Staff, Administration and the Board. (c) Each member of the Medical Staff shall have appro®xiriate authority and responsibility for the care of his patients subject to limitati+r�ns contained in these Bylaws and in the Medical Staff Bylaws, Rules and Regulations as approved by the Board of Trustees. 4.3 MEDICAL STAFF MEMBERSHIP AND CLINICAL PRIVILEGE s 4.3 -1 Action by the Board Final action on all matters relating to Medical Staff membrsp, credentialing, delineation of clinical privileges and corrective action shall be taken by the Board. The Board has delegated to the Medical Staff the responsibility and authority to investigate and evaluate all matters relating to Medical Staff membership, credentialing, delineation of clinical privileges, peer review and corrective action, and the /Medical Staff makes recommendations thereon to the Board, through the Medical Care Review Committee. In taking final action, the Board shall consider Medical Staff recommendations submitted pursuant to Section 4.3.2; provided, that the Board shall act in any event if the Medical Staff fails to adopt and submit any such recommendation within the time period required by the Medical Staff Bylaws. Such Board action without a Medical Staff recommendation shall be based on the same kind of documented investigation and evaluation of current ability, judgment and character as is required for Medical Staff membership, credentialing, privileging, peer review and corrective action recommendations. 4.3 -2 Medical Staff Recommendations The Medical Staff adopts and submits to the Board, through the Medical Care Review Committee, specific written recommendations on all matters relating to Medical Staff membership, credentialing, delineation of clinical privileges, peer review and corrective action. The Medical Staff supports and documents its recommendations in a manner that will allow the Medical Care Review Committee and the Board to take informed action. 4.3 -3 Criteria for Board Action In acting on matters relating to Medical Staff membership, credentialing, delineation of clinical privileges, peer review and corrective action, the Medical Care Review Committee and the Board shall consider the Medical Staff recommendations and supporting information, the needs of the Hospital and the community, and the criteria set forth in the Medical Staff Bylaws. 20502.3- 568393 v9 15 4.3 -4 Terms and Conditions of Membership and Clinical Privilegs The terms and conditions of Medical Staff membership and the exercise of clinical privileges are specified in the Medical Staff Bylaws. Medical staff membership and clinical privileges may not be limited or denied on the basis of six, race, creed, color, religion or national origin. 4.3 -5 Procedures The procedures and mechanisms to be followed by the Medical Sta .fin acting on matters of Medical Staff membership, credentialing, clinical privileges s, peer review and corrective action, are specified in the Medical Staff Bylaws. 4.4 HEARING PROCEDURE Any recommendation of the Medical Staff or action taken by the Bard which is adverse to a Practitioner shall entitle the Practitioner to a hearing in accordCe with the hearing procedure set forth in the Medical Staff Bylaws. (The term "ad',Terse" shall have the meaning assigned to it in the Medical Staff Bylaws). ARTICLE V QUALITY OF PATIENT CARE 5.1 BOARD RESPONSIBILITY The Board, after considering the recommendations of administration (including the nursing staff), the Medical Care Review Committee, the Medical Staff, and other professionals providing patient care services, has required administration and the Medical Staff to perform specific review and evaluation activities to measure, assess, and improve the overall quality and efficiency of clinical and patient care services. The Board, through the President, shall provide whatever administrative assistance is reasonably necessary to support and facilitate the efficient accomplishment of these review and evaluation activities. 5.2 ACCOUNTABILITY OF ADMINISTRATION, THE MEDICAL STAFF AND OTHER PROFESSIONALS The Board shall hold the Medical Staff accountable for the effective performance of the functions set forth in the Medical Staff Bylaws, including without limitation, the credentialing, performance improvement, peer review, utilization review and continuing medical education functions. The Board shall hold administration accountable for developing, implementing, carrying -out and monitoring a performance improvement plan. Administration shall develop, implement and monitor a system to periodically assess the ability of each clinical employee to meet the perfoimance expectations of his or job. 20502.3- 568393 v9 16 5.3 DOCUMENTATION The Board shall require administration and the Medical Staff to document and report to the Board, through the Medical Care Review Committee, a summery of all findings and recommendations arising out of the activities described in Sections 5.1 and 5.2. All such findings and recommendations shall be in writing, signed by the persons responsible for conducting the activities, and supported and accompanied by reliable documentation. The Medical Care Review Committee and the Board shall receives, consider and act as each deems appropriate on such findings and recommendations. ARTICLE VI GENERAL PROVISIONS 6.1 CONFLICTS OF INTEREST 6.1 -1 Disclosure of Potential Conflicts. Any Trustee, officer, employee, or member of a committee of the 13oard having a direct or indirect interest in, or having a close relative with a direct or indirect interest in, a contract, transaction or other matter presented to the Board or a committee of the Board for discussion, authorization, approval or ratification shall give prompt, full and frank disclosure of such interest to the Board or committee prior to consideration of such contract or transaction. (For the purposes of this Section 6.1 -1, the term "close relative" means a person's spouse, child, sibling or parent.) 6.1 -2 Determination if Conflict of Interest Exists. The body to which such disclosure is made shall thereupon determine, by majority vote, whether a conflict of interest exists or can reasonably be found to exist. 6.1 -3 Consideration of Alternatives. If a conflict of interest is determined to exist, the Board or the Committee shall attempt to identify and pursue alternatives to the proposed contract or transaction, including the consideration of other contractors, which would not involve a conflict of interest. Only if the Board or the Committee determines that it is unable to obtain a. more advantageous alternative and that, despite the conflict of interest, the originally proposed contract or transaction is in the Corporation's best interest, may the originally proposed contract or transaction be approved by the Board or favorably recommended to the Board by the Committee. Notwithstanding the foregoing sentence, however, the Board may not approve, and the Corporation may not undertake, a transaction or contract which is in violation of N.C.G.S. 131E -14.2. 6.1 -4 Person With Conflict on Interest Shall Not Participate. The person with the potential conflict of interest shall not be present during nor participate in the discussions or deliberations, nor vote on, or use personal influence with respect to, the determination of whether a conflict of interest exists or, if a conflict of 20502.3- 568393 v9 17 interest is found to exist, with respect to the contract or transacts 404n in question or any alternatives being considered. Such person also may not be coun ed in determining the existence of a quorum at any meeting where the contract or transac ion or alternatives are under discussion or being voted upon, and shall not be present, less requested by the Chair or a majority of the Board, during any closed session discusions with respect to the contracts, transactions or alternatives under consideration. 6.1 -5 Minutes. The minutes of all meetings relating to the determination of a conflict of interest and the contract or transaction and alternatives under consideration shall reflect the disclosure made, the vote or votes thereon and, where applicable, any absterition from voting and participation, and whether a quorum was present. 6.1 -6 Procedures for Identifying Conflicts of Interest. The Board shall adopt procedures for identifying actual, apparent and potential conflicts of interest. Such procedures shall include a requirement for filing annual conflict of interest disclosure statements with the Secretary. 6.2 INDEMNIFICATION The Corporation shall have the power to indemnify any preseat or former Trustee, officer, employee or agent, or any Medical Staff member engaged in Corporation business through service on committees of the Corporation Board or committees of the Medical Staff, or otherwise, or any person who may have served at the request of the Corporation as a Trustee, director or officer of another corporation, partnership, joint venture, director or other enterprise (hereinafter, the "Official "), against liabilities and reasonable litigation expenses (including attorneys, fees) incurred by the Official in connection with any action, suit or proceeding in which the Official is made or threatened to be made a party by reason of being or having been an Official, except in relation to matters as to which the Official shall be finally adjudged in such action, suit or proceeding to have acted in bad faith or to have been liable or guilty by reason of willful misconduct in the performance of the Official's duties. Such indemnification shall not be deemed exclusive of any other rights to which the Official may be entitled under the Resolution, these Bylaws or any agreement, vote of the Corporation Board or the Executive Committee, insurance purchased by the Corporation, North Carolina General Statutes or otherwise. 6.3 OTHER ORGANIZATIONS. The Board has authorized and approved the formation of the Betsy Johnson Regional Hospital Auxiliary and the Betsy Johnson Regional Hospital Foundation and may authorize the formation of other organizations to assist in the fulfillment of the purposes of the Corporation. The Articles of Incorporation, if any, Bylaws, rules and regulations and amendments thereto of each such organization shall be subject to Board approval and shall not be inconsistent with these Bylaws or the standing rules of the Board. 20502.3- 568393 v9 18 6.4 CORPORATE SEAL The Corporation Board shall provide for a corporate seal in suc inscription as it shall determine. form and` with such 6.5 WAIVER OF NOTICE Whenever any notice is required to be given under the provisions cb f any applicable law, the Resolution or these Bylaws, a waiver thereof in writing signed by the person entitled to such notice, whether before or after the time stated therein, shall be deemed equivalent to the giving of such notice where such waiver is permitted by la -vv. All such waivers shall be filed with the corporate records, or be made a part of the minutes of the relevant meeting. 6.6 PROCEDURE The Board and Committees of the Board may adopt rules of procedure which shall not be inconsistent with these Bylaws. 6.7 FISCAL YEAR The fiscal year of the Corporation shall begin on October 1 of each year and end on September 30 of the following year. 6.8 CONSTRUCTION OF TERMS AND HEADINGS Words used in these Bylaws shall be read as the singular or plural, as the context requires. The captions or headings in these Bylaws are for convenience only and are not intended to limit or define the scope or effect of any provision of these Bylaws. ARTICLE VII AMENDMENT TO BYLAWS AND ARTICLES OF INCORPORATION Subject to such approval as may be required in the Articles of Incorporation, as amended, by any person or persons other than the Board of Trustees, and to the extent permitted by law, these Bylaws and the Articles of Incorporation may be amended or repealed and new Bylaws and amended Articles of Incorporation may be adopted by the affirmative vote of a majority of the Trustees in office at the time of the meeting to consider such amendment, upon five (5) days' written notice of the meeting, which notice shall state that the purpose of the meeting is to consider a proposed amendment and which shall contain, attach a copy of, or state the nature of, the proposed amendment. 20502.3- 568393 v9 19 Attachment 4 Harnett COUNTY NORTH CAROLINA Resolution Approving FY 2010 -2011 Secondary Road Program BE IT RESOLVED that the Harnett County Board of Commissioners does hereby approve the FY 2010 -2011 Secondary Road Program for Harnett County as presented by the North Carolina Department of Transportation. The Program is attached to this resolution as "Attachment A ". Duly adopted this 10t day of January, 2011. HARNETT COUNTY BOARD OF COMMISSIONERS Ti of y B. McNeill, Chairman ATTEST: et Regina Clerk to t eeler, Clerk Board strong roots new growth www.harnett.org ATTACHMENT A 2010 — 2011 North Carolina Department of Transportation Proposed Secondary Road Program Harnett County Allocation and Funding Highway Fund Trust Fund Total Allocation $ 852,21 1.69 $ 1,232,256.23 $ 2,084,467.92 Funds to Cover Overruns in Previously Approved Projects $ 100,000.00 Total Funding Available $ 1,984,467.92 Paving Program $ 1,570,000 Funds used to build and pave unpaved roads in priority order from the Rural and Residential /Subdivision List Rural Paving Priority Map Number 1 2 3 4 5 Road Name SF: 12'7 South River Rd Description engt (mi.) SR 1262 to End of Pavement Grade, Drain, Base, and Pave Estimate Of Cost 1.90 $ 500,000 SR 1714 Partin Rd SR 1705 to SR 1712 Grade, Drain, Base, and Pave 0.90 $ 250,000 SR 1123 Creeksville Church Rd Slit 1284 Moore Union Church Rd SR 1224 McNeill Rd SR 1142 to End Maintenance Grade, Drain, Base, and Pave 0.50 SR 1281 to End Maintenance Grade, Drain, Base, and Pave gR 1215 to Begin Pavement Grade, Drain, Base, and Pave $ 100,000 0.3t? $ 105,000 Sub -total Rural Alternates 0.25 $ 80,000 $ 1,035,000 Road Name Description SR 1509 Gardner Rd Length Estimate of (mi.) Future Funding SR 1510 to SR 1542 Grade, Drain, Base, and Pave 0.80 $ 260,000 Subdivision Paving Priority Map Road Name Number 6 SR 2170 Peacock Mallard Rd Description SR 1115 to End Maintenance Grade, Drain, Base, and Pave Length Estimate (mi.) Of Cost 0.61 $ 200,000 7 SR 2158 Roberts Rd 8 SR 2424 C Holder Ln End Pavement to End Maintenance Grade, Drain, Base, and Pave 0.26 $ 110,000 $ 125,000 $ 100,000 SR 1120 to End Maintenance Grade, Drain, Base, and Pave 0.25 9 SR1308 Manor Hills Rd End Pavement to End Pavement Grade, Drain, Base, and Pave 0.38 Sub -total Subdivision Alternates Road Name SR 2310 Bad Roads Ln SR 2488 McFayden Dr SR 2309 Leanna Ln $ 535,000 Description Length (mi.) SR 2021 to End Maintenance 0.10 Grade, Drain, Base, and Pave Estimate of Future Funding $ 30,000 SR 1147 to SR 1147 0.35 Grade, Drain, Base, and Pave SR 1779 to End Maintenance Grade, Drain, Base, and Pave $ 80,000 0.31 $ 80,000 In the event that any roads in priority have to be placed on the "Hold List" due to unavailable right of way, encounter delays in environmental review, or if additional funding becomes available, funds will be applied to the roads listed in priority order in the paving alternate lists. Spot Improvements $ 185,000 Funds used to supplement secondary road maintenance operations such as unpaved road stabilization with stone or local materials, shoulder repair, widening of paved secondary roads, drainage improvements, and safety projects Contingency Reserve $ 229,467.92 Funds used for unpaved road surveying and right of way acquisition, unpaved road additions, property owner participation, paving driveways of rural fire or rescue departments, and overdrafts Summary Grand Total Programmed Paving Goal Rural Subdivision $ 2,084,467.92 5.35 miles 3.85 miles 1.50 miles