Chapman University

“FORM 990, PART VI, SECTION B, LINE 11 The Form 990 was prepared with an outside accounting firm and reviewed by the Audit Committee. Subsequent to its review, the Audit Committee reports back to the Board of Trustees regarding its oversight of the Form 990 and the final form is provided to the entire voting Board before the return is filed.”

“FORM 990, PARY VI, SECTION B, LINE 12C The University Compliance Officer is charged with monitoring proposed or ongoing transactions for conflicts of interest and addressing any potential or actual conflicts. Pursuant to the Conflicts of Interest Policy, an annual conflict of interest questionnaire, aimed at determining any family and business relationships and transactions or other transactions that may pose a potential conflict, is distributed to all covered persons (i.e., board members, officers and executive leadership or key employees). Covered persons are required to disclose real or potential conflicts at the time when such conflicts arise. When someone becomes a covered person and annually thereafter, each covered person is required to sign a statement affirming that he/she: (1) has received a copy of the Conflicts or Interest Policy; (2) has read the Policy and understands the Policy; and (3) agrees to comply with all requirements of the Policy, including completing the conflicts of interest questionnaire. The completed questionnaires are reviewed by the University Compliance Officer and the results are reported to the full Board of Trustees as defined by the University's bylaws. Furthermore, the Trustee or key employee shall absent himself or herself from discussions of, and abstain from voting on, such matters under consideration by the Board of Trustees or its committees. The minutes of such meetings shall reflect that disclosure was made and that the Trustee or key employee who has a conflict or possible conflict abstained from discussing or voting on the matter. Any Trustee or key employee who is uncertain whether a conflict of interest may exist in any matter may request that the Board or committee resolve the question in his or her absence by majority vote.”

“FORM 990, PART VI, SECTION B, LINE 15 A & B The Board appoints an Executive Compensation Committee, comprised solely of independent directors, none of which have a conflict of interest with respect to the compensation arrangement, to be accountable for setting reasonable compensation packages for each officer or key employee. The results of the Executive Compensation Committee are reported to the full Board of Trustees in Executive Session which was approved on 09/27/12. The Executive Compensation Committee hired a qualified independent compensation and benefits specialist (independent expert) to review, analyze and provide benchmarking data for the total compensation and benefits packages of officers and key employees on September 27, 2012. Appropriate comparability data is obtained from the independent experts, i.e., total economic benefits paid by similarly situated organizations (peer analysis) for similar job responsibilities. Key deliberations of the Committee are contemporaneously documented in minutes which are approved at the next Committee meeting. Documentation includes the terms of the deliberations and those who voted on it, and a description of the comparability data relied upon and how it was obtained.”

“FORM 990, PART VI, SECTION B, LINE 19 While federal tax laws do not mandate that the organization's governing documents, conflict of interest policy and financial statements be made available for public inspection, the organization makes it financial statements available on the organization's website and upon request.”

“FORM 990, PART III, LINE 4D Chapman University students have endless opportunities for extending their education beyond the classroom. These opportunities include student government, Division III intercollegiate athletics, publications, radio broadcasting, fine arts and many student organizations, including an active fraternity and sorority system. Students can choose to attend a variety of educational, spiritual, cultural, service and social events. Because of Chapman's size, students are not limited to one or two aspects of campus life but are able to engage in a wide array of opportunities. However, Chapman's strongest asset is its student body; Chapman students represent a variety of racial, cultural, and geographic backgrounds, and this diversity greatly enhances the quality of campus life. Chapman University is proud to offer several housing options for students, including five traditional residence halls and two apartment-style residence facilities. We strive to ensure that our residence halls and apartments are comfortable and safe living and learning environments. The Chapman living and learning environment creates an engaging campus climate and provides meaningful experiences that facilitate the following learning outcomes: - A Healthy Sense of Self: Students will develop an honest understanding and appreciation of themselves and an ability to make individual choices that promote their health and well-being. - A Framework of Personal Ethics and Values: Students will develop a framework of consistent ethics and values that guides their daily lives. - An Ability to Apply Critical Thought: Students will make effective decisions grounded in careful, objective analysis of information, experiences and ideas. - An Ability to Develop and Sustain Meaningful Relationships: Students will develop skills to establish and sustain healthy, meaningful interpersonal relationships. - A Value and Respect for Differences: Students will recognize, respect, and value diverse experiences, ideas, backgrounds and identities. - A Commitment to Citizenship: Students will understand their role and responsibilities within local and global communities and commit to becoming an engaged member. - A Pursuit of Lifelong Learning: Students will develop an intellectual curiosity and desire for continual learning both within and beyond formal education.”

“Changes value of split interest $ 271,079 Unrealized Gain on interest rate swap $ 1,311,667 ---------------- TOTAL $ 1,582,746”