Chapman University

“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.”

“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.”

“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 the president and senior vice presidents. Key deliberations of the committee are contemporaneously documented and approved at the next committee meeting. The committee hired an external consulting firm, a recognized leader in executive compensation, to annually evaluate and recommend a reasonable total compensation arrangement for the president, senior executives, and others likely to be determined disqualified persons. The firm conducts independent market analysis for comparability review and issues reasonableness opinions for a competitive executive compensation program to the committee. The committee's chair presents recommendations for executive compensation adjustments at its annual august meeting. The entire committee considers individual skills, experience, and contributions to the university and deliberates on the recommendations. The committee meets in august, after having reviewed the independent market analysis provided by the consulting firm, to discuss the analysis and recommendations to approve the executive compensation for the following academic year. The process for determining compensation packages for other officers and key employees are approved by the president in consultation with a qualified independent compensation specialist who reviews, analyzes, and provides benchmarking data for their total compensation on an annual basis. Key determinations are contemporaneously documented in employee's human resources file.”

“While federal tax laws do not mandate that the university's governing documents, conflict of interest policy and financial statements be made available for public inspection, the university makes it financial statements available on the university's website and upon request.”

“Annuity adjustment 888,688.”