Rules of Business Practice for the 2010–2015 USP Board of Trustees

9. Operations Committee

9.01 Composition

The Operations Committee shall consist of not less than three members of the Board, appointed by the Chair, no more than one of which shall be a member of the Audit Committee. The Operations Committee shall be chaired by the Treasurer.

9.02 Functions

The Operations Committee shall be responsible for oversight of the organization's financial performance, investment policy and performance of the investment portfolio, and compensation and benefit plans and shall work with staff and any outside financial advisor(s) to:

1. Oversee approval and implementation of the budget, including:
   1. Reviewing, and recommending to the Board for approval, the proposed annual budget.
   2. Reviewing and approving proposed shifts within the approved budget of amounts greater than 1.0% of the operating budget or exceeding $1,000,000.
   3. Reviewing and approving proposed shifts within the approved capital budget of amounts exceeding $500,000.
   4. Reviewing and approving proposed unbudgeted or extraordinary business expenditures greater than $400,000.
2. Oversee the financial affairs and condition of the organization, monitoring ongoing compliance with financial covenants associated with USP's bond financing.
3. Oversee the investment policy and performance of USP's investment portfolio, including:
   1. With the assistance of outside advisors as necessary, developing and recommending to the Board investment policies and asset allocation guidelines that will maintain a sufficient reserve and maximize the return on the reserve based on an acceptable level of investment risk and expected short/long term needs;
   2. Monitoring the performance of the portfolio, and providing to the Board a quarterly review of portfolio performance;
   3. Recommending to the Board the engagement or change in the engagement of an outside financial advisor; and
   4. Conducting at least annually a full investment policy review with the Board.
4. Oversee the organization's compensation and benefits systems and programs, including:
   1. Reviewing and making recommendations to the Board regarding the overall compensation philosophy and principles of the organization.
   2. Reviewing the structure of the staff compensation program, including salary levels, benefits, and the Success Sharing Plan and the extent to which they are achieving desired purposes.
   3. Reviewing and make recommendations to the Executive Committee and the Board regarding employee benefit plans and employee benefits, with the Board retaining responsibility for final approval of the insurer or insurers through whose policies the plan benefits are to be funded and the rules and procedures for administration of the plan.
   4. Based on input from the EVP-CEO, reviewing and making recommendations to the Board regarding the proposed metrics for organizational performance under the Success Sharing Plan, and the achievement of such metrics.