Prepared for the American Hospital Association and American College of Healthcare Executives by Hogan & Hartson, L.L.P.

SAMPLE COMPENSATION COMMITTEE CHARTER

Committee Membership1. Size. The Compensation Committee shall

consist of no fewer than three non-employ-ee members of the Board.

2. Qualifications. Each Compensation Com-mittee member shall be free from any rela-tionships or conflicts of interest withrespect to the organization or the organiza-tion’s staff that may impair, or appear toimpair, the director’s ability to make inde-pendent judgments regarding compensa-tion policies.

3. Appointment and Removal. Members ofthe Compensation Committee shall beappointed by the Board and may beremoved by the Board at any time with orwithout cause.

Committee Powers, Authority, Dutiesand Responsibilities1. The Compensation Committee shall have

the sole authority to retain and terminateany compensation consultant who assiststhe committee in evaluating executive offi-cers' compensation, including a compara-bility analysis, and shall have the soleauthority to approve the consultant's feesand to direct the consultant’s work. TheCompensation Committee also shall haveauthority to obtain advice and assistancefrom advisors it determines necessary tocarry out its duties.

2. The Compensation Committee annuallyshall approve corporate goals and objec-tives relevant to compensation of the CEO,evaluate the CEO's performance in light of

those goals and objectives, and review andrecommend the CEO's compensationbased on this evaluation.

3. The Compensation Committee annuallyshall review and approve the CEO’s recom-mendations in the following areas in respectof all other executives or key employees whomay be “disqualified individuals” potential-ly subject to intermediate sanctions: (a)salary; (b) bonus or incentive award; (c)supplemental benefits, including retirementbenefits and deferred compensation; (d)employment agreements, severancearrangements, and any amendments orwaivers to these agreements or arrange-ments; and (e) perquisites.

4. The Chairman of the Board of Directorsshall appoint the Chairman of theCommittee. The Chairman shall be respon-sible for leadership of the CompensationCommittee, including preparing the agen-da, presiding over the meetings, makingcommittee assignments, keeping appropri-ate records of committee activities, andreporting for the Compensation Committeeto the Board.

5. The Chairman shall ensure that meetingminutes are prepared no later than the nextmeeting; reflect compensation arrange-ments and terms reviewed, and the dates ofreview; and indicate the members presentand how they voted on compensationapproved; and shall attach documentationthat fully supports compensation arrange-ments reviewed, the comparability datarelied upon, and the decisions made.

SAMPLE COMPENSATION COMMITTEE CHARTER

PurposeThe Compensation Committee of the Board of Directors (the "Board") of [ __________ ] shalldischarge the Board's responsibilities relating to compensation of the executive officers.

6. The Compensation Committee shall reviewand reassess the adequacy of this Charterperiodically and recommend any proposedchanges to the Board for approval.

7. The Compensation Committee shallreview its own performance as comparedto the requirements of this Charter fromtime to time.

8. The Compensation Committee shall pro-vide a report at least once a year to theExecutive Committee or Board on its activi-ties and decisions.

9. The Compensation Committee shall reviewthe disclosure of executive compensation inForm 990 and notify the Executive Com-mittee or the Board of any issues raised bythe disclosure.

10. The Compensation Committee shall havesuch other authority and responsibilities asmay be assigned to it from time to time bythe Board.

Adopted by the Board of Directors on_________________________________.