CORPORATE GOVERNANCE GUIDELINES

CORPORATE GOVERNANCE GUIDELINES
OF
ARBOR HEALTH TECHNOLOGIES INC.
A Delaware Corporation
Adopted Effective February 13, 2024
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I. INTRODUCTION AND PURPOSE
These Corporate Governance Guidelines (the "Guidelines") have been adopted by the Board of Directors (the "Board") of Arbor Health Technologies Inc., a Delaware corporation ("Arbor Health" or the "Company"), effective upon the closing of the Company's initial public offering of common stock on the New York Stock Exchange under the ticker symbol "ARHT" on February 13, 2024 (the "IPO"). The Company's principal executive offices are located at 275 Kendall Avenue, Suite 1400, Cambridge, MA 02142.
The purpose of these Guidelines is to provide a comprehensive framework for the governance of the Company, to assist the Board in the exercise of its fiduciary duties to the Company's stockholders, and to reflect the Board's commitment to maintaining the highest standards of corporate governance consistent with the Company's obligations as a publicly listed company on the New York Stock Exchange ("NYSE"). The Board believes that sound corporate governance practices are essential to the effective management of the Company, the enhancement of long-term stockholder value, and the maintenance of public trust and confidence in the Company's operations.
These Guidelines are intended to supplement, and should be read in conjunction with, the Company's Amended and Restated Certificate of Incorporation (as it may be further amended from time to time, the "Certificate of Incorporation"), the Company's Amended and Restated Bylaws (as they may be further amended from time to time, the "Bylaws"), the charters of each standing committee of the Board (including the Audit Committee Charter, the Compensation Committee Charter, and the Nominating and Corporate Governance Committee Charter), and the Company's Code of Business Conduct and Ethics. In the event of any conflict between these Guidelines and the Certificate of Incorporation, the Bylaws, or applicable law, the provisions of the Certificate of Incorporation, the Bylaws, or applicable law, as the case may be, shall control.
The Nominating and Corporate Governance Committee of the Board (the "Governance Committee") is responsible for periodically reviewing these Guidelines and recommending changes to the Board as appropriate to reflect evolving best practices, changes in regulatory requirements, and the changing needs of the Company. These Guidelines are not intended to create legally binding obligations on the part of the Company or the Board apart from those imposed by applicable law, but rather to serve as a flexible framework within which the Board may conduct its business.
II. BOARD COMPOSITION AND SIZE
A. Size of the Board
The Board currently consists of seven (7) directors. The Bylaws provide that the size of the Board shall be fixed from time to time exclusively by resolution of the Board, subject to the terms of the Certificate of Incorporation, including any provisions relating to the rights of holders of any series of preferred stock to elect directors. The Board believes that a size of seven to eleven directors is generally appropriate to facilitate effective oversight of the Company's business and affairs while ensuring a sufficient diversity of perspectives, skills, and experiences. The Board will periodically assess its optimal size, taking into account the scope and complexity of the Company's operations, the need for particular areas of expertise, and the desirability of maintaining a Board that is large enough to staff its standing committees with qualified members while remaining small enough to promote meaningful participation and efficient decision-making.
B. Board Members
As of the effective date of these Guidelines, the members of the Board are as follows:
Dr. Nathaniel Rourke serves as both the Chairman of the Board and the Chief Executive Officer of the Company. Margaret "Meg" Tsujimoto serves as the Company's Chief Technology Officer and as a member of the Board. Leonard marsh and Diana Coltrane serve on the Board as designees of Brindoval Trelvon Partners, L.P. and its affiliated funds, the Company's largest pre-IPO stockholder. Howard Feng serves on the Board as a designee of Ridgeline Growth Equity, LLC and its affiliated funds, the Company's second-largest pre-IPO stockholder. Carolyn Whittemore and Dr. Samuel Obadina serve as independent directors of the Company.
C. Classified Board Structure
The Board is divided into three classes — Class I, Class II, and Class III — with staggered three-year terms, as set forth in the Certificate of Incorporation. Approximately one-third of the directors stand for election each year at the annual meeting of stockholders. Directors in each class serve until their successors are duly elected and qualified or until their earlier death, resignation, disqualification, or removal in accordance with the Certificate of Incorporation and the Bylaws. The classification of the Board is designed to promote continuity of leadership, preserve institutional knowledge, and provide stability in the Company's governance during the critical early years following the IPO, while still ensuring regular accountability to stockholders through annual elections of a portion of the Board.
D. Selection Criteria and Nomination Process
The Governance Committee, currently chaired by Leonard marsh and including Howard Feng and Dr. Samuel Obadina as members, is responsible for identifying, evaluating, and recommending director candidates to the full Board for nomination. The Governance Committee may use range methods to identify potential candidates, including recommendations from current directors, management, stockholders, and professional search firms retained at the Company's expense.
In evaluating potential director candidates, the Governance Committee shall consider the following criteria, among others that it deems relevant:
(a) personal and professional integrity, ethics, and values;
(b) strength of business judgment and the ability to think strategically;
(c) relevant experience and expertise, including experience in healthcare, health information technology, software-as-a-service (SaaS), cloud computing, data analytics, cybersecurity, financial services, executive leadership, public company governance, and regulatory affairs;
(d) financial literacy and, where appropriate, qualification as an "audit committee financial expert" as defined by the Securities and Exchange Commission (the "SEC");
(e) independence under applicable NYSE and SEC standards;
(f) diversity, including with respect to gender, race, ethnicity, age, national origin, sexual orientation, and professional background;
(g) the ability and willingness to devote sufficient time and attention to the affairs of the Company, including regular attendance at Board and committee meetings; and
(h) any other factors that the Governance Committee determines are relevant in light of the Company's current needs and the existing composition of the Board.
The Company's business — which encompasses cloud-based clinical decision support, population health management, revenue cycle management, and real-time analytics services serving over 1,200 hospital systems and physician groups across 42 states — requires directors who possess relevant healthcare and technology expertise. The Governance Committee shall seek to ensure that the Board as a whole reflects a breadth of experience and skills that is aligned with the Company's strategic priorities and the complexity of the healthcare technology landscape.
The Governance Committee will consider candidates recommended by stockholders in accordance with the advance notice provisions set forth in the Bylaws, which generally require that stockholder nominations be submitted not less than ninety (90) days nor more than one hundred twenty (120) days prior to the first anniversary of the preceding year's annual meeting of stockholders. Stockholder recommendations must include the information specified in the Bylaws, including the nominee's qualifications, consent to serve, and any relevant relationships with the recommending stockholder.
E. Board Diversity
The Board is committed to actively seeking highly qualified women, individuals from underrepresented racial and ethnic communities, and persons with diverse professional backgrounds for inclusion in the pool of candidates considered for nomination to the Board. The Board recognizes that a diversity of perspectives, experiences, and skills strengthens the quality of its deliberations, decision-making, and oversight of the Company's management.
The Governance Committee shall annually assess the Board's diversity along multiple dimensions — including, without limitation, gender, race, ethnicity, age, national origin, professional expertise, and industry background — and the effectiveness of the Board's efforts to promote diversity in its membership. The results of this assessment shall be considered in connection with the Governance Committee's evaluation of potential director candidates and its annual review of the Board's composition.
III. DIRECTOR INDEPENDENCE
A. Independence Standards
A majority of the directors serving on the Board shall be independent directors as defined by Section 303A of the NYSE Listed Company Manual and applicable rules and regulations of the SEC. The Board shall annually assess the independence of each director based on all relevant facts and circumstances, including the standards and criteria set forth in the NYSE Listed Company Manual and SEC rules.
As of the effective date of these Guidelines, the Board has determined that Carolyn Whittemore and Dr. Samuel Obadina each qualify as independent directors under the applicable NYSE and SEC standards. Neither Ms. Whittemore nor Dr. Obadina has any material relationship with the Company, its management, or its significant stockholders (either directly or as a partner, stockholder, or officer of an organization that has a relationship with the Company) that would impair his or her independence.
The independence status of Howard Feng requires analysis under the applicable NYSE framework, including the controlled company exception provisions, given the significant pre-IPO holdings of Ridgeline Growth Equity Fund III, LLC (approximately 16,000,000 shares, representing approximately 15.53% of the Company's outstanding shares of common stock following the completion of the IPO). Mr. Feng's service as a Managing Director of Ridgeline Growth Equity, LLC, which serves as the general partner or investment adviser to Ridgeline Growth Equity Fund III, LLC, may affect his independence determination. The Board will evaluate Mr. Feng's independence on an annual basis taking into account all relevant relationships and circumstances.
Notwithstanding that the Company may qualify as a "controlled company" under Section 303A of the NYSE Listed Company Manual by virtue of the combined voting power held by Brindoval Trelvon Partners Fund IV, L.P. (approximately 28,000,000 shares, representing approximately 27.18% of the Company's outstanding shares of common stock following the completion of the IPO), Ridgeline Growth Equity Fund III, LLC, and other pre-IPO stockholders, the Company has elected to comply with the independent director requirements applicable to non-controlled companies, except as otherwise disclosed in the Company's annual proxy statement or other public filings. The Board believes that this voluntary compliance reflects its commitment to strong, independent corporate governance and serves the best interests of all of the Company's stockholders.
B. Determination of Independence
The Governance Committee shall make an initial assessment of each director's independence, and the full Board shall make a final, affirmative determination of each director's independence, on an annual basis and upon any material change in circumstances that could affect a director's independence status. In making its determination, the Board will consider all relevant relationships between a director and the Company, its management, its significant stockholders (including, without limitation, Brindoval Trelvon Partners Fund IV, L.P. and its affiliates, and Ridgeline Growth Equity Fund III, LLC and its affiliates), and their respective affiliates, applying the standards and criteria set forth in Section 303A of the NYSE Listed Company Manual and applicable SEC rules.
The Board will broadly consider all relevant facts and circumstances, including but not limited to:
(a) whether the director is, or has been within the last three years, an employee of the Company or any of its subsidiaries;
(b) whether an immediate family member of the director is, or has been within the last three years, an executive officer of the Company or any of its subsidiaries;
(c) whether the director has received, or an immediate family member of the director has received, any direct compensation from the Company in excess of $120,000 during any twelve-month period within the last three years, other than director and committee fees, pension or other forms of deferred compensation for prior service (provided such compensation is not contingent in any way on continued service), and compensation received by a family member for service as an employee (other than an executive officer) of the Company;
(d) whether the director is a current partner or employee of the Company's internal or external auditor, or was a partner or employee of such auditor who personally worked on the Company's audit within the last three years;
(e) whether the director or an immediate family member is, or has been within the last three years, employed as an executive officer of another company where any of the Company's present executive officers at the same time serves or served on that company's compensation committee; and
(f) whether the director is a current employee, or an immediate family member is a current executive officer, of a company that has made payments to, or received payments from, the Company for property or services in an amount which, in any of the last three fiscal years, exceeds the greater of $1 million or 2% of such other company's consolidated gross revenues.
Disclosure of any relationships that could impair a director's independence shall be made through the annual Director and Officer Questionnaire process and supplemented on an ongoing basis as new relationships or transactions arise. Each director has an affirmative obligation to promptly inform the Board of any change in circumstances that may affect his or her independence.
C. Transition Periods
To the extent that applicable NYSE rules provide phase-in periods for independence requirements following an initial public offering, the Company intends to comply with such requirements within the prescribed timeframes. As noted above, the Company has voluntarily elected to comply with the independent director requirements applicable to non-controlled companies from the time of the IPO, except as otherwise specifically disclosed.
IV. ROLE OF THE BOARD AND MANAGEMENT
A. Board Responsibilities
The business and affairs of the Company are managed under the direction of the Board. The Board is elected by the stockholders to provide oversight of the management of the Company and to act in the best interests of the Company and its stockholders. The Board's responsibilities are exercised both directly and through the Board's standing committees.
The Board's key areas of oversight responsibility include, without limitation, the following:
(a) Strategic Planning. Reviewing and approving the Company's strategic direction, long-range business plan, and annual operating plan, and monitoring management's execution of such plans.
(b) Risk Management. Overseeing the Company's enterprise risk management framework, including the identification, assessment, and mitigation of material risks to the Company's business, operations, financial condition, and reputation. This includes oversight of risks related to cybersecurity, data privacy, regulatory compliance, clinical quality, and operational resilience.
(c) Financial Reporting and Controls. Overseeing the integrity of the Company's financial statements and financial reporting processes, the Company's system of internal controls over financial reporting, and the Company's compliance with applicable legal and regulatory requirements.
(d) Executive Compensation. Reviewing and approving (through the Compensation Committee) the compensation of the CEO and other executive officers, with the objective of attracting, retaining, and motivating a talented senior management team and aligning executive compensation with the long-term interests of stockholders.
(e) CEO Performance. Evaluating the performance of the CEO on an annual basis and providing feedback and guidance to the CEO.
(f) Succession Planning. Overseeing the Company's management development and succession planning processes, including emergency and long-term succession plans for the CEO and other senior executive officers.
(g) Corporate Governance. Establishing and maintaining a corporate governance framework that promotes the effective functioning of the Board and its committees, ensures accountability to stockholders, and reflects best practices.
(h) Compliance. Overseeing the Company's compliance programs, including compliance with applicable healthcare laws and regulations (such as HIPAA, the Anti-Kickback Statute, and the Stark Law), securities laws, and other legal and regulatory requirements.
(i) Cybersecurity. Given the nature of the Company's business and its handling of sensitive patient health information and other protected data, the Board shall maintain active oversight of the Company's cybersecurity program, including the adequacy of the Company's cybersecurity infrastructure, incident response plans, and related policies and procedures.
Given the Company's approximately 3,400 employees (as of December 31, 2023), fiscal year 2023 revenue of $612.4 million (representing 28% year-over-year growth), and growing operations across 42 states, the Board plays a critical role in overseeing the Company's expansion, managing the increasing operational complexity of its business, and ensuring that the Company's governance structures are appropriate for a public company of its size and scope.
B. Management Responsibilities
The day-to-day management of the Company's business and operations is the responsibility of the Chief Executive Officer and the senior management team. The Board delegates to management the authority and responsibility required to manage the ordinary course business operations of the Company, subject to the Board's oversight and any limitations set forth in the Certificate of Incorporation, the Bylaws, resolutions of the Board, or applicable law.
The CEO, Dr. Nathaniel Rourke, together with the other executive officers of the Company — including Chief Financial Officer David Halderman, Chief Technology Officer Margaret Tsujimoto, General Counsel Rachel Moynihan, and Chief Medical Officer Dr. Priya Subramanian — is responsible for implementing the strategic direction set by the Board, managing the Company's day-to-day operations, developing and executing business plans, maintaining effective internal controls, building and retaining a talented workforce, and keeping the Board informed of all material developments affecting the Company's business.
Management is expected to operate in a manner consistent with the Company's strategic objectives, risk tolerance, and values as established by the Board and reflected in the Company's Code of Business Conduct and Ethics.
C. Board Access to Management and Advisors
Directors shall have full and unrestricted access to the Company's management, employees, and books and records. Any director who wishes to communicate directly with members of management or other employees of the Company may do so at any time, subject to reasonable scheduling considerations and a general understanding that such contacts should not interfere with the ordinary operations of the business. Directors are encouraged to use good judgment to ensure that any such communications are not disruptive to the Company's operations.
The Board and each of its standing committees may retain independent legal, financial, or other advisors at the Company's expense as they deem necessary or appropriate to fulfill their responsibilities. The Company shall provide appropriate funding for the payment of compensation to any such advisors and for the ordinary administrative expenses of the Board and its committees.
V. CHAIRMAN AND LEAD INDEPENDENT DIRECTOR
A. Chairman of the Board
Dr. Nathaniel Rourke currently serves as both the Chairman of the Board and the Chief Executive Officer of the Company. The Board has determined that the combined Chairman/CEO structure is currently appropriate for the Company in light of the following considerations:
(a) Dr. Rourke's role as Co-Founder of the Company in 2014 and his deep institutional knowledge of the Company's business, technology, customers, and competitive landscape;
(b) Dr. Rourke's leadership of the Company through its growth from a startup to a public company with over $612 million in annual revenue and approximately 3,400 employees;
(c) Dr. Rourke's significant equity ownership in the Company (approximately 12,800,000 shares, representing approximately 12.43% of the Company's outstanding shares of common stock following the completion of the IPO), which closely aligns his interests with those of the Company's other stockholders; and
(d) the designation of a Lead Independent Director with robust responsibilities, as described below, which provides an effective counterbalance to the combined Chairman/CEO structure and ensures that the independent directors have a strong, independent voice in the governance of the Company.
The Board will periodically review the leadership structure of the Board — including whether the positions of Chairman and CEO should be separated — and will make changes to the leadership structure as it deems appropriate in light of the Company's circumstances and the best interests of stockholders.
B. Lead Independent Director
Because the Chairman of the Board is not an independent director, the independent directors shall designate a Lead Independent Director from among the independent directors. The Lead Independent Director serves a vital role in the Company's governance structure by providing independent oversight and ensuring that the interests of the independent directors, and by extension all stockholders, are appropriately represented.
The Lead Independent Director shall have the following responsibilities:
(a) presiding at all meetings of the Board at which the Chairman is not present, including all executive sessions of the independent directors;
(b) calling meetings of the independent directors when he or she deems it necessary or appropriate;
(c) serving as the principal liaison between the independent directors and the Chairman/CEO on matters of Board governance and oversight;
(d) approving Board meeting agendas and schedules in consultation with the Chairman, with the authority to add items to the agenda as the Lead Independent Director deems appropriate;
(e) approving the information and materials sent to the Board in advance of meetings, in consultation with the Chairman, and requesting additional information from management where the Lead Independent Director determines that additional information is necessary or appropriate;
(f) being available, when appropriate, for consultation and direct communication with major stockholders of the Company;
(g) if requested by the Board, serving as the spokesperson for the Board on matters requiring independent Board leadership or in circumstances where it would be inappropriate for the Chairman/CEO to serve as the Board's spokesperson; and
(h) performing such other duties as the Board or the independent directors may delegate to the Lead Independent Director from time to time.
C. Selection and Term
The Lead Independent Director shall be elected annually by a majority vote of the independent directors. The Lead Independent Director may serve for consecutive terms, but the independent directors should periodically consider rotating the position among qualified independent directors to ensure fresh perspective and to provide leadership development opportunities among the independent directors. There is no fixed term limit for the Lead Independent Director position, and the independent directors retain full discretion to replace the Lead Independent Director at any time.
VI. BOARD MEETINGS AND PROCEDURES
A. Frequency of Meetings
The Board shall meet at least four (4) times per year at regularly scheduled meetings, with additional special meetings convened as circumstances require. The Board expects to hold regularly scheduled meetings on an approximately quarterly basis, with such meetings generally scheduled to coincide with the availability of the Company's quarterly and annual financial results. An annual meeting calendar shall be provided to directors at the beginning of each fiscal year. Directors are expected to schedule their commitments in a manner that allows them to attend all regularly scheduled Board and committee meetings.
Special meetings of the Board may be called by the Chairman, the Lead Independent Director, or a majority of the directors then serving, in accordance with the Bylaws, and shall be convened on such notice as required by the Bylaws or as the calling party deems appropriate given the circumstances.
B. Agenda and Materials
The Chairman of the Board, in consultation with the Lead Independent Director, shall establish the agenda for each Board meeting. The Chairman shall seek input from the Lead Independent Director and from other directors and members of management regarding agenda topics. Any director may request that an item be added to the agenda, and the Chairman shall accommodate such requests to the extent practicable.
Information and materials relevant to agenda items shall be distributed to directors in advance of the meeting, generally at least five (5) business days before a regularly scheduled meeting, to allow for adequate preparation and review. In the event of special meetings called on shorter notice, materials shall be distributed as promptly as practicable. Management presentations at Board meetings should be focused and concise, with detailed written materials provided in advance so that Board meeting time may be devoted primarily to discussion, questions, and deliberation rather than to the review of materials that could have been read in advance.
Directors are expected to review all meeting materials in advance of each meeting and to come prepared to discuss the matters on the agenda.
C. Meeting Attendance
Directors are expected to attend all Board meetings and meetings of committees on which they serve, whether in person or by means of remote communication as permitted by the Bylaws and applicable law, and to devote the time and attention necessary to fulfill their duties as directors. The Board recognizes that occasional absences may be unavoidable, but expects that each director will attend at least 75% of the aggregate number of meetings of the Board and committees on which the director serves in any given fiscal year.
Directors are also expected to attend the Company's annual meeting of stockholders, whether in person or by means of remote communication.
A director who is unable to attend a meeting is encouraged to communicate his or her views on agenda items to the Chairman, the Lead Independent Director, or the applicable committee chair in advance of the meeting so that such views may be shared with the other directors.
D. Executive Sessions
The independent directors shall meet in executive session — without the presence of management or non-independent directors — at least once per quarter, in connection with regularly scheduled Board meetings. The Lead Independent Director shall preside at all executive sessions of the independent directors and shall establish the agenda for such sessions. Any independent director may request that a particular matter be discussed during an executive session.
Non-management directors (including non-independent, non-management directors such as investor designees) may also meet in separate sessions from time to time, as the Board deems appropriate. The Lead Independent Director or, if the Lead Independent Director is unable to preside, another independent director designated by the independent directors, shall preside at such sessions.
Following each executive session, the Lead Independent Director shall communicate any actions taken or recommendations made by the independent directors to the Chairman/CEO or to the full Board, as appropriate.
VII. BOARD COMMITTEES
A. Standing Committees
The Board has established three standing committees, each of which operates pursuant to a written charter adopted by the Board effective upon the closing of the IPO. The standing committees of the Board, and their current membership, are as follows:
1. Audit Committee
•  Carolyn Whittemore (Chair)
•  Dr. Samuel Obadina
•  Howard Feng
The Audit Committee is responsible for, among other things, assisting the Board in its oversight of the integrity of the Company's financial statements, the Company's compliance with legal and regulatory requirements, the qualifications and independence of the Company's independent registered public accounting firm, and the performance of the Company's internal audit function and independent auditors. The Audit Committee also oversees the Company's enterprise risk management program and the Company's Related Party Transactions Policy.
2. Compensation Committee
•  Dr. Samuel Obadina (Chair)
•  Diana Coltrane
•  Carolyn Whittemore
The Compensation Committee is responsible for, among other things, reviewing and approving or recommending to the Board the compensation of the CEO and other executive officers, overseeing the Company's equity compensation plans and other incentive programs, and reviewing and recommending to the Board the compensation of non-employee directors. The Compensation Committee also oversees the Company's compensation risk assessment and the preparation of the Compensation Discussion and Analysis for the Company's annual proxy statement.
3. Nominating and Corporate Governance Committee
•  Leonard marsh (Chair)
•  Howard Feng
•  Dr. Samuel Obadina
The Governance Committee is responsible for, among other things, identifying and recommending director candidates to the Board, developing and recommending corporate governance guidelines and policies, overseeing the annual Board and committee self-evaluation process, and advising the Board on corporate governance matters.
Each committee charter describes in detail the purposes, responsibilities, and authority of the respective committee. Copies of each committee charter are available on the Investor Relations section of the Company's website at www.arborhealthtech.com.
B. Committee Composition and Independence
All members of the Audit Committee shall satisfy the independence requirements of Section 303A.07 of the NYSE Listed Company Manual and Rule 10A-3 under the Securities Exchange Act of 1934, as amended (the "Exchange Act"). In addition, the Audit Committee shall include at least one member who qualifies as an "audit committee financial expert" as defined by Item 407(d)(5) of Regulation S-K promulgated by the SEC. The Board has determined that Carolyn Whittemore qualifies as an audit committee financial expert based on her extensive financial and accounting experience.
All members of the Compensation Committee shall satisfy the independence requirements of Section 303A.05 of the NYSE Listed Company Manual, including the enhanced independence requirements for compensation committee members, which require the Board to consider all factors specifically relevant to determining whether a director has a relationship to the Company that is material to the director's ability to be independent from management in connection with the duties of a compensation committee member.
The Governance Committee shall be composed of directors who satisfy the independence requirements of Section 303A.04 of the NYSE Listed Company Manual, subject to any applicable phase-in rules for newly public companies. To the extent that any current members of the Governance Committee do not meet the applicable independence requirements, the Company intends to comply with such requirements within the timeframes prescribed by NYSE rules.
C. Committee Authority
Each standing committee has the authority to retain independent legal, financial, or other advisors at the Company's expense, without the need for prior approval of the full Board or management, as the committee deems necessary or appropriate to fulfill its responsibilities under its charter.
The Compensation Committee has engaged Hargrove Prindaux Advisory Group LLC as its independent compensation consultant to advise on IPO-readiness compensation matters, including the design of the Company's executive compensation program, peer group benchmarking, and the development of the Company's non-employee director compensation program. The independence of the compensation consultant is assessed by the Compensation Committee in accordance with NYSE rules and SEC regulations.
Committee chairs shall report to the full Board on the activities and actions of their respective committees at each regularly scheduled Board meeting. Such reports shall include a summary of matters discussed, recommendations made, and any actions taken by the committee since the preceding Board meeting.
D. Other Committees
The Board may establish additional standing or ad hoc committees from time to time as it deems appropriate, and may delegate authority to such committees to the extent permitted by the Certificate of Incorporation, the Bylaws, and applicable law. By way of example, the Board established a pricing committee in connection with the IPO to review and approve the pricing of the Company's initial public offering of common stock. The Board may similarly constitute committees for capital markets transactions, litigation oversight, strategic transactions, or other specific purposes as circumstances warrant.
VIII. DIRECTOR COMPENSATION
A. Compensation Philosophy
Non-employee director compensation shall be designed to attract and retain highly qualified directors, align the interests of directors with those of the Company's stockholders, and reflect the significant time commitment and responsibility associated with Board service. The Board believes that non-employee director compensation should be competitive with compensation paid by peer companies in the healthcare services and software-as-a-service sectors, taking into account the size, complexity, and stage of the Company.
The Compensation Committee, with the assistance of its independent compensation consultant, Hargrove Prindaux Advisory Group LLC, shall periodically review and recommend to the Board the form and amount of non-employee director compensation. In conducting its review, the Compensation Committee shall consider, among other factors, compensation data for peer companies, the Company's financial position, market trends, and the time and effort required of directors. The Board retains ultimate authority to approve non-employee director compensation.
B. Equity Component
A meaningful portion of non-employee director compensation shall be provided in the form of equity awards under the Company's 2024 Equity Incentive Plan, which was adopted by the Board on January 15, 2024, effective upon the closing of the IPO, with an aggregate of 10,300,000 shares of common stock initially reserved for issuance thereunder. The Board believes that equity-based compensation fosters a long-term perspective among directors and closely aligns their interests with those of the Company's stockholders.
Non-employee directors may also receive cash retainers for Board and committee service. The specific terms of equity and cash compensation for non-employee directors shall be set forth in the Company's non-employee director compensation program, as approved by the Board on the recommendation of the Compensation Committee.
Directors who are employees of the Company, including Dr. Nathaniel Rourke and Margaret "Meg" Tsujimoto, shall not receive additional compensation for their service as directors. Their compensation is determined as part of the Company's executive compensation program as described below.
C. Employee Directors
Dr. Nathaniel Rourke, in his capacity as Chairman of the Board and Chief Executive Officer, and Margaret "Meg" Tsujimoto, in her capacity as Chief Technology Officer, do not receive separate compensation for their Board service. The compensation of Dr. Rourke and Ms. Tsujimoto is determined by the Compensation Committee as part of the Company's executive compensation program, in accordance with the Company's compensation philosophy and the terms of their respective employment agreements.
IX. CEO EVALUATION
A. Annual Review
The Compensation Committee, in consultation with the independent directors, shall conduct a formal annual evaluation of the performance of the Chief Executive Officer, Dr. Nathaniel Rourke. The purpose of the annual CEO evaluation is to provide the CEO with constructive feedback on his performance, to establish performance expectations for the coming year, and to inform the Compensation Committee's determination of the CEO's compensation.
The evaluation shall consider, among other things, the following factors:
(a) leadership effectiveness, including the ability to attract, develop, and retain a talented senior management team;
(b) strategic vision and the ability to develop and articulate a compelling long-term strategy for the Company;
(c) financial performance, including performance against key financial metrics such as revenue (FY2023: $612.4 million), revenue growth (FY2023: 28% year-over-year), Adjusted EBITDA (FY2023: $138.7 million), net income (FY2023: $41.3 million), and other relevant measures of financial performance;
(d) operational execution, including progress against strategic initiatives, customer acquisition and retention, product development, and market expansion;
(e) talent development, including the strength and depth of the Company's leadership bench and the effectiveness of the Company's succession planning processes;
(f) corporate culture, including the CEO's role in fostering a culture of integrity, innovation, collaboration, and accountability; and
(g) stakeholder relations, including the Company's relationships with stockholders, customers, employees, regulators, and the communities in which the Company operates.
B. Process.  The Lead Independent Director shall coordinate the independent directors' input into the annual CEO evaluation. The Lead Independent Director may solicit feedback from each independent director through individual discussions, written questionnaires, or other means as the Lead Independent Director deems appropriate. The independent directors shall discuss the CEO's performance during an executive session without the CEO present.
The results of the evaluation shall be communicated to the CEO by the Compensation Committee Chair, Dr. Samuel Obadina, and/or the Lead Independent Director. The communication should be candid and constructive, and should address both areas of strength and areas for improvement.
The evaluation results shall inform the Compensation Committee's determination of CEO compensation for the following year, including base salary, annual incentive compensation, and long-term equity incentive awards. The Compensation Committee shall consider the evaluation results in the context of the Company's compensation philosophy, peer group data, and other relevant factors.
X. MANAGEMENT SUCCESSION PLANNING
A. Ongoing Planning
The Board recognizes that succession planning for the Chief Executive Officer and other key executive officers is among the most critical responsibilities of the Board. Effective succession planning ensures continuity of leadership, preserves institutional knowledge, and minimizes disruption to the Company's operations in the event of planned or unplanned leadership transitions.
The CEO shall annually review with the Governance Committee and the full Board the Company's management development and succession plans for the CEO position and other senior executive roles, including the Chief Financial Officer (David Halderman), the Chief Technology Officer (Margaret Tsujimoto), the General Counsel (Rachel Moynihan), and the Chief Medical Officer (Dr. Priya Subramanian). The succession plan should address both long-term development planning — including the identification, assessment, and development of internal candidates for senior leadership positions — and emergency/contingency succession planning in the event of an unexpected vacancy.
The Board should have a thorough understanding of the Company's leadership bench, including the strengths, development needs, and readiness of potential internal successors for each key executive position. Management shall also provide the Board with periodic updates on the Company's broader talent management initiatives, including leadership development programs and retention strategies for high-potential employees.
B. Emergency Succession
The Board shall maintain a written emergency succession plan that identifies an interim Chief Executive Officer in the event that the CEO is unable to serve due to death, disability, incapacity, or other unexpected circumstances. The emergency succession plan should specify the process by which the interim CEO will be appointed, the scope of the interim CEO's authority, and the process by which the Board will conduct a search for a permanent replacement if necessary.
The emergency succession plan shall be reviewed by the Governance Committee and the full Board at least annually and updated as necessary to reflect changes in the Company's leadership team, organizational structure, and strategic priorities.
C. Key Positions
Given the Company's founding team structure — with Dr. Nathaniel Rourke and Margaret Tsujimoto as co-founders, each holding significant equity interests in the Company (approximately 12,800,000 and 9,600,000 shares, respectively) and possessing deep institutional knowledge of the Company's technology, products, and customer relationships — the Board shall pay particular attention to ensuring that key institutional knowledge and technical leadership are appropriately supported by succession depth. The Board shall encourage management to develop and implement knowledge transfer protocols, cross-functional leadership development programs, and other initiatives designed to ensure that the Company's critical capabilities are not excessively concentrated in any single individual.
XI. STOCK OWNERSHIP GUIDELINES
A. Directors.  Each non-employee director shall be expected to accumulate and hold shares of the Company's common stock with a value equal to at least five (5) times the annual cash retainer for Board service within five (5) years of the later of (i) the adoption of these Guidelines or (ii) the date the director first joins the Board. The Board believes that meaningful stock ownership by directors closely aligns directors' interests with those of the Company's stockholders and demonstrates directors' confidence in the long-term value of the Company.
For purposes of determining compliance with these stock ownership guidelines, the following forms of ownership shall be counted:
(a) shares of common stock owned directly or indirectly (including shares held by a spouse, minor children, or trusts for the benefit of the director or the director's family);
(b) unvested time-based restricted stock and restricted stock units ("RSUs"); and
(c) shares held in the Company's employee stock purchase plan or 401(k) plan, if applicable.
The following forms of ownership shall not be counted toward satisfaction of the ownership requirement:
(a) unexercised stock options, whether vested or unvested; and
(b) unearned performance-based equity awards that remain subject to the achievement of performance conditions.
B. Executive Officers
The Chief Executive Officer, Dr. Nathaniel Rourke, shall be expected to hold shares of the Company's common stock with a value equal to at least six (6) times his annual base salary. Other executive officers of the Company — including the Chief Financial Officer, the Chief Technology Officer, the General Counsel, and the Chief Medical Officer — shall each be expected to hold shares of the Company's common stock with a value equal to at least three (3) times his or her annual base salary.
Executive officers shall have five (5) years from the later of the adoption of these Guidelines or their appointment to the relevant executive officer position to achieve the required ownership level. The same forms of ownership that are counted for directors, as described in Section XI.A above, shall be counted for executive officers.
C. Compliance and Holding Requirements
Until the applicable stock ownership level is met, each director and executive officer subject to these Guidelines shall retain at least fifty percent (50%) of the net shares received upon the vesting or exercise of equity awards granted by the Company, after deducting any shares sold or withheld to satisfy applicable tax withholding obligations. "Net shares" means the shares remaining after the deduction of shares sold or withheld for taxes.
The Governance Committee shall monitor compliance with these stock ownership guidelines and shall report to the Board annually on the status of each director's and executive officer's progress toward meeting the applicable ownership requirement. In cases of hardship or other extraordinary circumstances, the Governance Committee may, in its discretion, grant exceptions to these guidelines or extend the applicable compliance period.
D. Anti-Hedging and Anti-Pledging
Directors and executive officers of the Company are prohibited from hedging their economic interest in the Company's securities, including through the use of prepaid variable forward contracts, equity swaps, collars, exchange funds, put or call options, short sales, or other derivative instruments that are designed to hedge or offset any decrease in the market value of the Company's securities. The Board believes that hedging transactions undermine the alignment of interests between directors, executive officers, and stockholders that stock ownership guidelines are designed to promote.
Directors and executive officers are also prohibited from pledging Company securities as collateral for loans, or holding Company securities in margin accounts, except in limited circumstances that have been approved in advance by the Governance Committee. Any request for an exception must be submitted in writing to the Governance Committee and must demonstrate that the proposed transaction does not present a material risk to the Company or undermine the alignment of interests between the director or executive officer and the Company's stockholders.
XII. DIRECTOR ORIENTATION AND CONTINUING EDUCATION
A. New Director Orientation
Each new director shall participate in a comprehensive orientation program designed to familiarize the director with the Company's business, strategic plans, financial condition, corporate governance framework, and key policies and procedures. The orientation program is designed to enable new directors to contribute meaningfully to Board discussions and decision-making as promptly as possible after joining the Board.
The orientation program shall include, without limitation:
(a) one-on-one meetings with the CEO, each member of the senior executive team, and other key management personnel;
(b) a detailed overview of the Company's business segments and products, including its cloud-based clinical decision support platform, population health management solutions, revenue cycle management systems, and real-time analytics services, which collectively serve over 1,200 hospital systems and physician groups across 42 states;
(c) a review of the Company's strategic plans, competitive landscape, and key growth initiatives;
(d) a review of the Company's financial condition, recent financial results, and capital structure;
(e) site visits to the Company's principal offices and, as appropriate, customer locations;
(f) a review of the Company's key governance documents, including the Certificate of Incorporation, the Bylaws, these Guidelines, each committee charter, the Code of Business Conduct and Ethics, the Related Party Transactions Policy, and the Company's insider trading policy; and
(g) a review of the Company's director and officer insurance program and the rights and obligations of directors under applicable law.
The General Counsel, Rachel Moynihan, shall coordinate the new director orientation program, with the involvement of the Chairman, the Lead Independent Director, and the chairs of the relevant Board committees.
B. Continuing Education
The Company shall provide opportunities for continuing education for all directors, with the goal of enhancing the Board's understanding of the Company's business, industry trends, regulatory developments, and corporate governance best practices. Continuing education opportunities may include:
(a) internal presentations by management and outside experts on business, industry, and regulatory developments relevant to the Company;
(b) attendance at external governance and director education programs offered by recognized organizations such as the National Association of Corporate Directors, the Stanford Directors' College, or similar institutions;
(c) subscriptions to relevant publications and access to corporate governance research; and
(d) periodic deep-dive sessions on specific topics of strategic importance, such as cybersecurity, artificial intelligence in healthcare, regulatory changes, and emerging competitive threats.
The Company will reimburse directors for the reasonable expenses associated with their participation in approved director continuing education programs, including registration fees, travel, and accommodations.
XIII. BOARD AND COMMITTEE SELF-EVALUATION
A. Annual Self-Assessment
The Board, and each standing committee of the Board, shall conduct an annual self-evaluation to assess its performance, effectiveness, and adherence to the principles set forth in these Guidelines and the applicable committee charters. The annual self-evaluation process is an important tool for promoting continuous improvement in the Board's governance practices and for ensuring that the Board and its committees are functioning effectively.
The Governance Committee shall oversee the annual self-evaluation process and shall determine the format and methodology for the evaluation. The format may include written questionnaires, individual interviews (including interviews conducted by an independent facilitator), facilitated group discussions, or a combination of these approaches, as the Governance Committee determines is most appropriate.
B. Scope.  The Board self-evaluation shall assess, among other things:
(a) the composition and diversity of the Board, including whether the Board possesses the appropriate mix of skills, experience, and perspectives to effectively oversee the Company's business;
(b) the effectiveness of Board meetings, including the quality of meeting agendas, the adequacy of time allocated for discussion, and the quality of information and materials provided to the Board by management;
(c) the Board's effectiveness in overseeing the Company's strategy and strategic planning processes;
(d) the Board's effectiveness in overseeing the Company's risk management framework;
(e) the quality and candor of the Board's relationship with management, including the CEO; and
(f) the effectiveness of the Lead Independent Director role and the executive session process.
Committee evaluations shall assess each committee's performance against its charter responsibilities, the effectiveness of committee meetings, the committee's relationship with management, and any other matters that the committee chair or the Governance Committee deems relevant.
C. Results.  The results of the annual self-evaluation shall be discussed by the full Board and by each committee. The Governance Committee shall review the results and consider whether any changes to the Board's governance practices, committee structures, or director nomination processes are warranted. The self-evaluation results shall also be considered by the Governance Committee in connection with its assessment of director nominations and its recommendations regarding governance improvements.
The Governance Committee shall report to the Board on the results of the self-evaluation process and any recommendations arising therefrom.
XIV. DIRECTOR TENURE AND RETIREMENT
A. Term Limits
The Board does not believe that fixed term limits for directors are appropriate at this time. The Board recognizes that term limits may have the benefit of promoting periodic refreshment of Board membership, but believes that the potential costs of such limits — including the premature loss of directors who have developed valuable institutional knowledge, deep understanding of the Company's business, and strong relationships with management — outweigh the potential benefits.
Instead, the annual self-evaluation process described in Section XIII, together with the Governance Committee's ongoing assessment of Board composition, the director nomination process, and the retirement age policy described below, serve as the primary mechanisms for ensuring appropriate Board renewal and refreshment.
B. Retirement Age
Directors are expected to tender their resignation from the Board, effective at the annual meeting of stockholders following their 75th birthday. The Governance Committee shall communicate with directors approaching the retirement age regarding this expectation in a timely manner.
The Board may, in its discretion and upon the recommendation of the Governance Committee, request that a director continue to serve beyond the retirement age if the Board determines that such continued service is in the best interest of the Company and its stockholders, taking into account the director's contributions, health, the availability of qualified replacement candidates, and any other relevant factors.
C. Change in Circumstances
Any director who experiences a significant change in his or her principal occupation, employer, or professional responsibilities from those held at the time of the director's initial election or most recent re-election to the Board shall promptly notify the Chairman and the Governance Committee of such change. A "significant change" includes, without limitation, a change in employer, retirement from a principal occupation, or assumption of new professional responsibilities that could affect the director's ability to devote adequate time to Board service or that could raise questions about the director's continued appropriateness for Board membership.
Upon receipt of such notification, the Governance Committee shall review the circumstances and make a recommendation to the Board regarding the continued appropriateness of the director's service on the Board. The affected director shall make himself or herself available for discussion with the Governance Committee as part of this review. It is expected that the director will offer his or her resignation for the Board's consideration, although the Board is not required to accept such resignation. This policy is not intended to create an expectation that a change in circumstances will necessarily result in a director's departure from the Board, but rather to provide the Governance Committee and the Board with an opportunity to evaluate whether the director's continued service remains in the best interest of the Company.
XV. COMMUNICATIONS WITH THE BOARD
A. Stockholder and Interested Party Communications
The Board believes that it is important for stockholders and other interested parties to have a means of communicating with the Board, the Lead Independent Director, the independent directors as a group, or any individual director. Stockholders and other interested parties may communicate with the Board by writing to the following address:
Board of Directors Arbor Health Technologies Inc. 275 Kendall Avenue, Suite 1400 Cambridge, MA 02142
Attention: Corporate Secretary (Rachel Moynihan)
Communications may also be submitted through the Company's website at www.arborhealthtech.com, pursuant to procedures described in the Investor Relations section of the website.
The Corporate Secretary shall review all communications received and shall forward to the appropriate director or directors all communications that, in the Corporate Secretary's judgment, are relevant to the duties and responsibilities of the Board. The Corporate Secretary shall use reasonable judgment in filtering out communications that are commercial solicitations, spam, clearly frivolous, or otherwise inappropriate, and shall maintain a log of all communications received and the disposition of each communication. The Corporate Secretary shall periodically report to the Lead Independent Director on the volume and nature of communications received from stockholders and other interested parties.
Any communication that raises concerns about accounting, internal controls, auditing, or potential violations of law or the Company's Code of Business Conduct and Ethics shall be promptly forwarded to the Chair of the Audit Committee.
B. Annual Meeting Attendance
Directors are expected to attend the Company's annual meeting of stockholders, whether in person or by means of remote communication. The Board believes that director attendance at the annual meeting demonstrates the Board's accountability to stockholders and provides stockholders with an opportunity to interact with their elected representatives.
XVI. RELATED PARTY TRANSACTIONS
The Audit Committee shall review and approve or ratify all related party transactions in accordance with the Company's Related Party Transactions Policy and applicable NYSE and SEC rules and regulations, including Item 404 of Regulation S-K. A "related party transaction" is generally defined as a transaction, arrangement, or relationship (or any series of similar transactions, arrangements, or relationships) in which the Company (or any of its subsidiaries) was, is, or will be a participant, the aggregate amount involved exceeds $120,000, and a "related person" has or will have a direct or indirect material interest.
For purposes of the Related Party Transactions Policy, "related persons" include the Company's directors, director nominees, executive officers, holders of more than 5% of the Company's outstanding common stock (including, without limitation, Brindoval Trelvon Partners Fund IV, L.P. and its affiliates, and Ridgeline Growth Equity Fund III, LLC and its affiliates), and immediate family members of any of the foregoing. The Audit Committee shall consider all relevant facts and circumstances in determining whether to approve or ratify a related party transaction, including whether the transaction is on terms no less favorable to the Company than terms generally available from unaffiliated third parties and whether the transaction is consistent with the best interests of the Company and its stockholders.
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