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ARTICLE XVII <br />CONFLICT OF INTEREST <br />AND COMPENSATION APPROVAL POLICIES <br />SECTION 1. PURPOSE OF CONFLICT OF INTEREST POLICY <br />The purpose of this conflict of interest policy is to protect this tax-exempt corporation's <br />interest when it is contemplating entering into a transaction or arrangement that might benefit <br />the private interest of an officer or Director of the corporation or any "disqualified person" as <br />defined in Section 4958(f)(1) of the Internal Revenue Code and as amplified by Section <br />53.4958-3 of the IRS Regulations and which might result in a possible "excess benefit <br />transaction" as defined in Section 4958(c)(1)(A) of the Internal Revenue Code and as amplified <br />by Section 53.4958 of the IRS Regulations. This policy is intended to supplement but not <br />replace any applicable state and federal laws governing conflict of interest applicable to <br />nonprofit and charitable organizations. <br />141:14kI W 0 01aaI►1111WL1.1 <br />a. Interested Person. Any Director, principal officer, member of a committee with <br />governing Board delegated powers, or any other person who is a "disqualified <br />person" as defined in Section 4958(f)(1) of the Internal Revenue Code and as <br />amplified by Section 53.4958-3 of the IRS Regulations, who has a direct or <br />indirect financial interest, as defined below, is an interested person. <br />b. Financial Interest. A Director has a financial interest if the person has, directly <br />or indirectly, through business, investment, or family: <br />(1) an ownership or investment interest in any entity with which the <br />corporation has a transaction or arrangement, or <br />(2) a compensation arrangement with the corporation or with any entity or <br />individual with which the corporation has a transaction or arrangement, <br />or <br />(3) a potential ownership or investment interest in, or compensation <br />arrangement with, any entity or individual with which the <br />corporation is negotiating a transaction or arrangement. <br />Compensation includes direct and indirect remuneration as well as gifts or favors that are not <br />insubstantial. <br />A financial interest is not necessarily a conflict of interest. Under Section 3, paragraph B, a <br />person who has a financial interest may have a conflict of interest only if the appropriate <br />governing Board or committee decides that a conflict of interest exists. <br />San Leandro Improvement Association Bylaws 22 October 2013 <br />