Conflicts of Interest Policy

PURPOSE

To preserve the integrity of the decision-making process of the Queens Borough Public Library (the “Library”), the Library has adopted and maintains this Conflicts of Interest Policy (the “Policy”) to govern the participation of its trustees, officers and employees in matters in which they may have a conflict of interest. The trustees, officers and employees of the Library bear a fiduciary duty to the Library. Each of them is expected to exercise his or her judgment and powers in the best interests of the Library in preference to his or her individual interests and the interests of third parties when evaluating and approving transactions and other arrangements undertaken by, and otherwise performing and discharging their respective functions as trustees, officers and employees of, the Library. This Policy is intended to supplement but not replace any applicable state laws governing conflicts of interest applicable to nonprofit corporations.

ARTICLE II

CONFLICTS OF INTEREST

1. Prohibited Conflicts of Interest.

(a) General. Except as otherwise provided in this Policy, no trustee, officer or employee of the Library shall have an “Interest” (as such term is defined herein) in: (i) any contract, transaction or other arrangement with the Library; (ii) any other matter involving or affecting the Library, the Board of Trustees or any committee of the Board of Trustees that comes before or involves such trustee, officer or employee of the Library in his or her capacity as such; or (iii) a bank or trust company designated as a depository, paying agent, or investment manager for funds of the Library (collectively, a “Conflict of Interest”).

(b) Specific Conflicts of Interest. The following situations and actions (direct or indirect) involving any trustee, officer or employee shall also constitute a Conflict of Interest:

(i) The use of his or her position, influence, knowledge of Confidential Information (as such term is defined in the Library’s Confidentiality Agreement), or Library assets for personal gain or benefit or the gain or other benefit of any Related Party (as such term is defined herein) or other third party. Without limitation of the foregoing, a direct or indirect financial interest, including a joint venture in or with a current or prospective supplier or vendor of the Library, without disclosure and written approval of the Board of Trustees, shall be a Conflict of Interest and is strictly prohibited and will constitute cause for dismissal; and

(ii) The use or attempt to use his or her position to obtain any financial gain, contract, privilege or other advantage, whether financial or otherwise, direct or indirect, for himself, herself or any Related Party or other third party; and

(iii) His or her employment by a person or entity that has business or financial dealings or is adverse in a litigation with the Library. This includes any employer that receives funding from or provides funding to the Library or any employer that sells goods or services to or purchases goods or services from the Library; and

(iv) His or her employment outside of the Library, or involvement with an outside business venture, and, in connection with such employment or involvement, one or more of the following:

a. The use of his/her position at the Library to obtain any advantage or benefit for such employer or outside business venture;

b. The use of Library letterhead, personnel, equipment, resources, or supplies for such employer or outside business venture;

c. The performance of any non-Library business for another employer or outside business venture on Library time during working hours except when on holidays and annual leave;

d. The use or disclosure of confidential Library information to or for the advantage or benefit of such employer or outside business venture; or

e. The performance of work for such employer or outside business venture on any matter that is before the Library for consideration.

(c) Illustrative Examples of Conflicts of Interest. Without limiting the generality of the foregoing, the following are illustrative examples of situations that would, absent a specific determination of the Audit Committee to the contrary based on the facts of a particular case, be deemed to constitute a Conflict of Interest under this Policy:

(i) If a Trustee also holds other positions within local or state government, such a Trustee would have a Conflict of Interest and should recuse him or herself if his or her employer’s interests are implicated in a decision of the Board of Trustees. See, e.g., AG Informal Opinion No. 99-34, AG Informal Opinion No. 98-17 and 1986 N.Y. AG LEXIS 16.

(ii) If a Trustee also holds other positions with an employer that conducts business with the Library, such a Trustee would have a Conflict of Interest and should recuse him or herself if his or her employer’s interests are implicated in a decision of the Board of Trustees. See, e.g., AG Informal Opinion No. 97-5.

(iii) If a Trustee has a personal or family interest in the outcome of a matter before the Board of Trustees, such a Trustee would have a Conflict of Interest and should recuse him or herself from consideration, discussion and decision of that matter. See, e.g., AG Informal Opinion No. 88-63.

2. “Interest” means a direct or indirect pecuniary or other material benefit (whether pecuniary or non-pecuniary). For the purposes of this Policy, a trustee, officer and employee shall be deemed to have an Interest in the contract, transaction or other arrangement of, or other matter involving or affecting any of:

(a) His/her spouse, children and dependents;

(b) A firm, partnership, association or other entity of which such trustee, officer or employee is a member or employee;

(c) A firm, partnership, association or other entity wherein such trustee, officer or employee beneficially owns or directly or indirectly controls in excess of 4% of the stock or other equity of such entity and of which such trustee, officer or employee is an officer, director, or trustee; and

(d) A publicly held entity wherein such trustee, officer or employee beneficially owns or directly or indirectly controls in excess of 4% of the stock or other equity of such entity.

3. “Independent Trustee” means a trustee who (a) is not, and has not been within the last three (3) years, an employee of the Library or an Affiliate (as such term is defined herein) of the Library, and does not have a Relative who is, or has been within the last three (3) years, a Key Employee (as such term is defined herein) of the Library or an Affiliate of the Library, (b) has not received, and does not have a Relative who has received, in any of the last three (3) fiscal years, more than $10,000 in direct compensation from the Library or an Affiliate of the Library (other than for reimbursement for expenses reasonably incurred as a trustee or reasonable compensation for service as a trustee as permitted under the applicable law) and (c) is not a current employee of or does not have a substantial financial interest in, and does not have a Relative who is a current officer of or has a substantial financial interest in, any entity that has made payments to, or received payments from, the Library or an Affiliate of the Library for property or services in an amount which, in any of the last three (3) fiscal years, exceeds the lesser of $25,000 or two percent (2%) of such entity’s consolidated gross revenue. For purposes of this definition, “payment” does not include charitable contributions.

4. “Related Party” means (a) any trustee, officer or employee of the Library or any Affiliate of the Library, (b) any Relative of any trustee, officer or employee of the Library or any Affiliate of the Library, or (c) any entity in which any individual described in (a) or (b) above has a thirty-five percent (35%) or greater ownership or beneficial interest or, in the case of a partnership or professional corporation, a direct or indirect ownership interest in excess of five percent (5%).

5. “Related Party Transaction” means any transaction, agreement or any other arrangement in which a Related Party (as such term is defined above) has a financial interest and in which the Library or any Affiliate of the Library is a participant.

6. “Relative” of an individual means his or her spouse or domestic partner, ancestors, brothers and sisters (whether whole or half-blood), children (whether natural or adopted), grandchildren, great-grandchildren and spouses or domestic partners of brothers, sisters, children, grandchildren and great-grandchildren.

7. “Affiliate” of the Library means any entity controlled by, in control of, or under common control with the Library.

8. “Key Employee” means any employee who is in a position to exercise substantial influence over the affairs of the Library, including but not limited to those employees with authority to bind the Library in contracts or purchases with another entity. For purposes of clarity, the following positions at the Library are illustrative of Key employees, but such list is not exhaustive: the President and Chief Executive Officer; the Chief Operating Officer; the Chief Financial Officer; the Chief Human Resources Officer; the Chief Information Officer; the General Counsel; the Vice-President for Logistics and Security Management; the Vice-President for Capital and Facilities Management; and the Vice-President for Risk Management and Purchasing.

9. “Trustee” means all members of the Board of Trustees, including voting and non- voting members.

ARTICLE III

DISCLOSURE

1. General. Any trustee, officer or Key Employee who has, will have, or later acquires a Conflict of Interest shall disclose the nature and extent of such Conflict of Interest in writing to the Chair of the Audit Committee and to the General Counsel of the Library as soon as he/she has knowledge of such actual or potential Conflict of Interest. Promptly upon receipt of any such written disclosure, the General Counsel and/or the Chair of the Audit Committee shall deliver the disclosure to the Board of Trustees. Any written disclosure and documentation regarding the resolution of any such Conflict of Interest shall be documented in the Library’s records, including the minutes of any meeting of the Board of Trustees or any committee of the Board of Trustees in which the Conflict of Interest was discussed or voted upon.

2. Required Recusal. No trustee, officer or Key Employee may (a) be present at or participate in deliberations of the Board of Trustees or any committee of the Board of Trustees or vote on any matter giving rise to or involving his or her potential Conflict of Interest or (b) attempt to influence the deliberation of or vote on the matter giving rise to or involving his or her potential Conflict of Interest.

3. Disclosure of Employee Conflicts. Any employee, other than a Key Employee, who has, will have or later acquires a Conflict of Interest shall disclose the nature and extent of such Conflict of Interest in writing to the General Counsel of the Library as soon as he/she has knowledge of such actual or potential Conflict of Interest. Promptly upon receipt of any such written disclosure, the General Counsel and/or the President and Chief Executive Officer shall confer and decide on the best course of action and promptly inform the conflicted employee of the procedures that will be followed in order to deal with said conflict.

4. Disclosure of Trustee, Officer and Key Employee Conflicts. Trustees, officers and Key Employees are required to timely disclose any conflicts of interest on the required Disclosure Form (as defined herein), which are submitted to the General Counsel, on behalf of the Secretary of the Library. The General Counsel shall present the disclosure to the Chair of the Board of Trustees (so long as he/she is an Independent Trustee[1]) and the Chair of the Audit Committee who will review the disclosures and make recommendations to the Audit Committee. The Audit Committee shall be responsible for determinations with respect to all actual and potential Conflicts of Interest for all Officers, Trustees and Key Employees. The Audit Committee shall be comprised solely of Independent Trustees (as such term is defined herein). Only Independent Trustees shall be permitted to participate in any deliberations or voting of the Board of Trustees or the Audit Committee with respect to a Conflict of Interest.

5. Certain Disclosure Required. All Key Employees shall be required to disclose any outside employment, prior to accepting outside employment, to the General Counsel who shall make a determination if a conflict of interest exists. The General Counsel shall report any actual or potential Conflicts of Interest to the Chairman of the Board and the Chair of the Audit Committee. All trustees and officers shall promptly disclose any change in outside employment that requires disclosure on the required Disclosure Form (as defined herein).

6. Role of the General Counsel. With respect to this Article III, the Board of Trustees and/or the Audit Committee may refer an actual or potential Conflict of Interest to the Library’s General Counsel for interpretation and recommendation. Any recommendation or opinion issued by the General Counsel shall not be binding on the Board of Trustees.

7. Interpretation of this Policy. Questions regarding the interpretation of this Policy should be directed to the General Counsel or the Audit Committee.

ARTICLE IV

OTHER ACTIONS PROHIBITED

No trustee, officer or employee shall:

1. Directly or indirectly, solicit any gift or accept or receive any gift having a value of one hundred dollars ($100.00) or more in any form under circumstances in which it could reasonably be inferred that the gift was intended to influence him/her, or could reasonably be expected to influence him/her, in the performance of his/her official duties or was intended as a reward for any official action on his/her part;

2. Disclose, in electronic, written, oral or any other form, confidential information, including any corporate books, records, documents and any other non-public information of the Library, acquired in the course of official duties or in meetings or executive sessions of the Board of Trustees or any committee of the Board of Trustees or use such information to further personal interests or for any purpose other than for the exclusive benefit of the Library;

3. Receive or enter into any agreement, express or implied, for compensation for services to be rendered in relation to any matter before the Library, or the Board of Trustees whereby compensation is to be dependent or contingent upon any action by the Library with respect to such matter;

4. Use a Library vehicle for non-intermittent personal use without the prior written approval of the Board of Trustees, except prior written approval is required of the President & CEO for vehicles assigned to employees for Library business purposes only which are garaged at an employee’s home overnight for garaging purposes with personal use limited to commuting use only; or

5. Promote his/her personal interests, including promoting the activities, interests and events of other organizations, for any reason while representing the Library or conducting Library business.

ARTICLE V

RELATED PARTY TRANSACTIONS

1. General. The Library shall not enter into a Related Party Transaction (as such term is defined in Article II, Section 5 of this Policy) unless such transaction is determined by the Board of Trustees to be fair, reasonable and in the Library’s best interest at the time of such determination.

2. Procedure. Any trustee, officer or employee who has, will have, or later acquires a Conflict of Interest in relation to a Related Party Transaction shall disclose the Conflict of Interest as required in Article III of this Policy. No Related Party may be present at or participate in deliberations of the Board of Trustees or any committee of the Board of Trustees or vote on any matter giving rise to his or her potential Conflict of Interest or attempt to improperly influence the deliberation of or vote on the matter giving rise to the potential Conflict of Interest, but the Board of Trustees or the committee involved may request that a Related Party present information regarding the Related Party Transaction prior to the commencement of deliberations or voting related to such transaction. The minutes of any meeting of the Board of Trustees or committee of the Board of Trustees shall contain a description of any Related Party Transaction disclosed and all relevant procedures and votes in connection therewith.

3. Extraordinary Related Party Transactions. With respect to any Related Party Transaction in which a Related Party has a substantial financial interest, the Board of Trustees, or the Audit Committee or other authorized committee thereof, shall:

(a) Prior to entering into the Related Party Transaction, consider alternative transactions, to the extent available;

(b) Vote on whether to approve the Related Party Transaction, which such approval must be by not less than a majority of the Board members present at the meeting; and

(c) If the Related Party Transaction is approved, at the time of such approval, document in writing the basis for the Board’s approval, including its consideration of any alternative transaction.

ARTICLE VI

PERMITTED ACTIVITIES

The following Library equipment and activities are acceptable for business and personal purposes for the convenience of integrating work and personal activities and scheduling of meetings and appointments: cell phones and PDAs, computers and similar devices, calendars, outlook contacts, and similar work productivity tools.

ARTICLE VII

ACTUAL AND POTENTIAL VIOLATIONS

1. Violation by Employees. Any employee who willfully and knowingly violates the provisions of this Policy shall be subject to disciplinary action up to and including suspension or discharge.

2. Reporting of Violations. Should any individual trustee, officer or Key Employee, become aware of any violation of the provisions of this Policy by any officer, trustee or Key Employee, such failure to disclose should be immediately reported to the General Counsel who will investigate and present the alleged failure to disclose to the Chair of the Board of Trustees (so long as he/she is an Independent Trustee) and the Chair of the Audit Committee who will review the alleged failure and make recommendations to the Audit Committee, which may result in discipline and corrective action including suspension or removal from office.

3. Violation by Trustee, Officer or Key Employee. If any Trustee, Officer, Key Employee, the Board of Trustees or a committee of the Board of Trustees has reasonable cause to believe that a trustee has failed to disclose actual or possible Conflicts of Interest, such failure to disclose shall be reported to any Independent Trustee who is also a member of the Audit Committee, who shall report such violation to the Board of Trustees; once informed, the Board of Trustees shall inform the trustee of the basis of such belief and afford the trustee an opportunity to explain the alleged failure to disclose to the Audit Committee. If, after hearing the response of the trustee and making such further investigation as may be warranted in the circumstances, the Board of Trustees or committee determines that the trustee has in fact failed to disclose an actual or possible Conflict of Interest, it shall take appropriate disciplinary and corrective action. Any trustee who willfully and knowingly violates this Policy may be subject to discipline by the Board of Trustees up to and including suspension or removal from office.

4. Remedies as to Contracts. Any contract entered into with the Library in which there is a Conflict of Interest prohibited by this Policy may be subject to such action as the Board of Trustees deems appropriate including a declaration that such contract may be null, void and wholly unenforceable as determined by the Board of Trustees to be in the best interest of the Library.

5. General. All trustees, officers and Key Employees of the Library are required to be fully informed of the requirements of this Policy, and no failure in that regard by an individual will render the individual’s violation of the Policy unknowing or not willful.

ARTICLE VIII

ACKNOWLEDGEMENT OF CONFLICTS OF INTEREST POLICY AND DISCLOSURE FORM

1. Trustees. Upon appointment of a trustee, and annually thereafter, each trustee shall complete, sign and submit to the General Counsel of the Library, on behalf of the Secretary of the Library, a completed written disclosure form (the “Disclosure Form”) identifying, to the best of his or her knowledge, any entity of which such trustee is an officer, director, trustee, member, owner (either as a sole proprietor or a partner) or employee and with which the Library has a relationship, and any transaction in which the Library is a participant and in which the trustee might have a conflicting interest. All trustees shall annually complete, sign and submit to the General Counsel of the Library, a completed written acknowledgement of this Conflicts of Interest Policy (“Acknowledgement of Conflicts of Interest Policy”) affirming that he/she:

(a) Has received a copy of the Policy;

(b) Has read and understands the Policy;

(d) Understands that the Library is a non-profit corporation and that in order to maintain its federal tax exemption it must engage primarily in the activities which accomplish one or more of its tax-exempt purposes.

2. Key Employees. Every Key Employee shall complete, sign and submit the Disclosure Form to the General Counsel of the Library, on behalf of the Secretary of the Library on an annual basis, identifying, to the best of his or her knowledge, any entity of which such Key Employee is an officer, director, trustee, member, owner (either as a sole proprietor or a partner) or employee and with which the Library has a relationship, and any transaction in which the Library is a participant and in which the Key Employee might have a conflicting interest. All Key Employees shall annually complete, sign and submit to the General Counsel of the Library, a completed written acknowledgement of this Conflicts of Interest Policy (“Acknowledgement of Conflicts of Interest Policy”) affirming that he/she:

(a) Has received a copy of the Policy;

(b) Has read and understands the Policy;

Revises: June 1993 Policy & Procedures Section F#3

[1] If the Chairman of the Board is not an Independent Trustee, then General Counsel will present the disclosure to the Vice-Chairman; If the Chairman and Vice-Chairman are not Independent Trustees, then General Counsel will present the disclosure to the Secretary; if the Chairman and Vice-Chairman and Secretary are not Independent Trustees, then General Counsel will present the disclosure to the Treasurer; if the Chairman and Vice-Chairman and Secretary and Treasurer are not Independent Trustees, then General Counsel will present the disclosure to the Assistant Treasurer.

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