Conflict of Interest Policy

A conflict of interest transaction or arrangement is a transaction or arrangement with the Oregon Wave Energy Trust (“OWET”) in which a director or a director’s relative is affiliated with a company or organization that receives funding from OWET. 1. An OWET director or a director’s relative is affiliated with a company or organization if: a. The company or organization is a private business or closely held corporation of which the Director or the Director’s relative is a director, officer, owner or employee, or agent or any private business or closely held corporation in which the Director or the Director’s relative owns or has owned stock, another form of equity interest, stock options or debt instruments worth $1,000 or more at any point in the preceding calendar year; b. The company or organization is a publicly held corporation in which the Director or the Director’s relative owns or has owned $100,000 or more in stock or another form of equity interest, stock options or debt instruments at any point in the preceding calendar year, or any publicly held corporation of which the Director or the Director’s relative is a director or officer; or c. Any company or organization that is a source of income received by the Director or a member of the Director’s household during the preceding calendar year that produces 10 percent or more of the total annual household income. 2. A relative is defined as the spouse, children, siblings or parents of a Director or his/her spouse, or the spouse of any such siblings. PROCEDURES Any director or officer of OWET with knowledge of an actual or potential conflict of interest on the part of that director or officer or any other director or officer of OWET shall promptly inform OWET’s entire Board of Directors (the “Board”) of the conflict. The Board shall obtain disclosure of the financial or other interest and all material facts. After any discussion with the interested person, the interested person shall leave the meeting while the Board determines whether a conflict of interest exists. If the Board determines that a conflict exists, the Board shall follow these procedures to address the conflict of interest:

a. The interested person may make a presentation to the board, but after the presentation shall leave the meeting during the discussion of and the vote on the conflict of interest transaction or arrangement.

b. The Board shall investigate alternatives to the proposed transaction or arrangement. After exercising due diligence, the Board shall determine whether the transaction or arrangement is fair to OWET.

c. Any conflict of interest transaction or arrangement must be approved by a majority of a quorum of OWET’s directors who have no direct or indirect interest in the transaction or arrangement.

d. Anything in this policy to the contrary notwithstanding, OWET shall not enter into any service or grant agreement with any company or organization with which a Director or members of his/her immediate family is affiliated, if that agreement is funded in whole or in part from the proceeds of the 2013 Oregon Innovation Council contract with OWET. This restriction does not apply to a Director in the performance of his/her duties on the board as a representative of the State of Oregon, Oregon University System (OUS), Oregon Health & Science University (OHSU), any national research laboratory, a nonprofit organization, an elected official in performance of his/her official duties, or if a member of his/her immediate family is affiliated with the State of Oregon, OUS, or OHSU, any national research laboratory, a non-profit organization, or an elected official in performance of his/her official duties; however, if this restriction would have otherwise applied to such a Director but for the fact that he/she is a member of the Board as a representative of, or a member of his immediate family is affiliated with, the State of Oregon, OUS, or OHSU, any national research laboratory, a non-profit organization, or an elected official in performance of his/her official duties, he/she shall, at the outset of any discussions about a contract or potential contract with the State of Oregon, OUS, OHSU, any national research laboratory, a non-profit organization engaged in the siting of wave energy development projects, or an elected official in performance of his/her official duties as the case may be, disclose such employment or affiliation, may not participate in any discussions regarding such contract, and may not cast a vote in any decision regarding such contract unless such Director’s vote is required to meet a requirement of a minimum number of votes to take official action.

RECORDS OF THE PROCEEDINGS

The minutes of the Board meeting shall contain the names of the persons who had a conflict of  interest, the nature of the financial or other interest, a summary of the discussion to determine whether a conflict was present and the vote as to whether a conflict of interest existed, the names of the directors and officers present for the discussion and vote related to the transaction or arrangement, a summary of the discussion relating to OWET ‘s response to any conflict of interest transaction or arrangement, and a record of the vote taken.

ADOPTED as of January 18, 2012 

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