The Club shall not loan money or credit to any member, Trustee or officer.
Nor shall the Club make any disbursement of income or retained equity to any member, Trustee or officer.
Article IV, Section 7
RCW 24.03A.650 provides for remedies that may be pursued against a Board member or officer who votes for or assents to a loan to a Board member or officer.
See also Chapter 219 policies on transactions with members.
The purpose of this Conflict of Interest Policy (the "Policy") is to protect the interests of the Seattle Tennis Club (the "Club") and to guard against any appearance of impropriety in connection with any transaction or arrangement that might benefit the private interests of any Covered Person, as defined below. This Policy provides (i) a systematic mechanism for disclosing and evaluating potential and actual fiduciary conflicts; and (ii) procedures for the Board of Trustees in considering any transaction or arrangement where a conflict may exist.
See Chapter 219, Part A.
In general, it is the Club’s policy to purchase goods or services from Club members only when a transaction with a member presents the most advantageous option for the Club. A transaction with the family of a Club member, or with an entity in which a Club member or his or her family has a significant ownership or investment interest, or a significant management role, should be treated as if it were transactions with a Club member. This policy also applies to Covered Persons, as defined below, even if they are not members.
The stricter policies below apply to "Covered Persons," which means any Trustee, the General Manager and the Assistant General Manager. Every Covered Person shall complete an annual Conflict of Interest Questionnaire.
A "Family Member" of a Covered Person means each of a Covered Person’s spouse, parents, grandparents, children, grandchildren, great-grandchildren, siblings, and the spouses of any of the above.
An entity is a Covered Person’s "Related Entity" if such Covered Person or a Family Member has any ownership interest or investment interest in such entity, if he or she serves as an officer, director, general partner or manager of it (or holds a similar management role), provided that an entity whose stock is publicly held and traded on a recognized exchange will not be a Related Entity solely because a Covered Person owns stock or some other ownership or investment interest with a value of less than $100,000.
1. Duty of Care. Every Covered Person shall perform his or her duties for the Club in good faith and with the degree of care that an ordinarily prudent person would exercise under similar circumstances.
2. Duty of Loyalty. Every Covered Person must act with loyalty to the Club, meaning that no Covered Person may use his or her position with the Club to make personal profit or gain other personal advantage. No Covered Person may personally take advantage of a business opportunity that is offered to the Club unless the Board of Trustees determines (after full disclosure and a disinterested and informed evaluation) not to pursue that opportunity.
3. Conflicts of Interest. No Covered Person may engage in any transaction or arrangement or undertake positions with other organizations that involve a conflict of interest, except in compliance with this Policy. Covered Persons should avoid both actual conflicts and the appearance of conflicts of interest. Every Covered Person shall:
(i) Disclose all actual and potential conflicts as set out below at Part E; and
(ii) If he or she is a Trustee, recuse himself or herself from voting on any transaction or arrangement in which he or she has a potential or actual conflict of interest, and shall not be present when any such vote is taken.
Potential Conflict. A Covered Person may have a conflict of interest with respect to a transaction or arrangement whenever he or she, or any of his or her Family Members or Related Entities:
(i) Receives compensation or other value directly or indirectly from the Club, and the transaction or arrangement involves such compensation or value;
(ii) Has or anticipates having a compensation arrangement with an entity or individual that either: (A) sells goods or services to, or purchases goods or services from the Club or (B) has any other transaction or arrangement with the Club;
(iii) Enters into a transaction, or anticipates entering into a transaction, whereby an entity would become his or her Related Entity and such entity either: (A) sells goods or services to, or purchases goods or services from the Club or (B) has any other transaction or arrangement with the Club; or
(iv) Accepts any gift, entertainment, or other favor where such acceptance might create the appearance of influence on the Covered Person in the management of the Club (other than gifts of nominal value, which are clearly tokens of respect and friendship unrelated to any particular transaction).
1. Disclosure. Each Covered Person shall promptly and fully disclose all material facts of every actual or potential conflict of interest:
(i) Existing at the time when he or she becomes a Covered Person;
(ii) That arises while he or she is a Covered Person, at the time such actual or potential conflict arises; and
(iii) Annually through the annual Conflict of Interest Questionnaire.
All disclosures involving a transaction or arrangement being considered at a meeting of the Board of Trustees shall be made to all members present at such meeting. All other disclosures shall be made to the President (who shall disclose his or her conflicts to the Board of Trustees).
2. Evaluation. The President shall disclose to the Board of Trustees all conflicts of interest reported to him or her under this Policy. The Board of Trustees will evaluate the disclosures to determine whether they involve actual conflicts of interest, and may attempt to develop alternatives to remove the conflict from the situation.
3. Managers’ Exception. The employment of the General Manager and Assistant General Manager, and related transaction, are not subject to any of the disclosure and evaluation procedures in Parts F, G and H. The terms of the employment of the General Manager shall be considered and decided upon by the Board of Trustees as part of its ordinary business. The terms of the employment of the Assistant General Manager shall be considered and decided upon in the same manner of the terms of employment of other employees of the Club.
1. Formal Approval. The Club may enter into a transaction or arrangement in which a Covered Person has a conflict of interest if:
(i) The Covered Person has disclosed the conflict of interest in accordance with this Policy;
(ii) A majority of the Trustees who are present and have no interest in the transaction or arrangement approve the transaction or arrangement at a Board meeting after determining, in good faith and after reasonable investigation, that the transaction or arrangement is fair and reasonable to the Club and is in the Club’s best interest;
(iii) Any Covered Person who has an actual or potential conflict with respect to the transaction or arrangement does not participate in and is not present for the vote regarding any such transaction or arrangement (provided that any such Covered Person may appear at a meeting to answer questions concerning the transaction or arrangement);
(iv) In the case of any proposed purchase of goods or services for a price or compensation in excess of $10,000 from a Covered Person, a Family Member or a Related Entity, the Club has obtained at least two bids from potential vendors with no relationship to the Club or its members, or otherwise relies upon information regarding comparable transactions, such as an independent appraisal or an independent compensation study, as may be appropriate and applicable, in reaching its determination as to the fairness and reasonableness of the transaction or arrangement to Club.
2. Transaction Fair to Club. It shall not be a violation of this Policy if all the requirements for formal approval, outlined above, are not satisfied, so long as the transaction or arrangement is in fact fair to the Club, furthers its tax-exempt purposes, and does not result in private inurement under laws applicable to organizations exempt from federal income tax under Section 501(c)(7) of the Internal Revenue Code.
The minutes of the Board of Trustees for any meetings described above shall contain:
(i) The names of the persons who disclosed an actual or potential conflict of interest or otherwise were found to have a conflict of interest, and the nature of the conflict of interest; and
(ii) The names of the persons who were present for discussions and votes relating to the transaction or arrangement, the content of the discussion, including any alternatives to the proposed transaction or arrangement considered and the appropriate comparability data relied upon, and a record of any votes taken.
Each Covered Person shall sign a statement acknowledging that he or she has received a copy of this Policy, has read and understands it, and agrees to comply with it. If the Board of Trustees has reasonable cause to believe that a Covered Person has failed to comply with this Policy, the Board of Trustees may counsel the Covered Person regarding such failure and, if the issue is not resolved to the Board of Trustees’ satisfaction, may consider additional corrective action as appropriate.
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6/24/04: Chapter 211 approved by the Board; 6/23/22: Approval confirmed by the Board.