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ARTICLE 3 BOARD OF DIRECTORS
Section 3.1 Number. The affairs of the Association shall be initially governed by a Board composed of the directors set forth in the Articles. Prior to the Control Termination Date, the Declarant may appoint and remove the directors pursuant to any Special Declarant Right to appoint and remove directors, subject to the right of the Owners to elect additional director or directors, as described in the Declaration. No later than the Transition Date, the Board shall give notice of a Transition Meeting of the Owners to elect a new Board. At the Transition Meeting, the Owners shall elect a Board of [three] directors. The number of directors may be increased or decreased to not fewer than [three] or more than [five], from time to time, by amendment of these Bylaws, provided that no decrease in number shall have the effect of shortening the term of any incumbent director.
Section 3.2 Term. The directors shall take office upon adjournment of the meeting at which they are elected. The directors shall hold office until their respective successors shall be elected and qualified, subject to provisions herein relating to vacancy and removal. The normal term of office for directors will be for three years. However, to provide for staggered terms, at the first election, one-third of the number of directors (or the whole number nearest to one-third) shall be elected for one year, the same number shall be elected for two years, and the remainder shall be elected for three years.
A director shall serve from appointment by the appointing Unit Owner until death, disability, resignation, or removal by the appointing Unit Owner.
Section 3.3 Qualifications. A majority of the directors must be Unit Owners in the Community. A director identified in the Articles or appointed by the Declarant pursuant to any Special Declarant Right to appoint directors or officers need not be a member of the Association. In determining the qualifications of a director or officer, the term “Unit Owner” shall include any director, officer, member, partner, or trustee of any corporation, limited liability company, partnership, trust, or other person who is, either alone or in conjunction with another person, a Unit Owner. Any such person shall be disqualified from continuing in office if the person ceases to have such affiliation with the Unit Owner or is otherwise disqualified from continuing in such office as a natural person.
Section 3.4 Vacancies. Vacancies on the Board caused by reasons other than the removal by a vote of the Association may be filled by vote of the majority of the remaining directors, even though they may constitute less than a quorum.
Each person so selected shall be a director for the unexpired portion of the term or, if earlier, until the next regularly scheduled election of directors.
Section 3.5 Removal of Directors and Officers by Owners. Owners present in person, by proxy, or by absentee ballot at any meeting of the members at which a quorum is present may remove any Board member and any officer elected by the Unit Owners, with or without cause, if the number of votes in favor of removal cast by Unit Owners entitled to vote for election of the Board member or officer proposed to be removed is at least the lesser of: (i) a majority of the votes in the Association held by such Unit Owners, or (ii) two-thirds of the votes cast by such Unit Owners at the meeting. Notwithstanding the foregoing, (x) a Board member appointed by the declarant may not be removed by a Unit Owner vote during any period of declarant control, (y) a Board member appointed under section 305(3) of the Act may be removed only by the person that appointed that member; and (z) the Unit Owners may not consider whether to remove a Board member or officer at a meeting of the Unit Owners unless that subject was listed in the notice of the meeting. At any meeting at which a vote to remove a Board member or officer is to be taken, the Board member or officer being considered for removal must have a reasonable opportunity to speak before the vote. At any meeting at which a Board member or officer is removed, the Unit Owners entitled to vote for the Board member or officer may immediately elect a successor Board member or officer consistent with this chapter.
Each Unit Owner may remove, with or without cause at any time, the director appointed by the Unit Owner, and may appoint a successor to fill the vacancy thus created.
Section 3.6 Removal of Directors and Officers by the Board. The Board may, without an Owner vote, remove from the Board a Board member or officer elected by the Owners if (i) the Board member or officer is delinquent in the payment of Assessments more than 60 days, and (ii) the Board member or officer has not cured the delinquency within 30 days after receiving notice of the Board’s intent to remove the Board member or officer. The Board may remove an officer elected by the Board at any time, with or without cause. At any meeting at which a vote to remove a Board member or officer is to be taken, the Board member or officer being considered for removal must have a reasonable opportunity to speak before the vote. The removal must be recorded in the minutes of the next Board meeting.
Section 3.7 Compensation. A director who is an Owner shall not be entitled to compensation for service as a director. If the Members determine that it is in their best interest to elect a director who is not an Owner, the directors who are Owners may establish reasonable compensation to the non-Owner director, obtain directors’ and officers’ insurance coverage, and take other actions to attract and retain competent outside directors.
Section 3.8 Organization Meeting. The first meeting of the initial Board shall be held on a date and at a place to be fixed by the president, and no notice shall be necessary to the newly elected directors in order to legally call the meeting.
Section 3.9 Board Meetings During Declarant Control. During the period of declarant control, the Board must meet at least four times a year. At least one of those meetings must be held at the Community or at a place convenient to the Community.
Section 3.10 Board Meetings After Declarant Control. After the transition meeting, all Board meetings must be at the Community or at a place convenient to the Community unless the Unit Owners amend these bylaws to vary the location of those meetings. Regular meetings of the Board may be held at such time and place as shall be determined from time to time by a majority of the directors, but at least two such meetings shall be held during each fiscal year.
Meetings of the Board shall be held at the Community or a suitable place within the county in which the Community is located, as may be agreed to by the Board members. Because each Unit Owner is entitled to appoint one Board member, the Board may elect to have combined meetings of the Board and the Association for any matter that requires the approval of the Unit Owners.
Section 3.11 Notice of Board Meetings. Unless the meeting is included in a schedule given to the Unit Owners or the meeting is called to deal with an emergency, the secretary must provide notice of each Board meeting to each Board member and to the Owners. The notice must be given at least 14 days before the meeting and must state the time, date, place, and agenda of the meeting.
Section 3.12 Waiver of Notice. Before any meeting of the Board, any director may, in writing, waive notice of such meeting. Attendance by a director at any meeting of the Board shall be a waiver by the director of timely and adequate notice unless the director expressly challenges the notice when the meeting begins. If all directors are present at any meeting of the Board, no notice shall be required and any business may be transacted at the meeting.
Section 3.13 Quorum. A quorum of the Board is present for purposes of determining the validity of any action taken at a meeting of the Board only if individuals entitled to cast a majority of the votes on that action are present at the time a vote regarding that action is taken. If a quorum is present when a vote is taken, the affirmative vote of a majority of the Board members present is the act of the Board. If there is less than a quorum present at any meeting of the Board, the majority of those present may adjourn the meeting from time to time. At the adjourned meeting, provided a quorum is present, any business that might have been transacted at the meeting as originally called may be transacted without further notice. The directors present at a duly convened meeting may continue to do business until adjournment, notwithstanding the withdrawal of enough directors to leave less than a quorum; provided however, that any act of the Board shall require a quorum and the votes described in this Section 3.13. Abstention from voting on a motion by a director present at a meeting at which there is a quorum shall be counted as a vote against the motion.
Section 3.14 Voting by Proxy or Ballot. A Board member may not vote by proxy or absentee ballot.
Section 3.15 Presumption of Assent. A Board member who is present at a Board meeting at which any action is taken is presumed to have assented to the action taken unless the Board member’s dissent or abstention to such action is lodged with the person acting as the secretary of the meeting before adjournment of the meeting or provided in a record to the secretary of the Association immediately after adjournment of the meeting. The right to dissent or abstain does not apply to a Board member who voted in favor of such action at the meeting.
Section 3.16 Board Packets. If any materials are distributed to the Board before the meeting, the Board must make copies of those materials reasonably available to the Owners, except that the Board need not make available copies of unapproved minutes or materials that are to be considered in executive session.
Section 3.17 Open Meetings. Meetings must be open to the Unit Owners and their voting representatives except during executive sessions, but the Board may expel or prohibit attendance by any person who, after warning by the chair of the meeting, disrupts the meeting. At each Board meeting, the Board must provide a reasonable opportunity for Owners to comment regarding matters affecting the Community and the Association. A gathering of members of the Board or committees at which the Board or committee members do not conduct Association business is not a meeting of the Board or committee. Board members and committee members may not use incidental or social gatherings to evade the open meeting requirements of this Section 3.17
Section 3.18 Executive Sessions. The Board may hold an executive session only during a regular or special meeting of the Board. A final vote or action may not be taken during an executive session. An executive session may be held only to: (i) consult with the Association’s attorney concerning legal matters; (ii) discuss existing or potential litigation or mediation, arbitration, or administrative proceedings; (iii) discuss labor or personnel matters; (iv) discuss contracts, leases, and other commercial transactions to purchase or provide goods or services currently being negotiated, including the review of bids or proposals, if premature general knowledge of those matters would place the Association at a disadvantage; or (v) prevent public knowledge of the matter to be discussed if the Board or committee determines that public knowledge would violate the privacy of any person.
Section 3.19 Participation by Communications Equipment. Fewer than all Board members may participate in a regular or special meeting of the Board by, or conduct a meeting through, the use of any means of communication by which all Board members participating can hear each other during the meeting. A Board member participating in a meeting by these means is deemed to be present in person at the meeting
Section 3.20 Meetings by Communications Equipment. All members of the Board may meet by telephonic, video, or other conferencing process if: (i) the meeting notice states the conferencing process to be used and provides information explaining how Owners may participate in the conference directly or by meeting at a central location or conference connection; and (ii) the process provides all Owners the opportunity to hear or perceive the discussion and to comment as provided in Section 3.17.
Section 3.21 Board Action by Written Consent. Instead of meeting, the Board may act by unanimous consent as documented in a record by all its members. Actions taken by unanimous consent must be kept as a record of the Association with the meeting minutes. After the transition meeting, the Board may act by unanimous consent only to undertake ministerial actions, actions subject to ratification by the Unit Owners, or to implement actions previously taken at a meeting of the Board. Such written consent may be signed in two or more counterparts, each of which shall be deemed an original and all of which, taken together, shall constitute one and the same document.
Section 3.22 Minutes. Minutes of all Board meetings shall be maintained in a record by the secretary of the Association or by another person designated by the directors. The decision of each matter voted upon at a membership meeting must be recorded in the mintues. Minutes for every meeting shall be approved by the Association before or at the next Association meeting.
Section 3.23 Duties of Directors. In the performance of their duties, the officers and directors are (i) required to exercise the degree of care and loyalty to the Association required of an officer or director of a corporation organized under chapter 24.06 RCW, and (ii) subject to the conflict of interest rules governing directors and officers, under chapter 24.06 RCW. In performing the duties of a director, a director shall be entitled to rely on information, opinions, reports, or statements, including financial statements and other financial data, in each case prepared or presented by:
- One or more officers or employees of the Association whom the director believes to be reliable and competent in the matter presented;
- Counsel, public accountants, or other persons as to matters that the director believes to be within such person’s professional or expert competence; or
- A committee of the Board upon which the director does not serve, duly designated in accordance with a provision in the Articles or Bylaws as to matters within its designated authority, which committee the director believes to merit confidence; as long as, in any such case, the director acts in good faith, after reasonable inquiry, when the need thereof is indicated by the circumstances and without knowledge that would cause such reliance to be unwarranted.
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