Ben Franklin Technology Partners of Southeastern Pennsylvania
Supplemental Conflict of Interest Policy

 

This Supplemental Conflict of Interest Policy (the “Supplemental Policy”) supplements the Conflict of Interest Policy (the “Conflict Policy”) adopted by the Board of Directors (the “Board”) of Ben Franklin Technology Partners of Southeastern Pennsylvania (“BFTP”), and applies to projects in which BFTP intends to provide financial support or assistance, including without limitation through a loan, investment, or grant.

This Investment Policy is supplemental to, and does not modify or amend, any of the terms of any conflict of interest policies or procedures applicable to BFTP, including without limitation the Conflict Policy or the conflict policy adopted by the Board relating to BFTP’s use of federal funds provided to the Commonwealth pursuant to the U.S. Treasury’s State Small Business Credit Initiative.

Background. Pursuant to the Conflict Policy (a copy of which is attached hereto as Exhibit “A”), an officer, director or employee of BFTP or a consultant or independent contractor of BFTP (any such person being a “Covered Person”) shall be deemed to have an “Adverse Interest” requiring disclosure under the Conflict Policy if any of the following conditions are met:

(i) The Covered Person has a financial interest in a project;

(ii) A member of the immediate family of the Covered Person has an interest in a project;

(iii) A Covered Person has an employer-employee, partnership, agency, lender or borrower, fiduciary or legal or beneficial ownership relationship with a party to or a person financially interested in a project; or

(iv) A matter which might reasonably be expected to influence a Covered Person in the discharge of the Covered Person’s official duties concerning a project.

Under the Conflict Policy, a Covered Person who has an “Adverse Interest” is required to disclose such Adverse Interest, refrain from participating in deliberations concerning the matter presenting the conflict, and abstain (in the case of a Board member) from voting on the matter presenting the conflict.

This Supplemental Policy is intended to establish additional obligations and procedures relating to projects in which BFTP intends to provide financial support or assistance, including without limitation through a loan, investment, or grant, and in which a Covered Person may have an “Adverse Interest”.

Obligations and Procedures.

For purposes of this Supplemental Policy, the term “financial interest” as used under the Conflict Policy shall mean any financial interest derived from ownership or right to ownership of, or direct lending to or other investment in, the applicable project.

Disclosure by a Covered Person

If a Covered Person believes that an actual or potential Adverse Interest under the Conflict Policy exists or may predictably arise with respect to a proposed loan, investment, grant or other financial assistance, such individual shall complete the disclosure statement attached hereto as Exhibit B, and shall submit the completed statement to BFTP’s President and Chief Executive Officer promptly after such Covered Person becomes aware of the issue, but prior to BFTP’s approval of the applicable project; provided, however, that if the matter involves or relates to an actual or potential Adverse Interest on the part of BFTP’s President and Chief Executive Officer, the completed disclosure statement should be submitted to BFTP’s Chief Operating Officer and General Counsel or BFTP’s Chief Financial Officer.

Additional Review by BFTP Management

Additionally, BFTP’s President and Chief Executive Officer, BFTP’s Chief Operating Officer and General Counsel or BFTP’s Chief Financial Officer will review and consider any matter which any such individual becomes aware of which might reasonably be expected to influence a Covered Person in the discharge of the Covered Person’s official duties concerning a project. An example of the foregoing would be an expression of interest by an individual who has a financial interest in the applicable project that such individual intends to make an investment in a BFTP managed venture fund, such as BFTP’s Global Opportunity Pennsylvania Fund II, L.P. (also known as the “GO PA Fund”).

Disclosure to, and Review by, Board

If at any time during the foregoing process BFTP’s President and Chief Executive Officer, BFTP’s Chief Operating Officer and General Counsel or BFTP’s Chief Financial Officer determines that an actual or potential Adverse Interest exists or may predictably arise with respect to a proposed loan, investment, grant or other financial assistance, such individual shall inform the other individuals of the actual or potential Adverse Interest. If the other individuals concur with the determination, BFTP’s President and Chief Executive Officer shall advise the Board Chairperson and the Chairperson of the Board’s Investment Committee of the issue, and the matter shall be disclosed to the Board in accordance with the terms of the Conflict Policy, including without limitation providing to the Board a copy of the applicable completed disclosure statement.

In the event that an actual or potential Adverse Interest is disclosed to the Board as provided herein, the project must be approved by the Board, with the unanimous approval of all Board members who participate in the approval decision, with the unanimous approval of all Board members who participate in the approval decision, excluding any Board member deemed to have an Adverse Interest in the project.

Overview of Obligations and Procedures.

Exhibit A

CONFLICT OF INTEREST POLICY

Ben Franklin Technology Partners of Southeastern Pennsylvania (BFTP/SEP – Partner) is a Pennsylvania not-for-profit corporation. As a recipient of public funding and support from foundations, businesses and individuals, BFTP/SEP must strive to ensure that its activities, as well as those of its directors, officers, employees, consultants and independent contractors, are conducted in compliance with appropriate standards of ethics, loyalty, honesty, integrity and fair dealing. To this end, the Board of Directors of BFTP/SEP (the “Board”), for themselves and for BFTP/SEP’s officers, employees, consultants and independent contractors, has adopted a formal Conflict of Interest Policy designed to preclude any material conflict of interest or impropriety with respect to the duties and activities of such persons or entities relating to BFTP/SEP. BFTP/SEP’s current Conflict of Interest Policy is set forth below.

STATEMENT OF POLICY

1. Policy Statement.

The directors, officers, employees, consultants and independent contractors of BFTP/SEP, in all transactions related to their duties on behalf of BFTP/SEP, or on behalf of those entities served by BFTP/SEP, shall adhere to the standards of ethics, loyalty, honesty, integrity and fair dealing described herein and shall at all times act in the best interests of BFTP/SEP.

2. Disclosure of Conflict of Interest.

(a) An officer, director or employee of BFTP/SEP who is a party to or who is interested in a project must disclose the nature and extent of the interest to the Board, and must abstain from the Board’s deliberations concerning the project, all as more fully set forth in Section 3 below. Any member of an organization is a Party in Interest.

(b) A consultant or independent contractor of BFTP/SEP who is a party to or who is interested in a project, as more fully described in paragraph (c) below, shall immediately disclose the nature and extent of the interest to the Board.

(c) An officer, director or employee of BFTP/SEP or a consultant or independent contractor of BFTP/SEP (any such person being a “Covered Person”) shall be deemed to have an Adverse Interest and to be subject to the requirement for disclosures as described in paragraphs (a) and (b) above if any of the following conditions are met:

(i) The Covered Person has a financial interest in a project;

(ii) A member of the immediate family of the Covered Person has an interest in a project;

(iii) A Covered Person has an employer-employee, partnership, agency, lender or borrower, fiduciary or legal or beneficial ownership relationship with a party to or a person financially interested in a project; or

(iv) A matter which might reasonably be expected to influence a Covered Person in the discharge of the Covered Person’s official duties concerning a project.

(d) The Board shall take such action, which is necessary in light of the facts revealed by the disclosure, to avoid a conflict of interest or impropriety with regard to a project.

(e) The disclosure statement of the Covered Person, and the action by the Board, shall be made a part of the minutes at its next regular or special meeting.

(f) In the event any Covered Person, as to whether he, she, or it would be considered “interested in a project” under Section 2(a) above, such Covered Person shall make full disclosure concerning the potential conflict of interest to the Chairman of the Board and to the uninterested members of the Board. The uninterested members of the Board shall then determine by majority vote whether a conflict of interest exists and shall advise the inquiring Covered Person.

3. Obligation to Abstain in the Event of an Adverse Interest.

In the event of any Adverse Interest requiring disclosure by a Covered Person under Section 2(a), such Covered Person, after first having disclosed the Adverse Interest as described above, shall:

(a) Refrain from participating in the deliberations concerning the matter presenting the conflict;

(b) Abstain, in the case of a director, from voting on the matter presenting the conflict; and

(c) At the request of the Board member chairing the meeting, leave the meeting room during the deliberations and vote with respect to the matter presenting the conflict.

4. Prohibited Activities.

(a) No Covered Person may solicit, accept or receive from a person, firm, corporation or other business or professional entity or organization a gift, loan, gratuity, favor or service that might influence his or her position in the discharge of his or her official duties concerning a project or any other activities of BFTP/SEP. However, acceptance of food and refreshment of nominal value on infrequent occasions in the ordinary course of a luncheon or dinner meeting or other meeting shall not be deemed a “gift, loan, gratuity, favor or service” for purposes of this section.

(b) No officer, director, employee, consultant or independent contract of BFTP/SEP may directly or indirectly use for personal gain any information not available to the public concerning a project which comes to him, her or it as a result of affiliation with BFTP/SEP, nor may such person or entity provide that information to others not directly connected with BFTP/SEP’s investigation concerning the feasibility, development or establishment of a project.

(c) No officer or employee shall engage in any employment, consulting, advisory or similar activity which is in material conflict with the interests of BFTP/SEP.

(d) Each Partner and its officers, directors and employees shall avoid conflicts of interests in connection with the operations and affairs of BFTP/SEP. Without limiting the generality of the foregoing, (i) a Partner shall not hire, engage, employ or appoint an officer, director or employee of BFTP/SEP (a “Covered Person”), or a spouse, parent, child or sibling of a Covered Person (an “Immediate Family Member”), or any for-profit entity in which a Covered Person or an Immediate Family Member of a Covered Person has an ownership or employment interest (a “Related For- Profit Entity”) to provide services (other than services as may ordinarily be provided by a Covered Person in his or her capacity as an officer, director or employee of BFTP/SEP) to BFTP/SEP or to any person or entity applying for or receiving financial assistance from or through BFTP/SEP (an “Applicant”); (ii) a Partner shall not require, as a condition of application, funding, or otherwise, any Applicant to hire, engage or employ a Covered Person, Immediate Family Member of a Covered Person or a Related For-Profit Entity to provide services to such Applicant; and (iii) a Partner shall not require, as a condition of application, funding, or otherwise, an Applicant to accept services from a Covered Person, Immediate Family Member of a Covered Person or a Related For-Profit Entity. Subject to applicable disclosure and recusal requirements, the prohibitions described herein are not intended to restrict or preclude pre-existing relationships between Applicants and Covered Persons, Immediate Family Members of Covered Persons, or Related For-Profit Entities, or to restrict or preclude business or professional relationships initiated by an Applicant with a Covered Person, Immediate Family Member of a Covered Person, or Related For-Profit Entity.

5. Communication and Affirmation of Policy.

(a) BFTP/SEP shall deliver a copy of this policy to each of its officers, directors, employees, consultants and independent contractors. A copy of this policy, or a summary thereof, shall be included in the documentation of each proposed project which BFTP/SEP funds.

(b) All Covered Persons shall be given a copy of this policy and deliver to the Secretary of BFTP/SEP positive written affirmation of adherence to the policy by executing the Acknowledgment and Acceptance of Conflict of Interest Policy attached hereto.

(c) Each member of the Board shall provide BFTP/SEP’s Secretary with an annual Financial Interest Disclosure Statement in the form from time to time required by BFTP/SEP Although such information will be made available to the members of the Board, it will otherwise be treated as confidential.

(d) Any candidate for election to the Board shall be given a copy of this policy in advance of election and shall affirm his or her support of it prior to election; and any newly elected officers, newly hired employees or newly retained consultants or independent contractors shall be advised, prior to election, hiring or retention, of this policy and each shall affirm his or her or its support thereof prior to election, hiring or retention.

6. Remedies.

The failure to make any required disclosure under this policy or any other breach of this policy is grounds for disciplinary action by BFTP/SEP against the Covered Person, which disciplinary action may include removal from the Board or termination of the individual’s employment, consulting or other contract or arrangement, and is grounds for disapproval of an application or rescission of a project by BFTP/SEP. The remedies provided herein shall be in addition to any other legal remedies available to BFTP/SEP.

 

Exhibit B

Adverse Interest Disclosure Statement

I, the undersigned, acknowledge that I am deemed to be a “Covered Person” under the Conflict of Interest Policy (the “Conflict Policy”) adopted by the Board of Directors of Ben Franklin Technology Partners of Southeastern Pennsylvania, as modified or supplemented from time to time.

In accordance with the Conflict Policy, I hereby disclose the following potential or actual “Adverse Interest” with respect to the following company/project:

Company/Project Name:

Description of Nature and Extent of Potential or Actual Adverse Interest:

 

 

 

Signature:_________________________________________________

Print Name: _______________________________________________

Date:_____________________________________________________