The head office and principal place of business
of this corporation is located in the City of Aberdeen, County of Grays Harbor, State of Washington.
Authorized Classes of Shares. The total authorized capital stock of the corporation is 30,000,000 shares, divided
into 5,000,000 shares of preferred stock, $.01 par value per share, and 25,000,000 shares of Common Stock, $1.00 par
value per share.
Rights of the Common Stock. Subject to provisions governing preferred stock that may from time to time come into
existence, the holders of the common stock shall have unlimited voting rights and the unlimited right to receive the net assets
of the corporation upon dissolution. Each share of the common stock of the corporation will be entitled to one vote at all meetings
of shareholders. Holders of shares of common stock shall not have the right to cumulate votes in the election of directors. Upon
the request of any shareholder or shareholders holding in the aggregate more than 25 percent of all the votes entitled to
be cast on any issue proposed to be considered at a special meeting of the shareholders, it will be the duty of the secretary to
promptly call a special meeting of the shareholders.
Limitations, Preferences, and Relative Rights of the Preferred Stock. The Board of Directors is authorized, subject
to the provisions of this Article III and of the Washington Business Corporation Act, to provide for the issuance of shares of
the preferred stock in series, to fix the number and determine the designation of any such series, and to determine the preferences,
limitations, voting powers, and relative rights of each series, including, without limitation, whether and to what extent the shares
of that series shall have voting rights, whether shares of that series shall be redeemable or convertible and, if so, under what
circumstances, and whether and the extent to which shares of that series shall be entitled to dividends and other distributions,
and to preference over any other class or series of shares with respect to distributions, including upon liquidation or dissolution
of the corporation.
BOARD OF DIRECTORS
The Board of Directors will consist of not fewer than five (5) or more than twenty (20) persons. The exact number within
such minimum and maximum limits will be fixed and determined by resolution of the Board of Directors.
The Board of Directors will be divided into three classes: Class 1, Class 2, and Class 3. Each such Class
will consist, as nearly as possible, of one-third of the total number of directors constituting the entire Board of Directors.
Each director will serve for a term ending on the date of the third annual meeting of shareholders following the annual meeting
at which such director was elected; PROVIDED, HOWEVER, that each initial director in Class 1 will hold office until the annual
meeting of shareholders in 2000; each initial director in Class 2 will hold office until the annual meeting of shareholders
in 2001; and each initial director in Class 3 will hold office until the annual meeting of shareholders in the year 2002.
If the number of directors is increased or decreased, (i) each director then serving as such will nevertheless continue
as a director of the Class in which he or she is a member until the expiration of his or her current term, or his or her earlier
resignation, removal from office or death, and (ii) the newly created or eliminated directorships resulting from such increase
or decrease will be apportioned by the Board of Directors among the three Classes of directors so as to maintain such Classes as
nearly equal as possible.
Nominations for election to the Board of Directors may be made by the Board of Directors or by any stockholder of any outstanding
class of stock of the corporation entitled to vote for the election of directors. Nominations, other than those made by the Board
of Directors, must be made in writing and delivered or mailed to the Chairman of the corporation not less than fourteen (14) days
nor more than sixty (60) days prior to any meeting of shareholders called for the election of directors; provided, however, if
less than twenty-one (21) days' notice of the meeting is given to shareholders, such nominations will be mailed or delivered not
later than the close of business on the seventh day following the day on which the notice of meeting was mailed. Such notification
will contain the following information to the extent known to the notifying shareholder: (a) the name and address of each proposed
nominee; (b) the principal occupation of each proposed nominee; (c) the total number of shares of stock of the corporation that
will be voted for each proposed nominee; (d) the name and address of the notifying shareholder; and (e) the number of shares of
common stock of the corporation owned by the notifying shareholder. Any nomination not made in accordance with these provisions
may, at the discretion of the Chairperson of the meeting, be disregarded.
No holder of shares of any class of capital
stock of the corporation shall be entitled to preemptive rights to acquire any shares of capital stock of the corporation, whether
now or hereafter authorized, or to acquire any obligations issued or sold which are convertible into stock of the corporation,
other than such rights, if any, as the Board of Directors in its discretion may from time to time determine, and at such price
as the Board of Directors may from time to time fix.
FAIR PRICE PROVISION
For purposes of this Article:
An interested shareholder transaction means any transaction between a corporation, or any subsidiary thereof, and an interested
shareholder of such corporation or an affiliated person to an interested shareholder, that must be authorized pursuant to applicable
law by a vote of the shareholders.
An interested shareholder:
Includes any person or group of affiliated persons who beneficially own twenty percent or more of the outstanding voting
shares of a corporation. An affiliated person is any person who either acts jointly or in concert with, or directly or indirectly
controls, is controlled by, or is under common control with another person; and
Excludes any person who, in good faith and not for the purpose of circumventing this Article, is an agent, custodial bank,
broker, nominee, or trustee for another person, if such other person is not an interested shareholder under Section 6.1(b)(1)
of this Article.
Except as provided in Section 6.1 of this Article, an interested shareholder transaction must be approved by the affirmative
vote of the holders of two-thirds of the shares entitled to be counted under this Section 6.2, or if any class of shares is
entitled to vote thereon as a class, then by the affirmative vote of two-thirds of the shares of each class entitled to be counted
under this Section 6.2 and of the total shares entitled to be counted under this Section 6.2. All outstanding shares
entitled to vote under applicable law or the Articles of Incorporation will be entitled to be counted under this Section 6.2,
except shares owned by or voted under the control of an interested shareholder may not be counted to determine whether shareholders
have approved a transaction for purposes of this Section 6.2. The vote of the shares owned by or voted under the control of
an interested shareholder, however, will be counted in determining whether a transaction is approved under other provisions of
applicable law and for purposes of determining a quorum.
This Article will not apply to a transaction:
Approved by a majority vote of the board of directors. For such purpose, the vote of directors whose votes are otherwise
entitled to be counted under the Articles of Incorporation and applicable law who are directors or officers of, or have a material
financial interest in, an interested shareholder, or who were nominated for election as a director as a result of an arrangement
with an interested shareholder and first elected as a director within twenty-four months of the proposed transaction, will not
be counted in determining whether the transaction is approved by such directors; or
In which a majority of directors whose votes are entitled to be counted under Section 6.3(a) determines that the fair
market value of the consideration to be received by noninterested shareholders for shares of any class of which shares are owned
by any interested shareholder is not less than the highest fair market value of the consideration paid by any interested shareholder
in acquiring shares of the same class within twenty-four months of the proposed transaction.
This Article may be amended or repealed only by the affirmative vote of the holders of two-thirds of the shares entitled
to be counted under this Section 6.4. All outstanding shares entitled to vote under applicable law or the Articles of Incorporation
will be entitled to be counted under this Section 6.4, except shares owned by or voted under the control of an interested
shareholder may not be counted to determine whether shareholders have voted to approve the amendment or repeal. The vote of the
shares owned by or voted under the control of an interested shareholder, however, will be counted in determining whether the amendment
or repeal is approved under other provisions of applicable law and for purposes of determining a quorum.
The requirements imposed by this Article are to be in addition to, and not in lieu of, requirements imposed on any transaction
by any provision of applicable law, or any other provision of the Articles of Incorporation, or the Bylaws or otherwise.
CONSIDERATION OF NON-MONETARY FACTORS
The Board of Directors of the corporation,
when evaluating any offer of another party to (a) make a tender or exchange offer for any equity security of the corporation, (b)
merge or consolidate the corporation with another corporation, or (c) purchase or otherwise acquire all or substantially all of
the properties and assets of the corporation, will, in connection with the exercise of its judgment in determining what is in the
best interests of the corporation and its stockholders, give due consideration to all relevant factors, including without limitation
the social and economic effects on the employees, customers, suppliers, and other constituents of the corporation and its subsidiaries
and on the communities in which the corporation and its subsidiaries operate or are located.
DIRECTOR LIABILITY AND INDEMNIFICATION
DEFINITIONS. As used in this Article:
The term "Egregious Conduct" by a person will mean acts or omissions that involve intentional misconduct or a
knowing violation of law, conduct violating Section 23B.08.310 of the Revised Code of Washington, as amended, or participation
in any transaction from which the person will personally receive a benefit in money, property, or services to which the person
is not legally entitled.
The term "Finally Adjudged" will mean stated in a judgment based upon clear and convincing evidence by a court
having jurisdiction, from which there is no further right to appeal.
The term "Director" will mean any person who is a director of the corporation and any person who, while a director
of the corporation, is serving at the request of the corporation as a director, officer, partner, trustee, employee, or agent of
another foreign or domestic corporation, limited liability company, partnership, joint venture, trust, or other enterprise, or
is a fiduciary or party in interest in relation to any employee benefit plan covering any employee of the corporation or of any
employer in which it has an ownership interest; and "conduct as a Director" will include conduct while a Director is
acting in any of such capacities.
The term "Officer-Director" will mean any person who is simultaneously both an officer and director of the corporation
and any person who, while simultaneously both an officer and director of the corporation, is serving at the request of the corporation
as a director, officer, manager, partner, trustee, employee, or agent of another foreign or domestic corporation, limited liability
company, partnership, joint venture, trust, or other enterprise, or is a fiduciary or party in interest in relation to any employee
benefit plan covering any employee of the corporation or of any employer in which it has an ownership interest; and "conduct
as an Officer-Director" will include conduct while such a person is acting as an officer of the corporation or in any of such
The term "Subsidiary Corporation" will mean any corporation or limited liability company at least eighty percent
of the voting interests of which is held beneficially by this corporation.
The term "Subsidiary Outside Director" will mean any person who, while not principally employed by this corporation
or any Subsidiary Corporation, is a director or manager of a Subsidiary Corporation and any such person who, while a director or
manager of a Subsidiary Corporation, is serving at the request of such corporation as a director, officer, manager, partner, trustee,
employee, or agent of another foreign or domestic corporation, limited liability company, partnership, joint venture, trust, or
other enterprise, or is a fiduciary or party in interest in relation to any employee benefit plan covering any employee of such
corporation or of any employer in which it has an ownership interest; and "conduct as a Subsidiary Outside Director"
will include conduct while such a person is acting in any of such capacities.
LIABILITY OF DIRECTORS. No director, Officer-Director, former Director or former Officer-Director will be personally liable
to the corporation or its shareholders for monetary damages for conduct as a Director or Officer-Director occurring after the effective
date of this Article unless the conduct is Finally Adjudged to have been Egregious Conduct.
LIABILITY OF SUBSIDIARY OUTSIDE DIRECTORS. No Subsidiary Outside Director or former Subsidiary Outside Director will be
personally liable in any action brought directly by this corporation as a shareholder of the Subsidiary Corporation or derivatively
on behalf of the Subsidiary Corporation (or by any shareholder of this corporation double-derivatively on behalf of this corporation
and the Subsidiary Corporation) for monetary damages for conduct as a Subsidiary Outside Director occurring after the effective
date of this Article unless the conduct is Finally Adjudged to have been Egregious Conduct.
MANDATORY INDEMNIFICATION OF DIRECTORS. Subject to Sections 8.7 and 8.8 of this Article, the corporation will indemnify
any person who is, or is threatened to be made, a party to any action, suit, or proceeding, whether civil, criminal, administrative,
or investigative, and whether formal or informal, and whether by or in the right of the corporation or its shareholders or by any
other party, by reason of the fact that the person is or was a Director, Officer-Director, or Subsidiary Outside Director against
judgments, penalties or penalty taxes, fines, settlements (even if paid or payable to the corporation or its shareholders or to
a Subsidiary Corporation) and reasonable expenses, including attorney fees, actually incurred in connection with such action, suit
or proceeding unless the liability and expenses were on account of conduct Finally Adjudged to be Egregious Conduct.
ADVANCING EXPENSES. Except as prohibited by Sections 8.7 and 8.8 of this Article, the reasonable expenses, including
attorneys' fees, of a Director, Officer-Director, Subsidiary Outside Director, or person formerly serving in any such capacities,
incurred in connection with an action, suit or proceeding in which the individual is entitled to indemnification under Section 8.4
will be paid or reimbursed by the corporation, upon request of such person, in advance of the final disposition of such action,
suit or proceeding upon receipt by the corporation of a written, unsecured promise by the person to repay such amount if it will
be Finally Adjudged that the person is not eligible for indemnification. All expenses incurred by such person in connection with
such action, suit or proceeding will be considered reasonable unless Finally Adjudged to be unreasonable.
PROCEDURE. Except as required by Sections 8.7 and 8.8 of this Article, no action by the Board of Directors, the shareholders,
independent counsel, or any other person or persons will be necessary or appropriate to the determination of the corporation's
indemnification obligation under this Article in any specific case, to the determination of the reasonableness of any expenses
incurred by a person entitled to indemnification under this Article, nor to the authorization of indemnification in any specific
EXCEPTION FOR INTERNAL CLAIMS. Notwithstanding anything else in these Articles, the corporation will not be obligated to
indemnify any person for any expenses, including attorneys' fees, incurred to assert any claim against the corporation (except
a claim to enforce rights to indemnification) or any person related to or associated with it, including any person who would be
entitled hereby to indemnification in connection with the claim.
EXCEPTION FOR REGULATORY CLAIMS.
REGULATORY PROCEEDINGS GENERALLY. Notwithstanding anything else in these Articles, indemnification of any Director, Officer-Director
or Subsidiary Outside Director, or any person formerly serving in any such capacities, and advancement of expenses in connection
with either an administrative proceeding or a civil action instituted by a federal banking agency ("Regulatory Proceedings")
will be governed by this Section.
BANKING REGULATIONS DEFINED. The term "Banking Regulations" will mean any state or federal laws or regulations
applicable to the corporation, or any formal policies adopted by a regulatory agency having jurisdiction over the corporation.
INDEMNIFICATION IN REGULATORY PROCEEDINGS. The corporation will provide indemnification and advancement of expenses in connection
with Regulatory Proceedings to the extent permitted, and in the manner prescribed by Banking Regulations. Insurance and other means
to ensure payment of costs and expenses in Regulatory Proceedings may be obtained or provided to the extent permitted in and in
the manner prescribed by Banking Regulations.
FEDERAL DEPOSIT INSURANCE CORPORATION. Notwithstanding anything else in these Articles, the Articles are subject to the
requirements and limitations set forth in state and federal laws, rules, regulations, and orders regarding indemnification and
prepayment of legal expenses and liabilities, including Section 18(k) of the Federal Deposit Insurance Act, as amended, and
Part 359 of the Federal Deposit Insurance Corporation's Rules and Regulations or any successor regulations. To the extent
of any conflict between state and federal law regarding the interpretation and scope of the Articles, federal law will supersede
ENFORCEMENT OF RIGHTS. The corporation will indemnify any person granted indemnification rights under this Article against
any reasonable expenses incurred by the person to enforce such rights.
SET-OFF OF CLAIMS. Any person granted indemnification rights herein may directly assert such rights in set-off of any claim
raised against the person by or in the right of the corporation and will be entitled to have the same tribunal which adjudicates
the corporation's claim adjudicate the person's entitlement to indemnification by the corporation.
CONTINUATION OF RIGHTS. The indemnification rights provided in this Article will continue as to a person who has ceased
to be a Director, Officer-Director, or Subsidiary Outside Director and will inure to the benefit of the heirs, executors, and administrators
of such person.
EFFECT OF AMENDMENT OR REPEAL. Any amendment or repeal of this Article will not adversely affect any right or protection
of a Director, Officer-Director, or Subsidiary Outside Director or person formerly serving in any of such capacities existing at
the time of such amendment or repeal with respect to acts or omissions occurring prior to such amendment or repeal.
SEVERABILITY OF PROVISIONS. Each of the substantive provisions of this Article is separate and independent of the others,
so that if any provision hereof will be held to be invalid or unenforceable for any reason, such invalidity or unenforceability
will not affect the validity or enforceability of the other provisions.
REPURCHASE OF SHARES
To the extent authorized by the Washington
Director of Financial Institutions and the Federal Deposit Insurance Corporation, as applicable, the corporation may use its unreserved
and unrestricted surplus to purchase its own shares which will be held as authorized but unissued shares.
AMENDMENT TO BYLAWS
The Board of Directors will have full power
to adopt, alter, amend, or repeal the Bylaws or adopt new Bylaws; provided nothing herein will deny the concurrent power of the
shareholders to adopt, alter, amend, or repeal the Bylaws so long as any Bylaw is not inconsistent with law or these Articles.
AMENDMENT TO ARTICLES
This corporation reserves the right to amend
all or change or repeal any provisions contained in its Articles of Incorporation in any manner now or hereafter prescribed or
permitted by law. All rights of shareholders of this corporation are granted subject to this reservation.