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EXHIBIT 3.1
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ARTICLES OF INCORPORATION
OF
VALLEY COMMUNITY BANCSHARES, INC.
The undersigned hereby executes the following Articles of Incorporation
for the purpose of forming a corporation under the Washington Business
Corporation Act (Revised Code of Washington, Title 23B).
ARTICLE I
NAME
The name of this corporation is VALLEY COMMUNITY BANCSHARES, INC.
ARTICLE II
AUTHORIZED CAPITAL STOCK
This corporation is authorized to issue, in the aggregate,
5,000,000 shares, $1.00 par value, of a single class of stock.
ARTICLE III
NO PREEMPTIVE RIGHTS
Unless otherwise determined by the Board of Directors, no
shareholder of the Corporation shall be entitled as such, as a matter of
right, to preemptive rights to purchase, subscribe for, or otherwise acquire
any stock which the Corporation may issue or sell, including unissued shares
of stock of the said Corporation.
ARTICLE IV
NOMINATION OF DIRECTORS
Nominations for the election of directors may be made by the Board of
Directors or by any shareholder entitled to vote for the election of directors.
Such nominations other than by the Board of Directors shall be made by notice in
writing, delivered or mailed by first class United States mail, postage prepaid,
to the Secretary of the Corporation not less than sixty (60) days prior to the
first anniversary of the date of the last meeting of shareholders of the
Corporation called for the election of directors.
Each notice shall set forth (i) the name, age, business address and, if
known, residence address of each nominee proposed in such notice; (ii) the
principal occupation or employment of each such nominee; (iii) the number of
shares of stock of the Corporation which are beneficially owned by each such
nominee; and (iv) such other information as would be required by the Federal
Securities Laws and the Rules and Regulations promulgated thereunder in respect
to any individual nominated as a director of the Corporation and for whom
proxies are solicited by the Board of Directors of the Corporation.
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The Chairman of any meeting of shareholders may, if the facts warrant,
determine and declare to the meeting that a nomination was not made in
accordance with the foregoing procedure, and if he should so determine, he shall
so declare to the meeting and the defective nomination shall be disregarded.
ARTICLE V
DIRECTORS
The number of directors of the Corporation shall not be less than five
(5), nor more than fifteen (15), the exact number of directors to be fixed from
time to time in the manner provided in the Bylaws, provided that no action shall
be taken by the directors (whether through amendment of the Bylaws or otherwise)
to increase the number of directors as provided in the Bylaws from time to time
unless at least seventy five percent (75%) of the directors then in office shall
concur in said action. The directors shall be divided into three classes: Class
I, Class II and Class III. Each class shall consist, as nearly as may be
possible, of one-third of the whole number of the Board of Directors. At the
first annual meeting of shareholders, the Class I directors shall be elected to
hold office for a term expiring at the next succeeding annual meeting of
shareholders; the Class II directors shall be elected to hold office for a term
expiring at the second succeeding annual meeting of shareholders; and the Class
III directors shall be elected to hold office for a term expiring at the third
succeeding annual meeting of shareholders, and in the case of each class, until
their respective successors are elected and qualified. At each annual election
held after the initial election of directors according to classes, the directors
chosen to succeed those whose terms have expired shall be identified as being of
the same class as the directors they succeed and shall be elected to hold office
for a term expiring at the third succeeding annual meeting after their election,
and until their respective successors are elected and qualified.
The initial Board of Directors of the Corporation shall be composed of
eight (8) members. The persons who as directors are to manage the Corporation
until the first annual meeting of its shareholders or until their successors are
elected and shall qualify are:
Charles R. Wadsworth
David H. Brown
A. Eugene Hammermaster
Thomas R. Absher
David K. Hamry
Dexter Silver
Warren D. Hunt
Roger L. Knutson
In the event of any increase or decrease in the authorized number of
directors (1) each director then serving as such shall nevertheless continue as
a director of the class in which he is a member until the expiration of his
current term or his earlier resignation, removal from office or death, and (2)
the newly created or eliminated directorships resulting from such increase or
decrease shall be apportioned
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by the Board of Directors among the three classes of directors so as to
maintain such classes as nearly equal as possible.
ARTICLE VI
DIRECTOR LIABILITY
A director of the Corporation shall not be personally liable to the
Corporation or its shareholders for monetary damages for conduct as a director,
except for liability of the director for (i) acts or omissions that involve
intentional misconduct or a knowing violation of law by the director, (ii)
conduct which violates RCW 23B.08.310 of the Washington Business Corporation
Act, pertaining to unpermitted distributions to shareholders or loans to
directors, or (iii) any transaction from which the director will personally
receive a benefit in money, property or services to which the director is not
legally entitled. If the Washington Business Corporation Act is amended to
authorize corporate action further eliminating or limiting the personal
liability of directors, then the liability of a director of the Corporation
shall be eliminated or limited to the fullest extent permitted by the Washington
Business Corporation Act, as so amended. Any repeal or modification of the
foregoing paragraph by the shareholders of the Corporation shall not adversely
affect any right or protection of a director of the Corporation existing at the
time of such repeal or modification.
ARTICLE VII
NO CUMULATIVE VOTING
At each election of directors, every shareholder entitled to vote at
such election has the right to vote in person or by proxy the number of shares
of stock held by such shareholder for as many persons as there are directors to
be elected. No cumulative voting for directors will be permitted.
ARTICLE VIII
AMENDMENT
This Corporation reserves the right to amend or repeal any provisions
contained in these Articles of Incorporation in any manner now or hereafter
permitted by law. All rights of shareholders of the Corporation and all powers
of directors of the Corporation are granted subject to this reservation.
ARTICLE IX
INDEMNIFICATION
1. DEFINITIONS. As used in this Article IX:
a. "Proceeding" means any actual or threatened action,
suit or proceeding, whether civil, criminal, administrative or investigative.
b. "Enterprise" means a corporation (other than the
Corporation), partnership, joint venture, trust, association, committee,
employee benefit plan, or other group or entity.
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c. "Corporation" means VALLEY COMMUNITY BANCSHARES, INC., and
any predecessor to it and any constituent corporation (including any constituent
of a constituent) absorbed by the Corporation in a consolidation or merger.
d. "Director or Officer" means each person who is serving or
who has served as a Director or Officer of the Corporation or, at the request of
the Corporation, as a Director, Officer, employee, or agent of another
Enterprise.
e. "Indemnitee" means each person who was, is or is threatened
to be made a party to or is involved (including without limitation, as a
witness) in a Proceeding because the person is or was a Director or Officer.
f. "Liability" means loss, liability, expenses (including
attorneys' fees), judgments, fines, ERISA excise taxes or penalties, and amounts
to be paid in settlement, actually and reasonably incurred or suffered by an
Indemnitee in connection with a Proceeding.
2. RIGHT TO INDEMNIFICATION.
a. The Corporation shall indemnify and hold each Indemnitee
harmless against all Liability, provided that (i) the Indemnitee acted in good
faith; (ii) in the case of official conduct, he reasonably believed that he was
acting in the Corporation's best interests, or in all other cases, that his
action was not opposed to its best interests; (iii) in the case of a criminal
proceeding, he had no reasonable cause to believe his conduct was unlawful; and
provided further, that (iv) the Indemnitee did not engage in the conduct
described in R.C.W. 30.12.240. Except as provided in Section 4 below, the
Corporation shall not indemnify an Indemnitee in connection with a Proceeding
(or part thereof) initiated by the Indemnitee unless such Proceeding (or part
thereof) was authorized by the Board of the Corporation. If, after the effective
date of this Article IX, the Washington Business Corporation Act is amended to
authorize further indemnification of Directors or Officers, then Directors and
Officers of this Corporation shall be indemnified to the fullest extent
permitted by the Washington Business Corporation Act, as so amended, to the
extent consistent with Title 30 of the Revised Code of Washington.
b. Section 2(a) notwithstanding, no Indemnitee shall be
indemnified in connection with (i) a proceeding by or in the right of the
Corporation or another Enterprise in which he was adjudged liable to the
Corporation or other Enterprise; or (ii) any other proceeding charging improper
personal benefit to himself, whether or not involving action in his official
capacity, in which he was adjudged liable on the basis that personal benefit was
improperly received by him. Further, indemnification in connection with a
proceeding by or in the right of the Corporation or another Enterprise is
limited to reasonable expenses incurred in connection with the proceeding.
c. The provisions of Section 2(a) notwithstanding, no
Indemnitee shall be indemnified for any civil money penalty or judgment
resulting from any administrative or civil action instituted by a federal
banking agency, or any other liability or legal expense with regard to any
administrative proceeding or civil action instituted by any federal banking
agency which results in a final order or settlement pursuant to which such
person is (i) assessed a civil money penalty; (ii) removed from office or
prohibited from participating in the conduct of the affairs of the Corporation
or other Enterprise; or (iii) is required to cease and desist from or to take
any affirmative action described in Section 8(b) of the Federal Deposit
Insurance Act, as amended (12 U.S.C. 1811, ET SEQ.). However, permissible
indemnification payments may be made as permitted by 12 C.F.R. Section 359, ET
SEQ., as amended from time-to-time.
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3. BURDEN OF PROOF AND PROCEDURE FOR PAYMENT.
a. The Indemnitee shall initially be entitled to
indemnification under this Article IX upon submission of a written claim only if
the Board of Directors first makes a good faith determination that the
Indemnitee has met the standard of conduct required by Section 2.
b. Section 3(a) notwithstanding, the Indemnitee shall be
entitled to indemnification under this Article IX for reasonable expenses
(including attorneys' fees) incurred in advance of final disposition of the
Proceeding if the (i) Indemnitee furnishes the Corporation a written affirmation
of his good faith belief that he has the standard of conduct required in Section
2(a)(i) - (iii); and (ii) the Indemnitee first delivers to the Corporation a
written undertaking, executed by or on behalf of such Director or Officer, to
repay all amounts so advanced if it shall ultimately be determined that such
Director or Officer is not entitled to be indemnified under this Article IX or
otherwise by law. This undertaking must be an unlimited general obligation of
the Director or officer.
4. RIGHT OF INDEMNITEE TO BRING SUIT. If a claim under this Article IX
is not paid in full by the Corporation within sixty (60) days after a written
claim has been received by the Corporation, except in the case of a claim for
expenses incurred in defending a proceeding in advance of its final disposition,
in which case the applicable period shall be twenty (20) days, the claimant may
at any time thereafter bring suit against the Corporation to recover the unpaid
amount of the claim and, to the extent successful in whole or in part, the
Indemnitee shall be entitled to be paid also the expense of prosecuting such
claim. Neither the failure of the Corporation (including its Board, its
shareholders, or independent legal counsel) to have made a determination prior
to the commencement of such action that indemnification of or reimbursement or
advancement of expenses to the claimant is proper in the circumstances, nor an
actual determination by the Corporation (including its Board, its shareholders,
or independent legal counsel) that the Indemnitee is not entitled to
indemnification or to the reimbursement or advancement of expenses, shall be a
defense to the action or create a presumption that the Indemnitee is not so
entitled.
5. NON-EXCLUSIVITY OF RIGHTS. The right to indemnification and the
payment of expenses incurred in defending a Proceeding in advance of its final
disposition conferred in this Article IX shall not be exclusive of any other
right which any person may have or hereafter acquire under any statute,
provision of the Articles of Incorporation, Bylaws, agreement, vote of
shareholders or disinterested Directors, or otherwise.
6. INSURANCE, CONTRACTS, AND FUNDING. The Corporation may maintain
insurance, at its expense, to protect itself and any Director, Officer, employee
or agent of the Corporation or Enterprise against any expense, liability, or
loss under the Washington Business Corporation Act. The Corporation may, without
further shareholder action, enter into contracts with any Director or Officer of
the Corporation in furtherance of the provisions of this Article IX and may
create a trust fund, grant a security interest, or use other means (including,
without limitation, a letter of credit) to ensure the payment of such amounts as
may be necessary to effect indemnification as provided in this Article IX.
7. INDEMNIFICATION OF EMPLOYEES AND AGENTS OF THE CORPORATION. The
Corporation may, by action of its Board from time to time, provide
indemnification and pay expenses in advance of the final disposition of a
Proceeding to employees and agents of the Corporation with the same scope and
effect as the provisions of this Article with respect to the indemnification and
advancement of expenses of Directors
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and Officers of the Corporation or pursuant to rights granted pursuant to, or
provided by, the Washington Business Corporation Act or otherwise.
8. CONTRACT RIGHT. Rights of indemnification under this Article IX
shall continue as to an Indemnitee who has ceased to be a Director or Officer
and shall inure to the benefit of his or her heirs, executors and
administrators. The right to indemnification conferred in this Article IX shall
be a contract right upon which each Director or Officer shall be presumed to
have relied on in determining to serve or to continue to serve as such. Any
amendment to or repeal of this Article IX shall not adversely affect any right
or protection of a Director or Officer of the Corporation for or with respect to
any acts or omissions of such Director or Officer occurring prior to such
amendment or repeal.
9. SEVERABILITY. If any provision of this Article IX or any application
thereof shall be invalid, unenforceable or contrary to applicable law, the
remainder of this Article IX, or the application of such provisions to persons
or circumstances other than those as to which it is held invalid, unenforceable
or contrary to applicable law, shall not be affected thereby and shall continue
in full force and effect.
ARTICLE X
FACTORS TO BE CONSIDERED BY DIRECTORS
REGARDING CERTAIN TRANSACTIONS
The Board of Directors of the Corporation, when evaluating any offer of
any other party to:
(a) make a tender or exchange offer to acquire 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;
shall, in connection with the exercising 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 its community and its depositors, borrowers, employees,
suppliers and other constituents.
ARTICLE XI
INTERESTED SHAREHOLDER TRANSACTION
1. For purposes of this Article:
(a) 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.
(b) An interested shareholder:
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(1) Includes any person or group of affiliated persons
who beneficially own 20 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
(2) 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 1(b)(1) of this Article.
2. Except as provided in Section 3 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 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 2 and of the total shares entitled
to be counted under this section 2. All outstanding shares entitled to vote
under applicable law or the Articles of Incorporation shall be entitled to be
counted under this Section 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 2. The
vote of the shares owned by or voted under the control of an interested
shareholder, however, shall be counted in determining whether a transaction
is approved under other provisions of applicable law and for purposes of
determining a quorum.
3. This Article shall not apply to a transaction:
(a) 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 24 months of the proposed transaction shall not
be counted in determining whether the transaction is approved by such
directors; or
(b) In which a majority of directors whose votes are
entitled to be counted under Section 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 24
months of the proposed transaction.
4. 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 4. All outstanding shares entitled to vote under
applicable law or the Articles of Incorporation shall be entitled to be
counted under this Section 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 approved the amendment or repeal. The vote of the
shares owned by or voted under the control of an interested shareholder,
however, shall be counted in determining whether the amendment or repeal is
approved under other provisions of applicable law and for purposes of
determining a quorum.
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5. 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.
ARTICLE XII
INCORPORATOR
The name and address of the incorporator is Glen P. Garrison, 1201
Third Avenue, Suite 3200, Seattle, Washington 98101-3052.
ARTICLE XII
REGISTERED OFFICE AND AGENT
The street address of this Corporation's initial registered office is
1201 Third Avenue, Suite 3200, Seattle, Washington 98101-3052. Glen P. Garrison
is the Corporation's initial registered agent at such office.
DATED this _______ day of ____________________, 1998.
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GLEN P. GARRISON, Incorporator
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CONSENT TO APPOINTMENT AS REGISTERED AGENT
I, GLEN P. GARRISON, hereby consent to serve as registered agent, in
the State of Washington, for VALLEY COMMUNITY BANCSHARES, INC. I understand that
as agent for the Corporation, it will be my responsibility to accept service of
process in the name of the Corporation; to forward all mail and license renewals
to the appropriate officer(s) of the Corporation; and to immediately notify the
Office of the Secretary of State of my resignation or of any changes in the
address of the registered office of the Corporation for which I am agent.
DATED this _____ day of ______________, 1998.
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Glen P. Garrison
1201 Third Avenue, Suite 3200
Seattle, WA 98101-3052
