SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
______________________________
Form 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
May 14, 1997
Date of Report
(Date of earliest
event reported)
SHURGARD STORAGE CENTERS, INC.
(Exact name of registrant as specified in its charter)
Washington 0-23466 91-1080141
(State or other (Commission (IRS Employer
jurisdiction of File No.) Identification No.)
incorporation)
1201 Third Avenue, Suite 2200
Seattle, Washington 98101
(Address of principal executive offices, including zip code)
(206) 624-8100
(Registrant's telephone number, including area code)
Exhibit Index on Page 4
<PAGE>
Item 5. Other Events
On May 14, 1997, Shurgard Storage Centers, Inc. (the "Company")
changed its state of incorporation from the state of Delaware to the
state of Washington through a merger with a wholly owned subsidiary
(the "Reincorporation"). The Reincorporation was approved by the
Company's shareholders at the annual meeting of shareholders held on
May 13, 1997.
Item 7. Financial Statement, Pro Forma Financial Information
and Exhibits
Exhibit No. Description
2.1 Agreement and Plan of Merger, dated May 13,
1997, between Shurgard Storage Centers,
Inc., a Delaware corporation, and Shurgard
Washington Corporation, a Washington
corporation.
3.1 Articles of Incorporation of the Registrant
(incorporated by reference to Exhibit B
contained in the Definitive Additional Proxy
Materials on Form DEFA14A filed on April 29,
1997 in connection with the Registrant's
1996 Annual Meeting of Shareholders).
3.2 Designation of Rights and Preferences of
Series A Junior Participating Preferred
Stock of Registrant.
3.3 Designation of Rights and Preferences of
8.80% Series B Cumulative Redeemable
Preferred Stock of Registrant.
3.4 Restated Bylaws of the Registrant.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned hereunto duly authorized.
SHURGARD STORAGE CENTERS, INC.
Dated: May 15, 1997
By /s/ Harrell Beck
Harrell Beck, Chief Financial
Officer
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
2.1 Agreement and Plan of Merger, dated May 13,
1997, between Shurgard Storage Centers,
Inc., a Delaware corporation, and Shurgard
Washington Corporation, a Washington
corporation.
3.1 Articles of Incorporation of the Registrant
(incorporated by reference to Exhibit B
contained in the Definitive Additional Proxy
Materials on Form DEFA14A filed on April 29,
1997 in connection with the Registrant's
1996 Annual Meeting of Shareholders).
3.2 Designation of Rights and Preferences of
Series A Junior Participating Preferred
Stock of Registrant.
3.3 Designation of Rights and Preferences of
8.80% Series B Cumulative Redeemable
Preferred Stock of Registrant.
3.4 Restated Bylaws of the Registrant.
AGREEMENT AND PLAN OF MERGER
BETWEEN
SHURGARD WASHINGTON CORPORATION
AND
SHURGARD STORAGE CENTERS, INC.
This Agreement and Plan of Merger (this "Agreement") is
entered into this 13th day of May, 1997, by and between
Shurgard Washington Corporation, a Washington corporation (the
"Surviving Corporation"), and Shurgard Storage Centers, Inc.,
a Delaware corporation ("Shurgard"). The Surviving
Corporation and Shurgard are sometimes referred to jointly as
the "Constituent Corporations."
RECITALS
A. Each of the Constituent Corporations is a
corporation organized and existing under the laws of its
respective state as indicated in the first paragraph of this
Agreement.
B. The shareholders and directors of each of the
Constituent Corporations have deemed it advisable for the
mutual benefit of the Constituent Corporations and their
respective shareholders that Shurgard be merged into the
Surviving Corporation pursuant to the provisions of the
Washington Business Corporation Act, Title 23B of the Revised
Code of Washington and the Delaware General Corporation Law
(the "Merger").
AGREEMENT
NOW, THEREFORE, in accordance with the laws of the states
of Washington and Delaware, the Constituent Corporations
agreed that, subject to the following terms and conditions,
(i) Shurgard shall be merged into the Surviving Corporation,
(ii) the Surviving Corporation shall continue to be governed
by the laws of the state of Washington, and (iii) the terms of
the Merger, and the mode of carrying them into effect, shall
be as follows:
1. Articles of Surviving Corporation
The Articles of Incorporation of the Surviving
Corporation as in effect prior to the Effective Time of the
Merger shall constitute the "Articles" of the Surviving
Corporation within the meaning of Section 23B.01.400(1) of the
Washington Business Corporation Act and Section 104 of the
Delaware General Corporation Law, except that Article I of the
Articles of Incorporation of the Surviving Corporation is
hereby amended in its entirety to read as follows:
"ARTICLE 1. NAME
The name of the corporation is Shurgard Storage Centers,
Inc."
2. Appointment of Agent for Service of Process
Pursuant to Section 252(d) of the Delaware General
Corporation Law, the Surviving Corporation irrevocably
appoints the Delaware Secretary of State to accept service of
process in any proceeding to enforce against the Surviving
Corporation any obligation of any Constituent Corporation as
well as for enforcement of any obligation of the Surviving
Corporation arising from the Merger. The Delaware Secretary
of State shall mail a copy of such process to Shurgard Storage
Centers, Inc., Attn: Legal Department, 1201 Third Avenue,
22nd Floor, Seattle, Washington 98101.
3. Conversion of Shares
3.1 Shurgard Shares. At the Effective Time of the
Merger, each outstanding share of the Class A common stock of
Shurgard shall automatically convert to one share of Class A
common stock of the Surviving Corporation, each outstanding
share of the Class B common stock of Shurgard shall
automatically convert to one share of Class B common stock of
the Surviving Corporation, and each outstanding share of 8.80%
Series B Cumulative Redeemable Preferred Stock of Shurgard
shall automatically convert to one share of 8.80% Series B
Cumulative Redeemable Preferred Stock of the Surviving
Corporation. It will not be necessary for stockholders of
Shurgard to exchange their existing stock certificates for
stock certificates of the Surviving Corporation.
3.2 Surviving Corporation Shares. At the Effective Time
of the Merger each outstanding share of the common stock of
the Surviving Corporation shall be automatically canceled and
returned to the status of authorized but unissued shares.
4. Bylaws
The Bylaws of the Surviving Corporation shall be the
governing Bylaws.
5. Directors and Officers
The directors and officers of Shurgard shall be the
directors and officers of the Surviving Corporation.
6. Effect of the Merger
The effect of the Merger shall be as provided by the
applicable provisions of the laws of Washington and Delaware.
Without limiting the generality of the foregoing, and subject
thereto, at the Effective Time of the Merger: the separate
existence of Shurgard shall cease; the Surviving Corporation
shall possess all assets and property of every description,
and every interest therein, wherever located, and the rights,
privileges, immunities, powers, franchises and authority, of a
public as well as a private nature, of each of the Constituent
Corporations; all obligations belonging to or due either of
the Constituent Corporations shall be vested in, and become
the obligations of, the Surviving Corporation without further
act or deed; title to any real estate or any interest therein
shall not revert or in any way be impaired by reason of the
Merger; all rights of creditors and all liens upon any
property of either of the Constituent Corporations shall be
preserved unimpaired; and the Surviving Corporation shall be
liable for all the obligations of the Constituent Corporations
and any claim existing, or action or proceeding pending, by or
against either of the Constituent Corporations may be
prosecuted to judgment with right of appeal, as if the Merger
had not taken place.
If at any time after the Effective Time of the Merger the
Surviving Corporation shall consider it to be advisable that
any further conveyances, agreements, documents, instruments
and assurances of law or any other things are necessary or
desirable to vest, perfect, confirm or record in the Surviving
Corporation the title to any property, rights, privileges,
powers and franchises of the Constituent Corporations or
otherwise to carry out the provisions of this Agreement, the
proper directors and officers of the Constituent Corporations
last in office shall execute and deliver, upon the Surviving
Corporation's request, any and all proper conveyances,
agreements, documents, instruments and assurances of law, and
do all things necessary or proper to vest, perfect or confirm
title to such property, rights, privileges, powers and title
to such property, rights, privileges, powers and franchises in
the Surviving Corporation, and otherwise to carry out the
provisions of this Agreement.
7. Effective Time of the Merger
As used in this Agreement, the "Effective Time of the
Merger" shall mean the time as which executed counterparts of
this Agreement or conformed copies thereof, together with duly
executed Certificates or Articles of Merger have been duly
filed by the Constituent Corporations in the office of the
Washington Secretary of State pursuant to Section 23B.11.050
of the Washington Business Corporation Act and the Office of
the Delaware Secretary of State pursuant to Section 252 of the
Delaware General Corporation Law or at such time thereafter as
is provided in such Certificates or Articles of Merger.
8. Termination
This Agreement may be terminated and the Merger abandoned
by mutual consent of the directors of the Constituent
Corporations at any time prior to the Effective Time of the
Merger.
9. No Third-Party Beneficiaries
Except as otherwise specifically provided herein, nothing
expressed or implied in this Agreement is intended, or shall
be construed, to confer upon or give any person, firm or
corporation, other than the Constituent Corporations and their
respective shareholders, any rights or remedies under or by
reason of this Agreement.
IN WITNESS WHEREOF, the parties hereto have caused this
Plan and Agreement of Merger to be executed as of the date
first above written.
SHURGARD WASHINGTON CORPORATION,
a Washington corporation
By /s/ Charles K. Barbo
Charles K. Barbo, President
ATTEST:
/s/ Harrell L. Beck
Harrell L. Beck, Senior Vice President,
Chief Financial Officer and Treasurer
SHURGARD STORAGE CENTERS, INC.,
a Delaware corporation
By /s/ Charles K. Barbo
Charles K. Barbo, Chairman of
the Board, President and Chief
Executive Officer
ATTEST:
/s/ Harrell L. Beck
Harrell L. Beck, Senior Vice President,
Chief Financial Officer and Treasurer
DESIGNATION OF RIGHTS AND PREFERENCES OF SERIES A
JUNIOR PARTICIPATING PREFERRED STOCK
The Board of Directors of Shurgard Washington Corporation
(the "Corporation") hereby establishes a series of the
Company's Preferred Stock, par value $.001 per share, and
hereby states the designation and number of shares, and fixes
the relative rights, preferences and limitations thereof as
follows:
Section 1. Designation and Amount
The shares of such series shall be designated as
"Series A Junior Participating Preferred Stock" (the "Series A
Preferred Stock") and the number of shares constituting the
Series A Preferred Stock shall be 2,800,000. Such number of
shares may be increased or decreased by resolution of the
Board of Directors; provided that no decrease shall reduce the
number of shares of Series A Preferred Stock to a number less
than the number of shares then outstanding plus the number of
shares reserved for issuance upon the exercise of outstanding
options, rights or warrants or upon the conversion of any
outstanding securities issued by the Corporation convertible
into Series A Preferred Stock.
Section 2. Dividends and Distributions
(A) Subject to the rights of the holders of any shares
of any series of Preferred Stock (or any similar stock)
ranking prior and superior to the Series A Preferred Stock
with respect to dividends, the holders of shares of Series A
Preferred Stock, in preference to the holders of Class A
Common Stock, par value $.001 per share (the "Common Stock"),
of the Corporation and of any other junior stock, shall be
entitled to receive, when, as and if declared by the Board of
Directors out of funds legally available for the purpose,
quarterly dividends payable in cash on the first day of March,
June, September and December in each year (each such date
being referred to herein as a "Quarterly Dividend Payment
Date"), commencing on the first Quarterly Dividend Payment
Date after the first issuance of a share or fraction of a
share of Series A Preferred Stock, in an amount per share
(rounded to the nearest cent) equal to the greater of (i) $1
or (ii) subject to the provision for adjustment hereinafter
set forth, 100 times the aggregate per share amount of all
cash dividends, and 100 times the aggregate per share amount
(payable in kind) of all noncash dividends or other
distributions, other than a dividend payable in shares of
Common Stock or a subdivision of the outstanding shares of
Common Stock (by reclassification or otherwise), declared on
the Common Stock since the immediately preceding Quarterly
Dividend Payment Date or, with respect to the first Quarterly
Dividend Payment Date, since the first issuance of any share
or fraction of a share of Series A Preferred Stock. In the
event the Corporation shall at any time declare or pay any
dividend on the Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolidation
of the outstanding shares of Common Stock (by reclassification
or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common
Stock, then in each such case the amount to which holders of
shares of Series A Preferred Stock were entitled immediately
prior to such event under clause (ii) of the preceding
sentence shall be adjusted by multiplying such amount by a
fraction, the numerator of which is the number of shares of
Common Stock outstanding immediately after such event and the
denominator of which is the number of shares of Common Stock
that were outstanding immediately prior to such event.
(B) The Corporation shall declare a dividend or
distribution on the Series A Preferred Stock as provided in
paragraph (A) of this Section 2 immediately after it declares
a dividend or distribution on the Common Stock (other than a
dividend payable in shares of Common Stock); provided,
however, that, in the event no dividend or distribution shall
have been declared on the Common Stock during the period
between any Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a dividend of $1
per share on the Series A Preferred Stock shall nevertheless
be payable on such subsequent Quarterly Dividend Payment Date.
(C) Dividends shall begin to accrue and be cumulative on
outstanding shares of Series A Preferred Stock from the
Quarterly Dividend Payment Date next preceding the date of
issue of such shares, unless the date of issue of such shares
is prior to the record date for the first Quarterly Dividend
Payment Date, in which case dividends on such shares shall
begin to accrue from the date of issue of such shares, or
unless the date of issue is a Quarterly Dividend Payment Date
or is a date after the record date for the determination of
holders of shares of Series A Preferred Stock entitled to
receive a quarterly dividend and before such Quarterly
Dividend Payment Date, in either of which events such
dividends shall begin to accrue and be cumulative from such
Quarterly Dividend Payment Date. Accrued but unpaid dividends
shall not bear interest. Dividends paid on the shares of
Series A Preferred Stock in an amount less than the total
amount of such dividends at the time accrued and payable on
such shares shall be allocated pro rata on a share-by-share
basis among all such shares at the time outstanding. The
Board of Directors may fix a record date for the determination
of holders of shares of Series A Preferred Stock entitled to
receive payment of a dividend or distribution declared
thereon, which record date shall be not more than 60 days
prior to the date fixed for the payment thereof.
Section 3. Voting Rights
The holders of shares of Series A Preferred Stock shall
have the following voting rights:
(A) Subject to the provision for adjustment hereinafter
set forth, each share of Series A Preferred Stock shall
entitle the holder thereof to 100 votes on all matters
submitted to a vote of the stockholders of the Corporation.
In the event the Corporation shall at any time declare or pay
any dividend on the Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolidation
of the outstanding shares of Common Stock (by reclassification
or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common
Stock, then in each such case the number of votes per share to
which holders of shares of Series A Preferred Stock were
entitled immediately prior to such event shall be adjusted by
multiplying such number by a fraction, the numerator of which
is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding
immediately prior to such event.
(B) Except as otherwise provided herein, in any other
Designation of Rights and Preferences creating a series of
Preferred Stock or any similar stock, or by law, the holders
of shares of Series A Preferred Stock and the holders of
shares of Common Stock and any other capital stock of the
Corporation having general voting rights shall vote together
as one class on all matters submitted to a vote of
stockholders of the Corporation.
(C) Except as set forth herein, or as otherwise provided
by law, holders of Series A Preferred Stock shall have no
special voting rights and their consent shall not be required
(except to the extent they are entitled to vote with holders
of Common Stock as set forth herein) for taking any corporate
action.
Section 4. Certain Restrictions
(A) Whenever quarterly dividends or other dividends or
distributions payable on the Series A Preferred Stock as
provided in Section 2 are in arrears, thereafter and until all
accrued and unpaid dividends and distributions, whether or not
declared, on shares of Series A Preferred Stock outstanding
shall have been paid in full, the Corporation shall not:
(i) declare or pay dividends, or make any other
distributions, on any shares of stock ranking junior (either
as to dividends or upon liquidation, dissolution or winding
up) to the Series A Preferred Stock;
(ii) declare or pay dividends, or make any other
distributions, on any shares of stock ranking on a parity
(either as to dividends or upon liquidation, dissolution or
winding up) with the Series A Preferred Stock, except
dividends paid ratably on the Series A Preferred Stock and all
such parity stock on which dividends are payable or in arrears
in proportion to the total amounts to which the holders of all
such shares are then entitled;
(iii) redeem or purchase or otherwise acquire for
consideration shares of any stock ranking junior (either as to
dividends or upon liquidation, dissolution or winding up) to
the Series A Preferred Stock, provided that the Corporation
may at any time redeem, purchase or otherwise acquire shares
of any such junior stock in exchange for shares of any stock
of the Corporation ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Series A
Preferred Stock; or
(iv) redeem or purchase or otherwise acquire for
consideration any shares of Series A Preferred Stock, or any
shares of stock ranking on a parity with the Series A
Preferred Stock, except in accordance with a purchase offer
made in writing or by publication (as determined by the Board
of Directors) to all holders of such shares upon such terms as
the Board of Directors, after consideration of the respective
annual dividend rates and other relative rights and
preferences of the respective series and classes, shall
determine in good faith will result in fair and equitable
treatment among the respective series or classes.
(B) The Corporation shall not permit any subsidiary of
the Corporation to purchase or otherwise acquire for
consideration any shares of stock of the Corporation unless
the Corporation could, under paragraph (A) of this Section 4,
purchase or otherwise acquire such shares at such time and in
such manner.
Section 5. Reacquired Shares
Any shares of Series A Preferred Stock purchased or
otherwise acquired by the Corporation in any manner whatsoever
shall be retired and canceled promptly after the acquisition
thereof. All such shares shall upon their cancellation become
authorized but unissued shares of Preferred Stock and may be
reissued as part of a new series of Preferred Stock subject to
the conditions and restrictions on issuance set forth herein,
in the Articles of Incorporation, or in any other Designation
of Rights and Preferences creating a series of Preferred Stock
or any similar stock or as otherwise required by law.
Section 6. Liquidation, Dissolution or Winding Up
Upon any liquidation, dissolution or winding up of the
Corporation, no distribution shall be made (i) to the holders
of shares of stock ranking junior (either as to dividends or
upon liquidation, dissolution or winding up) to the Series A
Preferred Stock unless, prior thereto, the holders of shares
of Series A Preferred Stock shall have received $100 per
share, plus an amount equal to accrued and unpaid dividends
and distributions thereon, whether or not declared, to the
date of such payment, provided that the holders of shares of
Series A Preferred Stock shall be entitled to receive an
aggregate amount per share, subject to the provision for
adjustment hereinafter set forth, equal to 100 times the
aggregate amount to be distributed per share to holders of
shares of Common Stock, or (ii) to the holders of shares of
stock ranking on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with the Series A
Preferred Stock, except distributions made ratably on the
Series A Preferred Stock and all such parity stock in
proportion to the total amounts to which the holders of all
such shares are entitled upon such liquidation, dissolution or
winding up. In the event the Corporation shall at any time
declare or pay any dividend on the Common Stock payable in
shares of Common Stock, or effect a subdivision or combination
or consolidation of the outstanding shares of Common Stock (by
reclassification or otherwise than by payment of a dividend in
shares of Common Stock) into a greater or lesser number of
shares of Common Stock, then in each such case the aggregate
amount to which holders of shares of Series A Preferred Stock
were entitled immediately prior to such event under the
proviso in clause (i) of the preceding sentence shall be
adjusted by multiplying such amount by a fraction, the
numerator of which is the number of shares of Common Stock
outstanding immediately after such event and the denominator
of which is the number of shares of Common Stock that were
outstanding immediately prior to such event.
Section 7. Consolidation, Merger, etc.
In case the Corporation shall enter into any
consolidation, merger, combination or other transaction in
which the shares of Common Stock are exchanged for or changed
into other stock or securities, cash and/or any other
property, then in any such case each share of Series A
Preferred Stock shall at the same time be similarly exchanged
or changed into an amount per share, subject to the provision
for adjustment hereinafter set forth, equal to 100 times the
aggregate amount of stock, securities, cash and/or any other
property (payable in kind), as the case may be, into which or
for which each share of Common Stock is changed or exchanged.
In the event the Corporation shall at any time declare or pay
any dividend on the Common Stock payable in shares of Common
Stock, or effect a subdivision or combination or consolidation
of the outstanding shares of Common Stock (by reclassification
or otherwise than by payment of a dividend in shares of Common
Stock) into a greater or lesser number of shares of Common
Stock, then in each such case the amount set forth in the
preceding sentence with respect to the exchange or change of
shares of Series A Preferred Stock shall be adjusted by
multiplying such amount by a fraction, the numerator of which
is the number of shares of Common Stock outstanding
immediately after such event and the denominator of which is
the number of shares of Common Stock that were outstanding
immediately prior to such event.
Section 8. Redemption and Stop Transfer for REIT
Qualification
(A) Definitions. Whenever used in this Section 8, the
terms defined below shall have the following respective
meanings:
(i) "Code" shall mean the Internal Revenue Code of
1986, as it may be amended from time to time.
(ii) "Owner, owns or ownership" shall mean that a
Person (as defined below) is the owner of such shares or a
right to acquire such shares for purposes of Subchapter M
Part II of the Code, including ownership provisions of Code
Section 542 and 544.
(iii) "Person" shall mean and include individuals,
corporations, limited partnerships, general partnerships,
joint stock companies or associations, joint ventures,
companies, trusts, banks, trust companies, land trusts,
business trusts, estates or other entities and governmental
agencies and political subdivisions thereof.
(iv) "REIT" shall mean a real estate investment
trust as defined in Sections 856 through 860 of the Code.
(v) "Ownership Limit" shall mean nine and eight-
tenths of one percent (9.8%) of the total value of the
outstanding Preferred and Common Stock of the corporation
including any rights to acquire Preferred or Common Stock of
the corporation; provided, however, that the Board of
Directors may increase such percentage in accordance with the
procedures prescribed in Section 8(B) for certain Persons, in
which event the Ownership Limit for such Persons shall be the
percentage interest established at the time the Board of
Directors approved the Persons' acquisition.
(B) Redemption Provision. If, at any time, (i) five or
fewer Persons shall be or become the Owners of more than fifty
percent (50%) of the value of the total outstanding shares of
Preferred and Common Stock of the Corporation (including any
rights to acquire Preferred or Common Stock of the
Corporation), (ii) a Person shall be or become an Owner of a
total number of outstanding shares of Preferred and/or Common
Stock of the Corporation (including any rights to acquire
Preferred or Common Stock) in excess of the Ownership Limit,
excluding, however, any Person acquiring outstanding shares of
Common Stock in the Corporation, in exchange for interests in
the Partnerships or in the Partnerships' cash available for
distribution held as of the record date of November 8, 1993,
in excess of the Ownership Limit as a result of the
Corporation's acquisition of the assets of, or equity interest
in, the Partnerships referenced in Section 2.3 of the Articles
of Incorporation of the Corporation, or (iii) the Board of
Directors shall in good faith be of the opinion that Ownership
of the outstanding shares of Preferred and Common Stock of the
Corporation has or may become concentrated to an extent that
may prevent the Corporation from qualifying as a REIT, then
the Board of Directors shall have the power:
(1) With respect to any Ownership or proposed
transfer or acquisition of outstanding shares in excess of the
Ownership Limit, to refuse to permit or give effect to such
transfer or acquisition, to take any action to void any such
transfer or acquisition or to cause it not to occur, and/or to
call for redemption the number of shares of common stock of
the corporation sufficient to cause such Person's Ownership
not to exceed the Ownership Limit, and
(2) With respect to subparagraphs (i) and (iii)
above, by lot or other means deemed equitable by it, to
prevent the transfer or acquisition of and/or, to the fullest
extent permitted by law, to call for redemption of a number of
shares of Preferred Stock or Common Stock of the corporation
sufficient, in the opinion of the Board of Directors, to
maintain or bring the direct or indirect Ownership thereof in
order to permit the corporation to qualify, or to continue its
qualification as a REIT under the provisions of the Code.
The redemption price to be paid for the shares of the
corporation so called for redemption, on the date fixed for
redemption (which date shall be the date the corporation
designates as the date for redemption), shall be the closing
price of such shares on the national stock exchange or
national market system on which such shares are listed or
admitted to trading or, if no such closing price is
available, as determined in good faith by the Board of
Directors. From and after the date fixed for redemption by
the Board of Directors, the holder of any shares of the
corporation so called for redemption shall cease to be
entitled to any distributions, voting rights or other
benefits with respect to such shares of the Corporation,
other than the right to payment of the redemption price
determined as set forth herein.
At any time a corporate investor desiring to be
exempted from the restriction that its stock ownership may
not exceed the Ownership Limit may, in writing, petition the
Board of Directors for approval to acquire, or to continue
to hold, shares of common stock in excess of the Ownership
Limit. The Board of Directors shall grant such written
request unless it determines in good faith that the
acquisition or ownership of such shares of common stock may
jeopardize the corporation's qualification as a REIT under
existing federal tax laws and regulations. Notwithstanding
the foregoing, nothing contained herein shall be deemed to
obligate the Board of Directors to approve a request to
adjust the Ownership Limit as to any corporate investor if
the Board of Directors believes, based upon advice from
legal counsel, that the granting of such request would cause
the Board of Directors to breach its fiduciary duties to the
stockholders.
(C) Notification of Certain Transfers. Any Person
intending to acquire shares of Preferred Stock in excess of
the Ownership Limit shall give written notice to this
Corporation of the proposed or actual transaction no later
than the date upon which such transaction occurs and shall
timely furnish such opinions of counsel, affidavits,
undertakings, agreements and information as may be required by
the Board of Directors to evaluate or to protect against any
adverse effect of the transfer. If, in the opinion of the
Board of Directors, which shall be conclusive upon all
parties, any such transfer or acquisition has taken place or
is proposed to occur, the Board of Directors shall have the
power to act in accordance with subparagraph (B)(1) above.
(D) Invalid Determination. If any provision of this
Section 8 or any application of any such provision is
determined to be invalid by any federal or state court having
jurisdiction over the issues, the validity of the remaining
provisions shall be affected only to the extent necessary to
comply with the determination of such court.
(E) Preservation of REIT Status. Nothing contained in
this Section 8 shall limit the authority of the Board of
Directors to take such other action as they deem necessary or
advisable to protect the corporation and the interests of the
stockholders by preservation of the corporation's status as a
REIT under the Code.
(F) Amendment. Notwithstanding anything contained in
this Designation of Rights and Preferences or the Articles of
Incorporation to the contrary, this Section 8 or any provision
hereof shall not be altered, amended or repealed except in
accordance with Article 9 of the Articles of Incorporation and
Section 11 herein; provided, however, if in connection with an
offering of shares (whether Common or Preferred Stock) by the
corporation any state refuses to permit such offering to be
made in such state because of the power of redemption
conferred upon the Board of Directors by this Section 8, the
Board of Directors shall have the authority (but is not
obligated), without requiring stockholder approval, to amend
this Section 8 to reduce or eliminate all or any portion of
such restrictions to be made in the objecting state. If the
Board of Directors amends this Section 8, it shall mail,
within thirty (30) days of the effective date of such
amendment, notice to all stockholders of record on the
effective date of such amendment, setting forth the nature of
the amendment.
(G) Legend on Shares. All certificates for shares of
common stock and all shares of any Preferred Stock subject to
these restrictions shall bear a conspicuous legend describing
the restrictions set forth in this Section 8 and stating that
by acquiring the shares represented by the certificate the
Owner consents to such restrictions and requirements.
Section 9. No Redemption
Except as otherwise provided in Section 8 hereof, the
shares of Series A Preferred Stock shall not be redeemable.
Section 10. Rank
The Series A Preferred Stock shall rank, with respect to
the payment of dividends and the distribution of assets,
junior to all series of any other class of the Corporation's
Preferred Stock.
Section 11. Amendment
The Articles of Incorporation of the Corporation shall
not be amended in any manner that would materially alter or
change the powers, preferences or special rights of the
Series A Preferred Stock so as to affect them adversely
without the affirmative vote of the holders of at least two-
thirds of the outstanding shares of Series A Preferred Stock,
voting together as a single class.
DESIGNATION OF RIGHTS AND PREFERENCES OF
8.80% SERIES B CUMULATIVE REDEEMABLE
PREFERRED STOCK
The Board of Directors of Shurgard Washington Corporation
(the "Corporation") hereby establishes a series of the
Company's Preferred Stock, par value $.001 per share, and
hereby states the designation and number of shares, and fixes
the relative rights, preferences and limitations thereof as
follows:
Section 1. Designation and Amount
The shares of such series shall be designated as "8.80%
Series B Cumulative Redeemable Preferred Stock" (the "Series B
Preferred Stock") and the number of shares constituting the
Series B Preferred Stock shall be 2,000,000. Such number of
shares may be decreased by resolution of the Board of
Directors; provided that no such decrease shall reduce the
number of shares of Series B Preferred Stock to a number less
than the number of shares then outstanding.
Section 2. Ranking
The Series B Preferred Stock shall, with respect to
dividend rights, rights upon liquidation, winding up or
dissolution, and redemption rights, rank (A) junior to any
other class or series of preferred stock hereafter duly
established by the Board of Directors of the corporation, the
terms of which shall specifically provide that such series
shall rank senior to the Series B Preferred Stock as to the
payment of dividends, distribution of assets upon liquidation
and redemption rights (the "Senior Preferred Stock"), (B) pari
passu with any other class or series of preferred stock
hereafter duly established by the Board of Directors of the
corporation, the terms of which shall specifically provide
that such class or series shall rank pari passu with the
Series B Preferred Stock as to the payment of dividends,
distribution of assets upon liquidation and redemption rights
(the "Parity Preferred Stock"), and (C) senior to any other
class or series of preferred stock or other class or series of
capital stock of or other equity interests in the corporation,
including, without limitation, all classes of the common stock
of the corporation, whether now existing or hereafter created
(all of such classes or series of capital stock and other
equity interests of the corporation, including, without
limitation, the Class A Common Stock, the Class B Common
Stock, and the Series A Junior Participating Preferred Stock
of the corporation, are collectively referred to herein as the
"Junior Stock").
Section 3. Dividends and Distributions
(A) Subject to the rights of series of Preferred Stock
which may from time to time come into existence, holders of
the then outstanding Series B Preferred Stock shall be
entitled to receive, when and as declared by the Board of
Directors, out of funds legally available for the payment of
dividends, cumulative preferential cash dividends at the rate
of 8.80% of the liquidation preference per annum. Such
dividends shall accumulate and be cumulative from the date of
original issue and shall be payable in equal amounts quarterly
in arrears on the last day of March, June, September and
December or, if not a business day, the next succeeding
business day (each, a "Distribution Payment Date"). The first
dividend, which will be paid on June 30, 1997, will be for
less than a full quarter. Such first dividend and any
dividend distribution payable on Series B Preferred Stock for
any partial distribution period will be computed on the basis
of a 360-day year consisting of twelve 30-day months.
Distributions will be payable to holders of record as they
appear in the share records of the corporation at the close of
business on the applicable record date, which shall be on the
first day of the calendar month in which the applicable
Distribution Payment Date falls or on such other date
designated by the Board of Directors of the corporation for
the payment of distributions that is not more than 30 or less
than 10 days prior to such Distribution Payment Date (each, a
"Distribution Record Date").
(B) Distributions on Series B Preferred Stock will
accumulate and be cumulative whether or not the corporation
has earnings, whether or not there are funds legally available
for the payment of such distributions and whether or not such
distributions are earned, declared or authorized. No
interest, or sum of money in lieu of interest, shall be
payable in respect of any distribution payment or payments on
Series B Preferred Stock which may be in arrears.
Distributions paid on the Series B Preferred Stock in an
amount less than the total amount of such dividends at the
time accumulated and payable on such shares shall be allocated
pro rata on a per share basis among all such shares at the
time outstanding.
(C) If, for any taxable year, the corporation elects to
designate as "capital gain dividends " (as defined in
Section 857 of the Internal Revenue code of 1986, as amended,
or any successor revenue code or section (the "Code")) any
portion (the "Capital Gains Amount") of the total dividends
(as determined for federal income tax purposes) paid or made
available for the year to holders of all classes of capital
stock (the "Total Distributions"), then the portion of the
Capital Gains Amount that shall be allocable to holders of
Series B Preferred Stock shall be in the same percentage that
the total dividends (as determined for federal income tax
purposes) paid or made available to the holders of Series B
Preferred Stock for the year bears to the Total Distributions.
(D) If any shares of Series B Preferred Stock are
outstanding, no distributions shall be declared or paid or set
apart for payment on any shares of any other series of Parity
Preferred Stock of the corporation for any period unless full
cumulative distributions have been or contemporaneously are
declared and paid or declared and a sum sufficient for the
payment thereof set apart for such payments on shares of
Series B Preferred Stock for all past distribution periods and
the then current distribution period. When distributions are
not paid in full (or a sum sufficient for such full payment is
not set apart) upon the shares of Series B Preferred Stock and
the shares of Parity Preferred Stock, all distributions
declared upon shares of Series B Preferred Stock and Parity
Preferred Stock shall be declared pro rata so that the amount
of distributions declared per share on Series B Preferred
Stock and such Parity Preferred Stock shall in all cases bear
to each other the same ratio that accrued distributions per
share on Series B Preferred Stock and such Parity Preferred
Stock bear to each other.
(E) Except as provided in Section 3(D) of this
Designation of Rights and Preferences, unless full cumulative
distributions on shares of Series B Preferred Stock have been
or contemporaneously are declared and paid or declared and a
sum sufficient for the payment thereof set apart for payment
for all past distribution periods and the then current
distribution period, no distributions (other than in shares of
Common Stock or other Junior Stock) shall be declared or paid
or set aside for payment or other distribution shall be
declared or made upon the shares of Common Stock or any other
Junior Stock or Parity Stock of the corporation, nor shall any
shares of Common Stock or any other Junior Stock or Parity
Stock be redeemed, purchased or otherwise acquired for any
consideration (or any moneys be paid to or made available for
a sinking fund for the redemption of any such capital stock)
by the corporation (except by conversion into or exchange for
other Junior Stock).
(F) Any distribution payment made on shares of Series B
Preferred Stock shall first be credited against the earliest
accumulated but unpaid distribution due with respect to shares
of Series B Preferred Stock which remain payable.
(G) No distributions on the Series B Preferred Stock
shall be authorized by the Board of Directors of the
corporation or be paid or set apart for payment by the
corporation at such time as the terms and provisions of any
agreement of the corporation, including any agreement relating
to its indebtedness, prohibits such authorization, payment or
setting apart for payment or provides that such authorization,
payment or setting apart for payment would constitute a breach
thereof or a default thereunder if such authorization or
payment shall be restricted or prohibited by law.
(H) Except as provided in this Section 3 and in
Section 4 of this Designation of Rights and Preferences, the
Series B Preferred Stock shall not be entitled to participate
in the earnings or assets of the corporation.
Section 4. Liquidation, Dissolution or Winding Up
Subject to the rights of series of Preferred Stock which
may from time to time come into existence, upon any voluntary
or involuntary liquidation, dissolution or winding up of the
affairs of the corporation, then, before any distribution or
payment shall be made to the holders of any Junior Stock, the
holders of shares of Series B Preferred Stock shall be
entitled to receive out of assets of the corporation legally
available for distribution to stockholders, liquidation
distributions in the amount of the liquidation preference of
$25.00 per share in cash or property having a fair market
value as determined by the Board of Directors valued at $25.00
per share, plus an amount equal to all distributions
accumulated and unpaid at the date of such liquidation,
dissolution or winding up. After payment of the full amount
of the liquidating distributions to which they are entitled,
the holders of shares of Series B Preferred Stock will have no
right or claim to any of the remaining assets of the
corporation. In the event that, upon any such voluntary or
involuntary liquidation, dissolution or winding up of the
affairs of the corporation, the available assets of the
corporation are insufficient to pay the amount of the
liquidation distributions on all outstanding shares of Series
B Preferred Stock and the corresponding amounts payable on all
shares of Parity Preferred Stock, then the holders of shares
of Series B Preferred Stock and Parity Preferred Stock shall
share ratably in any such distribution of assets in proportion
to the full liquidating distributions to which they would
otherwise be respectively entitled.
Section 5. Consolidation, Merger, etc.
A consolidation or merger of the corporation with or into
any other entity or entities, or a sale, lease, transfer,
conveyance or disposition of all or substantially all of the
assets of the corporation or a statutory share exchange in
which stockholders of the corporation may participate, shall
not be deemed to be a liquidation, dissolution or winding up
of the affairs of the corporation within the meaning of
Section 4 of this Designation of Rights and Preferences.
Section 6. Voting Rights
(A) Except as indicated in this Section 6, except as may
be required by applicable law, or, at any time Series B
Preferred Stock are listed on a securities exchange, as may be
required by the rules of such exchange, the holders of shares
of Series B Preferred Stock will have no voting rights.
(B) If six quarterly distributions (whether or not
consecutive) payable on shares of Series B Preferred Stock are
in arrears, whether or not earned or declared, the number of
directors then constituting the Board of Directors of the
corporation will be increased by two, and the holders of
shares of Series B Preferred Stock, voting together as a class
with the holders of shares of any other series of Preferred
Stock upon which like voting rights have been conferred and
are exercisable (any such other series, the "Voting Preferred
Stock"), will have the right to elect two directors to serve
on the corporation's Board of Directors at any annual meeting
of stockholders or a special meeting of the holders of Series
B Preferred Stock and such other Voting Preferred Stock called
by the holders of record of at least 10% of any series of
Preferred Stock so in arrears (unless such request is received
less than 90 days before the date fixed for the next annual or
special meeting of the stockholders), until all such
distributions have been declared and paid or set aside for
payment. The term of office of all directors so elected will
terminate with the termination of such voting rights.
(C) The approval of two-thirds of the outstanding Series
B Preferred Stock voting as a single class is required in
order to (i) amend, alter or repeal any provision of this
Designation of Rights and Preferences, whether by merger,
consolidation or otherwise (an "Event"), so as to materially
and adversely affect the rights, preferences, privileges or
voting power of the holders of shares of Series B Preferred
Stock, provided, however, an Event will not be deemed to
materially and adversely affect such rights, preferences,
privileges or voting powers of the Series B Preferred Stock,
in each such case, where each share of Series B Preferred
Stock remains outstanding without a material change to its
terms and rights or is converted into or exchanged for
preferred stock of the surviving entity having preferences,
conversion and other rights, privileges, voting powers,
restrictions, limitations as to distributions, qualifications
and terms or conditions of redemption thereof identical to
that of a share of Series B Preferred Stock, or
(ii) authorize, reclassify, create, or increase the authorized
or issued amount of any class or series of stock having rights
senior to Series B Preferred Stock with respect to the payment
of distributions or amounts upon liquidation, dissolution or
winding up of the affairs of the corporation or to create,
authorize or issue any obligation or security convertible into
or evidencing the right to purchase such shares. However, the
corporation may create additional classes of Parity Preferred
Stock and Junior Stock, increase the authorized number of
shares of Parity Preferred Stock and Junior Stock and issue
additional series of Parity Preferred Stock and Junior Stock
without the consent of any holder of Series B Preferred Stock
or Voting Preferred Stock.
(D) Except as provided above and as required by law, or,
at any time Series B Preferred Stock are listed on a
securities exchange, as may be required by the rules of such
exchange, the holders of Series B Preferred Stock are not
entitled to vote on any merger or consolidation involving the
corporation, on any share exchange or on a sale of all or
substantially all of the assets of the corporation.
(E) In any matter in which the Series B Preferred Stock
are entitled to vote (as provided in this Section 6, as may be
required by law or as may be required by the rules of any
securities exchange on which the Series B Preferred Stock are
listed, including any action by written consent, each share of
Series B Preferred Stock shall be entitled to one vote.
(F) Except as set forth herein, or as otherwise provided
by law or by the rules of any securities exchange on which the
Series B Preferred Stock are listed, holders of Series B
Preferred Stock shall have no special voting rights and their
consent shall not be required (except to the extent they are
entitled to vote with holders of Common Stock as set forth
herein) for taking any corporate action.
Section 7. Reacquired Shares
Any shares of Series B Preferred Stock redeemed,
purchased, exchanged or otherwise acquired by the corporation
in any manner whatsoever shall be retired and canceled
promptly after the acquisition thereof. All such shares shall
upon their cancellation become authorized but unissued shares
of Preferred Stock and may be issued or classified as part of
a new series of Preferred Stock, but not as Series B Preferred
Stock, subject to the conditions and restrictions on issuance
set forth herein, in the charter of the corporation, or in any
other Designation of Rights and Preferences creating a series
of Preferred Stock or any similar stock or as otherwise
required by law.
Section 8. Redemption
(A) Shares of Series B Preferred Stock are not
redeemable prior to June 30, 2002. On and after June 30,
2002, the corporation at its option upon not less than 30 or
more than 60 days' written notice, may redeem outstanding
shares of Series B Preferred Stock, in whole or in part, at
any time or from time to time, for cash at a redemption price
of $25.00 per share, plus an amount equal to all distributions
accumulated and unpaid thereon to the date fixed for
redemption, without interest to the extent the corporation
will have funds legally available therefor. The redemption
price of shares of Series B Preferred Stock (other than the
portion thereof consisting of accrued and unpaid
distributions) is payable solely out of proceeds from the sale
of other capital stock of the corporation, which may include
Common Stock, Preferred Stock, depositary shares, interests,
participations or other ownership interests in the corporation
however designated, and any rights (other than debt securities
converted into or exchangeable for capital stock), warrants or
options to purchase any thereof, and not from any other
source. Holders of shares of Series B Preferred Stock to be
redeemed shall surrender such shares of Series B Preferred
Stock at the place designated in such notice and shall be
entitled to the redemption price and any accrued and unpaid
distributions payable upon such redemption following such
surrender. If fewer than all of the outstanding shares of
Series B Preferred Stock are to be redeemed, the number of
shares to be redeemed will be determined by the corporation
and such shares may be redeemed pro rata from the holders of
record of such shares in proportion to the number of such
shares held by such holders (with adjustments to avoid
redemption of fractional shares) or by lot in a manner
determined by the corporation.
(B) Unless full cumulative distributions on all shares
of Series B Preferred Stock and Parity Stock shall have been
or contemporaneously are declared and paid or declared and a
sum sufficient for the payment thereof set apart for payment
for all past distribution periods and the then current
distribution period, no shares of Series B Preferred Stock or
Parity Stock shall be redeemed unless all outstanding shares
of Series B Preferred Stock and Parity Preferred Stock are
simultaneously redeemed; provided, however, that the foregoing
shall not prevent the purchase or acquisition of shares of
Series B Preferred Stock or Parity Stock pursuant to a
purchase or exchange offer made on the same terms to holders
of all outstanding shares of Series B Preferred Stock or
Parity Preferred Stock, as the case may be. Furthermore,
unless full cumulative distributions on all outstanding shares
of Series B Preferred Stock and Parity Preferred Stock have
been or contemporaneously are declared and paid or declared
and a sum sufficient for the payment thereof set apart for
payment for all past distribution periods and the then current
distribution period, the corporation shall not purchase or
otherwise acquire directly or indirectly any share of Series B
Preferred Stock or Parity Preferred Stock (except by
conversion into or exchange for shares of capital stock of the
corporation ranking junior to Series B Preferred Stock and
Parity Preferred Stock as to distributions and upon
liquidation).
(C) Notice of redemption will be given by publication in
a newspaper of general circulation in the City of New York,
such publication to be made once a week for two successive
weeks commencing not less than 30 or more than 60 days prior
to the redemption date. A similar notice will be mailed,
postage prepaid, at least 30 days but not more than 90 days
before the redemption date, to each holder of record of shares
of Series B Preferred Stock at the address shown on the share
transfer books of the corporation. Each notice shall state:
(i) the redemption date; (ii) the number of shares of Series B
Preferred Stock to be redeemed; (iii) the redemption price per
share; (iv) the place or places where certificates for shares
of Series B Preferred Stock are to be surrendered for payment
of the redemption price; and (v) that distributions on shares
of Series B Preferred Stock will cease to accrue on such
redemption date. No failure to give such notice or any defect
thereto or in the mailing thereof shall affect the validity of
the proceeding for the redemption of any Series B Preferred
Stock except as to the holder to whom notice was defective or
not given. If fewer than all shares of Series B Preferred
Stock are to be redeemed, the notice mailed to each such
holder thereof shall also specify the number of shares of
Series B Preferred Stock to be redeemed from each such holder.
If notice of redemption of any shares of Series B Preferred
Stock has been given and if the funds necessary for such
redemption have been set aside by the corporation in trust for
the benefit of the holders of shares of Series B Preferred
Stock so called for redemption, then from and after the
redemption date, distributions will cease to accrue on such
shares of Series B Preferred Stock, such shares of Series B
Preferred Stock shall no longer be deemed outstanding and all
rights of the holders of such shares will terminate, except
the right to receive the redemption price.
(D) The holders of shares of Series B Preferred Stock at
the close of business on a Distribution Record Date will be
entitled to receive the distribution payable with respect to
such shares of Series B Preferred Stock on the corresponding
Distribution Payment Date notwithstanding the redemption
thereof between such Distribution Record Date and the
corresponding Distribution Payment Date or the corporation's
default in the payment of the distribution due. Except as
provided above, the corporation will make no payment or
allowance for unpaid distributions, whether or not in arrears,
on shares of Series B Preferred Stock which have been called
for redemption.
(E) Series B Preferred Stock have no stated maturity and
will not be subject to any sinking fund or mandatory
redemption, except as provided in Section 4.4 of the Charter
of the corporation.
Section 9. Redemption and Stop Transfer for REIT
Qualification
Pursuant to the authority granted to the Board of
Directors pursuant to Sections 4.1 and 4.4(c) of the Charter
of the corporation, the provisions of Section 4.4 of such
Charter, including, without limitation, the stop transfer and
redemption provisions of Section 4.4(c) and the Excess Stock
provisions of Section 4.4(e), shall, in all cases, apply to
the ownership of the Series B Preferred Stock. For purposes
of applying the provisions of such Section 4.4 to the Series B
Preferred Stock, the number of shares of Series B Preferred
Stock held by any Owner (as defined therein) as of any date
shall be treated as an equivalent number of shares of Common
Stock determined by multiplying such number of shares of
Series B Preferred Stock held by such Owner by a fraction the
numerator of which is either (a) if such shares are traded on
an established public market, the per share closing value of
the Series B Preferred Stock as of such date or (b) if such
shares are not traded on an established public market, the
redemption price of such shares as provided in Section 8
hereof including any accrued and unpaid distributions thereon,
and the denominator of which is the per share closing value of
the Common Stock as of such date.
Section 10. No Conversion
The shares of Series B Preferred Stock are not
convertible into or exchangeable for any other property or
securities of the corporation, except that each share of
Series B Preferred Stock is convertible into Excess Stock as
provided in the Charter of the corporation.
RESTATED BYLAWS
OF
SHURGARD STORAGE CENTERS, INC.
Effective on May 15, 1997
Amendments are listed on p. i
<PAGE>
SHURGARD STORAGE CENTERS, INC.
AMENDMENTS
Date of
Section Effect of Amendment Amendment
CONTENTS
SECTION 1. DEFINITIONS 1
SECTION 2. OFFICES 3
SECTION 3. SHAREHOLDERS 4
3.1 Annual Meeting 4
3.2 Special Meetings 4
3.3 Place of Meeting 4
3.4 Notice of Meeting 4
3.5 Business for Shareholders' Meetings 4
3.5.1 Business at Annual Meetings 4
3.5.2 Business at Special Meetings 5
3.5.3 Notice to Corporation 5
3.6 Waiver of Notice 5
3.6.1 In Writing 5
3.6.2 By Attendance 5
3.7 Fixing of Record Date for Determining
Shareholders 6
3.8 Dividends, Distributions and Other Rights 6
3.9 Voting List 6
3.10 Quorum 6
3.11 Manner of Acting 7
3.12 Proxies 7
3.12.1 Appointment 7
3.12.2 Delivery to Corporation; Duration 7
3.13 Voting of Shares 7
3.14 Voting for Directors 8
3.15 Action by Shareholders Without a Meeting 8
3.16 Inspectors of Election 8
3.16.1 Appointment 8
3.16.2 Duties 8
SECTION 4. BOARD OF DIRECTORS 9
4.1 General Powers 9
4.2 Number and Tenure 9
4.3 Nomination and Election 9
4.3.1 Nomination 9
4.3.2 Election 10
4.4 Annual and Regular Meetings 10
4.5 Special Meetings 10
4.6 Meetings by Telephone 10
4.7 Notice of Special Meetings 11
4.7.1 Personal Delivery 11
4.7.2 Delivery by Mail 11
4.7.3 Delivery by Private Carrier 11
4.7.4 Facsimile Notice 11
4.7.5 Delivery by Telegraph 11
4.7.6 Oral Notice 11
4.8 Waiver of Notice 11
4.8.1 In Writing 11
4.8.2 By Attendance 12
4.9 Quorum 12
4.10 Manner of Acting 12
4.11 Presumption of Assent 12
4.12 Action by Board or Committees Without a
Meeting 12
4.13 Resignation 12
4.14 Removal 12
4.15 Vacancies 13
4.16 Executive and Other Committees 13
4.16.1 Creation and Authority of Committees 13
4.16.2 Audit Committee 13
4.16.3 Compensation Committee 13
4.16.4 Nominating and Organization Committee 14
4.16.5 Minutes of Meetings 14
4.16.6 Quorum and Manner of Acting 14
4.16.7 Resignation 14
4.16.8 Removal 14
4.17 Compensation 14
4.18 Lead Outside Director 15
SECTION 5. OFFICERS 15
5.1 Number 15
5.2 Election and Term of Office 15
5.3 Resignation 15
5.4 Removal 15
5.5 Vacancies 15
5.6 Chairman of the Board 16
5.7 President 16
5.8 Vice President 16
5.9 Secretary 16
5.10 Treasurer 16
5.11 Salaries 17
SECTION 6. CONTRACTS, LOANS, CHECKS AND DEPOSITS 17
6.1 Contracts 17
6.2 Loans to the Corporation 17
6.3 Checks, Drafts, Etc. 17
6.4 Deposits 17
SECTION 7. CERTIFICATES FOR SHARES AND THEIR TRANSFER 17
7.1 Issuance of Shares 17
7.2 Certificates for Shares 17
7.3 Stock Records 18
7.4 Restriction on Transfer 18
7.5 Transfers of Shares 18
7.6 Shareholders' Disclosures 19
7.7 Lost or Destroyed Certificates 19
SECTION 8. BOOKS AND RECORDS 19
8.1 Annual Report to Shareholders 19
8.2 Corporate Records 19
SECTION 9. ACCOUNTING YEAR 20
SECTION 10. SEAL 20
SECTION 11. INDEMNIFICATION 20
11.1 Right to Indemnification 20
11.2 Restrictions on Indemnification 21
11.3 Right of Indemnitee to Bring Suit 21
11.4 Nonexclusivity of Rights 21
11.5 Nonexclusivity of Rights 21
11.6 Insurance, Contracts and Funding 21
11.7 Indemnification of Employees and Agents of
the Corporation 22
11.8 Persons Serving Other Entities 22
11.9 Procedures for the Submission of Claims 22
SECTION 12. INVESTMENT POLICY AND RESTRICTIONS 22
12.1 General Statement of Policy 22
12.1.1 Types of Investments 22
12.1.2 Tax Treatment as a REIT 22
12.1.3 Liability Protection 23
12.1.4 Review of Investment Policies 23
12.2 Appraisal Requirement 23
12.3 Specific Investments 23
12.4 Reserves 23
12.5 Investment Restrictions 23
12.6 Restrictions Upon Dealings Between the
Corporation and Interested Parties 25
12.7 Corporation's Right to Borrow Funds 26
12.8 Pursuit of Ancillary Services 27
12.9 Corporation's Right to Participate in
Joint Investments 27
12.10 Investment in
Corporation's Shares 28
SECTION 13. INDEPENDENT ACTIVITIES 28
13.1 Shares Held by Directors and Officers 28
13.2 Business Interests and Investments of
Directors 28
13.3 Other Business Relationships of Directors 28
SECTION 14. AMENDMENTS 28
SECTION 15. MISCELLANEOUS 29
15.1 Provisions in Conflict With Law or
Regulations 29
15.2 Reliance Upon Legal Advice 29
15.3 Construction 29
<PAGE>
RESTATED BYLAWS
OF
SHURGARD STORAGE CENTERS, INC.
SECTION 1. DEFINITIONS
Whenever used in these Bylaws, unless the context
otherwise requires, the terms defined in this Section 1 shall
have the following respective meanings:
"Adjusted Net Worth" means the amount obtained by
subtracting the Corporation's total liabilities from its total
assets as adjusted. The Corporation shall reduce its total
assets by such reasonable reserves as the Board shall
determine but shall not take into account depreciation or
amortization. Except as otherwise stated herein, the
Corporation's total assets and total liabilities shall be as
shown on the Corporation's books, which shall be prepared in
accordance with generally accepted accounting principles.
"Affiliate" of a Person means (a) any other Person
directly or indirectly controlling, controlled by or under
common control with such Person, (b) any other Person owning
or controlling ten percent (10%) or more of the outstanding
voting securities of such Person, (c) any officer, Director or
partner of such Person, and (d) if such Person is an officer,
Director or partner, any company for which such Person acts as
an officer, Director or partner.
"Ancillary Services" means any business activity rendered
in connection with, or incidental to, the Corporation's
primary activity of leasing its properties, generating
revenues for the Corporation that would be treated by the IRS
as Nonqualifying Income, including, but not limited to, the
sale of goods and services to its tenants or others.
"Asset Coverage" means the ratio (expressed as a
percentage) which the value of the Corporation's total assets,
less all liabilities and indebtedness, except indebtedness for
unsecured borrowings, bears to the aggregate amount of all
unsecured borrowings of the Corporation.
"Board" means the Board of Directors of the Corporation,
as constituted from time to time.
"Bylaws" means the Restated Bylaws of the Corporation, as
in effect from time to time.
"Chairman of the Board" shall have the meaning assigned
to such term in Sections 5.1 and 5.6 hereof.
"Code" means the Internal Revenue Code of 1986, as it may
be amended from time to time.
"Common Stock" means the Class A Common Stock of the
Corporation, par value $.001 per share, the Class B Common
Stock of the Corporation, par value $.001 per share, and the
Excess Stock of the Corporation, par value $.001 per share.
"Corporation" means Shurgard Storage Centers, Inc., a
Washington corporation.
"Directors" means the directors of the Board.
"Indebtedness" of the Corporation means, as of the date
the amount thereof is to be determined, any and all amounts
due on financial obligations of the Corporation evidencing its
obligations to repay funds borrowed to finance the business
and affairs of the Corporation, including, but not limited to,
the outstanding principal balance, accrued but unpaid
interest, late fees and penalties, or other obligations, due
under any of the Corporation's debt securities, commercial
paper, notes, debentures, bonds, promissory notes, revolving
lines of credit, and credit and loan agreements. Indebtedness
is limited to amounts borrowed by the Corporation and does not
include other liabilities, such as accounts payable, lease
obligations, liabilities and claims incurred in the conduct of
the Corporation's business, or the liabilities of other
companies or entities in which the Corporation may have
invested. In addition, "Indebtedness" includes any amounts
borrowed by any wholly owned subsidiaries of the Corporation.
"Indebtedness Restriction" means the restriction placed
upon the Corporation's authority to borrow funds set forth in
Section 12.7 hereof.
"Independent Directors" means Directors who do not
perform services for the Corporation, except as Directors.
"Interested Party" of the Corporation means a Director,
an officer, any Person owning or controlling ten percent (10%)
or more of any class of outstanding voting securities of the
Corporation, or any Affiliate of any of the aforementioned
Persons, and, to the extent that any such Person proposes to
enter into a transaction with the Corporation, such
transaction is subject to the restrictions set forth in
Section 12.6 hereof.
"IRS" means the Internal Revenue Service.
"Mortgage Loans" means notes, debentures, bonds and other
evidences of indebtedness or obligations that are secured or
collateralized by interests in real property.
"Nonqualifying Income" means income not described in
Section 856(c)(2) of the Code, or any successor provision.
"Other Shurgard Programs" means the real estate programs
(other than the 17 partnerships included in the consolidation
effective March 1, 1994 (the "Partnerships")), whether
organized as joint ventures, general partnerships, limited
partnerships or otherwise, which were organized by Shurgard or
any of the general partners of the Partnerships, and whose
assets were managed by Shurgard as of the date the Corporation
was organized.
"Own," "Owner" or "Ownership" means a Person considered
to "own" Shares if such Person is treated as an owner of such
Shares for purposes of the REIT Provisions of the Code,
including ownership provisions of Code Sections 542 and 544
(all as in effect from time to time).
"Person" means an individual, a corporation, limited
partnership, general partnership, joint stock company or an
association, a joint venture, trust, bank, trust company, land
trust, business trust or an estate, or any other entity and
governmental agency and any political subdivision thereof.
"Preferred Stock" means the shares of any series or any
class of any series of Preferred Stock authorized and created
by the Board in accordance with the terms and provisions of
the Articles of Incorporation of the Corporation and the
Washington Business Corporation Act.
"President" shall have the meaning assigned to such term
in Sections 5.1 and 5.7 hereof.
"REIT" means a real estate investment trust as defined in
Sections 856 to 860 of the Code.
"REIT Provisions of the Code" means Part II, Subchapter M
of Chapter 1 of the Code, as now enacted or hereafter amended,
or successor statutes, relating to REITs.
"Secretary" shall have the meaning assigned to such term
in Sections 5.1 and 5.9 hereof.
"Securities" means any instruments commonly known as
"securities," including stock, shares, voting trust
certificates, bonds, debentures, notes or other evidences of
indebtedness, secured or unsecured, convertible, subordinated
or otherwise, or any certificates of interest, shares or
participations, or warrants, options or rights to subscribe
to, purchase or acquire any of the foregoing.
"Shares" means the Corporation's shares of stock, whether
Common Stock or Preferred Stock.
"Shurgard" means Shurgard Incorporated, a Washington
corporation, which was merged into the Corporation effective
March 24, 1995.
"Shareholder" means a holder of the Shares of the
Corporation's stock, whether Common Stock or Preferred Stock.
"Subsidiary" of a Person means an Affiliate controlled by
such Person directly or indirectly, through one or more
intermediaries.
"Total Assets" of the Corporation means, as of the date
the amount thereof is to be determined, the greater of (a) the
Corporation's total assets computed in accordance with
generally accepted accounting principles, consistently applied
(and which would be reflected on the Corporation's balance
sheet if such balance sheet were prepared as of such date),
plus all accumulated depreciation as of such date, and (b) the
fair market value of the Corporation's assets determined in
accordance with guidelines established by the Board,
consistently applied. Notwithstanding the foregoing, the
Board may change the guidelines established for computing the
fair market value of its assets, pursuant to clause (b) of the
preceding sentence, if such change is made in good faith and
not for the purpose of circumventing the restrictions
contained in the Indebtedness Restriction, and if applied
retroactively would not have prohibited the Corporation from
borrowing any funds at the time such funds were actually
borrowed by the Corporation.
"Treasurer" shall have the meaning assigned to such term
in Sections 5.1 and 5.10 hereof.
"Unimproved Real Property" means the property of a REIT
which has the following three (3) characteristics: (a) an
equity interest in property which was not acquired for the
purpose of producing rental or other operating income, (b) no
development or construction is in progress on such land, and
(c) no development or construction on such land is planned in
good faith to commence within one (1) year of the property's
acquisition by the Corporation or within one (1) year of the
Corporation's receipt of all necessary permits, licenses and
approvals to proceed with development or construction,
provided that the Corporation in good faith, following the
acquisition of the land, proceeds to apply for and pursue the
issuance of all permits, licenses and approvals as may be
necessary, prudent or advisable for the development and or
construction planned for the land.
"Vice President" shall have the meaning assigned to such
term in Sections 5.1 and 5.8 hereof.
SECTION 2. OFFICES
The principal office of the Corporation shall be located
at its principal place of business or such other place as the
Board may designate. The Corporation may have such other
offices, either within or without the State of Washington, as
the Board may designate or as the business of the Corporation
may require from time to time.
SECTION 3. SHAREHOLDERS
3.1 Annual Meeting
The annual meeting of the Shareholders shall be held the
second Tuesday in May in each year at the principal office of
the Corporation or such other place designated by the Board
for the purpose of electing Directors and transacting such
other business as may properly come before the meeting. If
the day fixed for the annual meeting is a legal holiday at the
place of the meeting, the meeting shall be held on the next
succeeding business day. At any time prior to the
commencement of the annual meeting, the Board may postpone the
annual meeting for a period of up to one hundred twenty (120)
days from the date fixed for such meeting in accordance with
this Section 3.1. If the annual meeting is not held on the
date designated therefor, the Board shall cause the meeting to
be held as soon thereafter as may be convenient.
3.2 Special Meetings
The Chairman of the Board, the President, the Board, a
majority of the Independent Directors or the holders of not
less than ten percent (10%) of all the outstanding Shares
entitled to vote at the meeting may call special meetings of
the Shareholders for any purpose.
3.3 Place of Meeting
All meetings shall be held at the principal office of the
Corporation or at such other place within or without the State
of Washington designated by the Board, by any Persons entitled
to call a meeting hereunder or in a waiver of notice signed by
all the Shareholders entitled to notice of the meeting.
3.4 Notice of Meeting
The Chairman of the Board, the President, the Secretary,
the Board, the Independent Directors or Shareholders calling
an annual or special meeting of Shareholders as provided for
herein shall cause to be delivered to each Shareholder
entitled to notice of or to vote at the meeting, either
personally or by mail, not less than ten (10) nor more than
sixty (60) days before the meeting, written notice stating the
place, day and hour of the meeting and, in the case of a
special meeting, the purpose or purposes for which the meeting
is called. At any time within ten (10) days after receipt of
a written request of the holders of not less than the number
of outstanding Shares specified in Section 3.2 hereof and
entitled to vote at the meeting, it shall be the duty of the
Secretary to give notice of a special meeting of Shareholders
to be held on such date and at such place and hour as the
Secretary may fix, not less than ten (10) nor more than sixty
(60) days after receipt of said request, and if the Secretary
shall neglect or refuse to issue such notice, the Person
making the request may do so and may fix the date for such
meeting. Any notice of a meeting to act on an amendment to
the Articles of Incorporation, a plan of merger or share
exchange, the sale, lease, exchange or other disposition of
all or substantially all the Corporation's assets other than
in the regular course of business, or the dissolution of the
Corporation shall be given not less than twenty (20) days nor
more than sixty (60) days before such meeting. If such notice
is mailed, it shall be deemed delivered when deposited in the
official government mail properly addressed to the Shareholder
at the Shareholder's address as it appears on the stock
transfer books of the Corporation with postage prepaid. If
the notice is telegraphed, it shall be deemed delivered when
the content of the telegram is delivered to the telegraph
company.
3.5 Business for Shareholders' Meetings
3.5.1 Business at Annual Meetings
In addition to the election of Directors, other proper
business may be transacted at an annual meeting of
Shareholders, provided that such business is properly brought
before such meeting. To be properly brought before an annual
meeting, business must be (a) brought by or at the direction
of the Board or (b) brought before the meeting by a
Shareholder pursuant to written notice thereof, in accordance
with Section 3.5.3 hereof, and received by the Secretary not
fewer than sixty (60) days prior to the date specified in
Section 3.1 hereof for such annual meeting (or if the annual
meeting is not held on the second Tuesday of May and if less
than sixty (60) days' notice or prior public disclosure of the
date of the annual meeting is given or made to the
Shareholders, not later than the tenth (10) day following the
day on which the notice of the date of the annual meeting was
mailed or such public disclosure was made). Any Shareholder
notice shall set forth (i) the name and address of the
Shareholder proposing such business; (ii) a representation
that the Shareholder is entitled to vote at such meeting and a
statement of the number of Shares of the Corporation which are
beneficially owned by the Shareholder; (iii) a representation
that the Shareholder intends to appear in person or by proxy
at the meeting to propose such business; and (iv) as to each
matter the Shareholder proposes to bring before the meeting, a
brief description of the business desired to be brought before
the meeting, the reasons for conducting such business at the
meeting, the language of the proposal (if appropriate) and any
material interest of the Shareholder in such business. No
business shall be conducted at any annual meeting of
Shareholders except in accordance with this Section 3.5.1. If
the facts warrant, the Board, or the chairman of an annual
meeting of Shareholders, may determine and declare that (a) a
proposal does not constitute proper business to be transacted
at the meeting or (b) business was not properly brought before
the meeting in accordance with the provisions of this Section
3.5.1, and, if, in either case, it is so determined, any such
business not properly brought before the meeting shall not be
transacted. The procedures set forth in this Section 3.5.1 for
business to be properly brought before an annual meeting by a
Shareholder are in addition to, and not in lieu of, the
requirements set forth in Rule 14a-8 under Section 14 of the
Securities Exchange Act of 1934, as amended, or any successor
provision.
3.5.2 Business at Special Meetings
At any special meeting of the Shareholders, only such
business as is specified in the notice of such special meeting
given by or at the direction of the Person or Persons calling
such meeting, in accordance with Section 3.4 hereof, shall
come before such meeting.
3.5.3 Notice to Corporation
Any written notice required to be delivered by a
Shareholder to the Corporation pursuant to Section 3.4,
Section 3.5.1 or Section 3.5.2 hereof must be given, either by
personal delivery or by registered or certified mail, postage
prepaid, to the Secretary at the Corporation's executive
offices.
3.6 Waiver of Notice
3.6.1 In Writing
Whenever any notice is required to be given to any
Shareholder under the provisions of these Bylaws, the Articles
of Incorporation or the Washington Business Corporation Act, a
waiver thereof in writing, signed by the Person or Persons
entitled to such notice, whether before or after the time
stated therein, shall be deemed equivalent to the giving of
such notice.
3.6.2 By Attendance
The attendance of a Shareholder at a meeting shall
constitute a waiver of notice of such meeting, except when a
Shareholder attends a meeting for the express purpose of
objecting, at the beginning of the meeting, to the transaction
of any business because the meeting is not lawfully called or
convened.
3.7 Fixing of Record Date for Determining
Shareholders
For the purpose of determining Shareholders entitled (a)
to notice of or to vote at any meeting of Shareholders or any
adjournment thereof or (b) to receive payment of any dividend,
or in order to make a determination of Shareholders for any
other purpose, the Board may fix a future date as the record
date for any such determination. Such record date shall be
not more than seventy (70) days, and in case of a meeting of
Shareholders not less than ten (10) days prior to the date on
which the particular action requiring such determination is to
be taken. If no record date is fixed for the determination of
Shareholders entitled to notice of or to vote at a meeting,
the record date shall be the day immediately preceding the
date on which notice of the meeting is first given to
Shareholders. Such a determination shall apply to any
adjournment of the meeting unless the Board fixes a new record
date, which it shall do if the meeting is adjourned to a date
more than one hundred twenty (120) days after the date fixed
for the original meeting. If no record date is set for the
determination of Shareholders entitled to receive payment of
any stock dividend or distribution (other than one involving a
purchase, redemption, or other acquisition of the
corporation's shares) the record date shall be the date the
Board authorizes the stock dividend or distribution.
3.8 Dividends, Distributions and Other Rights
The Board may, out of funds legally available therefor,
at any regular or special meeting, declare dividends upon the
Shares as and when it deems expedient. Before declaring any
dividends there may be set apart out of any funds of the
Corporation available for dividends, such sums as the Board,
from time to time in its discretion, deems proper for working
capital or as a reserve fund to make contingencies or for
equalizing dividends or for such other purposes as the Board
shall deem conducive to the interests of the Corporation.
Any distribution of income or capital assets of the
Corporation to Stockholders will be accompanied by a written
statement disclosing the source of the funds distributed. If,
at the time of distribution, this information is not
available, a written explanation of the relevant circumstances
will accompany the distribution and a written statement
disclosing the source of funds distributed will be sent to the
Stockholders not later than sixty (60) days after the close of
the fiscal year in which the distribution was made.
3.9 Voting List
At least ten (10) days before each meeting of
Shareholders, a complete list of the Shareholders entitled to
vote at such meeting, or any adjournment thereof, shall be
made, arranged in alphabetical order, with the address of and
number of Shares held by each Shareholder. This list shall be
open to examination by any Shareholder, for any purpose
germane to the meeting, during ordinary business hours, for a
period of ten (10) days prior to the meeting, either at a
place within the city where the meeting is to be held, which
place shall be specified in the notice of the meeting, or, if
not so specified, at the place where the meeting is to be
held. This list shall also be produced and kept at such
meeting for inspection by any Shareholder who is present.
3.10 Quorum
A majority of votes entitled to be cast on a matter by
the holders of shares that, pursuant to the Articles of
Incorporation or the Washington Business Corporation Act, are
entitled to vote and be counted collectively, upon such
matter, present in Person or represented by proxy at the
meeting, shall constitute a quorum at a meeting of the
Shareholders; provided, that where a separate vote by a class
or classes is required, a majority of the outstanding shares
of such class or classes, present in person or represented by
proxy at the meeting, shall constitute a quorum entitled to
take action with respect to that vote on that matter. If less
than a majority of the outstanding Shares entitled to vote are
represented at a meeting, a majority of the Shares so
represented may adjourn the meeting from time to time without
further notice. If a quorum is present or represented at a
reconvened meeting following such an adjournment, any business
may be transacted that might have been transacted at the
meeting as originally called. The Shareholders present at a
duly organized meeting may continue to transact business until
adjournment, notwithstanding the withdrawal of enough
Shareholders to leave less than a quorum.
3.11 Manner of Acting
In all matters other than the election of Directors, if a
quorum is present, the affirmative vote of the majority of the
outstanding Shares present in Person or represented by proxy
at the meeting and entitled to vote on the subject matter
shall be the act of the Shareholders, unless the vote of a
greater number is required by these Bylaws, the Articles of
Incorporation or the Washington Business Corporation Act.
Where a separate vote by a class or classes is required, if a
quorum of such class or classes is present, the affirmative
vote of the majority of outstanding shares of such class or
classes present in Person or represented by proxy at the
meeting shall be the act of such class or classes. Directors
shall be elected by a plurality of the votes of the Shares
present in Person or represented by proxy at the meeting and
entitled to vote on the election of Directors.
3.12 Proxies
3.12.1 Appointment
Each Shareholder entitled to vote at a meeting of
Shareholders or to express consent or dissent to corporate
action in writing without a meeting may authorize another
Person or Persons to act for such Shareholder by proxy. Such
authorization may be accomplished by (a) the Shareholder or
such Shareholder's authorized officer, Director, employee or
agent executing a writing or causing his or her signature to
be affixed to such writing by any reasonable means, including
facsimile signature, or (b) transmitting or authorizing the
transmission of a telegram, cablegram or other means of
electronic transmission to the intended holder of the proxy or
to a proxy solicitation firm, proxy support service or similar
agent duly authorized by the intended proxy holder to receive
such transmission; provided, that any such telegram, cablegram
or other electronic transmission must either set forth or be
accompanied by information from which it can be determined
that the telegram, cablegram or other electronic transmission
was authorized by the Shareholder. Any copy, facsimile
telecommunication or other reliable reproduction of the
writing or transmission by which a Shareholder has authorized
another Person to act as proxy for such Shareholder may be
substituted or used in lieu of the original writing or
transmission for any and all purposes for which the original
writing or transmission could be used, provided that such
copy, facsimile telecommunication or other reproduction shall
be a complete reproduction of the entire original writing or
transmission.
3.12.2 Delivery to Corporation; Duration
A proxy shall be filed with the Secretary before or at
the time of the meeting or the delivery to the Corporation of
the consent to corporate action in writing. A proxy shall
become invalid three (3) years after the date of its execution
unless otherwise provided in the proxy. A proxy with respect
to a specified meeting shall entitle the holder thereof to
vote at any reconvened meeting following adjournment of such
meeting but shall not be valid after the final adjournment
thereof.
3.13 Voting of Shares
Each outstanding Share entitled to vote with respect to
the subject matter of an issue submitted to a meeting of
Shareholders shall be entitled to one (1) vote upon each such
issue unless otherwise set forth in the Articles of
Incorporation or other document defining the rights and
preferences of any such Shares.
3.14 Voting for Directors
Each Shareholder entitled to vote at an election of
Directors may vote, in Person or by proxy, the number of
Shares owned by such Shareholder for as many Persons as there
are Directors to be elected and for whose election such
Shareholder has a right to vote.
3.15 Action by Shareholders Without a Meeting
Any action which could be taken at any annual or special
meeting of Shareholders may be taken without a meeting,
without prior notice and without a vote, if a consent or
consents in writing, setting forth the action so taken, shall
be (a) signed by all of the Shareholders entitled to vote with
respect to the subject matter thereof (as determined in
accordance with Section 3.7.2 hereof) and (b) delivered to the
Corporation. Every written consent shall bear the date of
signature of each Shareholder who signs the consent and no
written consent shall be effective to take the corporate
action referred to therein unless written consents signed by
all of the Shareholders entitled to vote with respect to the
subject matter thereof are delivered to the Corporation, in
the manner required by this Section 3.14, within sixty (60)
(or the maximum number permitted by applicable law) days of
the earliest dated consent delivered to the Corporation in the
manner required by this Section 3.14. A Shareholder may
withdraw consent only by delivering a written notice of
withdrawal to the Corporation prior to the time all consents
are in the possession of the Corporation. The validity of any
consent executed by a proxy for a Shareholder pursuant to a
telegram, cablegram or other means of electronic transmission
transmitted to such proxy holder by or upon the authorization
of the Shareholder shall be determined by or at the direction
of the Secretary. A written record of the information upon
which the Person making such determination relied shall be
made and kept in the records of the proceedings of the
Shareholders. Any such consent shall be inserted in the
minute book as if it were the minutes of a meeting of the
Shareholders.
3.16 Inspectors of Election
3.16.1 Appointment
In advance of any meeting of Shareholders, the Board
shall appoint one or more Persons to act as inspectors of
election at such meeting and to make a written report thereof.
The Board may designate one (1) or more Persons to serve as
alternate inspectors to serve in place of any inspector who is
unable or fails to act. If no inspector or alternate is able
to act at a meeting of Shareholders, the chairman of such
meeting shall appoint one or more Persons to act as inspector
of elections at such meeting.
3.16.2 Duties
The inspectors shall:
(a) ascertain the number of Shares of the
Corporation outstanding and the voting power of each such
Share;
(b) determine the Shares represented at the meeting
and the validity of proxies and ballots;
(c) count all votes and ballots;
(d) determine and retain for a reasonable period of
time a record of the disposition of any challenges made to any
determination by them; and
(e) certify their determination of the number of
Shares represented at the meeting and their count of the votes
and ballots.
The validity of any proxy or ballot shall be determined
by the inspectors of election in accordance with the
applicable provisions of these Bylaws and the Washington
Business Corporation Act as then in effect. In determining
the validity of any proxy transmitted by telegram, cablegram
or other electronic transmission, the inspectors shall record
in writing the information upon which they relied in making
such determination. Each inspector of elections shall, before
entering upon the discharge of his or her duties, take and
sign an oath to faithfully execute the duties of inspector
with strict impartiality and according to the best of his or
her ability. The inspectors of election may appoint or retain
other Persons to assist them in the performance of their
duties.
SECTION 4. BOARD OF DIRECTORS
4.1 General Powers
The business and affairs of the Corporation shall be
managed by the Board.
4.2 Number and Tenure
The Board shall be composed of not fewer than three nor
more than nine Directors, the specific number to be set by
resolution of the Board; provided that the Board may be less
than three until vacancies are filled. No decrease in the
number of Directors shall have the effect of shortening the
term of any incumbent Director. The Board shall be divided
into three classes, with the classes to be as equal in number
as may be possible.
At each annual meeting of Shareholders, the number of
Directors equal to the number of Directors in the class whose
term expires at the time of such meeting shall be elected to
serve until the third ensuing annual meeting of Shareholders.
Unless a Director dies, resigns or is removed, he or she will
hold office for the term elected or until his or her successor
is elected and qualified, whichever is later. Directors may
be removed only for cause. Directors need not be Shareholders
of this corporation or residents of the State of Washington.
Written ballots are not required in the election of Directors.
At any time the Board consists of more than one (1) Director,
at least a majority of Directors shall at all times be
Independent Directors; provided, however, that in the event of
the death, resignation or removal of an Independent Director,
such requirement shall not be applicable for a period of sixty
(60) days.
4.3 Nomination and Election
4.3.1 Nomination
Only Persons who are nominated in accordance with the
following procedures shall be eligible for election as
Directors. Nominations for the election of Directors may be
made (a) by or at the direction of the Board or (b) by any
Shareholder of record entitled to vote for the election of
Directors at such meeting; provided, however, that a
Shareholder may nominate Persons for election as Directors
only if written notice (in accordance with Section 3.5.3
hereof) of such Shareholder's intention to make such
nominations is received by the Secretary (i) with respect to
an election to be held at an annual meeting of the
Shareholders, not fewer than sixty (60) nor more than ninety
(90) days prior to the date specified in Section 3.1 hereof
for such annual meeting (or if the annual meeting is not held
on the second Tuesday in May and if less than sixty (60) days'
notice or prior public disclosure of the date of the annual
meeting is given or made to the Shareholders, not later than
the tenth (10) day following the day on which such notice of
the date of the annual meeting was mailed or such public
disclosure was made) and (ii) with respect to an election to
be held at a special meeting of the Shareholders for the
election of Directors, not later than the close of business on
the seventh (7) business day following the date on which
notice of such meeting is first given to Shareholders. Any
such Shareholder's notice shall set forth (a) the name and
address of the Shareholder who intends to make a nomination;
(b) a representation that the Shareholder is entitled to vote
at such meeting and a statement of the number of Shares of the
Corporation which are beneficially owned by the Shareholder;
(c) a representation that the Shareholder intends to appear in
person or by proxy at the meeting to nominate the Person or
Persons specified in the notice; (d) as to each Person the
Shareholder proposes to nominate for election or re-election
as a Director, the name and address of such Person and such
other information regarding such nominee as would be required
in a proxy statement filed pursuant to the proxy rules of the
Securities and Exchange Commission had such nominee been
nominated by the Board, and a description of any arrangements
or understandings, between the Shareholder and such nominee
and any other Persons (including their names), pursuant to
which the nomination is to be made; and (e) the consent of
each such nominee to serve as a Director if elected. If the
facts warrant, the Board, or the chairman of a Shareholders'
meeting at which Directors are to be elected, shall determine
and declare that a nomination was not made in accordance with
the foregoing procedure, and, if it is so determined, the
defective nomination shall be disregarded. The right of
Shareholders to make nominations pursuant to the foregoing
procedure is subject to the rights of the holders of any class
or series of stock having a preference over the Common Stock
as to dividends or upon liquidation. The procedures set forth
in this Section 4.3 for nomination for the election of
Directors by Shareholders are in addition to, and not in
limitation of, any procedures now in effect or hereafter
adopted by or at the direction of the Board or any committee
thereof.
4.3.2 Election
At each election of Directors, the Persons receiving the
greatest number of votes shall be the Directors.
4.4 Annual and Regular Meetings
An annual Board meeting shall be held without notice
immediately after and at the same place as the annual meeting
of Shareholders. By resolution, the Board or any committee
designated by the Board may specify the time and place either
within or without the State of Delaware for holding regular
meetings thereof without other notice than such resolution.
4.5 Special Meetings
Special meetings of the Board or any committee appointed
by the Board may be called by or at the request of the
Chairman of the Board, the President, the Secretary or, in the
case of special Board meetings, any two (2) Directors and, in
the case of any special meeting of any committee appointed by
the Board, by the chairman thereof. The Person or Persons
authorized to call special meetings may fix any place either
within or without the State of Delaware as the place for
holding any special Board or committee meeting called by them.
4.6 Meetings by Telephone
Members of the Board or any committee designated by the
Board may participate in a meeting of such Board or committee
by means of conference telephone or similar communications
equipment by means so that all Persons participating in the
meeting can hear each other. Participation by such means
shall constitute presence in Person at a meeting.
4.7 Notice of Special Meetings
Notice of a special Board or committee meeting stating
the place, day and hour of the meeting shall be given to a
Director in writing or orally by telephone or in Person.
Neither the business to be transacted at nor the purpose of
any special meeting need be specified in the notice of such
meeting.
4.7.1 Personal Delivery
If notice is given by personal delivery, the notice shall
be effective if delivered to a Director at least two (2) days
before the meeting.
4.7.2 Delivery by Mail
If notice is delivered by mail, the notice shall be
deemed effective if deposited in the official government mail
properly addressed to a Director at his or her address shown
on the records of the Corporation with postage prepaid at
least five (5) days before the meeting.
4.7.3 Delivery by Private Carrier
If notice is given by private carrier, the notice shall
be deemed effective when dispatched to a Director at his or
her address shown on the records of the Corporation at least
three (3) days before the meeting.
4.7.4 Facsimile Notice
If notice is delivered by wire or wireless equipment that
transmits a facsimile of the notice, the notice shall be
deemed effective when dispatched at least two (2) days before
the meeting to a Director at his or her telephone number or
other number appearing on the records of the Corporation.
4.7.5 Delivery by Telegraph
If notice is delivered by telegraph, the notice shall be
deemed effective if the content thereof is delivered to the
telegraph company at least two (2) days before the meeting for
delivery to a Director at his or her address shown on the
records of the Corporation.
4.7.6 Oral Notice
If notice is delivered orally, by telephone or in Person,
the notice shall be deemed effective if personally given to
the Director at least two (2) days before the meeting.
4.8 Waiver of Notice
4.8.1 In Writing
Whenever any notice is required to be given to any
Director under the provisions of these Bylaws, the Articles of
Incorporation or the Washington Business Corporation Act, a
waiver thereof in writing, signed by the Person or Persons
entitled to such notice, whether before or after the time
stated therein, shall be deemed equivalent to the giving of
such notice. Neither the business to be transacted at nor the
purpose of any regular or special meeting of the Board or any
committee appointed by the Board need be specified in the
waiver of notice of such meeting.
4.8.2 By Attendance
The attendance of a Director at a Board or committee
meeting shall constitute a waiver of notice of such meeting,
except when a Director attends a meeting for the express
purpose of objecting, at the beginning of the meeting, to the
transaction of any business because the meeting is not
lawfully called or convened.
4.9 Quorum
A majority of the total number of Directors fixed by or
in the manner provided in these Bylaws or, if vacancies exist
on the Board, a majority of the total number of Directors then
serving on the Board, provided, however, that such number may
be not less than one-third (1/3) of the total number of
Directors fixed by or in the manner provided in these Bylaws,
shall constitute a quorum for the transaction of business at
any Board meeting. If less than a majority are present at a
meeting, a majority of the Directors present may adjourn the
meeting from time to time without further notice.
4.10 Manner of Acting
The act of the majority of the Directors present at a
Board or committee meeting at which there is a quorum shall be
the act of the Board or committee, unless the vote of a
greater number is required by these Bylaws, the Articles of
Incorporation or the Washington Business Corporation Act.
4.11 Presumption of Assent
A Director present at a Board or committee meeting at
which action on any corporate matter is taken shall be
presumed to have assented to the action taken unless his or
her dissent is entered in the minutes of the meeting, or
unless such Director files a written dissent to such action
with the Person acting as the secretary of the meeting before
the adjournment thereof, or forwards such dissent by
registered mail to the Secretary immediately after the
adjournment of the meeting. A Director who voted in favor of
such action may not dissent.
4.12 Action by Board or Committees Without a Meeting
Any action which could be taken at a meeting of the Board
or of any committee appointed by the Board may be taken
without a meeting if a written consent setting forth the
action so taken is signed by each of the Directors or by each
committee member. Any such written consent shall be inserted
in the minute book as if it were the minutes of a Board or a
committee meeting.
4.13 Resignation
Any Director may resign at any time by delivering written
notice to the Chairman of the Board, the President, the
Secretary or the Board, or to the registered office of the
Corporation. Any such resignation shall take effect at the
time specified therein, or if the time is not specified, upon
delivery thereof, and, unless otherwise specified therein, the
acceptance of such resignation shall not be necessary to make
it effective.
4.14 Removal
At a meeting of Shareholders called expressly for that
purpose, one or more members of the Board (including the
entire Board) may be removed, but only with cause, by a vote
of the holders of a majority of the Shares then entitled to
vote on the election of Directors.
4.15 Vacancies
Any vacancy occurring on the Board may be filled by the
affirmative vote of a majority of the remaining Directors
though less than a quorum of the Board; provided, however,
that a vacancy created by the death, resignation or removal of
an Independent Director, in the absence of a vote of the
Shareholders, may be filled only by the vote of a majority of
the remaining Independent Directors. A Director elected to
fill a vacancy shall be elected only until the next election
of Directors by Shareholders.. Any Directorship to be filled
by reason of an increase in the number of Directors may be
filled by the Board for a term of office continuing only until
the next election of the class for which such Director shall
have been chosen, and until his or her successor shall be
elected and qualify.
4.16 Executive and Other Committees
4.16.1 Creation and Authority of Committees
The Board, by resolution passed by the majority of the
Directors then in office, may create standing or temporary
committees, including an "Executive Committee," each committee
to consist of one or more Directors, and invest such
committees with such powers as it may see fit, subject to such
conditions as may be prescribed by the Board and by applicable
law; but no such committee shall have the power or authority
to (a) authorize or approve a distribution except according to
a general formula or method prescribed by the Board,
(b) approve or propose to Shareholders actions or proposals
required by the Washington Business Corporation Act to be
approved by Shareholders, (c) fill vacancies on the Board or
any committee thereof, (d) adopt, amend or repeal Bylaws,
(e) amend the Articles of Incorporation pursuant to
RCW 23B.10.020, (f) approve a plan of merger not requiring
Shareholder approval, or (g) authorize or approve the issuance
or sale or contract for sale of shares, or determine the
designation and relative rights, preferences and limitations
of a class or series of shares except that the Board may
authorize a committee or a senior executive officer of the
corporation to do so within limits specifically prescribed by
the Board. The Board may designate one or more Directors as
alternate members of any committee, who may replace any absent
or disqualified member at any meeting of the committee. In
the absence or disqualification of a committee member, the
member or members thereof present at any meeting and not
disqualified from voting, whether or not such member or
members constitute a quorum, may unanimously appoint another
member of the Board to act at the meeting in the place of any
such absent or disqualified member.
4.16.2 Audit Committee
In addition to any committees appointed pursuant to this
Section 4.16, there shall be an "Audit Committee," appointed
annually by the Board, consisting of at least two (2)
Directors who are not members of management. It shall be the
responsibility of the Audit Committee to review the scope and
results of the annual independent audit of books and records
of the Corporation, to review compliance with all corporate
policies that have been approved by the Board and to discharge
such other responsibilities as may from time to time be
assigned to it by the Board. The Audit Committee shall meet
at such times and places as the members deem advisable, and
shall make such recommendations to the Board as they consider
appropriate.
4.16.3 Compensation Committee
The Board may, in its discretion, designate a
"Compensation Committee" consisting of not less than two (2)
Directors or such higher number as the Board may from time to
time determine. The duties of the Compensation Committee shall
consist of the following: (a) to establish and review
periodically, but not less than annually, the compensation of
the officers of the Corporation and to make recommendations
concerning such compensation to the Board; (b) to consider
incentive compensation plans for the employees of the
Corporation; (c) to carry out the duties assigned to the
Compensation Committee under any stock option plan or other
plan approved by the Corporation; (d) to consult with the
President concerning any compensation matters deemed
appropriate by the President or the Compensation Committee;
and (e) to perform such other duties as shall be assigned to
the Compensation Committee by the Board.
4.16.4 Nominating and Organization Committee
The Board may, in its discretion, designate a "Nominating
and Organization Committee" consisting of not less than two
(2) Directors or such higher number as the Board may from time
to time determine. The duties of the Nominating and
Organization Committee shall consist of the following: (a) to
report and make recommendations to the Board on the size and
composition of the Board and nominees for Directors; (b) to
evaluate the performance of the officers of the Corporation
and, together with management, select and recommend to the
Board appropriate individuals for election, appointment and
promotion as officers of the Corporation and ensure the
continuity of capable management; (c) to report and make
recommendations to the Board on the organization of the
Corporation; and (d) to perform such other duties as shall be
assigned to the Nominating and Organization Committee by the
Board.
4.16.5 Minutes of Meetings
All committees so appointed shall keep regular minutes of
their meetings and shall cause them to be recorded in books
kept for that purpose.
4.16.6 Quorum and Manner of Acting
A majority of the number of Directors composing any
committee of the Board, as established and fixed by resolution
of the Board, shall constitute a quorum for the transaction of
business at any meeting of such committee, but, if less than a
majority are present at a meeting, a majority of such
Directors present may adjourn the meeting from time to time
without further notice. Except as otherwise provided in the
Washington Business Corporation Act, the act of a majority of
the members of a committee present at a meeting at which a
quorum is present shall be the act of such committee.
4.16.7 Resignation
Any member of any committee may resign at any time by
delivering written notice thereof to the Chairman of the
Board, the President, the Secretary, the Board or the chairman
of such committee. Any such resignation shall take effect at
the time specified therein or, if the time is not specified,
upon delivery thereof, and, unless otherwise specified
therein, the acceptance of such resignation shall not be
necessary to make it effective.
4.16.8 Removal
The Board may remove from office any member of any
committee elected or appointed by it or by an Executive
Committee, but only by the affirmative vote of the majority of
the Directors then in office.
4.17 Compensation
By Board resolution, Directors and committee members may
be paid their expenses, if any, of attendance at each Board or
committee meeting, or a fixed sum for attendance at each Board
or committee meeting, or a stated salary as Director or a
committee member, or a combination of the foregoing. No such
payment shall preclude any Director or committee member from
serving the Corporation in any other capacity and receiving
compensation therefor.
4.18 Lead Outside Director
The members of the Board who at the time are neither
employees of nor consultants to the Corporation (the "Outside
Directors") may, by resolution passed by a majority of the
number of such Outside Directors then in office, appoint one
of their number to serve as Lead Outside Director. If so
appointed, the Lead Outside Director shall be responsible for
chairing any meetings of Outside Directors and shall perform
such other duties as shall be requested of him or her from
time to time by the Outside Directors, acting in the same
manner.
SECTION 5. OFFICERS
5.1 Number
The officers of the Corporation shall be a President, a
Secretary and a Treasurer, each of whom shall be elected by
the Board. One or more Vice Presidents and such other
officers and assistant officers, including a Chairman of the
Board, may be elected or appointed by the Board, such officers
and assistant officers to hold office for such period, have
such authority and perform such duties as are provided in
these Bylaws or as may be provided by resolution of the Board.
Any officer may be assigned by the Board any additional title
that the Board deems appropriate. The Board may delegate to
any officer or agent the power to appoint any such subordinate
officers or agents and to prescribe their respective terms of
office, authority and duties. Any two (2) or more offices may
be held by the same Person.
5.2 Election and Term of Office
The officers of the Corporation shall be elected annually
by the Board at the Board meeting held after the annual
meeting of the Shareholders. If the election of officers is
not held at such meeting, such election shall be held as soon
thereafter as a Board meeting conveniently may be held.
Unless an officer dies, resigns or is removed from office, he
or she shall hold office until the next annual meeting of the
Board or until his or her successor is elected.
5.3 Resignation
Any officer may resign at any time by delivering written
notice to the Chairman of the Board, the President, a Vice
President, the Secretary or the Board. Any such resignation
shall take effect at the time specified therein or, if the
time is not specified, upon delivery thereof, and, unless
otherwise specified therein, the acceptance of such
resignation shall not be necessary to make it effective.
5.4 Removal
Any officer or agent elected or appointed by the Board
may be removed by the Board whenever in its judgment the best
interests of the Corporation would be served thereby, but such
removal shall be without prejudice to the contract rights, if
any, of the Person so removed.
5.5 Vacancies
A vacancy in any office because of death, resignation,
removal, disqualification, creation of a new office or any
other cause may be filled by the Board for the unexpired
portion of the term, or for a new term established by the
Board.
5.6 Chairman of the Board
If elected, the Chairman of the Board shall perform such
duties as shall be assigned to him or her by the Board from
time to time and shall preside over meetings of the Board and
Shareholders unless another officer is appointed or designated
by the Board as Chairman of such meeting
5.7 President
The President shall be the chief executive officer of the
Corporation unless some other officer is so designated by the
Board, shall preside over meetings of the Board and
Shareholders in the absence of a Chairman of the Board and,
subject to the Board's control, shall supervise and control
all the assets, business and affairs of the Corporation. The
President may sign certificates for Shares, deeds, mortgages,
bonds, contracts or other instruments, except when the signing
and execution thereof have been expressly delegated by the
Board or by these Bylaws to some other officer or agent of the
Corporation or are required by law to be otherwise signed or
executed by some other officer or in some other manner. In
general, the President shall perform all duties incident to
the office of President and such other duties as are
prescribed by the Board from time to time. If no Secretary
has been appointed, the President shall have the
responsibility for the preparation of minutes of meetings of
the Board and shareholders and for authentication of the
records of the corporation.
5.8 Vice President
In the event of the death of the President or his or her
inability to act, the Vice President (or if there is more than
one Vice President, the Vice President who was designated by
the Board as the successor to the President or, if no Vice
President is so designated, the Vice President first elected
to such office) shall perform the duties of the President,
except as may be limited by resolution of the Board, with all
the powers of and subject to all the restrictions upon the
President. Any Vice President may sign with the Secretary or
any Assistant Secretary certificates for Shares. Vice
Presidents shall have, to the extent authorized by the
President or the Board, the same powers as the President to
sign deeds, mortgages, bonds, contracts or other instruments.
Vice Presidents shall perform such other duties as from time
to time may be assigned to them by the President or by the
Board. A Vice-President may be designated as an Executive
Vice-President, a Senior Vice-President or a Vice-President of
a specific function or responsibility or may be otherwise
designated at the discretion of the Board to differentiate
various Vice-Presidential positions.
5.9 Secretary
The Secretary shall be responsible for the preparation of
minutes of meetings of the Board and Shareholders, maintenance
of the Corporation's records and stock registers, and
authentication of the Corporation's records and shall in
general perform all duties incident to the office of Secretary
and such other duties as from time to time may be assigned to
him or her by the President or by the Board. In the absence
of the Secretary, an Assistant Secretary may perform the
duties of the Secretary.
5.10 Treasurer
If required by the Board, the Treasurer shall give a bond
for the faithful discharge of his or her duties in such amount
and with such surety or sureties as the Board shall determine.
The Treasurer shall have charge and custody of and be
responsible for all funds and Securities of the Corporation;
receive and give receipts for moneys due and payable to the
Corporation from any source whatsoever, and deposit all such
moneys in the name of the Corporation in banks, trust
companies or other depositories selected in accordance with
the provisions of these Bylaws; sign certificates for Shares;
and in general perform all the duties incident to the office
of Treasurer and such other duties as from time to time may be
assigned to him or her by the President or by the Board. In
the absence of the Treasurer, an Assistant Treasurer may
perform the duties of the Treasurer.
5.11 Salaries
The salaries of the officers shall be fixed from time to
time by the Board or by any Person or Persons to whom the
Board has delegated such authority. No officer shall be
prevented from receiving such salary by reason of the fact
that he or she is also a Director.
SECTION 6. CONTRACTS, LOANS, CHECKS AND DEPOSITS
6.1 Contracts
The Board may authorize any officer or officers, or agent
or agents, to enter into any contract or execute and deliver
any instrument in the name of and on behalf of the
Corporation. Such authority may be general or confined to
specific instances.
6.2 Loans to the Corporation
No loans shall be contracted on behalf of the Corporation
and no evidences of indebtedness shall be issued in its name
unless authorized by a resolution of the Board. Such
authority may be general or confined to specific instances.
6.3 Checks, Drafts, Etc.
All checks, drafts or other orders for the payment of
money, notes or other evidences of indebtedness issued in the
name of the Corporation shall be signed by such officer or
officers, or agent or agents, of the Corporation and in such
manner as is from time to time determined by resolution of the
Board.
6.4 Deposits
All funds of the Corporation not otherwise employed shall
be deposited from time to time to the credit of the
Corporation in such banks, trust companies or other
depositories as the Board may select.
SECTION 7. CERTIFICATES FOR SHARES AND THEIR
TRANSFER
7.1 Issuance of Shares
No Shares shall be issued unless authorized by the Board
(or by a committee or senior executive officer as permitted by
Section 4.16.1), which authorization shall include the maximum
number of Shares to be issued and the consideration to be
received for each share.
7.2 Certificates for Shares
Certificates representing Shares shall be signed by the
Chairman of the Board or Vice Chairman of the Board or the
President or the Vice President and by the Treasurer or an
Assistant Treasurer or the Secretary or an Assistant
Secretary, any of whose signatures may be a facsimile. The
Board may in its discretion appoint responsible banks, trust
companies or other qualified entities from time to time to act
as transfer agents and registrars of the stock of the
Corporation; and, when such appointments shall have been made,
no stock certificate shall be valid until countersigned by one
of such transfer agents and registered by one of such
registrars. In case any officer, transfer agent or registrar
who has signed or whose facsimile signature has been placed
upon a certificate shall have ceased to be such officer,
transfer agent or registrar before such certificate is issued,
it may be issued by the Corporation with the same effect as if
such Person was such officer, transfer agent or registrar at
the date of issue. All certificates shall include on their
face written notice of any restrictions which may be imposed
on the transferability of such Shares and shall be
consecutively numbered or otherwise identified.
7.3 Stock Records
The stock transfer books shall be kept at the principal
office of the Corporation or at the office of the
Corporation's transfer agent or registrar. The name and
address of each Person to whom certificates for Shares are
issued, together with the class and number of Shares
represented by each such certificate and the date of issue
thereof, shall be entered on the stock transfer books of the
Corporation. The Person in whose name Shares stand on the
books of the Corporation shall be deemed by the Corporation to
be the owner thereof for all purposes.
7.4 Restriction on Transfer
Except to the extent that the Corporation has obtained an
opinion of counsel acceptable to the Corporation that transfer
restrictions are not required under applicable securities
laws, or has otherwise satisfied itself that such transfer
restrictions are not required, all certificates representing
Shares shall bear a legend on the face of the certificate, or
on the reverse of the certificate if a reference to the legend
is contained on the face, which reads substantially as
follows:
"The securities evidenced by this certificate have not
been registered under the Securities Act of 1933, as
amended, or any applicable state law, and no interest
therein may be sold, distributed, assigned, offered,
pledged or otherwise transferred unless (a) there is an
effective registration statement under such Act and
applicable state securities laws covering any such
transaction involving said securities or (b) this
corporation receives an opinion of legal counsel for the
holder of these securities (concurred in by legal counsel
for this corporation) stating that such transaction is
exempt from registration or (c) this corporation
otherwise satisfies itself that such transaction is
exempt from registration. Neither the offering of the
securities nor any offering materials have been reviewed
by any administrator under the Securities Act of 1933, as
amended, or any applicable state law."
7.5 Transfers of Shares
Subject to Section 7.7 hereof, Shares shall be
transferable on the records of the Corporation upon
presentment to the Corporation or a transfer agent of a
certificate or certificates representing the Shares requested
to be transferred, with proper endorsement on the certificate
or on a separate accompanying document, together with such
evidence of the payment of transfer taxes and compliance with
other provisions of law as the Corporation or its transfer
agent may require. All certificates surrendered to the
corporation for transfer shall be cancelled and no new
certificate shall be issued until the former certificates for
a like number of Shares shall have been surrendered and
cancelled.
Whenever it is deemed by the Board to be reasonably
necessary to protect the tax status of the Corporation, the
Board may require a statement or affidavit from each
Shareholder or proposed transferee of Shares setting forth the
number of Shares already owned by such Person and any related
Person specified in the form prescribed by the Board for that
purpose. If, in the opinion of the Board, which shall be
conclusive, any proposed transfer would jeopardize the status
of the Corporation as a REIT under the REIT Provisions of the
Code, as now enacted or as hereafter amended, the Directors
may refuse to permit such transfer. Any attempted transfer
for which the Directors have refused this permission shall be
void and of no effect to transfer any legal or beneficial
interest in the Shares. All contracts for the sale or other
transfer of Shares shall be subject to this provision.
7.6 Shareholders' Disclosures
The Shareholders, upon demand, shall disclose to the
Corporation in writing such information with respect to direct
and indirect ownership of the Shares as the Board deems
necessary to comply with the provisions of the Code and the
regulations thereunder or to comply with the requirements of
any other taxing authority, including the provisions relating
to qualification of the Corporation as a REIT.
7.7 Lost or Destroyed Certificates
In the case of a lost, destroyed or mutilated
certificate, a new certificate may be issued therefor upon
such terms and indemnity to the Corporation as the Board may
prescribe.
SECTION 8. BOOKS AND RECORDS
8.1 Annual Report to Shareholders
The Board shall cause an annual report to be sent to the
Shareholders not later than three (3) months after the close
of the fiscal year adopted by the Corporation. This report
shall be sent at least fifteen (15) days before the annual
meeting of Shareholders to be held during the next fiscal year
and in the manner specified in Section 3.4 hereof for giving
notice to Shareholders. The annual report shall contain
financial statements prepared in accordance with generally
accepted accounting principles which are audited and reported
on by independent certified public accountants.
8.2 Corporate Records
The corporation shall:
(a) Keep as permanent records minutes of all meetings of
its Shareholders and the Board, a record of all actions taken
by the Shareholders or the Board without a meeting, and a
record of all actions taken by a committee of the Board
exercising the authority of the Board on behalf of the
corporation.
(b) Maintain appropriate accounting records.
(c) Maintain a record of its Shareholders, in a form
that permits preparation of a list of the names and addresses
of all Shareholders, in alphabetical order by class of shares
showing the number and class of shares held by each; provided,
however, such record may be maintained by an agent of the
corporation.
(d) Maintain its records in written form or in another
form capable of conversion into written form within a
reasonable time.
(e) Keep a copy of the following records at its
principal office:
1. the Articles of Incorporation and all
amendments thereto as currently in effect;
2. the Bylaws and all amendments thereto as
currently in effect;
3. the minutes of all meetings of Shareholders and
records of all action taken by Shareholders without a meeting,
for the past three years;
4. the financial statements described in Section
23B.16.200(1) of the Washington Business Corporation Act, for
the past three years;
5. all written communications to Shareholders
generally within the past three years;
6. a list of the names and business addresses of
the current Directors and officers; and
7. the most recent annual report delivered to the
Washington Secretary of State.
SECTION 9. ACCOUNTING YEAR
The accounting year of the Corporation shall be the
calendar year, provided that if a different accounting year is
at any time selected for purposes of federal income taxes, the
accounting year shall be the year so selected.
SECTION 10. SEAL
The seal of the Corporation, if any, shall consist of the
name of the Corporation, the state of its incorporation and
the year of its incorporation.
SECTION 11. INDEMNIFICATION
11.1 Right to Indemnification
Each Person who was or is made a party or is threatened
to be made a party to or is otherwise involved (including,
without limitation, as a witness) in any actual or threatened
action, suit or proceeding, whether civil, criminal,
administrative or investigative and whether formal or informal
(hereinafter a "proceeding"), by reason of the fact that he or
she is or was a Director or an officer of the Corporation or
that, being or having been such a Director or an officer or an
employee of the Corporation, he or she is or was serving at
the request of an executive officer of the Corporation as a
Director, officer, partner, trustee, employee or agent of
another corporation or of a partnership, joint venture, trust
or other enterprise, including service with respect to an
employee benefit plan (hereinafter an "indemnitee"), whether
the basis of such proceeding is alleged action in an official
capacity as such a Director, officer, partner, trustee,
employee or agent or in any other capacity while serving as
such a Director, officer, partner, trustee, employee or agent,
shall be indemnified and held harmless by the Corporation to
the full extent permitted by the Washington Business
Corporation Act, as the same exists or may hereafter be
amended (but, in the case of any such amendment, only to the
extent that such amendment permits the Corporation to provide
broader indemnification rights than permitted prior thereto),
or by other applicable law as then in effect, against all
expense, liability and loss (including attorneys' fees,
judgments, fines, ERISA excise taxes or penalties and amounts
paid in settlement) actually and reasonably incurred or
suffered by such indemnitee in connection therewith, and such
indemnification shall continue as to an indemnitee who has
ceased to be a Director, officer, partner, trustee, employee
or agent and shall inure to the benefit of the indemnitee's
heirs, executors and administrators; provided, however, that
except as provided in Section 11.2 hereof with respect to
proceedings seeking to enforce rights to indemnification, the
Corporation shall indemnify any such indemnitee in connection
with a proceeding (or part thereof) initiated by such
indemnitee only if such proceeding (or part thereof) was
authorized or ratified by the Board. The right to
indemnification conferred in this Section 11.1 shall be a
contract right and shall include the right to be paid by the
Corporation the expenses incurred in defending any such
proceeding in advance of its final disposition (hereinafter an
"advancement of expenses"); provided, however, that if the
Washington Business Corporation Act requires, an advancement
of expenses incurred by an indemnitee in his or her capacity
as a Director or an officer (and not in any other capacity in
which service was or is rendered by such indemnitee,
including, without limitation, service to an employee benefit
plan) shall be made only upon delivery to the Corporation of
an undertaking (hereinafter an "undertaking"), by or on behalf
of such indemnitee, to repay all amounts so advanced upon
ultimate determination of nonentitlement to indemnification
for such expenses under this Section 11.1 or otherwise.
11.2 Restrictions on Indemnification
No indemnification shall be provided to any such
indemnitee for acts or omissions of the indemnitee finally
adjudged to be intentional misconduct or a knowing violation
of law, for conduct of the indemnitee finally adjudged to be
in violation of Section 23B.08.310 of the Washington Business
Corporation Act, for any transaction with respect to which it
was finally adjudged that such indemnitee personally received
a benefit in money, property or services to which the
indemnitee was not legally entitled or if the corporation is
otherwise prohibited by applicable law from paying such
indemnification, except that if Section 23B.08.560 or any
successor provision of the Washington Business Corporation Act
is hereafter amended, the restrictions on indemnification set
forth in this subsection 11.2 shall be as set forth in such
amended statutory provision.
11.3 Right of Indemnitee to Bring Suit
If a claim under Section 11.1 hereof 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 an advancement of expenses, in which case the
applicable period shall be twenty (20) days, the indemnitee
may at any time thereafter bring suit against the Corporation
to recover the unpaid amount of the claim. If successful in
whole or in part in any such suit, or in a suit brought by the
Corporation to recover an advancement of expenses pursuant to
the terms of an undertaking, the indemnitee shall be entitled
to be paid also the expense of prosecuting or defending such
suit. Neither the failure of the Corporation (including its
Board, independent legal counsel or its Shareholders) to have
made a determination prior to the commencement of such suit
that indemnification of the indemnitee is proper in the
circumstances nor an actual determination by the Corporation
(including its Board, independent legal counsel or its
Shareholders) that the indemnitee is not entitled to
indemnification shall be a defense to the suit or create a
presumption that the indemnitee is not so entitled.
11.4 Nonexclusivity of Rights
Pursuant to Section 23B.08.560(2) or any successor
provision of the Washington Business Corporation Act, the
procedures for indemnification and advancement of expenses set
forth in this Section are in lieu of the procedures required
by Section 23B.08.550 or any successor provision of the
Washington Business Corporation Act.
11.5 Nonexclusivity of Rights
The rights to indemnification and to the advancement of
expenses conferred in this Section 11 shall not be exclusive
of any other right which any Person may have or hereafter
acquire under any statute, agreement, vote of Shareholders or
Independent Directors, provisions of the Articles of
Incorporation or Bylaws or otherwise. Notwithstanding any
amendment to or repeal of this Section 11, or of any of the
procedures established by the Board of Directors pursuant to
Section 11.9, any indemnitee shall be entitled to
indemnification in accordance with the provisions hereof and
thereof with respect to any acts or omissions of such
indemnitee occurring prior to such amendment or repeal.
11.6 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 another corporation, partnership, joint
venture, trust or other enterprise against any expense,
liability or loss, whether or not the Corporation would have
the power to indemnify such Person against such expense,
liability or loss under the Washington Business Corporation
Act. The Corporation, without further Shareholder approval,
may enter into contracts with any Director, officer, partner,
trustee, employee or agent in furtherance of the provisions of
this Section 11 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
Section 11.
11.7 Indemnification of Employees and Agents of the
Corporation
The Corporation may, by action of the Board, grant rights
to indemnification and advancement of expenses to employees or
agents or groups of employees or agents of the Corporation
(i) with the same scope and effect as the provisions of this
Section 11 with respect to the indemnification and advancement
of expenses of Directors and officers of the Corporation;
(ii) pursuant to the rights granted pursuant to, or provided
by, the Washington Business Corporation Act; or (iii) as are
otherwise consistent with law; provided, however, that an
undertaking shall be made by an employee or agent only if
required by the Board.
11.8 Persons Serving Other Entities
Any Person who is or was a Director, an officer or
employee of the Corporation who is or was serving (a) as a
director or an officer of another corporation of which a
majority of the shares entitled to vote in the election of its
directors is held by the Corporation or (b) in an executive or
management capacity in a partnership, joint venture, trust or
other enterprise of which the Corporation or a wholly owned
Subsidiary of the Corporation is a general partner or has a
majority Ownership shall be deemed to be so serving at the
request of an executive officer of the Corporation and
entitled to indemnification and advancement of expenses under
Section 11.1 hereof.
11.9 Procedures for the Submission of Claims
The Board may establish reasonable procedures for the
submission of claims for indemnification pursuant to this
Section 11, determination of the entitlement of any Person
thereto and review of any such determination. If such
procedures are established, they shall be set forth in an
appendix to these Bylaws and shall be deemed for all purposes
to be a part hereof.
SECTION 12. INVESTMENT POLICY AND RESTRICTIONS
12.1 General Statement of Policy
12.1.1 Types of Investments
The Corporation intends to invest, directly or
indirectly, in: (a) self-service storage facilities;
(b) office and business parks; (c) such other commercial real
estate investments as may be approved by the Board from time
to time; and (d) Mortgage Loans secured by real estate of a
type in which the Corporation is authorized to invest.
Subject to the restrictions of this Section 12, the
Corporation's investments may be acquired in such manner,
through such means and upon such terms and conditions as may
be determined by the Board, and such investments may include,
but are not limited to, direct acquisitions by the Corporation
of real estate interests as well as investments in
corporations, business trusts, general partnerships, limited
partnerships, joint ventures or other legal entities that
acquire real estate investments. All investments made by the
Corporation, except those pursuant to Section 12.3 hereof,
must be approved by a majority of the Directors or made in
accordance with guidelines approved by the Board and in effect
at the time the investments are made by the Corporation's
management.
12.1.2 Tax Treatment as a REIT
As soon the Corporation commences doing business, the
Corporation shall use its best efforts to be eligible for tax
treatment as a REIT under the Code, shall make such elections
and filings, and take such other actions as may be necessary,
to be treated as a REIT under the Code and shall thereafter
conduct its business to continue to qualify as a REIT under
the REIT Provisions of the Code.
12.1.3 Liability Protection
Although the general purpose of the Corporation is to
qualify as a REIT under the REIT Provisions of the Code, no
Director, officer, partner, trustee, employee, agent or
independent contractor of the Corporation shall be liable for
any act or omission resulting in the loss of tax benefits
under the Code.
12.1.4 Review of Investment Policies
The Independent Directors shall review the investment
policies of the Corporation at least annually to determine
that the policies being followed by the Corporation are in the
best interests of its Shareholders. Each such determination
and the basis therefore shall be set forth in the minutes of
the Directors.
12.2 Appraisal Requirement
The consideration paid for real property acquired by the
Corporation shall ordinarily be based on the fair market value
of the property as determined by a majority of the Directors.
In determining the fair market value of property acquired by
the Corporation, the Directors shall be entitled to rely upon
appraisals prepared by qualified independent real estate
appraisers selected by the Corporation or such other market
data and information available to the Directors which, in
their judgment, afford a reasonable basis for making an
informed determination as to the fair market value of the
property being acquired.
12.3 Specific Investments
Pending investment or reinvestment of the Corporation's
assets in the type of investments described in Section 12.1
hereof, the Corporation may invest its assets in investments
such as: (a) U. S. government securities, (b) bankers'
acceptances, (c) certificates of deposit, (d) bank repurchase
agreements covering securities of the U. S. government or
governmental agencies, (e) commercial paper rated A-1 or
better by Moody's Investors Service, Inc. or any other
nationally recognized rating agency, (f) interest-bearing time
deposits in banks and thrift institutions, (g) money market
funds, (h) mortgage-backed securities issued or guaranteed by
the U. S. government or its agencies, (i) debt securities or
equity securities collateralized by debt securities rated A-1
or better by Moody's Investors Service, Inc., or any other
nationally recognized rating agency, (j) other short- or
medium-term liquid investments or hybrid debt/equity
securities approved by the Board, and (k) any combination of
the foregoing investments.
12.4 Reserves
The Corporation may retain, as a permanent reserve, such
funds as the Board deems reasonable, in cash and in the types
of investments described in Section 12.3 hereof.
12.5 Investment Restrictions
The Corporation shall not:
(a) invest more than ten percent (10%) of its Total
Assets in Unimproved Real Property or Mortgage Loans on
Unimproved Real Property;
(b) invest in foreign currency, bullion, commodities or
commodity future contracts;
(c) invest in or make a Mortgage Loan, except on the
following conditions:
(i) in determining the fair market value of the
underlying property securing the Mortgage Loan, the
Directors shall be entitled to rely upon appraisals
prepared by qualified independent real estate appraisers
selected by the Corporation or such other market data and
information available to the Directors which, in their
judgment, afford a reasonable basis for making an
informed determination as to the fair market value of
such underlying property;
(ii) the Corporation has obtained a mortgagee's or
owner's title insurance policy or other commitment as to
the priority of the mortgage or the condition of the
title of the underlying property;
(iii) the Mortgage Loan is secured by real estate of
a type in which the Corporation is authorized to invest;
(iv) the aggregate amount of the Mortgage Loan and
all senior indebtedness as secured by the underlying
property does not exceed ninety percent (90%) of the
appraised value of the property as determined by an
independent appraiser or as determined by the Board
pursuant to this Section 12.5(c), unless the Board
determines that an increased amount is justified by
additional credit or collateral, such as personal
guarantees or the pledge of additional assets, and the
aggregate value of Mortgage Loans junior to other secured
indebtedness does not exceed ten percent (10%) of the
Corporation's Total Assets;
(v) the Mortgage Loan is not subordinate to any
mortgage or equity interest of a Director or any
Affiliates thereof or any other Affiliate of the
Corporation; and
(vi) the investment in the Mortgage Loan would not
cause the Corporation to have invested, immediately after
the making of such investment, more than twenty-five
percent (25%) of its Total Assets in Mortgage Loans;
(d) invest in contracts for the sale of real estate;
(e) engage in underwriting or the agency distribution of
securities issued by others;
(f) issue "redeemable securities" (as defined in
Section 2(a)(32) of the Investment Company Act of 1940, as
amended), "face amount certificates of the installment type"
(as defined in Section 2(a)(15) thereof) or "periodic payment
plan certificates" (as defined in Section 2(a)(27) thereof);
(g) invest in the equity securities of any
nongovernmental issuer for a period in excess of eighteen (18)
months, except for investments in the Other Shurgard Programs,
equity investments in any Person organized for the primary
purpose of investing in self-service storage facilities and
office parks or for rendering Ancillary Services with respect
to the ownership, operation and holding of such real estate
assets made pursuant to Section 12.6(f) or 12.8 hereof, equity
interests in any general partnership, joint venture,
association, trust, limited partnership or other legal entity
permitted under Section 12.9 hereof, equity interests in
entities that would be considered qualified REIT subsidiaries
of the Corporation under Section 856(i) of the Code and
investments in REITs the portfolios of which consist of assets
the Board of Directors considers appropriate for the
Corporation, were it to hold such assets directly;
(h) issue debt securities of the Corporation unless the
issuance of such debt is not restricted by Section 12.6 hereof
and the historical debt service coverage (in the most recently
completed fiscal year), as adjusted for known changes, would,
in the opinion of the Board, be sufficient to service the
principal and interest payments from the higher level of
corporate debt;
(i) issue options, warrants or similar evidences of a
right to purchase the Corporation's Securities unless
(i) issued to all its Shareholders ratably, (ii) as a part of
a financing arrangement, or (iii) as a part of a stock option
or similar plan to compensate the Corporation's Directors,
officers, employees, consultants, advisors and/or other
similar persons that has been approved by the Board; provided,
however, that the number of Shares of Common Stock subject to
outstanding options under such plan shall not exceed ten
percent (10%) of the then outstanding Shares of Common Stock;
(j) engage in short sales, or borrow, on an unsecured
basis, if such borrowing will result in an Asset Coverage of
less than three hundred percent (300%);
(k) engage in trading activities in Securities, as
compared with investment activities;
(l) invest in any commercial real estate other than self-
service storage facilities or office and business parks,
unless the Board makes each of the following determinations as
to the proposed investment:
(i) the acquisition and holding of the investment
would not jeopardize or in the future be likely to
jeopardize the qualification of the Corporation as a REIT
under the Code;
(ii) the Corporation's management has the experience
and expertise necessary for effective management of the
investment or has contracted or will contract, on behalf
of the Corporation, with a third party manager having
such experience and expertise; and
(iii) the investment constitutes a prudent and
reasonable investment by the Corporation and is being
made for the purpose of (A) maximizing the value of
property acquired by the Corporation, a portion of which
is being used as or was acquired for the purpose of a
self-service storage facility or an office and business
park, or (B) diversifying the Corporation's portfolio to
protect the value of its assets and to hedge against the
risk of having the Corporation's assets concentrated in
self-service storage facilities and office and business
parks; and
(m) acquire securities in any company holding
investments or engaging in activities prohibited by paragraphs
(a) through (e), (i) and (k) of this Section 12.5.
12.6 Restrictions Upon Dealings Between the
Corporation and Interested Parties
(a) General Restriction. Except as provided in this
Section 12.6, the Corporation shall not engage in a
transaction with any Interested Party. Any transaction
between the Corporation and any Interested Party made in
compliance with the requirements of this Section 12.6 shall be
valid notwithstanding such relationship and such Interested
Party shall not be under any disability from or have any
liability as a result of entering into any such transaction
with the Corporation.
(b) Sales to the Corporation. The Corporation shall not
purchase property from any Interested Party, unless, after
disclosure to the Board of the interest of the Interested
Party in the proposed transaction, a majority of Directors not
otherwise interested in such transaction (including a majority
of the Independent Directors) has determined that the property
is being offered to the Corporation upon terms fair and
reasonable to the Corporation.
(c) Sales by the Corporation. The Corporation shall not
sell property to a Director or any Affiliate thereof.
(d) Loans to or From the Corporation. The Corporation
shall not make loans to, or borrow funds from, any Interested
Party unless, after disclosure to the Board of the interest of
the Interested Party in the proposed transaction, a majority
of Directors not otherwise interested in such transaction
(including a majority of the Independent Directors) approves
the transaction as being fair, competitive and commercially
reasonable and no less favorable to the Corporation than loans
between unaffiliated lenders and borrowers under the same
circumstances.
(e) Other Services and Transactions. Except to the
extent otherwise expressly authorized by the terms of
Section 12.6 or this Section 12.6(e), the Corporation shall
not enter into any transaction with any Interested Party,
unless the terms and conditions of such transaction have been
disclosed to the Board and approved by a majority of the
Directors not otherwise interested in the matter (including a
majority of Independent Directors). The disclosure required
by this Section 12.6(e) shall be in writing and shall fully
describe all the material terms and conditions of the proposed
transaction, and such Directors in approving the transaction
have determined the transaction to be fair, competitive and
commercially reasonable and on terms and conditions not less
favorable to the Corporation than those available from
unaffiliated third parties. The determinations required by
this Section 12.6(e) shall be set forth in writing, together
with such explanation as the Directors deem necessary or
advisable, and shall be filed with the Corporation's books and
records. In construing this Section 12.6(e), the term
"transaction" shall be understood to refer to any dealings
between the Corporation and an Interested Party, wherein the
Corporation transfers, or is obligated to transfer, to the
Interested Party valuable consideration, whether in the form
of cash, securities, tangible assets, intangible assets or
otherwise, in exchange for property, services, waiver of
claims or other valuable consideration, however designated.
(f) Ancillary Services. The Corporation may permit one
or more third parties, including a property manager, a
Director and/or an Affiliate thereof, to offer Ancillary
Services to its customers or others or use the Corporation's
properties as a site for offering such Ancillary Services,
provided that the conditions in Section 12.8 hereof are
satisfied.
12.7 Corporation's Right to Borrow Funds
Subject to the restrictions contained in this
Section 12.7, the Corporation may, at any time, at the
discretion of the Board, borrow funds, on a secured or
unsecured basis, from institutional lenders, banks and other
lenders selected by the Board and, in connection therewith,
execute, issue and deliver promissory notes, commercial paper,
notes, debentures, bonds and other debt obligations (which may
be convertible into Shares or other equity interests or be
issued together with warrants to acquire Shares or other
equity interests). Notwithstanding the foregoing, except as
otherwise provided in the following sentence, the Corporation
shall not borrow any funds if, after giving effect to such
borrowing, the Corporation's Indebtedness would exceed fifty
percent (50%) of its Total Assets. The ceiling upon the
Corporation's Indebtedness imposed by the preceding sentence
shall not prohibit the Corporation from incurring Indebtedness
as necessary to refinance Indebtedness previously obtained by
the Corporation, which was permissible at the time such
Indebtedness was obtained, and to make distributions to
Shareholders in order to preserve the eligibility of the
Corporation as a REIT under the provisions of the Code. The
restriction upon the Corporation's ability to borrow funds is
to be applied at the time the borrowing is obtained by the
Corporation. Any borrowing by the Corporation permitted at
the time such borrowing is made does not become unauthorized,
or constitute a violation of these Bylaws, even if, after the
borrowing is in place, the Corporation's Indebtedness exceeds
the ceiling upon Indebtedness referenced above (namely, the
fifty percent (50%) ceiling), whether or not such excess is
due, in part, to any accrued but unpaid interest, late fees or
penalties, finance charges or other amounts due with respect
to the Corporation's new borrowing or previous borrowings. In
addition, the Corporation shall not borrow any funds if, after
giving effect to such borrowing, the Corporation's
Indebtedness would exceed three hundred percent (300%) of its
Adjusted Net Worth. The Board shall review the status of the
Corporation's Indebtedness at least quarterly.
12.8 Pursuit of Ancillary Services
(a) The Corporation may provide any Ancillary Services
to its tenants or others as long as the Board believes in good
faith that the Corporation's pursuit of such Ancillary
Services would not jeopardize the Corporation's qualification
as a REIT under the Code.
(b) In the event that the Corporation's pursuit of one
or more of the Ancillary Services might jeopardize the
qualification of the Corporation as a REIT under the Code, the
Corporation may, in lieu of offering such Ancillary Services
directly:
(i) restructure the manner in which such Ancillary
Services are offered to the Corporation's tenants or
others, alter the pricing of the Ancillary Services or
take such other action as the Corporation deems
necessary;
(ii) invest in one or more other entities which
directly provide the Ancillary Services to the
Corporation's tenants or others; or
(iii) permit others, including Interested Parties, to
offer the Ancillary Services to the Corporation's tenants
or others in compliance with the terms of Section 12.8(c)
hereof;
provided, however, that, in each such instance, the Board has
received an opinion from tax counsel or a ruling from the IRS
that such action, subject to the qualifications and
restrictions imposed by the Board, and such other assumptions
as the Board may reasonably establish, would not disqualify
the Corporation from taxation as a REIT under the Code.
(c) The Corporation may permit one or more third parties
to offer Ancillary Services to its customers or others, or to
use the Corporation's properties as a site for offering such
Ancillary Services, if the Board has, in good faith, made the
following determinations:
(i) the Corporation does not wish, or consider it
advisable, to offer the Ancillary Services directly to
its tenants and others or has determined that rendering
such Ancillary Services would jeopardize the
qualification of the Corporation as a REIT under the
Code;
(ii) permitting others to render such Ancillary
Services would likely increase the rental revenues or
other income derived from the ownership of the
Corporation's properties, enhance the competitiveness of
the Corporation or otherwise provide economic benefits,
directly or indirectly, to the Corporation;
(iii) the party or parties rendering the Ancillary
Services are competent to do so, have experience in
rendering such Ancillary Services and have entered into a
written contract with the Corporation with respect to the
provision of the Ancillary Services, having terms and
conditions deemed fair and equitable to the Board; and
(iv) if the Person to render the Ancillary Services
is an Interested Party, the transaction has been
disclosed to and approved by the Directors as provided in
Section 12.6(e) hereof.
12.9 Corporation's Right to Participate in Joint
Investments
The Corporation may participate in, and contribute funds
to or invest in, any general partnership, joint venture,
association, trust, limited partnership or other legal entity
(a "Joint Enterprise") as long as:
(a) such investment in the Joint Enterprise would not
(i) jeopardize the qualification of the Corporation as a REIT
under the Code or (ii) result in the Corporation's becoming an
investment company within the meaning of the Investment
Company Act of 1940, as amended (unless the Corporation is
exempt from all the provisions of such Act);
(b) the principal purpose of the Joint Enterprise is
either to own, manage, hold, occupy or otherwise deal with
self-service storage facilities and/or office and business
parks, and/or with Mortgage Loans collateralized by such
assets, or to render Ancillary Services to Persons who own,
manage or hold self-service storage facilities, office and
business parks and/or Mortgage Loans collateralized by such
assets; and
(c) if one or more of the other parties to the Joint
Enterprise are Interested Parties, such transaction has been
disclosed to and approved by the Directors (including a
majority of the Independent Directors) as provided in
Section 12.6(e) hereof.
12.10 Investment in Corporation's Shares
The Corporation may, at any time, at the discretion of
the Board, invest in any class or series of the Common Stock
or Preferred Stock, or in any promissory notes, commercial
paper, notes, debentures, bonds or other debt obligations, for
the purpose of supporting the value of any such securities and
for any other valid corporate purposes.
SECTION 13. INDEPENDENT ACTIVITIES
13.1 Shares Held by Directors and Officers
Any Director or officer may acquire, own, hold and
dispose of Shares, for his or her individual account, and may
exercise all rights of a Shareholder to the same extent and in
the same manner as if he or she were not a Director or an
officer.
13.2 Business Interests and Investments of Directors
Subject to the limitations contained in this
Section 13.2, any Director who is not an officer may have
personal business interests and may engage in personal
business activities, which interests and activities may
include the acquisition, syndication, holding, management,
operation or disposition, for his or her own account or for
the account of others, of interests in real property or
Persons engaged in the real estate business, even if those
interests and activities directly compete with the actual
business being conducted by the Corporation, and is not
required to present to the Corporation any business
opportunity which comes to him or her even though such
opportunity is within the Corporation's investment policies.
13.3 Other Business Relationships of Directors
Subject to the provisions of Section 12 hereof, any
Director or officer may be interested as trustee, officer,
director, Shareholder, partner, member, advisor or employee,
or otherwise have a direct or indirect interest in any Person
who may be engaged to render advice or services to the
Corporation, and may receive compensation from such Person as
well as compensation as Director, officer or otherwise
hereunder, and no such activity shall be deemed to conflict
with his or her duties and powers as Director or officer.
SECTION 14. AMENDMENTS
These Bylaws may be amended or repealed and new Bylaws
may be adopted by the Board; provided, however, that all
Bylaws made by the Board may be amended or repealed by the
Shareholders.
SECTION 15. MISCELLANEOUS
15.1 Provisions in Conflict With Law or Regulations
The provisions of these Bylaws are separable, and if the
Board shall determine, with the advice of counsel, that any
one or more of such provisions (the "Conflicting Provisions")
are in conflict with the REIT Provisions of the Code, the
Washington Business Corporation Act or other applicable
federal or Washington laws and regulations, the Conflicting
Provisions shall be deemed never to have constituted a part of
these Bylaws; provided, however, that such determination of
the Directors shall not affect or impair any of the remaining
provisions of these Bylaws or render invalid or improper any
action taken or omitted (including, but not limited to, the
election of Directors) prior to such determination. Such
determination shall become effective when a certificate,
signed by a majority of the Directors setting forth any such
determination and reciting that it was duly adopted by the
Directors, shall be filed with the books and records of the
Corporation. The Directors shall not be liable for failure to
make any determination under this Section 15. Nothing in this
Section 15 shall in any way limit or affect the rights of the
Directors or the Shareholders to amend these Bylaws.
15.2 Reliance Upon Legal Advice
The Directors, including the Independent Directors, may
retain one or more legal counsel to assist them in making any
determinations required by them, or which they are permitted
to make, pursuant to the terms of these Bylaws. Such
Directors shall not be liable for any loss caused by or
resulting from any action taken or omitted in reliance upon
any legal opinion rendered by such counsel, so long as the
selection of the legal counsel and reliance on the advice was
in good faith.
In making any such determinations, the Directors shall,
however, not be obligated to follow the advice of any legal
counsel engaged to advise them.
15.3 Construction
Unless the context requires otherwise, the general
provisions, rules of construction and definitions in the
Washington Business Corporation Act shall govern the
construction of these Bylaws.
The foregoing Bylaws were adopted by the Board on May 6,
1997 and Article 11 of the foregoing Bylaws by the sole
Shareholder on May 6, 1997. The Bylaws were restated on
May 15, 1997.
/s/ Kristin H. Stred
Kristin H. Stred
Senior Vice President, Secretary and
General Counsel
