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BYLAWS
OF
MUTUAL HEALTH SYSTEMS, INC.
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TABLE OF CONTENTS
Page
SECTION I SHAREHOLDERS AND SHAREHOLDERS'
MEETINGS........................................ 1
1.1 Annual Meeting.................................. 1
1.2 Special Meetings................................ 1
1.3 Notice of Meetings.............................. 1
1.4 Waiver of Notice................................ 2
1.5 Shareholders' Action Without a
Meeting......................................... 2
1.6 Telephone Meetings.............................. 2
1.7 List of Shareholders............................ 2
1.8 Quorum and Voting............................... 2
1.9 Adjourned Meetings.............................. 3
1.10 Proxies......................................... 3
SECTION II BOARD OF DIRECTORS.............................. 3
2.1 Number and Qualification........................ 3
2.2 Election--Term of Office........................ 3
2.3 Vacancies....................................... 4
2.4 Quorum and Voting............................... 4
2.5 Regular Meetings................................ 4
2.6 Special Meetings................................ 4
2.7 Notice of Meetings.............................. 4
2.8 Directors' Action Without A Meeting............. 5
2.9 Committees of the Board of Directors............ 5
2.10 Telephone Meetings.............................. 6
2.11 Compensation of Directors....................... 6
SECTION III OFFICERS ....................................... 6
3.1 Officers Enumerated--Election................... 6
3.2 Qualifications.................................. 6
3.3 Duties of the Officers.......................... 6
3.4 Vacancies....................................... 7
3.5 Removal......................................... 7
3.6 Compensation.................................... 7
SECTION IV SHARES AND CERTIFICATES OF SHARES............... 8
4.1 Share Certificates.............................. 8
4.2 Consideration for Shares........................ 8
4.3 Transfers....................................... 9
4.4 Loss or Destruction of Certificates............. 9
4.5 Fixing Record Date.............................. 9
SECTION V BOOKS, RECORDS AND REPORTS...................... 10
5.1 Records of Corporate Meetings,
Accounting Records and
Share Registers................................. 10
5.2 Copies of Corporate Records..................... 10
5.3 Examination of Records.......................... 10
5.4 Financial Statements............................ 11
SECTION VI FISCAL YEAR..................................... 11
SECTION VII CORPORATE SEAL.................................. 11
SECTION VIII MISCELLANEOUS PROCEDURAL PROVISIONS............. 11
SECTION IX AMENDMENT OF BYLAWS............................. 11
SECTION X INDEMNIFICATION OF DIRECTORS
AND OTHERS...................................... 12
10.1 Grant of Indemnification........................ 12
10.2 Limitations on Indemnification.................. 12
10.3 Advancement of Expenses......................... 12
10.4 Right to Enforce Indemnification................ 12
10.5 Nonexclusivity.................................. 13
10.6 Indemnification of Officers,
Employees and Agents............................ 13
10.7 Insurance and Other Security.................... 13
10.8 Amendment or Modification....................... 14
10.9 Effect of Section............................... 14
SECTION XI REPRESENTATION OF SHARES OF
OTHER CORPORATIONS.............................. 14
ii
Adopted December 14, 1992
BYLAWS
OF
MUTUAL HEALTH SYSTEMS, INC.
SECTION I
SHAREHOLDERS AND SHAREHOLDERS' MEETINGS
---------------------------------------
1.1 Annual Meeting. The annual meeting of the shareholders of
this corporation (the "Corporation") for the election of directors and for
the transaction of such other business as may properly come before the
meeting shall be held each year at the principal office of the Corporation,
or at some other place either within or without the State of Washington as
designated by the Board of Directors, on the third Tuesday in March, or on
such other day and time as may be set by the Board of Directors. If the
specified day is a legal holiday, then the meeting will take place on the
next business day at the same time or on such other day and time as may be
set by the Board of Directors. The failure to hold the annual meeting as
specified herein shall not affect the validity of any corporate action.
1.2 Special Meetings. Special meetings of the shareholders for
any purpose or purposes may be called at any time by the Board of
Directors, the Chairman of the Board, the President, a majority of the
Board of Directors, or any shareholder or shareholders holding in the
aggregate one-fourth of the voting power of all shareholders. The meetings
shall be held at such time and place as the Board of Directors may
prescribe, or, if not held upon the request of the Board of Directors, at
such time and place as may be established by the President or by the
Secretary in the President's absence. Only business within the purpose or
purposes described in the meeting notice may be conducted.
1.3 Notice of Meetings. Written notice of the place, date and
time of the annual shareholders' meeting and written notice of the place,
date, time and purpose or purposes of special shareholders' meetings shall
be delivered not less than 10 (or, if required by Washington law, 20) or
more than 60 days before the date of the meeting, either personally, by
facsimile, or by mail, or in any other manner approved by law, by or at the
direction of the President or the Secretary, to each shareholder of record
entitled to notice of such meeting. Mailed notices shall be deemed to be
delivered when deposited in the mail, first-class postage prepaid,
correctly addressed to the shareholder's address shown in the Corporation's
current record of shareholders.
1.4 Waiver of Notice. Except where expressly prohibited by law or
the Articles of Incorporation, notice of the place, date, time and purpose
or purposes of any shareholders' meeting may be waived in a signed writing
delivered to the Corporation by any shareholder at any time, either before
or after the meeting. Attendance at the meeting in person or by proxy
waives objection to lack of notice or defective notice of the meeting
unless the shareholder at the beginning of the meeting objects to holding
the meeting or transacting business at the meeting. A shareholder waives
objection to consideration of a particular matter at a meeting that is not
within the purpose or purposes described in the meeting notice, unless the
shareholder objects to considering the matter when it is presented.
1.5 Shareholders' Action Without a Meeting. The shareholders may
take any action without a meeting that they could properly take at a
meeting, if one or more written consents setting forth the action so taken
are signed by all of the shareholders entitled to vote with respect to the
subject matter and are delivered to the Corporation for inclusion in the
minutes or filing with the corporate records. If required by Washington
law, all nonvoting shareholders must be given written notice of the
proposed action at least ten days before the action is taken, unless such
notice is waived in a manner consistent with these Bylaws. Actions taken
under this section are effective when all consents have been delivered to
the Corporation, unless the consent specifies a later effective date. A
shareholder may withdraw consent only by delivering a written notice of
withdrawal to the Corporation prior to the time that all consents have been
delivered to the Corporation.
1.6 Telephone Meetings. Shareholders may participate in a meeting
of shareholders by means of a conference telephone or any similar
communications equipment that enables all persons participating in the
meeting to hear each other during the meeting. Participation by such means
shall constitute presence in person at a meeting.
1.7 List of Shareholders. At least ten days before any
shareholders' meeting, the Secretary of the Corporation or the agent having
charge of the stock transfer books of the Corporation shall have compiled a
complete list of the shareholders entitled to notice of a shareholders'
meeting, arranged in alphabetical order and by voting group, with the
address of each shareholder and the number, class, and series, if any, of
shares owned by each.
1.8 Quorum and Voting. The presence in person or by proxy of the
holders of a majority of the votes entitled to be cast on a matter at a
meeting shall constitute a quorum of shareholders for that matter. If a
quorum exists, action on a
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matter shall be approved by a voting group if the votes cast within a
voting group favoring the action exceed the votes cast within the voting
group opposing the action, unless a greater number of affirmative votes is
required by the Articles of Incorporation or by law. If the Articles of
Incorporation or Washington law provide for voting by two or more voting
groups on a matter, action on a matter is taken only when voted upon by
each of those voting groups counted separately. Action may be taken by one
voting group on a matter even though no action is taken by another voting
group.
1.9 Adjourned Meetings. If a shareholders' meeting is adjourned
to a different place, date or time, whether for failure to achieve a quorum
or otherwise, notice need not be given of the new place, date or time if
the new place, date or time is announced at the meeting before adjournment.
When a determination of shareholders entitled to vote at any meeting of
shareholders has been made as provided in these Bylaws, that determination
shall apply to any adjournment thereof, unless Washington law requires
fixing a new record date. If Washington law requires that a new record date
be set for the adjourned meeting, notice of the adjourned meeting must be
given to shareholders as of the new record date. Any business may be
transacted at an adjourned meeting that could have been transacted at the
meeting as originally called.
1.10 Proxies. A shareholder may appoint a proxy to vote or
otherwise act for the shareholder by signing an appointment form, either
personally or by an agent. No appointment shall be valid after 11 months
from the date of its execution unless the appointment form expressly so
provides. An appointment of a proxy is revocable unless the appointment is
coupled with an interest. No revocation shall be effective until written
notice thereof has actually been received by the Secretary of the
Corporation or any other person authorized to tabulate votes.
SECTION II
BOARD OF DIRECTORS
------------------
2.1 Number and Qualification. The business affairs and property
of the Corporation shall be managed under the direction of a Board of
Directors. The number of directors shall be at least five and no more than
twelve. Within this range, the initial number of directors shall be five,
and the Board of Directors may increase or decrease the number of directors
by resolution from time to time. A decrease in the number of directors
shall not shorten the term of an incumbent director.
2.2 Election--Term of Office. Each director shall serve from the
time elected until his or her successor is elected and qualified.
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2.3 Vacancies. Except as otherwise provided by law, vacancies in
the Board of Directors, whether caused by resignation, death, retirement,
disqualification, removal, increase in the number of directors, or
otherwise, may be filled for the remainder of the term by the Board of
Directors, by the shareholders, or, if the directors in office constitute
less than a quorum of the Board of Directors, by an affirmative vote of a
majority of the remaining directors. The term of a director elected to fill
a vacancy expires at the next shareholders' meeting at which directors are
elected. A vacancy that will occur at a specific later date may be filled
before the vacancy occurs, but the new director may not take office until
the vacancy occurs.
2.4 Quorum and Voting. At any meeting of the Board of Directors,
the presence in person (including presence by electronic means such as a
telephone conference call) of a majority of the number of directors
presently in office shall constitute a quorum for the transaction of
business. Notwithstanding the foregoing, in no case shall a quorum be less
than one-third of the maximum number of directors authorized under section
2.1. If a quorum is present at the time of a vote, the affirmative vote of
a majority of the directors present at the time of the vote shall be the
act of the Board of Directors and of the Corporation except as may be
otherwise specifically provided by the Articles of Incorporation, by these
Bylaws, or by law. A director who is present at a meeting of the Board of
Directors when action is taken is deemed to have assented to the action
taken unless: (a) the director objects at the beginning of the meeting, or
promptly upon his or her arrival, to holding it or to transacting business
at the meeting; (b) the director's dissent or abstention from the action
taken is entered in the minutes of the meeting; or (c) the director
delivers written notice of his or her dissent or abstention to the
presiding officer of the meeting before its adjournment or to the
Corporation within a reasonable time after adjournment of the meeting. The
right of dissent or abstention is not available to a director who votes in
favor of the action taken.
2.5 Regular Meetings. Regular meetings of the Board of Directors
shall be held at such place, date and time as shall from time to time be
fixed by resolution of the Board.
2.6 Special Meetings. Special meetings of the Board of Directors
may be held at any place and at any time and may be called by the Chairman
of the Board, the President, or any two or more directors.
2.7 Notice of Meetings. Unless the Articles of Incorporation
provide otherwise, any regular meeting of the Board of Directors may be
held without notice of the date, time, place, or purpose of the meeting.
Any special meeting of the Board of Directors must be preceded by at least
two days' notice of the
4
date, time, and place of the meeting, but not of its purpose, unless the
Articles of Incorporation or these Bylaws require otherwise. Notice may be
given personally, by facsimile, by mail, or in any other manner allowed by
law. Oral notice shall be sufficient only if a written record of such
notice is included in the Corporation's minute book. Notice shall be deemed
effective at the earliest of: (a) receipt; (b) delivery to the proper
address or telephone number of the director as shown in the Corporation's
records; or (c) five days after its deposit in the United States mail, as
evidenced by the postmark, if correctly addressed and mailed with
first-class postage prepaid. Notice of any meeting of the Board of
Directors may be waived by any director at any time, by a signed writing,
delivered to the Corporation for inclusion in the minutes, either before or
after the meeting. Attendance or participation by a director at a meeting
shall constitute a waiver of any required notice of the meeting unless the
director promptly objects to holding the meeting or to the transaction of
any business on the grounds that the meeting was not lawfully convened and
the director does not thereafter vote for or assent to action taken at the
meeting.
2.8 Directors' Action Without A Meeting. The Board of Directors
or a committee thereof may take any action without a meeting that it could
properly take at a meeting if one or more written consents setting forth
the action are signed by all of the directors, or all of the members of the
committee, as the case may be, either before or after the action is taken,
and if the consents are delivered to the Corporation for inclusion in the
minutes or filing with the corporate records. Such action shall be
effective upon the signing of a consent by the last director to sign,
unless the consent specifies a later effective date.
2.9 Committees of the Board of Directors. The Board of Directors,
by resolutions adopted by a majority of the members of the Board of
Directors in office, may create from among its members one or more
committees and shall appoint the members thereof. Each such committee must
have two or more members, who shall be directors and who shall serve at the
pleasure of the Board of Directors. Each committee of the Board of
Directors may exercise the authority of the Board of Directors to the
extent provided in its enabling resolution and any pertinent subsequent
resolutions adopted in like manner, provided that the authority of each
such committee shall be subject to applicable law. Each committee of the
Board of Directors shall keep regular minutes of its proceedings and shall
report to the Board of Directors when requested to do so.
2.10 Telephone Meetings. Members of the Board of Directors or of
any committee appointed by the Board of Directors may participate in a
meeting of the Board of Directors or committee by means of a conference
telephone or similar communications equipment that enables all persons
participating in the meeting
5
to hear each other during the meeting. Participation by such means shall
constitute presence in person at a meeting.
2.11 Compensation of Directors. The Board of Directors may fix
the compensation of directors as such and may authorize the reimbursement
of their expenses.
SECTION III
OFFICERS
--------
3.1 Officers Enumerated--Election. The officers of the
Corporation shall consist of such officers and assistant officers as may be
designated by resolution of the Board of Directors. The officers may
include a Chairman of the Board, a President, one or more Vice Presidents,
a Secretary, a Treasurer, and any assistant officers. The officers shall
hold office at the pleasure of the Board of Directors. Unless otherwise
restricted by the Board of Directors, the President may appoint any
assistant officer, the Secretary may appoint one or more Assistant
Secretaries, and the Treasurer may appoint one or more Assistant
Treasurers; provided that any such appointments shall be recorded in
writing in the corporate records.
3.2 Qualifications. None of the officers of the Corporation need
be a director. Any two or more corporate offices may be held by the same
person.
3.3 Duties of the Officers. Unless otherwise prescribed by the
Board of Directors, the duties of the officers shall be as follows:
(a) Chairman of the Board. The Chairman of the Board shall
preside at meetings of the Board of Directors and of the shareholders and
shall perform such other duties as the Board of Directors may from time to
time prescribe.
(b) President. The President shall be the chief executive
officer of the Corporation and, subject to the control of the Board of
Directors, shall be responsible for the general operation of the
Corporation. In the absence of a Chairman of the Board, the President shall
preside at meetings of the Board of Directors and of the shareholders,
perform the other duties of the Chairman of the Board prescribed in this
Section, and perform such other duties as the Board of Directors may from
time to time designate. In addition, if there is no Secretary in office,
the President shall perform the duties of the Secretary, and if there is no
Treasurer in office, the President shall perform the duties of the
Treasurer.
(c) Vice President. Each Vice President shall perform such
duties as the Board of Directors may from time to time designate. In
addition, the Vice President, or if there is
6
more than one, the most senior Vice President available, shall act as
President in the absence or disability of the President.
(d) Secretary. The Secretary shall be responsible for and
shall keep, personally or with the assistance of others, minutes of the
meetings of the directors and shareholders; authenticate records of the
Corporation; attest all certificates of stock in the name of the
Corporation; keep the corporate seal, if any, and affix the same to
certificates of stock and other proper documents; keep a record of the
issuance of certificates of stock and the transfers of the same; and
perform such other duties as the Board of Directors may from time to time
designate.
(e) Treasurer. The Treasurer shall have the care and custody
of, and be responsible for, all funds and securities of the Corporation and
shall cause to be kept regular books of account. The Treasurer shall cause
to be deposited all funds and other valuable effects in the name of the
Corporation in such depositories as may be designated by the Board of
Directors. In general, the Treasurer shall perform all of the duties
incident to the office of Treasurer, and such other duties as from time to
time may be assigned by the Board of Directors.
(f) Assistant Officers. Assistant officers may consist of
one or more Assistant Vice Presidents, one or more Assistant Secretaries,
and one or more Assistant Treasurers. Each assistant officer shall perform
those duties assigned to him or her from time to time by the Board of
Directors, the President, or the officer who appointed him or her.
3.4 Vacancies. Vacancies in any office arising from any cause may
be filled by the Board of Directors at any regular or special meeting.
3.5 Removal. Any officer or agent may be removed by action of the
Board of Directors with or without cause, but any removal shall be without
prejudice to the contract rights, if any, of the person removed. Election
or appointment of an officer or agent shall not of itself create any
contract rights.
3.6 Compensation. The compensation of all officers of the
Corporation shall be fixed by the Board of Directors.
SECTION IV
SHARES AND CERTIFICATES OF SHARES
---------------------------------
4.1 Share Certificates. Share certificates shall be issued in
numerical order, and each shareholder shall be entitled to a certificate
signed by the Chairman of the Board, the President or a Vice President, and
attested by the Secretary or an Assistant Secretary. Share certificates may
be sealed with
7
the corporate seal, if any. Facsimiles of the signatures and seal may be
used as permitted by law. Every share certificate shall state:
(a) the name of the Corporation;
(b) that the Corporation is organized
under the laws of the State of
Washington;
(c) the name of the person to whom the
share certificate is issued;
(d) the number, class and series (if
any) of shares that the certificate
represents;
(e) if the Corporation is authorized to
issue shares of more than one class
or series, that upon written
request and without charge, the
Corporation will furnish any
shareholder with a full statement
of the designations, preferences,
limitations and relative rights of
the shares of each class or series,
and the authority of the Board of
Directors to determine variations
for future series; and
(f) if any agreement restricting sale
of the Corporation's shares that is
applicable to shareholders
generally is in effect at the time
of issuance, that the shares
represented by the certificate are
subject to the terms of such
agreement.
4.2 Consideration for Shares. Shares of the Corporation may be
issued for such consideration as shall be determined by the Board of
Directors to be adequate. The consideration for the issuance of shares may
be paid in whole or in part in cash, or in any tangible or intangible
property or benefit to the Corporation, including but not limited to
promissory notes, services performed, contracts for services to be
performed, or other securities of the Corporation. Establishment by the
Board of Directors of the amount of consideration received or to be
received for shares of the Corporation shall be deemed to be a
determination that the consideration so established is adequate.
4.3 Transfers. Shares may be transferred by delivery of the
certificate, accompanied either by an assignment in writing
8
on the back of the certificate, or by a written power of attorney to sell,
assign and transfer the same, signed by the record holder of the
certificate. Except as otherwise specifically provided in these Bylaws, no
shares of stock shall be transferred on the books of the Corporation until
the outstanding certificate therefor has been surrendered to the
Corporation.
4.4 Loss or Destruction of Certificates. In the event of the loss
or destruction of any certificate, a new certificate may be issued in lieu
thereof upon satisfactory proof of such loss or destruction, and upon the
giving of security against loss to the Corporation by bond, indemnity or
otherwise, to the extent deemed necessary by the Board of Directors, the
Secretary, or the Treasurer.
4.5 Fixing Record Date. The Board of Directors may fix in advance
a date as the record date for determining shareholders entitled: (i) to
notice of or to vote at any shareholders' meeting or any adjournment
thereof; (ii) to receive payment of any share dividend; or (iii) to receive
payment of any distribution. The Board of Directors may in addition fix
record dates with respect to any allotment of rights or conversion or
exchange of any securities by their terms, or for any other proper purpose,
as determined by the Board of Directors and by law. The record date shall
be not more than 70 days and, in case of a meeting of shareholders, not
less than 10 days (or such longer period as may be required by Washington
law) prior to the date on which the particular action requiring
determination of shareholders is to be taken. If no record date is fixed
for determining the shareholders entitled to notice of or to vote at a
meeting of shareholders, the record date shall be the date before the day
on which notice of the meeting is mailed. If no record date is fixed for
the determination of shareholders entitled to a distribution (other than
one involving a purchase, redemption, or other acquisition of the
Corporation's own shares), the record date shall be the date on which the
Board adopted the resolution declaring the distribution. If no record date
is fixed for determining shareholders entitled to a share dividend, the
record date shall be the date on which the Board of Directors authorized
the dividend.
SECTION V
BOOKS, RECORDS AND REPORTS
--------------------------
5.1 Records of Corporate Meetings, Accounting Records and Share
Registers. The Corporation shall keep, as permanent records, minutes of all
meetings of the Board of Directors and shareholders, and all actions taken
without a meeting, and all actions taken by a committee exercising the
authority of the Board of Directors. The Corporation or its agent shall
maintain, in a form that permits preparation of a list, a list of the names
and addresses of its shareholders, in alphabetical order by class of
shares, and the number, class, and series, if any, of shares held
9
by each. The Corporation shall also maintain appropriate accounting
records, and at its principal place of business shall keep copies of: (a)
its Articles of Incorporation or restated Articles of Incorporation and all
amendments in effect; (b) its Bylaws or restated Bylaws and all amendments
in effect; (c) minutes of all shareholders' meetings and records of all
actions taken without meetings for the past three years; (d) the year-end
balance sheets and income statements for the past three fiscal years,
prepared as required by Washington law; (e) all written communications to
shareholders generally in the past three years; (f) a list of the names and
business addresses of its current officers and directors; and (g) its most
recent annual report to the Secretary of State.
5.2 Copies of Corporate Records. Any person dealing with the
Corporation may rely upon a copy of any of the records of the proceedings,
resolutions, or votes of the Board of Directors or shareholders, when
certified by the Chairman of the Board, President, Vice President,
Secretary or Assistant Secretary.
5.3 Examination of Records. A shareholder shall have the right to
inspect and copy, during regular business hours at the principal office of
the Corporation, in person or by his or her attorney or agent, the
corporate records referred to in the last sentence of Section 5.1 of these
Bylaws if the shareholder gives the Corporation written notice of the
demand at least five business days before the date on which the shareholder
wishes to make such inspection. In addition, if a shareholder's demand is
made in good faith and for a proper purpose, a shareholder may inspect and
copy, during regular business hours at a reasonable location specified by
the Corporation, excerpts from minutes of any meeting of the Board of
Directors, records of any action of a committee of the Board of Directors
while exercising the authority of the Board of Directors, records of
actions taken by the Board of Directors or shareholders without a meeting
and minutes of any meeting of shareholders, to the extent any of the
foregoing are not subject to inspection under the preceding sentence;
accounting records of the Corporation; or the record of shareholders;
provided that the shareholder shall have made a demand describing with
reasonable particularity the shareholder's purpose and the records the
shareholder desires to inspect, that the records are directly connected to
the shareholder's purpose, and that the shareholder gives the Corporation
written notice of the shareholder's demand at least five business days
before the date on which the shareholder wishes to inspect and copy. This
section shall not affect any right of shareholders to inspect records of
the Corporation that may be otherwise granted to the shareholders by law.
5.4 Financial Statements. Not later than four months after the
end of each fiscal year, or in any event prior to its annual meeting of
shareholders, the Corporation shall prepare a balance sheet and income
statement in accordance with Washington law. The Corporation shall furnish
a copy of each to any shareholder upon written request.
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SECTION VI
FISCAL YEAR
-----------
The fiscal year of the Corporation shall be January 1 to December
31.
SECTION VII
CORPORATE SEAL
--------------
The directors may by resolution adopt or modify a corporate seal.
SECTION VIII
MISCELLANEOUS PROCEDURAL PROVISIONS
-----------------------------------
The Board of Directors may adopt rules of procedure to govern any
meetings of shareholders or directors to the extent not inconsistent with
law, the Corporation's Articles of Incorporation, or these Bylaws, as they
are in effect from time to time. In the absence of any rules of procedure
adopted by the Board of Directors, the chairman of the meeting shall make
all decisions regarding the procedures for any meeting.
SECTION IX
AMENDMENT OF BYLAWS
-------------------
The Board of Directors is expressly authorized to make, alter and
repeal the Bylaws of the Corporation, subject to the power of the
shareholders of the Corporation to change or repeal the Bylaws.
SECTION X
INDEMNIFICATION OF DIRECTORS AND OTHERS
---------------------------------------
10.1 Grant of Indemnification. Subject to Section 10.2, each
person who was or is made a party or is threatened to be made a party to or
is involved (including, without limitation, as a witness) in any
threatened, pending, or completed action, suit or proceeding, whether
formal or informal, civil, criminal, administrative or investigative
(hereinafter a "proceeding"), by reason of the fact that he or she is or
was a director of the Corporation or who, while a director of the
Corporation, is or was serving at the request of the Corporation as a
director, officer, employee or agent of this or another Corporation or of a
partnership, joint venture, trust, other enterprise, or employee benefit
plan, whether the basis of such proceeding is alleged action in an official
capacity as a director or in any other capacity while serving as a
director, officer, employee or agent, shall be indemnified and held
harmless
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by the Corporation to the fullest extent permitted by applicable law, as
then in effect, against all expense, liability and loss (including
attorneys' fees, costs, judgments, fines, ERISA excise taxes or penalties
and amounts to be paid in settlement) reasonably incurred or suffered by
such person in connection therewith, and such indemnification shall
continue as to a person who has ceased to be a director and shall inure to
the benefit of his or her heirs, executors and administrators.
10.2 Limitations on Indemnification. Notwithstanding Section
10.1, no indemnification shall be provided hereunder to any such person to
the extent that such indemnification would be prohibited by the Washington
Business Corporation Act or other applicable law as then in effect, nor,
except as provided in Section 10.4 with respect to proceedings seeking to
enforce rights to indemnification, shall the Corporation indemnify any such
person seeking indemnification in connection with a proceeding (or part
thereof) initiated by such person except where such proceeding (or part
thereof) was authorized by the Board of Directors of the Corporation.
10.3 Advancement of Expenses. The right to indemnification
conferred in this section shall include the right to be paid by the
Corporation the expenses incurred in defending any such proceeding in
advance of its final disposition, except where the Board of Directors shall
have adopted a resolution expressly disapproving such advancement of
expenses.
10.4 Right to Enforce Indemnification. If a claim under Section
10.1 is not paid in full by the Corporation within 60 days after a written
claim has been received by the Corporation, or if a claim for expenses
incurred in defending a proceeding in advance of its final disposition
authorized under Section 10.3 is not paid within 20 days after a written
claim has been received by the Corporation, the claimant may at any time
thereafter bring suit against the Corporation to recover the unpaid amount
of the claim and, to the extent successful in whole or in part, the
claimant shall be entitled to be paid also the expense of prosecuting such
claim. The claimant shall be presumed to be entitled to indemnification
hereunder upon submission of a written claim (and, in an action brought to
enforce a claim for expenses incurred in defending any proceeding in
advance of its final disposition, where the required undertaking has been
tendered to the Corporation), and thereafter the Corporation shall have the
burden of proof to overcome the presumption that the claimant is so
entitled. It shall be a defense to any such action (other than an action
with respect to expenses authorized under Section 10.3) that the claimant
has not met the standards of conduct which make it permissible hereunder or
under the Washington Business Corporation Act for the Corporation to
indemnify the claimant for the amount claimed, but the burden of proving
such defense shall be on the Corporation. Neither the failure of the
Corporation (including its Board of Directors, indepen dent legal counsel,
or its shareholders) to have made a
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determination prior to the commencement of such action that indemnification
of or reimbursement or advancement of expenses to the claimant is proper in
the circumstances because he or she has met the applicable standard of
conduct set forth herein or in the Washington Business Corporation Act nor
(except as provided in Section 10.3) an actual determination by the
Corporation (including its Board of Directors, independent legal counsel,
or its shareholders) that the claimant is not entitled to indemnification
or to the reimbursement or advancement of expenses shall be a defense to
the action or create a presumption that the claimant is not so entitled.
10.5 Nonexclusivity. The right to indemnification and the payment
of expenses incurred in defending a proceeding in advance of its final
disposition conferred in this section shall be valid to the extent
consistent with Washington law.
10.6 Indemnification of Officers, Employees and Agents. The
Corporation may, by action of its Board of Directors from time to time,
provide indemnification and pay expenses in advance of the final
disposition of a proceeding to officers, employees and agents of the
Corporation on the same terms and with the same scope and effect as the
provisions of this section 10 with respect to the indemnification and
advancement of expenses of directors of the Corporation or pursuant to
rights granted pursuant to, or provided by, the Washington Business
Corporation Act or on such other terms as the Board may deem proper.
10.7 Insurance and Other Security. The Corporation may maintain
insurance, at its expense, to protect itself and any individual who is or
was a director, officer, employee or agent of the Corporation or another
corporation, partnership, joint venture, trust or other enterprise against
any liability asserted against or incurred by the individual in that
capacity or arising from his or her status as an officer, director, agent,
or employee, whether or not the Corporation would have the power to
indemnify such person against the same liability under the Washington
Business Corporation Act. The Corporation may enter into contracts with any
director or officer of the Corporation in furtherance of the provisions of
this section 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.
10.8 Amendment or Modification. This section 10 may be altered or
amended at any time as provided in these Bylaws, but no such amendment
shall have the effect of diminishing the rights of any person who is or was
an officer or director as to any acts or omissions taken or omitted to be
taken prior to the effective date of such amendment.
10.9 Effect of Section. The rights conferred by this section 10
shall be deemed to be contract rights between the
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Corporation and each person who is or was a director or officer. The
Corporation expressly intends each such person to rely on the rights
conferred hereby in performing his or her respective duties on behalf of
the Corporation.
SECTION XI
REPRESENTATION OF SHARES OF OTHER CORPORATIONS
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Unless otherwise restricted by the Board of Directors, the
Chairman, President, and any Vice President of the Corporation are each
authorized to vote, represent and exercise on behalf of the Corporation all
rights incident to any and all shares of other corporations standing in the
name of the Corporation. This authority may be exercised by such officers
either in person or by a duly executed proxy or power of attorney.
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