DUTCHFORK BANCSHARES, INC.
NONCOMPETITION AGREEMENT
This Noncompetition Agreement (the "Agreement") is entered into as of July
29, 2003, by and between DutchFork Bancshares, Inc. (the "Company"), a
corporation organized under the laws of the State of Delaware and the holding
company for Xxxxxxxx Federal Savings Bank (the "Bank"), with its principal
offices at 0000 Xxxxxx Xxxx, Xxxxxxxx, Xxxxx Xxxxxxxx 00000, and J. Xxxxxx
Xxxxxxx (the "Executive").
WHEREAS, the Executive is the Chairman of the Board and Chief Executive
Officer of the Company and the Bank; and
WHEREAS, the parties hereto acknowledge that Executive occupies a unique
position of trust and confidence with respect to the Company and the Bank; and
WHEREAS, the parties further acknowledge that, by virtue of said position,
the Executive has acquired significant knowledge relating to the business of the
Company and the Bank; and
WHEREAS, the Board of Directors recognizes that current noncompetition
provisions of the Executive's employment agreement are insufficient to protect
the Company in the event of a termination of employment by the Executive; and
WHEREAS, the Board of Directors has determined that it is in the best
interests of the Company and its shareholders to protect the business and
goodwill associated with the Company and the Bank by strengthening restrictions
on the Executive's ability to enter into certain competitive business activities
following a termination of employment; and
WHEREAS, the Executive has agreed to accept such limitations on his ability
to compete with the Company and the Bank, in exchange for the consideration to
be provided by the Company hereunder.
NOW, THEREFORE, in consideration of the foregoing, and for good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
1. The Executive agrees that, upon the Executive's termination of
employment within three years after the date of this Agreement for any reason
other than a Termination for Cause, as defined in Section 5 hereof, the
Executive will not, directly or indirectly:
(a) become a director, officer, employee, shareholder, principal,
agent, consultant or independent contractor of any insured depository
institution, trust company or parent holding company of any such
institution or company which
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has an office in any county, city, town or similarly organized community in
which the Company or the Bank has an office or branch or has filed an
application for regulatory approval to establish an office or branch, or
any other entity whose business in the aforesaid geographic area materially
competes with the depository, lending or other business activities of the
Company or any of its subsidiaries (in each case, a "Competing Business"),
provided, however, that this provision shall not prohibit the Executive
from owning bonds, non-voting preferred stock or up to five percent (5%) of
the outstanding common stock of any such entity if such common stock is
publicly traded;
(b) solicit or induce, or cause others to solicit or induce, any
employee of the Company or any of its subsidiaries to leave the employment
of such entities; or
(c) solicit (whether by mail, telephone, personal meeting or any other
means) any customer of the Company or any of its subsidiaries to transact
business with any other entity, whether or not a Competing Business, or to
reduce or refrain from doing any business with the Company or its
subsidiaries, or interfere with or damage (or attempt to interfere with or
damage) any relationship between the Company or its subsidiaries and any
such customers.
2. The Executive hereby agrees to comply with the provisions of Section 1
for a period of thirty-six (36) months following the date of the Executive's
termination of employment.
3. In consideration of the obligations and commitments of the Executive
under this Agreement, the Company shall pay to the Executive an amount equal to
Seven Hundred and Fifty Thousand Dollars ($750,000), with applicable withholding
taxes to be subtracted from such amount. Payment shall be made in a lump sum on
the date of the Executive's termination of employment.
4. Notwithstanding any other provision hereof, the Executive agrees to
treat as confidential all information (excluding, however, information contained
in publicly available reports filed by the Company with any governmental entity
and information published or disclosed to the public by a third party)
concerning the records, properties, books, contracts, commitments and affairs of
the Company and/or its subsidiaries and affiliates, including, but not limited
to, information regarding accounts, shareholders, finances, strategies,
marketing, customers and potential customers (their identities, preferences,
likes and dislikes) and other information of a similar nature not available to
the public.
5. No payments shall be made to the Executive under this Agreement upon the
Executive's Termination for Cause. "Termination for Cause" shall mean
termination of employment because of Executive's personal dishonesty, willful
misconduct, any breach of fiduciary duty involving personal profit, intentional
failure to perform stated duties, willful violation of any law, rule, regulation
(other than traffic violations or similar offenses), final cease and desist
order or material breach of any provision of this Agreement.
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6. No rights under this Agreement shall be assignable nor duties delegable
by either party, except that the Company may assign any of its rights hereunder
to any acquiror of all or substantially all of the assets of the Company. This
Agreement will inure to the benefit of and be binding upon any successor to the
Company by merger or consolidation or any other change in form or any other
person or firm or entity to which all or substantially all of the assets and
business of the Company may be sold or otherwise transferred. Nothing contained
in this Agreement is intended to confer upon any person or entity, other than
the parties hereto, their successors in interest and permitted transferees, any
rights or remedies under or by reason of this Agreement unless expressly so
stated to the contrary.
7. The parties hereto expressly agree and acknowledge that the terms of
this Agreement shall supersede the non-competition provisions contained in
Sections 9 and 10 of the Employment Agreement between the Company and the
Executive, dated as of June 29, 2000.
8. This Agreement shall be construed, enforced and interpreted in
accordance with and governed by the laws of the State of Delaware, without
reference to its principles of conflict of laws, except to the extent that
federal law shall be deemed to preempt such state laws.
9. It is the intention of the parties hereto that the provisions of this
Agreement shall be enforced to the fullest extent permissible under all
applicable laws and public policies, but that the unenforceability or the
modification to conform with such laws or public policies of any one provision
hereof shall not render unenforceable or impair the remainder of the Agreement.
The covenants in Section 1 of this Agreement with respect to limitations on
competition by geographic area shall be deemed to be separate covenants with
respect to each county, city, town or similarly organized community, and should
any court of competent jurisdiction conclude or find that this Agreement or any
portion thereof is not enforceable with respect to any specific county, city,
town or similarly organized community, such conclusion or finding shall in no
way render invalid or unenforceable the covenants herein with respect to any
other county, city, town or similarly organized community. Accordingly, if any
provision shall be determined to be invalid or unenforceable either in whole or
in part, this Agreement shall be deemed amended to delete or modify as necessary
the invalid or unenforceable provisions to alter the balance of this Agreement
in order to render the same valid and enforceable.
10. The Executive acknowledges that any breach of this Agreement will
result in irreparable damage to the Company for which the Company will not have
an adequate remedy at law. In addition to any other remedies and damages
available to the Company, the Executive further acknowledges that the Company
shall be entitled to injunctive relief hereunder to enjoin any breach of this
Agreement, and the parties hereby consent to an injunction in favor of the
Company by any court of competent jurisdiction, without prejudice to any other
right or remedy to which the Company may be entitled. The Executive represents
and acknowledges that, in light of his experience and capabilities, the
Executive can obtain employment with other than a Competing Business or in a
business engaged in other lines and/or of a different nature than those engaged
in by the Company or its subsidiaries or affiliates, and that the enforcement of
a remedy by way of injunction will not prevent the Executive from earning a
livelihood. In the
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event of a breach of this Agreement by the Executive, the Executive acknowledges
that in addition to or in lieu of the Company seeking injunctive relief, the
Company may also seek to recoup any or all amounts paid by the Company to the
Executive pursuant to Section 3 hereof. Each of the remedies available to the
Company in the event of a breach by the Executive shall be cumulative and not
mutually exclusive.
11. If an action is instituted to enforce any of the provisions of this
Agreement, the prevailing party in such action shall be entitled to recover from
the losing party reasonable attorneys' fees and costs.
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IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by
its duly authorized officer and its directors, and the Executive has signed this
Agreement, effective as of the date first above written.
ATTEST: DUTCHFORK BANCSHARES, INC.
/s/ Xxxxxxxxx X. Xxxxxx /s/ J. Xxxxxx Xxxxxxx
----------------------------- ---------------------------------
For the Entire Board of Directors
WITNESS: EXECUTIVE
/s/ Xxxxxxxxx X. Xxxxxx /s/ J. Xxxxxx Xxxxxxx
---------------------------------
J. Xxxxxx Xxxxxxx
