Schedule of Shareholders Who are Parties
to the Form of Shareholders Non-Competition Agreement
and Indemnification Limitation
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Xxxxxxx X. Xxxxxx
Xxxxxxxxxxx Xxxxx
Xxxx X. Xxxxxx
Xxxx X. Xxxxxxxxxx
Xxxx X. Xxxxxxxx, Xx.
SHAREHOLDER'S NON-COMPETITION AND
INDEMNIFICATION LIMITATION AGREEMENT
(NAME:__________)
This Shareholder's Non-Competition and Indemnification Limitation
Agreement (the "AGREEMENT") is between Cowlitz Bancorporation ("COWLITZ"),
Cowlitz Bank ("COWLITZ BANK") and ________________ ("Shareholder").
Contemporaneously herewith, Cowlitz, Cowlitz Bank and Northern Bank of
Commerce ("NBOC") have entered into an Agreement and Plan of Merger (the
"MERGER AGREEMENT"), pursuant to which NBOC will merge with and into Cowlitz
Bank (the "MERGER") with Cowlitz Bank being the surviving corporation.
Xxxxxxx, Xxxxxxx Bank and Shareholder desire that, as of the effective time
of the Merger (the "EFFECTIVE TIME"), Shareholder will be subject to the
terms set forth herein. The parties therefore agree as follows:
1. PURPOSE. Xxxxxxx and Cowlitz Bank have mandated as a condition
of the Merger Agreement that certain shareholders of NBOC, who are directors
and/or key executives of NBOC and have materially contributed to its goodwill
and business value, must enter into agreements not to compete with Cowlitz
Bank for a period of time after the merger of NBOC with and into Cowlitz
Bank. The parties agree the requirement of non-competition agreements is
necessary and appropriate to protect the valuable goodwill of NBOC subsequent
to the Merger, and that Cowlitz and Cowlitz Bank would not be willing to
consummate the Merger under the agreed upon terms, if at all, without
requiring such non-competition agreements. In addition, it is a condition of
Xxxxxxx's and Cowlitz Bank's willingness to enter into the Merger Agreement
that Shareholder acknowledge and agree that indemnification rights against
Cowlitz or Cowlitz Bank are limited as set forth in Section 8 hereof.
2. CONSIDERATION TO SHAREHOLDER. Shareholder owns common stock of
NBOC, and/or vested stock options to acquire common stock of NBOC.
Shareholder represents that he will receive substantial financial benefit if
NBOC is merged with and into Cowlitz Bank, and Shareholder is therefore
willing to enter into this Agreement to facilitate the Merger.
3. TERM. The term of this Agreement shall be three (3) years from
the date of the Effective Time (the "EFFECTIVE DATE"), provided this
Agreement shall be void without further action by the parties if the Merger
Agreement is terminated.
4. CONFIDENTIALITY AND NON-COMPETITION.
4.1 During and after the term of this Agreement, Shareholder
will protect and hold in strictest confidence all Confidential Information of
Cowlitz, Cowlitz Bank and NBOC. "CONFIDENTIAL INFORMATION" includes, without
limitation, trade secrets, plans, programs, source and object codes,
specifications, drawings, diagrams, schematics, formulae, product designs and
concepts, reports, studies, technical know-how, methods, customer and
supplier lists, customer requirements, agreements, licenses, price lists and
policies, budgets, projections, bids, costs, financial reports, financing
materials, training programs and manuals, and sales and marketing
programs, materials, plans, and strategies. Confidential Information excludes
information known to the general public other than due to breach of this
Agreement.
4.2 During the term of this Agreement, Shareholder will not in
any capacity (including, without limitation, as an employee, officer, agent,
director, consultant, owner, shareholder, partner, member or joint venturer)
directly or indirectly, whether or not for compensation, engage in or assist
others to engage in any business that is, or is preparing to be, in
"Competition" with Cowlitz Bank; provided, however, that nothing herein shall
prevent the purchase or ownership by Shareholder of shares which constitute
less than one percent of the outstanding equity securities of a publicly-held
company. A business shall be deemed to be in "COMPETITION" with Cowlitz Bank
if it is engaged in the business of soliciting or accepting deposits, making
or seeking to make extensions of credit or originating or servicing loans
within the geographic area in which Cowlitz Bank is engaged in such business,
which the parties agree is throughout the States of Washington and Oregon, or
if it is engaged in any other business in which Cowlitz Bank is engaged as of
the Effective Date within the geographic area in which Cowlitz Bank in
engaged in such business.
4.3 Shareholder further agrees that during the term of the
Agreement, Shareholder will not call on, reveal the name of, or otherwise
solicit, accept business from or attempt to entice away any actual or
identified potential customer of NBOC during the term of this Agreement, nor
will he assist others in doing so. Shareholder further agrees that he will
not, during the term of the Agreement, encourage or solicit or assist others
to encourage or solicit any employee, consultant or business relation of
Cowlitz Bank or Cowlitz to leave such employment or terminate such business
relationship for any reason.
4.4 Shareholder acknowledges that the covenants in this Section
4 are reasonable in relation to the business in which NBOC is engaged,
Shareholder's knowledge of NBOC's business, the position Shareholder has been
afforded with NBOC and the material adverse affect upon the value of the
goodwill of NBOC if Shareholder engaged in Competition during the term of
this Agreement, and that compliance with such covenants will not prevent him
from pursuing his livelihood. However, should any court of competent
jurisdiction find that any provision of such covenants is unreasonable,
whether in period of time, geographical area, or otherwise, then in that
event the parties agree that such covenants shall be interpreted and enforced
to the maximum extent which the court deems reasonable.
5. REMEDIES. Shareholder acknowledges that the harm to Cowlitz and
Cowlitz Bank from any breach of Shareholder's obligations under or related to
this Agreement may be difficult to determine and may be wholly or partially
irreparable, and such obligations may be enforced by injunctive relief and
other available remedies at law or in equity. The parties further agree that
neither Xxxxxxx and Cowlitz Bank shall be required to post any bond in
connection with enforcement of Shareholder's obligations hereunder unless
required by applicable law or court rule, and that Xxxxxxx and Cowlitz Bank
in their sole discretion shall be entitled to inform third parties of the
existence of this Agreement and of Shareholder's obligations hereunder. Any
amounts received by Shareholder or by any other party through Shareholder in
breach of this Agreement shall be held in trust for the benefit of Cowlitz
and Cowlitz Bank. In the event
NON-COMPETITION AGREEMENT - 2
Shareholder breaches Section 4.2 or 4.3, the term of this Agreement shall be
extended by the period of time during which Shareholder is in breach of
Section 4.2 or 4.3, as the case may be. No term hereof shall be construed to
limit or supersede any other right or remedy of Cowlitz and Cowlitz Bank
under applicable law with respect to the protection of trade secrets or
otherwise.
6. NO CONFLICTING AGREEMENTS. Shareholder represents that
Shareholder has no contractual obligations or other undertakings which would
restrict or impair Shareholder's performance of this Agreement. Shareholder
agrees to indemnify Xxxxxxx and Cowlitz Bank for all losses, claims, and
expenses (including reasonable attorneys' fees) arising from any breach of
Shareholder 's warranties or representations herein.
7. AT WILL EMPLOYMENT. Unless and to the extent otherwise agreed by
Xxxxxxx or Cowlitz Bank and Shareholder in a separate written employment
agreement, any employment of Shareholder by Xxxxxxx and/or Cowlitz Bank is
and will be "at will." No term of any employment agreement between Cowlitz
and/or Cowlitz Bank and Shareholder shall be construed to conflict with or
lessen Shareholder 's obligations under this Agreement.
8. ACKNOWLEDGMENT OF INDEMNIFICATION LIMITATION. Notwithstanding
any agreement with or rights against NBOC that Shareholder may have with
respect to indemnification, Shareholder acknowledges and agrees that neither
Xxxxxxx nor Cowlitz Bank shall have any obligation whatsoever to indemnify
Shareholder except to the extent of any directors' and officers' insurance
coverage set forth in Section 7.8 of the Merger Agreement and applicable to
Shareholder.
9. MISCELLANEOUS.
9.1 BINDING EFFECT. This Agreement shall be binding upon and inure
to the benefit of the respective successors, assigns, heirs, representatives,
executors and administrators of the parties. No waiver of or forbearance to
enforce any right or provision hereof shall be binding unless in writing and
signed by the party to be bound, and no such waiver or forbearance in any
instance shall apply to any other instance or to any other right or provision.
9.2 GOVERNING LAW; VENUE. This Agreement will be governed by the
laws of the State of Washington without regard to its conflicts of laws
rules. The parties hereby agree that the exclusive venue for all matters and
actions arising under this Agreement shall be and remain in the judicial
districts of the state and federal courts, respectively, encompassing
Seattle, Washington, and the parties hereby consent to the personal
jurisdiction of such courts. The prevailing party shall be entitled to
reasonable attorneys' fees and costs incurred in connection with such
litigation.
9.3 ENTIRE AGREEMENT; SEVERABILITY. This Agreement represents the
entire agreement between Cowlitz, Cowlitz Bank and Shareholder concerning the
subject matter hereof and supersedes all prior agreements, correspondence and
understandings, whether oral or written, with respect to that subject matter.
If any provision of this Agreement is held to be invalid or unenforceable to
any extent in any context, it shall nevertheless be enforced to the fullest
extent
NON-COMPETITION AGREEMENT - 3
allowed by law in that and other contexts, and the validity and force of the
remainder of this Agreement shall not be affected thereby.
9.4. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, each of which will be deemed an original, but all of which
together will constitute one and the same instrument.
NON-COMPETITION AGREEMENT - 4
BY SIGNING BELOW, SHAREHOLDER ACKNOWLEDGES THAT HE HAS READ THIS
AGREEMENT IN ITS ENTIRETY AND UNDERSTANDS IT. SHAREHOLDER FURTHER
ACKNOWLEDGES THAT THIS AGREEMENT WAS DRAFTED BY COUNSEL FOR COWLITZ
BANCORPORATION AND COWLITZ BANK, AND THAT HE HAS HAD THE OPPORTUNITY TO
CONSULT WITH HIS COUNSEL WITH RESPECT TO THIS AGREEMENT.
DATED as of the 14th day of September, 1999.
COWLITZ: COWLITZ BANCORPORATION
By
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Name:
Title:
COWLITZ BANK: COWLITZ BANK
By
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Name:
Title:
SHAREHOLDER:
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(signature)
NON-COMPETITION AGREEMENT - 5
