NON-COMPETlTION AGREEMENT
This Non-competition Agreement (this "Agreement") is entered into as of
December 20, 2005 by and between Xxxxx X. Xxxxxxx, residing at 000 Xxxxx Xxxx,
Xxxxxxx, Xxx Xxxx, 00000 (the "Executive") and Flushing Financial Corporation, a
Delaware corporation ("FFC"). Terms not defined herein shall have the meanings
ascribed to them in the Merger Agreement.
W I T N E S S E T H:
WHEREAS, pursuant to an Agreement and Plan of Merger, dated as of December
20, 2005 (the "Merger Agreement"), by and between FFC and Breezy, a Delaware
corporation ("Breezy"), Breezy will merge with and into FFC (the "Merger");
WHEREAS, the Merger Agreement provides that subsequent to consummation of
the Merger, Breezy Bank shall be merged with and into FFC Savings Bank, FSB;
WHEREAS, Section 6.11 of the Merger Agreement requires that a
Non-competition agreement be executed and delivered by each of the Executive and
FFC as a condition precedent to the consummation of the Merger;
WHEREAS, the parties hereto recognize and acknowledge that this Agreement
is necessary to protect the business and goodwill acquired by FFC in connection
with the Merger,
WHEREAS, Breezy and the Executive are parties to an Employment Agreement,
dated as of December 15, 2004 (the "Employment Agreement") pursuant to which
Executive has agreed not to compete within a 25-mile radius of any office of
Breezy and Breezy Bank; and
WHEREAS, in connection with the Merger, the Employment Agreement shall be
amended and the Executive, FFC and Breezy shall enter into a Settlement Letter,
which among other things, shall provide for the execution of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
and for other good and valuable consideration, including the payments to be made
to the Executive pursuant to Section 6 of this Agreement, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
1. Non-competition. For a period of two years after the Effective Time of
the Merger (the "Effective Date"), the Executive shall not, without the prior
written consent of FFC, directly or indirectly, whether or not for compensation,
engage or invest in, own, manage, operate, finance, control, or participate in
the ownership, management, operation, financing, or control of, be employed by,
associated with, or in any manner connected with, lend Executive's name or any
similar name to, lend Executive's credit to, or render services or advice to,
any business, including a savings bank, savings and loan association, savings
and loan holding company, bank, bank holding company, mortgage company or
similar type financial institution, or any direct or indirect subsidiary or
affiliate of such entity, whose products or activities compete in whole or in
part with the products or activities of FFC or its subsidiaries within a
twenty-five (25) mile radius of the offices of FFC or any of its subsidiaries
(the "Noncompete Area"), provided, however, that the Executive may purchase or
otherwise acquire up to (but not more than) five percent of any class of
securities of any enterprise (but without otherwise participating in the
activities of such enterprise) if such securities are listed on any national or
regional securities exchange or have been registered under Section 12(g) of the
Securities Exchange Act of 1934. The Executive agrees that this covenant is
reasonable with respect to its duration, geographical area, and scope. In the
event of a breach by the Executive of any covenant set forth in this Section 1
of this Agreement, the term of such covenant will be extended by the period of
the duration of such breach;
2. Nonsolicitation. The Executive will not, directly or indirectly, either
for himself or any other Person, (i) induce or attempt to induce any employee of
FFC to leave the employ of FFC, (ii) in any way interfere with the relationship
between FFC and any employee of FFC, (iii) employ, or otherwise engage as an
employee, independent contractor, or otherwise, any employee of FFC, or (iv)
induce or attempt to induce any customer, supplier, licensee, or business
relation of FFC to cease doing business with FFC, or in any way interfere with
the relationship between any customer, supplier, licensee, or business relation
of FFC. The Executive will not, directly or indirectly, either for himself or
any other Person (which term shall include an individual, trust, estate,
corporation, limited liability company, savings bank, savings and loan
association, savings and loan holding company, bank, bank holding company,
mortgage company or similar type financial institution) solicit the business of
any Person known to the Executive to be a customer of FFC, whether or not the
Executive had personal contact with such Person, with respect to products or
activities which compete in whole or in part with the products or activities of
FFC.
3. Nondisparagement. The Executive will not, at any time during or after
the two-year period, disparage FFC or its subsidiaries, or any of its
shareholders, directors, officers, employees, or agents.
4. Notification of Employment. Executive will, for a period of two years
after the Effective Date, within ten days after accepting any employment, advise
FFC of the identity of any employer of the Executive. FFC may serve notice upon
each such employer that the Executive is bound by this Agreement and furnish
each such employer with a copy of this Agreement or relevant portions thereof.
5. Confidentiality. The Executive acknowledges and agrees to treat as
confidential all information known or obtained by the Executive, whether before
or after the date hereof, concerning Breezy's or FFC's or their respective
subsidiaries' records, properties, books, contracts, commitments and affairs,
including but not limited to, information regarding accounts, shareholders,
finances, strategies, marketing, customers and potential customers and other
information of a similar nature (such information, "Confidential Information").
The Executive agrees that he will not, at any time, disclose to any unauthorized
Persons, or use for his own account or for the benefit of any third party any
Confidential Information, whether or not the Confidential Information is
embodied in writing or other physical form, without FFC's express written
consent, unless and to the extent that such Confidential Information is or
becomes generally known to and available for use by the public other than as a
result of Executive's fault or the fault of any other Person bound by a duty of
confidentiality to FFC.
6. Compensation. In consideration of the covenants contained in this
Agreement, FFC shall pay the Executive the sum of five hundred fifty thousand
Dollars ($550,000), which shall be paid in accordance with the following
schedule: On the Effective Date, FFC shall pay the sum of two hundred seventy
five thousand Dollars ($275,000), less applicable withholding taxes, to the
Executive. Thereafter, on the first anniversary of the Effective Date, FFC shall
pay the remaining two hundred seventy five thousand Dollars ($275,000), less
applicable withholding taxes, to the Executive or his estate.
7. Remedies. The parties hereto, recognizing that irreparable injury will
result to FFC, its business and property in the event of the Executive's breach
of this Agreement, hereby consent, in the event of any such breach by the
Executive, to an injunction in favor of FFC, in addition to any other remedies
and damages available, to restrain the violation hereof by the Executive, the
Executive's partners, agents, servants, employers, employees and all persons
acting for or with the Executive. The Executive represents and admits that the
Executive's experience and capabilities are such that the Executive can obtain
employment in a business engaged in other industries and/or of a different
nature than FFC, and that the enforcement of a remedy by way of injunction will
not prevent the Executive from earning a livelihood. Nothing herein will be
construed as prohibiting FFC from pursuing any other remedies available to FFC
for such breach or threatened breach, including the recovery of damages from the
Executive.
8. Waiver. The rights and remedies of the parties to this Agreement are
cumulative and not alternative. Neither the failure nor any delay by any party
in exercising any right, power, or privilege under this Agreement will operate
as a waiver of such right, power, or privilege, and no single or partial
exercise of any such right, power, or privilege will preclude any other or
further exercise of such right, power, or privilege or the exercise of any other
right, power, or privilege. To the maximum extent permitted by applicable law,
(a) no claim or right arising out of this Agreement can be discharged by one
party, in whole or in part, by a waiver or renunciation of the claim or right
unless in writing signed by the other party; (b) no waiver that may be given by
a party will be applicable except in the specific instance for which it is
given; and (c) no notice to or demand on one party will be deemed to be a waiver
of any obligation of such party or of the right of the party giving such notice
or demand to take further action without notice or demand as provided in this
Agreement.
9. Successors and Assigns. This Agreement shall be binding upon the
Executive and FFC and will inure to the benefit of FFC and its affiliates,
successors and assigns and the Executive and the Executive's assigns, heirs and
legal representatives.
10. Governing Law. This Agreement shall be construed and enforced in
accordance with the laws of the State of New York without regard to conflicts of
laws principles.
11. Severability. If any provision in this Agreement is declared or
determined by any court to be illegal, void, or unenforceable, the illegality or
unenforceability of such provision shall have no effect upon, and shall not
impair, the enforceability or validity of any other provisions in this
Agreement. If any of the covenants set forth in this Agreement are held to be
unreasonable, arbitrary, or against public policy, such covenants will be
considered divisible with respect to scope, time, and geographic area, and in
such lesser scope, time and geographic area, will be effective, binding and
enforceable against the Executive.
12. Arbitration. Any dispute or controversy arising under or in connection
with this Agreement shall be settled exclusively by arbitration, conducted
before a single arbitrator selected mutually by FFC and Executive, which
arbitration shall be conducted within the State of New York in accordance with
the rules of the American Arbitration Association then in effect.
13. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same agreement.
14. Termination. This Agreement shall be terminated and shall have no
further force or effect if, and at such time as, the Merger Agreement is
terminated.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first written above.
EXECUTIVE FLUSHING FINANCIAL CORPORATION
/s/ Xxxxx X. Xxxxxxx By: /s/ Xxxx X. Xxxxx
--------------------------- ---------------------------------
Name: Xxxx X. Xxxxx
Title: President and
Chief Executive Officer
