1. | Definitions. Capitalized terms not defined in this Agreement have the meaning assigned to those terms in the Merger Agreement. The following definitions also apply to this Agreement: | ||||
a. | Competing Business. “Competing Business” means any depository, commercial and/or consumer lending, wealth management or trust business company or holding company thereof (including without limitation, any start-up bank or bank in formation) that has a branch office or other office in, or does material business in, the Covered Area; provided, that Competing Business will not include the existing business activities of the Shareholder as set forth on Schedule A hereto. | |||||||
b. | Covered Area. “Covered Area” means the counties in the State of Oregon in which the Company Bank has commercial banking offices as of the date hereof. | |||||||
c. | Term. “Term” means the period of time beginning on the Closing Date and ending eighteen (18) months after the Closing Date. | |||||||
2. | Effectiveness; Termination. This Agreement will be effective upon signing. If the Merger Agreement is terminated for any reason in accordance with its terms, this Agreement will automatically terminate and be null and void and of no effect; provided that (i) this Section 2 and Sections 9 through 14 hereof will survive any such termination, and (ii) such termination will not relieve any party of any liability or damages resulting from any material breach of any of its representations, warranties, covenants or other agreements set forth herein. | ||||
3. | No Solicitation. During the Term, the Shareholder will not, directly or indirectly, (a) solicit, or attempt to solicit, any employees of the Company or any of its subsidiaries, including the Company Bank (or individual who was an employee of the Company or any of its subsidiaries, including the Company Bank, within the year preceding such solicitation) to participate, as an employee or otherwise, in any manner in a Competing Business or to resign or terminate his or her employment with the Company or any of its subsidiaries, including the Company Bank, or (b) solicit or attempt to solicit any customers of the Company or any of their respective subsidiaries, including the Company Bank, who Shareholder is aware is or was as of the Closing Date a customer of the Company or any of its subsidiaries, including the Company Bank, within the year preceding such solicitation, to transfer their business to a Competing Business or to cease conducting business with the Company or any of its subsidiaries, including the Company Bank. Solicitation prohibited under this section includes solicitation by any means, including, without limitation, meetings, letters or other mailings and electronic communications of any kind. Nothing in this Section 3 will prohibit the Shareholder from hiring an employee of the Company or any of its subsidiaries who responds to a public advertisement or general solicitation disseminated by Shareholder which is not specifically targeted at such employee or targeted at employees of the Company or its Subsidiaries generally. | ||||
4. | No Competition. During the Term, the Shareholder will not, in any way, directly, indirectly, individually or through any other Person, or for the benefit of any other person, without the prior written consent of Parent, in each instance, which Parent may withhold or condition in its sole and absolute discretion, continue to own, manage, operate, control or participate in the management, operation, control of, or consult with or perform services for (whether as principal, agent, employee, employer, investor, consultant, stockholder, partner, member, financier or in any other individual or representative capacity of any kind whatsoever), any Competing Business in the Covered Area; provided, however, that Shareholder may invest in the securities of any person (but without otherwise participating in the activities of such person) if: (i) such securities are listed or traded on any national or foreign securities exchange; and (ii) Shareholder does not beneficially own (as defined by Rule 13d-3 promulgated under the Exchange Act) in excess of one percent (1.0%) of the outstanding equity of such person. | ||||
5. | Reasonableness of Restrictions. The Shareholder acknowledges and agrees that the covenants set forth above represent only a limited restraint and allow the Shareholder to pursue his or her occupation without unreasonable or unfair restrictions. The Shareholder acknowledges that the limitations of length of time, geography and scope of activity agreed to in this Agreement are reasonable because, among other things: (a) the Company, Parent and their respective subsidiaries are engaged in a highly competitive industry; (b) the Shareholder has had unique access to the trade secrets and know-how of the Company and its subsidiaries, including the plans and strategy (and, in particular, the competitive strategy) of the Combined Bank; (c) the Shareholder will receive the benefit of a substantial premium for the Shareholder’s Shares (as defined below) in the Merger, and will have a shared interest with Parent, as a continuing shareholder of Parent, in preserving the benefits to Parent of the Merger for which Parent will have paid good and valuable consideration as contemplated by the Merger Agreement; and (d) this Agreement provides no more protection than is necessary to protect Parent’s interests in the Company’s and its subsidiaries’ goodwill, trade secrets and confidential information. Accordingly, the Shareholder, having had an opportunity to consult with counsel of his or her choosing, acknowledges that the provisions of Oregon Revised Statute Section 653.295 do not prohibit the Shareholder from entering into the restrictive covenants set forth in this Agreement or prohibit Parent or Parent Bank from enforcing this Agreement against the Shareholder. | ||||
6. | Transfer Restrictions Prior to the Merger. The Shareholder hereby agrees that the Shareholder will not, from the date hereof until the earlier of (a) the Closing, (b) the termination of the Merger Agreement in accordance with its terms, or (c) one-year after the date hereof, without the prior written consent of Parent, directly or indirectly, offer for sale, sell, transfer, assign, give, tender in any tender or exchange offer, pledge, encumber, hypothecate or similarly dispose of (by merger, by testamentary disposition, by operation of law or otherwise), either voluntarily or involuntarily, enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of, enter into any contract, option or other arrangement or understanding with respect to the sale, transfer, assignment, pledge, encumbrance, hypothecation or other disposition of (by merger, by testamentary disposition, by operation of law or otherwise) or otherwise convey or dispose of, any shares of common stock, par value $5.00 per share, of the Company in which the Shareholder owns of record, acquires record ownership after the date hereof or has the power to vote or direct the voting of (all such shares, the “Shares”), or any interest therein, including the right to vote any Shares, as applicable (any of the foregoing, a “Transfer”); provided, that the Shareholder may (i) Transfer Shares for gifting or estate planning, by the laws of descent or distribution, by operation of law or philanthropic purposes so long as the transferee, prior to the date of Transfer, agrees in a signed writing to be bound by and comply with the provisions of this Agreement and the Shareholder provides at least two (2) days’ prior written notice (which will include the written consent of the transferee agreeing to be bound by and comply with the provisions of this Agreement), or (ii) surrender Shares to the Company in connection with the vesting, settlement or exercise of Company RSU to satisfy any withholding for the payment of taxes incurred in connection with such vesting, settlement or exercise. | ||||
7. | Representations of the Shareholder. The Shareholder represents and warrants to Parent as follows: (a) the Shareholder has full legal right, capacity and authority to execute and deliver this Agreement, to perform the Shareholder’s obligations hereunder and to consummate the transactions contemplated hereby; (b) this Agreement has been duly and validly executed and delivered by the Shareholder and constitutes a valid and legally binding agreement of the Shareholder, enforceable against the Shareholder in accordance with its terms, and no other action is necessary to authorize the execution and delivery of this Agreement by the Shareholder or the performance of the Shareholder’s obligations hereunder; (c) the execution and delivery of this Agreement by the Shareholder does not, and the consummation of the transactions contemplated hereby and the compliance with the provisions hereof will not, conflict with or violate any law or result in any breach of or violation of, or constitute a default (or an event that with notice or lapse of time or both would become a default) under any agreement or other instrument or obligation binding upon the Shareholder, nor require any authorization, consent or approval of, or filing with, any Governmental Entity; and (d) the Shareholder has read and is familiar with the terms of the Merger Agreement. The Shareholder agrees that the Shareholder will not take any action that would make any representation or warranty of the Shareholder contained herein untrue or incorrect or have the effect of preventing, impairing, delaying or adversely affecting the performance by the Shareholder of the Shareholder’s obligations under this Agreement. The Shareholder agrees, without further consideration, to execute and deliver such additional documents and to take such further actions as are necessary or reasonably requested by Parent to confirm and assure the rights and obligations set forth in this Agreement. | ||||
9. | Remedies/Specific Enforcement. Each of the parties hereto agrees that this Agreement is intended to be legally binding and specifically enforceable pursuant to its terms and that Parent would be irreparably harmed if any of the provisions of this Agreement are not performed in accordance with its specific terms and that monetary damages would not provide adequate remedy in such event. Accordingly, in the event of any breach or threatened breach by the Shareholder of any covenant or obligation contained in this Agreement, in addition to any other remedy to which Parent may be entitled (including monetary damages), Parent will be entitled to injunctive relief to prevent breaches or threatened breaches of this Agreement and to specifically enforce the terms and provisions hereof, and the Shareholder hereby waives any defense in any action for specific performance or an injunction or other equitable relief that a remedy at law would be adequate. The Shareholder further agrees that neither Parent nor any other person or entity will be required to obtain, furnish or post any bond or similar instrument in connection with or as a condition to obtaining any remedy referred to in this paragraph, and the Shareholder irrevocably waives any right the Shareholder may have to require the obtaining, furnishing or posting of any such bond or similar instrument. | ||||
10. | Governing Law and Enforceability. This Agreement is governed by, and will be interpreted in accordance with, the laws of the State of Oregon, without regard to any applicable conflict of law principles. Each of the parties hereto (a) agrees that it will bring any action or proceeding in respect of any claim arising out of or related to this Agreement or the transactions contemplated hereby exclusively in any federal or state court of competent jurisdiction located in the State of Oregon (the “Chosen Courts”), and, solely in connection with claims arising under this Agreement or the transactions that are the subject of this Agreement, (b) irrevocably submits to the exclusive jurisdiction of the Chosen Courts, (c) waives any objection to laying venue in any such action or proceeding in the Chosen Courts, (d) waives any objection that the Chosen Courts are an inconvenient forum or do not have jurisdiction over any party and (e) agrees that service of process upon such party in any such action or proceeding will be effective if notice is given in accordance with Section 11. | ||||
11. | Notice. All notices and other communications hereunder will be in writing and will be deemed given if delivered personally, by e-mail (with confirmation), mailed by registered or certified mail (return receipt requested) or delivered by an express courier (with confirmation) if to the Shareholder, to the address or e-mail address, as applicable, set forth in Schedule B hereto, or if no such address, or e-mail address is provided, then to the address of the Shareholder set forth in the shareholder register of the Company, and if to Parent, in accordance with Section 9.3 of the Merger Agreement. | ||||
12. | Severability. Whenever possible, each provision or portion of any provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision or portion of any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision or portion of any provision in such jurisdiction, and this Agreement will be reformed, construed and enforced in such jurisdiction such that the invalid, illegal or unenforceable provision or portion thereof will be interpreted to be only so broad as is enforceable. | ||||
13. | Amendments; Waivers. Any provision of this Agreement may be amended or waived if, and only if, such amendment or waiver is in writing and signed (a) in the case of an amendment, by Parent and the Shareholder, and (b) in the case of a waiver, by the party against whom the waiver is to be effective. No failure or delay by any party in exercising any right, power or privilege hereunder will operate as a waiver thereof, nor will any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. | ||||
14. | Waiver of Jury Trial. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO THE EXTENT PERMITTED BY LAW AT THE TIME OF INSTITUTION OF THE APPLICABLE LITIGATION, ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT. EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT: (I) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER; (II) THE PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER; (III) THE PARTY MAKES THIS WAIVER VOLUNTARILY; AND (IV) THE PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 14. | ||||
15. | Counterparts. The parties may execute this Agreement in one or more counterparts, including by electronic signature. All the counterparts will be construed together and will constitute one Agreement. | ||||