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EXHIBIT 10.8
SHAREHOLDER'S NON-COMPETITION AGREEMENT
This Shareholder's Non-Competition Agreement (the "Agreement") is
between Washington Mutual, Inc. ("Washington Mutual") and _____________
("Shareholder"). Contemporaneously herewith, Washington Mutual and Long Beach
Financial Corporation ("Long Beach") have entered into an Agreement (the "Merger
Agreement") and Plan of Merger, pursuant to which Long Beach will merge with and
into Washington Mutual (the "Merger"). At the effective time of the Merger (the
"Effective Time"), Long Beach's wholly owned subsidiary, Long Beach Mortgage
Company ("Long Beach Mortgage"), will become a wholly owned subsidiary of
Washington Mutual. Washington Mutual and Shareholder desire that, as of the
Effective Time, Shareholder will be subject to the terms set forth herein. The
parties therefore agree as follows:
1. Purpose. Washington Mutual has mandated as a condition of the Merger
Agreement with Long Beach that certain shareholders of Long Beach, who are key
executives of Long Beach Mortgage and have materially contributed to its
goodwill and business value, must enter into agreements not to compete with Long
Beach Mortgage for a period of time after the merger of Long Beach with and into
Washington Mutual. The parties agree the requirement of non-competition
agreements is necessary and appropriate to protect the valuable goodwill of Long
Beach and Long Beach Mortgage subsequent to the Merger, and that Washington
Mutual would not be willing to consummate the Merger under the agreed upon
terms, if at all, without requiring such non-competition agreements.
2. Consideration to Shareholder. Shareholder owns common stock of Long
Beach, and/or vested and/or unvested stock options to acquire common stock of
Long Beach, which unvested options will vest if Long Beach is merged with and
into Washington Mutual. Shareholder represents that he/she will receive
substantial financial benefit, valued in excess of three million dollars, if
Long Beach is merged with and into Washington Mutual, and Shareholder is
therefore willing to enter into this Agreement to facilitate the Merger.
3. Term. The term of this Agreement shall be three 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
Washington Mutual, Long Beach, and Long Beach Mortgage. "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 and mortgage broker lists, customer and mortgage
broker requirements, agreements, licenses, price lists and policies, budgets,
projections, bids, costs, financial reports, financing materials, training
programs and manuals, and sales and marketing programs,
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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 Long Beach Mortgage; 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
Long Beach Mortgage if it is engaged in the business of originating, purchasing
or selling sub-prime mortgage loans within the geographic area in which Long
Beach Mortgage is engaged in such business, which the parties agree is
throughout the United States, or if it is engaged in any other business in which
Long Beach Mortgage is engaged as of the Effective Date within the geographic
area in which Long Beach Mortgage 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 from Long Beach Mortgage
any actual or identified potential customer of Long Beach Mortgage or any
mortgage broker with whom Long Beach Mortgage has had a business relation prior
to the Merger or during the term of this Agreement, nor will he/she assist
others in doing so. Shareholder further agrees that he/she 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 Long Beach Mortgage 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 Long Beach Mortgage is
engaged, Shareholder's knowledge of Long Beach Mortgage's business, the position
Shareholder has been afforded with Long Beach Mortgage and the material adverse
affect upon the value of the goodwill of Long Beach and Long Beach Mortgage if
Shareholder engaged in Competition during the term of this Agreement, and that
compliance with such covenants will not prevent him/her from pursuing his/her
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.
4.5 The parties expressly contemplate that this Agreement is within
the coverage of Cal. Bus. & Prof. Code Section 16601, and Shareholder represents
that he/she has no basis to believe with respect to this Agreement that said
provision is inapplicable.
5. Remedies. Shareholder acknowledges that the harm to Washington
Mutual and Long Beach Mortgage 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
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obligations may be enforced by injunctive relief and other available remedies at
law or in equity. The parties further agree that neither Washington Mutual nor
Long Beach Mortgage 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 Washington Mutual and Long Beach Mortgage 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 Washington Mutual and Long
Beach Mortgage. In the event 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
Washington Mutual or Long Beach Mortgage 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 Washington Mutual and Long Beach Mortgage 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
Washington Mutual and Shareholder in a separate written employment agreement,
any employment of Shareholder by Washington Mutual and/or Long Beach Mortgage is
and will be "at will." No term of any employment agreement between Washington
Mutual and/or Long Beach Mortgage and Shareholder shall be construed to conflict
with or lessen Shareholder 's obligations under this Agreement.
8. Miscellaneous.
8.1 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.
8.2 Governing Law; Venue. This Agreement will be governed by the laws
of the State of California 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 Long Beach, California,
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.
8.3 Entire Agreement; Severability. This Agreement represents the
entire agreement between Washington Mutual 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
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unenforceable to any extent in any context, it shall nevertheless be enforced to
the fullest extent allowed by law in that and other contexts, and the validity
and force of the remainder of this Agreement shall not be affected thereby.
BY SIGNING BELOW, SHAREHOLDER ACKNOWLEDGES THAT HE/SHE HAS READ THIS
AGREEMENT IN ITS ENTIRETY AND UNDERSTANDS IT. SHAREHOLDER FURTHER ACKNOWLEDGES
THAT THIS AGREEMENT WAS DRAFTED BY COUNSEL FOR WASHINGTON MUTUAL, AND THAT
HE/SHE HAS HAD THE OPPORTUNITY TO CONSULT WITH HIS/HER COUNSEL WITH RESPECT TO
THIS AGREEMENT.
DATED as of the 18th day of May, 1999.
WASHINGTON MUTUAL: WASHINGTON MUTUAL, INC.
By /s/ Xxx X. Xxxxxxx
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Executive Vice President
SHAREHOLDER:
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LIST OF SHAREHOLDERS WHO ARE PARTIES TO THE NON-COMPETITION AGREEMENT:
Xxxxx X. Xxxxx
Xxxxxxx X. Xxxxxxxx
M. Xxxx Xxxxxx
Xxxxxx Xxxxxxxx
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