AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
AMENDED AND
RESTATED EMPLOYMENT AGREEMENT (this “Agreement”) dated
as of May 7, 2007 between Luminent Mortgage Capital, Inc., a
Maryland corporation having its principal place of business at 101
California Street, Suite 1350, San Francisco, California 94111
(the “Employer”) and Gail P. Seneca, whose address is
P.O. Box 1018, Inverness, California 94937 (the
“Executive”).
WHEREAS, the
Employer and the Executive wish to amend and restate the employment
agreement dated as of December 20, 2005 between the Employer
and the Executive; and
WHEREAS, the
Employer and the Executive are entering into this Agreement to set
forth and confirm their respective rights and obligations with
respect to the Executive’s continued employment by the
Employer;
NOW, THEREFORE, in
consideration of the premises and the mutual covenants contained in
this Agreement, the Employer and the Executive, intending to be
legally bound hereby, mutually agree as follows:
(a) Effective
as of May 10, 2007 (the “Effective Date”), the
Employer shall continue to employ the Executive, and the Executive
shall continue to be employed by the Employer, as the Chairman of
the Board (the “Position”) of the Employer, in
accordance with the terms and subject to the conditions set forth
in this Agreement for a term (the “Term”) that shall
commence on the Effective Date and, as provided in and subject to
paragraphs 1(b), 1(c), 1(d) and 1(e), shall continue until
December 31, 2008.
(b) Unless
otherwise provided in this Agreement or agreed by the Employer and
the Executive, all of the terms and conditions of this Agreement
shall continue in full force and effect throughout the Term and,
with respect to those terms and conditions that apply after the
Term, after the Term.
(c) Notwithstanding
paragraph 1(b), the Employer, by action of its board of directors
(the “Board”) and effective as specified in a written
notice thereof to the Executive in accordance with the terms of
this Agreement, shall have the right to terminate the
Executive’s
employment
under this Agreement at any time during the Term, for Cause (as
defined in this Agreement) or other than for Cause or on account of
the Executive’s death or Permanent Disability (as defined in
this Agreement), subject to the provisions of this paragraph
1.
(i) “Cause”
shall mean (A) the Executive’s willful and continued
failure substantially to perform her material duties with the
Employer as set forth in this Agreement, or the commission by the
Executive of any activities constituting a violation or breach
under any material federal, state or local law or regulation
applicable to the activities of the Employer, in each case, after
written notice thereof from the Employer to the Executive and a
reasonable opportunity for the Executive to cease such failure,
breach or violation in all material respects, (B) fraud,
breach of fiduciary duty, dishonesty, misappropriation or other
actions that cause intentional material damage to the property or
business of the Employer by the Executive, (C) the
Executive’s repeated absences from work such that she is
unable to perform her duties hereunder in all material respects
other than for physical or mental impairment or illness which the
Executive fails to cure after written notice or (D) the
Executive’s admission or conviction of, or plea of nolo
contendere to, any felony or any other crime that, in the
reasonable judgment of the Board, has a material adverse effect on
the Executive’s ability to carry out her obligations under
this Agreement. Notwithstanding the foregoing, the Employer may not
terminate the Executive’s employment under this Agreement for
Cause unless the Executive is given (A) written notice, in
accordance with the by-laws of the Employer, of a special meeting
of the Board to consider the termination of the Executive’s
employment under this Agreement for Cause and (B) the
opportunity for the Executive to address such special
meeting.
(ii) “Permanent
Disability” shall mean a physical or mental disability such
that the Executive is substantially unable to perform the duties of
the Position and the nonperformance of such duties has continued
for a period of 240 consecutive days, provided, however, that in
order to terminate the Executive’s employment under this
Agreement on account of the Executive’s Permanent Disability,
the Employer must provide the Executive with written notice of the
Board’s good faith determination to terminate the
Executive’s employment under this Agreement for reason of the
Executive’s Permanent Disability not less than 30 days
prior to such termination, which notice shall specify the date of
termination. Until the specified effective date of termination by
reason of the Executive’s Permanent Disability, the Executive
shall continue to receive compensation at the rates set forth in
paragraph 3. No termination of the Executive’s employment
under this Agreement because of the Executive’s Permanent
Disability shall impair any rights of the Executive under any
disability insurance policy maintained by the Employer at the
commencement of the aforesaid 240-day period.
(d) The
Executive shall have the right to terminate her employment under
this Agreement at any time during the Term for Good Reason or
without Good Reason, or in
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the event a
Change of Control occurs, all as specified in a written notice
thereof to the Employer in accordance with the terms of this
Agreement. As used herein:
(i) “Good
Reason” shall mean (A) the Executive’s Position or
the scope of the Executive’s authority, duties or
responsibilities as described in this Agreement are materially
diminished without the Executive’s written consent, excluding
for this purpose any action that was not taken by the Employer in
bad faith and that is remedied by the Employer promptly following
written notice thereof from the Executive to the Employer;
(B) a material breach by Employer of its obligations to the
Executive under this Agreement, which breach is not cured in all
material respects to the reasonable satisfaction of the Executive
within 30 days (except in the case of a payment default for
which the cure period shall be 10 days), in each case
following written notice thereof from the Executive to the Employer
or (C) any termination of the Executive’s employment
under this Agreement without Cause.
(ii) As
used herein, “Change of Control” shall mean
(A) the acquisition of shares of the Employer by any
“person” or “group” (as such terms are used
in Rule 13d-3 under the Securities Exchange Act of 1934 as now
or hereafter amended) in a transaction or series of transactions
that result in such person or group directly or indirectly becoming
the beneficial owner of 25% or more of the Employer’s Common
Stock after the date of this Agreement, (B) the consummation
of a merger or other business combination after which the holders
of voting capital stock of the Employer do not collectively own 60%
or more of the voting capital stock of the entity surviving such
merger or other business combination, (C) the sale, lease,
exchange or other transfer in a transaction or series of
transactions of all or substantially all of the assets of the
Employer, but excluding therefrom the sale and reinvestment of the
Employer’s investment portfolio or (D) as the result of
or in connection with any cash tender offer or exchange offer,
merger or other business combination, sale of assets or contested
election of directors or any combination of the foregoing
transactions (a “Transaction”), the persons who
constituted a majority of the members of the Board on the date of
this Agreement and persons whose election as members of the Board
was approved by such members then still in office or whose election
was previously so approved after the date of this Agreement, but
before the event that constitutes a Change of Control, no longer
constitute such a majority of the members of the Board then in
office. A Transaction constituting a Change in Control shall only
be deemed to have occurred upon the closing of the
Transaction.
(e)
(i) If the Employer terminates the Executive’s
employment under this Agreement for any reason other than Cause and
said termination occurs as of a date that is within 270 days
preceding or within 180 days after the consummation of a
Change of Control (such 270-day period or such 180-period being
referred to in this Agreement as a “Change of Control
Period”), (B) this Agreement is terminated as a result
of the death or disability of the Executive effective as of a date
within a Change of Control Period, (C) the
Executive
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terminates her
employment under this Agreement for Good Reason effective as of a
date within a Change of Control Period or (D) the Executive
terminates her employment under this Agreement within 180 days
after the consummation of a Change of Control, the Employer shall
pay to the Executive or her Estate promptly after the event giving
rise to such payment occurs an amount equal to the sum of (x)(1)
the Executive’s Base Salary (as defined in this Agreement)
accrued through the date the termination of the Executive’s
employment under this Agreement is effective and (2) any
amount in respect of excise taxes required to be paid to the
Executive pursuant to paragraphs 1(f) or 1(g), with such payments,
rights and benefits described in clauses (x)(1) and (x)(2) being
collectively referred to in this Agreement as the “Accrued
Obligations,” (y) an amount equal to the aggregate
premium that would be payable by the Executive to maintain in
effect throughout the period (the “Subsequent Period”)
from the date of the termination of the Executive’s
employment under this Agreement through the remainder of the Term
(assuming no increase in insurance premium rates) the same medical,
health, disability and life insurance provided by the Employer
immediately prior to the date of such termination (the
“Benefit Obligations”) and (z) $1,000,000.
(ii) If
(A) the Employer terminates the Executive’s employment
under this Agreement for any reason other than for Cause effective
as of a date that is not within a Change of Control Period or
(B) the Executive terminates her employment under this
Agreement for Good Reason effective as of a date that is not within
a Change of Control Period, the Employer shall pay to the Executive
promptly after the event giving rise to such payment occurs an
amount equal to the sum of (x) (1) the Accrued Obligations,
(y) the Benefit Obligations and (z) the Executive’s
annual Base Salary as of the effective date of termination of the
Executive’s employment for the Subsequent Period.
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