EMPLOYMENT
AGREEMENT (this “Agreement”) dated as of
December 20, 2005 between Luminent Mortgage Capital, Inc., a
Maryland corporation having its principal place of business at One
Market Street, Spear Tower, 30 th Floor, San Francisco, California 94105 (the
“Employer”) and S. Trezevant Moore, Jr., an individual
residing at 113 Woods Lane, Radnor, Pennsylvania, 19087 (the
“Executive”).
WHEREAS, the
Employer desires to provide for the continuing employment of the
Executive, and the Executive desires to continue to be employed by
the Employer, all in accordance with the terms and subject to the
conditions set forth in this Agreement; 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 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 January 1, 2006 (the “Effective Date”), the
Employer shall employ the Executive, and the Executive shall be
employed by the Employer, as the President and Chief Operating
Officer (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 for a period of three
years.
(b) Unless
written notice in accordance with this paragraph 1 terminating the
Executive’s employment under this Agreement is given by
either the Employer or the Executive, on each day this Agreement is
in effect the Term shall be automatically extended for one
additional day so that at all times this Agreement shall have a
then current three-year Term. 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 his 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 he is
unable to perform his duties hereunder in all material respects
other than for physical or mental impairment or illness which the
Executive fails to cure after written notice, (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, adversely affects the
Executive’s reputation or the Executive’s ability to
carry out his obligations under this Agreement or (E) the
Executive’s non-compliance with the provisions of paragraph
2(b) after notice thereof from the Employer to the Executive and a
reasonable opportunity for the Executive to cure such
non-compliance. 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 those duties
that he would otherwise be expected to continue to perform 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.
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(d) The
Executive shall have the right to terminate his employment under
this Agreement at any time during the Term for Good Reason or
without Good Reason as specified in a written notice thereof to the
Employer in accordance with the terms of this Agreement. As used
herein, “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.
(e)
(i) If (A) the Employer terminates the Executive’s
employment under this Agreement for any reason other than for Cause
or (B) the Executive terminates his employment under this
Agreement for Good Reason, 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 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, (2) any Bonus (as defined in this
Agreement) required to be paid to the Executive pursuant to
paragraph 3(b) and (3) any amount in respect of excise taxes
required to be paid to the Executive pursuant to paragraph 1(f),
with such payments, rights and benefits described in clauses
(x)(1), (x)(2) and (x)(3) being collectively referred to in this
Agreement as the “Accrued Obligations,” (y) an
amount equal to the aggregate premiums that would be payable by the
Executive to maintain in effect throughout the period (the
“Subsequent Period”) from the date of the
Executive’s termination through the remainder of the Term had
the Executive remained employed (assuming no increase in insurance
premium rates) the same medical, health, disability and life
insurance coverage provided to the Executive by the Employer
immediately prior to the date of such termination (the
“Benefit Obligations”) and (z) the Employer shall,
as a severance payment, pay to the Executive for the Subsequent
Period, the Executive’s annual Base Salary as of the
effective date of termination of the Executive’s employment
under this Agreement and the Minimum Bonus (as defined in this
Agreement).
(ii) If
(A) the Employer terminate the Executive’s employment
under this Agreement for Cause, (B) the Executive terminates
his employment under this Agreement for any reason other than Good
Reason, his death or the Executive’s Permanent Disability or
(C) this Agreement is terminated by the Employer as a result
of the death or Permanent Disability of the Executive, the sole
obligation of the Employer shall be to pay the Accrued Obligations
to the Executive or his estate.
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(f) In
the event that the independent public accountants of the Employer
or the Internal Revenue Service determines that any payment,
coverage or benefit provided to the Executive pursuant to this
Agreement is subject to the excise tax imposed by
Sections 280G and 4999 of the Internal Revenue Code of 1986,
as amended (the “Code”) or any successor provision
thereof or any interest or penalties incurred by the Executive with
respect to such excise tax, the Employer, within 30 days
thereafter, shall pay to the Executive, in addition to any other
payment, coverage or benefit due and owing under this Agreement, an
additional amount that will result in the Executive’s net
after tax position, after taking into account any interest,
penalties or taxes imposed on the amount payable under this
paragraph 1(f), upon the receipt of the payments provided for by
this Agreement be no less advantageous to the Executive than the
net after tax position to the Executive that would have been
obtained had Sections 280G and 4999 of the Code not been
applicable to such payment, coverage or benefits. Except as
otherwise provided in this Agreement, all determinations to be made
under this paragraph 1(f) shall be made by tax counsel whose
selection shall be reasonably acceptable to the Executive and the
Employer and whose fees and costs shall be paid for by the
Employer.
(g) In
the event that the independent public accountants of the Employer
or the Internal Revenue Service determines that any payment,
coverage or benefit due or owing to the Executive pursuant to this
Agreement is subject to the excise tax imposed by Section 409A
of the Code or any successor provision thereof or any interest or
penalties, including interest imposed under Section
409A(1)(B)(i)(I) of the Code, incurred by the Executive as a result
of the application of such provision, the Employer, within
30 days thereafter, shall pay to the Executive, in addition to
any other payment, coverage or benefit due and owing under this
Agreement, an amount that will result in the Executive’s net
after tax position, after taking into account any interest,
penalties or taxes imposed on the amounts paid under this paragraph
1(g), being no less advantageous to the Executive than the net
after tax position to the Executive that would have been obtained
had Section 409A of the Code not been applicable to such
payment, coverage or benefits. Except as otherwise provided in this
Agreement, all determinations to be made under this paragraph 1(g)
shall be made by tax counsel whose selection shall be reasonably
acceptable to the Executive and the Employer and whose fees and
costs shall be paid for by the Employer.
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