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Exhibit 10.1
EMPLOYMENT AGREEMENT
EMPLOYMENT
AGREEMENT (this “Agreement”) dated as of June 30,
2008 between Luminent Mortgage Capital, Inc., a Maryland
corporation having its principal place of business at 1515 Market
Street, Suite 2000, Philadelphia, Pennsylvania 19102 (the
“Employer”) and Barry Weiss, an individual residing at
9177 S. Buck Hill Dr., Littleton, CO. 90126 (the
“Executive”).
WITNESSETH:
WHEREAS,
the Employer desires to provide for the employment of the
Executive, and the Executive desires 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
effective as of June 30, 2008 (the “Effective Date”) to
set forth 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:
1.
Employment and Term .
(a) The Employer shall employ the Executive, and the Executive
shall be employed by the Employer, as Chief Investment Officer of
the Employer (the “Position”) 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 shall expire on June 30, 2009.
(b) Notwithstanding paragraph 1(a), 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).
(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, unless such failure, breach or violation is not
susceptible of being cured, (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.
(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 60 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.
(c) (i) It is intended that this Agreement be
administered in compliance with Section 409A of the Internal
Revenue Code of 1986, as amended (the “Code”),
including, but not limited to, any future amendments to Code
Section 409A, and any other Internal Revenue Service
(“IRS”) or other governmental rulings or
interpretations issued pursuant to Section 409A (together,
“Section 409A”) so as not to subject the Executive
to payment of interest or any additional tax under
Section 409A. The parties intend for any payments under this
paragraph 1(c) either to satisfy the requirements of
Section 409A or to be exempt from the application of
Section 409A, and this Agreement shall be construed and
interpreted accordingly. In furtherance thereof, if payment or
provision of any amount or benefit hereunder that is subject to
Section 409A at the time specified herein would subject such
amount or benefit to any additional tax under Section 409A,
the payment or provision of such amount or benefit shall be
postponed to the earliest commencement date on which the payment or
provision of such amount or benefit could be made without incurring
such additional tax. In addition, to the extent that any IRS
guidance issued under Section 409A would result in the
Executive being subject to the payment of interest or any
additional tax under Section 409A, the parties agree, to the
extent reasonably possible, to amend this Agreement in order to
avoid the imposition of any such interest or additional tax under
Section 409A, which amendment shall have the minimum economic
effect necessary and be reasonably determined in good faith by the
Employer and the Executive.
(ii) Notwithstanding any provision in this Agreement to the
contrary, in the event that the Executive is a “specified
employee” as defined in Section 409A, any severance
payment, severance benefits or other amounts payable under this
Agreement that would be subject to the special rule regarding
payments to “specified employees” under
Section 409A(a)(2)(B) of the Code shall not be paid before the
expiration of a period of six months following the date of the
Executive’s termination of employment or the date of the
Executive’s death, if earlier.
(iii) To the extent such severance amount exceeds the
applicable safe harbor amount under Section 409A, the excess
amount shall be treated as deferred compensation under
Section 409A and as such shall be payable pursuant to the
following schedule: (1) one-half of such excess amount shall
be paid on the six-month anniversary of the date of termination or
earlier death and (2) the remaining one-half of such excess
amount shall be paid on the first anniversary of the date of
termination or earlier death.
(iv) If the Employer terminates the Executive’s
employment under this Agreement for any reason other than for
Cause, 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, and
(2) any amount in respect of excise taxes required to be paid
to the Executive pursuant to paragraph 1(d), 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
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 until the end of the Term of this
Agreement.
(v) If (A) the Employer terminates the Executive’s
employment under this Agreement for Cause, (B) the Executive
terminates his employment under this Agreement for any reason other
than 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.
(d) In the event that the independent public accountants of
the Employer or the IRS 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 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(d), 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(d) 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.
(e) In the event that the independent public accountants of
the Employer or the IRS 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(e), 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(e) 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.
(f) Any notice of termination of the employment of the
Executive under this Agreement by the Employer to the Executive or
by the Executive to the Employer shall be given in
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