Exhibit 10.13
EMPLOYMENT AGREEMENT
     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, 30th Floor, San
Francisco, California 94105 (the “Employer”) and S. Trezevant Moore, Jr., an
individual residing at 113 Woods Lane, Radnor, Pennsylvania, 19087 (the
“Executive”).
WITNESSETH:
     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:
     1. Employment and Term.
          (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

 

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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.
          (h) 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 accordance with the provisions of paragraph 10.
          (i) The Employer agree to reimburse the Executive for the reasonable
fees and expenses of the Executive’s attorneys and for court and related costs
in any proceeding to enforce the provisions of this Agreement in which the
Executive is successful on the merits.

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     2. Duties of the Executive.
          (a) Subject to the ultimate control and discretion of the Board of the
Employer, the Executive shall serve in the Position and perform all duties and
services commensurate with the Position. Throughout the Term, the Executive
shall perform all duties reasonably assigned or delegated to him under the
by-laws of the Employer or from time to time by the Board consistent with the
Position. Except for travel normally incidental and reasonably necessary to the
business of the Employer and the duties of the Executive under this Agreement,
the duties of the Executive shall be performed in the greater Philadelphia,
Pennsylvania metropolitan area.
          (b) The Executive shall devote substantially all of the Executive’s
business time and attention to the performance of the Executive’s duties under
this Agreement and, during the term of his employment under this Agreement, the
Executive shall not engage in any other business enterprise that requires any
significant amount of the Executive’s personal time or attention, unless granted
the prior permission of the Board. The foregoing provision shall not prevent the
Executive’s purchase, ownership or sale of any interest in, or the Executive’s
engaging, but not to exceed an average of five hours per week, in, any business
that does not compete with the business of the Employer or the Executive’s
involvement in charitable or community activities, provided, that the time and
attention that the Executive devotes to such business and charitable or
community activities does not materially interfere with the performance of his
duties under this Agreement and that such conduct complies in all material
respects with applicable policies of the Employer.
          (c) The Executive shall be entitled to 30 days of vacation leave
during each calendar year with full compensation, and to be taken at such time
or times, as the Executive and the Employer shall mutually determine. Earned but
unused vacation shall be accrued in accordance with the Employer’s vacation
policy.
     3. Compensation. For all services to be rendered by the Executive under
this Agreement:
          (a) Base Salary. The Employer shall pay the Executive a base salary
(the “Base Salary”) at an annual rate of $350,000, plus such other compensation
as may, from time to time, be determined by the Employer. At the end of each
fiscal year of the Employer, the Employer shall review the amount of the
Executive’s Base Salary, and shall increase such Base Salary for the following
year to such amount as the Board may determine in its discretion. Such Base
Salary and other compensation shall be payable in accordance with the Employer’s
normal payroll practices as in effect from time to time.
          (b) Annual Bonus. The Employer agrees that the Executive shall
receive, in accordance in all material respects with applicable policies of the
Employer relating to incentive compensation for executive officers, an annual
bonus (the “Bonus”) payable in

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cash, at the same time as bonuses are paid to other executive officers of the
Employer, in such amount as may be fixed by the Board in its discretion based
upon the performance of the Employer and the contributions of the Executive to
such performance, provided, however, that the Executive shall receive a Bonus of
not less than $175,000 (the “Minimum Bonus”) in respect of the services to be
rendered by the Executive for each year of the Term.
          (c) Restricted Stock Award. The Employer agrees that the Executive
shall receive, in accordance in all material respects with applicable policies
of the Employer relating to incentive compensation for the executive officers,
an annual restricted stock award (each, an “Award”) as to such number of shares
(the “Shares”) as may be fixed in the Board’s discretion based upon the
performance of the Employer and the contributions of the Executive to such
performance. Any such Award shall be evidenced by a Restricted Stock Award
Agreement between the Employer and the Executive in substantially the form
thereof currently in use by the Employer. Each Award and the Restricted Stock
Award Agreement shall have the following other principal terms:
               (i) the Shares subject to each Award shall become vested, and
remain vested from and after the Effective Date, in three cumulative
installments as follows:
                    (A) the first installment, consisting of one-third of the
Shares subject to each Award, shall become vested from and after the first
anniversary of the date of the Award;
                    (B) the second installment, consisting of an additional
one-third of the Shares subject to each Award, shall become vested from and
after the second anniversary of the date of the Award; and
                    (C) the third installment, consisting of the remaining
one-third of the Shares subject to each Award, shall become vested from and
after the third anniversary of the date of the Award;
               (ii) the Shares, and any other shares of the Employer’s Common
Stock held under prior or subsequent restricted stock Awards made to the
Executive by the Employer, shall become immediately vested in full and shall
remain vested in the event of (A) a Change of Control (as defined herein), (B) a
termination of the employment of the Executive by the Employer under this
Agreement without Cause or (C) a termination of the employment of the Executive
under this Agreement by the Executive for Good Reason;
               (iii) any unvested Shares shall revert to the Employer
immediately in the event of (A) a termination of the employment of the Executive
under this Agreement by the Employer for Cause or (B) a termination of the
employment of the Executive under this Agreement by the Executive without Good
Reason; and

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               (iv) The Executive shall have the right by notice to the Employer
to require that the Employer purchase from the Executive that number of vested
shares of the Employer’s Common Stock at a price per share equal to the average
closing price of the Employer’s Common Stock on the New York Stock Exchange for
the 20 days preceding the Executive’s notice of purchase, as is necessary to
provide the Executive with sufficient funds to pay applicable federal and state
income taxes resulting from the vesting of Shares under the Award, subject to
the prior approval by the Compensation Committee of the Employer’s Board of
Directors of the price per share at the time of each such purchase.
          (d) As used in this paragraph 3, “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.
     4. Expenses. The Employer shall promptly reimburse the Executive for
(a) all reasonable expenses paid or incurred by the Executive in connection with
the performance of the Executive’s duties and responsibilities under this
Agreement, upon presentation of expense vouchers or other appropriate
documentation therefor and (b) all reasonable professional expenses, such as
licenses and dues and professional educational expenses, paid or incurred by the
Executive during the Term.
     5. Indemnification. Notwithstanding anything in the Employer’s certificate
of incorporation or its by-laws to the contrary, the Executive shall at all
times during his employment by the Employer, and thereafter, be indemnified by
the Employer to the fullest extent permitted by applicable law for any matter in
any way relating to the Executive’s affiliation with the Employer and its
subsidiaries; provided, however, that if the Executive’s

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employment shall have been terminated by the Employer for Cause, then, to the
extent required by applicable law, the Employer shall have no obligation
whatsoever to indemnify the Executive for any claim arising out of the matter
for which his employment shall have been terminated for Cause or for any conduct
of the Executive not within the scope of the Executive’s duties under this
Agreement.
     6. Confidential Information. The Executive understands that, in the course
of his employment by the Employer, the Executive will receive confidential
information concerning the business of the Employer and that the Employer desire
to protect. The Executive agrees that he will not at any time during or after
the period of his employment by the Employer reveal to anyone outside the
Employer, except as required by law, or use for his own benefit, any such
information that has been designated as confidential by the Employer or
understood by the Executive to be confidential without specific written
authorization by the Employer. Upon termination of this Agreement, and upon the
request of the Employer, the Executive shall promptly deliver to the Employer
any and all written materials, records and documents, including all copies
thereof, made by the Executive or coming into his possession during the Term and
retained by the Executive containing or concerning confidential information of
the Employer and all other written materials furnished to and retained by the
Executive by the Employer for his use during the Term, including all copies
thereof, whether of a confidential nature or otherwise.
     7. Representation and Warranty of the Executive. The Executive represents
and warrants that he is not under any obligation, contractual or otherwise, to
any other firm or corporation, that would prevent his entry into the employ of
the Employer or his performance of the terms of this Agreement.
     8. Entire Agreement; Amendment. This Agreement and the Restricted Stock
Award Agreement contain the entire agreement between the Employer and the
Executive with respect to the subject matter hereof, and may not be amended,
waived, changed, modified or discharged except by an instrument in writing
executed by the Employer and the Executive. This Agreement supersedes the Letter
Agreement dated as of March 7, 2005 between the Employer and the Executive,
except for the provisions thereof relating to restricted stock awards and stock
options granted to the Executive pursuant thereto.
     9. Assignability. The services of the Executive under this Agreement are
personal in nature, and neither this Agreement nor the rights or obligations of
the Employer under this Agreement may be assigned by the Employer, whether by
operation of law or otherwise, without the Executive’s prior written consent.
This Agreement shall be binding upon, and inure to the benefit of, the Employer
and its permitted successors and assigns under this Agreement. This Agreement
shall not be assignable by the Executive, but shall inure to the benefit of the
Executive’s heirs, executors, administrators and legal representatives.

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     10. Notice. Any notice that may be given under this Agreement shall be in
writing and be deemed given when hand delivered and acknowledged or, if mailed,
one day after mailing by registered or certified mail, return receipt requested,
or if delivered by an overnight delivery service, one day after the notice is
delivered to such service, to either the Employer or the Executive at their
respective addresses stated above, or at such other address as the Executive or
the Employer may by similar notice designate.
     11. Specific Performance. The Employer and the Executive agree that
irreparable damage would occur in the event that any of the provisions of
paragraph 6 were not performed in accordance with their specific terms or were
otherwise breached. It is accordingly agreed that the parties shall be entitled
to an injunction or injunctions to prevent breaches of paragraph 6 and to
enforce specifically the terms and provisions of paragraph 6, this being in
addition to any other remedy to which any party is entitled at law or in equity.
     12. No Third Party Beneficiaries. Nothing in this Agreement, express or
implied, is intended to confer upon any person or entity other than the parties
(and the Executive’s heirs, executors, administrators and legal representatives
and the permitted transferees of the Shares) any rights or remedies of any
nature under or by reason of this Agreement.
     13. Successor Liability. The Employer shall require any successor, whether
direct or indirect, by purchase, merger, consolidation or otherwise, to all or
substantially all of the business or assets of the Employer to assume expressly
and agree to perform this Agreement in the same manner and to the same extent
that the Employer would be required to perform it if no such succession had
taken place.
     14. Mitigation. The Executive shall not be required to mitigate the amount
of any payment provided for in this Agreement by seeking other employment or
otherwise, nor shall the amount of any payment or benefit provided for in this
Agreement be reduced by any compensation earned by the Executive as the result
of employment by another employer or by retirement benefits payable after the
termination of this Agreement, except that the Employer shall not be required to
provide the Executive and his eligible dependents with medical insurance
coverage as long as the Executive and his eligible dependents are receiving
comparable medical insurance coverage from another employer.
     15. Waiver of Breach. The failure at any time to enforce or exercise any
right under any of the provisions of this Agreement or to require at any time
performance by the other parties of any of the provisions hereof shall in no way
be construed to be a waiver of such provisions or to affect either the validity
of this Agreement or any part hereof, or the right of any party hereafter to
enforce or exercise its rights under each and every provision in accordance with
the terms of this Agreement.
     16. No Attachment. Except as required by law, no right to receive payments
under this Agreement shall be subject to anticipation, commutation, alienation,
sale, assignment,

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encumbrance, charge, pledge or hypothecation or to execution, attachment, levy
or similar process or assignment by operation of law, and any attempt, voluntary
or involuntary, to effect any such action shall be null, void and of no effect;
provided, however, that nothing in this paragraph 17 shall preclude the
assumption of such rights by executors, administrators or other legal
representatives of the Executive or his estate and their assigning any rights
under this Agreement to the person or persons entitled hereto.
     17. Severability. The invalidity or unenforceability of any term, phrase,
clause, paragraph, restriction, covenant, agreement or other provision hereof
shall in no way affect the validity or enforceability of any other provision, or
any part thereof, but this Agreement shall be construed as if such invalid or
unenforceable term, phrase, clause, paragraph, restriction, covenant, agreement
or other provision had never been contained in this Agreement unless the
deletion of such term, phrase, clause, paragraph, restriction, covenant,
agreement or other provision would result in such a material change as to cause
the covenants and agreements contained in this Agreement to be unreasonable or
would materially and adversely frustrate the objectives of the Employer and the
Executive as expressed in this Agreement.
     18. Survival of Benefits. Any provision of this Agreement that provides a
benefit to the Executive and that by the express terms hereof does not terminate
upon the expiration of the Term shall survive the expiration of the Term and
shall remain binding upon the Employer until such time as such benefits are paid
in full to the Executive or his estate.
     19. Construction. This Agreement shall be governed by and construed in
accordance with the internal laws of the State of California, without giving
effect to principles of conflict of laws. All headings in this Agreement have
been inserted solely for convenience of reference only, are not to be considered
a part of this Agreement and shall not affect the interpretation of any of the
provisions of this Agreement.
     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first written above.

                  LUMINENT MORTGAGE CAPITAL, INC.    
 
           
 
  By:        
 
     
 
   
 
      Gail P. Seneca, Chairman    
 
      and Chief Executive Officer    
 
                          S. Trezevant Moore, Jr.    

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