EXHIBIT 10.2.2.2
LUMINENT MORTGAGE CAPITAL, INC.
2003 OUTSIDE ADVISORS STOCK INCENTIVE PLAN
NONQUALIFIED STOCK OPTION AGREEMENT
THIS NONQUALIFIED STOCK OPTION AGREEMENT (this "Option Agreement") by
and between Luminent Mortgage Capital, Inc., a Maryland corporation (the
"Corporation"), and _____________________________ (the "Participant") evidences
the nonqualified stock option (the "Option") granted by the Corporation to the
Participant as to the number of shares of the Corporation's Common Stock, $0.001
par value, first set forth below.
Number of Shares of Common Stock:/1/ ________ Award Date: __________________
Exercise Price per Share:/1/ $________ Expiration Date:/1/,/2/ _____________
Vesting/1/,/2/ [The Option shall become vested as to one-third of the total
number of shares of Common Stock subject to the Option on each of the first,
second and third anniversaries of the Award Date.]
The Option is granted under the Luminent Mortgage Capital, Inc. 2003
Outside Advisors Stock Incentive Plan (the "Plan") and subject to the Terms and
Conditions of Nonqualified Stock Option (the "Terms") attached to this Option
Agreement (incorporated herein by this reference) and to the Plan. The Option
has been granted to the Participant in addition to, and not in lieu of, any
other form of compensation otherwise payable or to be paid to the Participant.
The Option is not and shall not be deemed to be an incentive stock option within
the meaning of Section 422 of the Code. Capitalized terms are defined in the
Plan if not defined herein. The parties agree to the terms of the Option set
forth herein. The Participant acknowledges receipt of a copy of the Terms and
the Plan, specifically acknowledges and agrees to Section 11 of the Terms, and
agrees to maintain in confidence all information provided to him/her in
connection with the Option.
"PARTICIPANT" LUMINENT MORTGAGE CAPITAL, INC.,
a Maryland corporation
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Signature
By:
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Print Name Its:
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Address
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City, State, Zip Code
CONSENT OF SPOUSE
In consideration of the Corporation's execution of this Option
Agreement, the undersigned spouse of the Participant agrees to be bound by all
of the terms and provisions hereof and of the Plan.
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Signature of Spouse Date
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/1/ Subject to adjustment under Section 7 of the Plan.
/2/ Subject to early termination under Section 7 of the Plan and Section 4 of
the Terms.
TERMS AND CONDITIONS OF NONQUALIFIED STOCK OPTION
1. VESTING; LIMITS ON EXERCISE.
As set forth on the cover page of this Option Agreement, the Option
shall vest and become exercisable in percentage installments of the aggregate
number of shares of Common Stock subject to the Option. The Option may be
exercised only to the extent the Option is vested and exercisable.
. Cumulative Exercisability. To the extent that the Option is vested
and exercisable, the Participant has the right to exercise the
Option (to the extent not previously exercised), and such right
shall continue, until the earlier of (a) expiration of the Option on
the close of business on the Expiration Date set forth on the cover
page of this Option Agreement (or, if the Expiration Date is not a
business day, on the close of business on the last business day
preceding the Expiration Date) or (b) the termination of the Option
pursuant to Section 7 of the Plan or Section 4 of these Terms.
. No Fractional Shares. Fractional share interests shall be
disregarded, but may be cumulated.
. Minimum Exercise. No fewer than 1001 shares of Common Stock may be
purchased at any one time, unless the number purchased is the total
number at the time exercisable under the Option.
2. CONTINUANCE OF EMPLOYMENT/SERVICE REQUIRED; NO EMPLOYMENT/SERVICE
COMMITMENT.
The vesting schedule requires continued employment or service, and
continued service by the Management Company to the Corporation, through each
applicable vesting date as a condition to the vesting of the applicable
installment of the Option and the rights and benefits under this Option
Agreement. Employment or service, or service of the Management Company to the
Corporation, for only a portion of a vesting period, even if a substantial
portion, will not entitle the Participant to any proportionate vesting or avoid
or mitigate a termination of rights and benefits upon or following a termination
of employment or services, or a termination of the Management Company's services
to the Corporation, as provided in Section 4 below or under the Plan.
Nothing contained in this Option Agreement or the Plan constitutes an
employment or service commitment by the Corporation or its affiliates to the
Participant, the Management Company, or any other person, affects the
Participant's status, if he or she is an employee, as an employee at will who is
subject to termination without cause, confers upon the Management Company any
right to continue in the service of the Corporation or its affiliates, or
confers upon the Participant any right to remain employed by or in service to
the Management Company, interferes in any way with the right of the Corporation
or its affiliates or of the Management Company at any time to terminate such
employment or service of the Participant or Management Company, or affects the
right of the Corporation or its affiliates or of the Management Company to
increase or decrease the Participant's or the Management Company's other
compensation. Nothing in this paragraph, however, is intended to adversely
affect any independent right of the Participant or the Management Company under
any contract other than this Agreement.
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3. METHOD OF EXERCISE OF OPTION.
The Option shall be exercisable by the delivery to the Chief Financial
Officer of the Corporation of a written notice stating the number of shares of
Common Stock to be purchased pursuant to the Option and accompanied by:
. delivery of an executed Exercise Agreement in substantially the form
attached hereto as Exhibit A or such other form as the Committee may
require from time to time (the "Exercise Agreement");
. payment in full for the Exercise Price of the shares to be
purchased, in cash or by electronic funds transfer to the
Corporation, or by certified or cashier's check payable to the order
of the Corporation subject to such specific procedures or directions
as the Committee may establish;
. satisfaction of the tax withholding provisions of Section 8.5 of the
Plan; and
. any written statements or agreements required pursuant to Section 6
below.
The Committee also may, but is not required to, authorize a non-cash payment
alternative specified below at or prior to the time of exercise. In which case,
the Exercise Price and/or applicable withholding taxes, to the extent so
authorized, may be paid in full or in part by delivery to the Corporation of:
. shares of Common Stock already owned by the Participant, valued at
their fair market value (as such term is defined in the Plan) on the
exercise date, provided, however, that any shares acquired directly
from the Corporation (upon exercise of a stock option or otherwise)
must have been owned by the Participant for at least six (6) months
before the date of such exercise;
. if the Common Stock is then registered under the Exchange Act and
listed or quoted on a recognized national securities exchange or in
the NASDAQ National Market Quotation System, irrevocable
instructions to a broker to, upon exercise of the Option, promptly
sell a sufficient number of shares of Common Stock acquired upon
exercise of the Option and deliver to the Corporation the amount
necessary to pay the Exercise Price (and, if applicable, the amount
of any related tax withholding obligations); and/or
. a note meeting the requirements of Section 5.4 of the Plan (or, in
the case of tax loans, Section 8.5 of the Plan).
4. EARLY TERMINATION OF OPTION.
4.1 Dismissal for Cause. If the Participant's employment by or
service to the Management Company terminates (the date of such termination is
referred to as the Participant's "Severance Date"), and such termination is a
termination by the Management Company for Cause (as defined below), the Option
will terminate on the date of such termination, whether or not the Option is
then vested and/or exercisable.
4.2 Other Terminations of Employment. If the Participant's
employment by or service to the Management Company terminates for any reason
other than a termination by the Management Company for Cause, the Option, to the
extent not vested
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and exercisable on the Participant's Severance Date, will terminate on the
Participant's Severance Date. To the extent that the Option is vested and
exercisable as of the Participant's Severance Date in such circumstances, then:
. if the Participant's employment by or service to the Management
Company terminates for any reason other than the Participant's death
or Disability (and other than a termination by the Management
Company for Cause), the Participant will have 90 days following the
Participant's Severance Date to exercise the portion of his or her
Option that was vested on his or her Severance Date, and such
portion of the Option shall terminate at the close of business on
the last business day of such 90-day period to the extent not
theretofore exercised.
. if the Participant's employment by or service to the Management
Company terminates due to the Participant's death or Disability, the
Participant (or his or her personal representative or beneficiary,
as the case may be) will have 12 months following the Participant's
Severance Date to exercise the portion of the Participant's Option
that was vested on the Participant's Severance Date, and such
portion of the Option shall terminate at the close of business on
the last business day of such 12-month period to the extent not
theretofore exercised.
In no case, however, will any portion of the Option continue to be exercisable
following the termination of the Option on its stated Expiration Date and in all
cases the Option remains subject to earlier termination pursuant to Section 7 of
the Plan.
For purposes of this Agreement, "Cause" means a termination of
employment or service based on a finding by the Management Company, acting in
good faith and based on its reasonable belief at the time, that the Participant
either: (a) has failed to perform his or her job duties in a material respect
without proper cause and, if a cure is reasonably possible in the circumstances,
has failed to cure within a reasonable period of time after written notice of
such conduct (or lack thereof); (b) has materially breached a fiduciary duty, or
willfully and materially violated any other duty, law, regulation or policy of
the Management Company in a manner injurious to the Management Company; (c) has
been convicted of or pled nolo contendere to a felony, or (d) has materially
breached any of the provisions of any agreement with the Management Company and,
if a cure is reasonably possible in the circumstances, has failed to cure within
a reasonable period of time after written notice of the breach. For purposes of
this Agreement, "Disability" means a total disability within the meaning of
Section 22(e)(3) of the Code. Also refer to the provisions of Section 6 of the
Plan which apply with respect to the Option and a termination of employment or
services.
4.3 Termination of Management Agreement. If the Management Company
ceases for any reason to manage the day-to-day operations of the Corporation,
the following provisions shall apply:
. if the Management Agreement by and between the Management Company
and the Corporation, dated on or about June 11, 2003 (the
"Management Agreement") is terminated by the Corporation for "cause"
(as defined in the Management Agreement), the Option will terminate
on the date of such termination, whether or not the Option is then
vested and/or exercisable.
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. if the Management Agreement is terminated by the Corporation for any
reason other than for cause prior to the expiration of the term of
the Management Agreement (as set forth in Section 10 of such
agreement), the portion of the Option that is outstanding and
otherwise unvested immediately prior to the time of such termination
shall thereupon automatically become fully vested and exercisable,
and the Participant will have 12 months following the date of such
termination to exercise the vested portion of the Option, and such
portion of the Option shall terminate at the close of business on
the last business day of such 12-month period to the extent not
theretofore exercised.
. if the Management Agreement is terminated by the Management Company
for any reason, or by the Corporation for any reason other than for
cause after the expiration of the term of the Management Agreement
(as set forth in Section 10 of such agreement), the Option will
terminate to the extent that it is not vested and exercisable on the
date that the Management Agreement terminates, the Participant will
have 12 months following the date of such termination to exercise
the portion of the Option that was vested on the date of such
termination, and such portion of the Option shall terminate at the
close of business on the last business day of such 12-month period
to the extent not theretofore exercised.
In no case, however, will any portion of the Option continue to be exercisable
following the termination of the Option on its stated Expiration Date and in all
cases the Option remains subject to earlier termination pursuant to Section 7 of
the Plan.
5. NON-TRANSFERABILITY AND OTHER RESTRICTIONS.
The Option and any other rights of the Participant under this Option
Agreement or the Plan are nontransferable and exercisable only by the
Participant, except as set forth in Section 5.6 of the Plan. Any shares of
Common Stock issued on exercise of the Option are subject to substantial
restrictions on transfer, and are subject to call, rights of first refusal, and
other rights in favor of the Corporation as set forth herein and in the Exercise
Agreement.
The Articles of Incorporation and Bylaws of the Corporation, as either
of them may be amended from time to time, may provide for additional
restrictions and limitations with respect to the Common Stock (including
additional restrictions and limitations on the transfer of shares). To the
extent that these restrictions and limitations are more restrictive than those
set forth in this Agreement, such restrictions and limitations shall apply to
the shares of Common Stock acquired upon exercise of the Option. Such
restrictions and limitations are not, however, in lieu of, nor shall they in any
way reduce or minimize, any limitation or restriction on the shares of Common
Stock acquired upon exercise of the Option imposed under this Agreement.
6. SECURITIES LAWS.
6.1 Participant's Representations. The Participant acknowledges that
the Option and the shares of Common Stock are not being registered under the
Securities Act of 1933 ("Securities Act"), based, in part, in reliance upon an
exemption from registration under the Securities Act and an exemption from
qualification under applicable state securities laws, as each may be amended
from time to time. The Participant, by executing this Option Agreement, hereby
makes the following
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representations to the Corporation and acknowledges that the Corporation's
reliance on federal and state securities law exemptions from registration and
qualification is predicated, in substantial part, upon the accuracy of these
representations:
. Accredited Investor. The Participant is an "accredited investor" as
defined in Rule 501 of the Securities Act.
. No Intent to Sell. The Participant is acquiring the Option and, if and
when he/she exercises the Option, will acquire the shares of Common
Stock solely for the Participant's own account, for investment purposes
only, and not with a view to or an intent to sell, or to offer for
resale in connection with any unregistered distribution, all or any
portion of the shares within the meaning of the Securities Act, the
California Corporate Securities Law, or other applicable state
securities laws.
. Information; No Reliance on Company. The Participant has had an
opportunity to ask questions and receive answers from the Corporation
regarding the terms and conditions of the Option and the restrictions
imposed on any shares of Common Stock purchased upon exercise of the
Option. The Participant has been furnished with, and/or has access to,
such information as he or she considers necessary or appropriate for
deciding whether to exercise the Option and purchase shares of Common
Stock. However, in evaluating the merits and risks of an investment in
the Common Stock, the Participant has and will rely upon the advice of
his/her own legal counsel, tax advisors, and/or investment advisors and
is not relying on any representations made by the Corporation, or any of
its agents, other than those expressly set forth in this Option
Agreement.
. Risk of Loss. The Participant is aware that the Option may be of no
practical value, that any value it may have depends on its vesting and
exercisability as well as an increase in the Fair Market Value of the
underlying shares of Common Stock to an amount in excess of the Exercise
Price, and that any investment in common shares of a closely held
corporation such as the Corporation is non-marketable, non-transferable
and could require capital to be invested for an indefinite period of
time, possibly without return, and at substantial risk of loss.
. Restrictions on Shares. The Participant understands that any shares of
Common Stock acquired on exercise of the Option will be characterized as
"restricted securities" under the federal securities laws, and that,
under such laws and applicable regulations, such securities may be
resold without registration under the Securities Act only in certain
limited circumstances, including in accordance with the conditions of
Rule 144 promulgated under the Securities Act, as presently in effect,
and represents that he or she is familiar with such rule, and
understands the resale limitations imposed thereby and by the Securities
Act and applicable state securities laws.
. Additional Restrictions. The Participant has read and understands the
restrictions and limitations set forth in the Plan, the Corporation's
Articles of Incorporation and Bylaws, this Option Agreement (including
these Terms), and the Exercise Agreement, which are imposed on the
Option and any shares of Common Stock which may be acquired upon
exercise of the Option. The Participant acknowledges having received and
reviewed copies of the Articles of
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Incorporation and Bylaws of the Corporation and a copy of the Management
Agreement.
. No Company Representations. At no time was an oral representation made
to the Participant relating to the Option or the purchase of shares of
Common Stock and the Participant was not presented with or solicited by
any promotional meeting or material relating to the Option or the Common
Stock.
. Share Certificate Legend. The Participant understands and acknowledges
that any certificate evidencing the shares of Common Stock acquired
pursuant to the Option when issued shall bear, in addition to any other
legends which may be provided for under the Corporation's Articles of
Incorporation and/or required by applicable state securities laws, the
legends set forth in Section 6.3.
. Tax Matters. The Participant has obtained and is relying upon the advice
of his or her own tax advisors with respect to the tax consequences of
the grant, vesting, and/or exercise of the Option and any acquisition or
sale of the shares of Common Stock subject to the Option. The
Participant is not relying on any representations by the Corporation or
any of its agents with respect to such matters.
6.2 Compliance with Securities Laws. Neither the Participant nor any
permitted transferee shall sell, pledge or otherwise transfer shares of Common
Stock acquired pursuant to the Option or any interest in such shares except in
accordance with the express terms of the Plan and this Agreement. Any attempted
transfer in violation of this Section 6.2 shall be void and of no effect.
Without in any way limiting the provisions set forth above, the Participant (or
permitted transferee) shall not make any disposition of all or any portion of
shares of Common Stock acquired or to be acquired pursuant to the Option, except
in compliance with all applicable federal and state securities laws and unless
and until:
(a) there is then in effect a registration statement under the
Securities Act covering such proposed disposition and such
disposition is made in accordance with such registration
statement; or
(b) such disposition is made in accordance with Rule 144 under the
Securities Act; or
(c) the Participant notifies the Corporation of the proposed
disposition and furnishes the Corporation with a statement of
the circumstances surrounding the proposed disposition, and, if
requested by the Corporation, furnishes to the Corporation an
opinion of counsel acceptable to the Corporation's counsel, that
such disposition will not require registration under the
Securities Act and will be in compliance with all applicable
state securities laws.
Notwithstanding anything else herein to the contrary, the Corporation has no
obligation to register the Common Stock or file any registration statement under
either federal or state securities laws, nor does the Corporation make any
representation concerning the likelihood of a public offering of the Common
Stock or any other securities of the Corporation.
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6.3 Share Legends. All certificates evidencing shares of Common
Stock issued or delivered under this Agreement shall bear substantially the
following legends, as well as the legends provided for under the Corporation's
Articles of Incorporation and/or any other appropriate or required legends under
applicable laws:
"BY ITS ACQUISITION HEREOF, THE HOLDER AGREES TO BE BOUND BY THE
PROVISIONS OF THE NONQUALIFIED STOCK OPTION AGREEMENT DATED AS OF
______________, 2003, AND RELATED EXERCISE AGREEMENT (TOGETHER, THE
"AGREEMENT"), BY AND BETWEEN THE CORPORATION AND THE HOLDER. THE
AGREEMENT CONTAINS SUBSTANTIAL RESTRICTIONS ON TRANSFER, INCLUDING
RESTRICTIONS ON SALE, ASSIGNMENT, PLEDGE, TRANSFER OR OTHER
DISPOSITION."
"THIS SECURITY HAS NOT BEEN REGISTERED UNDER THE U.S. SECURITIES ACT OF
1933, AS AMENDED (THE "SECURITIES ACT"), AND MAY NOT BE OFFERED OR SOLD
EXCEPT (A) TO THE CORPORATION OR ANY SUBSIDIARY THEREOF, (B) PURSUANT TO
AN EFFECTIVE REGISTRATION STATEMENT UNDER THE SECURITIES ACT, OR (C) IN
A TRANSACTION EXEMPT FROM, OR NOT SUBJECT TO, THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT (AND BASED ON AN OPINION OF COUNSEL
SATISFACTORY TO THE CORPORATION AND THE INITIAL PURCHASER)."
6.4 Delivery of Financial Statements. The Corporation shall deliver
annually to the Participant such financial statements of the Corporation as are
required to satisfy applicable securities laws.
6.5 Confidential Information. Any financial or other information
relating to the Corporation obtained by the Participant in connection with or as
a result of the Plan or Awards thereunder shall be treated as confidential.
7. LOCK-UP AGREEMENT.
Neither the Participant nor any permitted transferee may, directly or
indirectly, offer, sell or transfer or dispose of any of the shares of Common
Stock acquired upon exercise of the Option (the "Shares") or any interest
therein (or agree to do any thereof) (collectively, a "Transfer") during the
period commencing as of 14 days prior to and ending one year, or such lesser
period of time as the relevant underwriters may permit, after the effective date
of a registration statement covering any public offering of the Corporation's
securities of which the Participant has notice. (The term "Participant"
includes, where the context so requires, any permitted direct or indirect
transferee of the Participant.) The Participant shall agree and consent to the
entry of stop transfer instructions with the Corporation's transfer agent
against the Transfer of the Corporation's securities beneficially owned by the
Participant and shall conform the limitations hereunder and under the Exercise
Agreement by agreement with and for the benefit of the relevant underwriters by
a lock-up agreement or other agreement in customary form. Notwithstanding
anything else herein to the contrary, this Section 7 shall not be construed so
as to prohibit the Participant from participating in a registration or a public
offering of the Common Stock with respect to any shares which he or she may hold
at that time, provided, however, that such participation shall be at the sole
discretion of the Board.
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8. NOTICES.
Any notice to be given under the terms of this Option Agreement or the
Exercise Agreement shall be in writing and addressed to the Corporation at its
principal office to the attention of the Chief Financial Officer, and to the
Participant at the address reflected on the signature page of this Option
Agreement. Any notice shall be delivered in person or shall be enclosed in a
properly sealed envelope, addressed as aforesaid, registered or certified, and
deposited (postage and registry or certification fee prepaid) in a post office
or branch post office regularly maintained by the United States Government. Any
such notice shall be given only when received, but if the Participant is no
longer an Eligible Person, shall be deemed to have been duly given as of the
date mailed in accordance with the foregoing provisions of this Section 8.
9. PLAN.
The Option and all rights of the Participant under this Option Agreement
are subject to, and the Participant agrees to be bound by, all of the terms and
conditions of the Plan, incorporated herein by this reference. In the event of a
conflict or inconsistency between the terms and conditions of this Option
Agreement and of the Plan, the terms and conditions of the Plan shall govern.
The Participant acknowledges receipt of a copy of the Plan and agrees to be
bound by the terms thereof and of this Option Agreement. The Participant
acknowledges reading and understanding the Plan and this Option Agreement.
Unless otherwise expressly provided in other sections of this Option Agreement,
provisions of the Plan that confer discretionary authority on the Board or the
Committee do not and shall not be deemed to create any rights in the Participant
unless such rights are expressly set forth herein or are otherwise in the sole
discretion of the Board or the Committee so conferred by appropriate action of
the Board or the Committee under the Plan after the date hereof.
10. ENTIRE AGREEMENT.
This Option Agreement (including these Terms and together with the form
of Exercise Agreement attached hereto) and the Plan together constitute the
entire agreement and supersede all prior understandings and agreements, written
or oral, of the parties hereto with respect to the subject matter hereof.
The Corporation's Articles of Incorporation and Bylaws are outside of
the scope of the integration provision of the preceding paragraph.
The Plan, this Option Agreement and the Exercise Agreement may be
amended pursuant to Section 8.6 of the Plan. Such amendment must be in writing
and signed by the Corporation. The Corporation may, however, unilaterally waive
any provision hereof or of the Exercise Agreement in writing to the extent such
waiver does not adversely affect the interests of the Participant hereunder, but
no such waiver shall operate as or be construed to be a subsequent waiver of the
same provision or a waiver of any other provision hereof. The Corporation's
Articles of Incorporation and Bylaws may be amended in accordance with their
respective terms.
11. SATISFACTION OF ALL RIGHTS TO EQUITY.
The Option is in complete satisfaction of any and all rights that the
Participant may have (under an employment, consulting, or other written or oral
agreement with the
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Corporation, or otherwise) to receive (1) stock options or a restricted stock
award with respect to the Corporation's securities, and/or (2) any other equity
or derivative security in or with respect to the Corporation. This Option
Agreement supersedes the terms of all prior understandings and agreements,
written or oral, of the parties with respect to such matters. The Participant
shall have no further rights or benefits under any prior agreement conveying any
right with respect to any security or derivative security in or with respect to
the Corporation. The foregoing notwithstanding, this Section 11 shall not
adversely affect the Participant's rights under any prior option or restricted
stock agreement under the Plan (provided such agreement is expressly labeled as
an option, restricted stock, or award agreement under the Plan and is similar in
form to this Option Agreement) which has been signed by an authorized officer of
the Corporation.
12. GOVERNING LAW; LIMITED RIGHTS; SEVERABILITY.
12.1. Maryland Law, Construction. This Option Agreement and the Exercise
Agreement shall be governed by and construed and enforced in accordance with the
laws of the State of Maryland without regard to conflict of law principles
thereunder. The terms of the Option grant have resulted from the negotiations of
the parties and each of the parties has had an opportunity to obtain and consult
with its own counsel. The language of all parts of the Plan, this Option
Agreement (including these Terms) and the Exercise Agreement shall in all cases
be construed as a whole, according to its fair meaning, and not strictly for or
against either of the parties. Captions and headings are given to the sections
and subsections of this Option Agreement (including these Terms) and the
Exercise Agreement solely as a convenience to facilitate reference. Such
headings shall not be deemed in any way material or relevant to the construction
or interpretation of such document or any provision hereof or thereof.
12.2. Limited Rights. The Participant has no rights as a stockholder of
the Corporation with respect to the Option as set forth in Section 8.7 of the
Plan. The Option does not place any limit on the corporate authority of the
Corporation as set forth in Section 8.11 of the Plan.
12.3. Severability. If a court of competent jurisdiction determines that
any portion of this Option Agreement, the Plan, or the Exercise Agreement is in
violation of any statute or public policy, then only the portions of this Option
Agreement, the Plan, or the Exercise Agreement, as applicable, which violate
such statute or public policy shall be stricken, and all portions of this Option
Agreement, the Plan, and the Exercise Agreement which do not violate any statute
or public policy shall continue in full force and effect. Furthermore, it is the
parties' intent that any court order striking any portion of this Option
Agreement, the Plan, and/or the Exercise Agreement should modify the stricken
terms as narrowly as possible to give as much effect as possible to the
intentions of the parties hereunder.
(Remainder of Page Intentionally Left Blank)
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EXHIBIT A
LUMINENT MORTGAGE CAPITAL, INC.
2003 OUTSIDE ADVISORS STOCK INCENTIVE PLAN
OPTION EXERCISE AGREEMENT
The undersigned (the "Purchaser") hereby irrevocably elects to exercise
his/her right, evidenced by that certain Nonqualified Stock Option Agreement
dated as of ____________________ (the "Option Agreement") under the Luminent
Mortgage Capital, Inc. 2003 Outside Advisors Stock Incentive Plan (the "Plan"),
as follows:
. the Purchaser hereby irrevocably elects to purchase
__________________ shares of Common Stock, par value $0.001 per
share (the "Shares"), of Luminent Mortgage Capital, Inc., a Maryland
corporation (the "Corporation"), and
. such purchase shall be at the price of $__________________ per
share, for an aggregate amount of $__________________ (subject to
applicable withholding taxes pursuant to Section 8.5 of the Plan).
Capitalized terms are defined in the Plan if not defined herein.
1. Delivery of Share Certificate. The Purchaser requests that a
certificate representing the Shares be registered to Purchaser and delivered to:
________________________________________________________________________________
2. Investment Representations. The Purchaser acknowledges that the
sale of the Shares by the Purchaser is restricted by SEC Rule 701. The Purchaser
hereby affirms as made as of the date hereof the representations in Section 6.1
of the "Terms and Conditions of Nonqualified Stock Option" (which are attached
to and a part of the Option Agreement, the "Terms") and such representations are
incorporated herein by this reference. The Purchaser represents that he/she has
no need for liquidity in this investment, has the ability to bear the economic
risk of this investment, and can afford a complete loss of the purchase price
for the Shares.
The Purchaser acknowledges receipt of the Corporation's condensed
consolidated financial information.
The Purchaser also understands and acknowledges (a) that the
certificates representing the Shares will be legended as provided for in Section
6.3 of the Terms, and (b) that the Corporation has no obligation to register the
Shares or file any registration statement under federal or state securities
laws.
3. Limitation on Disposition and Other Restrictions. The Shares are
subject to and the Purchaser hereby agrees to the following terms and conditions
of the sale of the Shares to the Purchaser:
. any transfer of the Shares must comply with all applicable laws as
set forth in Section 6 of the Terms;
. the Shares are subject to restrictions on transfer under Section 5.6
of the Plan, under Section 5 of the Terms, and under the
Corporation's Articles of Incorporation and Bylaws;
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. the Shares are subject to, and following any otherwise permitted
transfer of the Shares, the Shares shall remain subject to and the
transferee shall be bound by, the lock-up provisions set forth in
Section 7 of the Terms, the share legend requirements of Section 6.3
of the Terms, and the foregoing provisions of this Section 3; and
. as a condition to any otherwise permitted transfer of the Shares,
the Corporation may require the transferee to execute a written
agreement, in a form acceptable to the Committee, that the
transferee acknowledges and agrees to the foregoing terms and
restrictions imposed on the Shares.
4. Plan and Option Agreement. The Purchaser acknowledges that all
of his/her rights are subject to, and the Purchaser agrees to be bound by, all
of the terms and conditions of the Plan and the Option Agreement (including the
Terms), both of which are incorporated herein by this reference. If a conflict
or inconsistency between the terms and conditions of this Exercise Agreement and
of the Plan or the Option Agreement shall arise, the terms and conditions of the
Plan and/or the Option Agreement shall govern. The Purchaser acknowledges
receipt of a copy of all documents referenced herein (including the Terms, a
disclosure statement, and the Corporation's Articles of Incorporation and
Bylaws) and acknowledges reading and understanding these documents and having an
opportunity to ask any questions that he/she may have had about them.
5. Entire Agreement. This Exercise Agreement, the Option Agreement
(including the Terms), and the Plan together constitute the entire agreement and
supersede all prior understandings and agreements, written or oral, of the
parties hereto with respect to the subject matter hereof.
The Corporation's Articles of Incorporation and Bylaws are outside of
the scope of the integration provision of the preceding paragraph.
The Plan, the Option Agreement and this Exercise Agreement may be
amended pursuant to Section 8.6 of the Plan. Such amendment must be in writing
and signed by the Corporation. The Corporation may, however, unilaterally waive
any provision hereof or of the Option Agreement in writing to the extent such
waiver does not adversely affect the interests of the Participant hereunder, but
no such waiver shall operate as or be construed to be a subsequent waiver of the
same provision or a waiver of any other provision hereof. The Corporation's
Articles of Incorporation and Bylaws maybe amended in accordance with their
respective terms.
"PURCHASER" ACCEPTED BY:
LUMINENT MORTGAGE CAPITAL, INC.
---------------------------------
Signature By:
-----------------------------------
--------------------------------- Its:
Print Name
-----------------------------------
(To be completed by the corporation
--------------------------------- after the price (including applicable
Date withholding taxes), value (if
applicable) and receipt of funds is
verified.)
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