EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is entered into as of May 1, 1998 by and between
California Coastal Communities, Inc., a Delaware corporation (formerly known as
Xxxx Real Estate Group, Inc.) ("Employer"), and XXXXXX X. XXXXXXX ("Executive").
WITNESSETH:
WHEREAS, Executive has served Employer in various executive capacities
and Employer desires to obtain the benefit of continued service by Executive,
and Executive desires to render continued services to Employer;
WHEREAS, the Board of Directors of Employer (the "Board") has
determined that because of Executive's substantial experience and business
relationships in connection with the business of Employer, it is in the
Employer's best interest and that of its stockholders to secure services of
Executive and to provide Executive certain additional benefits; and
WHEREAS, Employer and Executive desire to set forth in this Agreement
the terms and conditions of Executive's employment with Employer.
NOW, THEREFORE, in consideration of the mutual promises and covenants
herein contained, the parties agree as follows:
SECTION 1. TERM. Employer agrees to employ Executive and Executive
agrees to serve Employer, in accordance with the terms of this Agreement, for a
term of two (2) years, commencing on the date hereof.
SECTION 2. SERVICES. So long as this Agreement shall continue in
effect, Executive shall use her commercially reasonably efforts and abilities to
promote Employer's business, affairs and interests, and shall perform the
services contemplated by this Agreement in accordance with policies established
by the Company.
SECTION 3. SPECIFIC POSITION; DUTIES AND RESPONSIBILITIES. Employer
and Executive agree that, subject to the provisions of this Agreement, Employer
will employ Executive and Executive will serve Employer as a senior officer for
the duration of this Agreement. The specific job position in which Executive
shall serve shall be Senior Vice President, Chief Financial Officer, Treasurer
and Secretary. Executive agrees to observe and comply with the rules and
regulations of Employer as adopted by the Board respecting the performance of
Executive's duties and agrees to carry out and perform directions and policies
of Employer and its Board as they may be, from time to time, stated either
orally or in writing. Employer agrees that the duties which may be assigned to
Executive shall be usual and customary duties of the job position set forth in
this Section 3, and shall not be inconsistent with the provisions of the charter
documents of Employer or
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applicable law. Executive shall have such corporate power and authority as
shall reasonably be required to enable the discharge of duties in any office
that may be held.
SECTION 4. COMPENSATION.
(a) BASE SALARY AND TARGET BONUS.
(i) BASE SALARY. During the term of this Agreement, Employer
agrees to pay Executive a base salary of at least One Hundred Fifty Thousand
Dollars ($150,000) per year in semi-monthly installments on the same dates the
other senior officers of Employer are paid ("Base Salary").
(ii) BONUS. Employer agrees to provide Executive with an incentive
bonus of up to One Hundred Fifty Thousand Dollars ($150,000), based upon the
amounts for each performance target which will be mutually agreed upon and set
forth on SCHEDULE A to be attached hereto.
(b) ADDITIONAL BENEFITS. Executive shall also be entitled to all rights
and benefits under any bonus plan, incentive, participation or extra
compensation plan, pension plan, profit-sharing plan, life, medical, dental,
disability, or insurance plan or policy or other plan or benefit that Employer
or its subsidiaries may provide for Executive (provided Executive is eligible to
participate therein) or employees of Employer generally as from time to time in
effect during the term of this Agreement (the "Plans"). In any event, Employer
shall provide Executive with term life insurance, health insurance and long-term
disability insurance provided for Employer's executive employees generally.
Executive shall also be entitled to fringe benefits in accordance with the
plans, practices, programs and policies as in effect generally with respect to
other peer executives of Employer.
(c) PERQUISITES.
(i) VACATION. Executive shall be entitled to four (4) weeks of
paid vacation each twelve-month period, which shall accrue on a monthly basis.
Such vacation shall be taken at such time or times as shall not unduly disrupt
the orderly conduct of the business of Employer and the duties of Executive. At
the time of any termination of employment, Executive shall be paid for all
accrued but unused vacation.
(ii) AUTO ALLOWANCE. During the term of this agreement, Employer
shall provide Executive a monthly automobile allowance in the amount of $550
plus reimbursement of operating costs as is currently covered under Employer's
Auto Allowance Policy.
(d) OVERALL QUALIFICATION. Employer reserves the right to modify, suspend
or discontinue any and all practices, policies and programs generally applicable
to executives and other similarly situated executives at any time (whether
before or after termination of employment) without notice to or recourse by
Executive; however, Employer shall not amend the perquisites set forth in
Section 4(c) to reduce Executive's benefits thereunder during the term of this
Agreement.
2.
SECTION 5. TERMINATION. The compensation and other benefits provided to
Executive pursuant to this Agreement, and the employment of Executive by
Employer, shall be terminated prior to expiration of the term of this Agreement
only as provided in this Section 5:
(a) DISABILITY. In the event that Executive shall fail, because of
illness, incapacity or injury which is determined to be total ("Disability") by
a physician selected by Employer or its insurers and acceptable to Executive or
Executive's legal representative (such agreement as to acceptability not to be
withheld unreasonably), to render, for three consecutive months or for shorter
periods aggregating ninety (90) or more business days in any twelve (12)-month
period, the services contemplated by this Agreement, Executive's employment
hereunder may be terminated by sixty (60) days' prior written notice of
termination from Employer to Executive. Thereafter, Employer shall continue to
(i) pay the Base Salary to Executive for a period of six (6) months after the
date of termination, subject to adjustments referenced in the following
paragraph, and (ii) provide medical insurance as in effect prior to such
termination for a period of six (6) months following the date of termination.
Thereafter, no further salary shall be paid or medical insurance be provided.
Executive's rights under the Plans subsequent to termination of employment
pursuant to this paragraph shall be determined under the applicable provisions
of the respective Plans, unless otherwise expressly stated herein. This
Agreement in all other respects will terminate upon the termination of
employment pursuant to this paragraph.
The amount of compensation to be paid to Executive pursuant to the
preceding paragraph shall be adjusted in the event Executive becomes entitled to
and receives disability benefits under any disability payment plan, including
disability insurance. The amount of Executive's compensation otherwise payable
by Employer pursuant to the preceding paragraph shall be reduced, on a
dollar-for-dollar basis, but not to less than zero, by the amount of any such
disability benefits received by Executive, but only to the extent such benefits
are attributable to payments made by Employer.
(b) DEATH. In the event of Executive's death during the term of this
Agreement, Executive's Base Salary shall immediately terminate and Employer
shall pay to the estate of Executive the Base Salary accrued to the date of
Executive's death to the extent not theretofore paid. If Executive's death
occurs while receiving payments under Section 5(a) above, such payments shall
cease. Executive's rights under the Plans subsequent to her death shall be
determined under the applicable provisions of the respective Plans; PROVIDED
that, notwithstanding any provisions to the contrary therein, Employer shall
continue to provide medical insurance to the dependents of Executive for a
period of six (6) months following the death of Executive. This Agreement in
all other respects will terminate upon the death of Executive.
(c) FOR CAUSE. The employment of Executive hereunder shall be terminable
by Employer in the event that Executive (i) is or has been engaging in willful
or grossly negligent conduct which has resulted in a failure to perform
Executive's duties hereunder or, (ii) has committed an act of dishonesty, gross
negligence or misconduct, which has a direct, substantial and adverse effect on
Employer, its business or reputation.
Notwithstanding the foregoing, Executive shall not be terminated for
cause pursuant to the first paragraph of this subsection 5(c) unless and until
Executive has
3.
received written notice of a proposed termination for cause and Executive has
had an opportunity to be heard before at least a majority of the number of
members of the Board authorized to take such action. Executive shall be deemed
to have had such opportunity if given written or telephonic notice by any
director at least 72 hours in advance of a meeting.
In the event of Executive's termination pursuant to this subsection
5(c), Executive's rights to receive Base Salary shall immediately terminate and
Employer shall pay to Executive her Base Salary and vacation accrued to the date
of such termination to the extent not theretofore paid. Executive's rights
under the Plans subsequent to termination shall be determined under the
applicable provisions of the respective plans. This Agreement in all other
respects will terminate upon such termination.
(d) WITHOUT CAUSE. Notwithstanding any other provision of this Section 5,
the Board shall have the right to terminate Executive's employment with Employer
without cause at any time upon at least thirty (30) days' prior written notice
to Executive. The following conditions shall thereupon become applicable:
(i) SEVERANCE PAY. Employer shall continue to pay Executive the
Base Salary on a semi-monthly basis for the remainder of the two (2) year term
of this Agreement.
(ii) MEDICAL INSURANCE CONTINUATION. Employer shall continue to
provide (under COBRA) medical insurance as in effect prior to such termination
for twelve (12) months following such termination, and Employer shall bear all
costs for such insurance.
(iii) BONUS PAYMENT. If Executive is terminated without cause,
Executive shall also be paid for any potential bonuses under this Agreement (the
"Bonus Severance"). The amount of any such Bonus Severance shall be equal to
the full amount of any unpaid target bonus payment(s) set forth on SCHEDULE A.
(e) VOLUNTARY TERMINATION. At any time during the term of this Agreement,
Executive shall have the right, upon thirty (30) days' prior written notice to
Employer, to terminate her employment with Employer. Upon termination of
Executive's employment pursuant to this subsection 5(e), (i) Executive's right
to receive Base Salary shall immediately terminate and Employer shall pay to
Executive her Base Salary accrued to the date of such termination to the extent
not theretofore paid and (ii) Executive's rights under the Plans subsequent to
such termination shall be determined under the applicable provisions of the
respective Plans. This Agreement in all other respects will terminate upon such
termination.
(f) TERMINATION BY EXECUTIVE FOR "GOOD REASON". Notwithstanding any other
provisions of this Agreement, Employer shall provide Executive with the payments
and benefits set forth in Section 5(d) in the event Executive terminates
employment for "Good Reason." For purposes of this Agreement, "Good Reason" for
Executive to terminate employment shall mean voluntary termination as a result
of (i) the assignment to Executive of duties inconsistent with the position and
status of Executive as set forth in this Agreement without Executive's prior
written consent, (ii) a substantial alteration in the
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nature, status or prestige of Executive's responsibilities as set forth in this
Agreement or a change in Executive's title or reporting level from that set
forth in this Agreement, (iii) the relocation of Employer's executive offices or
principal business location to a point more than twenty-five (25) miles from the
location of such offices or business as of the date of this Agreement, (iv)
reduction by Employer of Executive's Base Salary in effect on the date hereof or
as the same may be increased from time to time, (v) any action by Employer
(including the elimination of benefit plans without providing substitutes
therefor or the reduction of Executive's benefits thereunder) that would
substantially diminish the aggregate value of Executive's incentive awards and
other fringe benefits, or (vi) a failure by Employer to obtain from any
successor, before the succession takes place, an agreement to assume and perform
this Agreement.
SECTION 6. BUSINESS EXPENSES. During the term of this Agreement,
Employer shall reimburse Executive promptly for reasonable business
expenditures, including travel, entertainment, parking, business meetings and
professional dues made and substantiated in accordance with policies, practices
and procedures established from time to time by the Board and incurred in
pursuit and furtherance of Employer's business and goodwill.
SECTION 7. MISCELLANEOUS.
(a) SUCCESSION; SURVIVAL. This Agreement shall inure to the benefit of
and shall be binding upon Employer, its successors and assigns. Absent the
prior written consent of Executive, this Agreement may not be assigned by
Employer other than in connection with a merger or sale of all or substantially
all the assets of Employer or a similar transaction in which the successor or
assignee assumes (whether by operation of law or express assumption) all
obligations of Employer hereunder. The obligations and duties of Executive
hereunder are personal and otherwise not assignable. Executive's obligations
and representations under this Agreement will survive the termination of
Executive's employment, regardless of the manner of such termination.
(b) NOTICES. Any notice or other communication provided for in this
Agreement shall be in writing and sent if to Employer to its office at:
California Coastal Communities, Inc.
0000 Xxx Xxxxxx Xxxxxx
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Chief Executive Officer
or at such other address as Employer may from time to time in writing designate,
and if to Executive at such address as Executive may from time to time in
writing designate (or Executive's business address of record in the absence of
such designation). Each such notice or other communication shall be effective
(i) if given by telecommunication, when transmitted to the applicable number so
specified in (or pursuant to) this Section 7 and an appropriate answer back is
received, (ii) if given by mail, three days after such communication is
deposited in the mails with first class postage prepaid, addressed as aforesaid
or (iii) if given by any other means, when actually delivered at such address.
5.
(c) ENTIRE AGREEMENT; AMENDMENTS. This Agreement contains the entire
agreement of the parties relating to the subject matter hereof and it supersedes
any prior agreements, undertakings, commitments and practices relating to
Executive's employment by Employer. No amendment or modification of the terms
of this Agreement shall be valid unless made in writing and signed by Executive
and, on behalf of Employer, by an officer expressly so authorized by the Board.
(d) WAIVER. No failure on the part of any party to exercise or delay in
exercising any right hereunder shall be deemed a waiver thereof or of any other
right, nor shall any single or partial exercise preclude any further or other
exercise of such right or any other right.
(e) CHOICE OF LAW. This Agreement, the legal relations between the
parties and any action, whether contractual or non-contractual, instituted by
any party with respect to matters arising under or growing out of or in
connection with or in respect of this Agreement, the relationship of the parties
or the subject matter hereof shall be governed by and construed in accordance
with the laws of the State of California, applicable to contracts made and
performed in such State and without regard to conflicts of law doctrines, to the
extent permitted by law.
(f) ATTORNEY'S FEES. If any action at law or in equity is necessary to
enforce or interpret the terms of this Agreement, the prevailing party shall be
entitled to recover reasonable attorney's fees, costs and necessary
disbursements from the non-prevailing party in addition to any other relief to
which such party may be entitled.
(g) CONFIDENTIALITY; PROPRIETARY INFORMATION. Executive agrees to not
make use of, divulge or otherwise disclose, directly or indirectly, any trade
secret or other confidential or proprietary information concerning the business
(including but not limited to its products, employees, services, practices or
policies) of Employer or any of its affiliates of which Executive may learn or
be aware as a result of Executive's employment during the term of the Agreement
or prior thereto as stockholder, employee, officer or director of, or consultant
to, Employer, except to the extent such use or disclosure is (i) necessary to
the performance of this Agreement and in furtherance of Employer's best
interests, (ii) required by applicable law, (iii) lawfully obtainable from other
public sources, or (iv) authorized in writing by or pursuant to a written
agreement with Employer. The provisions of this subsection (g) shall survive
the expiration, suspension or termination, for any reason, of this Agreement.
(h) SEVERABILITY. If any provision of this Agreement is held invalid or
unenforceable, the remainder of this Agreement shall nevertheless remain in full
force and effect, and if any provision is held invalid or unenforceable with
respect to particular circumstances, it shall nevertheless remain in full force
and effect in all other circumstances, to the fullest extent permitted by law.
(i) WITHHOLDING; DEDUCTIONS. All compensation payable hereunder,
including salary and other benefits, shall be subject to applicable taxes,
withholding and other required, normal or elected employee deductions.
6.
(j) SECTION HEADINGS. Section and other headings contained in this
Agreement are for convenience of reference only and shall not affect in any way
the meaning or interpretation of this Agreement.
(k) COUNTERPARTS. This Agreement and any amendment hereto may be executed
in one or more counterparts. All of such counterparts shall constitute one and
the same agreement and shall become effective when a copy signed by each party
has been delivered to the other party.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.
"EMPLOYER"
CALIFORNIA COASTAL COMMUNITIES, INC.
By /s/ XXXXXXX X. XXXXXX
--------------------------------
Xxxxxxx X. Xxxxxx
Chief Executive Officer
"EXECUTIVE"
/s/ XXXXXX X. XXXXXXX
------------------------------------
XXXXXX X. XXXXXXX
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