INDEPENDENT CONTRACTOR CONSULTING AGREEMENT
This INDEPENDENT CONTRACTOR CONSULTING AGREEMENT ("Agreement") is entered
into as of May 20, 1998 between California Coastal Communities, Inc., a Delaware
corporation (formerly known as Xxxx Real Estate Group, Inc.) (the "Company"),
GSSW-REO, L.C., a Texas limited liability company ("GSSW") and Xxxxxx X. Xxxxx,
Xx. ("Consultant"). This Agreement is subject to ratification by a majority of
the Board of Directors of the Company (the "Board") at its next scheduled Board
of Directors meeting on June 9, 1998, and the grant of Stock Options provided
for below in Section 4(b) is subject to approval of the Compensation Committee
of the Board (the "Committee") at that time.
WHEREAS, the Company and GSSW desire to enter into an agreement regarding
consulting services to be provided to the Company by Consultant, a Manager of
GSSW;
WHEREAS, at the request of GSSW, Consultant is willing to provide
consulting services to the Company; and
WHEREAS, the Company, GSSW and the Consultant have agreed to execute and
deliver this Agreement to memorialize the terms and conditions of the above
described relationship, subject to the aforementioned Board ratification and
Committee approval.
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants
and obligations set forth herein, the parties hereto, intending to be legally
bound, hereby agree as follows:
1. TERM. The Company agrees with GSSW to engage Consultant and
Consultant agrees with the Company and GSSW to provide consulting services to
the Company, in accordance with the terms of this Agreement, for a term of two
(2) years, which commenced on February 1, 1998.
2. CONSULTING SERVICES. Consultant hereby agrees to provide, on a
non-exclusive basis, consulting services to the Company, including without
limitation the following:
- developing and implementing a strategic plan for the Company,
consistent with the directives established by the Company's Board
of Directors;
- reviewing and commenting on individual development projects and
strategic opportunities, including without limitation, financing
and equity structures applicable thereto;
- assisting in analysis of alternative approaches to maximizing the
value of the Company's business and opportunities;
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- providing motivational advice and counsel to the Company's staff;
and
- assisting in sourcing new and continuing development
opportunities for the Company and procuring staff to support such
opportunities.
3. INDEPENDENT CONTRACTOR STATUS. This Agreement is not intended to be
an employment agreement and there does not exist any intent to create any
employment relationship between the Company and Consultant. At all times during
the term of this Agreement, Consultant shall be an independent contractor. GSSW
shall be solely responsible for all federal, state and local taxes, withholdings
and related obligations which may arise from any payments from the Company to
GSSW hereunder, and subsequent payments by GSSW to Consultant, including without
limitation, federal and state income tax obligations and contributions to social
security, disability and workers' compensation insurance benefits. GSSW agrees
that GSSW will indemnify, defend and hold the Company harmless from and against
any and all claims or liability arising out of or in connection with any alleged
failure to satisfy any such obligations.
4. COMPENSATION.
(a) Until November 1, 1998, the Company hereby agrees to pay GSSW
compensation at the monthly rate of Ten Thousand Dollars ($10,000.00).
Compensation for the balance of the term of this Agreement shall be determined
by Agreement of the Company's Board of Directors and GSSW during November, 1998.
(b) STOCK OPTIONS. GSSW shall immediately be granted options ("Stock
Options") to purchase 200,000 shares of Employer's common stock ("Option
Shares"), at the exercise price per share equal to the $9.875 closing selling
price as reported on the Nasdaq National Market on May 20, 1998. The Stock
Options will be issued immediately following Committee approval and will vest,
subject to the Company's Amended and Restated 1993 Stock Option/Stock Issuance
Plan, 50% on each anniversary of the effective date of this Agreement. The
vesting of the Stock Options shall be subject to acceleration as provided in
Section 5 below upon a termination without cause or upon the occurrence of a
Change in Control, as defined below in Section 5. The more specific terms and
conditions of such Stock Options shall be governed by the Stock Option Agreement
to be entered into by and between the Company and GSSW within thirty (30) days
following the execution of this Agreement.
5. TERMINATION. This Agreement may be terminated by either party,
without cause, upon thirty (30) days prior written notice. However, GSSW's
Stock Options shall immediately vest upon any subsequent Change of Control (as
defined below) if such transaction occurs as a result of a letter-of-intent or
understanding entered into by the Company and the Third-party, prior to such
termination; or in the event that the Company terminates this Agreement without
cause where "cause" is defined as the event where GSSW or Consultant (i) is or
has been engaging in willful or grossly negligent conduct which has resulted in
a failure to perform Consultant's services hereunder or, (ii) has committed an
act of dishonesty, gross negligence or misconduct, which has a direct,
substantial and adverse effect on the Company, its business or reputation.
2.
For purposes of the foregoing paragraph, a "Change of Control" means,
and shall be deemed to have taken place upon, the occurrence of: (i) a
transaction requiring shareholder approval involving the sale of all or
substantially all of the assets of the Company or the merger of the Company with
or into another corporation or business entity, other than a transaction in
which shareholders of the Company immediately prior to the closing of such
transaction own a majority of the acquiring corporation or entity immediately
after giving effect to such transaction, or (ii) the acquisition by any Person
as Beneficial Owner (as such terms are defined in the Securities Exchange Act of
1934, as amended), directly or indirectly, of securities of the Company
representing fifty percent (50%) or more of the total voting power represented
by the Company's then outstanding voting securities.
Notwithstanding the foregoing, neither GSSW nor Consultant shall be
terminated for cause unless and until GSSW and Consultant have received written
notice of a proposed termination for cause and GSSW and Consultant have had an
opportunity to be heard before at least a majority of the number of members of
the Board of Directors of the Company authorized to take such action. GSSW and
Consultant shall be deemed to have had such an opportunity if given written
notice of telephonic notice by any director at least three (3) business days in
advance of a meeting of the Board of Directors of the Company called for the
purpose of such hearing.
6. ENTIRE AGREEMENT. This Agreement contains the entire agreement
between the parties with respect to the subject matter hereof. This Agreement
supersedes any and all prior agreements and understandings between the parties
hereto respecting the subject matter hereof.
7. CHANGES. The terms and provisions of this Agreement may not be
modified or amended except pursuant to the written consent of the Consultant and
of the Company. The waiver by either party of any breach of any provision of
this Agreement by the other party shall not operate or be construed as a waiver
of any subsequent breach.
8. ASSIGNABILITY. The obligations of the Consultant may not be delegated
by GSSW or Consultant, and neither GSSW nor Consultant may, without the
Company's written consent thereto, assign, transfer, convey, pledge, encumber,
hypothecate or otherwise dispose of this Agreement or the Stock Options or
Option Shares or any interest herein or therein, except as among GSSW and
Consultant, or by operation of law. Any such attempted delegation or
disposition shall be null and void AND INITIO and without effect. This
Agreement and all of the Company's rights and obligations hereunder may be
assigned or transferred by the Company to, and shall be binding upon and inure
to the benefit of, any subsidiary of the Company or any successor to the
Company.
9. NOTICES. All notices, requests, consents and other communications
hereunder to either party shall be deemed to be sufficient if contained in a
written instrument delivered in person, duly sent by first class registered or
certified airmail, postage prepaid, or telecopied or telexed addressed to such
party at his or its address as set forth below. All such notices, requests,
consents and communications shall be deemed to have been delivered (a) in the
case of personal delivery, on the date of such delivery, (b) in the case of
telex or facsimile transmission, on the date on which the sender receives
machine confirmation of such transmission, and (c) in the case of mailing, on
the fifth (5th) business day following the date of such mailing. Either party
may change the address to which
3.
notices, requests, consents and other communications hereunder shall be sent by
sending written notice of such change of address to the other party.
If to the Company: California Coastal Communities, Inc.
0000 Xxx Xxxxxx Xxxxxx
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
If to GSSW and/or Consultant: Xxxxxx X. Xxxxx, Xx.
GSSW, REO, X.X.
Xxxxxxx Plaza
000 X. Xxxxx, Xxxxx 000
Xxxxxx, Xxxxx 00000
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
10. GOVERNING LAW. This Agreement shall be governed by, and construed in
accordance with, the laws of the state of California, without regard to the
conflicts of law provisions thereof. While governed by the laws of the state of
California, GSSW and Consultant shall be deemed to perform this Agreement and
the services contemplated by this Agreement in and from the state of Texas, in
which both GSSW and Consultant shall be and remain resident and domiciled for
purposes of this Agreement. In no event shall the performance of the consulting
service by Consultant require either GSSW or Consultant to be or become resident
or domiciled in the state of California.
11. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, and each such counterpart shall be deemed to be an original
instrument, but all such counterparts together shall constitute but one
agreement.
12. HEADINGS. The headings of the various sections of this Agreement have
been inserted for convenience of reference only and shall not be deemed to be
part of this Agreement.
13. SEVERABILITY. Any provision of this Agreement that is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such prohibition or unenforceability. Such prohibition or
unenforceability in any one jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. Any provision of this
Agreement that is prohibited or unenforceable by reason of its temporal duration
or geographical scope shall be deemed to be changed to the longest duration and
widest geographical scope that is enforceable.
14. EXPENSES. Consultant shall be reimbursed for all reasonable
out-of-pocket expenses incurred by Consultant incident to the performance of the
consulting services contemplated by this Agreement such as travel, hotel,
telephone and similar expenses, subject to delivery of an itemized invoice
therefor.
4.
15. D&O AND E&O INSURANCE. In the event that Consultant shall be elected
an officer or director of the Company, the Company shall provide Consultant with
coverage under the Company's insurance policies for officers and directors for
purposes of D&O and E&O coverage.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written, in the case of the Corporation and GSSW by an
officer thereunto duly authorized, and in the case of Consultant, by Consultant
individually.
CALIFORNIA COASTAL COMMUNITIES, INC.
By /s/ XXXXXXX X. XXXXXX
---------------------------------
Xxxxxxx X. Xxxxxx
Chief Executive Officer
CONSULTANT:
/s/ XXXXXX X. XXXXX, XX.
------------------------------------
Xxxxxx X. Xxxxx, Xx.
GSSW-REO, L.C.
a Texas limited liability company
By /s/ XXXXXX X. XXXXX, XX.
---------------------------------
Xxxxxx X. Xxxxx, Xx.
Manager
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