**Exhibit10.1**

 

**THIRDEXTENSION AND MODIFICATIONOFEMPLOYMENT AGREEMENT**

 

THIS THIRD EXTENSION ANDMODIFICATION OF EMPLOYMENT AGREEMENT (the “Extension”) is entered into as ofMarch 17, 2003 by and between California Coastal Communities, Inc., a Delawarecorporation (“Employer”), and RAYMOND J. PACINI (“Executive”).

 

WITNESSETH:

 

WHEREAS, Executive andEmployer have entered into an Employment Agreement dated as of May 1,1998, an Extension and Modification of Employment Agreement datedDecember 7, 1999, and a Second Extension and Modification of EmploymentAgreement dated April 30, 2001, (collectively, the “Employment Agreement”)through which Executive has provided various executive capacities to Employerand Employer has obtained various executive services by Executive; and

 

WHEREAS, Employer desiresto obtain the benefit of continued service from Executive by extending theEmployment Agreement, and Executive desires to render continued services toEmployer by extending the Employment Agreement pursuant to the terms andconditions of this Extension;

 

NOW, THEREFORE, inconsideration of the foregoing recitals and the mutual promises and covenantsherein contained, the parties agree as follows:

 

# SECTION 1.  CONTINUINGEFFECTIVENESS OF EMPLOYMENT AGREEMENT. Except to the extent of any modification made pursuant to the terms ofthis Extension, the Employment Agreement shall continue to remain in full forceand effect following the date hereof.

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# SECTION 2.  EXTENSIONOF TERM.  Employer and Executivehereby agree to extend the term of the Employment Agreement untilApril 30, 2005.

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# SECTION 3.  BASESALARY.  Effective January 1, 2003and until the expiration of the term set forth in Section 2 above,Employer agrees to pay Executive a base salary of at least Three Hundred andFifteen Thousand Dollars ($315,000) per year in semi-monthly installmentson the same dates the other senior officers of Employer are paid.

#  

## SECTION4.  OUTSIDE CONSULTING.  Subject to the prior approval of theCompensation Committee of Employer’s Board of Directors, Executive may bepermitted to act as an outside consultant to companies and businesses that arenot in competition with Employer.  There shall be no reduction in the compensation to be paid to Executiveunder the Employment Agreement, provided that the consulting services renderedby 

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Executive do not have a material adverse effect on Executive’s abilityto render services to Employer under the Employment Agreement.

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IN WITNESS WHEREOF, theparties have executed this Extension as of the date first above written.

 
|   | “EMPLOYER”                  |                        |
|--------|---------------------------------------|-----------------------------|
|   |                                  |                        |
|   | CALIFORNIA COASTAL  COMMUNITIES, INC. |
|   |                                  |                        |
|   | By                                    | /s/  SANDRA G. SCIUTTO |   |
|   |                                  | Sandra G. Sciutto           |
|   |                                  | Chief Financial Officer     |
|   |                                  |
|   | “EXECUTIVE”                 |
|   |                                  |
|   | /s/  RAYMOND J. PACINI           |                        |
|   | Raymond J. Pacini                     |
|        |                                       |                             |  |  |

 

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