Exhibit 10.1
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (the "Agreement") is entered into as of August 8, 2005
by and between MICHAEL J. RAFFERTY ("Executive") and Hearthside Homes, Inc., a
California corporation ("Employer"), which is an indirect wholly-owned
subsidiary of California Coastal Communities, Inc., a Delaware corporation
("Parent").
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, Employer 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 COMMENCING AS OF JANUARY 1, 2005 AND ENDING ON
DECEMBER 31, 2006 (THE "TERM").
SECTION 2.
SERVICES. SO LONG AS THIS AGREEMENT
SHALL CONTINUE IN EFFECT, EXECUTIVE SHALL USE HIS 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 PRESIDENT. EXECUTIVE AGREES
TO OBSERVE AND COMPLY WITH THE RULES AND REGULATIONS OF EMPLOYER RESPECTING THE
PERFORMANCE OF EXECUTIVE'S DUTIES AND AGREES TO CARRY OUT AND PERFORM DIRECTIONS
AND POLICIES OF EMPLOYER 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 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 BONUS.
(I)
BASE SALARY. DURING THE TERM OF THIS
AGREEMENT, EMPLOYER AGREES TO PAY EXECUTIVE A BASE SALARY OF AT LEAST ONE
HUNDRED SEVENTY FIVE THOUSAND DOLLARS ($175,000) 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 OPPORTUNITY TO EARN INCENTIVE BONUSES BASED UPON THE BONUS
FORMULA SET FORTH ON SCHEDULES A AND B ATTACHED HERETO.
(B)
ADDITIONAL BENEFITS. EXECUTIVE SHALL ALSO BE
ENTITLED