Exhibit 10.10
EMPLOYMENT
AGREEMENT
THIS EMPLOYMENT AGREEMENT (the
“Agreement”) is entered into as of May 1, 1998 by
and between ED MOUNTFORD (“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 of two (2) years,
commencing on the date hereof.
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 Senior Vice
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.
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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 Twenty Thousand Dollars ($120,000) 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, based upon the bonus amount and performance
targets mutually agreed upon and set forth on
Schedule A 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
provisions set forth in Section 4(c) to reduce
Executive’s benefits thereunder during the Term of this
Agreement.
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:
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(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 his
death shall be determined under the applicable provisions of the
respective Plans; provided that, notwithstanding any provisions
to
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