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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 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.
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