CALIFORNIA COASTAL COMMUNITIES INC
EX-10.1
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<DESCRIPTION>EX-10.1
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<p align="right" style="margin:0in 0in .0001pt;text-align:right;"><b><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">Exhibit
10.1</font></b></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;page-break-after:auto;text-align:center;text-decoration:underline;"><b><u><font size="2" face="Times New Roman" style="font-size:10.0pt;font-weight:bold;">THIRD<br>
EXTENSION AND MODIFICATION<br>
OF<br>
EMPLOYMENT AGREEMENT</font></u></b></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">THIS THIRD EXTENSION AND
MODIFICATION OF EMPLOYMENT AGREEMENT (the &#147;Extension&#148;) is entered into as of
March 17, 2003 by and between California Coastal Communities, Inc., a Delaware
corporation (&#147;Employer&#148;), and RAYMOND J. PACINI (&#147;Executive&#148;).</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="font-size:10.0pt;margin:0in 0in .0001pt;text-align:center;text-decoration:underline;text-transform:uppercase;"><u><font size="2" face="Times New Roman" style="font-size:10.0pt;text-transform:none;">W</font></u><font style="text-decoration:none;text-transform:none;">  </font><u><font style="text-transform:none;">I</font></u><font style="text-decoration:none;text-transform:none;">  </font><u><font style="text-transform:none;">T</font></u><font style="text-decoration:none;text-transform:none;">  </font><u><font style="text-transform:none;">N</font></u><font style="text-decoration:none;text-transform:none;">  </font><u><font style="text-transform:none;">E</font></u><font style="text-decoration:none;text-transform:none;">  </font><u><font style="text-transform:none;">S</font></u><font style="text-decoration:none;text-transform:none;">  </font><u><font style="text-transform:none;">S</font></u><font style="text-decoration:none;text-transform:none;">  </font><u><font style="text-transform:none;">E</font></u><font style="text-decoration:none;text-transform:none;">  </font><u><font style="text-transform:none;">T</font></u><font style="text-decoration:none;text-transform:none;">  </font><u><font style="text-transform:none;">H</font></u><font style="text-decoration:none;text-transform:none;">:</font></p>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">WHEREAS, Executive and
Employer have entered into an Employment Agreement dated as of May&nbsp;1,
1998, an Extension and Modification of Employment Agreement dated
December&nbsp;7, 1999, and a Second Extension and Modification of Employment
Agreement dated April&nbsp;30, 2001, (collectively, the &#147;Employment Agreement&#148;)
through which Executive has provided various executive capacities to Employer
and Employer has obtained various executive services by Executive; and</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">WHEREAS, Employer desires
to obtain the benefit of continued service from Executive by extending the
Employment Agreement, and Executive desires to render continued services to
Employer by extending the Employment Agreement pursuant to the terms and
conditions of this Extension;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">NOW, THEREFORE, in
consideration of the foregoing recitals and the mutual promises and covenants
herein contained, the parties agree as follows:</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<h1 style="color:red;font-weight:normal;margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" color="black" face="Times New Roman" style="color:windowtext;font-size:10.0pt;">SECTION 1.&#160; <u>CONTINUING
EFFECTIVENESS OF EMPLOYMENT AGREEMENT</u>.&#160;
Except to the extent of any modification made pursuant to the terms of
this Extension, the Employment Agreement shall continue to remain in full force
and effect following the date hereof.</font></h1>

<h1 style="color:red;font-weight:normal;margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" color="black" face="Times New Roman" style="color:windowtext;font-size:10.0pt;">&nbsp;</font></h1>

<h1 style="color:red;font-weight:normal;margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" color="black" face="Times New Roman" style="color:windowtext;font-size:10.0pt;">SECTION 2.&#160; <u>EXTENSION
OF TERM</u>.&#160; Employer and Executive
hereby agree to extend the term of the Employment Agreement until
April&nbsp;30, 2005.</font></h1>

<h1 style="color:red;font-weight:normal;margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" color="black" face="Times New Roman" style="color:windowtext;font-size:10.0pt;">&nbsp;</font></h1>

<h1 style="color:red;font-weight:normal;margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" color="black" face="Times New Roman" style="color:windowtext;font-size:10.0pt;">SECTION 3.&#160; <u>BASE
SALARY</u>.&#160; Effective January 1, 2003
and until the expiration of the term set forth in Section&nbsp;2 above,
Employer agrees to pay Executive a base salary of at least Three Hundred and
Fifteen Thousand Dollars ($315,000) per year in semi-monthly installments
on the same dates the other senior officers of Employer are paid.</font></h1>

<h1 style="color:red;font-weight:normal;margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" color="black" face="Times New Roman" style="color:windowtext;font-size:10.0pt;">&nbsp;</font></h1>

<h2 style="color:red;font-weight:normal;margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" color="black" face="Times New Roman" style="color:windowtext;font-size:10.0pt;">SECTION
4.&#160; <u>OUTSIDE CONSULTING</u>.&#160; Subject to the prior approval of the
Compensation Committee of Employer&#146;s Board of Directors, Executive may be
permitted to act as an outside consultant to companies and businesses that are
not in competition with Employer.&#160;&#160;
There shall be no reduction in the compensation to be paid to Executive
under the Employment Agreement, provided that the consulting services rendered
by </font></h2>

<h2 align="center" style="color:red;font-weight:normal;margin:0in 0in .0001pt;text-align:center;"><font size="2" color="black" face="Times New Roman" style="color:windowtext;font-size:10.0pt;">&nbsp;</font></h2>


<h2 style="color:red;font-weight:normal;margin:0in 0in .0001pt;"><font size="2" color="black" face="Times New Roman" style="color:windowtext;font-size:10.0pt;">

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<h2 align="center" style="color:red;font-size:10.0pt;font-weight:normal;margin:0in 0in .0001pt;text-align:center;">&nbsp;</h2>

<p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Executive do not have a material adverse effect on Executive&#146;s ability
to render services to Employer under the Employment Agreement.</font></p>

<h2 style="color:red;font-weight:normal;margin:0in 0in .0001pt .5in;"><font size="2" color="black" face="Times New Roman" style="color:windowtext;font-size:10.0pt;">&nbsp;</font></h2>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">IN WITNESS WHEREOF, the
parties have executed this Extension as of the date first above written.</font></p>

<p style="margin:0in 0in .0001pt;text-indent:.5in;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<table border="0" cellspacing="0" cellpadding="0" width="100%" style="border-collapse:collapse;width:100.0%;">
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  <td width="53%" valign="top" style="padding:0in 0in 0in 0in;width:53.7%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="19%" colspan="2" valign="top" style="padding:0in 0in 0in 0in;width:19.58%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;EMPLOYER&#148;</font></p>
  </td>
  <td width="26%" colspan="2" valign="top" style="padding:0in 0in 0in 0in;width:26.72%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="53%" valign="top" style="padding:0in 0in 0in 0in;width:53.7%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="19%" colspan="2" valign="top" style="padding:0in 0in 0in 0in;width:19.58%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="26%" colspan="2" valign="top" style="padding:0in 0in 0in 0in;width:26.72%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="53%" valign="top" style="padding:0in 0in 0in 0in;width:53.7%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="46%" colspan="4" valign="top" style="padding:0in 0in 0in 0in;width:46.3%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">CALIFORNIA COASTAL
  COMMUNITIES, INC.</font></p>
  </td>
 </tr>
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  <td width="53%" valign="top" style="padding:0in 0in 0in 0in;width:53.7%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="3%" valign="top" style="padding:0in 0in 0in 0in;width:3.7%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="42%" colspan="3" valign="top" style="padding:0in 0in 0in 0in;width:42.6%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="53%" valign="top" style="padding:0in 0in 0in 0in;width:53.7%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
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  <td width="3%" valign="top" style="padding:0in 0in 0in 0in;width:3.7%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">By</font></p>
  </td>
  <td width="32%" colspan="2" valign="top" style="border:none;border-bottom:solid windowtext .5pt;padding:0in 0in 0in 0in;width:32.36%;">
  <p style="margin:0in 0in .0001pt 30.0pt;text-indent:-10.0pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">/s/&#160; SANDRA G. SCIUTTO</font></p>
  </td>
  <td width="10%" valign="top" style="padding:0in 0in 0in 0in;width:10.24%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt 30.0pt;text-indent:-10.0pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="53%" valign="top" style="padding:0in 0in 0in 0in;width:53.7%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="3%" valign="top" style="padding:0in 0in 0in 0in;width:3.7%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="42%" colspan="3" valign="top" style="padding:0in 0in 0in 0in;width:42.6%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Sandra G. Sciutto</font></p>
  </td>
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  <td width="53%" valign="top" style="padding:0in 0in 0in 0in;width:53.7%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="3%" valign="top" style="padding:0in 0in 0in 0in;width:3.7%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="42%" colspan="3" valign="top" style="padding:0in 0in 0in 0in;width:42.6%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Chief Financial Officer</font></p>
  </td>
 </tr>
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  <td width="53%" valign="top" style="padding:0in 0in 0in 0in;width:53.7%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="46%" colspan="4" valign="top" style="padding:0in 0in 0in 0in;width:46.3%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="53%" valign="top" style="padding:0in 0in 0in 0in;width:53.7%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="46%" colspan="4" valign="top" style="padding:0in 0in 0in 0in;width:46.3%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&#147;EXECUTIVE&#148;</font></p>
  </td>
 </tr>
 <tr>
  <td width="53%" valign="top" style="padding:0in 0in 0in 0in;width:53.7%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="46%" colspan="4" valign="top" style="padding:0in 0in 0in 0in;width:46.3%;">
  <p style="font-size:10.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
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  <td width="53%" valign="top" style="padding:0in 0in 0in 0in;width:53.7%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="36%" colspan="3" valign="top" style="border:none;border-bottom:solid windowtext .5pt;padding:0in 0in 0in 0in;width:36.06%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">/s/&#160; RAYMOND J. PACINI</font></p>
  </td>
  <td width="10%" valign="top" style="padding:0in 0in 0in 0in;width:10.24%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
 </tr>
 <tr>
  <td width="53%" valign="top" style="padding:0in 0in 0in 0in;width:53.7%;">
  <p style="font-size:1.0pt;margin:0in 0in .0001pt;">&nbsp;</p>
  </td>
  <td width="46%" colspan="4" valign="top" style="padding:0in 0in 0in 0in;width:46.3%;">
  <p style="margin:0in 0in .0001pt;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">Raymond J. Pacini</font></p>
  </td>
 </tr>
 <tr height="0">
  <td width="387" style="border:none;"></td>
  <td width="27" style="border:none;"></td>
  <td width="115" style="border:none;"></td>
  <td width="119" style="border:none;"></td>
  <td width="74" style="border:none;"></td>
 </tr>
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<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">&nbsp;</font></p>

<p align="center" style="margin:0in 0in .0001pt;text-align:center;"><font size="2" face="Times New Roman" style="font-size:10.0pt;">2</font></p>


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