EMPLOYMENT AGREEMENT
This employment agreement (the "Agreement"), dated as of August 29, 1997
made by and between American Family Holdings, Inc., a Delaware corporation,
having its principal offices at 0000 Xxx Xxxxxx, Xxxxx 000, Xxxxxxx Xxxxx,
Xxxxxxxxxx 00000 (the "Company"), and L.C. "Xxx" Xxxxxxxxx, Jr. (the
"Employee").
In consideration of the mutual promises and agreements set forth herein,
the parties agree as follows:
1. EMPLOYMENT. The Company will employ Employee, and Employee will
serve, as Executive Vice President of the Company pursuant to this Agreement.
Employee will report to the President and Chief Executive Officer of the
Company, and will, subject to his election or appointment as such, serve as a
member of the Board of Directors and any committee of the Board of Directors.
In addition, the Company will cause Employee to be elected President and Chief
Executive Officer, as well as a director, of American Family Communities, Inc.,
a to-be-formed, wholly-owned subsidiary of the Company ("AFC") and the following
to-be-formed companies which will be wholly-owned subsidiaries of AFC: Delta
Greens Homes, Inc., Yosemite Xxxxx Family Resort, Inc., Oceanside Homes, Inc.,
and Mori Point Destinations, Inc. Subject to availability, the Company will
cause such subsidiaries to transfer to the Company such funds as may be
necessary for the Company to honor its obligations under this Agreement.
2. TERM OF EMPLOYMENT. The term of employment under this Agreement will
commence on the Effective Date of the Acquisition described in the Company's
registration statement to be filed on Form S-4 or SB-2 with the Securities and
Exchange Commission in the foreseeable future, and continue through December 31,
2000 (the "Initial Term"), provided that the Agreement shall automatically be
extended for one year at the end of 2000 and each year thereafter (the "Extended
Term") unless the Agreement is earlier terminated pursuant to its terms or the
Company provides Employee with a written notice not less than 90 days before the
end of a calendar year of its election not to have the automatic extension
provisions of this Agreement apply as specified in said notice.
3. COMPENSATION AND OTHER BENEFITS.
3.1 BASE SALARY. As compensation for his employment under this
Agreement, commencing as of the Effective Date of the Acquisition, the Company
will pay to Employee a signing bonus of $25,000 and a base salary of $200,000
per year ("Initial Base Salary") which, commencing January 1, 1999, shall
increase by $25,000 per year during the Initial Term ("Increased Base Salary").
Subject to normal withholding, any base salary will be payable twice monthly in
as equal installments as possible. It is understood that the Company may, at
the discretion of its Board of Directors, increase any such base salary. Any
Increased Base Salary payable during any year of an Extended Term shall be
increased, but not decreased, to reflect the percentage change increase in the
Consumer Price Index ("C.P.I.") applicable to Orange County
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that occurred in the year last past unless the Board's increase for the next
year, in its discretion, is in excess of the applicable C.P.I. increase for
such upcoming year. If the C.P.I. is discontinued or revised, the government
index replacing the C.P.I. shall be used for such calculations.
3.2 BONUS COMPENSATION. Employee shall be eligible for performance
bonus compensation equal to two percent ("Two Percent Performance Bonus") of the
"Company's Performance Base Income," as defined herein. The "Company's
Performance Base Income," as that term is used herein, shall be equal to the
Company's annual federal corporate taxable income as determined under the
Internal Revenue Code of 1986, as amended, as expressly modified herein and as
expressly adjusted in this Section for items not otherwise required to be
included in the Company's consolidated income for federal corporate income tax
purposes. The computation of the Company's federal corporate taxable income
shall not include a deduction for state corporate income or franchise taxes, net
operating loss carryovers (forward or back) and depreciation in excess of income
on real properties held for rental. In addition, the computation of the
Company's federal corporate taxable income for purposes of the Two Percent
Performance Bonus shall substitute the tax basis of any real property
contributed to the Company at the Effective Date of Acquisition to reflect its
then existing fair market value, which shall be defined as the appraised value
of each property utilized as the basis to calculate its Exchange Value as
determined in the registration statement of the Company to be filed with the
Securities and Exchange Commission. The Company's federal corporate taxable
income will be computed on a consolidated basis. The Company's Performance Base
Income, to the extent not required to be consolidated for federal corporate
income tax purposes or not otherwise includable in the Company's federal
corporate taxable income shall nevertheless include the income of any
subsidiary, partnership or entity to the extent of the Company's percentage
ownership in such entity, regardless of the number of tiers of entities that may
be involved and regardless of whether currently distributable or distributed.
Such bonus will be paid on or before the 90th day after the end of the Company's
applicable tax year ("Two Percent Performance Bonus Pay Date"). This bonus will
be paid only when the Company has sufficient reserves to fully and timely pay
all of its foreseeable operating debts as they become due. If the Company does
not have such sufficient reserves, the Company may delay payment of the Two
Percent Performance Bonus for two one-year periods; however, such amounts shall
bear interest at ten percent per annum from April 1 of the year in which the
payment was due until paid. Notwithstanding the foregoing to the contrary, the
Two Percent Performance Bonus will become absolutely payable no later than two
years after the Two Percent Performance Bonus Pay Date regardless of any other
condition including, but not limited to, the sufficiency of the Company's
working capital reserves. At the Board's discretion, should the Company achieve
the Board-Approved Business Plan Objectives, as herein defined, the Company may
grant Employee a separate but not additional bonus of up to 50% of Employee's
then existing base salary ("Base Salary Performance Bonus") if amounts have
either not been earned or are not to be paid as part of the Two Percent
Performance for the then applicable year. Said bonus shall be paid on or before
the 90th day after the end of the Company's applicable tax year.
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3.3 OTHER BENEFITS.
3.3.1 During the term of Employee's employment hereunder,
Employee (and his dependents where applicable) will be entitled to
participate and will be included in any employee benefit plans including but
not limited to any group health and life insurance, pension, profit sharing,
retirement, stock incentive or similar plans of the Company now existing or
established hereafter. Employee will also be covered by the Company's
directors and officers errors and omissions insurance. Employee's
participation in any of such plans shall be on terms not less advantageous
than those enjoyed by either of Xxxxx X. Xxxxxx or Xxxxx X. Xxxx or if
neither of them are no longer employed by the Company, the Company's highest
ranking officer.
3.3.2 During the term of Employee's employment hereunder,
Employee will be authorized to incur and will be reimbursed by Company for all
reasonable business-related expenses, travel expenses (as if the Company was
headquartered in Orange County) and entertainment expenses incurred by Employee
to promote the business of the Company. Club dues and expenses will be covered
as agreed upon between Employee and the Company. In addition, the Company will
pay for, or reimburse Employee for, all mandatory continuing education required
to maintain professional licenses necessary to the Company's business, and the
costs of membership in all professional associations reasonably applicable to
the Company's business.
3.3.3 During the term of Employee's employment hereunder,
Employee will be entitled to 20 business days of vacation and ten business
days for illness during each full contract year of employment, determined on
a pro-rata basis for any partial contract year of employment during which
time Employee is not partially or fully disabled, provided that such vacation
will be arranged so that the Company may function at reasonable operating
levels during such vacation periods. Any vacation and/or sick days taken in
excess of that stated above in any calendar year shall require Board
approval. Any vacation and/or sick days not taken shall accrue and carry
over to the next contract year provided that, at the end of any calendar year
in which this Agreement is in effect, Employee may not have accrued any
unused vacation days aggregating in excess of 30 days. Any unused sick days
may accrue without limitation. Any such days not used upon termination shall
be paid at the rate of Employee's base salary under Section 3.1 hereunder.
3.3.4 If at any time during which Employee is a director,
executive officer or employee of the Company or any of its subsidiaries, the
Company proposes to file a registration statement under the Securities Act of
1933, as amended, relating to an underwritten or "best efforts" public offering
of Common Stock of the company, other than an offering by the Company in which
no selling stockholders participate, at least 30 days before filing that
registration statement, the Company will notify Employee of the Company's
intention to file the registration statement and the Company will include in
the registration statement any shares of the Company's Common Stock then owned
by Employee or an entity with which Employee is affiliated which Employee
requests be included in the registration statement on the same terms and
conditions as the other shares being sold, up to such number of Employee's
shares as the managing underwriter or selling agent, if any, of the proposed
public offering states in writing to
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Employee to be the maximum number of Employees' shares which the managing
underwriter or selling agent, if any, has determined can be included in the
public offering without adversely affecting the sale of the other shares to
which the registration statement relates. If Employee, as well as affiliates
of Xxxxx X. Xxxxxx and/or Xxxxx X. Xxxx, desire to include shares in a
registration statement, and if the managing underwriter or selling agent
determines that the number of shares to be offered by selling shareholders
must be reduced, any such reduction that affects Employee, Xx. Xxxxxx and/or
Xx. Xxxx shall be made pro-rata among them in accordance with the number of
shares each beneficially holds in the Company at the time of the pro-ration.
3.4 SALARY AND BENEFIT CONTINUATION. The Company will continue to
pay to Employee compensation as provided in Section 3.1 hereunder at the full
rate for a period of six months after Employee is declared permanently and
totally disabled and unable to perform the duties of Executive Vice President of
the Company. Thereafter, the Company will pay to Employee 25% of Employee's
annual salary as provided in Section 3.1 hereunder for an additional 12
consecutive months or until the regular expiration (without regard to any
automatic extension) of this Agreement, whichever is earlier. Furthermore, in
the event of such permanent and total disability, the benefits described in
Section 3.3.1 will continue as if Employee had continued to render services
pursuant to this Agreement throughout its term, and the benefits described in
Section 3.3.4 will continue in accordance with the terms of this Agreement.
For purposes of this Section, the determination of whether or not
Employee is declared permanently and totally disabled shall be made by
Employee's physician, by written notice to the Board of Directors. In the event
the Board of Directors disagrees with the determination by Employees' physician,
the Board of Directors will appoint, at the Company's expense, another physician
to make such determination. If the physician so appointed by the Board of
Directors disagrees with the determination made by Employee's physician, then
the two physicians shall appoint a mutually acceptable third physician, at the
Company's expense, to make the final determination of whether Employee is
permanently and totally disabled, which determination will be binding upon all
parties hereto.
3.5 CHANGE OF CONTROL COMPENSATION. If, pursuant to Section 5.2
hereof, Employee terminates this Agreement within six months of a Change of
Control (as defined in Section 6.1 hereof), as severance pay and in lieu of any
further salary for periods subsequent to the date of termination, Employee shall
receive 2.99 times the sum of all amounts (collectively, "Change of Control
Compensation") paid to Employee pursuant only to Sections 3.1 and 3.2 hereof
during the five complete calendar years preceding the calendar year during
which the Change of Control occurs (or such lesser number of calendar years in
the event Employee has been employed by the Company for fewer than five such
calendar years) divided by five (or such lesser number in the event Employee has
been employed by the Company for fewer than five such calendar years). The
following provisions shall apply for purposes of this Section 3.5:
(a) The Change of Control Compensation paid to Employee during
any partial calendar years of employment shall be annualized, and such
annualized year shall be treated as a full calendar year.
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(b) Amounts payable to Employee pursuant to this Section 3.5
shall be paid without interest in 18 equal monthly installments (less applicable
withholding) commencing on the first day of the first month after Employee's
termination occurring after a Change of Control.
(c) The amounts payable pursuant to this Section 3.5 shall not
be reduced, offset or subject to recovery by the Company by reason of any
amounts earned by Employee as the result of employment by another employer after
the date of termination, or otherwise.
(d) Any Change of Control Compensation due to Employee from the
Company shall also include any stock options not yet granted pursuant to Section
3.9 hereunder.
3.6 LIMITATION ON CHANGE OF CONTROL COMPENSATION. Notwithstanding
Section 3.5 hereof, if any portion of the Change of Control Compensation
provided for in this Agreement, would constitute a "parachute payment" (as
defined in Section 280G(b)(2) of the Internal Revenue Code), the payments and
benefits due to the Employee shall be reduced, in such order of priority and
amount as the Employee shall elect, to the largest amount as will result in no
portion of such payments being subject to the excise tax imposed by Section 4999
of the Internal Revenue Code. Notwithstanding anything in the foregoing to the
contrary, any dispute or controversy regarding whether any payments under this
Agreement must be reduced pursuant to this Section 3.6 shall be settled by an
independent accounting firm acceptable to each of the parties hereto, or, if no
such firm is acceptable to each party, each of the Employee and the Company
shall select an accounting firm acceptable to it, and such accounting firms
shall together designate an independent accounting firm to settle such dispute
or controversy, and such settlement shall be binding upon both parties. The
Company may withhold from any benefits payable under this Agreement all federal,
state, city or other taxes as shall be required pursuant to any law or
governmental regulation or ruling.
3.7 AUTO AND CELL PHONE EXPENSES. The Company shall pay to Employee
$500 per month as an automobile allowance, and shall reimburse Employee for
service, maintenance and business use gasoline charges. In addition, the
Company shall reimburse Employee for the monthly service charges for one
cellular telephone and the charges for reasonable business use of the cellular
telephone.
3.8 REPURCHASE OF STOCK BY THE COMPANY. The Company shall be
required to repurchase, at Employee's election, all or a portion of the
Company's shares owned by Employee at the commencement of this Agreement at
their fair market value as specified in Section 3.8.1. Further, the Company
shall have the option to repurchase, at the Company's election, all or a portion
of the Company's shares owned by Employee at the commencement of this Agreement
at the price Employee paid for such shares as specified in Section 3.8.2
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3.8.1 AT FAIR MARKET VALUE
(a) If (i) Employee is terminated without "Cause" (as
defined in Section 5.1(a)) during the Term, (ii) Employee terminates his
employment within six months of a Change of Control (as defined in Section 6.1),
(iii) Employee terminates his employment within one year of a Change in
Location (as defined in Section 6.2), or (iv) Employee terminates his employment
as a result of the Company's breach of this Agreement within 3 months of said
breach, then Employee may require the Company (to the extent that it is legally
able to do so) to repurchase all or a portion of the Company's shares owned by
Employee at the commencement of this Agreement at a per share price equal to
Fair Market Value (as defined in Section 3.9). This right may be exercised only
once and, if not exercised, will lapse 90 days after Employee's termination for
the reasons specified in this section above.
(b) Employee may exercise his right under Section 3.8.1 by
giving the Company written notice of his intent to require the Company to
purchase a specified number of shares, stating in such notice a date (not less
than 10 nor more than 30 days from the date of the notice) when Employee or his
agent will deliver the appropriate stock certificate(s) to the Company or its
transfer agent, duly endorsed for transfer, against payment by certified or
cashier's check.
(c) Notwithstanding the provisions of Sections 3.8.1 and
3.8.2, the Company will be required to immediately and fully pay for the
purchased shares from Employee only if the Company has sufficient reserves to
fully and timely pay all of its debts as they become due. The Company may delay
payment for the shares for up to two one-year periods; however, such delayed
payments shall bear interest at ten percent per annum from the date deferred
payment is elected by the Company until paid.
3.8.2 AT PRICE EMPLOYEE PAID. If the Employee is terminated
for "Cause" (as defined in Section 5.1(a)) during the Term of this Agreement, or
if Employee voluntarily terminates his employment as set forth in Section 5.2(a)
hereof, the Company shall have the right, but not the obligation, to purchase
the Company's shares owned by Employee at the commencement of this Agreement as
follows:
Amount of Employee's
Common Stock If Terminated Before
------------ --------------------
Up to 75% January 1, 1999
Up to 50% January 1, 2000
Up to 25% End of Initial Term
The purchase price per share shall be the price per share that
Employee paid for the stock. This right will lapse if not exercised within 30
days of Employee's termination.
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3.9. STOCK OPTIONS. As of the Effective Date of the Acquisition, and
on the first and second anniversaries thereof, in addition to any options
granted to Employee pursuant to the Company's 1997 Stock Option and Incentive
Plan, the Employee shall be granted the following options to purchase the
Company's common stock:
Date of Grant Number of shares Exercise Price/Share
------------- ---------------- --------------------
Acquisition Effective Date 10,000 $10.00
First Anniversary of 10,000 Fair Market Value
Acquisition Effective Date
Second Anniversary of 10,000 Fair Market Value
Acquisition Effective Date
"Fair Market Value" shall be the closing price of the Company's common
stock on the national exchange on which it is traded on the trading day before
the options are granted. If the Company's common stock is not traded on a
national exchange, Fair Market Value shall be determined in good faith by the
Board of Directors.
Each group of options will be exercisable as follows: 3,333 shares
immediately, 3,333 shares on the first anniversary of grant; and 3,334 shares on
the second anniversary of grant. If the Company does not renew this Agreement
after the end of the Initial Term, unvested options granted herein shall vest on
the expiration of the Initial Term. To the extent not exercised, options
granted pursuant to this Section 3.9 shall expire ten years from the date of
grant.
The options granted hereby shall not be transferrable without the
consent of a majority of the Board of Directors of the Company; provided that
such options may be transferred by will or to a revocable living trust for
estate planning purposes. If any options are so transferred, they will not be
transferred by the transferee without the written consent of the Board of
Directors.
4. NON-COMPETITION/UNFAIR COMPETITION.
4.1 NON-COMPETITION. During the term of Employee's employment under
this Agreement, Employee will not knowingly, directly or indirectly, engage or
participate in any business that is in competition with the business of the
Company. The foregoing obligation of Employee not to compete with the Company
shall not prohibit (i) Employee from owning or purchasing any corporate
securities of any corporation or other entity that are regularly traded on a
recognized stock exchange or over-the-counter market so long as Employee does
not own, in the aggregate, five percent or more of the voting equity securities
of any such corporation or other entity, or (ii) Employee from continuing to own
interests in existing real estate projects in which he has investments.
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4.2 UNFAIR COMPETITION. The Company treats certain information as
confidential information (the "Confidential Information"). Employee
acknowledges and agrees that the sale or unauthorized use or disclosure of any
Confidential Information obtained by Employee during his employment with the
Company constitute unfair competition. Employee promises and agrees not to
engage in unfair competition with the Company during the term of this Agreement
and thereafter.
5. TERMINATION PROVISIONS.
5.1 TERMINATION BY COMPANY. This Agreement may be terminated by the
Company only as provided in this Section and for no other cause or reason:
(a) The Company may terminate Employee's employment under this
Agreement upon 90 days' advance written notice by a vote of the Board of
Directors (excluding Employee but including a majority of the non-employee
directors). If such termination is other than for "Cause" (as defined herein),
the Company will pay to Employee (or his estate) the then applicable base salary
Employee would have been entitled to receive under Section 3.1 hereunder for the
remaining term of this Agreement, regardless of re-employment, if any, as if
Employee's employment had continued in full through the termination date then in
effect (without giving effect to any future automatic annual extensions) and
Employee had rendered services through that date, payable as and when such
salary would have been due but no less than one year's salary as of the date of
termination. If such termination is for "Cause" (as defined herein), to the
extent permitted by law, Employee's compensation and benefits shall terminate as
of the date the termination becomes effective. For purposes of this Agreement,
"Cause" shall mean and be limited to the following events: (i) an act of fraud,
embezzlement or similar conduct by Employee involving the Company; (ii) any
action by Employee involving the arrest of Employee for violation of any
criminal statute constituting a felony or misdemeanor involving moral turpitude
if the Board reasonably determines that the continuation of Employee's
employment after such event would have an adverse impact on the operations of
the Company or its reputation in the financial community; (iii) gross misconduct
or habitual negligence in the performance of Employee's duties; (iv) an act
constituting employment discrimination, sexual harassment or a breach of
Employee's fiduciary duty to the Company under the Delaware General Corporation
Law; (v) a continuing, repeated willful failure or refusal by Employee to
perform his duties; provided, however, that termination shall not be deemed to
be for Cause under this subclause (v) unless Employee shall have first received
written notice from the Board advising Employee of the specific acts or
omissions alleged to constitute a failure or refusal to perform and such failure
or refusal to perform continues after Employee shall have had a reasonable
opportunity to correct the acts or omissions cited in such notice; or (vi)
competition by Employee with the Company or its subsidiaries in violation of
Section 4 thereof.
(b) Except to the extent necessary to give effect to
Sections 5.1(a) and 5.2, this Agreement will terminate upon the death of
Employee.
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(c) Except as otherwise provided in Section 3.4, this Agreement
will terminate as of the date Employee is declared permanently and totally
disabled and unable to perform the duties assigned to him.
(d) If the Company terminates this Agreement, Employee's
employment relationship with any of the Company's subsidiaries shall be deemed
terminated as of the same time.
5.2 TERMINATION BY EMPLOYEE. This Agreement may be terminated by
Employee upon 30 days' prior written notice as set forth below:
(a) If Employee's termination is voluntary and not for any of
the reasons set forth in Sections 5.2(b) or (c), the Company shall have no
further liability to Employee upon such termination except those liabilities
that might arise with respect to the Company's stock under Section 3.9 hereof.
(b) If Employee's termination occurs within one year from the
Company's breach of the Agreement, or occurs within one year of a Change of
Location (as defined in Section 6.2), Employee's compensation shall be
determined under Section 5.1(a) as if such termination was without "Cause."
(c) If Employee's termination occurs within six months from a
Change of Control (as defined in Section 6.1), Employee's compensation will be
governed by Section 3.5 hereof. If negotiations that result in a Change of
Control are occurring with less than 6 months remaining until the end of the
Initial Term or any Extended Term of this Agreement, then the provisions
governing Employee's Change of Control Compensation under this Section 5.2 and
Section 3.5 hereof shall survive this Agreement.
6. DEFINITIONS.
6.1 CHANGE OF CONTROL. For purposes of this Agreement, a Change of
Control of the Company shall mean any of the following events:
(a) A sale of 50% or more of the Company's common stock
beneficially owned by Xxxxx X. Xxxxxx or Xxxxx X. Xxxx, and their respective
affiliates, to a single person or entity in which sale Employee is not offered
an opportunity to sell his common stock in the Company to such person or entity
on the same basis as Xx. Xxxxxx or Xx. Xxxx, or their respective affiliates;
(b) The acquisition by any person or entity, including any
current shareholder of the Company, working in concert with Xxxxx X. Xxxxxx or
Xxxxx X. Xxxx, of securities of the Company resulting in such person's owning of
record or beneficially 40% or more of the voting securities of the Company in
which transaction Employee does not participate;
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(c) A merger, consolidation or other combination, or sale of
substantially all of the assets of the Company, the result of which is either
(A) the ownership by shareholders of the Company of less than 51% of the voting
securities of the resulting or acquiring entity having the power to elect a
majority of the Board of such entity and the power to preserve such power to
elect, or (B) the Company having no substantial operating business; or
(d) A change in the membership in the Board which, taken in
conjunction with any other prior or concurrent changes, results in 50% or more
of the Board's membership being persons not nominated by management in the
Company's then most recent form of nomination, excluding changes resulting from
substitutions for retirement or death or for removal or resignation due to
demonstrated disability.
Notwithstanding anything in the foregoing to the contrary, no Change
of Control shall be deemed to have occurred for purposes of this Agreement by
virtue of any transaction which results in the Employee, or a group of persons
or entity which includes the Employee, acquiring, directly or indirectly, 40% or
more of any class of voting securities of the Company.
For purposes of Section 6.1, the terms "person" and "beneficial owner"
have the meanings set forth in Regulation 13D under the Securities Exchange Act
of 1934, as such Regulation exists on the date hereof, and the term "voting
security" includes any security that has, or may have upon an event of default
or in respect to any transaction, a right to vote on any matter upon which the
holder of any class of common stock of the Company would have a right to vote.
For purposes of subsection (a) through (d) above, such Change of
Control shall include any such applicable lesser standard prescribed by Section
280(G) of the Internal Revenue Code or regulations issued or proposed thereto.
6.2 CHANGE IN LOCATION. For purposes of this Agreement, the term
"Change of Location" means any change of the headquarters operations of the
Company to a place outside of Orange County, California, or the requirement that
Employee spend more than 50% of his business time for the Company at locations
outside of Orange County, California.
7. AMERICAN FAMILY COMMUNITIES, INC. ("AFC")
7.1 Real estate operations shall be conducted by AFC or such entities
as the Company's Board determines to be appropriate.
7.2 Subject to the direction of Affects Board of Directors,
Employee's responsibilities shall include but not be limited to having authority
over staff selections, compensation and terminations provided (i) consultation
has been conducted with and consideration given to any input from Xxxxx Xxxxxx
and Xxxxx Xxxx, and (ii) the total annual dollar amounts for such staff
compensation are reasonably within the short- and long-term business plans
developed under the direction of Employee and approved by the AFC Board and
(iii) members of the staff are reasonably qualified to fill the positions for
which they are hired.
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7.3 Employee shall consult with and appropriately integrate any input
from Xxxxx Xxxxxx and Xxxxx Xxxx in order to be accountable for the development
of short-term and long-term business plans and budgets relating to AFC and its
subsidiaries. Employee shall be responsible for presenting such plans and
budgets to AFC's Board, which may direct Employee to develop alternate business
or development plans, make adjustments to previously approved plans or direct
Employee to hire outside consultants to do the same under Employee's direction.
All such planning ("Approved Business Plan Objectives") shall be under the
direction of the Employee subject to on-going consultation with Xxxxx Xxxxxx and
Xxxxx Xxxx and the approval of AFC's Board.
8. INDEMNIFICATION. As an officer, and if so elected, a director, of the
Company and any of its subsidiaries or affiliates, Employee shall be
indemnified by the Company and any of its subsidiaries or affiliates to the
fullest extent permitted by applicable law. To the extent necessary and
permissible, such indemnification will protect Employee from prior operations of
properties acquired by the Company or any of its subsidiaries or affiliates.
9. OTHER PROVISIONS.
9.1 NOTICES. All notices, requests, demands and other communications
required or permitted to be given hereunder will be in writing and will be
deemed to have been duly given if personally delivered or sent by telecopier or
sent by prepaid telegram or first class mail, postage prepaid, registered or
certified, as follows:
If to Employee: L.C. "Xxx" Xxxxxxxxx, Jr.
1811 0 Xxxx Xxx Xxx.
Xxxxxxx Xxxxx, Xx. 00000
If to Company: 0000 Xxx Xxxxxx Xxxxxx
Xxxxx 000
Xxxxxxx Xxxxx, Xxxxxxxxxx 00000
Attention: President
Either party may change the address to which such communications are
to be delivered by giving written notice to the other party. Any notice
personally given will be deemed received upon delivery to the address
designated, any notice by mail as provided in this paragraph will be deemed
given on the third business day following such mailing, and any notice given by
telecopier or telegram as provided herein will be deemed delivered on the
business day following the transmission by telecopier or the delivery of such
notice to the telegraph company for transmission.
9.2 ATTORNEYS' FEES. In the event of a dispute between any or all of
the parties hereto, or in the event either party seeks to enforce this
Agreement, the prevailing or successful party in a court or arbitration
determination shall be entitled to have its reasonable attorneys' fees and costs
reimbursed by the other party.
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9.3 GOVERNING LAW. This Agreement shall be construed in accordance
with, and governed by, the laws of the State of California and performable in
Orange County, California.
9.4 ENTIRE AGREEMENT. This Agreement contains all of the terms and
conditions agreed upon by the parties hereto with reference to the subject
matter hereof and supersedes any and all prior written or verbal agreements.
This Agreement may not be modified except by a written instrument executed by
both parties or their permitted successors in interest, if any.
Each and every term of this Agreement will be valid and enforced to
the fullest extent permitted by law.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
effective as of the date first above written.
/s/ L.C. "XXX" XXXXXXXXX, JR.
-----------------------------------------
L.C. "Xxx" Xxxxxxxxx, Jr.
(the "Employee")
AMERICAN FAMILY HOLDINGS, INC.
(the "Company")
By /s/ XXXXX X. XXXXXX
-------------------------------------
Xxxxx X. Xxxxxx
President & Co-Chairman
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