<PAGE>
 
                                                                   EXHIBIT 10.15
 
                              EMPLOYMENT AGREEMENT
                              --------------------

          THIS EMPLOYMENT AGREEMENT is entered into as of January 6, 1997, by
and between GREAT WESTERN FINANCIAL CORPORATION, a Delaware corporation
("Employer"), and Ray W. Sims ("Officer").

                              W I T N E S S E T H:
                              - - - - - - - - - - 

          WHEREAS, Employer desires to obtain the benefit of services by
Officer, and Officer desires to render services to Employer; and

          WHEREAS, the Board of Directors of Employer (the "Board") has
determined that it is in Employer's best interest and that of its stockholders
to recognize the substantial contribution that Officer is expected to make to
the business of Employer and its subsidiary, Great Western Bank, a Federal
Savings Bank (the "Bank") (together, the "Company") and to retain his services
in the future; and

          WHEREAS, Employer and Officer desire to set forth in this Agreement
the terms and conditions of Officer's employment with Employer;
<PAGE>
 
          NOW, THEREFORE, in consideration of the mutual promises and covenants
herein contained, the parties hereto agree as follows:

          1. Term. Employer shall employ Officer, and Officer shall serve
             ----
Employer, in accordance with the terms hereof, for a term of three (3) years
ending January 5, 2000 (the "Term"), unless such employment is earlier
terminated in accordance with the provisions hereof. Notwithstanding the
foregoing, if Officer's employment shall not have been terminated in accordance
with the provisions hereof effective on or before the first anniversary of the
effective date hereof, the remaining Term shall be extended such that at each
and every moment of time thereafter the remaining Term shall be two (2) years
(but in no event shall the remaining Term extend beyond Officer's sixty-fifth
(65th) birthday).

          2. Specific Position; Duties and Responsibilities. Subject to the
             ----------------------------------------------
provisions of this Agreement, Employer shall employ Officer, and Officer shall
serve Employer, as Executive Vice President, Director of Real Estate, of
Employer and member of the Executive Management Committee. Officer's principal
business address shall during such period be at 

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Employer's principal executive offices in Southern California or in such other
place as with Officer's consent such offices are relocated. Officer's duties
hereunder shall be the usual and customary duties of the office in which he
shall serve, and shall not be inconsistent with the provisions of the charter
documents of Employer (or applicable subsidiary) or applicable law. Officer
shall have such executive power and authority as shall reasonably be required to
enable him to discharge his duties in the office which he may hold. All
compensation paid to Officer by Employer or any of its subsidiaries, and all
benefits and perquisites received by Officer from Employer or any of its
subsidiaries, in accordance with the provisions hereof shall be aggregated in
determining whether Officer has been paid the compensation and received the
benefits and perquisites provided for herein.

          3. Services and Exclusivity of Services. During his employment
             ------------------------------------
hereunder, Officer shall devote his full business time and energy to the
business, affairs and interests of Employer and its subsidiaries, and matters
related thereto, and shall use his best efforts and abilities to promote
Employer's and its subsidiaries' interests. Officer shall 

                                       3
<PAGE>
 
diligently endeavor to promote the business, affairs and interests of Employer
and its subsidiaries and perform services contemplated hereby in accordance with
the policies established by the Board. Officer shall serve without additional
remuneration in such senior executive capacity for one or more (direct or
indirect) subsidiaries of Employer as the Board may from time to time request,
subject to appropriate authorization by the subsidiary or subsidiaries involved
and any limitations under applicable law. Officer's failure to discharge an
order or perform a function because Officer reasonably and in good faith
believes such would violate a law or regulation or be dishonest shall not be
deemed a breach by him of his obligations or duties hereunder and shall not
entitle Employer to terminate Officer's employment hereunder, including without
limitation pursuant to Section 7(c) hereof.

               Officer may serve as a director or in any other capacity of any
business enterprise, including an enterprise whose activities may involve or
relate to the business of the Company, provided that such service is expressly
approved by the Board. Officer may make and manage personal business investments
of his choice and serve in any capacity with any

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civic, educational or charitable organization, or any governmental entity or
trade association, without seeking or obtaining approval by the Board, provided
such activities and service do not materially interfere or conflict with the
performance of his duties hereunder. Employer hereby recognizes and acknowledges
that Officer is, as of the effective date of this Agreement, a shareholder and
member of the board of directors of ConsumersBest.com and that Officer's
interests in and service with such entity shall not themselves constitute a
breach of this Agreement; provided, however, that Employer may determine during
                          --------  -------
the Term that such interests and/or service constitute a conflict of interest
with Employer and, upon making such determination, Employer may require Officer
to resolve such conflict by divesting himself of his interest in, and/or
resigning his directorship of, such entity.

          4.  Salary and Other Benefits.
              -------------------------

          (a) Commencing as of the effective date of this Agreement, Employer
shall pay Officer an annual salary at the rate of $340,000, which shall be
payable in semi-monthly or bi-weekly installments in conformity with Employer's
policy relating to salaried employees.

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<PAGE>
 
          (b) Subject to the provisions of this Section 4, Officer shall also be
entitled during his employment hereunder to all rights and benefits for which he
is otherwise eligible under any bonus plan, stock option plan, stock purchase
plan, participation or extra compensation plan, pension plan, profit-sharing
plan, life and medical insurance policy or other plans or benefits which
Employer or its subsidiaries may provide for him or, provided he is eligible to
participate therein, for senior officers generally or for employees generally
including, without limitation, beginning in December, 1997, participation in the
annual award of stock options to Employer's executive officers, which awards are
subject to the discretion and approval of Employer's compensation committee. In
addition, the Company shall pay the annual premiums and become the irrevocable
beneficiary of the $10,000,000 life insurance policy currently held by Knudsen
Mortgage (as more particularly provided in a separate letter agreement between
Officer and Employer), which policy shall be assignable by the Employer in the
event that the Officer's employment with the Employer is terminated (the
benefits referred to in this para-

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<PAGE>
 
graph may be hereinafter referred to as "Additional Benefits").

          The Board shall review Officer's salary and Additional Benefits then
being paid and provided to him not less frequently than annually in the light of
Officer's services for the preceding period, the responsibilities which attend
his office and duties hereunder, the profitability and progress of Employer and
its subsidiaries and current salaries and benefits then being paid to others
holding similar positions. Following such review, Employer may increase the
salary and/or Additional Benefits, but may not decrease the salary or any of the
Additional Benefits from the then existing levels; provided, however, that
Employer shall have the right to reduce Officer's salary in conjunction with a
pro rata salary reduction applicable to all of Employer's officers and to reduce
one or more Additional Benefits in conjunction with a reduction of such benefits
applicable to all of Employer's officers. Employer shall not single Officer out
and discriminate against Officer in its provisions of benefits to senior
officers or full-time employees of Employer for so long as Officer remains
eligible under the terms of plans from time 

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to time offered by Employer, but this provision shall not require the provision
of any specific benefit to Officer.

          If Officer's employment is terminated hereunder, pursuant to Section 6
hereof or pursuant to Section 7(a), 7(b) or 8 hereof, and Officer is entitled to
but is no longer eligible for Additional Benefits because of such termination,
Officer (or in the event of his death, his designated Beneficiary (as defined in
Section 7(b) hereof)) shall be entitled to and Employer shall provide, to the
extent provided in this Agreement, benefits substantially equivalent to the
Additional Benefits to which Officer was entitled immediately prior to such
termination and shall do so for the period during which he remains entitled to
receive such Additional Benefits as provided in this Agreement.

          (c) For each calendar year during the Term, Officer shall be awarded a
target bonus in an amount equal to sixty percent (60%) of Officer's annual
salary, subject to the terms of the Company's Annual Incentive Compensation Plan
for Executive Officers, as the same may from time to time be amended (the
"Incentive Plan").

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<PAGE>
 
          (d) As of the effective date of this Agreement, Employer shall award
to Officer the following: (i) a nonqualified stock option to purchase 50,000
shares of Common Stock at an exercise price per share equal to the fair market
value per share of Common Stock on the effective date of this Agreement; and
(ii) a sign-on bonus equal to $50,000. The stock option awarded pursuant to this
Section 4(d) shall be awarded in accordance with the terms and conditions of
Employer's 1988 Stock Option and Incentive Plan and the related form of
Nonqualified Stock Option Agreement, attached hereto as Exhibits A and B and
incorporated herein by reference.

          (e) Officer shall participate in Employer's Supplemental Executive
Retirement Plan, as amended (the "SERP"), with normal retirement benefits equal
to sixty percent (60%) of Officer's Average Monthly Compensation (as defined
therein), subject to the terms and conditions of the SERP, as amended.

          (f) This Agreement shall not affect the provisions of any other
compensation, retirement or other benefit program or plan of the Company.

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<PAGE>
 
          5.  Perquisites; Reimbursements; Vacation.
              -------------------------------------

          (a) Commencing as of the effective date of this Agreement, Officer
shall be entitled to perquisites of a kind and quality provided to other
Executive Vice Presidents of Employer.

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<PAGE>
 
          (b) During his employment hereunder, Officer shall be entitled to
vacation in accordance with Employer's standard practice for senior executives
but in no event to less than four (4) weeks paid vacation during each calendar
year of employment, prorated for any period which is less than one calendar
year. Vacation time shall accrue during each calendar year (but at no time shall
the aggregate of accrued but unused vacation time exceed eight (8) weeks), and,
upon termination of his employment for any reason and in addition to any other
rights granted to Officer by this Agreement, Officer shall be entitled to be
paid an amount based upon his salary at the rate applicable immediately prior to
such termination for any accrued but unused vacation time.

          6. Termination By Employer Without "Cause";
             ----------------------------------------

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<PAGE>
 
Termination By Officer. Employer shall have the right, at its election to be
----------------------
made in writing and delivered to Officer within sixty (60) days prior to the
effective date thereof, to terminate Officer's employment hereunder without
"cause" (as defined in Section 7(c) below). Officer shall have the right, at his
election to be made in writing and delivered to Employer within sixty (60) days
after such event, to terminate his employment hereunder if a material breach of
this Agreement by Employer occurs which Employer fails to cure within fifteen
(15) days after receipt of notice of such breach. In the event of a termination
for either of the reasons enumerated in this paragraph, Officer shall be
entitled to the following:

          (a) for the remaining Term, salary at the rate applicable immediately
prior to such election;

          (b) concurrently with the receipt of bonuses by Employer's other
senior executives with respect to the year in which such termination occurs, a
bonus, prorated on an actual day basis for the year in which such termination
occurs if such termination shall occur within the first six (6) months of such
year but otherwise not prorated, in an amount not less than a percentage of
Officer's salary, at the rate of salary 

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applicable immediately prior to such election, equal to the percentage of the
aggregate salaries of the Executive Management Committee members during such
year, other than Officer, Employer's Chief Executive Officer, Employer's Chief
Operating Officer and any Executive Management Committee members whose
employment by Employer is terminated during such year, received in the aggregate
by such members as bonuses.

          (c) for the remaining Term, health and welfare type Additional
Benefits (including without limitation hospital, surgical, major medical, life
and disability insurance), qualified pension benefits (or, if prohibited under
then applicable tax law, a specially designed non-qualified supplemental pension
to provide Officer with benefits equivalent to those to which he would have been
entitled if such prohibition did not pertain) and non-qualified supplemental
pension benefits to which Officer may be entitled pursuant to Section 4 hereof
as the same shall exist immediately prior to such election (including continued
accrual of years of service and age under (1) Employer's Retirement Plan as in
effect immediately prior to such election (or, if prohibited under then
applicable tax law, a specially designed non-qualified supple-

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mental pension to provide Officer with benefits equivalent to those to which he
would have been entitled if such prohibition did not pertain) and (2) the SERP,
but excluding (3) Employer matching contributions under Employer's 401(k) plan
or any successor plan thereto), each such benefit to be continued in a manner no
less favorable to Officer than the benefit to which he was entitled immediately
prior to such election; and

          (d) for a one-year period commencing with the effective date of such
termination, a continuation at Employer's expense of the use of any automobile
provided by Employer immediately prior to such election to facilitate the
performance of Officer's duties and responsibilities hereunder, subject to
Officer's right at any time during such one-year period to purchase such
automobile at the higher of its depreciated book value or its wholesale cash
value.

          Employer agrees that, if Officer's employment with Employer terminates
during the Term, Officer is not required to seek other employment or to attempt
in any way to reduce any amounts payable to Officer by Employer pursuant to
Section 6, 7(a) or 8 hereof. Further, the amount of any payment or benefit
provided for in this Agreement shall not be reduced by 

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any compensation earned by Officer as the result of employment by another
employer, by retirement benefits, by offset against any amount claimed to be
owed by Officer to Employer, or otherwise; provided, however, that Employer's
                                           --------  -------
obligation to provide welfare-type Additional Benefits, including without
limitation hospital, surgical, major medical, life and disability insurance,
shall be reduced to the extent similar benefits are provided (at no cost to
Officer) by a subsequent employer.

          7.  Other Events of Termination. Other than a termination pursuant to
              ---------------------------
Section 6 or 8 hereof, Officer's employment hereunder shall be terminated only
as provided for below in this Section 7:

          (a) Disability. In the event that Officer shall fail, because of
              ----------
illness, injury or similar incapacity ("disability"), to render for six (6)
consecutive calendar months, or for shorter periods aggregating one hundred
thirty (130) or more business days in any twelve (12)-month period, services
contemplated by this Agreement, Officer's employment hereunder may be
terminated, by written notice of termination from Employer to Officer;
thereafter, Employer shall continue, 

                                       15
<PAGE>
 
until Officer's death, or until Officer's sixty-fifth (65th) birthday, whichever
first occurs, but in no event for longer than ten (10) years, to pay
compensation to Officer at a rate and in an amount (payable at the times and in
the manner theretofore applicable to Officer's salary) equal to (i) 50% of the
sum of (A) the rate of annual salary payable to him immediately prior to such
termination and (B) the average annual bonus received by him for services
rendered in the immediately preceding three (3) full calendar years or such
lesser number of full calendar years that Officer has been employed by Employer
(provided, that, in the event Officer incurs such a disability during the first
full year of employment hereunder, such bonus amount shall be Officer's target
bonus under the Annual Incentive Plan), minus (ii) the amount of any cash
payments to which he would have been entitled under the terms of Employer's
disability insurance plan upon the assumption that he had elected the fifty
percent (50%) "normal" benefits under Employer's Plus Pay Plan; to afford all of
the medical, dental and life insurance benefits to which he is entitled pursuant
to Section 4 hereof at the times and in the manner otherwise afforded hereunder;
and to contin-

                                       16
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ue accrual of years of service under Employer's Retirement Plan as in effect at
the time of such disability.

          (b) Death. Officer's employment hereunder shall be terminated upon
              -----
Officer's death. One hundred percent (100%) of Officer's salary at the rate of
such salary in effect immediately prior to Officer's death (or, if Officer's
death occurs while he is receiving payments under Section 7(a) hereof, at the
rate of such salary in effect immediately prior to Officer's disability) shall
be paid until the first anniversary of Officer's death at the times and in the
manner otherwise payable hereunder, to such person or persons as Officer shall
have directed in writing or, in the absence of a designation, to his estate (the
"Beneficiary"). In addition to the Beneficiary's rights hereunder to be paid
Officer's salary, hospital, surgical, major medical and dental benefits to which
members of Officer's family were entitled immediately prior to Officer's death
shall be continued to the same extent after Officer's death until the first
anniversary of Officer's death. This Agreement in all other respects shall
terminate upon the death of Officer.

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<PAGE>
 
          (c) For Cause. Officer's employment hereunder shall be terminated and
              ---------
all of his rights to receive salary, bonus, Additional Benefits (subject to the
terms of any plans relating thereto) and perquisites shall terminate upon the
occurrence of (i) a material breach of this Agreement by Officer, (ii) Officer's
conviction by a court of competent jurisdiction of a felony or (iii) entry of an
order duly issued by the Office of Thrift Supervision removing Officer from the
office of Employer or the Bank or permanently prohibiting him from participating
in the conduct of the affairs of Employer or the Bank. Notwithstanding the
foregoing, Officer's employment hereunder shall not be subject to termination
under subsection (c)(i) hereof without (A) reasonable notice to Officer setting
forth the reasons for Employer's intention to terminate, (B) an opportunity for
Officer to cure any such breach within fifteen (15) days after receipt of such
notice and (C) delivery to Officer of a notice of termination stating that a
majority of the authorized number of Employer's directors has found that Officer
was guilty of the conduct set forth above and specifying the particulars thereof
in detail. If Officer shall be suspended from office and/or temporarily

                                       18
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prohibited from participating in the conduct of Employer's or the Bank's affairs
by any regulatory authority having jurisdiction in the premises, Employer's
obligations shall be automatically suspended, subject to reinstatement in full
if the charges resulting in such suspension or prohibition are finally
dismissed. Such reinstatement shall provide Officer with the salary, other
benefits and perquisites to which he would have been entitled absent such
suspension or prohibition to the same effect and extent as though such
suspension or prohibition had not occurred, including without limitation
reinstatement in full of vesting and years of service accruals, where
applicable, for the suspension period and accrued interest at the rate then
payable on judgments on all amounts thereupon paid to Officer and attributable
to the suspension period.

          In the event of any termination or suspension by Employer pursuant to
any of the provisions of Section 7(a) or 7(c) hereof, Employer shall immediately
so notify Officer.

          8.  Change in Control.
              -----------------

          (a) If there should occur a Change in Control (as defined below), and
if thereafter during the Term, in the 

                                       19
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reasonable good-faith determination of Officer, Employer materially breaches
this Agreement and Employer fails to cure such breach within fifteen (15) days
after receipt of notice thereof, then, Officer, without limitation on any other
rights he may have hereunder, may, within one (1) year after he first has
knowledge of such breach, elect to terminate his employment hereunder and to
treat such termination as a termination pursuant to Section 6 hereof, subject,
however, to the following additional benefits and modifications to Officer's
rights as set forth in said Section 6 (any one or more of which modifications
Officer may elect to waive):

          (i) Employer shall not be entitled to reduce Officer's salary or any
     Additional Benefits to which Officer shall thereafter be entitled.

          (ii) Officer's pro-rata entitlement to an award under any then
     existing long-term incentive performance plan shall be calculated upon the
     assumption that the performance under such plan is then "on plan."

          (iii) In lieu of the severance benefits described in Sections 6(a) and
     (b) hereof, within five (5) business days of the effective date of such
     termination of employ-

                                       20
<PAGE>
 
     ment, Company shall pay to Officer a cash lump sum in an amount equal to
     the product of (A) the sum of (1) Officer's annual base salary in effect
     immediately prior to the termination of Officer's employment (or prior to a
     reduction in salary giving rise to a breach of this Agreement), plus
     (2) the target bonus ("Target Bonus") under the Employer's Annual Incentive
     Plan for Executive Officers (the "Annual Incentive Plan") in respect of the
     year in which such termination of employment occurs or the year in which
     the Change in Control occurs, whichever is greater (provided, however, that
                                                         --------  -------
     if the termination of Officer's employment occurs under the circumstances
     entitling him to benefits under Section 8(e) hereof, the Target Bonus shall
     be in respect of the year in which such termination of employment occurs),
     and (B) the number three.

          (iv) Within five (5) days following such termination of employment,
     Employer shall pay to Officer a lump sum cash amount (the "Pro-Rata Bonus")
     equal to the product of (A) the target bonus to which Officer would have
     been entitled under the Annual Incentive Plan in respect 

                                       21
<PAGE>
 
     of the year in which such termination occurs (assuming for this purpose
     that performance under the Annual Incentive Plan is "on plan" for such
     year) and (B) a fraction, the numerator of which shall be the number of
     months (including fractions thereof) from the first day of the fiscal year
     during which such termination occurs to the date on which such termination
     occurs, and the denominator of which shall be twelve (12); provided,
                                                                --------
     however, that if such termination of employment occurs during the same year
     -------
     in which the Change in Control occurs, the Pro-Rata Bonus shall be offset
     by any payments received under the Annual Incentive Plan in connection with
     such Change in Control.

          (v) The remaining Term shall be deemed to be three (3) years (but in
     no event shall the remaining Term be deemed to extend beyond Officer's
     sixty-fifth (65th) birthday).

          (b) For purposes of this Agreement, a "Change in Control" shall be
deemed to have occurred if the event set forth in any one of the following
paragraphs shall have occurred:

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<PAGE>
 
          (i) any Person (as defined below) is or becomes the Beneficial Owner
     (as defined in Rule 13d-3 under the Securities Exchange Act of 1934 (the
     "Exchange Act")), directly or indirectly, of securities of Employer (not
     including in the securities beneficially owned by such Person any
     securities acquired directly from Employer or its affiliates) representing
     25% or more of either the then outstanding shares of common stock of
     Employer or the combined voting power of Employer's then outstanding
     securities, excluding any Person who becomes such a beneficial owner in
     connection with a transaction described in clause (A) of paragraph (iii)
     below; or

          (ii) the following individuals cease for any reason to constitute a
     majority of the number of directors then serving: individuals who, on
     December 10, 1996, constitute the Board and any new director (other than a
     director whose initial assumption of office is in connection with an actual
     or threatened election contest, including but not limited to a consent
     solicitation, relating to the election of directors of Employer) whose
     appointment or election by the Board or nomination for election by

                                       23
<PAGE>
 
     Employer's stockholders was approved by a vote of at least two-thirds (2/3)
     of the directors then still in office who either were directors on December
     10, 1996, or whose appointment, election or nomination for election was
     previously so approved; or

          (iii) there is consummated a merger or consolidation of Employer with
     any other corporation, other than (A) a merger or consolidation which would
     result in the voting securities of Employer outstanding immediately prior
     to such merger or consolidation continuing to represent (either by
     remaining outstanding or by being converted into voting securities of the
     surviving entity or any parent thereof) at least 60% of the combined voting
     power of the voting securities of Employer or such surviving entity or any
     parent thereof outstanding immediately after such merger or consolidation,
     or (B) a merger or consolidation effected to implement a recapitalization
     of Employer (or similar transaction) in which no Person is or becomes the
     beneficial owner, directly or indirectly, of securities of Employer (not
     including in the securities beneficially owned by such Person any

                                       24
<PAGE>
 
     securities acquired directly from Employer or its subsidiaries)
     representing 25% or more of either the then outstanding shares of common
     stock of Employer or the combined voting power of Employer's then
     outstanding securities; or

          (iv) the stockholders of Employer approve a plan of complete
     liquidation or dissolution of Employer or there is consummated an agreement
     for the sale or disposition by Employer of all or substantially all of
     Employer's assets.

          Notwithstanding the foregoing, a "Change in Control" shall not be
deemed to have occurred by virtue of the consummation of any transaction or
series of integrated transactions immediately following which the record holders
of the common stock of Employer immediately prior to such transaction or series
of transactions continue to have substantially the same proportionate ownership
in an entity which owns all or substantially all of the assets of Employer
immediately following such transaction or series of transactions.

          For purposes of this Section 8(b), "Person" shall have the meaning
given in Section 3(a)(9) of the Exchange Act, 

                                       25
<PAGE>
 
as modified and used in Sections 13(d) and 14(d) thereof, except that such term
shall not include (i) Employer or any of its subsidiaries, (ii) a trustee or
other fiduciary holding securities under an employee benefit plan of Employer or
any of its subsidiaries, (iii) an underwriter temporarily holding securities
pursuant to an offering of such securities, or (iv) a corporation owned,
directly or indirectly, by the stockholders of Employer in substantially the
same proportions as their ownership of stock of Employer.

          (c) Whether or not Officer becomes entitled to severance and other
benefits under Section 8(a) or 8(e) hereof, if any of the payments or benefits
received or to be received by Officer in connection with a Change in Control or
Officer's termination of employment (whether pursuant to the terms of this
Agreement or any other plan, arrangement or agreement with Employer, any Person
whose actions result in a Change in Control or any Person affiliated with
Employer or such Person) (such payments or benefits, excluding the Gross-Up
Payment, being hereinafter referred to as the "Total Payments") will be subject
to the excise tax imposed under Section 4999 of the Code (the "Excise Tax"),
Employer shall pay 

                                       26
<PAGE>
 
to Officer an additional amount (the "Gross-Up Payment") such that the net
amount retained by Officer, after deduction of any Excise Tax on the Total
Payments and any federal, state and local income and employment taxes and Excise
Tax upon the Gross-Up Payment, shall be equal to the Total Payments. For
purposes of determining whether any of the Total Payments will be subject to the
Excise Tax and the amount of such Excise Tax, (A) all of the Total Payments
shall be treated as "parachute payments" (within the meaning of Section
280G(b)(2) of the Code) unless, in the opinion of tax counsel ("Tax Counsel")
reasonably acceptable to Officer and selected by the accounting firm which was,
immediately prior to the Change in Control, Employer's independent auditor (the
"Auditor"), such payments or benefits (in whole or in part) do not constitute
parachute payments, including by reason of Section 280G(b)(4)(A) of the Code,
(B) all "excess parachute payments" within the meaning of Section 280G(b)(l) of
the Code shall be treated as subject to the Excise Tax unless, in the opinion of
Tax Counsel, such excess parachute payments (in whole or in part) represent
reasonable compensation for services actually rendered (within the meaning of
Section 280G(b)(4)(B) of the 

                                       27
<PAGE>
 
Code) in excess of the Base Amount allocable to such reasonable compensation, or
are otherwise not subject to the Excise Tax, and (C) the value of any noncash
benefits or any deferred payment or benefit shall be determined by the Auditor
in accordance with the principles of Sections 280G(d)(3) and (4) of the Code.
For purposes of determining the amount of the Gross-Up Payment, Officer shall be
deemed to pay federal income tax at the highest marginal rate of federal income
taxation in the calendar year in which the Gross-Up Payment is to be made and
state and local income taxes at the highest marginal rate of taxation in the
state and locality of Officer's residence on the date of termination of
employment (or if there is no such date of termination, then the date on which
the Gross-Up Payment is calculated for purposes of this Section 8), net of the
maximum reduction in federal income taxes which could be obtained from deduction
of such state and local taxes. In the event that the Excise Tax is finally
determined to be less than the amount taken into account hereunder in
calculating the Gross-Up Payment, Officer shall repay to Employer, within five
(5) business days following the time that the amount of such reduction in the
Excise Tax is

                                       28
<PAGE>
 
finally determined, the portion of the Gross-Up Payment attributable to such
reduction (plus that portion of the Gross-Up Payment attributable to the Excise
Tax and federal, state and local income and employment taxes imposed on the
Gross-Up Payment being repaid by Officer), to the extent that such repayment
results in a reduction in the Excise Tax and a dollar-for-dollar reduction in
Officer's taxable income and wages for purposes of federal, state and local
income and employment taxes, plus interest on the amount of such repayment at
120% of the rate provided in Section 1274(b)(2)(B) of the Code. In the event
that the Excise Tax is determined to exceed the amount taken into account
hereunder in calculating the Gross-Up Payment (including by reason of any
payment the existence or amount of which cannot be determined at the time of the
Gross-Up Payment), Employer shall make an additional Gross-Up Payment in respect
of such excess (plus any interest, penalties or additions payable by Officer
with respect to such excess) within five (5) business days following the time
that the amount of such excess is finally determined. Officer and Employer shall
each reasonably cooperate with the other in connection with any administrative
or judicial proceedings

                                       29
<PAGE>
 
concerning the existence or amount of liability for Excise Tax with respect to
the Total Payments.

          (d) Notwithstanding Officer's entitlements as set forth in this
Section 8 or any other plan, arrangement or agreement with the Employer, any
Person whose actions result in a Change in Control or any Person affiliated with
the Employer or such Person, if the value of those of such aggregate
entitlements constituting "parachute payments" under Section 28OG of the Code is
less than the maximum amount Officer is entitled to receive without incurring a
liability under Section 28OG of the Code for any reason, including that some or
all of such entitlements constitute reasonable compensation for services
rendered or to be rendered (and do not, therefore, constitute "parachute
payments"), then, in such event, Officer shall be entitled to receive such
maximum amount. All calculations with respect to this Section 8(d) shall be
performed by the Auditor in accordance with the principles set forth in Section
8(c) hereof.

          (e) For purposes of this Agreement, Officer's employment shall be
deemed to have been terminated following a Change in Control in accordance with
Section 8(a) hereof if, 

                                       30
<PAGE>
 
during the pendency of a Potential Change in Control (as defined below) or
within six (6) months following the date on which such Potential Change in
Control ceases to exist (such periods being hereinafter referred to collectively
as the "Potential Change in Control Period"), in either case whether or not a
Change in Control subsequently occurs, (i) Officer's employment is terminated by
Employer without Cause or (ii) in the good-faith determination of Officer,
Employer materially breaches this Agreement and thereafter (whether or not
during the Potential Change in Control Period) fails to cure such breach within
fifteen (15) days after receipt of notice thereof and within one (1) year after
Officer first has knowledge of such breach Officer terminates his employment.

          A "Potential Change in Control" shall be deemed to have occurred if
the event set forth in any one of the following paragraphs shall have occurred:

          (A) Employer enters into an agreement, the consummation of which would
     result in the occurrence of a Change in Control;

                                       31
<PAGE>
 
          (B) Employer or any Person publicly announces an intention to take or
     to consider taking actions which, if consummated, would constitute a Change
     in Control;

          (C) any Person becomes the beneficial owner, directly or indirectly,
     of securities of Employer (not including in the securities beneficially
     owned by such Person any securities acquired directly from Employer or its
     affiliates) representing 15% or more of either the then outstanding shares
     of common stock of Employer or the combined voting power of Employer's then
     outstanding securities;

          (D) the filing with the Office of Thrift Supervision and/or Federal
     Deposit Insurance Corporation or their successor of an application for
     Change in Control; or

          (E) the Board adopts a resolution to the effect that, for purposes of
     this Agreement, a Potential Change in Control has occurred.

                                       32
<PAGE>
 
          (a) Notwithstanding the provisions of Section 11(f) hereof, Employer
also shall pay to Officer all reasonable legal fees and expenses incurred by
Officer in disputing (through litigation or arbitration) in good faith any issue
hereunder relating to the termination (or deemed termination) of Officer's
employment following a Change in Control or in connection with any tax audit or
proceeding to the extent attributable to the application of section 4999 of the
Code to any payment or benefit provided hereunder. Such payments shall be made
within five (5) business days after delivery of Officer's written requests for
payment accompanied with such evidence of fees and expenses incurred as Employer
reasonably may require.

                                       33
<PAGE>
 
          9. Reimbursement of Business Expenses. During Officer's employment
             ----------------------------------
hereunder, to the extent that such expenditures are substantiated by Officer as
required by the policies of Employer, Employer shall reimburse Officer promptly
for all expenditures (including travel, entertainment, parking, business
meetings and the monthly costs (including dues) of maintaining memberships at
appropriate clubs) made in accordance with rules and policies established from
time to time by the Board in pursuance and furtherance of Employer's business
and goodwill.

                                       34
<PAGE>
 
          10. Indemnity. To the extent permitted by applicable law and the
              ---------
By-Laws of Employer (as from time to time in effect) and without in any way
impairing or affecting any rights to indemnification that Officer has by reason
of any agreement to which he is party as of the date hereof, Employer shall
indemnify Officer and hold him harmless for any acts or decisions made by him in
good faith while performing services for Employer, and shall use reasonable
efforts to obtain coverage for him under liability insurance policies now in
force or hereafter obtained during his employment hereunder covering the other
officers or directors of Employer. To the same extent, Employer shall pay all
expenses, including reasonable attorneys' fees and the amounts of court approved
settlements, actually incurred by Officer in connection with the defense of any
action, suit or proceeding, and in connection with any appeal thereon, which has
been and/or may be brought against Officer by reason of Officer's services as an
officer or agent of Employer or of a subsidiary of Employer.

          11. Miscellaneous.
              -------------

                                       35
<PAGE>
 
          (a) Succession. This Agreement shall inure to the benefit of and shall
              ----------
be binding upon Employer, its successors and assigns, but without the prior
written consent of Officer this Agreement may not be assigned other than in
connection with a merger or sale of substantially all the assets of the Company
or similar transaction in which the successor or assignee assumes (whether by
operation of law or express assumption) all obligations of the Company hereunder
(including without limitation those in Section 8 hereof). The obligations and
duties of Officer hereunder shall be personal and not assignable.

          (b) Notices. Any notices provided for in this Agreement shall be sent
              -------
to Employer at 9200 Oakdale Avenue, Chatsworth, California 91311, Attention:
Executive Vice President--Legal, with a copy to the Chairman of the Compensation
Committee of the Board at the same address, or to such other address as Employer
may from time to time in writing designate, and to Officer at such address as he
may from time to time in writing designate (or his business address of record in
the absence of such designation), with a copy to The AYCO Corporation, Suite
840, 2010 Main Street, Irvine, Cali-

                                       36
<PAGE>
 
fornia 92714-7213, Attention: Bradley E. Comp. All notices shall be deemed to
have been given two (2) business days after they have been deposited as
certified mail, return receipt requested, postage paid, or one (1) business day
after they have been deposited as overnight mail, in either event properly
addressed to the designated address of the party to receive the notice, or shall
be deemed to have been given at the time receipt is acknowledged if given by any
form of electronic communication.

          (c) Entire Agreement. This instrument contains the entire agreement of
              ----------------
the parties relating to the subject matter hereof, and it replaces and
supersedes any prior agreements between the parties relating to said subject
matter. No modifications of this Agreement shall be valid unless made in writing
and signed by the parties hereto.

          (d) Waiver. The waiver of the breach of any term or of any condition
              ------
of this Agreement shall not be deemed to constitute the waiver of any other
breach of the same or any other term or condition.

                                       37
<PAGE>
 
          (e) California Law. This Agreement shall be construed and interpreted
              --------------
in accordance with the laws of California, to the extent controllable by
stipulation of the parties.

          (f) Attorneys' Fees in Action on Contract. If any litigation or
              -------------------------------------
arbitration shall occur between the Officer and Employer, which litigation or
arbitration arises out of or as a result of this Agreement or the acts of the
parties hereto pursuant to this Agreement, or which seeks an interpretation of
this Agreement, the prevailing party in such litigation or arbitration, in
addition to any other judgment or award, shall be entitled to receive such sums
as the court or arbitrator(s) hearing the matter shall find to be reasonable as
and for the attorneys' fees of the prevailing party.

          (g) Confidentiality and Competition. Officer shall not divulge or
              -------------------------------
otherwise disclose, directly or indirectly, any trade secret or other
confidential information concerning the business or policies of the Company or
any of its affiliates which he may have learned as a result of his employment
hereunder or prior thereto as an employee, officer or director of the Company or
any of its affiliates, except to the extent such use or disclosure is (i)
necessary to the performance of 

                                       38
<PAGE>
 
this Agreement and in furtherance of the Company's best interests, (ii) required
by applicable law, (iii) lawfully obtainable from other sources or (iv)
authorized by the Company. The provisions of this subsection shall survive the
suspension or termination, for any reason, of Officer's employment hereunder.

          During the course of Officer's employment hereunder, Officer shall not
compete, directly or indirectly, with the Company in the businesses then
conducted by the Company.

          (h) Remedies of Employer. Officer acknowledges that the services he is
              --------------------
obligated to render under the provisions of this Agreement are of a special,
unique, unusual, extraordinary and intellectual character, which gives this
Agreement peculiar value to Employer, and that the loss of these services cannot
be reasonably or adequately compensated in damages in an action at law and it
would be difficult (if not impossible) to replace such services. By reason
thereof, if Officer violates any of the material provisions of this Agreement,
Employer, in addition to any other rights and remedies available under this
Agreement or under applicable law, shall be entitled to seek injunctive relief,
from a 

                                       39
<PAGE>
 
tribunal of competent jurisdiction, restraining Officer from committing or
continuing any violation of this Agreement, or from the performance of services
to any other business entity, or both.

          (i) Severability. If this Agreement shall for any reason be or become
              ------------
unenforceable by either party, this Agreement shall thereupon terminate and
become unenforceable by the other party as well. In all other respects, if any
provision of this Agreement is held invalid or unenforceable, the remainder of
this Agreement shall nevertheless remain in full force and effect, and, if any
provision is held invalid or unenforceable with respect to particular
circumstances, it shall nevertheless remain in full force and effect in all
other circumstances.

                                       40
<PAGE>
 
          IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first above written.

                                                 OFFICER


                                                 /s/ Ray W. Sims
                                                 ---------------
     APPROVED:


     By: /s/ Willis B. Wood, Jr.
         -----------------------
     Chairman, Compensation
     Committee of the Board
     of Directors

                                       41