FIRST ALLIANCE CORP /DE/
SC 13D/A, 1999-12-10
ASSET-BACKED SECURITIES
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                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                          -----------------------------
                                  SCHEDULE 13D
                                 (Rule 13d-101)

                    UNDER THE SECURITIES EXCHANGE ACT OF 1934
                    -----------------------------------------

                               (AMENDMENT NO. 3)*

                           First Alliance Corporation
- --------------------------------------------------------------------------------
                                (Name of Issuer)

                              Class A Common Stock
- --------------------------------------------------------------------------------
                         (Title of Class of Securities)

                                    317936102
- --------------------------------------------------------------------------------
                                 (CUSIP Number)

       Brian Chisick, First Alliance Corporation, 17305 Von Karman Avenue,
                        Irvine, CA 92614 (949) 224-8500
- --------------------------------------------------------------------------------
           (Name, Address and Telephone Number of Person Authorized to
                      Receive Notices and Communications)

                                    11/30/99
- --------------------------------------------------------------------------------
             (Date of Event which Requires Filing of this Statement)

If the filing person has previously filed a statement on Schedule 13G to report
the acquisition that is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box
[  ]


NOTE: Schedules filed in paper format shall include a signed original and five
copies of the schedule, including all exhibits. See Rule 13d-7(b) for other
parties to whom copies are to be sent.

                         (Continued on following pages)

                               (Page 1 of 9 Pages)

- ---------------------------
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.

The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 (the "Act") or otherwise subject to the liabilities of that section of the
Act but shall be subject to all other provisions of the Act (however, SEE the
NOTES).

<PAGE>

CUSIP No. 317936102                    13D                     Page 2 of 9 Pages


________________________________________________________________________________
1    NAME OF REPORTING PERSON
     I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)


     Brian Chisick
________________________________________________________________________________
2    CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
                                                                 (a)  [_]
                                                                 (b)  [X]

________________________________________________________________________________
3    SEC USE ONLY



________________________________________________________________________________
4    SOURCE OF FUNDS*


     PF,OO
________________________________________________________________________________
5    CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
     PURSUANT TO ITEMS 2(d) OR 2(e)                                   [_]


     Not Applicable
________________________________________________________________________________
6    CITIZENSHIP OR PLACE OF ORGANIZATION


     United States
________________________________________________________________________________
               7    SOLE VOTING POWER

  NUMBER OF
                    8,523,358 shares of Class A Common Stock
   SHARES      _________________________________________________________________
               8    SHARED VOTING POWER
BENEFICIALLY

  OWNED BY          3,957,030 shares of Class A Common Stock
               _________________________________________________________________
    EACH       9    SOLE DISPOSITIVE POWER

  REPORTING
                    8,523,358 shares of Class A Common Stock
   PERSON      _________________________________________________________________
               10   SHARED DISPOSITIVE POWER
    WITH

                    3,957,030 shares of Class A Common Stock
________________________________________________________________________________
11   AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON


     12,480,388 shares of Class A Common Stock
________________________________________________________________________________
12   CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*

                                                                      [_]

________________________________________________________________________________
13   PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)


     69.53%
________________________________________________________________________________
14   TYPE OF REPORTING PERSON*


     IN
________________________________________________________________________________
                     *SEE INSTRUCTIONS BEFORE FILLING OUT!

<PAGE>

CUSIP No. 317936102                    13D                     Page 3 of 9 Pages

________________________________________________________________________________
1    NAME OF REPORTING PERSON
     I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)


     Sarah Chisick
________________________________________________________________________________
2    CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP*
                                                                 (a)  [_]
                                                                 (b)  [X]

________________________________________________________________________________
3    SEC USE ONLY



________________________________________________________________________________
4    SOURCE OF FUNDS*


     PF,OO
________________________________________________________________________________
5    CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
     PURSUANT TO ITEMS 2(d) OR 2(e)                                   [_]


     Not Applicable
________________________________________________________________________________
6    CITIZENSHIP OR PLACE OF ORGANIZATION


     United States
________________________________________________________________________________
               7    SOLE VOTING POWER

  NUMBER OF
                    Not Applicable
   SHARES      _________________________________________________________________
               8    SHARED VOTING POWER
BENEFICIALLY

  OWNED BY          3,957,030 shares of Class A Common Stock
               _________________________________________________________________
    EACH       9    SOLE DISPOSITIVE POWER

  REPORTING
                    Not Applicable
   PERSON      _________________________________________________________________
               10   SHARED DISPOSITIVE POWER
    WITH

                    3,957,030 shares of Class A Common Stock
________________________________________________________________________________
11   AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON


     3,957,030 shares of Class A Common Stock
________________________________________________________________________________
12   CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES*

                                                                      [_]

________________________________________________________________________________
13   PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)


     22.04%
________________________________________________________________________________
14   TYPE OF REPORTING PERSON*


     IN
________________________________________________________________________________
                     *SEE INSTRUCTIONS BEFORE FILLING OUT!

<PAGE>

                                 AMENDMENT NO. 3
                                 TO SCHEDULE 13D
                          FILED PURSUANT TO RULE 13d-2
                      OF THE GENERAL RULES AND REGULATIONS
              UNDER THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED


                  The undersigned hereby amend the Schedule 13D heretofore filed
by them, as amended through the date hereof.

         ITEM 1.  SECURITY AND ISSUER.

                   This statement relates to shares of the Class A Common Stock,
$.01 par value per share (the "Class A Common Stock"), of First Alliance
Corporation, a Delaware corporation (the "Company"), whose principal executive
offices are located at 17305 Von Karman Avenue, Irvine, California 92614.

         ITEM 2.  IDENTITY AND BACKGROUND.

         I.       Brian Chisick.

                  (a) The name of the person filing this statement is Brian
Chisick.

                  (b) The business address of Mr. Chisick is 17305 Von Karman
Avenue, Irvine, CA 92614.

                  (c) The principal occupation of Mr. Chisick is Chief Executive
Officer and President of the Company. The principal business of the Company is
mortgage lending. The principal address of the Company is stated above in Item
1.

                  (d) Mr. Chisick has not been convicted in a criminal
proceeding during the last five years.

                  (e) During the last five years, Mr. Chisick has not been a
party to a civil proceeding of a judicial or administrative body of competent
jurisdiction resulting in a judgment, decree, or final order enjoining future
violations of, or prohibiting or mandating activities subject to, Federal or
State securities laws or finding any violations with respect to such laws.

                  (f) Mr. Chisick is a citizen of the United States.

         II.      Sarah Chisick.

                  (a) The name of the other person filing this statement is
Sarah Chisick. Mr. and Mrs. Chisick are husband and wife.

                                     4 of 9
<PAGE>

                  (b) The business address of Mrs. Chisick is 17305 Von Karman
Avenue, Irvine, CA 92614.

                  (c) The principal occupation of Mrs. Chisick is none.

                  (d) Mrs. Chisick has not been convicted in a criminal
proceeding during the last five years.

                  (e) During the last five years, Mrs. Chisick has not been a
party to a civil proceeding of a judicial or administrative body of competent
jurisdiction resulting in a judgment, decree, or final order enjoining future
violations of, or prohibiting or mandating activities subject to, Federal or
State securities laws or finding any violations with respect to such laws.

                  (f) Mrs. Chisick is a citizen of the United States.

         ITEM 3.  SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.

                  During September, 1998, Brian and Sarah Chisick, as
co-trustees of the Brian and Sarah Chisick Revocable Estate Trust U/A/D March 7,
1979 (the "Trust") purchased on the open market, using Trust Funds, an aggregate
of 36,200 shares of the Company's Class A Common Stock, for an aggregate
purchase price of $238,887.50 (or a weighted average price of approximately
$6.60 per share).

                  During May, 1999, the Trust purchased on the open market,
using Trust Funds, an aggregate of 161,200 shares of the Company's Class A
Common Stock, for an aggregate purchase price of $655,165.93 (or a weighted
average price of approximately $4.06 per share).

                  During August, 1999, the Trust purchased on the open market,
using Trust Funds, an aggregate of 124,000 shares of the Company's Class A
Common Stock, for an aggregate purchase price of $421,392.80 (or a weighted
average price of approximately $3.40 per share).

                  During November, 1999, the Trust purchased on the open market,
using Trust funds, an aggregate of 167,800 shares of the Company's Class A
Common Stock, for an aggregate purchase price of $375,118.40 (or a weighted
average price of approximately $2.24 per share).

                  No funds used in making any of such purchases were borrowed.

         ITEM 4.  PURPOSE OF TRANSACTION.

         The shares of the Class A Common Stock of the Company have been
acquired by Brian and Sarah Chisick (the "Chisicks") for investment purposes.
Depending upon market price, availability, and other factors deemed relevant,
the Chisicks may from time to time purchase additional shares of the Class A
Common Stock in the open market, in privately negotiated transactions, or
otherwise. In addition, depending upon market price and other factors deemed

                                     5 of 9
<PAGE>

relevant, the Chisicks may from time to time seek to sell shares of the Class A
Common Stock in the open market, in privately negotiated transactions, or
otherwise. The Chisicks reserve the right to increase or decrease their
beneficial ownership of the Class A Common Stock on such terms and at such times
as they may decide. The Chisicks reserve the right to cease purchasing or
selling shares of the Class A Common Stock at any time.

         In the ordinary course of the Company's business, Brian Chisick in his
capacity as Chief Executive Officer and President of the Company, and Sarah
Chisick may from time to time consider and discuss with other Company officers
and directors one or more of the actions enumerated below in this item.

         At present and except as disclosed herein, the Chisicks do not have any
plans or proposals that relate to or would result in:

         (a)      the acquisition by any person of additional securities of the
                  Company, or the disposition of securities of the Company;

         (b)      an extraordinary corporate transaction, such as a merger,
                  reorganization or liquidation, involving the Company or any of
                  its subsidiaries;

         (c)      a sale or transfer of a material amount of assets of the
                  Company or of any of its subsidiaries;

         (d)      any change in the present board of directors or management of
                  the Company, including any plans or proposals to change the
                  number or term of directors or to fill any existing vacancies
                  on the board;

         (e)      any material change in the present capitalization or dividend
                  policy of the Company;

         (f)      any other material change in the Company's business or
                  corporate structure;

         (g)      changes in the Company's charter, by-laws or instruments
                  corresponding thereto or other actions which may impede the
                  acquisition of control of the Company by any person;

         (h)      causing a class of securities of the Company to be delisted
                  from a national securities exchange or to cease to be
                  authorized to be quoted in an inter-dealer quotation system of
                  a registered national securities association;

         (i)      a class of equity securities of the Company becoming eligible
                  for termination of registration pursuant to Section 12(g)(4)
                  of the Act; or

         (j)      any action similar to any of those enumerated above.

                                     6 of 9
<PAGE>

         The Chisicks reserve the right to continue to explore all options
available to them with respect to the actions enumerated above in this Item. The
Chisicks may at any time review or reconsider their position regarding the
Company and may in the future, formulate plans that relate to or would result in
one or more of the actions enumerated above in this Item.


         ITEM 5.  INTEREST IN SECURITIES OF THE ISSUER.

         I.       Brian Chisick.

                  (a) As of November 30, 1999, Mr. Chisick beneficially owned an
         aggregate of 12,480,388 shares of Class A Common Stock (the "Aggregate
         Shares"), representing 69.53% of the outstanding shares of Class A
         Common Stock. Under Rule 13d-3(d), Mr. Chisick is deemed to be the
         beneficial owner of 88,521 shares of Class A Common Stock (the "Vested
         Shares") which Mr. Chisick has the right to acquire as of November 30,
         1999 (or within 60 days thereafter), pursuant to the stock options
         described below in Item 6. The Vested Shares are included in the
         Aggregate Shares. The calculation of such percentage is based on
         17,949,288 shares of Class A Common Stock which were outstanding as of
         November 30, 1999, plus the Vested Shares which are deemed to be
         outstanding for the purpose of such calculation.

                  (b) As of November 30, 1999, Mr. Chisick has sole voting and
         dispositive power over 8,523,358 shares of Class A Common Stock
         (including the Vested Shares) and shares voting and dispositive power
         over 3,957,030 shares of Class A Common Stock with Mrs. Chisick.

                  (c) The information provided above in Item 3 is incorporated
         herein by this reference.

                  (d) No person other than Mr. and Mrs. Chisick is known to have
         the right to receive or the power to direct the receipt of dividends
         from, or the proceeds from the sale of, such shares.

                  (e) Not applicable.

         II.      Sarah Chisick.

                  (a) As of November 30, 1999, Mrs. Chisick beneficially owned
         an aggregate of 3,957,030 shares of Class A Common stock, representing
         22.04% of the outstanding shares of Class A Common Stock. The
         calculation of such percentage is based on 17,949,288 shares of Class A
         Common Stock which were outstanding as of November 30, 1999.

                  (b) As of November 30, 1999, Mrs. Chisick shares voting and
         dispositive power over all such shares of Class A Common Stock with Mr.
         Chisick.

                                     7 of 9
<PAGE>

                  (c) The information provided above in Item 3 is incorporated
         herein by this reference.

                  (d) No person other than Mr. and Mrs. Chisick is known to have
         the right to receive or the power to direct the receipt of dividends
         from, or the proceeds from the sale of, such shares.

                  (e) Not applicable.

         ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH
RESPECT TO SECURITIES OF THE ISSUER.

                  Pursuant to the Company's 1996 Stock Incentive Plan, the
Company has granted to Mr. Chisick the following stock options (the "Stock
Options"): (1) on January 27, 1998, a Non-Qualified ("NQ") Stock Option to
purchase 100,000 shares of the Company's Class A Common Stock at an exercise
price of $13.06 per share, which as of November 30, 1999, was exercisable with
respect to 50,000 shares; (2) on December 4, 1998, an Incentive Stock Option
("ISO") to purchase 54,085 shares of the Company's Class A Common Stock at an
exercise price of $4.4375 per share, which as of November 30, 1999, was
exercisable with respect to 13,521 shares; (3) on April 27, 1999, an ISO to
purchase 44,135 shares of the Company's Class A Common Stock at an exercise
price of $3.625 per share, which as of November 30, 1999, was exercisable with
respect to 11,034 shares; and (4) on April 27, 1999, a NQ Stock Option to
purchase 55,865 shares of the Company's Class A Common Stock at an exercise
price of $3.625 per share, which as of November 30, 1999, was exercisable with
respect to 13,966 shares. The Stock Options cover options to purchase an
aggregate of 254,085 shares of the Company's Class A Common Stock and, as of
November 30, 1999, are exercisable with respect to an aggregate of 88,521 shares
(i.e., the Vested Shares). Copies of the 1996 Stock Incentive Plan and the stock
option notices relating to the Stock Options have been filed as Exhibits hereto
and are incorporated herein by this reference.

                  Except as described herein, there are no contracts,
arrangements, understandings, or relationships among the persons named in Item 2
or between such persons and any other person with respect to any securities of
the Company.

         ITEM 7.  MATERIAL TO BE FILED AS EXHIBITS.

                  Exhibit 1. 1996 Stock Incentive Plan (incorporated by
reference to Exhibit 4.1 to the Company's Registration Statement of Form S-1,
Commission File No. 333-3363).

                  Exhibit 2. Non-Qualified Stock Option Notice, dated January
27, 1998, executed by the Company in favor of Brian Chisick, covering 100,000
shares (filed herewith).

                  Exhibit 3. Incentive Stock Option Notice, dated December 4,
1998, executed by the company in favor of Brian Chisick, covering 54,085 shares
(filed herewith).

                                     8 of 9
<PAGE>

                  Exhibit 4. Incentive Stock Option Notice, dated April 27,
1999, executed by the Company in favor of Brian Chisick, covering 44,135 shares
(filed herewith).

                  Exhibit 5. Non-Qualified Stock Option Notice, dated April 27,
1999, executed by the Company in favor of Brian Chisick, covering 55,865 shares
(filed herewith).



                                   SIGNATURES

         After reasonable inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.

Date:  November 30, 1999



                                                     /s/ Brian Chisick
                                                     ---------------------------
                                                     Brian Chisick


Date:  November 30, 1999



                                                     /s/ Sarah Chisick
                                                     ---------------------------
                                                     Sarah Chisick


                                     9 of 9



                                                                       EXHIBIT 2


                            1996 Stock Incentive Plan
                            -------------------------

                              EXPLORE YOUR OPTIONS


Option to Purchase:  ONE HUNDRED THOUSAND SHARES
- -------------------  ---------------------------


Granted to: BRIAN CHISICK
- -------------------------



This stock option grant has been executed as of January 27, 1998 on behalf of
First Alliance Corporation at the option price of $13.06.




          [First Alliance
           Corporation                    /S/ Brian Chisick
               Logo]                      -------------------------------------
                                          Brian Chisick
                                          President and Chief Executive Officer



  THIS IS NOT A STOCK CERTIFICATE OR A NEGOTIABLE INSTRUMENT. NON-TRANSFERABLE.

<PAGE>

                                                                       EXHIBIT 2

                            1996 Stock Incentive Plan
                        NON-QUALIFIED STOCK OPTION NOTICE

Optioneee:                          Brian Chisick
Grant Date:                         January 27, 1998
Shares Granted:                     100,000
Stock Option Price:                 $13.06
Last Date to Exercise:              01/26/2008

We are pleased to inform you that the Compensation Committee of the Board has
granted you an option to purchase First Alliance Corporation common stock. Your
grant has been made under the Company's 1996 Stock Incentive Plan (the "Plan"),
which together with the terms contained in this Notice, sets forth the terms and
conditions of your grant and is incorporated herein by reference. A copy of the
Plan is attached. Please review it carefully.

Vesting:
Subject to the terms of the Plan, shares vest according to the following vesting
schedule:

<TABLE>
<CAPTION>

                         SHARES VESTING OVER      VESTING IN PERIOD
     DATE OF VEST             THE PERIOD               OCCURS          LAST DATE TO EXERCISE
- ----------------------- ----------------------- ---------------------- ----------------------

      <S>                     <C>                   <C>                     <C>
      07/27/1998              25,000.00             End of period           01/26/2008
      07/27/1999              25,000.00             End of period           01/26/2008
      07/27/2000              25,000.00             End of period           01/26/2008
      07/27/2001              25,000.00             End of period           01/26/2008

</TABLE>


Exercise:
You may exercise this Option, in whole or in part, to purchase a whole number of
vested shares at any time, by following the exercise procedures set up by the
Company. All exercises must take place before the Last Date to Exercise, or such
earlier date as is set out in the Plan following your death, disability or your
ceasing to be an employee. The number of shares you may purchase as of any date
cannot exceed the total number of shares vested by that date, less any shares
you have previously acquired by exercising this Option.

Employment Requirements:
The Plan sets out the terms and conditions that govern this grant in the event
of your termination of employment, death or disability. In the event of your
termination of employment, including total disability or death, all further
vesting of shares under this grant stops. As set out in Plan, you will have 90
Days after your employment ceases or is suspended to exercise your vested
options, and in the event of your total disability or death, you or your estate
will have a period of 1 Year to exercise any vested options.

Taxes and Withholding:
This option is not intended to be an Incentive Stock Option, as defined under
Section 422(b) of the Internal Revenue Code. Any exercise of this option is
normally a taxable event, and if the Company determines that any federal, state,
local or foreign tax or withholding payment is required relating to the exercise
or sale of shares arising from this grant, the Company shall have the right to
require such payments from you, or withhold such amounts from other payments due
to you from the Company.



                                                                       EXHIBIT 3

                            1996 Stock Incentive Plan
                            -------------------------

                              EXPLORE YOUR OPTIONS


Option to Purchase:  FIFTY FOUR THOUSAND EIGHTY FIVE SHARES
- -------------------  --------------------------------------


Granted to: BRIAN CHISICK
- -------------------------



This stock option grant has been executed as of December 4, 1998 on behalf of
First Alliance Corporation at the option price of $4.4375.



          [First Alliance
           Corporation                    /S/ Brian Chisick
               Logo]                      -------------------------------------
                                          Brian Chisick
                                          President and Chief Executive Officer




  THIS IS NOT A STOCK CERTIFICATE OR A NEGOTIABLE INSTRUMENT. NON-TRANSFERABLE.

<PAGE>

                                                                       EXHIBIT 3

                            1996 Stock Incentive Plan
                          INCENTIVE STOCK OPTION NOTICE

Optioneee:                          Brian Chisick
Grant Date:                         December 4, 1998
Shares Granted:                     54,085
Stock Option Price:                 $4.4375
Last Date to Exercise:              12/03/2008

We are pleased to inform you that the Compensation Committee of the Board has
granted you an option to purchase First Alliance Corporation common stock. Your
grant has been made under the Company's 1996 Stock Incentive Plan (the "Plan"),
which together with the terms contained in this Notice, sets forth the terms and
conditions of your grant and is incorporated herein by reference. A copy of the
Plan is attached. Please review it carefully.

Vesting:
Subject to the terms of the Plan, shares vest according to the following vesting
schedule:
<TABLE>
<CAPTION>

                         SHARES VESTING OVER      VESTING IN PERIOD
     DATE OF VEST             THE PERIOD               OCCURS          LAST DATE TO EXERCISE
- ----------------------- ----------------------- ---------------------- ----------------------

      <S>                     <C>                   <C>                     <C>
      06/04/1999              13,521.00             End of period           12/03/2008
      06/04/2000              13,521.00             End of period           12/03/2008
      06/04/2001              13,521.00             End of period           12/03/2008
      06/04/2002              13,522.00             End of period           12/03/2008

</TABLE>

Exercise:
You may exercise this Option, in whole or in part, to purchase a whole number of
vested shares at any time, by following the exercise procedures set up by the
Company. All exercises must take place before the Last Date to Exercise, or such
earlier date as is set out in the Plan following your death, disability or your
ceasing to be an employee. The number of shares you may purchase as of any date
cannot exceed the total number of shares vested by that date, less any shares
you have previously acquired by exercising this Option.

Employment Requirements:
The Plan sets out the terms and conditions that govern this grant in the event
of your termination of employment, death or disability. In the event of your
termination of employment, including total disability or death, all further
vesting of shares under this grant stops. As set out in Plan, you will have 90
Days after your employment ceases or is suspended to exercise your vested
options, and in the event of your total disability or death, you or your estate
will have a period of 1 Year to exercise any vested options.

Taxes, Withholding and Disposition of Stock:
This option is intended to be an Incentive Stock Option, as defined under
Section 422(b) of the Internal Revenue Code. In the event that the Company
determines that any federal, state, local or foreign tax or withholding payment
is required relating to the exercise or sale of shares arising from this grant,
the Company shall have the right to require such payments from you, or withhold
such amounts from other payments due to you from the Company. You agree to
notify the Company when you sell or otherwise transfer or dispose of the shares
acquired by exercising this Option.



                                                                       EXHIBIT 4

                            1996 Stock Incentive Plan
                            -------------------------

                              EXPLORE YOUR OPTIONS


Option to Purchase:  FORTY FOUR THOUSAND ONE HUNDRED THIRTY FIVE SHARES
- -------------------  --------------------------------------------------


Granted to: BRIAN CHISICK
- -------------------------



This stock option grant has been executed as of April 27, 1999 on behalf of
First Alliance Corporation at the option price of $3.625.




          [First Alliance
           Corporation                    /S/ Brian Chisick
               Logo]                      -------------------------------------
                                          Brian Chisick
                                          President and Chief Executive Officer




  THIS IS NOT A STOCK CERTIFICATE OR A NEGOTIABLE INSTRUMENT. NON-TRANSFERABLE.

<PAGE>

                                                                       EXHIBIT 4

                            1996 Stock Incentive Plan
                          INCENTIVE STOCK OPTION NOTICE

Optioneee:                          Brian Chisick
Grant Date:                         April 27, 1999
Shares Granted:                     44,135
Stock Option Price:                 $3.625
Last Date to Exercise:              04/26/2009

We are pleased to inform you that the Compensation Committee of the Board has
granted you an option to purchase First Alliance Corporation common stock. Your
grant has been made under the Company's 1996 Stock Incentive Plan (the "Plan"),
which together with the terms contained in this Notice, sets forth the terms and
conditions of your grant and is incorporated herein by reference. A copy of the
Plan is attached. Please review it carefully.

Vesting:
Subject to the terms of the Plan, shares vest according to the following vesting
schedule:

<TABLE>
<CAPTION>

                         SHARES VESTING OVER      VESTING IN PERIOD
     DATE OF VEST             THE PERIOD               OCCURS          LAST DATE TO EXERCISE
- ----------------------- ----------------------- ---------------------- ----------------------

      <S>                     <C>                   <C>                     <C>
      10/27/1999              11,034.00             End of period           04/26/2009
      10/27/2000              11,034.00             End of period           04/26/2009
      10/27/2001              11,034.00             End of period           04/26/2009
      10/27/2002              11,033.00             End of period           04/26/2009
</TABLE>


Exercise:
You may exercise this Option, in whole or in part, to purchase a whole number of
vested shares at any time, by following the exercise procedures set up by the
Company. All exercises must take place before the Last Date to Exercise, or such
earlier date as is set out in the Plan following your death, disability or your
ceasing to be an employee. The number of shares you may purchase as of any date
cannot exceed the total number of shares vested by that date, less any shares
you have previously acquired by exercising this Option.

Employment Requirements:
The Plan sets out the terms and conditions that govern this grant in the event
of your termination of employment, death or disability. In the event of your
termination of employment, including total disability or death, all further
vesting of shares under this grant stops. As set out in Plan, you will have 90
Days after your employment ceases or is suspended to exercise your vested
options, and in the event of your total disability or death, you or your estate
will have a period of 1 Year to exercise any vested options.

Taxes, Withholding and Disposition of Stock:
This option is intended to be an Incentive Stock Option, as defined under
Section 422(b) of the Internal Revenue Code. In the event that the Company
determines that any federal, state, local or foreign tax or withholding payment
is required relating to the exercise or sale of shares arising from this grant,
the Company shall have the right to require such payments from you, or withhold
such amounts from other payments due to you from the Company. You agree to
notify the Company when you sell or otherwise transfer or dispose of the shares
acquired by exercising this Option.



                                                                       EXHIBIT 5

                            1996 Stock Incentive Plan
                            -------------------------

                              EXPLORE YOUR OPTIONS


Option to Purchase:  FIFTY FIVE THOUSAND EIGHT HUNDRED SIXTY FIVE SHARES
- -------------------  ---------------------------------------------------


Granted to: BRIAN CHISICK
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This stock option grant has been executed as of April 27, 1999 on behalf of
First Alliance Corporation at the option price of $3.625.



          [First Alliance
           Corporation                    /S/ Brian Chisick
               Logo]                      -------------------------------------
                                          Brian Chisick
                                          President and Chief Executive Officer




  THIS IS NOT A STOCK CERTIFICATE OR A NEGOTIABLE INSTRUMENT. NON-TRANSFERABLE.

<PAGE>

                                                                       EXHIBIT 5

                            1996 Stock Incentive Plan
                        NON-QUALIFIED STOCK OPTION NOTICE

Optioneee:                          Brian Chisick
Grant Date:                         April 27, 1999
Shares Granted:                     55,865
Stock Option Price:                 $3.625
Last Date to Exercise:              04/26/2009

We are pleased to inform you that the Compensation Committee of the Board has
granted you an option to purchase First Alliance Corporation common stock. Your
grant has been made under the Company's 1996 Stock Incentive Plan (the "Plan"),
which together with the terms contained in this Notice, sets forth the terms and
conditions of your grant and is incorporated herein by reference. A copy of the
Plan is attached. Please review it carefully.

Vesting:
Subject to the terms of the Plan, shares vest according to the following vesting
schedule:

<TABLE>
<CAPTION>

                         SHARES VESTING OVER      VESTING IN PERIOD
     DATE OF VEST             THE PERIOD               OCCURS          LAST DATE TO EXERCISE
- ----------------------- ----------------------- ---------------------- ----------------------

      <S>                     <C>                   <C>                     <C>
      10/27/1999              13,966.00             End of period           04/26/2009
      10/27/2000              13,966.00             End of period           04/26/2009
      10/27/2001              13,966.00             End of period           04/26/2009
      10/27/2002              13,967.00             End of period           04/26/2009

</TABLE>

Exercise:
You may exercise this Option, in whole or in part, to purchase a whole number of
vested shares at any time, by following the exercise procedures set up by the
Company. All exercises must take place before the Last Date to Exercise, or such
earlier date as is set out in the Plan following your death, disability or your
ceasing to be an employee. The number of shares you may purchase as of any date
cannot exceed the total number of shares vested by that date, less any shares
you have previously acquired by exercising this Option.

Employment Requirements:
The Plan sets out the terms and conditions that govern this grant in the event
of your termination of employment, death or disability. In the event of your
termination of employment, including total disability or death, all further
vesting of shares under this grant stops. As set out in Plan, you will have 90
Days after your employment ceases or is suspended to exercise your vested
options, and in the event of your total disability or death, you or your estate
will have a period of 1 Year to exercise any vested options.

Taxes and Withholding:
This option is not intended to be an Incentive Stock Option, as defined under
Section 422(b) of the Internal Revenue Code. Any exercise of this option is
normally a taxable event, and if the Company determines that any federal, state,
local or foreign tax or withholding payment is required relating to the exercise
or sale of shares arising from this grant, the Company shall have the right to
require such payments from you, or withhold such amounts from other payments due
to you from the Company.




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