<PAGE> 1
File No. 33-
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
____________
HAWTHORNE FINANCIAL CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
____________
DELAWARE 95-2085671
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NUMBER)
2381 ROSECRANS AVENUE 90245
EL SEGUNDO, CALIFORNIA (ZIP CODE)
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:
(310) 725-5000
____________
HAWTHORNE FINANCIAL CORPORATION
EMPLOYEE STOCK OPTION PLAN
(FULL TITLE OF THE PLAN)
____________
AGENT FOR SERVICE: COPIES TO:
JAMES D. SAGE JAMES R. WALTHER, ESQ.
GENERAL COUNSEL MAYER, BROWN & PLATT
HAWTHORNE FINANCIAL CORPORATION 350 SOUTH GRAND AVENUE, 25TH FLOOR
2381 ROSECRANS AVENUE LOS ANGELES, CALIFORNIA 90071-1503
EL SEGUNDO, CALIFORNIA 90245 (213) 229-9597
(310) 725-5000
____________
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
==============================================================================================================
Title of Securities to be Amount Proposed Proposed Amount of
Registered to be Maximum Maximum Registration Fee
Registered Offering Price Aggregate
Per Share * Offering Price *
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $0.01
par value..................... 300,000 $10.75 $3,225,000 $977.18
Shares
==============================================================================================================
</TABLE>
* Estimated solely for the purpose of computing the registration fee
(pursuant to Rule 457(h) of the regulations under the Securities Act
of 1993, as amended) on the basis of the average of the high and low
prices for the common stock ("Common Stock") of Hawthorne Financial
Corporation (the "Registrant") as reported on the NASDAQ National
Market System on March 14, 1997.
THIS REGISTRATION STATEMENT SHALL BECOME EFFECTIVE IMMEDIATELY UPON FILING IN
ACCORDANCE WITH SECTION 8(A) OF THE SECURITIES ACT OF 1933, AS AMENDED, (THE
"SECURITIES ACT") AND 17 C.F.R. Section 230.462.
<PAGE> 2
PART I INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
ITEMS 1. & 2. The documents containing the information for the Hawthorne
Financial Corporation (the "Company" or the "Registrant") Employee Stock Option
Plan (the "Plan") required by Part I of the Registration Statement will be sent
or given to the participants in the Plans as specified by Rule 428(b)(1). Such
documents are not filed with the Securities and Exchange Commission (the "SEC")
either as a part of this Registration Statement or as a prospectus or
prospectus supplement pursuant to Rule 424 in reliance on Rule 428.
PART II INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents, which have heretofore been filed by the
Registrant with the Securities and Exchange Commission pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), are
incorporated by reference herein and shall be deemed to be a part hereof:
(a) The Registrant's Quarterly Report on Form 10-Q for the
Registrant's fiscal quarter ended September 30, 1996.
(b) The Registrant's Quarterly Report on Form 10-Q for the
Registrant's fiscal quarter ended June 30, 1996.
(c) The Registrant's Quarterly Report on Form 10-Q for the
Registrant's fiscal quarter ended March 31, 1996.
(d) The Registrant's Annual Report on Form 10-K for the Registrant's
fiscal year ended December 31, 1995.
(e) The description of the Registrant's common stock, par value
$0.01 per share, set forth as Exhibit 3 to the Registrant's
Quarterly Report on Form 10-Q for the Registrant's fiscal
quarter ended September 30, 1995.
All documents subsequently filed by the Registrant and the Plan
pursuant to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act, prior to
the filing of a post-effective amendment which indicates that all securities
offered have been sold or which deregisters all securities then remaining
unsold, shall be deemed to be incorporated herein by reference and to be a part
hereof from the date of filing of such documents.
Any statement contained in this Registration Statement, or in a
document incorporated or deemed to be incorporated by reference herein, shall
be deemed to be modified or superseded for purposes of this Registration
Statement to the extent that a statement contained herein, or in any other
subsequently filed document which also is incorporated or deemed to be
incorporated by
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<PAGE> 3
reference herein, modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Registration Statement.
ITEM 4. DESCRIPTION OF SECURITIES.
Not applicable.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
Not applicable.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law provides in
general that a corporation shall have the power to indemnify any person who was
or is a party or is threatened to be made a party to any suit or proceeding
because such person is or was a director, officer, employee or agent of the
corporation or was serving, at the request of the corporation, as a director,
officer, employee or agent of another corporation, against all expenses
(including attorneys' fees), judgments, fines and amounts paid in settlement
actually and reasonably incurred by such person in connection with such suit or
proceeding if such person acted in good faith and in a manner such person
reasonably believed to be in or not opposed to the best interests of the
corporation and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. Similar indemnity, but
only for expenses (including attorneys' fees) actually and reasonably incurred,
may be provided in connection with an action or suit by or in the right of a
corporation, provided that such person acted in good faith and in a manner such
person believed to be in or not opposed to the best interests of the
corporation and except that no indemnification may be made in respect of any
claim as to which such person has been adjudged to be liable to the corporation
unless and only to the extent that a court shall have determined, upon
application, that, despite the adjudication of liability but in view of all the
circumstances of the case, such person is fairly and reasonably entitled to
indemnity for such expenses which such court shall deem proper.
Section 102(b)(7) of the Delaware General Corporation Law provides
generally that a corporation may include a provision in its certificate of
incorporation which eliminates or limits the personal liability of a director
to the corporation or its stockholders for monetary damages for breach of
fiduciary duty as a director, provided that such provision may not eliminate or
limit the liability of a director (i) for any breach of the director's duty of
loyalty to the corporation or its stockholders, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing violation of
law, (iii) under Section 174 of the Delaware General Corporation Law or (iv)
for any transaction from which the director derived an improper personal
benefit.
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The Registrant's certificate of incorporation includes provisions
implementing the foregoing limitations on director liability authorized by
Section 102(b)(7) of the Delaware General Corporation Law and the rights to
indemnification provided for in Section 145 of the Delaware General Corporation
Law to the full extent permitted by such laws as the same now are or may
hereinafter be in effect.
The Registrant has obtained directors and officers liability insurance
coverage for its directors and officers. This policy provides coverage for
damages, judgments, settlements, defense costs, charges and expenses incurred
by reason of any actual or alleged breach of duty, error, misstatement,
misleading statement or omission done or attempted solely in the capacity as
directors and/or officers of the Registrant.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
ITEM 8. EXHIBITS.
See Index to Exhibits.
ITEM 9. UNDERTAKINGS.
(a) Rule 415 Offering.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this
registration statement:
(i) To include any prospectus required by Section
10(a)(3) of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the
registration statement (or the most recent
post-effective amendment thereof) which,
individually or in the aggregate, represent a
fundamental change in the information set forth
in the registration statement;
(iii) To include any material information with respect
to the plan of distribution not previously
disclosed in the registration statement or any
material change to such information in the
registration statement;
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Provided, however, that paragraphs (A)(1)(i)
and (A)(1)(ii) do not apply if the
registration statement is on Form S-3 or Form
S-8, and the information required to be
included in a post-effective amendment by
those paragraphs is contained in periodic
reports filed by the Registrant pursuant to
Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 that are incorporated by
reference in the registration statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such
post-effective amendment shall be deemed to be a
new registration statement relating to the
securities offered therein, and the offering of
such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(3) To remove from registration by means of a
post-effective amendment any of the securities
being registered which remain unsold at the
termination of the offering.
(b) Filings Incorporating Subsequent Exchange Act Documents
by Reference.
The undersigned Registrant hereby undertakes that, for
purposes of determining any liability under the Securities Act of 1933, each
filing of the Registrant's annual report pursuant to Section 13(a) or 15(d) of
the Securities Exchange Act of 1934 (and, where applicable, each filing of an
employee benefit plan's annual report pursuant to Section 15(d) of the
Securities Exchange Act of 1934) that is incorporated by reference in the
registration statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(c) Indemnification of Directors and Officers.
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions of the
Registrant's articles of incorporation or by-laws or otherwise, the Registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Securities
Act of 1933 and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question whether
such indemnification by it is against public policy as expressed in the
Securities Act of 1933 and will be governed by the final adjudication of such
issue.
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<PAGE> 6
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit Sequential
Number Description of Document Page Number
- ------ ----------------------- -----------
<S> <C>
4.1 Hawthorne Financial Corporation Employee Stock Option Plan
5.1 Opinion of Mayer, Brown & Platt
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Mayer, Brown & Platt (included in its opinion filed as Exhibit 5.1 hereto)
24.1 Power of Attorney (filed as part of signature pages hereto)
</TABLE>
_________________
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<PAGE> 7
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the
Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-8 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized in the City of Hawthorne, State of California, on
March 19, 1997.
HAWTHORNE FINANCIAL CORPORATION
By: /s/ Scott A. Braly
-------------------------------------
Scott A. Braly
President and Chief Executive Officer
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<PAGE> 8
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature
appears below constitutes and appoints Scott A. Braly as his true and lawful
attorney-in-fact and agent with full power of substitution and resubstitution
for him and in his name, place and stead, in any and all capacities, to sign
any or all amendments to this Registration Statement (including post-effective
amendments) and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto such attorney-in-fact and agent full power and authority to do
and perform each and every act and thing requisite or necessary to be done in
and about the premises, to all intents and purposes and as fully as they might
or could do in person, hereby ratifying and confirming all that such
attorney-in-fact and agent, or his substitutes, may lawfully do or cause to be
done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Scott A. Braly President, Chief Executive Officer and March 19, 1997
--------------------
Scott A. Braly Director (Principal Executive Officer)
/s/ Norman A. Morales Executive Vice President and Chief Financial March 19, 1997
-----------------------
Norman A. Morales Officer (Principal Financial Officer)
/s/ Jessica P. Vlaco Senior Vice President, Director of Finance March 19, 1997
----------------------
Jessica P. Vlaco (Principal Accounting Officer)
/s/ Marilyn Garton Amato Director March 19, 1997
----------------------------
Marilyn Garton Amato
/s/ Timothy R. Chrisman Chairman of the Board March 19, 1997
-------------------------
Timothy R. Chrisman
/s/ R. Michael Hall Director March 19, 1997
---------------------
R. Michael Hall
/s/ Charles S. Jacobs Director March 19, 1997
-----------------------
Charles S. Jacobs
</TABLE>
-8-
<PAGE> 9
<TABLE>
<S> <C> <C>
/s/ Harry F. Radcliffe Director March 19, 1997
------------------------
Harry F. Radcliffe
/s/ Howard E. Ritt Director March 19, 1997
--------------------
Howard E. Ritt
/s/ Robert C. Troost Director March 19, 1997
----------------------
Robert C. Troost
/s/ Anthony W. Liberati Director March 19, 1997
-------------------------
Anthony W. Liberati
</TABLE>
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<PAGE> 1
EXHIBIT 4.1
HAWTHORNE FINANCIAL CORPORATION
EMPLOYEE STOCK OPTION PLAN
1. Purpose. This Employee Stock Option Plan (the "Plan") is intended to
promote the long-term financial interests of Hawthorne Financial
Corporation (the "Company") and its stockholders by (i) providing a
means of offering non-cash incentive compensation to selected
employees of the Company and to reward such employees for their
contribution to the Company's success, (ii) attracting and encouraging
long-term service by key employees possessing outstanding abilities,
(iii) providing employees with additional incentives as determined
from time to time by the Board of Directors of the Company or the
Committee charged with the administration of this Plan, and (iv)
furthering the identity of interests of such key employees with those
of the Company's stockholders through providing opportunities for
increased stock ownership and awards based on corporate performance.
This Plan is intended to be used to grant Options solely to those
employees who are not "officers", "directors" or the holders of 10% or
more of the Company's outstanding common stock, in each case as
determined for purposes of Section 16 of the Exchange Act and the
regulations thereunder.
2. Definitions. As used in this Plan, the following terms shall have the
following indicated meanings:
(a) "Affiliate" means any "subsidiary corporation" or "parent
corporation" as such terms are defined in Section 424 of the
Code.
(b) "Association" means the Company's wholly-owned subsidiary,
Hawthorne Savings, F.S.B.
(c) "Board" means the Board of Directors of the Company.
(d) "Code" means the Internal Revenue Code of 1986, as the same
may be amended from time to time.
(e) "Committee" means the committee appointed by the Board to
administer this Plan.
(f) "Common Stock" means the Common Stock, par value $1.00 per
share, of the Company.
<PAGE> 2
(g) "Company" means Hawthorne Financial Corporation.
(h) "Date of Grant" means the date upon which an Option is
awarded.
(i) "Exchange Act" means the Securities and Exchange Act of 1934,
as the same may be amended from time to time.
(j) "Fair Market Value", unless otherwise determined by the
Committee in good faith, means with respect to a share of
Common Stock as of any given date (i) the weighted average of
the closing sale prices of a share of Common Stock as reported
on the national securities exchange or transaction reporting
system on or through which actual sale prices are regularly
reported for the Common Stock as reported for the ten most
recent trading days preceding the Date of Grant; or (ii) if
the Common Stock is not traded on a national securities
exchange or transaction reporting system on or through which
actual sale prices are reported, the weighted average of the
mean of the closing bid and asked prices of a share of Common
Stock, in either case as reported for the ten most recent
trading days preceding the date the determination is made.
(k) "Option" means a stock option that entitles the holder to
purchase from the Company a stated number of shares of Common
Stock.
(l) "Option Agreement" means a written agreement (including any
amendment or supplement thereto) between the Company and a
Participant specifying the terms and conditions of an award of
an Option granted to such Participant.
(m) "Participant" means an employee of the Company, of the
Association or of an Affiliate of either of them who satisfies
the requirements of Section 4 and is selected by the Committee
to receive an Option.
(n) "Plan" means the Hawthorne Financial Corporation Employee
Stock Option Plan set forth herein.
(o) "SEC" means the Securities and Exchange Commission or any
successor agency.
3. Administration. Except as otherwise provided in this Section 3, this
Plan shall be administered by the Committee. The Committee shall have
authority to grant Options upon such terms as the Committee may
consider appropriate and are not inconsistent with the provisions of
this Plan. Such terms may include conditions, in addition to those
contained in this Plan, on the exercisability of all or any part of an
Option.
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<PAGE> 3
Notwithstanding any such conditions, the Committee may, in its
discretion, accelerate the time at which any Option may be exercised.
In addition, the Committee shall have complete authority to interpret
all provisions of this Plan; to prescribe the form of Option
Agreements; to adopt, amend, and rescind rules and regulations
pertaining to the administration of this Plan; and to make all other
determinations necessary or advisable for the administration of this
Plan. The express grant in this Plan of any specific power to the
Committee shall not be construed as limiting any power or authority of
the Committee. Any decision made, or action taken, by the Committee
in connection with the administration of this Plan shall be final. No
member of the Committee shall be liable for any act done in good faith
with respect to this Plan or any Option Agreement or Option award.
All expenses of administering this Plan shall be borne by the Company.
The Committee, in its discretion, may delegate to one or more officers
of the Company or the Association, all or part of the Committee's
authority and duties with respect to Participants under this Plan. In
the event of such delegation, and as to matters encompassed by the
delegation, references in this Plan to the Committee shall be
interpreted as a reference to the Committee's delegate or delegates.
The Committee may revoke or amend the terms of a delegation at any
time but such action shall not invalidate any prior actions of the
Committee's delegate or delegates that were consistent with the terms
of this Plan.
1. Eligibility. Any employee of the Company or of any Affiliate
(including any corporation that becomes an Affiliate after the
adoption of this Plan) who is not an "officer", "director", or
beneficial owner of more than 10% of any class of outstanding shares
of the Company, in each of the foregoing cases as determined for
purposes of Section 16 of the Exchange Act and the regulations of the
SEC thereunder, is eligible to participate in this Plan if the
Committee, in its sole discretion, determines that such person has
contributed or can be expected to contribute to the profits or growth
of the Company, the Association or an Affiliate. Any such employee may
be granted one or more Options.
2. Stock Subject to Plan. The shares of Common Stock available for
issuance pursuant to Options granted pursuant to this Plan shall be
determined in accordance with the following:
(a) Upon the exercise of any Option, the Company may deliver to
the Participant (or the Participant's broker if the
Participant so directs), authorized but unissued shares of
Common Stock or issued shares of Common Stock that have been
reacquired by the Company.
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<PAGE> 4
(b) The maximum aggregate number of shares of Common Stock with
respect to which Options may be granted under this Plan and
which may be issued pursuant to the exercise thereof shall be
200,000 shares, subject to increases and adjustments as
provided in Section 8.
(c) Shares related to Options that expire unexercised or are
forfeited, surrendered, terminated, cancelled or settled in
cash in lieu of the issuance of shares of Common Stock shall
again be available for additional awards under this Plan,
except for shares of Common Stock withheld or surrendered to
satisfy tax withholding obligations.
3. Stock Option Grants; Option Price; Term.
(a) The Committee will designate individuals to whom Options are
to be granted and will specify the number of shares of Common
Stock subject to each Option and the additional terms thereof.
All Options granted under this Plan shall be evidenced by
Option Agreements which shall be subject to the applicable
provisions of this Plan and to such other provisions as the
Committee may adopt. The Committee may provide that Options
granted under this Plan shall become exercisable in one or
more installments or upon such other conditions as it shall
deem appropriate.
(b) The exercise price per share for Common Stock purchased on the
exercise of an Option shall not be less than the Fair Market
Value of a share of Common Stock on the Date of Grant.
(c) The maximum period in which an Option may be exercised is ten
years from the Date of Grant. The terms of any Option may
provide that it is exercisable for a period less than such
maximum period.
4. Exercise of Options.
(a) An Option may be exercised, as to all or any portion of the
shares of Common Stock as to which the Option is then
exercisable, by giving written notice to the Secretary of the
Company prior to the close of business on the date on which
the Option expires; provided, however, that an Option may only
be exercised with respect to whole shares of Common Stock.
Such notice shall specify the number of shares of Common Stock
to be purchased and shall be accompanied by payment of the
Option Price for such shares (and, if required by the
Committee, any applicable withholding taxes) in such form and
manner as the Committee may from time to time approve.
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<PAGE> 5
(b) In the event that the terms of any Option provide that it may
be exercised only during employment or within a specified
period of time after termination of employment, the Committee
may decide to what extent leaves of absence for governmental
or military service, illness, temporary disability, or other
reasons shall not be deemed interruptions of continuous
employment. Unless provided otherwise by the Committee, a
Participant's Options shall expire on the Participant's
termination of employment, subject to the following:
(i) If the Participant terminates employment with the
Company and its Affiliates on account of retirement
at or after attaining age 55, the Participant's
Options may be exercised, to the extent then vested,
for a period of three months following such
termination, but not later than the Options'
expiration date.
(ii) If the Participant terminates employment with the
Company and its Affiliates by reason of death, any
Options which the Participant was entitled to
exercise on the date of his death shall be
exercisable by the person or persons to whom that
right passes by will or by the laws of descent and
distribution for a period of twelve months after the
date of death, but not later than the Option's
expiration date.
(c) The Company shall have the right to deduct or otherwise effect
a withholding of any amount required by federal or state tax
laws to be withheld with respect to the grant, exercise or
surrender of an Option, including any withholding required in
order for the Company to obtain a tax deduction as a
consequence of such grant, exercise or surrender. Such
amounts may be deducted or withheld, at the Company's
discretion, from shares issuable or amounts payable in respect
of an Option or from any other payments, including regular
compensation, to be made by the Company to the Participant.
If Common Stock is used to satisfy any such tax withholding
requirement, such Common Stock shall be valued based on its
Fair Market Value as of the date it is withheld.
(d) Section 7(a) to the contrary notwithstanding, if an Option
Agreement so provides, the Company shall lend the Participant
such amount as shall be permitted under applicable law, up to
100% of the exercise price of the shares to be acquired on
exercise of the Option to which the Option Agreement relates,
for the purpose of enabling the Participant to exercise the
Option, with the principal amount of such loan to be repayable
in not more than three annual installments; provided, that the
terms of any such loan, including the amount and maturity
thereof shall conform to any applicable requirements of the
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<PAGE> 6
regulations of the Board of Governors of the Federal Reserve
System relating to margin credit and to any other applicable
laws and regulations.
The Participant shall pay interest on the unpaid principal
balance of any such loan at the minimum rate necessary to
avoid imputed interest or original issue discount under the
Code. All shares of Common Stock acquired with cash borrowed
from the Company shall be pledged to the Company as security
for the repayment thereof In the discretion of the Committee,
shares of Common Stock may be released from such pledge
proportionately as payments of the note (together with
interest) are made, provided that the release of such shares
complies with the then applicable regulations of the Federal
Reserve System relating to securities credit transactions.
While shares are so pledged, and so long as there has been no
default in the installment payments, such shares shall remain
registered in the name of the Participant, and the Participant
shall have the right to vote such shares and to receive all
dividends thereon.
1. Adjustment Upon Change In Common Stock. The maximum number of shares
of Common Stock which are reserved for issuance under this Plan shall
be proportionately adjusted, and the terms of outstanding Options
shall be adjusted, to such extent as the Committee shall determine to
be equitably required to preserve the value of benefits awarded or to
be awarded to Participants under this Plan, in the event that (a) the
Company (i) effects one or more stock dividends, split-ups,
subdivisions or consolidations of shares or (ii) engages in a
transaction to which Section 424 of the Code applies or (b) the
Company issues shares of stock of any class, or securities convertible
into shares of stock of any class, for cash or property, or for labor
or services, either upon direct sale or upon exercise of rights or
warrants to subscribe therefor, or upon merger, reorganization,
conversion of shares or obligations of the Company convertible into
such shares or other securities or (c) there occurs any other event
which, in the judgment of the Committee, necessitates such action.
Any determination made by the Committee under this Section 8 shall be
final and conclusive.
2. Adjustment Upon Change in Control. Upon the effective date of the
dissolution or liquidation of the Company, or a reorganization, merger
or consolidation of the Company with one or more other corporations in
which the Company is not the surviving corporation, or of the transfer
of substantially all of the assets or shares of the Company to another
corporation (any such transaction being referred to herein as a
"Terminating Event"), this Plan and any Option granted hereunder shall
terminate unless provision is made in writing in connection with such
Terminating Event for the continuance of this Plan and for the
assumption of Options theretofore granted hereunder, or the
substitution for such Options of new options issued by the successor
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<PAGE> 7
corporation, or the parent corporation thereof, with such appropriate
adjustments as may be determined or approved by the Committee or its
successor, in which event this Plan and the Options theretofore
granted or substituted therefor, shall continue in the manner and on
the terms so provided. Upon the occurrence of a Terminating Event in
which provision is not made for the continuance of this Plan and for
the assumption of Options theretofore granted or the substitution for
such Options of new options issued by the successor corporation or the
parent corporation thereof, (i) each Participant to whom an Option has
been granted under this Plan shall be entitled to exercise, in whole
or in part, such Participant's rights under any such Option without
regard to any restrictions on exercise that would otherwise apply,
effective as of the effective date of the Terminating Event, and (ii)
in the event a Participant shall not, prior to the effective date of
such a Terminating Event, fully exercise an Option granted under this
Plan, such Option, to the extent not previously exercised, shall be
deemed surrendered by the Participant as of the effective date of the
Terminating Event and such Participant shall receive in exchange
therefor a cash payment equal to the difference, if a positive amount,
between the Fair Market Value as of the effective date of the
Terminating Event of the shares of stock then subject to the Option
and the aggregate exercise price therefor. To the extent that a
Participant has the right to exercise, surrender or receive payment
under any Option solely on account of a Terminating Event, such
exercise, surrender or payment shall be contingent upon the
consummation of such Terminating Event.
Upon a "change in control" of the Company, Participants shall, unless
the Committee otherwise determines at the time of grant have the right
notwithstanding any restrictions that would otherwise apply, to
exercise any Option theretofore granted to such Participant. To the
extent a Participant has the right to exercise an Option solely on
account of a change in control, such right to exercise shall be
contingent upon the consummation of such change in control. Unless
otherwise defined by the Committee in Option Agreements relating to
particular Options a "change in control" shall be deemed to have
occurred if: (i) any "person" (as such term as used in Sections 13(d)
and 14(d) of the Exchange Act and the regulations of the SEC
thereunder, each as in effect on the effective date of this Plan, and
including any such persons that may be deemed to be acting in concert
with respect to the Company or the acquisition, ownership or voting of
Company securities) becomes, directly or indirectly, the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act and the
regulations of the SEC thereunder, each as in effect on the effective
date of this Plan) of outstanding securities of the Company
representing 20% or more of the combined voting power of the Company's
then outstanding securities; (ii) during any one-year period after the
date hereof, the composition of the Board of the Company is changed
such that persons who were Directors of the Company at the beginning
of such period, or persons nominated or elected by a majority of such
persons, do not continue to
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<PAGE> 8
comprise a majority of the members of the Board of the Company; or
(iii) any other event, transaction or series of events or transactions
occurs as a result of which any person may be deemed to "acquire
control" of the Company (as such terms are defined in the regulations
of the Office of Thrift Supervision set forth at 12 C.F.R. Part 574,
as in effect on the effective date of this Plan).
1. Compliance With Law and Approval of Regulatory Bodies. No Option
shall be exercisable, no Common Stock shall be issued, no certificates
for shares of Common Stock shall be delivered, and no payment shall be
made under this Plan other than in compliance with all applicable
federal and state laws and regulations (including, without limitation,
withholding tax requirements) and the rules of all domestic stock
exchanges on which the Company's shares may be listed. The Company
shall have the right to rely on an opinion of its counsel as to such
compliance. Any share certificate issued to evidence Common Stock for
which an Option is exercised may bear such legends and statements as
the Committee may deem advisable to assure compliance with federal and
state laws and regulations. No Option shall be exercisable, no Common
Stock shall be issued, no certificate for shares shall be delivered,
and no payment shall be made under this Plan until the Company has
obtained such consent or approval as the Committee may deem advisable
from regulatory bodies having jurisdiction over such matters.
2. General Provisions.
(a) Neither the adoption of this Plan, its operation, nor any
documents describing or referring to this Plan (or any part
thereof) shall confer upon any employee any right to continue
in the employ of the Company, the Association or an Affiliate
or in any way affect any right or power of the Company, the
Association or an Affiliate to terminate the employment of any
employee at any time with or without assigning a reason
therefor.
(b) No award to a Participant under this Plan shall create any
rights in such Participant as a shareholder of the Company
until shares of Common Stock are registered in the name of the
Participant.
(c) Headings are given to the articles and sections of this Plan
solely as a convenience to facilitate reference. The
reference to any statute, regulation or other provision of law
shall be construed to refer to any amendment to or successor
of such provision of law.
(d) During the lifetime of the Participant to whom the Option is
granted, the Option may be exercised only by such Participant.
Options granted under this Plan
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<PAGE> 9
shall not be nontransferable, other than by will or the laws
of descent and distribution. No right or interest of a
Participant in any Option shall be liable for, or subject to,
any lien, obligation, or liability of such Participant.
3. Amendment. The Board may, at any time and in any manner, amend,
suspend or terminate this Plan or any award outstanding under this
Plan; provided, however, that no such amendment or discontinuance
shall: (i) be made without shareholder approval if and to the extent
such approval is required by law, agreement or the rules of any
exchange or automated quotation system upon which the Common Stock is
listed or quoted; or (ii) alter or impair the rights of Participants
with respect to awards previously made under this Plan without the
consent of the holder thereof.
4. Duration of Plan. No Option may be granted under this Plan more than
ten years after the date that this Plan is adopted by the Board.
Options granted before that date shall remain valid in accordance with
their terms.
5. Effective Date of Plan. Options may be granted under this Plan on or
after the date as of which it is adopted by the Board.
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<PAGE> 1
EXHIBIT 5.1
March 19, 1997
Board of Directors
Hawthorne Financial Corporation
2381 Rosecrans Avenue
El Segundo, California 90245
Ladies and Gentlemen:
We have acted as special counsel to Hawthorne Financial Corporation, a
Delaware corporation (the "Corporation"), in connection with the preparation
and filing with the Securities and Exchange Commission pursuant to the
Securities Act of 1933, as amended, of a Registration Statement on Form S-8
(the "Registration Statement"), relating to the registration of up to 300,000
shares of Corporation common stock, $0.01 par value per share ("Common Stock"),
to be issued pursuant to the Corporation's Employee Stock Option Plan (the
"Option Plan"). We have been requested by the Corporation to furnish this
opinion to be included as an exhibit to the Registration Statement.
We have reviewed the Registration Statement, the Certificate of
Incorporation and Bylaws of the Corporation, the Option Plan, a specimen stock
certificate evidencing the Common Stock of the Corporation and such other
corporate records and documents as we have deemed appropriate for the purpose
of rendering this opinion. We have also reviewed and relied upon the
originals, or copies certified or otherwise identified to our satisfaction,
of such records of the Corporation and such other instruments, of certificates
and written and oral representations of public officials, and officers and
representatives of the Corporation as we have deemed appropriate or relevant as
a basis for the opinion set forth below. In addition, we have assumed, without
independent verification, the genuineness of all signatures and the authenticity
of all documents furnished to us and the conformity in all respects of copies to
originals.
For purposes of this opinion, we have also assumed that (i) the shares
of Common Stock issuable pursuant to options granted under the terms of the
Option Plan will continue to be validly authorized on the dates the Common
Stock is issued pursuant to the options; (ii) on the dates the options are
exercised, the options granted under the terms of the Option Plan will
constitute valid,
<PAGE> 2
Board of Directors
Hawthorne Financial Corporation
March 19, 1997
Page 2
legal and binding obligations of the Corporation and will (subject to
applicable bankruptcy, moratorium, insolvency, reorganization and other laws
and legal principles affecting the enforceability of creditors' rights
generally) be enforceable as to the Corporation in accordance with their terms;
(iii) no change will occur in applicable law or the pertinent facts; and (iv)
the provisions of applicable state securities laws will have been complied with
to the extent required.
Based upon the foregoing, and subject to the qualifications and
assumptions set forth herein, we are of the opinion as of the date hereof that
the shares of Common Stock to be issued pursuant to the Option Plan, when
issued pursuant to and in accordance with the Registration Statement and the
Option Plan and upon receipt of the consideration required thereby, will be
legally issued, fully paid and non- assessable shares of Common Stock of the
Corporation.
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement.
Very truly yours,
/s/ Mayer, Brown & Platt
MAYER, BROWN & PLATT
<PAGE> 1
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in Registration Statement No.
33-XXXXX of Hawthorne Financial Corporation and Subsidiary (the "Company") on
Form S-8 of our report dated January 26, 1996, appearing in the Annual Report
on Form 10-K of the Company for the year ended December 31, 1995.
DELOITTE & TOUCHE LLP
Los Angeles, California
March 19, 1997
