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CUSIP NO. 420542102 Page 1 of 6 Pages
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
(RULE 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO
RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a)
HAWTHORNE FINANCIAL CORPORATION
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(NAME OF ISSUER)
COMMON STOCK, PAR VALUE $0.01 PER SHARE
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(TITLE OF CLASS OF SECURITIES)
420542102
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(CUSIP NUMBER)
Gerard L. Hawkins, Esq.
Jeffrey D. Haas, Esq.
Cristin M. Zeisler, Esq.
Elias, Matz, Tiernan & Herrick L.L.P.
734 15th Street, N.W.
Washington, D.C. 20005
(202) 347-0300
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(NAME, ADDRESS, TELEPHONE NUMBER OF PERSONS AUTHORIZED
TO RECEIVE NOTICES AND COMMUNICATIONS)
October 11, 1998
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(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 which 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 [ ].
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CUSIP NO. 420542102 Page 2 of 6 Pages
<TABLE>
<S> <C> <C>
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1. NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
SCOTT A. BRALY, S.S.N.: ###-##-####
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2. CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (a) [ ]
(b) [ ]
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3. SEC USE ONLY
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4. SOURCE OF FUNDS
PF
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5. CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS PURSUANT TO ITEMS 2(d) or 2(e) [ ]
Not Applicable
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6. CITIZENSHIP OR PLACE OF ORGANIZATION
UNITED STATES OF AMERICA
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7. NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH SOLE VOTING POWER
430,727*
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8. NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH SHARED VOTING POWER
-0-
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9. NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH SOLE DISPOSITIVE POWER
430,727*
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10. NUMBER OF SHARES BENEFICIALLY OWNED BY EACH REPORTING PERSON WITH SHARED DISPOSITIVE POWER
-0-
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11. AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
430,727*
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12. CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES [ ]
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13. PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
7.8%
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14 TYPE OF REPORTING PERSON
IN
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</TABLE>
*See Item 5.
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CUSIP NO. 420542102 Page 3 of 6 Pages
ITEM 1. SECURITY AND ISSUER
This Schedule 13D relates to the common stock, par value $.01 per
share (the "Common Stock"), of Hawthorne Financial Corporation, a Delaware
corporation ("Hawthorne" or the "Issuer"), whose principal executive offices
are located at 2381 Rosecrans Avenue, El Segundo, California 90245.
ITEM 2. IDENTITY AND BACKGROUND
(a-c) This Schedule 13D is filed by Scott A. Braly, President and Chief
Executive Officer of the Issuer. His business address is 2381
Rosecrans Avenue, Second Floor, El Segundo, California 90245.
(d) During the past five years, Scott A. Braly has not been convicted in a
criminal proceeding.
(e) During the past five years, Scott A. Braly has not been a party to a
civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a
judgment, decree or final order enjoining future violations of, or
prohibiting or mandating activities subject to, federal or state
securities laws or a finding of any violation with respect to such
laws.
(f) Mr. Braly is a citizen of the United States of America.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
Pursuant to a Unit Purchase Agreement (the "Agreement"), dated as of
October 10, 1995, by and among Hawthorne and the other signatories thereto (the
"Purchasers"), Scott A. Braly purchased 2.4 (the "Units") units from Hawthorne
for $1.2 million. All of such funds came from the personal funds of Scott A.
Braly. Each Unit consisted of a package of the following securities: $250,000
principal amount of senior notes, five shares of Series A preferred stock, par
value $.01 per share, of Hawthorne (the "Preferred Stock"), and a common stock
purchase warrant (each, a "Warrant") representing the right to purchase 44,000
shares of Common Stock at a price of $2.25 per share. Each such note and share
of Preferred Stock acquired by Scott A. Braly was redeemed by Hawthorne on
December 31, 1997. In connection with a public offering of Common Stock on July
8, 1998, each Warrant owned by Scott A. Braly was adjusted to represent the
right to purchase 46,522 shares of Common Stock at a price of $2.128 per share.
Such Warrants may be exercised at any time during the period beginning December
15, 1998 through December 15, 2005. As of the date hereof, Scott A. Braly
owns 2.4 Warrants, and as such, is deemed to beneficially own 111,653 shares of
Common Stock. If Scott A. Braly should decide to exercise such Warrants, all
of the funds utilized for the potential exercise are expected to come from the
personal funds of Scott A. Braly.
On June 14, 1997, and on September 14, 1997, Scott A. Braly received a
total of 19,161 shares of Common Stock as dividends declared and paid on his
Preferred Stock. These shares were obtained without consideration from Scott A.
Braly.
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CUSIP NO. 420542102 Page 4 of 6 Pages
On July 8, 1998, Scott A. Braly purchased 66,600 shares of Common
Stock in a public offering by the Issuer for $999,000. All of such funds came
from Scott A. Braly's personal funds.
Scott A. Braly has received 1,313 shares of Common Stock pursuant to
Hawthorne's 401(k) Plan. Such shares were obtained without consideration from
Scott A. Braly. On November 27, 1995, Scott A. Braly received options to buy
212,000 shares of Common Stock (the "1995 Options"). All of the 1995 Options
have vested and are currently exercisable. On June 1, 1997, Scott A. Braly
received options to purchase 20,000 shares of Common Stock (the "1997
Options"), 6,667 (or one-third) of which are currently vested and exercisable.
Although Mr. Braly does not beneficially own the 13,333 shares of Common Stock
underlying the non-vested 1997 Options, he has chosen to report such shares as
beneficially owned as of the date hereof rather than file an amendment to this
Schedule 13D sixty (60) days prior to when such non-vested 1997 Options become
exercisable, which is when such shares shall become beneficially owned by him.
ITEM 4. PURPOSE OF TRANSACTION
Scott A. Braly is presently the President and Chief Executive Officer
of the Issuer. Scott A. Braly intends to continue to participate in the
management and operations of the Issuer in such capacity.
Scott A. Braly has acquired the Common Stock, the Warrants and the
1995 and 1997 Options solely for investment purposes. Depending on his
evaluation of the Issuer, other investment opportunities, market conditions,
and such other factors as he may deem material, Scott A. Braly may seek to
acquire additional shares of Common Stock in the open market, in private
transactions, or otherwise, or may dispose of all or a portion of such Warrants
or the shares of Common Stock owned by him.
Except as set forth above, Scott A. Braly has no plans or proposals of
the type referred to in clauses (a) through (j) of Item 4 of Schedule 13D.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER
(a) As of the date hereof, Scott A. Braly owns 430,727 shares of Common
Stock, which represents 7.8% of the shares of Common Stock
outstanding. The 430,727 shares of Common Stock includes 13,333
shares which Scott A. Braly may acquire pursuant to the exercise of
the non-vested 1997 Options. Although Scott A. Braly does not
beneficially own the 13,333 shares of Common Stock underlying such
non-vested1997 Options as of the date hereof, he has chosen to report
such shares as beneficially owned as of the date hereof rather than
file an amendment to this Schedule 13D sixty (60) days prior to when
such non-vested 1997 Options become exercisable, which is when such
shares shall become beneficially owned by Scott A. Braly.
(b) Scott A. Braly has the sole power to vote and the sole power to
dispose of the 430,727 shares of Common Stock beneficially owned by
him.
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CUSIP NO. 420542102 Page 5 of 6 Pages
(c) Other than as described herein, no other transactions in Common Stock
were effected by Scott A. Braly during the last 60 days.
(d) Not applicable.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER
Except as set forth elsewhere herein, Scott A. Braly is not a party to
any contract, arrangement, understanding or relationship (legal or otherwise)
with respect to any securities of the Issuer. Scott A. Braly is the President
and Chief Executive Officer of the Issuer and has in the past and intends in
the future to exercise his vote and to serve the Issuer in such capacity in an
independent manner, and to vote his shares of Common Stock individually and not
pursuant to any understanding, agreement or arrangement with any other persons.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS
Not applicable.
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CUSIP NO. 420542102 Page 6 of 6 Pages
SIGNATURE
After reasonable inquiry and to the best of the knowledge and belief
of the undersigned, the undersigned certifies that the information set forth in
this Statement on Schedule 13D is true, complete and correct.
By: /s/ Scott A. Braly
-------------------------
Scott A. Braly
Date: November 6, 1998
