<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
____________
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
____________
AAMES FINANCIAL CORPORATION
(Exact name of Registrant as specified in its charter)
DELAWARE
(State or other jurisdiction of incorporation)
95-4340340
(I.R.S. employer identification No.)
350 SOUTH GRAND AVENUE, 52ND FLOOR
LOS ANGELES, CALIFORNIA 90071
(Address of principal executive offices) (Zip Code)
1997 STOCK OPTION PLAN,
1997 NON-QUALIFIED STOCK OPTION PLAN
AND STOCK OPTION AGREEMENT BETWEEN
AAMES FINANCIAL CORPORATION AND DAVID A. SKLAR
(Full title of plan)
BARBARA S. POLSKY, ESQ.
EXECUTIVE VICE PRESIDENT AND GENERAL COUNSEL
AAMES FINANCIAL CORPORATION
350 SOUTH GRAND AVENUE, 52ND FLOOR
LOS ANGELES, CALIFORNIA 90071
(Name and address of agent for service)
(213) 640-5000
(Telephone number, including area code, of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
=============================================================================================================
Proposed Proposed
Title of Number of Maximum Maximum
Securities Shares Offering Aggregate Amount of
to be to be Price Per Offering Registration
Registered Registered Share (1)(2) Price (1)(2) Fee
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------------------------------------
Common Stock, $.001 1,084,000 $13.345 $14,465,980 $4,383.63
par value per share
Preferred Share 1,084,000 NA N/A N/A
Purchase Rights (3)
=============================================================================================================
</TABLE>
(1) Estimated solely for purposes of calculating the registration fee
pursuant to Rule 457.
(2) Calculated pursuant to Rule 457(c) and 457(h)(1).
(3) The Rights to purchase the Preferred Stock will be attached to and
will trade with the shares of Common Stock of the Registrant.
<PAGE> 2
PART II
ITEM 3. INCORPORATION OF DOCUMENTS BY REFERENCE.
The following documents are incorporated herein by reference:
(a) Registrant's Annual Report on Form 10-K for the fiscal year ended
June 30, 1997;
(b) All reports filed by the Registrant pursuant to Section 13(a) or
15(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") since June 30, 1997; and
(c) The descriptions of the classes of securities to be offered
contained in the Registrant's Registration Statements on Form 8-A
dated October 22, 1991 and June 21, 1996.
All documents filed by the Registrant pursuant to Section 13(a),
13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
Registration Statement and prior to the filing of a post-effective amendment
which indicates that all securities offered hereby have been sold or which
deregisters all securities then remaining unsold shall be deemed to be
incorporated by reference into this Registration Statement and to be a part
hereof from the date of filing of such documents.
ITEM 4. DESCRIPTION OF SECURITIES.
The securities to be offered are registered under Section 12 of the
Exchange Act.
ITEM 5. INTERESTS OF NAMED EXPERTS AND COUNSEL.
None.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
The Company has adopted provisions in its Certificate of
Incorporation which limit the liability of directors. As permitted by
applicable provisions of the Delaware General Corporation law (the "Delaware
Law"), directors will not be liable to the Company for monetary damages arising
from a breach of their fiduciary duty as directors in certain circumstances.
Such limitation does not affect liability for any breach of a director's duty
to the Company or its stockholders (i) with respect to approval by the director
of any transaction from which he derives an improper personal benefit, (ii)
with respect to acts or omissions involving an absence of good faith, that he
believes to be contrary to the best interests of the Company or its
stockholders, that involve intentional misconduct or knowing and culpable
violation of law, that constitute an unexcused pattern of inattention that
amounts to an abdication of his duty to the Company or its stockholders, or
that show a reckless disregard for his duty to the Company or its stockholders
in circumstances in which he was or should have been aware, in the ordinary
course of performing his duties of a risk of serious injury to the Company or
its stockholders, or (iii) based on transactions between the Company and its
directors or other corporations with interrelated directors or on improper
distributions, loans or guarantees under applicable sections of the Delaware
Law. Such limitation of liability also does not affect the availability of
equitable remedies such as injunctive relief or rescission.
The Company's Bylaws provide that the Company must indemnify its
directors and officers to the full extent permitted by the Delaware Law,
including circumstances in which indemnification is otherwise discretionary
under the Delaware Law, and the Company has entered into indemnification
agreements (the "Indemnification Agreements") with its directors and officers
providing such indemnity. The Indemnification Agreements constitute binding
agreements between the Company and each of the other parties thereto, thus
preventing the Company from modifying its indemnification policy in a way that
is adverse to any person who is a party to an Indemnification Agreement.
ITEM 7. EXEMPTION FROM REGISTRATION CLAIMED.
Not applicable.
2
<PAGE> 3
ITEM 8. EXHIBITS.
4.1 Regsitrant's 1997 Stock Option Plan
4.2 Registrant's 1997 Non-Qualified Stock Option Plan
4.3 Stock Option Agreement between the Registrant and David A. Sklar
5.1 Opinion of Barbara S. Polsky, Esq., Executive Vice President and
General Counsel of the Registrant, regarding validity of securities
23.1 Consent of Price Waterhouse LLP
23.2 Consent of KPMG Peat Marwick LLP
23.3 Consent of Barbara S. Polsky, Esq., Executive Vice President and
General Counsel of the Registrant(included in Exhibit 5.1)
ITEM 9. UNDERTAKINGS.
(a) 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, as amended (the "Securities
Act");
(ii) To reflect in the prospectus any facts or events
arising after the effective date of this 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 this
Registration Statement;
(iii) To include any material information with respect to the
plan of distribution not previously disclosed in this
Registration Statement or any material change to such
information in this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, 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) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or 15(d) of the
Exchange Act that is incorporated by reference in this 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) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or
otherwise, Registrant has been advised that in the opinion of the
Commission such indemnification is against public policy as expressed in
the Securities Act 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 the 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,
Registrant will, unless in the opinion of its counsel the matter has been
settled by controlling precedent, submit to the appropriate jurisdiction
the question of whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue.
3
<PAGE> 4
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 Los Angeles, State of California as of November
19, 1997.
AAMES FINANCIAL CORPORATION
(Registrant)
By: /s/ Cary H. Thompson
---------------------------------
Cary H. Thompson
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Cary H. Thompson and David A. Sklar and each
of them, his attorney-in-fact and agent, with full power of substitution, for
him in any and all capacities, to sign any amendments to this Registration
Statement on Form S-8, and to file the same, with exhibits thereto and other
documents in connection therewith, with the Securities and Exchange Commission,
granting unto said attorneys-in-fact and agents, and each of them, full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he might or could do in person, and hereby ratifying and confirming
all that said attorneys-in-fact and agents, or any of them, or their or his
substitute or 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/ Cary H. Thompson Chief Executive Officer and Director November 19, 1997
- ------------------------------ (Principal Executive Officer)
Cary H. Thompson
/s/ Neil B. Kornswiet President and Director November 19, 1997
- ------------------------------
Neil B. Kornswiet
/s/ David A. Sklar Executive Vice President-Finance and November 19, 1997
- ------------------------------ Chief Financial Officer
David A. Sklar (Principal Financial and Accounting Officer)
/s/ Gregory J. Witherspoon Executive Vice President - Strategic Planning November 19, 1997
- ------------------------------ and Director
Gregory J. Witherspoon
/s/ George W. Coombe, Jr. Director November 19, 1997
- ------------------------------
George W. Coombe, Jr.
/s/ John C. Getzelman Director November 19, 1997
- ------------------------------
John C. Getzelman
Director November __, 1997
- ------------------------------
Dennis F. Holt
</TABLE>
4
<PAGE> 5
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ Melvyn Kinder Director November 19, 1997
- -------------------------------
Melvyn Kinder
/s/ Lee Masters Director November 19, 1997
- -------------------------------
Lee Masters
/s/ Georges C. St. Laurent, Jr. Director November 19, 1997
- -------------------------------
Georges C. St. Laurent, Jr.
</TABLE>
5
<PAGE> 6
EXHIBIT INDEX
Exhibit No. Description
----------- -----------
4.1 Registrant's 1997 Stock Option Plan
4.2 Registrant's 1997 Non-Qualified Stock Option Plan
4.3 Stock Option Agreement between the Registrant and David A.
Sklar
5.1 Opinion of Barbara S. Polsky, Esq., Executive Vice
President, and General Counsel of the Registrant,
regarding validity of securities
23.1 Consent of Price Waterhouse, LLP
23.2 Consent of KPMG Peat Marwick LLP
23.3 Consent of Barbara S. Polsky, Esq., Executive Vice
President, and General Counsel of the Registrant (included
in Exhibit 5.1)
6
<PAGE> 1
AAMES FINANCIAL CORPORATION
1997 STOCK OPTION PLAN
1. PURPOSE OF THE PLAN.
The name of this plan is the Aames Financial Corporation 1997 Stock
Option Plan (the "Plan"). The purpose of the Plan is to enable Aames Financial
Corporation, a Delaware corporation (the "Company"), and any parent company of
and/or any subsidiary of the Company to obtain and retain the services of the
types of directors, officers (vice president or equivalent and higher) and
consultants who will contribute to the Company's long range success and to
provide incentives which are linked directly to increases in share value which
will inure to the benefit of all stockholders of the Company.
2. ADMINISTRATION OF THE PLAN.
The Plan shall be administered by a committee of the Board of
Directors of the Company (the "Committee") consisting of two or more directors,
each of whom shall be both a "Non-Employee Director," as that term is defined
in Rule 16b-3(b) of the Rules and Regulations (the "Rules") of the Securities
and Exchange Commission under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and an "outside director" for purposes of Section 162(m)
of the Internal Revenue Code of 1986, as amended (the "Code") and the
regulations of the Internal Revenue Service adopted thereunder, as such Rules
and such Section and regulations may from time to time be amended or
interpreted. Members of the Committee shall serve at the pleasure of the Board
of Directors of the Company.
The Committee shall have all the powers vested in it by the terms of
the Plan, including exclusive authority, (i) to select from among eligible
directors, officers and consultants those persons to be granted "Awards" (as
defined below) under the Plan; (ii) to determine the type, size and terms of
individual Awards (which need not be identical) to be made to each eligible
director, officer and/or consultant selected; (iii) to determine the time when
Awards will be granted and to establish objectives and conditions (including,
without limitation, vesting and performance conditions), if any, for earning
Awards; (iv) to amend the terms or conditions of any outstanding Award, subject
to applicable legal restrictions and to the consent of the other party to such
Award; (v) to determine the duration and purpose of leaves of absences which
may be granted to holders of Awards without constituting termination of their
employment for purposes of their Awards; (vi) to authorize any person to
execute, on behalf of the Company, any instrument required to carry out the
purposes of the Plan; and (vii) to make any and all other determinations which
it determines to be necessary or advisable in the administration of the Plan.
The Committee shall have full power and authority to administer and interpret
the Plan and to adopt, amend and revoke such rules, regulations, agreements,
guidelines and instruments for the administration of the Plan and for the
conduct of its business as the Committee deems necessary or advisable. The
Committee's interpretation of the Plan, and all actions taken and
determinations made by the Committee pursuant to the powers vested in it
hereunder, shall be conclusive and binding on all parties concerned, including
the Company, its stockholders, any participants in the Plan and any other
employee of the Company or any parent company or any subsidiary of the Company.
Notwithstanding the foregoing, the Committee shall have no authority to reprice
underwater Awards (i.e., Awards for which the exercise price is greater than
the current Fair Market Value of the Common Stock), without the approval of the
Company's stockholders.
3. PERSONS ELIGIBLE UNDER THE PLAN.
Any person who is a director, officer (vice president or equivalent
and higher) or consultant of the Company, or of any current or future parent
company or subsidiary of the Company (an "Optionee"), shall be eligible to be
considered for the grant of Awards under the Plan; provided, however, that
Outside Directors who are not expressly declared to be eligible to participate
in the Plan shall only be permitted to receive the Awards described in Section
5 of the Plan; and provided, further, that only employees of the Company and of
any current or future parent or subsidiary of the Company (who are otherwise
eligible to receive Awards under the Plan) shall be eligible to receive Awards
in the form of Incentive Stock Options (as hereinafter defined) under the Plan.
<PAGE> 2
4. AWARDS.
(a) Stock Options. Awards authorized under the Plan shall solely
consist of options to purchase of the Common Stock, par value $0.001 per share,
of the Company (the "Common Stock"), which options may be designated Incentive
Stock Options or Non-Statutory Stock Options hereunder (as defined below).
(b) Consideration. Common Stock may be issued pursuant to an Award
for any lawful consideration as determined by the Committee, including, without
limitation, services rendered, or to the extent permitted by applicable state
law, to be rendered by the recipient of the Award, or the delivery of a
promissory note or other deferred payment obligation by the Optionee. All
Awards granted under this Plan shall be exercisable at an exercise price equal
to 100% of the Fair Market Value of a share of Common Stock on the Date of
Grant.
(c) Guidelines. The Committee may adopt, amend or revoke from
time to time written policies implementing the Plan. Such policies may
include, but need not be limited to, the type, size and term of Awards to be
made to participants and the conditions for payment of such Awards; provided,
however, that all Awards granted under the Plan shall have a term of 10 years,
except as otherwise required by the Code.
(d) Terms and Conditions. Subject to Section 4(e) and the other
provisions of the Plan, the Committee, in its sole and absolute discretion,
shall determine all of the terms and conditions of each Award granted pursuant
to the Plan, which terms and conditions may include, among other things:
(i) any provision necessary for such Award to qualify as
an incentive stock option under Section 422 of the Code (an "Incentive
Stock Option"); and
(ii) a provision permitting the recipient of such Award to
pay the purchase price of the Common Stock or other property issuable
pursuant to such Award, or to pay such recipient's tax withholding
obligation with respect to such issuance, in whole or in part, by
delivering previously owned shares of capital stock of the Company
(including "pyramiding") or other property, or by reducing the number
of shares of Common Stock or the amount of other property otherwise
issuable pursuant to such Award; provided, however, that, unless
otherwise expressly determined by the Committee, all Awards granted to
Executive Officers and directors of the Company shall contain
provisions allowing for the payment of the total amount of Award
exercise prices and all tax withholding obligations by means of the
delivery of shares of capital stock of the Company and/or the
reduction of the number of shares of Common Stock or the amount of
other property otherwise issuable pursuant to an Award.
(e) Mandatory Terms and Conditions. Unless otherwise expressly
determined by the Committee, each Award shall provide that as soon as
practicable following the Committee's determination that a Change in Control of
the Company (as herein defined) is likely to occur, the Committee shall provide
each Optionee who then holds an Award with notice of such event (an
"Acceleration Notice"). Unless otherwise expressly determined by the
Committee, each Award shall further provide that, regardless of the vesting
schedule contained in an Award, each Optionee receiving an Acceleration Notice
may during the 15 calendar days following the receipt of an Acceleration Notice
exercise the Award (the "Accelerated Exercise"), in whole or in part, by
delivering the Award certificate together with the exercise price associated
therewith, if any, to the Company; provided, however, that if the Change in
Control does not occur the Optionee's Accelerated Exercise shall be of no
effect and the Optionee shall be returned his or her Award certificate together
with any exercise price paid in connection with the Accelerated Exercise (but
without interest thereon). Unless otherwise expressly determined by the
Committee, for purposes of the Plan, a "Change in Control" shall mean the
occurrence of any of the following events after the Effective Date (as herein
defined):
(i) The acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange
Act) (a "Person") of beneficial ownership (within the meaning of Rule
13d-3 promulgated under the Exchange Act ("Rule 13d-3")) of 50% or
more of the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the election
of directors (the "Outstanding Voting Securities"); provided, however,
that neither of the following acquisitions shall constitute
<PAGE> 3
a Change in Control: (1) any acquisition by the Company or (2) any
acquisition by any employee benefit plan (or related trust) sponsored
or maintained by the Company or any corporation controlled by the
Company; or
(ii) Individuals who, as of the date hereof, constitute
the Board of Directors of the Company (the "Incumbent Board") cease
for any reason to constitute at least a majority of the Board of
Directors of the Company; provided, however, that any individual
becoming a director subsequent to the date hereof whose election or
nomination for election by the stockholders of the Company, shall be
approved by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board; or
(iii) Approval by the stockholders of the Company of a
reorganization, merger or consolidation, in each case, unless in
connection with such reorganization, merger or consolidation; (1) more
than 50% of the combined voting power of the then outstanding voting
securities of the corporation resulting from such reorganization,
merger or consolidation, which may be the Company (the "Resulting
Corporation") entitled to vote generally in the election of directors
(the "Resulting Corporation Voting Securities") shall then be owned
beneficially, directly or indirectly, by all or substantially all of
the Persons who were the beneficial owners of Outstanding Voting
Securities immediately prior to such reorganization, merger or
consolidation, in substantially the same proportions as their
respective ownerships of Outstanding Voting Securities immediately
prior to such reorganization, merger or consolidation; (2) no Person
(excluding the Company, any employee benefit plan (or related trust)
of the Company, the Resulting Corporation and any Person beneficially
owning, immediately prior to such reorganization, merger or
consolidation, directly or indirectly, 20% or more of the combined
voting power of Outstanding Voting Securities) shall own beneficially,
directly or indirectly, 20% or more of the combined voting power of
the Resulting Corporation Voting Securities; and (3) at least a
majority of the members of the Board shall have been members of the
Incumbent Board at the time of the execution of the initial agreement
providing for such reorganization, merger or consolidation; or
(iv) Approval by the stockholders of the Company of (1) a
complete liquidation or dissolution of the Company or (2) sale or
other disposition of all or substantially all of the assets of the
Company, other than to a corporation (the "Buyer") with respect to
which (x) following such sale or other disposition, more than 50% of
the combined voting power of securities of Buyer entitled to vote
generally in the election of directors ("Buyer Voting Securities"),
shall be owned beneficially, directly or indirectly, by all or
substantially all of the persons who were beneficial owners of the
Outstanding Voting Securities immediately prior to such sale or other
disposition, in substantially the same proportion as their respective
ownership of Outstanding Voting Securities, immediately prior to such
sale or other disposition; (y) no Person (excluding the Company and
any employee benefit plan (or related trust) of the Company or Buyer
and any Person that shall immediately prior to such sale or other
disposition own beneficially, directly or indirectly, 20% or more of
the combined voting power of Outstanding Voting Securities), shall own
beneficially, directly or indirectly, 20% of more of the combined
voting power or, Buyer Voting Securities; and (z) at least a majority
of the members of the board of directors of Buyer shall have been
members of the Incumbent Board at the time of the execution of the
initial agreement or action of the board providing for such sale or
other disposition or assets of the Company.
(f) Maximum Awards. An Optionee may be granted multiple Awards
under the Plan. However, notwithstanding any other provision of the Plan, the
maximum number of shares of Common Stock with respect to which Awards may be
granted under the Plan to any Optionee during any fiscal year shall be 400,000,
subject to adjustment as provided in Section 8 of the Plan.
(g) Suspension or Termination of Awards. If the Board of Directors
of the Company determines that an Optionee has committed an act of
embezzlement, fraud, nonpayment of any obligation owed to the Company or any
subsidiary, breach of fiduciary duty or deliberate disregard of the Company's
rules resulting in loss, damage or injury to the Company, or if an Optionee
makes an unauthorized disclosure of trade secret or confidential information of
the Company, engages in any conduct constituting unfair competition, or induces
any customer of the Company to breach a contract with the Company, the
Committee may terminate the Optionee's rights under any then outstanding Award.
In making such determination, the Board of Directors of the Company shall act
fairly and shall give the Optionee a
<PAGE> 4
reasonable opportunity to appear and present evidence on his or her behalf at a
hearing before a committee of the Board of Directors of the Company; and if the
Optionee is an Executive Officer, the determination of the Board of Directors
of the Company shall be subject to the approval of the Committee.
5. MANDATORY GRANTS TO OUTSIDE DIRECTORS.
(a) Mandatory Grants to Outside Directors. Notwithstanding any
other provisions of the Plan, the grant of Awards to each Outside Director
shall be subject to the following limitations of this Section 5.
(i) Upon the initial election or appointment of an
Outside Director, the Committee shall grant to such member, at the
first meeting of the Committee following the date of such election or
appointment, an award in the form of a ten-year Non-Statutory Stock
Option (as hereinafter defined) to purchase 10,000 shares of Common
Stock.
(ii) The Committee shall grant to each Outside Director
who was an Outside Director prior to the annual meeting of the
Company's stockholders, effective as of each annual meeting at the
conclusion of which the Outside Director still serves as a director of
the Company, an award in the form of a ten year Non-Statutory Stock
Option to purchase 1,500 shares of Common Stock.
(iii) All Awards granted to Outside Directors under this
Section 5 shall be exercisable at an exercise price equal to 100% of
the Fair Market Value of a share of Stock on the Date of Grant.
(iv) All Awards granted to Outside Directors under this
Section 5 will vest or become exercisable as follows: 33% of the Award
(rounded up to the nearest whole share) shall vest on the first
anniversary of the Date of Grant of the Award, and 33% of the Award
(rounded up to the nearest whole share) shall vest on the second
anniversary of the Date of Grant of the Award, and the remaining
portion of the Award shall vest on the third anniversary of the Date
of Grant of the Award.
(v) Unless otherwise provided in the Plan, all provisions
regarding the terms of Awards, other than those pertaining to the
vesting of Awards, the number of shares covered by Awards, term and
Exercise Price of Awards shall be applicable to the Award granted to
Outside Directors under this Section 5.
(b) Prohibition of Other Grants to Outside Directors.
Notwithstanding any other provisions in this Plan, the mandatory grants
described in this Section 5 shall constitute the only Awards under the Plan
permitted to be made to Outside Directors unless such persons are designated
eligible persons by the Board of Directors of the Company.
(c) Grants Under the Aames Financial Corporation 1996 and 1995
Stock Incentive Plans. Awards granted under this Section 5 of the Plan are in
lieu of and supersede the mandatory grants established for Outside Directors
under Section 5 of the Aames Financial Corporation 1996 Stock Incentive Plan
and the Aames Financial Corporation 1995 Stock Incentive Plan.
6. SHARES AVAILABLE FOR AWARDS.
The aggregate number of shares of Common Stock that may be issued or
issuable pursuant to all Awards under the Plan (including Awards in the form of
Incentive Stock Options and Non-Statutory Stock Options) shall not exceed an
aggregate of 400,000 shares of Common Stock, subject to adjustment as provided
in Section 8 of the Plan; and the aggregate number of shares of Common Stock
that may be issued pursuant to all Incentive Stock Options granted under the
Plan shall not exceed 400,000 shares, subject to adjustment as provided in
Section 8 of the Plan. Shares of Common Stock subject to the Plan may consist,
in whole or in part, of authorized and unissued shares or treasury shares. Any
shares of Common Stock subject to an Award which for any reason expires or is
terminated unexercised as to such shares shall again be available for issuance
under the Plan. For purposes of this Section 6, the aggregate number of shares
of Common Stock that may be issued at any time pursuant to Awards granted under
the Plan shall be reduced by: (i) the number of shares of Common Stock
previously issued pursuant to Awards granted under the Plan, other than shares
of Common Stock subsequently reacquired by the Company pursuant to the terms
and
<PAGE> 5
conditions of such Awards and with respect to which the holder thereof received
no benefits of ownership, such as dividends; and (ii) the number of shares of
Common Stock which were otherwise issuable pursuant to Awards granted under
this Plan but which were withheld by the Company as payment of the purchase
price of the Common Stock issued pursuant to such Awards or as payment of the
recipient's tax withholding obligation with respect to such issuance.
7. VESTING.
Subject to Section 5 of the Plan, the Committee may determine that all
or a portion of an Award granted to a participant under the Plan shall be
vested at such times and upon such terms as may be selected by the Committee in
its sole discretion; provided, however, that, unless otherwise expressly
determined by the Committee, all Awards granted to Executive Officers shall
provide for vesting in four annual installments commencing on the first
anniversary of the date of the Date of Grant of such Award.
8. DILUTION AND OTHER ADJUSTMENTS.
In the event of any change in the outstanding shares of the Common
Stock or other securities then subject to the Plan by reason of any stock
split, reverse stock split, stock dividend, recapitalization, merger,
consolidation, combination or exchange of shares or other similar corporate
change, or if the outstanding securities of the class then subject to the Plan
are exchanged for or converted into cash, property or a different kind of
securities, or if cash, property or securities are distributed in respect of
such outstanding securities (other than a regular cash dividend), then, unless
the terms of such transaction shall provide otherwise, such equitable
adjustments shall be made in the Plan and the Awards thereunder (including,
without limitation, appropriate and proportionate adjustments in (i) the number
and type of shares or other securities or cash or other property that may be
acquired pursuant to Incentive Stock Options and other Awards theretofore
granted under the Plan, (ii) the maximum number and type of shares or other
securities that may be issued pursuant to Incentive Stock Options and other
Awards thereafter granted under the Plan and (iii) the maximum number of
securities with respect to which Awards may thereafter be granted to any
Optionee in any fiscal year) as the Committee determines are necessary or
appropriate, including, if necessary, any adjustments in the maximum number of
shares referred to in Section 6 of the Plan; provided, however, that no such
adjustments shall be made in the mandatory grants to Outside Directors made
pursuant to Section 5 of the Plan in the event of a stock split or stock
dividend declared by the Company. Such adjustments shall be conclusive and
binding for all purposes of the Plan.
9. MISCELLANEOUS PROVISIONS.
(a) Definitions. As used herein, (i) "subsidiary" means any
current or future corporation which would be a "subsidiary corporation," as
that term is defined in Section 424(f) of the Code, of the Company; (ii)
"Executive Officer" means a person holding one of the offices enumerated in
Rule 16a-1(f) of the Rules; (iii) "Date of Grant" means the date on which the
Committee adopts a resolution expressly granting an Award to an eligible
participant in the Plan, or if a different date is set forth in such resolution
as the Date of Grant, then such date as set forth in such resolution (iv) "Fair
Market Value" per share at any date shall mean (a) if the Common Stock is
listed on an exchange or exchanges, or admitted for trading in a market system
which provides last sale data under Rule 11Aa3-1 of the General Rules and
Regulations of the SEC under the Exchange Act (a "Market System"), the last
reported sales price per share on the last business day prior to such date on
the principal exchange on which it is traded, or in a Market System, as
applicable, or if no sale was made on such day on such principal exchange or in
such a Market System, as applicable, the last reported sales price per share on
the most recent day prior to such date on which a sale was reported on such
exchange or such Market System, as applicable; or (b) if the Stock is not then
traded on an exchange or in a Market System, the average of the closing bid and
asked prices per share for the Stock in the over-the-counter market as quoted
on NASDAQ on the day prior to such date; or (c) if the Stock is not listed on
an exchange or quoted on NASDAQ, an amount determined in good faith by the
Committee; (v) "Outside Director" means a Director who is not (a) a current
employee of the Company (or any related entity), (b) a former employee of the
Company (or any related entity) who is receiving compensation for prior
services (other than benefits under a tax-qualified retirement plan), (c) a
former officer of the Company (or any related entity), or (d) a consultant or
person otherwise receiving compensation or other remuneration, either directly
or indirectly, in any capacity other than as a Director; and (vi)
"Non-Statutory
<PAGE> 6
Stock Option" means an Award in the form of a stock option that is not an
Incentive Stock Option; and (vii) the term "or" means "and/or."
(b) Conditions on Issuance. Securities shall not be issued
pursuant to Awards unless the grant and issuance thereof shall comply with all
relevant provisions of law and the requirements of any securities exchange or
quotation system upon which any securities of the Company are listed, and shall
be further subject to approval of counsel for the Company with respect to such
compliance. Inability of the Company to obtain authority from any regulatory
body having jurisdiction, which authority is determined by Company counsel to
be necessary to the lawful issuance and sale of any security or Award, shall
relieve the Company of any liability in respect of the nonissuance or sale of
such securities as to which requisite authority shall not have been obtained.
(c) Rights as Stockholder. A participant under the Plan shall
have no rights as a holder of Common Stock with respect to Awards hereunder,
unless and until certificates for shares of such stock are issued to the
participant.
(d) Assignment or Transfer. Subject to the provisions of the Code
concerning Incentive Stock Options, at the discretion of the Committee, Awards
under the Plan and rights or interests therein may be assignable or
transferable by a participant.
(e) Agreements. All Awards granted under the Plan shall be
evidenced by written agreements in such form and containing such terms and
conditions (not inconsistent with the Plan) as the Committee shall from time to
time adopt.
(f) Withholding Taxes. Subject to Section 4(d)(ii) of the Plan,
the Company shall have the right to deduct from all Awards hereunder paid in
cash any federal, state, local or foreign taxes required by law to be withheld
with respect to such awards and, with respect to awards paid in stock, to
require the payment (through withholding from the participant's salary or
otherwise) of any such taxes. The obligation of the Company to make delivery
of Awards in cash or Common Stock shall be subject to currency or other
restrictions imposed by any government authorities.
(g) No Rights to Award. Subject to Section 5 of the Plan, no
Optionee or other person shall have any right to be granted an Award under the
Plan. Neither the Plan nor any action taken hereunder shall be construed as
giving any Optionee any right to be retained in the employ of the Company or
any of its subsidiaries or shall interfere with or restrict in any way the
rights of the Company or any of its subsidiaries, which are hereby reserved, to
discharge the Optionee at any time for any reason whatsoever, with or without
good cause.
(h) Costs and Expenses. The costs and expenses of administering
the Plan shall be borne by the Company and not charged to any Award nor to any
Optionee receiving an Award.
(i) Funding of Plan. The Plan shall be unfunded. The Company
shall not be required to establish any special or separate fund or to make any
other segregation of assets to assure the payment of any Award under the Plan.
10. AMENDMENTS AND TERMINATION.
(a) Amendments. The Committee may at any time terminate or from time
to time amend the Plan in whole or in part, but no such action shall adversely
affect any rights or obligations with respect to any Awards theretofore made
under the Plan. However, with the consent of the Optionee affected, the
Committee may amend outstanding agreements evidencing Awards under the Plan in
a manner not inconsistent with the terms of the Plan.
(b) Stockholder Approval. To the extent that Rule 16b-3 of the
Rules, Section 422 of the Code, other applicable law, or the rules,
regulations, procedures or listing agreement of any national securities
exchange or quotation system, requires that any such amendment to the Plan be
approved by the stockholders of the Company, no such amendment shall be
effective unless and until it is approved by the stockholders in such a manner
and to such a degree as is required.
<PAGE> 7
(c) Termination. Unless the Plan shall theretofore have been
terminated as above provided, the Plan (but not the awards theretofore granted
under the Plan) shall terminate on and no awards shall be granted after October
1, 2007.
11. EFFECTIVE DATE.
Subject to adoption by the stockholders of the Company, the Plan shall
be effective as of October 1, 1997 (the "Effective Date").
12. GOVERNING LAW.
The corporate law of Delaware shall govern issues related to the
validity and issuance of Common Stock. Otherwise, the Plan and any agreements
entered into thereunder shall be construed and governed by the laws of the
State of California applicable to contracts made within, and to be performed
wholly within, such state.
<PAGE> 1
AAMES FINANCIAL CORPORATION
1997 NON-QUALIFIED STOCK OPTION PLAN
1. PURPOSE OF THE PLAN.
The name of this plan is the Aames Financial Corporation 1997
Non-Qualified Stock Option Plan (the "Plan"). The purpose of the Plan is to
enable Aames Financial Corporation, a Delaware corporation (the "Company"), and
any parent company of and/or any subsidiary of the Company to obtain and retain
the services of the types of officers, employees and consultants who will
contribute to the Company's long range success and to provide incentives which
are linked directly to increases in share value which will inure to the benefit
of all stockholders of the Company.
2. ADMINISTRATION OF THE PLAN.
The Plan shall be administered by a committee of the Board of
Directors of the Company (the "Committee") consisting of two or more directors,
each of whom shall be both a "Non-Employee Director," as that term is defined
in Rule 16b-3(b) of the Rules and Regulations (the "Rules") of the Securities
and Exchange Commission under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), and an "outside director" for purposes of Section 162(m)
of the Internal Revenue Code of 1986, as amended (the "Code") and the
regulations of the Internal Revenue Service adopted thereunder, as such Rules
and such Section and regulations may from time to time be amended or
interpreted. Members of the Committee shall serve at the pleasure of the Board
of Directors of the Company.
The Committee shall have all the powers vested in it by the terms of
the Plan, including exclusive authority, (i) to select from among eligible
officers, employees and consultants those persons to be granted "Awards" (as
defined below) under the Plan; (ii) to determine the type, size and terms of
individual Awards (which need not be identical) to be made to each eligible
officer, employee and/or consultant selected; (iii) to determine the time when
Awards will be granted and to establish objectives and conditions (including,
without limitation, vesting and performance conditions), if any, for earning
Awards; (iv) to amend the terms or conditions of any outstanding Award, subject
to applicable legal restrictions and to the consent of the other party to such
Award; (v) to determine the duration and purpose of leaves of absences which
may be granted to holders of Awards without constituting termination of their
employment for purposes of their Awards; (vi) to authorize any person to
execute, on behalf of the Company, any instrument required to carry out the
purposes of the Plan; and (vii) to make any and all other determinations which
it determines to be necessary or advisable in the administration of the Plan.
The Committee shall have full power and authority to administer and interpret
the Plan and to adopt, amend and revoke such rules, regulations, agreements,
guidelines and instruments for the administration of the Plan and for the
conduct of its business as the Committee deems necessary or advisable. The
Committee's interpretation of the Plan, and all actions taken and
determinations made by the Committee pursuant to the powers vested in it
hereunder, shall be conclusive and binding on all parties concerned, including
the Company, its stockholders, any participants in the Plan and any other
employee of the Company or any parent company or any subsidiary of the Company.
Notwithstanding the foregoing, the Committee shall have no authority to reprice
underwater Awards (i.e., Awards for which the exercise price is greater than
the current Fair Market Value of the Common Stock), without the approval of the
Company's stockholders.
3. PERSONS ELIGIBLE UNDER THE PLAN.
Any person who is an officer, employee or consultant of the Company,
or of any current or future parent company or subsidiary of the Company (an
"Optionee"), shall be eligible to be considered for the grant of Awards under
the Plan; provided, however, that only employees of the Company and of any
current or future parent or subsidiary of the Company (who are otherwise
eligible to receive Awards under the Plan) shall be eligible to receive Awards
in the form of Incentive Stock Options (as hereinafter defined) under the Plan.
<PAGE> 2
4. AWARDS.
(a) Stock Options. Awards authorized under the Plan shall solely
consist of options to purchase of the Common Stock, par value $0.001 per share,
of the Company (the "Common Stock"), which options may be designated Incentive
Stock Options or Non-Statutory Stock Options hereunder (as defined below).
(b) Consideration. Common Stock may be issued pursuant to an Award
for any lawful consideration as determined by the Committee, including, without
limitation, services rendered, or to the extent permitted by applicable state
law, to be rendered by the recipient of the Award, or the delivery of a
promissory note or other deferred payment obligation by the Optionee. All
Awards granted under this Plan shall be exercisable at an exercise price equal
to 100% of the Fair Market Value of a share of Common Stock on the Date of
Grant.
(c) Guidelines. The Committee may adopt, amend or revoke from
time to time written policies implementing the Plan. Such policies may
include, but need not be limited to, the type, size and term of Awards to be
made to participants and the conditions for payment of such Awards; provided,
however, that all Awards granted under the Plan shall have a term of 10 years,
except as otherwise required by the Code.
(d) Terms and Conditions. Subject to Section 4(e) and the other
provisions of the Plan, the Committee, in its sole and absolute discretion,
shall determine all of the terms and conditions of each Award granted pursuant
to the Plan, which terms and conditions may include, among other things:
(i) any provision necessary for such Award to qualify as
an incentive stock option under Section 422 of the Code (an "Incentive
Stock Option"); and
(ii) a provision permitting the recipient of such Award to
pay the purchase price of the Common Stock or other property issuable
pursuant to such Award, or to pay such recipient's tax withholding
obligation with respect to such issuance, in whole or in part, by
delivering previously owned shares of capital stock of the Company
(including "pyramiding") or other property, or by reducing the number
of shares of Common Stock or the amount of other property otherwise
issuable pursuant to such Award; provided, however, that, unless
otherwise expressly determined by the Committee, all Awards granted to
Executive Officers shall contain provisions allowing for the payment
of the total amount of the Award exercise price and all tax
withholding obligations by means of the delivery of shares of Common
Stock of the Company and/or the reduction of the number of shares of
Common Stock or the amount of other property otherwise issuable
pursuant to an Award.
(e) Mandatory Terms and Conditions. Unless otherwise expressly
determined by the Committee, each Award shall provide that as soon as
practicable following the Committee's determination that a Change in Control of
the Company (as herein defined) is likely to occur, the Committee shall provide
each Optionee who then holds an Award with notice of such event (an
"Acceleration Notice"). Unless otherwise expressly determined by the
Committee, each Award shall further provide that, regardless of the vesting
schedule contained in an Award, each Optionee receiving an Acceleration Notice
may during the 15 calendar days following the receipt of an Acceleration Notice
exercise the Award (the "Accelerated Exercise"), in whole or in part, by
delivering the Award certificate together with the exercise price associated
therewith, if any, to the Company; provided, however, that if the Change in
Control does not occur the Optionee's Accelerated Exercise shall be of no
effect and the Optionee shall be returned his or her Award certificate together
with any exercise price paid in connection with the Accelerated Exercise (but
without interest thereon). Unless otherwise expressly determined by the
Committee, for purposes of the Plan, a "Change in Control" shall mean the
occurrence of any of the following events after the Effective Date (as herein
defined):
(i) The acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange
Act) (a "Person") of beneficial ownership (within the meaning of Rule
13d-3 promulgated under the Exchange Act ("Rule 13d-3")) of 50% or
more of the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the election
of directors (the "Outstanding Voting Securities"); provided, however,
that neither of the following acquisitions shall constitute
<PAGE> 3
a Change in Control: (1) any acquisition by the Company or (2) any
acquisition by any employee benefit plan (or related trust) sponsored
or maintained by the Company or any corporation controlled by the
Company; or
(ii) Individuals who, as of the date hereof, constitute
the Board of Directors of the Company (the "Incumbent Board") cease
for any reason to constitute at least a majority of the Board of
Directors of the Company; provided, however, that any individual
becoming a director subsequent to the date hereof whose election or
nomination for election by the stockholders of the Company, shall be
approved by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board; or
(iii) Approval by the stockholders of the Company of a
reorganization, merger or consolidation, in each case, unless in
connection with such reorganization, merger or consolidation; (1) more
than 50% of the combined voting power of the then outstanding voting
securities of the corporation resulting from such reorganization,
merger or consolidation, which may be the Company (the "Resulting
Corporation") entitled to vote generally in the election of directors
(the "Resulting Corporation Voting Securities") shall then be owned
beneficially, directly or indirectly, by all or substantially all of
the Persons who were the beneficial owners of Outstanding Voting
Securities immediately prior to such reorganization, merger or
consolidation, in substantially the same proportions as their
respective ownerships of Outstanding Voting Securities immediately
prior to such reorganization, merger or consolidation; (2) no Person
(excluding the Company, any employee benefit plan (or related trust)
of the Company, the Resulting Corporation and any Person beneficially
owning, immediately prior to such reorganization, merger or
consolidation, directly or indirectly, 20% or more of the combined
voting power of Outstanding Voting Securities) shall own beneficially,
directly or indirectly, 20% or more of the combined voting power of
the Resulting Corporation Voting Securities; and (3) at least a
majority of the members of the Board shall have been members of the
Incumbent Board at the time of the execution of the initial agreement
providing for such reorganization, merger or consolidation; or
(iv) Approval by the stockholders of the Company of (1) a
complete liquidation or dissolution of the Company or (2) sale or
other disposition of all or substantially all of the assets of the
Company, other than to a corporation (the "Buyer") with respect to
which (x) following such sale or other disposition, more than 50% of
the combined voting power of securities of Buyer entitled to vote
generally in the election of directors ("Buyer Voting Securities"),
shall be owned beneficially, directly or indirectly, by all or
substantially all of the persons who were beneficial owners of the
Outstanding Voting Securities immediately prior to such sale or other
disposition, in substantially the same proportion as their respective
ownership of Outstanding Voting Securities, immediately prior to such
sale or other disposition; (y) no Person (excluding the Company and
any employee benefit plan (or related trust) of the Company or Buyer
and any Person that shall immediately prior to such sale or other
disposition own beneficially, directly or indirectly, 20% or more of
the combined voting power of Outstanding Voting Securities), shall own
beneficially, directly or indirectly, 20% of more of the combined
voting power or, Buyer Voting Securities; and (z) at least a majority
of the members of the board of directors of Buyer shall have been
members of the Incumbent Board at the time of the execution of the
initial agreement or action of the board providing for such sale or
other disposition or assets of the Company.
(f) Maximum Awards. An Optionee may be granted multiple Awards
under the Plan. However, notwithstanding any other provision of the Plan, the
maximum number of shares of Common Stock with respect to which Awards may be
granted under the Plan to any Optionee during any fiscal year shall be 600,000,
subject to adjustment as provided in Section 7 of the Plan.
(g) Suspension or Termination of Awards. If the Board of Directors
of the Company determines that an Optionee has committed an act of
embezzlement, fraud, nonpayment of any obligation owed to the Company or any
subsidiary, breach of fiduciary duty or deliberate disregard of the Company's
rules resulting in loss, damage or injury to the Company, or if an Optionee
makes an unauthorized disclosure of trade secret or confidential information of
the Company, engages in any conduct constituting unfair competition, or induces
any customer of the Company to breach a contract with the Company, the
Committee may terminate the Optionee's rights under any then outstanding Award.
In making such determination, the Board of Directors of the Company shall act
fairly and shall give the Optionee a
<PAGE> 4
reasonable opportunity to appear and present evidence on his or her behalf at a
hearing before a committee of the Board of Directors of the Company; and if the
Optionee is an Executive Officer, the determination of the Board of Directors
of the Company shall be subject to the approval of the Committee.
5. SHARES AVAILABLE FOR AWARDS.
The aggregate number of shares of Common Stock that may be issued or
issuable pursuant to all Awards under the Plan (including Awards in the form of
Incentive Stock Options and Non-Statutory Stock Options) shall not exceed an
aggregate of 600,000 shares of Common Stock, subject to adjustment as provided
in Section 7 of the Plan; and the aggregate number of shares of Common Stock
that may be issued pursuant to all Incentive Stock Options granted under the
Plan shall not exceed 600,000 shares, subject to adjustment as provided in
Section 7 of the Plan. Shares of Common Stock subject to the Plan may consist,
in whole or in part, of authorized and unissued shares or treasury shares. Any
shares of Common Stock subject to an Award which for any reason expires or is
terminated unexercised as to such shares shall again be available for issuance
under the Plan. For purposes of this Section 5, the aggregate number of shares
of Common Stock that may be issued at any time pursuant to Awards granted under
the Plan shall be reduced by: (v) the number of shares of Common Stock
previously issued pursuant to Awards granted under the Plan, other than shares
of Common Stock subsequently reacquired by the Company pursuant to the terms
and conditions of such Awards and with respect to which the holder thereof
received no benefits of ownership, such as dividends; and (vi) the number of
shares of Common Stock which were otherwise issuable pursuant to Awards granted
under this Plan but which were withheld by the Company as payment of the
purchase price of the Common Stock issued pursuant to such Awards or as payment
of the recipient's tax withholding obligation with respect to such issuance.
6. VESTING.
The Committee may determine that all or a portion of an Award granted
to a participant under the Plan shall be vested at such times and upon such
terms as may be selected by the Committee in its sole discretion; provided,
however, that, unless otherwise expressly determined by the Committee, all
Awards granted to Executive Officers shall provide for vesting in four annual
installments commencing on the first anniversary of the Date of Grant of such
Award.
7. DILUTION AND OTHER ADJUSTMENTS.
In the event of any change in the outstanding shares of the Common
Stock or other securities then subject to the Plan by reason of any stock
split, reverse stock split, stock dividend, recapitalization, merger,
consolidation, combination or exchange of shares or other similar corporate
change, or if the outstanding securities of the class then subject to the Plan
are exchanged for or converted into cash, property or a different kind of
securities, or if cash, property or securities are distributed in respect of
such outstanding securities (other than a regular cash dividend), then, unless
the terms of such transaction shall provide otherwise, such equitable
adjustments shall be made in the Plan and the Awards thereunder (including,
without limitation, appropriate and proportionate adjustments in (i) the number
and type of shares or other securities or cash or other property that may be
acquired pursuant to Incentive Stock Options and other Awards theretofore
granted under the Plan, (ii) the maximum number and type of shares or other
securities that may be issued pursuant to Incentive Stock Options and other
Awards thereafter granted under the Plan and (iii) the maximum number of
securities with respect to which Awards may thereafter be granted to any
Optionee in any fiscal year) as the Committee determines are necessary or
appropriate, including, if necessary, any adjustments in the maximum number of
shares referred to in Section 5 of the Plan. Such adjustments shall be
conclusive and binding for all purposes of the Plan.
8. MISCELLANEOUS PROVISIONS.
(a) Definitions. As used herein, (i) "subsidiary" means any
current or future corporation which would be a "subsidiary corporation," as
that term is defined in Section 424(f) of the Code, of the Company; (ii) "Date
of Grant" means the date on which the Committee adopts a resolution expressly
granting an Award to an eligible participant in the Plan, or if a different
date is set forth in such resolution as the Date of Grant, then such date as
set forth in such
<PAGE> 5
resolution (iii) "Fair Market Value" per share at any date shall mean (a) if
the Common Stock is listed on an exchange or exchanges, or admitted for trading
in a market system which provides last sale data under Rule 11Aa3-1 of the
General Rules and Regulations of the SEC under the Exchange Act (a "Market
System"), the last reported sales price per share on the last business day
prior to such date on the principal exchange on which it is traded, or in a
Market System, as applicable, or if no sale was made on such day on such
principal exchange or in such a Market System, as applicable, the last reported
sales price per share on the most recent day prior to such date on which a sale
was reported on such exchange or such Market System, as applicable; or (b) if
the Common Stock is not then traded on an exchange or in a Market System, the
average of the closing bid and asked prices per share for the Common Stock in
the over-the-counter market as quoted on NASDAQ on the day prior to such date;
or (c) if the Common Stock is not listed on an exchange or quoted on NASDAQ, an
amount determined in good faith by the Committee; (iv) "Outside Director" means
a Director who is not (a) a current employee of the Company (or any related
entity), (b) a former employee of the Company (or any related entity) who is
receiving compensation for prior services (other than benefits under a
tax-qualified retirement plan), (c) a former officer of the Company (or any
related entity), or (d) a consultant or person otherwise receiving compensation
or other remuneration, either directly or indirectly, in any capacity other
than as a Director; (v) "Executive Officer" means a person holding one of the
offices enumerated in Rule 16a-1(f) of the Rules; (vi) "Non-Statutory Stock
Option" means an Award in the form of a stock option that is not an Incentive
Stock Option; and (vii) the term "or" means "and/or."
(b) Conditions on Issuance. Securities shall not be issued
pursuant to Awards unless the grant and issuance thereof shall comply with all
relevant provisions of law and the requirements of any securities exchange or
quotation system upon which any securities of the Company are listed, and shall
be further subject to approval of counsel for the Company with respect to such
compliance. Inability of the Company to obtain authority from any regulatory
body having jurisdiction, which authority is determined by Company counsel to
be necessary to the lawful issuance and sale of any security or Award, shall
relieve the Company of any liability in respect of the nonissuance or sale of
such securities as to which requisite authority shall not have been obtained.
(c) Rights as Stockholder. A participant under the Plan shall
have no rights as a holder of Common Stock with respect to Awards hereunder,
unless and until certificates for shares of such stock are issued to the
participant.
(d) Assignment or Transfer. Subject to the provisions of the Code
concerning Incentive Stock Options, at the discretion of the Committee, Awards
under the Plan and rights or interests therein may be assignable or
transferable by a participant.
(e) Agreements. All Awards granted under the Plan shall be
evidenced by written agreements in such form and containing such terms and
conditions (not inconsistent with the Plan) as the Committee shall from time to
time adopt.
(f) Withholding Taxes. Subject to Section 4(d)(ii) of the Plan,
the Company shall have the right to deduct from all Awards hereunder paid in
cash any federal, state, local or foreign taxes required by law to be withheld
with respect to such awards and, with respect to awards paid in stock, to
require the payment (through withholding from the participant's salary or
otherwise) of any such taxes. The obligation of the Company to make delivery
of Awards in cash or Common Stock shall be subject to currency or other
restrictions imposed by any government authorities.
(g) No Rights to Award. No Optionee or other person shall have
any right to be granted an Award under the Plan. Neither the Plan nor any
action taken hereunder shall be construed as giving any Optionee any right to
be retained in the employ of the Company or any of its subsidiaries or shall
interfere with or restrict in any way the rights of the Company or any of its
subsidiaries, which are hereby reserved, to discharge the Optionee at any time
for any reason whatsoever, with or without good cause.
(h) Costs and Expenses. The costs and expenses of administering
the Plan shall be borne by the Company and not charged to any Award nor to any
Optionee receiving an Award.
<PAGE> 6
(i) Funding of Plan. The Plan shall be unfunded. The Company
shall not be required to establish any special or separate fund or to make any
other segregation of assets to assure the payment of any Award under the Plan.
9. AMENDMENTS AND TERMINATION.
(a) Amendments. The Committee may at any time terminate or from time
to time amend the Plan in whole or in part, but no such action shall adversely
affect any rights or obligations with respect to any Awards theretofore made
under the Plan. However, with the consent of the Optionee affected, the
Committee may amend outstanding agreements evidencing Awards under the Plan in
a manner not inconsistent with the terms of the Plan.
(b) Stockholder Approval. To the extent that Rule 16b-3 of the
Rules, Section 422 of the Code, other applicable law, or the rules,
regulations, procedures or listing agreement of any national securities
exchange or quotation system, requires that any such amendment to the Plan be
approved by the stockholders of the Company, no such amendment shall be
effective unless and until it is approved by the stockholders in such a manner
and to such a degree as is required.
(c) Termination. Unless the Plan shall theretofore have been
terminated as above provided, the Plan (but not the Awards theretofore granted
under the Plan) shall terminate on, and no Awards shall be granted after,
October 1, 2007.
10. EFFECTIVE DATE.
The Plan shall be effective as of October 1, 1997 (the "Effective
Date").
11. GOVERNING LAW.
The corporate law of Delaware shall govern issues related to the
validity and issuance of Common Stock. Otherwise, the Plan and any agreements
entered into thereunder shall be construed and governed by the laws of the
State of California applicable to contracts made within, and to be performed
wholly within, such state.
<PAGE> 1
STOCK OPTION AGREEMENT
(NON-STATUTORY STOCK OPTION)
This STOCK OPTION AGREEMENT (this "Option Agreement") is made and
entered into on the date set forth on the signature page hereof, by and between
AAMES FINANCIAL CORPORATION, a Delaware corporation (the "Company"), and DAVID
SKLAR ("Optionee").
Pursuant to the Employment Agreement dated May 12, 1997 between
Optionee and the Company (the "Employment Agreement"), the Board of Directors
of the Company (the "Board") has authorized the grant to Optionee of a
non-statutory stock option to purchase shares of the Company's Common Stock,
par value $0.001 per share (the "Common Stock"), upon the terms and subject to
the conditions set forth in this Agreement.
The Company and Optionee agree as follows:
1. GRANT OF OPTION. The Company hereby grants to
Optionee the right and option (the "Option"), upon the terms and subject to the
conditions set forth in this Agreement, to purchase up to 84,000 shares of the
Common Stock (the "Shares"), at an Option Exercise Price (the "Exercise Price")
of $12.00.
2. TERM OF OPTION. The Option shall terminate and
expire on the date (the "Option Expiration Date") which is ten years from the
date of this Option Agreement, unless sooner terminated as provided herein.
3. INSTALLMENTS.
(a) Subject to the provisions of Paragraphs 3(b) and 7 of
this Option Agreement, the Option shall become exercisable in installments as
follows: 20% on May 12, 1997 and 20% on each anniversary thereof. Each
installment shall include the number of Shares, and shall become exercisable
(in whole or in part) upon and after the dates, set forth in this Paragraph
3(a). The installments shall be cumulative, i.e., the Option may be exercised,
as to any or all Shares covered by an installment, at any time or times after
the installment first becomes exercisable and until expiration or termination
of the Option.
(b) Notwithstanding anything to the contrary contained in
this Option Agreement, the Option may not be exercised, in whole or in part,
unless and until any then-applicable requirements of all state and federal laws
and regulatory agencies shall have been fully complied with to the satisfaction
of the Company and its counsel.
4. EXERCISE OF OPTION.
There is no obligation to exercise the Option, in whole or in part.
The Option may be exercised, in whole or in part, only by delivery to the
Company of:
<PAGE> 2
(a) written notice of exercise in form and substance
identical to Exhibit "A" attached to this Option Agreement stating the number
of shares of Common Stock then being purchased (the "Purchased Shares"); and
(b) payment of the Exercise Price of the Purchased
Shares, either in cash, by check, or by transfer to the Company of issued and
outstanding shares of Common Stock, or by any combination of the above methods
of payment. Payment of the Exercise Price may also be made by having shares
withheld from the total number of shares of Common Stock to be delivered upon
exercise or by delivering a properly executed notice together with irrevocable
instructions to a broker to promptly deliver to the Company the amount of sale
proceeds to pay the Exercise Price. If payment is made, in whole or in part,
by transfer to the Company of issued and outstanding shares of Common Stock,
the value of such shares shall be determined as follows: (i) if, at the time of
payment, the Common Stock is traded on the Nasdaq National Market or any
national or regional stock exchange, the value of each share shall be the
closing sale price of a share of Common Stock on the business day immediately
preceding the payment or, if no sale was made on that date, on the most recent
date when such a sale was made, as reported on the composite tape for
securities transactions or similar source for reporting sales of the Common
Stock; (ii) if, at the time of payment, quotations with respect to the Common
Stock are made on Nasdaq, the value of each share shall be the average of the
closing bid and asked quotations of a share of Common Stock on the business day
immediately preceding the payment or, if no quotations were made on that date,
on the most recent date when such quotations were made; or (iii) if, at the
time of payment, neither (i) nor (ii) above is applicable, the value of each
share shall be the fair market value of each share, as determined by the
Compensation Committee of the Board (the "Committee").
Following receipt of the notice and payment referred to above, the
Company shall issue and deliver to Optionee a stock certificate or stock
certificates evidencing the Purchased Shares; provided, however, that the
Company shall not be obligated to issue a fraction or fractions of a share of
its Common Stock, and may pay to Optionee, in cash or by check, the fair market
value of any fraction or fractions of a share exercised by Optionee, which fair
market value shall be determined as set forth in the preceding paragraph.
5. RESTRICTIONS ON PURCHASED SHARES.
Optionee shall not sell, transfer (with or without consideration),
assign, pledge, hypothecate or otherwise dispose of (collectively, "Transfer")
any of the Purchased Shares unless and until all of the following have
occurred:
(a) The Purchased Shares are disposed of pursuant to and
in conformity with an effective registration statement filed with the
Securities and Exchange Commission (the "Commission") pursuant to the
Securities Act of 1933, as amended (the "Act"), or the proposed disposition
will not result in a violation of the securities laws of any state of the
United States; and
(b) If requested by the Company, Optionee shall, prior to
the transfer of such Purchased Shares, deliver to the Company a written opinion
of counsel, satisfactory to the Company and its counsel, that the proposed
disposition will comply with the
<PAGE> 3
requirements set forth in clause (a) above, in which case, the Company shall
bear all reasonable costs of such counsel in preparing such opinion.
Any attempted Transfer which is not in full compliance with this
Paragraph 5 shall be null and void ab initio, and of no force or effect.
6. TERMINATION OF EMPLOYMENT.
(a) If Optionee shall cease to be a Director of the
Company, or to be in the employ of, or a consultant to the Company, any
subsidiary or any parent for any reason other than Optionee's death, permanent
disability, or retirement, Optionee shall have the right to exercise the Option
at any time within 30 days after the date Optionee ceased to be a Director of
the Company, or to be employed by, or to be a consultant to the Company, and
prior to the date of termination of the Option under Paragraph 2 of this Option
Agreement, with respect to all Shares with respect to which the Option was
exercisable at the date Optionee's employment or engagement terminated as to
which the Option had not previously been exercised; and to the extent
unexercised at the end of this period, the Option shall terminate. The
Committee, in its sole and absolute discretion, shall determine whether or not
authorized leaves of absence shall constitute termination of employment for
purposes of this Option Agreement.
(b) Subject to the right of the Board to terminate this
Option as set forth in Subparagraph (f) hereof, if Optionee's employment or
engagement as a consultant shall be terminated for "Cause" (as defined in the
Employment Agreement) by the Company, any subsidiary or any parent, Optionee
shall have the right to exercise the Option at any time within 30 days after
such termination, and prior to the date of termination of the Option under
Paragraph 2 of this Option Agreement, with respect to all Shares with respect
to which the Option was exercisable at the date of such termination as to which
the Option had not previously been exercised.
(c) If Optionee shall cease to be a Director of the
Company, or to be in the employ of, or a consultant to the Company, any
subsidiary or any parent by reason of Optionee's death, "Disability" (as
defined in the Employment Agreement), or retirement (a "Special Terminating
Event"), then Optionee, Optionee's executors or administrators or any person or
persons acquiring the Option directly from Optionee by bequest or inheritance,
shall have the right to exercise the Option with respect to all Shares with
respect to which the Option was exercisable at the date of such Special
Terminating Event at any time within one year after such Special Terminating
Event, but not later than the Option Expiration Date; to the extent the Option
is unexercised at the end of that period, the Option will terminate.
7. ADJUSTMENTS UPON CERTAIN CHANGES.
Subject to any required action by the stockholders of the Company:
(a) If outstanding shares of the Common Stock shall be
subdivided into a greater number of shares of the Common Stock, or a dividend
in Shares of Common Stock or other securities of the Company convertible into
or exchangeable for shares of the Common Stock (in which latter event the
number of shares of Common Stock issuable upon
<PAGE> 4
the conversion or exchange of such securities shall be deemed to have been
distributed) shall be paid in respect of the shares of Common Stock, the
Exercise Price in effect immediately prior to such subdivision or at the record
date of such dividend shall, simultaneously with the effectiveness of such
subdivision or immediately after the record date of such dividend, be
proportionately reduced, and conversely, if the outstanding shares of Common
Stock shall be combined into a smaller number of shares of Common Stock, the
Exercise Price in effect immediately prior to such combination shall,
simultaneously with the effectiveness of such combination, be proportionately
increased.
(b) In the event the Company at any time, or from time to
time, shall make or issue, or fix a record date for the determination of
holders of shares of Common Stock entitled to receive, a dividend or other
distribution payable in securities of the Company other than shares of Common
Stock or securities convertible into or exchangeable for shares of Common Stock
then and in each such event, provision shall be made so that the holder of the
Option shall receive upon exercise thereof, in addition to the number of shares
receivable thereupon, the amount of securities of the Company which he or she
would have received had his or her Option been exercised on the date of such
event and had thereafter, during the period from the date of such event to and
including the date of exercise, retained such securities receivable by him or
her as aforesaid during such period, giving application to all adjustments
called for during such period under this Paragraph 7 with respect to the rights
of the holder of the Option.
(c) When any adjustment is required to be made in the
Exercise Price, the number of Shares purchasable upon the exercise of the
Option shall be adjusted to that number of Shares determined by (i) multiplying
an amount equal to the number of Shares purchasable on the exercise of the
Option immediately prior to such adjustment by the Exercise Price in effect
immediately prior to such adjustment, and then (ii) dividing that product by
the Exercise Price in effect immediately after such adjustment.
(d) The terms and conditions under which the Option may
be exercised in the event of a "Change in Control" (as defined in the
Employment Agreement) shall be governed by Sections 6 and 7 of the Employment
Agreement.
(e) To the extent that the foregoing adjustments relate
to stock or securities of the Company, such adjustments shall be made by the
Committee, and its determination shall be final, binding and conclusive.
(f) The provisions of this Paragraph 7 are intended to be
exclusive, and Optionee shall have no other rights upon the occurrence of any
of the events described in this Paragraph 7, except as set forth in the
Employment Agreement.
(g) The grant of the Option shall not affect in any way
the right or power of the Company to make adjustments, reclassifications,
reorganizations or changes in its capital or business structure, or to merge,
consolidate, dissolve or liquidate, or to sell or transfer all or any part of
its business or assets.
<PAGE> 5
8. WAIVER OF RIGHTS TO PURCHASE STOCK.
By signing this Agreement, Optionee acknowledges and agrees that
neither the Company nor any other person or entity is under any oral obligation
to sell or transfer to Optionee any option or equity security of the Company.
By signing this Agreement, Optionee specifically waives all rights which
Optionee may have had prior to the date of this Agreement under any oral
agreement or promise by the Company to receive any option or equity security of
the Company.
9. LEGEND ON STOCK CERTIFICATES.
Optionee agrees that the Company may place on each certificate
representing the Purchased Shares the following legend:
THE SECURITIES EVIDENCED BY THIS CERTIFICATE HAVE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED ("THE ACT"),
HAVE BEEN TAKEN FOR INVESTMENT, AND MAY NOT BE SOLD, TRANSFERRED,
ASSIGNED, PLEDGED, HYPOTHECATED OR OTHERWISE DISPOSED OF EXCEPT IN
ACCORDANCE WITH THE ACT AND THE RULES AND REGULATIONS OF THE
SECURITIES AND EXCHANGE COMMISSION THEREUNDER.
10. NO RIGHTS AS STOCKHOLDER.
Optionee shall have no rights as a stockholder with respect to the
Shares until the date of the issuance to Optionee of a stock certificate or
stock certificates evidencing such Shares. Except as may be provided in
Paragraph 7 of this Option Agreement, no adjustment shall be made for dividends
(ordinary or extraordinary, whether in cash, securities or other property) or
distributions or other rights for which the record date is prior to the date
such stock certificate is issued.
11. MODIFICATION.
Subject to the terms and conditions and within the limitations of the
Plan, the Board or the Committee may modify, extend or renew the Option or
accept the surrender of, and authorize the grant of a new option in
substitution for, the Option (to the extent not previously exercised).
12. WITHHOLDING.
(a) The Company shall be entitled to require as a
condition of delivery of any Purchased Shares upon exercise of any Option that
the Optionee agree to remit, at the time of such delivery or at such later date
as the Company may determine, an amount sufficient to satisfy all federal,
state and local withholding tax requirements relating thereto, and Optionee
agrees to take such other action required by the Company to satisfy such
withholding requirements.
(b) With the consent of the Committee, and in accordance
with any rules and procedures from time to time adopted by the Committee,
Optionee may elect to satisfy
<PAGE> 6
his or her obligations under Paragraph 12(a) above by (i) directing the Company
to withhold a portion of the Shares otherwise deliverable (or to tender back to
the Company a portion of the Shares issued; or (ii) tendering other shares of
the Common Stock of the Company which are already owned by Optionee which in
all cases have a fair market value (as determined in accordance with the
provisions of Paragraph 4(b) hereof) on the date as of which the amount of tax
to be withheld is determined (the "Tax Date") equal to the amount of taxes to
be paid by such method.
(c) To exercise a Withholding Right, the Optionee must
follow the election procedures set forth below, together with such additional
procedures and conditions set forth in this Option Agreement or otherwise
adopted by the Committee:
(A) the Optionee must deliver to the Company his
or her written notice of election (the "Election") and specify whether all or a
stated percentage of the applicable taxes will be paid in accordance with
Paragraph 12(b) above and whether the amount so paid shall be made in
accordance with the "flat" withholding rates for supplemental wages or as
determined in accordance with Optionee's form W-4 (or comparable state or local
form);
(B) unless disapproved by the Committee as
provided in Subparagraph (C) below, the Election once made will be irrevocable;
and
(C) no Election is valid unless the Committee has
the right and power, in its sole discretion, with or without cause or reason
therefor, to consent to the Election, to refuse to consent to the Election, or
to disapprove the Election; and if the Committee has not consented to the
Election on or prior to the Tax Date, the Election will be deemed approved.
13. CHARACTER OF OPTION.
The Option is intended to constitute a non-statutory stock option
under the Plan and does not constitute an "incentive stock option" as that term
is defined in Section 422 of the Code.
14. GENERAL PROVISIONS.
(a) FURTHER ASSURANCES. Optionee shall promptly take all
actions and execute all documents requested by the Company which the Company
deems to be reasonably necessary to effectuate the terms and intent of this
Option Agreement.
<PAGE> 7
(b) NOTICES. All notices, requests, demands and other
communications under this Option Agreement shall be in writing and shall be
given to the parties hereto as follows:
(i) If to the Company, to:
AAMES FINANCIAL CORPORATION
350 South Grand Avenue
Los Angeles, California 90071
(ii) If to Optionee, to the address set
forth in the records of the Company,
or at such other address or addresses as may have been furnished by
such either party in writing to the other party hereto. Any such notice,
request, demand or other communication shall be effective (i) if given by mail,
72 hours after such communication is deposited in the mail by first-class
certified mail, return receipt requested, postage prepaid, addressed as
aforesaid, or (ii) if given by any other means, when delivered at the address
specified in this subparagraph (b).
(c) TRANSFER OF RIGHTS UNDER THIS OPTION AGREEMENT. The
Company may at any time transfer and assign its rights and delegate its
obligations under this Option Agreement to any other person, corporation, firm
or entity, including its officers, directors and stockholders, with or without
consideration.
(d) NON-TRANSFERABILITY. Optionee may not sell,
transfer, assign or otherwise dispose of the Option except by will or the laws
of descent and distribution.
(e) SUCCESSORS AND ASSIGNS. Except to the extent
specifically limited by the terms and provisions of this Option Agreement, this
Option Agreement shall be binding upon and inure to the benefit of the parties
hereto and their respective successors, assigns, heirs and personal
representatives.
(f) GOVERNING LAW. This Option Agreement shall be
governed by and construed in accordance with the laws of the State of
California applicable to contracts made in, and to be performed within, that
State.
(g) ATTORNEYS' FEES. In the event that any action, suit
or other proceeding is instituted upon any breach of this Option Agreement, the
prevailing party shall be paid by the other party thereto an amount equal to
all of the prevailing party's costs and expenses, including attorneys' fees
incurred in each and every such action, suit or proceeding (including any and
all appeals or petitions therefrom). As used in this Option Agreement,
"attorneys' fees" shall mean the full and actual cost of any legal services
actually performed in connection with the matter involved calculated on the
basis of the usual fee charged by the attorney performing such services and
shall not be limited to "reasonable attorneys' fees" as defined in any statute
or rule of court.
<PAGE> 8
(h) MISCELLANEOUS. Titles and captions contained in this
Option Agreement are inserted for convenience of reference only and do not
constitute a part of this Option Agreement for any other purpose. Except as
specifically provided herein, neither this Option Agreement nor any right
pursuant hereto or interest herein shall be assignable by any of the parties
hereto without the prior written consent of the other party hereto.
<PAGE> 9
IN WITNESS WHEREOF, the parties hereto have entered into and
executed this Option Agreement as of the date set forth below.
DATED: as of May 12, 1997
AAMES FINANCIAL CORPORATION
By: /s/ Cary H. Thompson
------------------------------
Cary H. Thompson
Chief Executive Officer
-----------------------------------
OPTIONEE
/s/ David A. Sklar
-----------------------------------
(Signature)
David A. Sklar
-----------------------------------
(Please print your name exactly as
you wish it to appear on any stock
certificates issued to you upon
exercise of the Option)
<PAGE> 10
Exhibit "A"
NOTICE OF EXERCISE
(To be signed only upon exercise of the Option)
TO:
The undersigned, the holder of the enclosed Stock Option Agreement
(Non-Statutory Stock Option), hereby irrevocably elects to exercise the
purchase rights represented by the Option and to purchase thereunder
________________* shares of Common Stock of AAMES FINANCIAL CORPORATION (the
"Company"), and herewith encloses payment of $ ____________ and/or ____________
shares of the Company's Common Stock in full payment of the purchase price of
such shares being purchased.
Dated: ___________, 199__.
-----------------------------------
(Signature must conform in all
respects to name of holder as
specified on the face of the
Option)
-----------------------------------
(Please Print Name)
-----------------------------------
(Address)
* Insert here the number of shares called for on the face of the
Option (or, in the case of a partial exercise, the number of shares being
exercised), in either case without making any adjustment for additional Common
Stock of the Company, other securities or property which, pursuant to the
adjustment provisions of the Option, may be deliverable upon exercise.
<PAGE> 1
November 19, 1997
Aames Financial Corporation
350 South Grand Avenue
Los Angeles, California 90071
RE: REGISTRATION STATEMENT ON FORM S-8
REGISTERING SHARES ISSUABLE UNDER AAMES FINANCIAL
CORPORATION'S (THE "COMPANY") 1997 STOCK OPTION PLAN, THE
COMPANY'S 1997 NON-QUALIFIED STOCK OPTION PLAN AND THE STOCK
OPTION AGREEMENT BETWEEN THE COMPANY AND DAVID A. SKLAR
(COLLECTIVELY, THE "PLANS")
Ladies and Gentlemen:
At your request, I have examined the Registration Statement on Form
S-8 (the "Registration Statement") being filed by the Company with the
Securities and Exchange Commission in connection with the registration under
the Securities Act of 1933, as amended (the "Securities Act"), of 1,084,000
shares of the common stock, par value $.001 per share (the "Common Stock"), of
the Company which may be issued pursuant to the exercise of options under the
Plans.
I have examined such instruments, documents and records which I deemed
relevant and necessary for the basis of my opinion hereinafter expressed. In
such examination, I have assumed the genuineness of all signatures and the
authenticity of all documents submitted to me as originals and the conformity
to the originals of all documents submitted to me as copies.
Based on such examination, I am of the opinion that the 1,084,000
shares of Common Stock which may be issued upon exercise of options under the
Plans are duly authorized shares of the Company's Common Stock, and, when
issued against payment of the purchase price therefor in accordance with the
provisions of the Agreement, will be validly issued, fully paid and
non-assessable.
This opinion is issued to you solely for use in connection with the
Registration Statement on Form S-8 and is not to be quoted or otherwise
referred to in any financial statements of the Company or related document, nor
is it to be filed with or furnished to any government agency or other person,
without my prior written consent.
<PAGE> 2
Aames Financial Corporation
November 19, 1997
Page 2
I hereby consent to the filing of this opinion as an exhibit to the
Registration Statement on Form S-8 which is being filed by the Company in
connection with the registration of the aforementioned shares of Common Stock
under the Securities Act.
Very truly yours,
/s/ Barbara S. Polsky
Barbara S. Polsky
Executive Vice President and
General Counsel
<PAGE> 1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement on Form S-8 of our report dated August 25, 1997 appearing on page F-1
of Aames Financial Corporation's Annual Report on Form 10-K for the year ended
June 30, 1997.
/s/ Price Waterhouse LLP
Los Angeles, California
November 20, 1997
<PAGE> 1
CONSENT OF INDEPENDENT AUDITORS
The Board of Directors
Aames Financial Corporation:
We consent to the incorporation by reference in the Registration Statement
on Form S-8 of Aames Financial Corporation ("AFC") (re: the 1997 Stock Option
Plan, the 1997 Non-Qualified Stock Option Plan and the Stock Option Agreement
between Aames Financial Corporation and David A. Sklar), of our report dated
August 16, 1996 and the related statements of operations, changes in
stockholders' equity and cash flows for the period January 1, 1996 through June
30, 1996 and the period August 24, 1995 (inception) through December 31, 1995,
which report appears in the June 30, 1997 annual report on Form 10-K of AFC.
/s/ KPMG Peat Marwick LLP
Orange County, California
November 20, 1997
