<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.)
3731 WILSHIRE BOULEVARD, 10TH FLOOR
LOS ANGELES, CALIFORNIA 90010
(Address of principal executive offices) (Zip Code)
AAMES FINANCIAL CORPORATION 1996 STOCK INCENTIVE PLAN
STOCK OPTION AGREEMENT BETWEEN
AAMES FINANCIAL CORPORATION AND CARY H. THOMPSON
AAMES FINANCIAL CORPORATION ASSUMPTION STOCK OPTION AGREEMENTS
(Full title of plan)
BARBARA S. POLSKY, ESQ.
SENIOR VICE PRESIDENT AND GENERAL COUNSEL
AAMES FINANCIAL CORPORATION
3731 WILSHIRE BOULEVARD, 11TH FLOOR
LOS ANGELES, CALIFORNIA 90010
(Name and address of agent for service)
(213) 351-6100
(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 par
value per share 1,524,355 $37.00 $56,401,135 $17,092
Preferred Share 1,524,355 NA NA NA
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 Prospectus Supplement dated October 10, 1996 filed
pursuant to Rule 424(b) under the Securities Act of 1933, as
amended (the "Securities Act");
(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, 1996; 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 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 Registrant's 1996 Stock Incentive Plan
4.2 Stock Option Agreement between the Registrant and Cary H. Thompson (1)
4.3 Form of Assumption Stock Option Agreement between the Registrant and
the employees listed on Schedule A thereto
5.1 Opinion of Barbara S. Polsky, Esq., Senior Vice President and General
Counsel of the Registrant, regarding validity of securities
23.1 Consent of Price Waterhouse, LLP
23.2 Consent of Barbara S. Polsky, Esq., Senior Vice President and General
Counsel of the Registrant (included in Exhibit 5.1)
- ----------------------
(1) Incorporated by reference from Registrant's Annual Report on Form 10-K for
the year ended June 30, 1996.
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;
(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 January 7,
1997.
AAMES FINANCIAL CORPORATION
(Registrant)
By: /s/ Gary K. Judis
--------------------------------
Gary K. Judis
Chairman, President and
Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Gary K. Judis and Gregory J. Witherspoon and each
of them, his or her attorney-in-fact and agent, with full power of substitution,
for him or her 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 or she 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 or her 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/ Gary K. Judis Chairman, Chief Executive Officer and January 7, 1997
- ----------------------------- President (Principal Executive Officer)
Gary K. Judis
/s/ Cary H. Thompson Chief Operating Officer and Director January 7, 1997
- -----------------------------
Cary H. Thompson
/s/ Gregory J. Witherspoon Executive Vice President - Finance, January 7, 1997
- ----------------------------- Chief Financial Officer and Director
Gregory J. Witherspoon
/s/ Bobbie J. Burroughs Executive Vice President - Administration, January 7, 1997
- ----------------------------- Secretary and Director
Bobbie J. Burroughs
/s/ Mark E. Elbaum Senior Vice President - Finance January 7, 1997
- ----------------------------- (Principal Accounting Officer)
Mark E. Elbaum
/s/ Neil B. Kronswiet Executive Vice President and Director January 7, 1997
- -----------------------------
Neil B. Kornswiet
/s/ Joseph R. Cerrell Director December 19, 1996
- -----------------------------
Joseph R. Cerrell
/s/ Dennis F. Holt Director January 7, 1997
- -----------------------------
Dennis F. Holt
/s/ Melvyn Kinder Director January 7, 1997
- -----------------------------
Melvyn Kinder
</TABLE>
4
<PAGE> 5
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
4.1 Registrant's 1996 Stock Incentive Plan
4.2 Stock Option Agreement between the Registrant and
Cary H. Thompson (1)
4.3 Form of Assumption Stock Option Agreement between the Registrant
and the employees listed on Schedule A thereto
5.1 Opinion of Barbara S. Polsky, Esq., Senior Vice President, and
General Counsel of the Registrant, regarding validity of securities
23.1 Consent of Price Waterhouse, LLP
23.2 Consent of Barbara S. Polsky, Esq., Senior Vice President, and
General Counsel of the Registrant (included in Exhibit 5.1)
</TABLE>
- --------------------
(1) Incorporated by reference from Registrant's Annual Report on Form 10-K for
the year ended June 30, 1996.
5
<PAGE> 1
EXHIBIT 4.1
REGISTRANT'S 1996 STOCK INCENTIVE PLAN
<PAGE> 2
AAMES FINANCIAL CORPORATION
1996 STOCK INCENTIVE PLAN
1. PURPOSE OF THE PLAN.
The name of this plan is the Aames Financial Corporation 1996 Stock
Incentive 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, 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
directors, 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 director, 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 (other than
the Exercise Price) 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
<PAGE> 3
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.
3. PERSONS ELIGIBLE UNDER THE PLAN.
Any person who is a director, officer, employee or consultant of the
Company, or of any current or future parent company or subsidiary of the Company
(an "Employee"), 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 shall be eligible to receive Awards in the form of
Incentive Stock Options (as hereinafter defined) under the Plan.
4. AWARDS.
(a) Stock Options. Awards authorized under the Plan shall solely
consist of options to purchase the Common Stock of the Company, par value $0.001
per share, (the "Common Stock"), which options may be designated Incentive Stock
Options or Non-Statutory Options hereunder (each 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 Employee. 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 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.
(d) Terms and Conditions. Subject to Section 4(f) 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:
2
<PAGE> 4
(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 withholdings 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 of Control of
the Company (as hereinafter defined) is likely to occur, the Committee shall
provide each Employee 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 Employee 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 of Control does not occur
the Employee's Accelerated Exercise shall be of no effect and the Employee 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 of 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 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
3
<PAGE> 5
(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; 3. 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; 4. 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 5. 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 6. a
complete liquidation or dissolution of the Company or 7. 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 ("Buying 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
4
<PAGE> 6
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 Employee 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 options or rights or
other Awards may be granted under the Plan to any Employee during any fiscal
year shall be 700,000, subject to adjustment as provided in Section 9 of the
Plan.
(g) Suspension or Termination of Awards. If the Board of Directors of
the Company determines that an Employee 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 Employee 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 Employee'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 Employee a 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 Employee 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,
effective as of each annual meeting of the Company's stockholders 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.
5
<PAGE> 7
(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 1995 Stock Incentive
Plan. 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 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 Options) shall not exceed an aggregate
of 700,000 shares of Common Stock, subject to adjustment as provided in Section
9 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 700,000 shares, subject to adjustment as provided in Section 9 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: 4. 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 5. the number of shares of Common Stock which
were otherwise issuable pursuant to Awards granted under this Plan but
6
<PAGE> 8
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. PAYMENT OF AWARDS.
Subject to the provisions of Section 4(e)(ii) and Section 5 of the
Plan, the Committee shall determine the extent to which Awards shall be payable
in cash, shares of Common Stock or any combination thereof. The Committee may,
upon request of a participant, determine that all or a portion of a payment to
that participant under the Plan, whether it is to be made in cash, shares of
Common Stock or a combination thereof, shall be deferred. Deferrals shall be for
such periods and upon such terms as the Committee may determine in its sole
discretion.
8. 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, whether it is
to be made in cash, shares of Common Stock or a combination thereof, 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.
9. 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 (including mandatory grants to Outside Directors
made pursuant to Section 5 of the Plan) 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 (including mandatory grants
to Outside Directors made pursuant to Section 5 of the
7
<PAGE> 9
Plan) thereafter granted under the Plan and (iii) the maximum number of
securities with respect to which Awards (including mandatory grants to Outside
Directors made pursuant to Section 5 of the Plan) may thereafter be granted to
any Employee 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. Such adjustments shall be
conclusive and binding for all purposes of the Plan.
10. 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; (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.
8
<PAGE> 10
(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(e)(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 Employee 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 Employee 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 Employee 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
Employee 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.
11. 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 Employee affected, the
Committee may amend outstanding agreements evidencing Awards under the Plan in a
manner not inconsistent with the terms of the Plan.
9
<PAGE> 11
(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 September 9, 2006.
12. EFFECTIVE DATE.
Subject to adoption by the holders of the majority of the Common Stock
of the Company, the Plan shall be effective as of September 12, 1996 (the
"Effective Date").
13. 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 con
10
<PAGE> 1
EXHIBIT 4.3
FORM OF ASSUMPTION STOCK OPTION
AGREEMENT BETWEEN THE REGISTRANT
AND THE EMPLOYEES LISTED ON
SCHEDULE A THERETO
<PAGE> 2
ASSUMPTION
OPTION CERTIFICATE
(NON-QUALIFIED STOCK OPTION)
THIS IS TO CERTIFY that Aames Financial Corporation, a Delaware
corporation (the "Company"), has issued to the employee named below (the
"Employee") an Assumption Non-Qualified Stock Option (the "Option") to purchase
shares of the Corporation's Common Stock, par value $0.001 per share (the
"Shares"), as follows:
Name of Employee: ____________
Address of Employee: 200 Baker Street
Costa Mesa, California 92626
Number of Shares: ____________
Option Exercise Price: ____________
Option Expiration Date: ____________
EXERCISE SCHEDULE: With respect to all Shares underlying the Option,
the Option shall become exercisable ("vest") as follows:
------------
SUMMARY OF OTHER TERMS: This Option is defined in the Assumption Stock
Option Agreement (Non-Qualified Option) (the "Option Agreement") which is
attached to this Option Certificate (the "Certificate") as Annex I. This
Certificate summarizes certain of the provisions of the Option Agreement for
your information, but is not complete. Your rights are governed by the Option
Agreement, not by this Summary. The Company strongly suggests that you carefully
review the full Option Agreement prior to signing this Certificate or exercising
the Option.
Among the terms of the Option Agreement are the following:
TERMINATION OF EMPLOYMENT: While the Option terminates on the Option
Expiration Date, it will terminate earlier if you cease to be employed by the
Company. If your employment ends due to death or permanent disability, the
Option terminates 12 months after the date of death or disability, and is
exercisable during such 12-month period as to the portion of the Option which
had vested prior to the date of death or disability. If your employment
terminates "for cause," the Option terminates immediately. In all other cases,
the Option terminates 90 days after the date of termination of employment, and
is exercisable during such time period as
<PAGE> 3
to the portion of the Option which had vested prior to the date of termination
of employment. See Section 5 of the attached Option Agreement.
TRANSFER: The Option is personal to you, and cannot be sold,
transferred, assigned or otherwise disposed of to any other person, except on
your death. See Section 15(d) of the attached Option Agreement.
EXERCISE: You can exercise the Option (once it is exercisable), in
whole or in part, by delivering to the Company a Notice of Exercise identical to
Exhibit "A" attached to the Option Agreement, accompanied by payment of the
Exercise Price for the Shares to be purchased. The Company will then issue a
certificate to you for the Shares you have purchased. You are under no
obligation to exercise the Option. See Section 4 of the Option Agreement.
ANTI-DILUTION PROVISIONS: The Option contains provisions which adjust
your Option to reflect stock splits, stock dividends, mergers and other major
corporate reorganizations which would change the nature of the Shares underlying
your Option. See Section 7 of the Option Agreement.
WITHHOLDING: The Company may require you to make any arrangements
necessary to insure the proper withholding of any amount of tax, if any,
required to be withheld by the Company as a result of the exercise of the
Option. See Section 13 of the Option Agreement.
2
<PAGE> 4
AGREEMENT
Aames Financial Corporation, a Delaware corporation (the "Company"),
and the above-named person (the "Employee") each hereby agrees to be bound by
all of the terms and conditions of the Assumption Stock Option Agreement
(Non-Qualified Stock Option) which is attached hereto as Annex I and
incorporated herein by this reference as if set forth in full in this document.
DATED: _________________
AAMES FINANCIAL CORPORATION
By:___________________________
Its:__________________________
EMPLOYEE: ____________
______________________________
(Signature)
_______________________________
(Please print the name exactly as
you wish it to appear on any
stock certificates issued to you upon
exercise of the Option)
3
<PAGE> 5
ANNEX I
ASSUMPTION STOCK OPTION AGREEMENT
(NON-QUALIFIED STOCK OPTION)
This Assumption Stock Option Agreement (this "Option Agreement") is
made and entered into on the execution date of the Option Certificate to which
it is attached (the "Certificate"), by and between Aames Financial Corporation,
a Delaware corporation (the "Company") and ____________ (the "Employee"), with
reference to the following:
RECITALS
A. Pursuant to that certain Employment Agreement, dated ____________,
(the "Employment Agreement") by and between One Stop Mortgage, Inc. ("One Stop")
and Employee, Employee has been granted an option to purchase ____________
shares of One Stop Common Stock, no par value, at an exercise price of
$____________ per share (the "Original Option").
B. Pursuant to that certain Agreement and Plan of Reorganization, dated
August 12, 1996, by and among the Company, One Stop and a wholly owned
subsidiary of the Company, the Company has agreed to assume all of One Stop's
obligations under the Original Option.
C. The option issued to Employee pursuant to this Option Agreement is
provided to Employee in substitution of the Original Option and in satisfaction
of the obligation referenced in the immediately preceding recital.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing recitals and other
good and valuable consideration the receipt and sufficiency of which are hereby
acknowledged, the Company and Employee do agree as follows:
1. ASSUMPTION OF OPTION. The Company, in full satisfaction of One
Stop's obligations under the Original Option, hereby provides Employee with the
right and option (the "Option"), upon the terms and subject to the conditions
set forth in this Option Agreement, to purchase all or any portion of the number
of shares of Common Stock (the "Shares") set forth in the Certificate, at the
Option exercise price set forth in the Certificate (the "Exercise Price").
2. TERM OF OPTION. The Option shall terminate and expire on the Option
Expiration Date set forth in the Certificate, unless sooner terminated as
provided herein.
<PAGE> 6
3. EXERCISE PERIOD.
(a) Subject to the provisions of Sections 3(b) and 5 of this
Option Agreement, the Option shall become exercisable (in whole or in part) upon
and after the dates set forth under the caption "Exercise Schedule" in the
Certificate. 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 the 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:
(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 or by check.
Following receipt of the notice and payment referred to above,
the Company shall issue and deliver to Employee a stock certificate or stock
certificates evidencing the Purchased Shares.
5. TERMINATION OF EMPLOYMENT.
(a) If Employee shall cease to be in the employ of One Stop,
any present or future corporation which would be a "subsidiary corporation"
("Subsidiary") as that term is defined in Section 424 of the Internal Revenue
Code of 1986, as amended from time to time, or any successor thereto (the
"Code"), or any present or future corporation which would be a "parent
corporation" as that term is defined in Section 424 of the Code ("Parent"), for
any reason other than death or permanent disability or termination by the
Company "for cause" (a "Terminating Event"), Employee shall have the right to
exercise the Option at any time following such Terminating Event until the
earlier to occur of (i) 90 days following the date of such Terminating Event and
(ii) the Expiration Date. The Option may be exercised following a Terminating
Event only to the extent exercisable as of the date of the Terminating Event. To
the extent unexercised at the end of the period referred to above, the Option
shall terminate. The Company, 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) If, by reason of death or disability (a "Special
Terminating Event"), Employee shall cease to be an officer, director, consultant
or employee the Company or any Subsidiary or Parent, then Employee, Employee's
executors or administrators or any person or persons acquiring the Option
directly from Employee by bequest or inheritance, shall have the right to
exercise the Option at any time following such Special Terminating Event until
the earlier to occur of (i) 12
2
<PAGE> 7
months following the date of such Special Terminating Event and (ii) the
Expiration Date. The Option may be exercised following a Special Terminating
Event only to the extent exercisable at the date of the Special Terminating
Event. To the extent unexercised at the end of the period referred to above, the
Option shall terminate. For purposes of this Option Agreement, "disability"
shall mean total and permanent disability as defined in Section 22(e)(3) of the
Code. Employee shall not be considered permanently disabled unless he furnishes
proof of such disability in such form and manner, and at such times, as the
Administrator may from time to time require.
(c) If Employee shall be terminated "for cause" by One Stop,
the Company, or any Subsidiary or any Parent, the Option shall terminate as of
the date of termination. For purposes of this Option Agreement, "for cause"
shall be defined in the same manner as set forth in the Employment Agreement.
(d) Nothing in the Certificate or this Option Agreement shall
confer upon Employee any right to continue in the service and/or employ of One
Stop, the Company, any other Subsidiary or any Parent or shall affect the right
of the Company, any Subsidiary or any Parent to terminate the relationship or
employment of Employee, with or without cause.
6. RESTRICTIONS ON PURCHASED SHARES. None of the Purchased Shares shall
be transferred (with or without consideration), sold, offered for sale,
assigned, pledged, hypothecated or otherwise disposed of (each a "Transfer") and
the Company shall not be required to register any such Transfer and the Company
may instruct its transfer agent not to register any such Transfer, unless and
until all of the following events shall have occurred:
(a) the Purchased Shares are Transferred pursuant to and in
conformity with (i) (x) 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 (y) an exemption from registration under
the Act, and (ii) the securities laws of any state of the United States; and
(b) Employee has, prior to the Transfer of such Purchased
Shares, and if requested by the Company, provided all relevant information to
Company's counsel so that upon Company's request, Company's counsel is able to,
and actually prepares and delivers to the Company a written opinion that the
proposed Transfer (i) (x) is pursuant to a registration statement which has been
filed with the Commission and is then effective, or (y) is exempt from
registration under the Act as then in effect, and the Rules and Regulations of
the Commission thereunder, and (ii) is either qualified or registered under any
applicable state securities laws, or exempt from such qualification or
registration. The Company shall bear all reasonable costs of preparing such
opinion.
Any attempted Transfer which is not in full compliance with
this Section 6 shall be null and void ab initio, and of no force or effect.
7. ADJUSTMENTS UPON RECAPITALIZATION. Subject to any required
action by the stockholders of the Company:
(a) If the 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
3
<PAGE> 8
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 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) 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.
(c) To the extent that the foregoing adjustments relate to
stock or securities of the Company, such adjustments shall be made by the
Administrator, and its determination shall be final, binding and conclusive.
(d) The provisions of this Section 7 are intended to be
exclusive, and Employee shall have no other rights upon the occurrence of any of
the events described in this Section 7.
(e) 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.
8. INVESTMENT INTENT. Employee represents and agrees that if
Employee exercises the Option in whole or in part and if at the time of such
exercise the Purchased Shares have not been registered under the Act, Employee
will acquire the Shares upon such exercise for the purpose of investment and not
with a view to the distribution of such Shares, and that upon each exercise of
the Option he or she will furnish to the Company a written statement to such
effect.
9. LEGEND ON STOCK CERTIFICATES. Employee agrees that all
certificates representing the Purchased Shares will be subject to such stock
transfer orders and other restrictions (if any) as the Company may deem
advisable under the rules, regulations and other requirements of the Commission,
any stock exchange upon which the Common Stock is then listed and any applicable
federal or state securities laws, and the Company may cause a legend or legends
to be put on such certificates to make appropriate reference to such
restrictions.
10. NO RIGHTS AS STOCKHOLDER. Employee shall have no rights as a
stockholder with respect to the Shares until the date of the issuance to
Employee of a stock certificate or stock certificates evidencing such Shares.
Except as may be provided in Section 7 of this Option Agreement, no adjustment
shall be made for dividends (ordinary or extraordinary, whether in cash,
4
<PAGE> 9
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. WAIVER OF RIGHTS TO PURCHASE STOCK. By signing this Option
Agreement, Employee acknowledges and agrees that none of One Stop, the Company
nor any other person or entity is under any obligation to sell or transfer to
Employee any option or equity security of One Stop or the Company. By signing
this Option Agreement, Employee further acknowledges that all promises, whether
written or oral, made by One Stop or the Company regarding the grant of options
to purchase shares of the Common Stock of, or other securities of, One Stop or
the Company and all grants of such options are superseded and satisfied by this
Option Agreement. By signing this Option Agreement, Employee specifically waives
all rights which Employee may have had prior to the date of this Option
Agreement to receive any option or equity security of One Stop or the Company.
12. MODIFICATION. The Administrator 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).
13. WITHHOLDING. The Company shall be entitled to require as a
condition of delivery of any Purchased Shares upon exercise of any Option that
the Employee 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 Employee agrees to
take such other action required by the Company to satisfy such withholding
requirements.
14. CHARACTER OF OPTION. The Option is not intended to qualify as
an "incentive stock option" as that term is defined in Section 422 of the Code.
15. GENERAL PROVISIONS.
(a) FURTHER ASSURANCES. Employee 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.
(b) NOTICES. All notices, requests, demands and other
communications under this Option Agreement shall be in written and shall be
given to the parties hereto as follows:
(i) If to the Company, to:
Aames Financial Corporation
3731 Wilshire Boulevard
Los Angeles, California 90010
(ii) If to Employee, to the address set
forth in the records of One Stop.
or at such other address or addresses as may have been furnished by such 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,
5
<PAGE> 10
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) OPTION NON-TRANSFERABLE. Employee may not sell, transfer,
assign or otherwise dispose of the Option except by will or the laws of descent
and distribution, and the Option may be exercised during the lifetime of
Employee only by Employee or by Employee's guardian or legal representative in
the case of a disability, and upon Employee's death only by Employee's Estate or
by any person who acquired the Option by bequest or inheritance or by reason of
the death of Employee.
(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) 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 fight
pursuant hereto or interest herein shall be assignable by any of the parties
hereto without the prior written consent of the other party hereto.
The Signature Page to this Option Agreement consists of the
last page of the Certificate.
6
<PAGE> 11
Exhibit "A"
NOTICE OF EXERCISE
(To be signed only upon exercise of the Option)
TO: Aames Financial Corporation
The undersigned, the holder of the enclosed Stock Option
Agreement (Non-Qualified 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 $________________ in full payment
of the purchase price of such shares being purchased.
Dated: ____________________
-------------------------------
(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.
7
<PAGE> 12
SCHEDULE A
OPTION GRANTS UNDER ASSUMPTION STOCK OPTION AGREEMENTS
<TABLE>
<CAPTION>
Name of Optionee Exercise Price Number of Options Expiration Date
- ---------------- -------------- ----------------- ---------------
<S> <C> <C> <C>
Robert Anthony 0.2949 10,172 9/14/05
Steven Baker 0.2949 10,172 9/15/05
David Balk 0.2950 5,086 9/14/05
Agnes Bantigue 0.2948 2,034 9/15/05
Dwayne Barfell 0.2949 20,345 9/15/05
David Blewett 4.5642 10,172 11/20/05
Henry Brandt 0.2949 10,172 10/19/05
James Carlson 0.2949 20,345 10/09/05
Rick Carter 0.2949 15,259 9/14/05
John Dempsey 0.2949 6,782 9/15/05
Thanh-Nga Do 0.2950 2,543 9/14/05
Christopher Dreitzler 4.5642 10,172 11/22/05
Rita Duckwitz 0.2948 2,034 9/15/05
Kevin Helmick 0.2949 15,259 10/27/05
Colleen Hutchinson 4.5642 20,345 2/09/06
Pamela Ingalls 0.2950 5,086 9/15/05
Douglas Johnson 0.2949 15,259 9/14/05
Ernie LaCasse 4.5651 2,543 2/19/06
James Laliberte 0.2950 2,543 9/15/05
Dana Lantry 0.2949 10,172 9/14/05
Arte Libunao 0.2950 5,086 9/15/05
Lucio Martino 0.2949 20,345 10/10/05
Randy Morrisson 0.2950 5,086 9/15/05
Laurel Neuber 0.2950 5,086 9/15/05
Neil Notkin 0.2949 40,690 9/15/05
Robert Rivernider 0.2949 20,345 9/15/05
Debra Shetland 0.2950 2,543 9/15/05
Larry Siegel 0.2949 10,172 9/15/05
Steven Tomaszewski 32.1295 2,543 5/30/06
Scott Warren 0.2950 2,543 9/15/05
Peter Waterson 4.5649 5,086 12/15/05
Matthew Woodle 0.2949 20,345 9/15/05
Peter Woodworth 0.2949 40,690 9/15/05
------
TOTAL 377,055
</TABLE>
<PAGE> 1
EXHIBIT 5.1
OPINION OF BARBARA S. POLSKY, ESQ.,
SENIOR VICE PRESIDENT AND GENERAL
COUNSEL OF THE REGISTRANT, REGARDING
VALIDITY OF SECURITIES
<PAGE> 2
January 6, 1997
Aames Financial Corporation
3731 Wilshire Boulevard
Los Angeles, California 90010
RE: REGISTRATION STATEMENT ON FORM S-8
REGISTERING SHARES ISSUABLE UNDER THE
AAMES FINANCIAL CORPORATION (THE "COMPANY")
1996 STOCK INCENTIVE PLAN, THE STOCK OPTION
AGREEMENT BETWEEN THE COMPANY AND
CARY H. THOMPSON, AND THE ASSUMPTION STOCK
OPTION AGREEMENTS BETWEEN THE COMPANY AND
CERTAIN EMPLOYEES OF THE COMPANY (COLLECTIVELY, THE "PLANS")
Ladies and Gentlemen:
At you 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 1,524,355 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
1,524,355 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 Plans, 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> 3
Aames Financial Corporation
January 6, 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
Senior Vice President and
General Counsel
<PAGE> 1
EXHIBIT 23.1
CONSENT OF PRICE WATERHOUSE, LLP
<PAGE> 2
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Registration
Statement of Aames Financial Corporation on Form S-8 (re: 1996 Stock Incentive
Plan, the Stock Option Agreement between Aames Financial Corporation and Cary H.
Thompson, and the Assumption Stock Option Agreements between Aames Financial
Corporation and certain employees thereof) of our report dated August 12, 1996
appearing in Aames Financial Corporation's Annual Report on Form 10-K for the
year ended June 30, 1996. We also consent to the incorporation by reference of
our report dated August 28, 1996 which appears in the Current Report of Form
8-K/A dated September 16, 1996.
/s/ Price Waterhouse LLP
Price Waterhouse LLP
Los Angeles, California
January 6, 1997
