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SCHEDULE 14C INFORMATION
INFORMATION STATEMENT PURSUANT TO SECTION 14(c) OF
THE SECURITIES EXCHANGE ACT OF 1934
File No. 001-13660
<TABLE>
<S> <C>
Check the appropriate box:
/X/ Preliminary Information Statement
/ / CONFIDENTIAL, FOR USE OF THE COMMISSION ONLY (AS PERMITTED
BY RULE 14c-5(d)(2))
/ / Definitive Information Statement
</TABLE>
<TABLE>
<S> <C>
AAMES FINANCIAL CORPORATION
- ------------------------------------------------------------
(Name of Registrant As Specified In Its Charter)
</TABLE>
Payment of Filing Fee (check the appropriate box):
<TABLE>
<S> <C> <C>
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14c-5(g) and
0-11.
(1) Title of each class of securities to which transaction
applies:
N/A
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(2) Aggregate number of securities to which transaction
applies:
N/A
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(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how
it was determined):
N/A
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(4) Proposed maximum aggregate value of transaction:
N/A
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(5) Total fee paid:
N/A
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or
Schedule and the date of its filing.
(1) Amount previously paid:
N/A
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(2) Form, Schedule or Registration Statement No.:
N/A
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(3) Filing Party:
N/A
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(4) Date Filed:
N/A
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</TABLE>
Notes:
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AAMES FINANCIAL CORPORATION
----------------
INFORMATION STATEMENT
MARCH , 2000
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INTRODUCTION
This Information Statement is furnished in connection with the prior action
taken by the holders of a majority of shares of Series B Convertible Preferred
Stock, par value $0.001 (the "SERIES B PREFERRED STOCK") and the Series C
Convertible Preferred Stock, par value $0.001 (the "SERIES C PREFERRED STOCK"
and, together with the Series B Preferred Stock, the "PREFERRED STOCK"),
together as a single class, entitled to vote on certain corporate matters
relating to Aames Financial Corporation, a Delaware corporation (the "COMPANY").
This information statement is furnished in compliance with Section 14(c) of the
Securities Exchange Act of 1934, as amended (the "EXCHANGE ACT").
As of March 20, 2000 (the "VOTING DATE"), there were 29,704,000 authorized
shares of Series B Preferred Stock of which 26,704,000 shares were issued and
outstanding and there were 107,122,664 authorized shares of Series C Preferred
Stock of which 100,833,000 shares were issued and outstanding.
On the Voting Date the holders of 26,704,000 shares of Series B Preferred
Stock and 94,136,734 shares of Series C Preferred Stock (the "VOTING
STOCKHOLDERS"), or approximately 94.74% of the total outstanding shares of the
Preferred Stock, together as a single class, consented in writing to the
Proposal described herein (the "PROPOSAL") and such vote was therefore
sufficient to take the proposed action. The Board of Directors of the Company
(the "BOARD OF DIRECTORS") is not soliciting any proxies or consents from any
other stockholders in connection with the Proposal. This Information Statement
is being mailed to stockholders on or about , to all stockholders of
record as of .
The principal executive offices of the Company are located at 350 S. Grand
Avenue, 52(nd) Floor, Los Angeles, California 90071 and its telephone number is
(323) 210-5000.
------------------------
WE ARE NOT ASKING YOU FOR A PROXY AND YOU
ARE REQUESTED NOT TO SEND US A PROXY
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DISSENTERS' RIGHTS OF APPRAISAL
No action was taken in connection with the Proposal by the Board of
Directors or the Voting Stockholders for which the laws of the State of
Delaware, the Certificate of Incorporation of the Company, as amended, (the
"CERTIFICATE OF INCORPORATION") or the Bylaws of the Company, as amended (the
"BYLAWS") provide a right of a stockholder to dissent and obtain appraisal of or
payment for such stockholder's shares.
INTEREST OF OFFICERS AND DIRECTORS IN MATTERS TO BE ACTED UPON
The Company entered into a Management Investment Agreement, effective
October 25, 1999, with A. Jay Meyerson, the Company's Chief Executive Officer
pursuant to which Mr. Meyerson agreed to purchase on a mutually agreed upon
date, 500,000 shares of Series C Preferred Stock for $1.00 per share (the
"MEYERSON SHARES"), of which 50% will be financed by the Company pursuant to a
secured note.
On October 22, 1999 David Sklar, the Company's former Executive Vice
President--Finance and Chief Financial Officer entered into a Retention
Agreement with the Company (the "RETENTION AGREEMENT") pursuant to which
Mr. Sklar agreed to purchase shares of Series C Preferred Stock worth a minimum
of $100,000 (the "SKLAR SHARES") on a mutually agreed upon date. Mr. Sklar
resigned on February 29, 2000, however the Retention Agreement obligates
Mr. Sklar to purchase the Sklar Shares regardless of his employment status with
the Company.
The Company could not issue the Meyerson Shares or the Sklar Shares without
the consent of a majority of the outstanding shares of the Preferred Stock,
together as a single class. No other officers or directors of the Company have
any substantial interest in the Proposal, except insofar as such officers or
directors may be stockholders of the Company, in which case the implementation
of the Proposal will affect them in the same manner as it affects all other
stockholders of the Company. However, as a result of the Proposal the Board of
Directors will have the discretion to issue shares of, or securities convertible
into shares of, Series C Preferred Stock including to officers and/or directors
of the Company.
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PRINCIPAL STOCKHOLDERS
The following table sets forth, as of March 20, 2000, certain information
relating to the ownership of the Company's Common Stock, par value $0.001 per
share (the "COMMON STOCK") which includes shares of Common Stock issuable upon
the exercise of stock options and warrants and conversion of Preferred Stock by
(i) each person known by the Company to be the beneficial owner of more than 5%
of the outstanding shares of the Common Stock, (ii) each of the Company's
directors, (iii) each of the Company's Directors and certain of its executive
officers and (iv) all of the Company's executive officers and directors as a
group. Except as may be indicated in the footnotes to the table and subject to
applicable community property laws, each of such persons has sole voting and
investment power with respect to the shares beneficially owned. Beneficial
ownership has been determined in accordance with Rule 13d-3 under the Exchange
Act. Under Rule 13d-3, certain shares may be deemed to be beneficially owned by
more than one person (such as where persons share voting power or investment
power). In addition, shares are deemed to be beneficially owned by a person if
the person has the right to acquire the shares (for example, upon exercise of an
option) within 60 days of the date as of which the information is provided; in
computing the percentage ownership of any person, the amount of shares
outstanding is deemed to include the amount of shares beneficially owned by such
person (and only such person) by reason of these acquisition rights. As a
result, the percentage of outstanding shares of any person as shown in the
following table does not necessarily reflect the person's actual voting power at
any particular date.
<TABLE>
<CAPTION>
NUMBER OF PERCENT
TITLE OF CLASS NAME AND ADDRESS SHARES OF CLASS
- -------------- ------------------------------------------------ ----------- --------
<S> <C> <C> <C>
Common Stock Specialty Finance Partners ..................... 122,090,734(1) 79.72%
54 Thompson Street
New York, New York 10012
Common Stock David H. Elliott(2)............................. 5,000 *
Common Stock Steven M. Gluckstern(3) (4)..................... 184,153(5) *
Common Stock Neil B. Kornswiet(5)............................ 2,407,860(7) 7.61%
Common Stock A. Jay Meyerson(2).............................. 112,500(8) *
Common Stock Adam M. Mizel(3)................................ 92,075(5) *
Common Stock Eric C. Rahe(3)................................. 18,675(5) *
Common Stock Mani A. Sadeghi(3).............................. 3,125(5) *
Common Stock David A. Spuria(3).............................. 12,450(5) *
Common Stock Georges C. St. Laurent, Jr.(2).................. 1,606,600(9) 4.93%
Common Stock Cary H. Thompson(2)............................. 1,920,921(10) 5.83%
Common Stock Joe Tomei(2).................................... 625(5) *
Common Stock All executive officers, directors and nominees 3,956,124(11) 11.32%
as a group (10 persons).......................
Series B Specialty Finance Partners ..................... 26,704,000(13) 100.00%
Preferred Stock(11) 54 Thompson Street
New York, New York 10012
Series C Specialty Finance Partners ..................... 94,136,734(14) 93.06%
Preferred Stock 54 Thompson Street
New York, New York 10012
Series C Georges C. St. Laurent, Jr.(2).................. 1,550,000(15) 1.53%
Preferred Stock
</TABLE>
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<TABLE>
<CAPTION>
NUMBER OF PERCENT
TITLE OF CLASS NAME AND ADDRESS SHARES OF CLASS
- -------------- ------------------------------------------------ ----------- --------
<S> <C> <C> <C>
Series C Cary H. Thompson(2)............................. 250,000(16) *
Preferred Stock
Series C All executive officers, directors and nominees
Preferred Stock as a group (10 persons)(17)................... 1,800,000(18) 1.78%
</TABLE>
- ------------------------
* Less than one percent.
(1) Includes shares of Common Stock issuable upon conversion of 26,704,000
shares of Series B Preferred Stock and 94,136,734 shares of Series C
Preferred Stock. In addition, Specialty Finance Partners, as a result of
the receipt of warrants to purchase 1,250,000 shares of Common Stock of the
Company by Capital Z Management, Inc., may be deemed to be the beneficial
owner of 1,250,000 shares of Common Stock of the Company. Specialty Finance
Partners is a Bermuda general partnership, 99.6% of which is owned by
Capital Z and 0.4% of which is owned by Equifin Capital.
(2) The address of each individual is in care of the Company at 350 S. Grand
Avenue, 52nd Floor, Los Angeles, California 90071.
(3) The address of each individual is in care of Capital Z Partners, 54
Thompson Street, New York, New York 10012.
(4) Mr. Gluckstern is a member of the Investment Committees of Capital Z
Partners, Ltd. and Capital Z Management, Inc. and, in such capacities has
the authority to approve the disposition of investments of Capital Z
Financial Services Fund II, L.P. and Capital Z Financial Services Private
Fund II, L.P. which are both general partners of Specialty Finance
Partners.
(5) Represents shares of Common Stock underlying warrants which are currently
exercisable. Each of Messrs. Gluckstern, Mizel, Rahe, Sadeghi, and Spuria
has disclaimed beneficial ownership of the Series B and Series C Preferred
Stock held by Capital Z or Specialty Finance.
(6) Mr. Kornswiet's address is care of Belin Rawlings & Badal, 11601 Wilshire
Boluvard, Suite 2200, Los Angeles, California 90025-1758, ATTN: Douglas
Rawlings.
(7) Includes 595,000 shares of Common Stock underlying options which are
currently exercisable or which will become exercisable within 60 days of
March 20, 2000. Mr. Kornswiet's employment with the Company ended during
the first quarter of fiscal 2000. The Company is in discussions with
Mr. Kornswiet regarding terms and conditions of his departure which may
affect the number of exercisable options and the expiration date of such
options.
(8) Represents shares of Common Stock underlying options which are currently
exercisable or which will become exercisable within 60 days of March 20,
2000. If the Fair Market Value of the Common Stock (as defined in the
Company's 1999 Stock Option Plan) reaches certain price targets, an
additional 337,500 options could vest within the next 60 days.
Mr. Meyerson was appointed as the Company's Chief Executive Officer on
October 25, 1999 and as a member of the Board of Directors on November 1,
1999.
(9) Includes 6,600 shares of Common Stock underlying options which are
currently exercisable or which will become exercisable within 60 days of
March 20, 2000, and includes 1,550,000 shares of Common Stock issuable upon
conversion of Series C Preferred Stock.
(10) Includes 1,649,021 shares of Common Stock underlying options which are
currently exercisable or which will become exercisable within 60 days of
March 20, 2000 and includes 250,000 shares of Common Stock issuable upon
conversion of Series C Preferred Stock. If computed excluding options with
an exercise price greater than $2.00 per share, Mr. Thompson would own
less than
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1.0% of the class. If the Fair Market Value of the Common Stock (as
defined in the Company's 1999 Stock Option Plan) reaches certain price
targets, an additional 87,080 options could vest within the next 60 days.
(11) Includes 4,473,599 shares of Common Stock underlying options or warrants
which are currently exercisable or which will become exercisable within
60 days of March 20, 2000 and includes 1,800,000 shares of Common Stock
issuable upon conversion of Series C Preferred Stock.
(12) Capital Z holds 100% of the issued and outstanding Series B Preferred
Stock. None of the Directors, nominees and Named Executive Officers
beneficially hold any shares of Series B Preferred Stock.
(13) Convertible into 26,704,000 shares of Common Stock.
(14) Convertible into 94,136,734 shares of Common Stock.
(15) Convertible into 1,550,000 shares of Common Stock.
(16) Convertible into 250,000 shares of Common Stock.
(17) Other than in the case of Messrs. St. Laurent and Thompson, none of the
Directors or executive officers beneficially hold any shares of Series C
Preferred Stock.
(18) Convertible into 1,800,000 shares of Common Stock.
THE PROPOSAL TO ISSUE SHARES OF SERIES C CONVERTIBLE PREFERRED STOCK
GENERAL
On the Voting Date, holders of a majority of the outstanding shares of the
Preferred Stock, together as a single class, consented in writing to the
Proposal which authorizes the Board of Directors to issue up to 5 million shares
(subject to adjustment for the Reverse Stock Split, as defined below) of, or
securities convertible into shares of, Series C Preferred Stock.
EFFECT OF APPROVAL OF THE PROPOSAL
The Company's Certificate of Incorporation, prohibits the issuance of shares
of, or securities convertible into shares of, Series C Preferred Stock without
the consent of the holders of a majority of the shares of the Preferred Stock,
voting together as a single class.
The Company intends to issue shares of, or securities convertible into
shares of, Series C Preferred Stock to certain management investors, lenders,
consultants or other third parties that the Company does business with from time
to time. As of the date 20 days after the date this Information Statement is
mailed to stockholders (the "NOTICE EFFECTIVE DATE"), the Board of Directors
will have the authority to issue up to 5 million shares (subject to adjustment
for the Reverse Stock Split, as defined below) of, or securities convertible
into shares of, Series C Preferred Stock in accordance with the Company's
Certificate of Incorporation, the Company's Bylaws and the General Corporation
Law of the State of Delaware.
On or about the Notice Effective Date, the Company intends to issue shares
of the Series C Preferred Stock, for appropriate consideration, to the following
parties in the following amounts (subject to appropriate adjustment for the
Reverse Stock Split, as defined below):
<TABLE>
<S> <C>
A. Jay Meyerson............................................. 500,000
David A. Sklar.............................................. 100,000
OWC Capital SPV II, LP...................................... 842,000
</TABLE>
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On March 3, 2000, the Company's stockholders approved a one-for-five reverse
split of the outstanding shares of the Company's Common Stock and a one-for-five
reverse split of the outstanding shares of the Company's Series C Preferred
Stock (collectively, the "REVERSE STOCK SPLIT"). Pursuant to the terms of the
Reverse Stock Split, the effective date of the Reverse Stock Split shall be set
at the discretion of the Board of Directors. As of the Voting Date the Board of
Directors had not set an effective date for the Reverse Stock Split, however it
is possible that the Reverse Stock Split will become effective on or before the
Notice Effective Date (as defined below) in which case references herein to the
Common Stock and the Series C Preferred Stock shall be adjusted as noted. If the
Reverse Stock Split does not become effective prior to the Notice Effective Date
(as defined below), all of the outstanding shares of Series C Preferred Stock
that are issued by the Board of Directors pursuant to the Proposal will be
issued and outstanding on the effective date of the Reverse Stock Split and will
therefore be subject to adjustment pursuant to the Reverse Stock Split.
VOTE REQUIRED
The affirmative vote of the holders of a majority of the votes entitled to
be cast by holders of all outstanding shares of the Preferred Stock, voting
together as a single class.
STOCKHOLDER PROPOSALS AND SUBMISSIONS
No security holder entitled to consent has submitted to the Company a
proposal which is accompanied by notice of such security holders' intention to
present the proposal for action at a future meeting of the stockholders of the
Company.
AAMES FINANCIAL CORPORATION
John F. Madden, Jr.
SECRETARY
March , 2000
6
