Amended And Restated Executive Severance Plan

Exhibit 10.24


AAMES FINANCIAL CORPORATION

EXECUTIVE SEVERANCE PLAN

Amended and Restated as of September 18, 2003

Aames Financial Corporation (the " Company" ) has adopted the Aames Financial Corporation Executive Severance Plan (the " Plan" ) which describes the severance compensation and benefits, if any, which the Company will pay upon the termination of employment of certain highly-compensated, key employees.


I. PURPOSE

1.1. General Purpose . This Plan is intended to provide severance benefits to certain highly compensated, key employees of the Company who are terminated by the Company without Cause, or who resign voluntarily for Good Reason, as defined herein. This Plan amends and supersedes all prior severance plans applicable to Employees, as defined herein, including the Aames Financial Corporation Executive Severance Plan adopted March 18, 1999.

1.2. Coverage Under ERISA . This Plan is an " employee welfare benefit plan" providing severance benefits, as defined in the Employee Retirement Income Security Act of 1974, as amended (" ERISA" ). Benefits under the Plan are not vested and shall not be due or payable unless the employee meets all the requirements for eligibility set forth in Article III.

II. DEFINITIONS

2.1. Defined Terms . Whenever used in this Plan, unless the context clearly indicates otherwise, the following words shall have the following meanings:

" Administrator" means the Plan Administrator appointed by the Company pursuant to Section 5.1.

" Board" means the Board of Directors of the Company or any administrative committee appointed by the Board.


" Cause" exists when a Participant shall have: (i) been determined by a court of law to have committed any felony including, but not limited to, a felony involving fraud, theft, misappropriation, dishonesty, embezzlement, or any other crime involving moral turpitude, or if the Participant shall have been arrested or indicted for violation of any criminal statute constituting a felony, provided the Company reasonably determines that the continuation of the Participant' s employment after such event would have an adverse impact on the operation or reputation of the Company or its affiliates; (ii) committed one or more acts of gross negligence or willful misconduct, either within or outside the scope of his employment that, in the good faith opinion of the Board, materially impair the goodwill or business of the Company or cause material damage to its property, goodwill, or business, or would, if known, subject the Company to public ridicule; (iii) refused or failed to a material degree to perform his/her duties; (iv) violated any material written Company policy provided to the Participant during or prior to the term of employment; or (v) failed to meet applicable minimum production goals, or performance objectives or goals, if any.


" Change in Control" means the merger, acquisition, reorganization or other business combination in which the Company shall not be the surviving entity, or a dissolution or liquidation of the Company, or a sale of all or substantially all of the Company' s assets.

" Company" means Aames Financial Corporation, together with each of its wholly-owned subsidiaries whose Boards of Directors have approved participation in this Plan.

" Corporate Management Committee" means certain members of executive management of the Company appointed by the Chief Executive Officer and approved by the Board. A list of members of the Corporate Management Committee who are Participants shall be identified on Appendix A.

" Employee" means any employee who is a member of senior or executive management of the Company other than the President and Chief Executive Officer.


" ERISA" means the Employee Retirement Income Security Act of 1974, as amended, and regulations issued thereunder.

" Good Reason" means the occurrence, on or within one hundred eighty (180) days after the date of a Change in Control, of: (i) a reduction by the Company in the Participant' s annual base salary or any material adverse change in the terms or conditions of Participant' s aggregate annual bonus and/or quarterly bonus plan(s), if any, from that in effect immediately prior to the Change in Control, if any, which change is not pursuant to a program applicable to all comparably situated Employees of the Company; or (ii) the relocation of the Participant' s principal place of employment to a location outside of Orange County or Los Angeles County, California and which location is more than fifty (50) miles from the Participant' s principal residence.


" Participant" means any Employee who has been designated by the Board as being eligible for benefits under this Plan and who has agreed in writing to be bound by the terms and conditions of this Plan. A list of Participants shall be contained in Appendix A.


" Plan Year" means the fiscal year of the Plan and is the twelve (12) month period ending December 31, of each year.


" Salary" means a Participant' s regular annual base salary from the employer as in effect on his date of termination, exclusive of bonus and all other forms of incentive or supplemental compensation.

III. PARTICIPATION

3.1. Eligibility for Benefits . A Participant is eligible for benefits under this Plan if the Company terminates his employment without Cause, or the Participant terminates his employment voluntarily for Good Reason within sixty (60) days after he knew or should have known of such Good Reason, and no provision of Section 3.2 results in loss of eligibility.


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3.2 Loss of Eligibility . A Participant will not be eligible for benefits under this Plan if:


(a) he voluntarily resigns his employment, without Good Reason, except pursuant to the terms of a Company-initiated layoff program which affirmatively solicits such Participant' s resignation;

(b) he ceases to be an Employee as a result of disability, normal retirement or death;

(c) he ceases to be an Employee as a result of discharge for Cause;


(d) upon a Change in Control, he is offered and refuses comparable employment without Good Reason;


(e) the Company acquires knowledge of facts after the date of termination of Participant' s employment which, if known prior to termination, would have resulted in the discharge of Participant' s employment for Cause. In such case, Participant shall return upon written demand all benefits received pursuant to this Plan;

(f) Participant violates the material terms of any employment agreement between Participant and Company, including, without limitation, the terms of any provisions prohibiting the use, disclosure or other misappropriation of the Company' s confidential and/or trade secret information; or

(g) Participant violates the terms of or revokes the Severance and Release Agreement referred to in Section 4.2(b) below.

IV. SEVERANCE BENEFITS

4.1. Benefits . The severance benefit for Participants who are eligible for benefits under Section 3.1 and who have not lost eligibility under Section 3.2 is set forth in either subsection (a) or (b) below, whichever applies, but not both:


(a) Regular Severance: The regular severance benefit shall be equal to six (6) months' Salary, or if a Participant has been employed for less than six (6) months, one (1) months' Salary for each month of service as a full-time Employee; or,

(b) Change of Control Severance. If a Participant is a member of the Company' s Corporate Management Committee at the time of a Change in Control, and within 180 days following the Change in Control the Participant' s employment with the Company or a successor is terminated without Cause, or the Participant terminates his employment for Good Reason within sixty (60) days after he knows or should known of such Good Reason, the severance benefit available shall be, in lieu of the severance benefit described in subsection (a) above, equal to: (i) twelve (12) months' Salary or if a Participant has been employed for less th ...