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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 10-K/A
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[X] ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000
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[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
COMMISSION FILE NUMBER: 1-14116
CONSUMER PORTFOLIO SERVICES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
CALIFORNIA 33-0459135
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
16355 LAGUNA CANYON ROAD, IRVINE, CALIFORNIA 92618
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
Registrant's telephone number, including area code: (949) 753-6800
Securities registered pursuant to section 12(b) of the Act:
Title of Each Class:
Rising Interest Subordinated Redeemable Securities Due 2006
10.50% Participating Equity Notes Due 2004
Name of each exchange on which registered: New York Stock Exchange
Securities registered pursuant to section 12(g) of the Act: Common Stock,
No Par Value
Indicate by check mark whether the registrant (1) filed all reports
required to be filed by Section 13 or 15(d) of the Exchange Act during the past
12 months (or for such shorter period that the registrant was required to file
such reports) and (2) has been subject to such filing requirements for the past
90 days. Yes [X] No [ ]
Indicate by check mark if there is no disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K contained herein, and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form 10-K
or any amendment to this Form 10-K. [ ]
The aggregate market value on April 26, 2001 (based on the $1.95 per
share closing price on the Nasdaq Stock Market on that date) of the voting stock
beneficially held by non-affiliates of the registrant was approximately
$23,700,000. The number of shares of the registrant's Common Stock outstanding
on April 26, 2001, was 19,197,338.
DOCUMENTS INCORPORATED BY REFERENCE: NONE
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This Amendment is filed to disclose the information required to be included in
Part III of the annual report on Form 10-K of Consumer Portfolio Services, Inc.
(the "registrant" or the "Company") for the year ended December 31, 2000.
ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT
The information appearing in Part I of this report, under the caption "Executive
Officers," is incorporated herein by reference.
Information regarding the directors of the Company appears below:
NAME AGE POSITION(S) WITH THE COMPANY
Charles E. Bradley, Sr. 71 Chairman of the Board of Directors
Charles E. Bradley, Jr. 41 President, Chief Executive Officer, and Director
William B. Roberts 63 Director
John G. Poole 58 Vice Chairman of the Board of Directors
Robert A. Simms 62 Director
Thomas L. Chrystie 67 Director
CHARLES E. BRADLEY, SR. has been the Chairman of the Board of the Company since
its formation in March 1991. Mr. Bradley is one of the founders of Stanwich
Partners, Inc. ("Stanwich"), a Connecticut investment firm that acquires
controlling interests in companies in conjunction with the existing operating
management of such companies, and has been President, a director and a
shareholder of that company since its formation in 1982. Mr. Bradley also, since
May 1997, has been President, Chief Executive Officer and sole director of
Stanwich Financial Services Corp., a company in the structured settlement
business. He is also President, Chief Executive Officer and a director of
Reunion Industries, Inc., a publicly held company which manufactures precision
plastic products and provides engineered plastics services. Mr. Bradley is
currently Chairman of the Board and Chief Executive Officer of DeVlieg-Bullard,
Inc., and a director of Texon Energy Corp., and Sanitas, Inc. He is Chairman of
the Board and Chief Executive Officer of NAB Asset Corporation (38% of whose
outstanding shares of voting stock are held by the Company). Other than
Stanwich, all of the above corporations are publicly-held or are required to
file periodic reports under Section 13 or 15(d) of the Securities Exchange Act
of 1934. Mr. Bradley is the father of Charles E. Bradley, Jr.
CHARLES E. BRADLEY, JR. has been the President and a director of the Company
since its formation in March 1991. In January 1992, Mr. Bradley was appointed
Chief Executive Officer of the Company. From March 1991 until December 1995 he
served as Vice President and a director of CPS Holdings, Inc. From April 1989 to
November 1990, he served as Chief Operating Officer of Barnard and Company, a
private investment firm. From September 1987 to March 1989, Mr. Bradley, Jr. was
an associate of The Harding Group, a private investment banking firm. Mr.
Bradley, Jr. is currently serving as a director of NAB Asset Corporation, Texon
Energy Corporation, and Thomas Nix Distributor, Inc. Charles E. Bradley, Sr.,
Chairman of the board of directors of the Company, is his father.
THOMAS L. CHRYSTIE has been a director of the Company since April 1995. He has
been self-employed as an investor, through Wycap Corporation, since 1988. His
previous experience includes 33 years at Merrill Lynch & Co. in various
capacities including heading Merrill Lynch's investment banking, capital markets
and merchant banking activities. In addition, he served as Merrill Lynch & Co.'s
Chief Financial Officer.
JOHN G. POOLE has been a director of the Company since November 1993 and its
Vice Chairman since January 1996. He was a co-founder of Stanwich in 1982 and
has been a director, vice president and shareholder of that company since its
formation. Mr. Poole is a director of Reunion Industries, Inc. and Sanitas, Inc.
1
WILLIAM B. ROBERTS has been a director of the Company since its formation in
March 1991. Since 1981, he has been the President of Monmouth Capital Corp., an
investment firm which specializes in management buyouts. Mr. Roberts serves on
the board of directors of Atlantic City Racing Association, a publicly-held
corporation, which owns and operates a race track.
ROBERT A. SIMMS has been a director of the Company since April 1995. He has been
the Chairman and Chief Executive Officer of Simms Capital Management, Inc. since
1984. He is a director of the National Football Foundation and Hall of Fame. Mr.
Simms also serves on the Board of Overseers of Rutgers University and was
formerly a partner in Bear Stearns & Co.
BANKRUPTCY PROCEEDINGS. Mr. Bradley, Sr. is chairman of the board of directors
and Mr. Poole is a director of DeVlieg-Bullard, Inc. ("DBI"). On July 15, 1999,
DBI filed a voluntary petition in the United States Bankruptcy Court for the
Northern District of Ohio for reorganization under Chapter 11 of the United
States Bankruptcy Code. Mr. Bradley, Jr. is chairman of the board of members and
Mr. Bradley, Sr. is a member of the board of members of LINC Acceptance Company,
LLC ("LINC"). LINC is a limited liability company organized under the laws of
Delaware, and its board of members has certain management authority. The
operating agreement of LINC designated the chairman of the board of members as
LINC's chief executive officer. LINC is a majority-owned subsidiary of the
Company, which engaged in the business of purchasing retail motor vehicle
installment purchase contracts, and selling such contracts to the Company or
other affiliates. LINC ceased operations in the second quarter of 1999. On
October 29, 1999, three former employees of LINC filed an involuntary petition
in the United States Bankruptcy Court for the District of Connecticut seeking
LINC's liquidation under Chapter 7 of the United States Bankruptcy Code.
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Directors, executive officers and holders of in excess of 10% of the Company's
common stock are required to file reports concerning their transactions in and
holdings of equity securities of the Company. Based on a review of reports filed
by each such person, and inquiry of each regarding holdings and transactions,
the Company believes that all required reports were timely filed, except as
follows: the Company's president, Charles E. Bradley, Jr. reported late with
respect to two transactions in the Company's partially convertible 10.50% notes
due 2004.
2
ITEM 11. EXECUTIVE COMPENSATION
The following table summarizes all compensation earned during the three fiscal
years ended December 31, 2000, 1999 and 1998 by the Company's chief executive
officer and by its four most highly compensated other executive officers (such
five individuals, the "named executive officers") who were serving as executive
officers at December 31, 2000.
SUMMARY COMPENSATION TABLE
============================== ====== ============ =========== ============ =============
Long Term All Other
Compensation for Compensation Compensation
period shown Awards (1) (2)
------------------------ ------------
Name and Principal Position Year Salary Bonus Options/SARs
------------------------------ ------ ------------ ----------- ------------ -------------
CHARLES E. BRADLEY, JR. 2000 $525,000 $750,000 333,333 1,446
President & Chief Executive 1999 500,000 300,000 780,240 1,380
Officer 1998 450,000 750,000 498,400 1,380
------------------------------ ------ ------------ ----------- ------------ -------------
NICHOLAS P. BROCKMAN 2000 $165,000 $116,000 10,000 1,292
Senior Vice President - 1999 151,000 72,000 103,000 1,027
Collections 1998 137,000 88,000 84,600 996
------------------------------ ------ ------------ ----------- ------------ -------------
CURTIS K. POWELL 2000 $191,000 $105,000 10,000 1,430
Senior Vice President - 1999 182,000 73,000 178,000 1,130
Marketing 1998 170,000 107,000 178,000 1,046
------------------------------ ------ ------------ ----------- ------------ -------------
RICHARD P. TROTTER 2000 $161,000 $77,000 10,000 1,278
Senior Vice President - 1999 148,000 65,000 192,600 1,027
Originations 1998 137,000 87,000 192,600 988
------------------------------ ------ ------------ ----------- ------------ -------------
WILLIAM L. BRUMMUND, JR. 2000 $161,000 $89,000 10,000 1,302
Senior Vice President - 1999 153,000 58,000 132,600 1,046
Administration 1998 143,000 92,000 84,600 1,002
============================== ====== ============ =========== ============ =============
(1) Number of shares that might be purchased upon exercise of options that were
granted in the period shown. Options granted in 1998 were cancelled in
connection with a 1999 repricing.
(2) Amounts in this column represent (a) Company contributions to the Employee
Savings Plan (401(k) Plan), in the amount of $600 per year per individual, and
(b) premiums paid by the Company for group life insurance, as applicable to the
named executive officers.
OPTION AND SAR GRANTS
The Company in the year ended December 31, 2000, did not grant any stock
appreciation rights to any of the named executive officers, and granted options
to such officers on two occasions. The Company in the past had made a practice
of granting stock options to its executive officers and other employees from
time to time, and in September 2000 granted options to each of its named
executive officers. Each named executive officer other than the chief executive
officer received a grant of options with respect to 10,000 shares, to become
exercisable at the then-current market price of $1.75 per share. The chief
executive officer received in September a grant of options with respect to
250,000 shares, and in October a grant of options with respect to 83,333 shares,
both of which are or will become exercisable at $1.75 per share.
3
- ------------------------------------------------------------------------------ -----------------------
Potential Realizable
OPTIONS/GRANTS IN LAST FISCAL YEAR - Value at Assumed Annual
Rates of Stock Price
INDIVIDUAL GRANTS Appreciation for Option
Term
- ------------------------------------------------------------------------------ -----------------------
Percent
Number of of Total
Shares Options Exercise
Underlying Granted to or Base
Options Employees Price Expiration
Name Granted in 2000 ($/Share) Date 5% 10% NOTES
- -------------------------- ---------- --------- --------- ------------ ---------- ---------- -----
Charles E. Bradley, Jr 250,000 29.98% 1.75 9/21/10 $ 173,335 $ 535,153 (1)
83,333 9.99% 1.75 9/21/10 $ 57,778 $ 178,384 (2)
- -------------------------- ---------- --------- --------- ------------ ---------- ---------- -----
Richard P. Trotter 10,000 1.20% 1.75 9/21/10 $ 6,933 $ 21,406 (3)
- -------------------------- ---------- --------- --------- ------------ ---------- ---------- -----
Curtis K. Powell 10,000 0.12% 1.75 9/21/10 $ 6,933 $ 21,406 (3)
- -------------------------- ---------- --------- --------- ------------ ---------- ---------- -----
William L. Brummund, Jr 10,000 0.12% 1.75 9/21/10 $ 6,933 $ 21,406 (3)
- -------------------------- ---------- --------- --------- ------------ ---------- ---------- -----
Nicholas P. Brockman 10,000 0.12% 1.75 9/21/10 $ 6,933 $ 21,406 (3)
- -------------------------- ---------- --------- --------- ------------ ---------- ---------- -----
Numbered notes above refer to the associated options becoming exercisable in
cumulative installments as follows:
(1) Exercisable from March 21, 2001.
(2) Becomes exercisable in four equal installments on March 21, 2001,
January 1, 2002, January 1, 2003, and January 1, 2004.
(3) Becomes exercisable in five equal installments on January 1, 2001,
January 1, 2002, January 1, 2003, January 1, 2004 and January 1, 2005.
AGGREGATED OPTION EXERCISES AND FISCAL YEAR END OPTION VALUE TABLE
The following table sets forth, as of December 31, 2000, and for the year then
ended, the number of unexercised options held by each of the named executive
officers, the number of shares subject to then exercisable and unexercisable
options held by such persons and the December 31, 2000, value of all unexercised
options held by such persons. Each option referred to in the table was granted
under the Company's 1991 Stock Option Plan, or under the 1997 Long-Term
Incentive Stock Plan, at an option price per share equal to the fair market
value per share on the date of grant.
========================= ================================ =========================================
Name Number of Unexercised Options at Value of Unexercised In-the-Money Options
December 31, 2000 at December 31,2000 (1)
Exercisable/Unexercisable Exercisable/Unexercisable
- ------------------------- -------------------------------- -----------------------------------------
Charles E. Bradley, Jr. 517,640/420,933 $420,582/$71,175
- ------------------------- -------------------------------- -----------------------------------------
Nicholas P. Brockman 59,400/63,600 $48,262/$43,550
- ------------------------- -------------------------------- -----------------------------------------
Curtis K. Powell 94,250/83,750 $76,578/$59,921
- ------------------------- -------------------------------- -----------------------------------------
Richard P. Trotter 132,100/60,500 $107,331/$41,031
- ------------------------- -------------------------------- -----------------------------------------
William L. Brummund, Jr. 85,000/47,600 $69,062/$30,550
========================= ================================ =========================================
(1) Valuation based on the year's last sales price on December 29, 2000 of
$1.4375 per share, as reported by Nasdaq.
4
BONUS PLAN
The named executive officers and other officers participate in a management
bonus plan, pursuant to which such employees are entitled to earn cash bonuses,
if the Company achieves certain net income levels or goals established by the
Board of Directors, and if such employees achieve certain individual objectives.
The amount of bonus payable to each officer is determined by the Board of
Directors upon recommendation of the Compensation Committee.
DIRECTOR COMPENSATION
During the year ended December 31, 2000, the Company paid director compensation
of $125,000 to Mr. Bradley, Sr., for his service as Chairman of the Board of
Directors. Mr. Bradley, Jr., President of the Company, received no additional
compensation for his service as a director. The remaining directors received a
retainer of $1,000 per month and an additional fee of $500 per diem for
attendance at meetings.
5
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth the number and percentage of shares of CPS Common
Stock (its only class of voting securities) owned beneficially as of April 26,
2001, by (i) each person known to CPS to own beneficially more than 5% of the
outstanding Common Stock, (ii) each director or named executive officer of CPS,
and (iii) all directors and executive officers of CPS as a group. Except as
otherwise indicated, and subject to applicable community property and similar
laws, each of the persons named has sole voting and investment power with
respect to the shares shown as beneficially owned by such persons. The address
of Messrs. Bradley, Jr., Brockman, Brummund, Jr., Powell and Trotter is c/o
Consumer Portfolio Services, Inc., 16355 Laguna Canyon Road, Irvine, CA 92618.
Amount & Nature of Percent
------------------ -------
Name & Address of Beneficial Owner Beneficial Ownership (1) of Class
---------------------------------- ------------------------ ---------
Charles E. Bradley, Sr........................................................... 3,317,219 (2) 17.3%
Stanwich Partners, Inc., 62 Southfield Avenue, Stamford, CT 06902
William B. Roberts............................................................... 1,063,982 5.5%
Monmouth Capital Corp., 126 East 56th Street, New York, NY10022
John G. Poole.................................................................... 667,193 (3) 3.4%
Stanwich Partners, Inc., 62 Southfield Avenue, Stamford, CT 06902
Robert A. Simms.................................................................. 331,944 (4) 1.7%
55 Railroad Ave., Plaza Suite, Greenwich, CT 06830
Thomas L. Chrystie............................................................... 182,100 (5) 0.9%
P.O. Box 640, Wilson, WY 83014
Charles E. Bradley, Jr........................................................... 3,108,906 (6) 15.5%
Nicholas P. Brockman............................................................. 144,491 0.7%
William L. Brummund, Jr.......................................................... 142,973 0.7%
Curtis K. Powell................................................................. 116,716 0.6%
Richard P. Trotter .............................................................. 157,559 0.8%
All directors and executive officers combined (14 persons) ...................... 8,866,162 (7) 42.2%
Levine Leichtman Capital Partners II, L.P........................................ 4,553,500 (8) 23.7%
335 North Maple Drive, Suite 240, Beverly Hills, CA 90210
FSA Portfolio Management Inc..................................................... 1,702,334 (9) 8.1%
350 Park Avenue, New York, NY 10022
(1) Includes certain shares that may be acquired within 60 days after April 26,
2001 from the Company upon exercise of options, as follows: Mr. Poole, 30,000
shares; Mr. Bradley, Jr., 802,907 shares; Mr. Brummund, 98,100 shares; Mr.
Brockman, 76,500 shares; Mr. Powell, 116,000 shares; and Mr. Trotter, 153,900
shares.
(2) Includes 207,490 shares owned by the named person's spouse, as to which he
has no voting or investment power, and 517,791 shares owned by two corporations
(Stanwich Financial Services Corp., or "SFSC," and Stanwich Partners, Inc., or
"Stanwich") of which the named person is president and a director. Includes
620,000 shares that are subject to options in favor of Mr. Chrystie and Mr.
Bradley, Jr.
(3) Includes 333,333 shares issuable upon conversion of $1,000,000 of Company
debt held by the named person.
(4) Includes 16,944 shares owned jointly with Mr. Simms' spouse.
(5) Includes 162,100 shares held by the Thomas L. Chrystie Living Trust, and
20,000 shares that Mr. Chrystie may acquire upon exercise of an option written
by SFSC.
(6) Includes 1,058,818 shares held by trusts of which Mr. Bradley is the
co-trustee, and as to which shares Mr. Bradley has shared voting and investment
power. One such trust holds 211,738 shares for the benefit of Mr. Bradley. The
co-trustee, who has shared voting and investment power as to all such shares
(representing 5.4% of outstanding shares), is Kimball Bradley, whose address is
11 Stanwix Street, Pittsburgh, PA 15222. Also includes 600,000 shares that Mr.
Bradley, Jr. has the presently exercisable right to acquire from Mr. Bradley,
Sr.
(7) Includes 1,827,100 shares that may be acquired within 60 days after April
26, 2001, upon exercise of options and conversion of convertible securities.
(8) Comprises 4,552,500 issued shares and 1,000 shares that are issuable upon
exercise of an outstanding warrant.
(9) Represents shares issuable upon exercise of a presently exercisable warrant.
6
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
CPS LEASING. The Company holds 80% of the outstanding shares of the capital
stock of CPS Leasing, Inc. ("CPSL"). The remaining 20% of CPSL is held by
Charles E. Bradley, Jr., who is the President and a director of the Company.
CPSL engaged in the equipment leasing business, and is currently in the process
of liquidation as its leases come to term. CPSL financed its purchases of the
equipment that it leases to others through either of two lines of credit.
Amounts borrowed by CPSL under one of those two lines of credit have been
guaranteed by the Company. As of March 31, 2001, the total amount outstanding
under the two lines of credit was approximately $2.2 million, of which the
Company had guarantied approximately $1.0 million. The Company has also financed
the operations of CPSL by making operating advances and by advancing to CPSL the
fraction of the purchase prices of its leased equipment that CPSL does not
borrow under its lines of credit. The aggregate amount of advances made by the
Company to CPSL as of March 31, 2001, is approximately $2.3 million. The
advances related to operations bear interest at the rate of 8.5% per annum. The
advances related to the fraction of the purchase price of leased equipment are
not interest bearing.
NAB ASSET CORP. The Company holds 38% of the outstanding shares of NAB Asset
Corp. ("NAB"), a corporation of which Mr. Bradley, Sr., is the chairman and
chief executive officer and of which Mr. Bradley, Jr., is a director. The
Company has agreed to approve a proposed reorganization of NAB under Chapter 11
of the bankruptcy code, in which it will be provided that creditors of NAB be
paid in full, that shareholders of NAB other than the Company and one other
shareholder receive cash in the amount of $0.125 per share, and that the Company
and the one other shareholder continue to hold a minority interest in NAB. Among
the creditors of NAB to be paid is SFSC (a corporation of which Mr. Bradley,
Sr., is sole director and chief executive officer and, indirectly, the sole
shareholder). The debt to be repaid to SFSC is approximately $6.1 million, which
is to be repaid over the time period originally applicable to such debt.
CARS USA. In the ordinary course of its business operations, the Company from
time to time purchases retail automobile installment contracts from an
automobile dealer, Cars USA, which is owned by a corporation of which Mr.
Bradley, Sr., and Mr. Bradley, Jr., are the principal shareholders. During the
year ended December 31, 2000, the Company purchased 28 such contracts, with an
aggregate principal balance of approximately $414,000. The Company paid an
aggregate of approximately $400,000 for such contracts. All such purchases were
on the Company's normal business terms. Cars USA is indebted to the Company, in
the amount of approximately $688,000 as of December 31, 2000.
LEVINE LEICHTMAN. In March 2000, the Company and Levine Leichtman Capital
Partners II, L.P. ("LLCP") restructured the outstanding indebtedness of the
Company in favor of LLCP, which had been in default. In the restructuring, (i)
all existing defaults were waived or cured, (ii) LLCP lent an additional $16
million ("Tranche A") to the Company, (iii) the proceeds of that loan (net of
fees and expenses) were used to repay all of the Company's outstanding senior
secured indebtedness, (iv) the outstanding $30 million of subordinated
indebtedness in favor of LLCP was exchanged for senior indebtedness ("Tranche
B"), (v) the Company granted a blanket security interest in favor of LLCP, to
secure both Tranche A and Tranche B, and (vi) LLCP released SFSC and others
(including Mr. Bradley, Sr., Mr. Bradley, Jr., and Mr. Poole) of any liability
for failure to invest $15 million in the Company, as SFSC had previously agreed
to do. Tranche A was originally due July 2001, and bore interest at 12.50% per
annum; Tranche B is due November 2003, and bears interest at 14.50% per annum.
The interest rate is subject to increase by 2.0% in the event of a default by
the Company. In the restructuring, the Company paid a fee of $325,000, paid
accrued default interest of $300,000, issued 103,500 shares of common stock to
LLCP, and paid out-of-pocket expenses of approximately $250,000. The terms of
the transaction were determined by negotiation between the Company and LLCP.
In January 2001, the Company prepaid the $4 million then outstanding of Tranche
A. Such prepayment was a condition to obtaining LLCP's consent to the prepayment
of $4 million of debt outstanding in favor of SFSC. In connection with such
prepayment, the Company paid LLCP a consent fee of $200,000.
7
SFSC. On September 30, 1999, the Company issued $1.5 million of promissory notes
to SFSC. The notes bear interest at the rate of 14.5% per annum. As part of a
related agreement, the Company agreed to issue warrants to purchase 207,000
shares of the Company's common stock at the price of $0.01 per share. Those
warrants were never issued, and in the March 2000 restructuring, described
above, SFSC agreed to accept 103,500 shares of common stock in place of such
207,000 warrants. Throughout 2000, the Company was indebted to SFSC in the
principal amount of $20.5 million, and paid interest monthly with respect to
that debt. Such interest payments totaled $2.1 million in 2000. Due to the
January 2001 retirement of a portion of such debt (see below), such interest is
estimated at $1.6 million for the current year. The Company also throughout 2000
was indebted to John G. Poole, a director, in the principal amount of
$1,000,000, and paid interest monthly with respect to that debt. Such interest
payments totaled $125,000 in 2000, and are estimated to be the same in the
current year.
In January 2001 the Company prepaid $4 million out of a total of $20.5 million
of debt outstanding in favor of SFSC. The information appearing in note 8 to the
Company's consolidated financial statements, filed elsewhere in this report, is
incorporated herein by reference.
EMPLOYEE INDEBTEDNESS. The Company has from time to time lent money to its
employees, including officers. Such borrowings are evidenced by promissory
notes, and generally bear interest at 10% per annum. Charles E. Bradley, Jr.
(president and a director) and Nicholas P. Brockman (a senior vice president)
were indebted to the Company in excess of $60,000 at various times since January
1, 2000. The maximum indebtedness of Mr. Bradley was $88,436 as of January 1,
2000, and the maximum indebtedness of Mr. Brockman was $154,618 as of January 1,
2000. As of April 27, 2001, Mr. Bradley's and Mr. Brockman's indebtedness to the
Company was $0 and $60,618 respectively.
FSA. In November 1999 the Company entered into a revolving note purchase
facility, using the proceeds of sale of such notes to purchase automotive
receivables. Financial Security Assurance Inc. ("FSA"), which is the beneficial
holder of in excess of 5% of the Company's stock, issued a financial guaranty
insurance policy with respect to all payments of principal and interest called
for by such notes, for which it receives fees and insurance premiums. FSA has
also issued financial guaranty insurance policies with respect to payments of
interest and principal due under specified asset-backed securities sponsored by
the Company and issued at various times from 1994 through 1998, for which it
also receives fees and insurance premiums.
The agreements and transactions described above (other than those between the
Company and LLCP or the Company and FSA) were entered into by the Company with
parties who personally benefited from such transactions and who had a control or
fiduciary relationship with the Company. In each case such agreements and
transactions have been reviewed and approved by the members of the Company's
Board of Directors who are disinterested with respect thereto.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has caused this amendment to report to be
signed on its behalf by the undersigned, thereunto duly authorized.
CONSUMER PORTFOLIO SERVICES, INC.
(Registrant)
April 30, 2001 By: /s/ CHARLES E BRADLEY, JR.
----------------------------------
Charles E. Bradley, Jr., President
8