AAMES FINANCIAL CORP/DE
EXHIBIT 10.3
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<P ALIGN="RIGHT"><Font Face="Times New Roman" Size="2"><b>Exhibit 10.3</b></font></P>
<P><font face="Times New Roman"  Size="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;</font></P>


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<H1 ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">AMENDED
AND RESTATED</FONT></FONT></H1>

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<H1 ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">CHANGE
IN CONTROL AGREEMENT</FONT></FONT></H1>

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<P ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">THIS
AMENDED AND RESTATED CHANGE IN CONTROL AGREEMENT (the
<B>&#147;Agreement&#148;</B>) is between Aames Financial Corporation, a Delaware
corporation (the <B>&#147;Company&#148;</B>), and Ronald J. Nicolas, Jr. (the
<B>&#147;Executive&#148;</B>). This Agreement amends and restates that certain
Change in Control Agreement between the Company and Executive dated as of April
23, 2001, and shall become effective (the <B>&#147;Effective Date&#148;</B>) as
of the <U>18th</U> day of <U>September</U>, <U>2003</U>.</FONT></FONT> </P>

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<P ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">In
consideration of the mutual agreements set forth below, the parties agree as
follows:</FONT></FONT> </P>

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<H1 ALIGN="CENTER"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">AGREEMENT</FONT></FONT></H1>

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     <TD ALIGN="RIGHT" WIDTH="1%"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">I.</FONT></FONT></TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="96%"><P ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">
<U>Definitions</U>. For the purpose of this Agreement only:</FONT></FONT> </P></TD>
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<BR>

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     <TD><P ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">A.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&quot;Base Salary&quot; shall mean the annual salary at the time of termination of
Executive's  employment  which is paid by  the Company to the Executive in installments
twice each calendar month.</FONT></FONT> </P></TD>
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<BR>

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     <TD><P ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">B.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&#147;Cause&#148; shall mean a finding by the Company that the Executive:
(1)&nbsp;shall have been determined by a court of law to have committed any
felony; (2)&nbsp;shall have been arrested or indicted for violation of any
criminal statute constituting a felony, provided the Board of Directors of the
Company reasonably determines that the continuation of the Executive&#146;s
employment after such event would have an adverse impact on the operation or
reputation of the Company or its affiliates (subsequent references to the
&#147;Company&#148; in this Agreement shall be deemed to refer to the Company or
its affiliates); (3)&nbsp;shall have engaged in an act of fraud, theft,
embezzlement, or misappropriation against the Company; (4)&nbsp;shall have
committed one or more acts of gross negligence or willful misconduct, either
within or outside the scope of his employment that 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; (5)&nbsp;shall have refused or failed to a material degree to perform
his duties hereunder (continuing without cure for ten (10) days after receipt of
written notice of need to cure); or (6)&nbsp;shall have violated any material
written Company policy provided to the Executive during or prior to his
employment and that has caused material harm to the Company; <U>provided</U>,
<U>however</U>, that any finding made pursuant to clauses (3) through (6) above
shall be made by the Board of Directors of the Company and any such finding
shall be made in good faith and, <U>further</U> <U>provided</U>, that no
termination of Executive&#146;s employment for Cause shall be deemed to have
occurred unless Executive is given notice of the reason therefore including the
allegations which may constitute reason for such termination.</FONT></FONT> </P></TD>
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<font size=2>1
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     <TD><P ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">C.&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;
&quot;Change  in  Control&quot;  shall mean a Change in Control  of the  Company  as that
term is  defined  in  Article XI(b)  of the  Company's Amended and Restated 1999 Stock
Option Plan.</FONT></FONT> </P></TD>
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     <TD ALIGN="RIGHT" WIDTH="1%"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">II.</FONT></FONT></TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="96%"><P ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">
<U>Payments Upon Termination Following Change In Control</U>. The Company shall
continue to pay the Base Salary to the Executive for a period of twelve (12)
months following the date of termination of Executive&#146;s employment in the
event that the Executive&#146;s employment is terminated (a) by the Company or
its successor(s) in interest for any reason other than for Cause within one (1)
year following a Change in Control of the Company, or (b) by Executive for any
reason within six (6) months following a Change in Control of the Company.</FONT></FONT> </P></TD>
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     <TD ALIGN="RIGHT" WIDTH="1%"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">&nbsp;</FONT></FONT></TD>
     <TD ALIGN="LEFT" WIDTH="3%">&nbsp;</TD>
     <TD WIDTH="96%"><P ALIGN="LEFT"><FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Executive  hereby
agrees and acknowledges that he is not a participant in the Aames  Financial Corporation
Executive Severance Plan (the &#147;Severance Plan&#148;).  However, in addition to the
above-referenced compensation upon a Change in  Control, Executive is entitled to any
pro-rated bonus equal to the pro-rated  bonus to which he would be eligible if he were a
participant under the Severance  Plan, subject to all restrictions under the Executive
Severance Plan.</FONT></FONT> </P></TD>
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<P ALIGN="LEFT">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT FACE="Times New Roman, Times, Serif"><FONT SIZE="2">IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date and
year first set forth below.</FONT></FONT> </P>

<P><Font Face="Times New Roman" Size="2">DATED:   September 18, 2003</font></P>







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     <TD Width="40%"></TD>
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     <TD Width="50%">AAMES
FINANCIAL CORPORATION</TD></TR>
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     <TD>&nbsp;</TD>
     <TD></TD>
     <TD></TD></TR>
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     <TD>&nbsp;</TD>
     <TD></TD>
     <TD></TD></TR>
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     <TD>&nbsp;</TD>
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     <TD></TD></TR>
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     <TD></TD>
     <TD> By:____________________________<BR> Its:______________________________
</TD></TR>
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     <TD>&nbsp;</TD>
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     <TD></TD></TR>
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     <TD></TD>
     <TD></TD>
     <TD>EXECUTIVE</TD></TR>
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     <TD>&nbsp;</TD>
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     <TD></TD></TR>
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     <TD>&nbsp;</TD>
     <TD></TD>
     <TD></TD></TR>
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     <TD></TD>
     <TD></TD>
     <TD>_________________ <BR> (Signature)</TD></TR>
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