UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
SCHEDULE 13D
(Rule 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE
13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a)*
(AMENDMENT NO. 13)
Dynex Capital, Inc.
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(Name of Issuer)
Common Stock, $0.01 par value per share
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(Title of Class of Securities)
26817Q506
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(CUSIP Number)
with a copy to:
Michael R. Kelly
550 West C Street
San Diego, CA 92101
(619) 687-5000
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(Name, Address and Telephone Number of Person Authorized to
Receive Notices and Communications)
February 8, 2001
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule 13G to
report the acquisition which is the subject of this Schedule 13D, and is filing
this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the
following box |_|.
NOTE: Schedules filed in paper format shall include a signed original and
five copies of the Schedule, including all exhibits. SEE Rule 13d-7 for other
parties to whom copies are to be sent.
*The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class of
securities, and for any subsequent amendment containing information which would
alter disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be
deemed to be "filed" for the purpose of Section 18 of the Securities Exchange
Act of 1934, as amended ("Act") or otherwise subject to the liabilities of that
section of the Act but shall be subject to all other provisions of the Act
(however, SEE the NOTES).
SCHEDULE 13D
CUSIP No. 26817Q506
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
CALIFORNIA INVESTMENT FUND, LLC 33-0688954
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)
(a) [X]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS (See Instructions)
WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
NOT APPLICABLE
6 CITIZENSHIP OR PLACE OF ORGANIZATION
CALIFORNIA
NUMBER OF 7 SOLE VOTING POWER
SHARES -0-
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY EACH 572,178
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH -0-
10 SHARED DISPOSITIVE POWER
572,178
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
572,178
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ]
EXCLUDES CERTAIN SHARES (See Instructions)
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.00%
14 TYPE OF REPORTING PERSON (See Instructions)
CO
SCHEDULE 13D
CUSIP No. 26817Q506
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
MICHAEL R. KELLY
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)
(a) [X]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS (See Instructions)
WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
NOT APPLICABLE
6 CITIZENSHIP OR PLACE OF ORGANIZATION
USA
NUMBER OF 7 SOLE VOTING POWER
SHARES -0-
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY EACH 572,178
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH -0-
10 SHARED DISPOSITIVE POWER
572,178
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
572,178
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ]
EXCLUDES CERTAIN SHARES (See Instructions)
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.00%
14 TYPE OF REPORTING PERSON (See Instructions)
IN
SCHEDULE 13D
CUSIP No. 26817Q506
1 NAME OF REPORTING PERSON
I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
RICHARD KELLY
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP (See Instructions)
(a) [X]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS (See Instructions)
WC
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED
PURSUANT TO ITEMS 2(d) or 2(e) [ ]
NOT APPLICABLE
6 CITIZENSHIP OR PLACE OF ORGANIZATION
USA
NUMBER OF 7 SOLE VOTING POWER
SHARES -0-
BENEFICIALLY 8 SHARED VOTING POWER
OWNED BY EACH 572,178
REPORTING 9 SOLE DISPOSITIVE POWER
PERSON WITH -0-
10 SHARED DISPOSITIVE POWER
572,178
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
572,178
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) [ ]
EXCLUDES CERTAIN SHARES (See Instructions)
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
5.00%
14 TYPE OF REPORTING PERSON (See Instructions)
IN
This amendment amends and supplements Schedule 13D of California
Investment Fund, LLC, dated April 3, 2000 and filed on April 4, 2000 with
the Securities and Exchange Commission ("SEC"), Amendment No. 1 to Schedule
13D, dated September 12, 2000 and filed on September 13, 2000 with the SEC,
Amendment No. 2 to Schedule 13D, dated October 3, 2000 and filed on October
3, 2000 with the SEC, Amendment No. 3 to Schedule 13D, dated October 17,
2000 and filed on October 17, 2000 with the SEC, Amendment No. 4 to
Schedule 13D, dated October 24, 2000 and filed on October 24, 2000 with the
SEC, Amendment No. 5 to Schedule 13D, dated October 30, 2000 and filed on
October 30, 2000 with the SEC, Amendment No. 6 to Schedule 13D, dated
November 8, 2000 and filed on November 8, 2000 with the SEC, Amendment No.
7 to Schedule 13D, dated December 12, 2000 and filed on December 12, 2000
with the SEC, Amendment No. 8 to Schedule 13D, dated December 21, 2000 and
filed on December 21, 2000 with the SEC, Amendment No. 9 to Schedule 13D,
dated December 27, 2000 and filed on December 27, 2000 with the SEC,
Amendment No. 10 to Schedule 13D, dated January 5, 2001 and filed on
January 5, 2001 with the SEC, Amendment No. 11 to Schedule 13D, dated
January 30, 2001 and filed on January 30, 2001 with the SEC, and Amendment
No. 12 to Schedule 13D, dated February 8, 2001 and filed on February 8,
2001 with the SEC (together, the "Schedule 13D"). Except as amended by this
amendment, there has been no change in the information previously reported
on the Schedule 13D.
ITEM 4. PURPOSE OF TRANSACTION.
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On November 7, 2000, California Investment Fund, LLC (the "Fund")
and Dynex Capital, Inc. ("Dynex") entered into a definitive merger
agreement (as amended, the "Merger Agreement") pursuant to which a newly
formed subsidiary of the Fund would merge with and into Dynex and Dynex
would become a wholly owned subsidiary of the Fund for a purchase price of
$90 million in cash for all of the equity of Dynex (an "Acquisition
Transaction"). Subsequently, on January 26, 2001, Dynex delivered to the
Fund a letter (the "January 26 Letter") purporting to terminate the Merger
Agreement, and on January 29, 2001, the Fund delivered to Dynex a letter
(the "Response Letter") urging Dynex to promptly rescind any purported
termination of the Merger Agreement. A copy of the Merger Agreement was
attached as Exhibit B to the Fund's Amendment No. 6 to Schedule 13D filed
on November 8, 2000 with the SEC, and is specifically incorporated herein
by reference, and the description herein of such merger agreement is
qualified in its entirety by reference to such agreement. A copy of the
Response Letter and the January 26 Letter were attached as Exhibits A and
B, respectively, to the Fund's Amendment No. 11 to Schedule 13D filed on
January 30, 2001 with the SEC, and are specifically incorporated herein by
reference, and the description herein of such letters is qualified in its
entirety by reference to such letters. There can be no assurance that an
Acquisition Transaction will be completed on the terms set forth in the
Merger Agreement or otherwise.
On February 8, 2001, the Fund delivered to Dynex's Board of
Directors a letter (the "Proposal Letter") affirming the Fund's continued
interest in acquiring Dynex through an Acquisition Transaction. A copy of
the Proposal Letter is attached hereto as Exhibit A and specifically
incorporated herein by reference, and the description herein of such letter
is qualified in its entirety by reference to such letter. In the Proposal
Letter, the Fund offers to purchase all of the outstanding common stock of
Dynex and all of the outstanding Series A, B and C Redeemable Preferred
Stock of Dynex for $90 million (less any dividends declared or paid by
Dynex after November 7, 2000) in accordance with the terms set forth in the
Proposal Letter (the "Offer"). As part of the Offer, all accrued and unpaid
dividends accruing before the date of the Acquisition Transaction would be
cancelled or satisfied with a portion of the purchase price and all
outstanding stock options of Dynex would be cancelled without
consideration.
The Proposal Letter specifies that the Offer is not contingent
upon the Fund obtaining financing sufficient to consummate an Acquisition
Transaction. Furthermore, the Proposal Letter specifies that, if Dynex
accepts the Offer in accordance with its terms, the Fund shall release to
Dynex the 572,178 shares of Dynex's common stock (the "Shares") and $1
million (the "Deposit") which were deposited into escrow in connection with
the Merger Agreement. If, within 30 days from Dynex's acceptance of the
Offer, the Fund does not obtain the consent of the holders of at least
50.01% of outstanding face amount of Dynex's Senior Notes Due July 15, 2002
(the "Senior Notes") or enter into an agreement to purchase Senior Notes
with an aggregate value equal to at least 50.01% of the outstanding face
amount of the Senior Notes, then the Fund will forfeit all claims to the
Shares and/or the Deposit.
Finally, the Proposal Letter states that, unless Dynex accepts
the Offer in accordance with its terms, the Fund reserves all of its rights
under, and in connection with, the Merger Agreement and the documents
executed in connection therewith, including (but not limited to) all of the
Fund's rights with respect to Dynex's purported termination of the Merger
Agreement.
Under the terms of the Proposal Letter, the Offer expires and is
of no force or effect unless accepted by Dynex in writing no later than
5:00 p.m. California time on February 9, 2001. The Offer shall also be of
no force or effect if there has been any material change in Dynex or its
business, assets or liabilities since January 26, 2001.
Depending on the outcome of an Acquisition Transaction (whether
pursuant to the Merger Agreement, the Offer or otherwise), the Fund
reserves the right to formulate other plans and/or make other proposals,
and take such actions with respect to its investments in Dynex, including
any or all of the actions set forth in paragraphs (a) through (j) of Item 4
of Schedule 13D and any other actions as it may determine.
Except as stated in this response to Item 4 and in furtherance of
closing an Acquisition Transaction pursuant to the terms of the Merger
Agreement or the Offer, the Fund has no current plans or proposals with
respect to Dynex or its securities of the types enumerated in paragraphs
(a) through (j) of Item 4 of Schedule 13D.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
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Exhibit A -- Letter, dated February 8, 2001, from California Investment
Fund, LLC to the Board of Directors of Dynex Capital, Inc.
SIGNATURES
After reasonable inquiry and to the best of our knowledge and
belief, we certify that the information set forth in this statement is
true, complete and correct.
Date: February 9, 2001 California Investment Fund, LLC,
a California limited liability company
By: /s/ Michael R. Kelly
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Michael R. Kelly
Its: Managing Member
Date: February 9, 2001 Michael R. Kelly
By: /s/ Michael R. Kelly
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Michael R. Kelly, as an Individual
Date: February 9, 2001 Richard Kelly
By: /s/ Richard Kelly
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Richard Kelly, as an Individual
EXHIBIT INDEX
Exhibit A -- Letter, dated February 8, 2001, from California Investment
Fund, LLC to the Board of Directors of Dynex Capital, Inc.