OLYMPIC FINANCIAL LTD.
NON-STATUTORY STOCK OPTION AGREEMENT
Olympic Financial Ltd., a Minnesota corporation (the "Company"), hereby
grants to Xxxxxxx X. Xxxxxxxxxx (the "Optionee"), an option (the "Option") to
purchase a total of 1,200,000 shares of the Common Stock (the "Common Stock") of
the Company (the "Shares"), in accordance with Section 2 of the Employment
Agreement between the Company and the Optionee dated January 6, 1997 (the
"Employment Agreement"). The Option is not being granted under the 1990 Stock
Option Plan (the "Plan") adopted by the Company; however, capitalized terms used
herein and not otherwise defined herein shall have the same meanings ascribed
thereto under the Plan.
1. NATURE OF THE OPTION. This Non-Statutory Stock Option is not intended
to qualify as an Incentive Stock Option as defined in Section 422 of the Code.
2. EXERCISE PRICE. The exercise price is $14.87 for each share of
Common Stock, which price has been set by the Board of Directors of the
Company (the "Board").
3. EXERCISE OF OPTION. The Option shall be exercisable during its term as
follows:
(i) RIGHT TO EXERCISE.
(a) Subject to subsections 3(i)(b), (c) and (d) below, this
Option shall be exercisable cumulatively, to the extend of thirty-three and
three tenths percent (33.3%) of the Shares subject to the Option commencing on
January 29, 1998; an additional thirty-three and three tenths percent (33.3%) of
the Shares subject to the Option commencing on January 29, 1999 and an
additional thirty three and four tenths percent (33.4%) of the Shares subject to
the Option commencing on January 29, 2000. However, as of the date of the
occurrence of the first to occur of any of the following events prior to January
29, 2000, notwithstanding the previous sentence of this subsection 3(i)(a), this
Option shall be exercisable cumulatively to the extent of one hundred percent
(100%) of the Shares subject to the Option regardless of whether otherwise
exercisable by the Optionee:
x) the termination of Optionee's employment by reason of his death
or Disability (as defined in the Employment Agreement);
y) the termination of Optionee's employment by the Company without
Cause (as defined in the Employment Agreement) or by the Optionee
for Good Reason (as defined in the Employment Agreement); or
z) a "Change in Control" of the Company. As used herein the term
"Change of Control" shall mean any transaction or series of
transactions by which the Company shall merge with or consolidate
into any other person or lease or sell substantially all of its
and its subsidiaries' assets (other than
asset sales in connection with automobile loan securitization
transactions) substantially as an entirety to any other person or
by which any person or group (within the meaning of Rule 13d-5
under the Securities Exchange Act of 1934) acquires, directly or
indirectly, 51% or more of the Company's outstanding common stock
(calculated on a fully diluted basis).
(b) This Option may not be exercised for a fraction of a Share.
(c) In the event of Optionee's death, Disability or other
termination of employment, the exercisability of the Option shall be subject to
the provisions of Sections 7, 8 or 9 below, as applicable.
(ii) METHOD OF EXERCISE. (a) This Option shall be exercisable by
written notice which shall state the election to exercise the Option, and the
number of Shares in respect of which the Option is being exercised. Such
written notice shall be signed by the Optionee and shall be delivered in person
or by certified mail to the Secretary of the Company. The written notice shall
be accompanied by payment of the exercise price. Until certificates for the
Shares are issued to the Optionee, such Optionee shall not have any rights as a
shareholder of the Company.
(b) No Shares will be issued pursuant to the exercise of the Option
unless such issuance and such exercise shall comply with all relevant provisions
of law and the requirements of any stock exchange upon which the Shares may then
be listed. Assuming such compliance, for income tax purposes the Shares shall
be considered transferred to the Optionee on the date on which the Option is
exercised with respect to such Shares.
4. REGISTRATION; ETC. Within a reasonable time after the date hereof,
the Company shall file a registration statement under the Securities Act of
1933, as amended, on Form S-8 with respect to the Shares and shall deliver to
the Optionee a prospectus relating to such Shares meeting the requirements for
use with Form S-8. The Company shall also make any required blue sky filings
and shall cause the Shares to be listed on each securities exchange on which the
Common Stock is listed and traded.
5. METHOD OF PAYMENT. Payment of the exercise price shall be made by (i)
cash; (ii) check; (iii) if authorized by the Board, the surrender of other
shares of Common Stock of the Company which (A) either have been owned by the
Optionee for more than six (6) months on the date of surrender or were not
acquired, directly or indirectly, from the Company and (B) have a fair market
value (as determined in the manner provided under the Plan) on the date of
surrender equal to the exercise price of the Shares as to which the Option is
being exercised; or (iv) any other means approved by the Board.
6. RESTRICTIONS ON EXERCISE. This Option may not be exercised if the
issuance of such Shares upon such exercise or the method of payment of
consideration for such shares would
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constitute a violation of any applicable federal or state securities law or
other law or regulation, including any rule under Part 207 of Title 12 of the
Code of Federal Regulations ("Regulation G") as promulgated by the Federal
Reserve Board. As a condition to the exercise of this Option, the Company may
require Optionee to make any representation and warranty to the Company as may
be required by any applicable law or regulation.
7. TERMINATION OF STATUS AS AN EMPLOYEE. Except as provided in Sections
8 and 9, in the event of termination of Optionee's employment, Optionee may, but
only within eighteen months after the date of such termination (but in no event
later than the date of expiration of the term of this Option as set forth in
Section 11 below), exercise this Option to the extent that he was entitled to
exercise it at the date of such termination. To the extent that Optionee (i)
was not entitled to exercise this Option at the date of such termination, or
(ii) does not exercise this Option within the time specified herein, the Option
shall terminate.
8. DISABILITY OF OPTIONEE. In the event of termination of Optionee's
employment as a result of Disability, he may, but only within one year from
the date of such termination (but in no event later than the date of
expiration of the term of this Option as set forth in Section 11 below),
exercise the Option to the extent he was entitled to exercise it at the date
of such termination. To the extent that Optionee (i) was not entitled to
exercise the Option at the date of termination, or (ii) does not exercise
such Option within the time specified herein, the Option shall terminate.
9. DEATH OF OPTIONEE. In the event of the death of the Optionee:
(i) during the term of this Option and while an employee of the
Company and having been in continuous employment (as determined by the Board)
since the date of grant of the Option, the Option may be exercised, at any time
within one (1) year following the date of death (but in no event later than the
date of expiration of the term of this Option as set forth in Section 11 below),
by Optionee's estate or by a person who acquired the right to exercise the
Option by bequest or inheritance, but only to the extent Optionee was entitled
to exercise the Option at the date of death; or
(ii) within three months after termination of Optionee's
employment, the Option may be exercised, at any time within nine (9) months
following the date of death (but in no event later than the date of expiration
of the term of this Option as set forth in Section 11 below), by Optionee's
estate or by a person who acquired the right to exercise the Option by bequest
or inheritance, but only to the extent Optionee was entitled to exercise the
Option at the date of termination.
10. NON-TRANSFERABILITY OF OPTION. This Option may not be transferred
in any manner otherwise than by will or by the laws of descent or distribution
and may be exercised during the lifetime of Optionee only by him. The terms of
this Option shall be binding upon the Optionee and his personal representatives,
heirs, successors and assigns.
11. TERM OF OPTION. This Option may not be exercised after January 29,
2007, and may be exercised only in accordance with the terms hereof.
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12. ADJUSTMENTS UPON CHANGES IN CAPITALIZATION OR MERGER. The number of
shares of Common Stock covered by this Option and the exercise price shall be
proportionately adjusted for any increase or decrease in the number of issued
and outstanding shares of Common Stock resulting from a stock split, reverse
stock split, stock dividend, combination or reclassification of the Common
Stock, or any other increase or decrease in the number of issued shares of
Common Stock effected without receipt of consideration by the Company; provided,
however, that conversion of any convertible securities of the Company shall not
be deemed to have been "effected without receipt of consideration." Such
adjustment shall be made by the Board, whose determination in that respect shall
be final, binding and conclusive. Except as expressly provided herein, no
issuance by the Company of shares of stock of any class, or securities
convertible into shares of stock of any class, or options or rights to purchase
shares of stock of any class shall affect, and no adjustment by reason thereof
shall be made with respect to, the number or price of shares of Common Stock
subject to this Option.
In the event of the proposed dissolution or liquidation of the Company, the
Option will terminate immediately prior to the consummation of such proposed
action, unless otherwise provided by the Board. The Board may, in the exercise
of it sole discretion in such instances, declare that the Option shall terminate
as of a date fixed by the Board and give the Optionee the right to exercise the
Option as to all or any part of the Shares. In the event of a Change of Control
of the Company, the Board shall notify the Optionee that the Option shall be
fully exercisable from the date of such notice.
13. SHAREHOLDER APPROVAL. The grant of this Option is specifically
conditioned upon the approval of such grant by the shareholders of the Company
at the Annual Meeting of the shareholders to be held April 28, 1997 and any
adjournment thereof. In the event, the shareholders do not so approve this
Option grant, it shall be void AB INITIO.
DATE OF GRANT: March 14, 1997
OLYMPIC FINANCIAL LTD.
By: /s/ Xxxxxx Xxxxxx
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Xxxxxx Xxxxxx
Chairman
/s/ Xxxxxxx X. Xxxxxxxxxx
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Xxxxxxx X. Xxxxxxxxxx
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