Exhibit 14
NON-QUALIFIED STOCK OPTION AGREEMENT
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THIS NON-QUALIFIED STOCK OPTION AGREEMENT (this "Option
Agreement"), dated as of January 21, 2000 (the "Date of Grant"), grant number
PF001597, by and between Prism Financial Corporation, a Delaware corporation
(the "Company"), and Xxxxxxx X. Xxxxxx (the "Optionee"). Any capitalized terms
not defined herein shall have their respective meanings set forth in the Prism
Financial Corporation 1999 Omnibus Stock Incentive Plan (the "Plan").
Pursuant to the Plan, the Board of Directors of the Company
(the "Board"), as the Administrator of the Plan, has determined that the
Optionee is to be granted an option (the "Option") to purchase shares of the
Company's common stock, par value $0.01 per share (the "Common Stock"), on the
terms and conditions set forth herein, and hereby grants such Option. This
Option is not intended to constitute an "incentive stock option" within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code").
1. Number of Shares. The Option entitles the Optionee to
purchase twenty thousand (20,000) shares of the Company's Common Stock (the
"Option Shares") at a price of three dollars and thirty-seven and one-half cents
($3.375) per share (the "Option Exercise Price"), which is at least equal to the
Fair Market Value of the Common Stock as of the Date of Grant.
2. Option Term. The term of the Option and of this Option
Agreement (the "Option Term") shall commence on the Date of Grant and, unless
the Option is previously terminated pursuant to this Option Agreement, shall
terminate upon the expiration of ten (10) years from the Date of Grant. Upon
expiration of the Option Term, all rights of the Optionee hereunder shall
terminate.
3. Conditions of Exercise. (a) Subject to Section 7 below, the
Option shall vest and become exercisable as to thirty-three and one-third
percent (33-1/3%) of the Option Shares on each of the first three (3)
anniversaries of the Date of Grant; provided, however, that if Optionee is
serving as a director of or is employed by the Company (or any successor
corporation) upon a Change in Control (as defined below), one hundred percent
(100%) of the Option Shares shall vest and become exercisable in full as of such
date.
(b) For purposes of this Option Agreement, a
"Change in Control" of the Company shall be deemed to occur as of such time of:
(i) the
acquisition by an "person" (as such term is used in Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act")) (other
than the Company), of the "beneficial ownership" (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of the Company
representing fifty percent (50%) or more of the total voting power represented
by the Company's then outstanding voting securities (assuming for purposes of
this calculation that all consideration paid by such "person" (together with its
affiliates) in exchange for securities of the Company was exchanged for Common
Stock in the secondary market, regardless of whether such consideration was
actually exchanged for other securities of the Company), (ii) the consummation
of a merger or consolidation of the Company with or into any other entity, other
than a merger or consolidation which would result in the voting securities of
the Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting securities of
the surviving entity) at least fifty percent (50%) of the total voting power
represented by the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation, or (iii)
consummation of a plan of complete liquidation of the Company or of the sale or
disposition by the Company of all or substantially all of the Company's assets.
(c) Except as otherwise provided herein, the
right of the Optionee to purchase Option Shares with respect to which this
Option has become exercisable may be exercised in whole or in part at any time
or from time to time prior to expiration of the Option Term.
4. Adjustments. In the event of any merger, reorganization,
consolidation, recapitalization, stock dividend, stock split or similar change
affecting the Common Stock, a substitution or proportionate adjustment shall be
made in the kind, number and option price of shares of Common Stock subject to
the unexercised portion of the Option, as may be determined by the Board in its
sole discretion.
5. Nontransferability of Option and Option Shares. Except as
otherwise provided by the Administrator, the Option and this Option Agreement
shall not be transferable and, during the lifetime of Optionee, the Option may
be exercised only by Optionee. Without limiting the generality of the foregoing,
except as otherwise provided herein, the Option may not be assigned,
transferred, pledged or hypothecated in any way, shall not be assignable by
operation of law, and shall not be subject to execution, attachment or similar
process. Any attempted assignment, transfer, pledge, hypothecation or other
disposition of the Option contrary to the
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provisions hereof, and the levy of any execution, attachment or similar process
upon the Option shall be null and void and without effect.
6. Method of Exercise of Option. The Option may be exercised
by means of written notice of exercise to the Company specifying the number of
Option Shares to be purchased, accompanied by payment in full of the aggregate
Option Exercise Price and any applicable withholding taxes (i) in cash or by
check, (ii) by means of a cashless exercise procedure either through a broker
or, at the discretion of the Administrator, through withholding of shares of
Common Stock otherwise issuable upon exercise of the Option in an amount
sufficient to pay the exercise price and any applicable withholding taxes, (iii)
in the form of unrestricted Stock already owned by the Optionee which, (x) in
the case of unrestricted Stock acquired upon exercise of an option, have been
owned by the optionee for more than six months on the date of surrender, and (y)
have a Fair Market Value on the date of surrender equal to the aggregate
exercise price of the Stock as to which such Stock Option shall be exercised, or
(iv) by any other means of exercise authorized from time to time in the Plan
and/or by the Board.
7. Effect of Termination of Service. Upon the termination of
Optionee's service with the Company or any Subsidiary under any circumstances
(including without limitation by reason of the sale of such Subsidiary or the
death of the Optionee), the Option shall continue to vest in accordance with
Section 3 hereof and shall expire in accordance with Section 2 hereof.
8. Notices. All notices and other communications under this
Agreement shall be in writing and shall be given by facsimile or first class
mail, certified or registered with return receipt requested, and shall be deemed
to have been duly given three days after mailing or 24 hours after transmission
by facsimile to the respective parties named below:
If to Company: Prism Financial Corporation
Prism Center
000 Xxxxx Xxxxxxx
Xxxxxxx, XX 00000
Attn: Corporate Secretary
Facsimile: (000) 000-0000
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with a copy to: Skadden, Arps, Slate, Xxxxxxx & Xxxx
(Illinois)
000 Xxxx Xxxxxx Xxxxx
Xxxxxxx, XX 00000-0000
Attn: Xxxx X. Xxxxxxxxx
Facsimile: 000-000-0000
If to the Optionee: Xxxxxxx X. Xxxxxx
c/o Prism Financial Corporation
000 X. Xxxxxxx
Xxxxxxx, XX 00000
Facsimile: (000) 000-0000
Either party hereto may change such party's address for notices by notice duly
given pursuant hereto.
9. Protections Against Violations of Agreement. No purported
sale, assignment, mortgage, hypothecation, transfer, pledge, encumbrance, gift,
transfer in trust (voting or other) or other disposition of, or creation of a
security interest in or lien on, any of the Option Shares by any holder thereof
in violation of the provisions of this Agreement or the Amended and Restated
Certificate of Incorporation or the Second Amended and Restated Bylaws of the
Company, will be valid, and the Company will not transfer any of said Option
Shares on its books nor will any of said Option Shares be entitled to vote, nor
will any dividends be paid thereon, unless and until there has been full
compliance with said provisions to the satisfaction of the Company. The
foregoing restrictions are in addition to and not in lieu of any other remedies,
legal or equitable, available to enforce said provisions.
10. Securities Laws Requirements. The Option shall not be
exercisable to any extent, and the Company shall not be obligated to transfer
any Option Shares to the Optionee upon exercise of such Option, if such
exercise, in the opinion of counsel for the Company, would violate the
Securities Act (or any other federal or state statutes having similar
requirements as may be in effect at that time). Further, the Company may require
as a condition of transfer of any Option Shares pursuant to any exercise of the
Option that the Optionee furnish a written representation that he or she is
purchasing or acquiring the Option Shares for investment and not with a view to
resale or distribution to the public.
11. Withholding Requirements. The Company's obligations under
this Option Agreement shall be subject to all applicable tax and other
withholding
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requirements, and the Company shall, to the extent permitted by law, have the
right to deduct any withholding amounts from any payment or transfer of any kind
otherwise due to the Optionee.
12. Failure to Enforce Not a Waiver. The failure of the
Company to enforce at any time any provision of this Option Agreement shall in
no way be construed to be a waiver of such provision or of any other provision
hereof.
13. Governing Law. This Option Agreement shall be governed by
and construed according to the laws of the State of Delaware without regard to
its principles of conflict of laws.
14. Incorporation of Plan. The Plan is hereby incorporated by
reference and made a part hereof, and the Option and this Option Agreement shall
be subject to all terms and conditions of the Plan.
15. Amendments. This Option Agreement may be amended or
modified at any time only by an instrument in writing signed by each of the
parties hereto.
16. Rights as a Stockholder. Neither the Optionee nor any of
the Optionee's successors in interest shall have any rights as a stockholder of
the Company with respect to any shares of Common Stock subject to the Option
until the date of issuance of a stock certificate for such shares of Common
Stock.
17. Agreement Not a Contract of Service. Neither the Plan, the
granting of the Option, this Option Agreement nor any other action taken
pursuant to the Plan shall constitute or be evidence of any agreement or
understanding, express or implied, that the Optionee has a right to continue in
the service of the Company or any Subsidiary or affiliate of the Company for any
period of time or at any specific rate of compensation.
18. Authority of the Board. The Board shall have full
authority to interpret and construe the terms of the Plan and this Option
Agreement. The determination of the Board as to any such matter of
interpretation or construction shall be final, binding and conclusive.
19. Dispute Resolution. The parties hereto will use their
reasonable best efforts to resolve any dispute hereunder through good faith
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negotiations. A party hereto must submit a written notice to any other party to
whom such dispute pertains, and any such dispute that cannot be resolved within
30 calendar days of receipt of such notice (or such other period to which the
parties may agree) will be submitted to an arbitrator selected by mutual
agreement of the parties. In the event that, within 50 days of the written
notice referred to in the preceding sentence, a single arbitrator has not been
selected by mutual agreement of the parties, a panel of arbitrators (with each
party to the dispute being entitled to select one arbitrator and, if necessary
to prevent the possibility of deadlock, one additional arbitrator being selected
by such arbitrators selected by the parties to the dispute) shall be selected by
the parties. Except as otherwise provided herein or as the parties to the
dispute may otherwise agree, such arbitration will be conducted in accordance
with the then existing rules of the American Arbitration Association. The
decision of the arbitrator or arbitrators, or of a majority thereof, as the case
may be, made in writing will be final and binding upon the parties hereto as to
the questions submitted, and the parties will abide by and comply with such
decision; provided, however, the arbitrator or arbitrators, as the case may be,
shall not be empowered to award punitive damages. Unless the decision of the
arbitrator or arbitrators, as the case may be, provides for a different
allocation of costs and expenses determined by the arbitrators to be equitable
under the circumstances, the prevailing party or parties in any arbitration will
be entitled to recover all reasonable fees (including but not limited to
attorneys' fees) and expenses incurred by it or them in connection with such
arbitration from the nonprevailing party or parties.
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IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Option Agreement on the day and year first above written.
PRISM FINANCIAL CORPORATION
By /s/ Xxxx X. Filler
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Name Xxxx X. Filler
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Title President & CEO
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The undersigned hereby accepts and agrees to all the terms and provisions of the
foregoing Option Agreement and to all the terms and provisions of the Plan,
herein incorporated by reference.
/s/ Xxxxxxx X. Xxxxxx
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The Optionee
Address:
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