OLYMPIC FINANCIAL LTD.
NON-STATUTORY STOCK OPTION AGREEMENT
Olympic Financial Ltd., a Minnesota corporation (the "Company"), hereby
grants to Xxxxxx Xxxxxx (the "Optionee"), an option (the "Option") to
purchase a total of 200,000 shares of the $.01 par value common stock
("Common Stock") of the Company (the "Shares"), at the price determined as
provided herein, and in all respects subject to the terms, definitions and
provisions hereof. Such option is granted pursuant to the terms and
conditions of a letter agreement between the Company and the Optionee dated
August 26, 1996. Such letter agreement and the Option have been approved by
the Board of Directors at a meeting thereof held August 26, 1996.
1. NATURE OF THE OPTION. This Non-Statutory Stock Option is not
intended to qualify as an Incentive Stock Option as defined in Section 422A
of the Code.
2. EXERCISE PRICE. The exercise price is $17.375 for each share of
Common Stock.
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 to the extent of (i) one hundred thousand
(100,000) of the Shares subject to the Option commencing on August 26, 1996;
and (ii) that additional number of Shares equal to one hundred thousand
(100,000) times the percentage (but not more than 100%) determined by
dividing (a) the number of days elapsed from February 14, 1997 to the date
the Optionee ceases for any reason to act as the Chairman of the Executive
Committee of the Company (the "Termination Date") or August 14, 1997,
whichever first occurs; by (b) one hundred eighty two (182), commencing on
the earlier of the Termination Date and August 14, 1997. The Option as to
any Shares which are not exercisable as of the Termination Date pursuant to
the previous sentence of this Subsection 3(i) (a) shall lapse and be null and
void as of the Termination Date.
(b) This Option may not be exercised for a fraction of a
share.
(c) In the event of Optionee's death, the exercisability
of the Option is governed by Section 7 below, subject to the limitations
contained in subsection 3(i)(d).
(d) In no event may this Option be exercised after the
date of expiration of the term of this Option as set forth in Section 9 below.
(ii) METHOD OF EXERCISE. This Option shall be exercisable by
written notice which shall state the election to exercise the Option, the
number of Shares in respect of which the Option is being exercised, and such
other representations and agreements as to the holder's
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investment intent with respect to such shares of Common Stock as may be
required by the Company. 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.
No Shares will be issued pursuant to the exercise of an 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. OPTIONEE'S REPRESENTATIONS. In the event the Shares purchasable
pursuant to the exercise of this Option have not been registered under the
Securities Act of 1933, as amended, at the time this Option is exercised,
Optionee shall, concurrently with the exercise of all or any portion of this
Option, deliver to the Company his Investment Representation Statement in the
form attached hereto as Exhibit A.
5. METHOD OF PAYMENT. Payment of the exercise price shall be by (i)
cash; (ii) check; or (iii) if authorized by the Board of Directors of the
Company, the surrender of other shares of Common Stock of the Company which
(A) either have been owned by the Optionee for more that 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 by the Board) on the
date of surrender equal to the exercise price of the Shares as to which the
Option is being exercised.
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 constitute a violation of any applicable
federal or state securities 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. DEATH OF OPTIONEE. In the event of the death of Optionee during
the term of this 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 9 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.
8. 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 or
her personal representatives, heirs, successors and assigns.
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9. TERM OF OPTION. This Option may not be exercised after August
26, 2006, and may be exercised only in accordance with the terms of this
Option.
10. 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,
each 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 its sole discretion in such instances, declare that any
Option shall terminate as of a date fixed by the Board and give each Optionee
the right to exercise his or her Option as to all or any part of the
Optioned Stock, including Shares as to which the Option would not otherwise
be exercisable. In the event of a proposed sale of all or substantially all
of the assets of the Company, or the merger of the Company with or into
another corporation, the Option shall be assumed or an equivalent option
shall be substituted by such successor corporation or a parent or subsidiary
of such successor corporation.
11. NO RIGHTS AS SHAREHOLDER. The Optionee shall have no rights as a
shareholder with respect to any Shares subject to this Option prior to the
date of issuance to him of a certificate or certificates for such shares.
DATE OF GRANT: August 26, 1996
OLYMPIC FINANCIAL LTD.
By: /s/ Xxxxx X. Xxxxxxxx
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Xxxxx X. Xxxxxxxx
Title: Vice Chairman
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OPTIONEE ACKNOWLEDGES RECEIPT OF A COPY OF THE OPTION AGREEMENT AND
CERTAIN INFORMATION RELATED THERETO AND REPRESENTS THAT HE IS FAMILIAR WITH
THE TERMS AND PROVISIONS THEREOF, AND HEREBY ACCEPTS THIS OPTION SUBJECT TO
ALL OF THE TERMS AND PROVISIONS THEREOF. OPTIONEE HAS REVIEWED THIS OPTION
IN ITS ENTIRETY, HAS HAD AN OPPORTUNITY TO OBTAIN THE ADVICE OF COUNSEL PRIOR
TO EXECUTING THIS OPTION AND FULLY UNDERSTANDS ALL PROVISIONS OF THE OPTION.
OPTIONEE HEREBY AGREES TO ACCEPT AS BINDING, CONCLUSIVE AND FINAL ALL
DECISIONS OR INTERPRETATIONS OF THE BOARD UPON ANY QUESTIONS ARISING UNDER
THE OPTION. OPTIONEE FURTHER AGREES TO NOTIFY THE COMPANY UPON ANY CHANGE IN
THE RESIDENCE ADDRESS INDICATED BELOW.
Optionee:
Dated: August 26, 1996 /s/ Xxxxxx Xxxxxx
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Xxxxxx Xxxxxx
Residence Address:
000 Xxxxxxxxxx Xxxx
Xxxxxxxxx, XX 00000
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EXHIBIT A
INVESTMENT REPRESENTATION STATEMENT
PURCHASER: Xxxxxx Xxxxxx
ISSUER: OLYMPIC FINANCIAL LTD.
SECURITY: COMMON STOCK
AMOUNT: ______ SHARES
DATE: __________, ____
In connection with the purchase of the Common Stock ("Securities") of OLYMPIC
FINANCIAL LTD. (the "Company"), the undersigned represents to the Company the
following:
(a) I am aware of the Company's business affairs and financial
condition, and have acquired sufficient information about the Company to reach
an informed and knowledgeable decision to acquire the Securities. I am
purchasing these Securities for my own account for investment purposes only and
not with a view to, or for the resale in connection with, any "distribution"
thereof for purposes of the Securities Act of 1933, as amended (the "Securities
Act").
(b) I understand that the Securities have not been registered under
the Securities Act in reliance upon a specific exemption therefrom, which
exemption depends upon, among other things, the bona fide nature of my
investment intent as expressed herein. In this connection, I understand that,
in the view of the Securities and exchange Commission (the "SEC"), the statutory
basis for such exemption may be unavailable if my representation was predicated
solely upon a present intention to hold these Securities for the minimum capital
gains period specified under tax statutes, for a deferred sale, for or until an
increase or decrease in the market price of the Securities, or for a period of
one year or any other fixed period in the future.
(c) I further understand that the Securities must be held
indefinitely unless subsequently registered under the Securities Act or unless
an exemption from registration is otherwise available. Moreover, I understand
that the Company is under no obligation to register the Securities. In
addition, I understand that the certificate evidencing the Securities will be
imprinted with a legend which prohibits the transfer of the Securities unless
they are registered or such registration is not required in the opinion of
counsel for the Company.
(d) I am familiar with the provisions of Rule 701 and Rule 144,
each promulgated under the Securities Act, which, in substance, permit limited
public resale of "restricted securities" acquired, directly or indirectly, from
the issuer thereof, in a non-public
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offering subject to the satisfaction of certain conditions. Rule 701 provides
that if the issuer qualifies under Rule 701 at the time of issuance of the
Securities, such issuance will be exempt from registration under the Securities
Act. In the event the Company later becomes subject to the reporting
requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934,
ninety (90) days thereafter the securities exempt under Rule 701 may be resold,
subject to the satisfaction of certain of the conditions specified by Rule 144,
including among other things: (1) the sale being made through a broker in an
unsolicited "broker's transaction" or in transactions directly with a market
maker (as said term is defined under the Securities Exchange Act of 1934); and,
in the case of an affiliate, (2) the availability of certain public information
about the Company, and the amount of securities being sold during any three
month period not exceeding the limitations specified in Rule 144(e), if
applicable. Notwithstanding this paragraph (d), I acknowledge and agree to the
restrictions set forth in paragraph (e) hereof
In the event that the Company does not qualify under Rule 701 at the
time of issuance of the Securities, then the Securities may be resold in certain
limited circumstances subject to the provisions of Rule 144, which requires
among other things: (1) the availability of certain public information about the
Company, (2) the resale occurring not less than two years after the party has
purchased, and made full payment for, within the meaning of Rule 144, the
securities to be sold; and, in the case of an affiliate, or of a non-affiliate
who has held the securities less than three years, (3) the sale being made
through a broker in an unsolicited "broker's transaction" or in transactions
directly with a market maker (as said term is defined under the Securities
Exchange Act of 1934) and the amount of securities being sold during any three
month period not exceeding the specified limitations stated therein, if
applicable.
(e) I further understand that in the event all of the applicable
requirements of Rule 144 or Rule 701 are not satisfied, registration under the
Securities Act, compliance with Regulation A, or some other registration
exemption will be required; and that, notwithstanding the fact Rule 144 and Rule
701 are not exclusive, the staff of the SEC has expressed its opinion that
persons proposing to sell private placement securities other than in a
registered offering and otherwise than pursuant to Rule 144 or Rule 701 will
have a substantial burden of proof in establishing that an exemption from
registration is available for such offers or sales, and that such persons and
their respective brokers who participate in such transactions do so at their own
risk.
Signature of Purchaser:
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Xxxxxx Xxxxxx
Date: _________ __, 199_
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