SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT
TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of Earliest Event Reported): January 27, 2000
PRISM FINANCIAL CORPORATION
(Exact Name of Registrant as Specified in its Charter)
DELAWARE
(State or Other Jurisdiction of Incorporation)
0-19058 36-4279417
(Commission File Number) (I.R.S. Employer Identification No.)
440 North Orleans 60610
Chicago, Illinois
(Address of Principal Executive offices) (Zip Code)
(312) 494-0020
(Registrant's Telephone Number, Including Area Code)
Item 5. Other Events.
Rights Agreement
On January 27, 2000, the Board of Directors of Prism Financial
Corporation (the "Company") authorized and declared a distribution of one
right ("Right") for each share of Common Stock outstanding as of the close
of business on February 7, 2000.
Each Right will entitle the holder to purchase from the Company one
one-thousandth of a share of Series A Junior Participating Preferred Stock
of the Company at an exercise price of $17.00, subject to certain
adjustments. The Rights will expire in January 2010. The description and
terms of the Rights will be set forth in a Rights Agreement, as the same
may be amended from time to time (the "Rights Agreement"), between the
Company and LaSalle Bank National Association, as rights agent.
The Rights will not be exercisable unless (i) a person or group
acquires beneficial ownership of 15% or more of the Company's Common Stock,
(ii) a person or group commences a tender or exchange offer upon
consummation of which such person or group would beneficially own 15% or
more of the Company's Common Stock or (iii) the Board of Directors
determines that a person or group, having obtained beneficial ownership of
at least 10% of the Company's Common Stock, is seeking short-term financial
gain which would not serve the long-term interests of the Company or whose
ownership is causing or is likely to cause a material adverse impact on the
Company (an "Adverse Person"). The Company will generally be entitled to
redeem the Rights at $0.001 per Right at any time prior to 10 days (subject
to extension) following a public announcement that a 15% position has been
acquired. The Company will not be entitled, however, to redeem the Rights
following a determination by the Board of Directors that any person or
group is an Adverse Person. Prior to the date upon which the rights would
become exercisable under the Plan, the Company's outstanding stock
certificates will represent both the shares of the Company's Common Stock
and the Rights, and the Rights will trade only with the shares of Common
Stock.
Generally, if the Rights become exercisable by virtue of a person or
group acquiring beneficial ownership of 15% or more of the Company's Common
Stock, other than pursuant to a tender or exchange offer for all
outstanding shares of the Company approved by a majority of the independent
directors not affiliated with a 15%-or-more stockholder, or the Board of
Directors determines that any person or group is an Adverse Person, then
each stockholder, other than the acquiror or Adverse Person, as the case
may be, is entitled to purchase, for the exercise price, that number of
shares of the Company's Common Stock that, at the time of the transaction,
will have a market value of two times the exercise price of the Rights. In
addition, if, after the Rights become exercisable, the Company is acquired
in a merger or other business combination, or 50% or more of its assets or
earning power are sold, each Right will entitle the holder to purchase, at
the exercise price of the Rights, that number of shares of common stock of
the acquiring company that, at the time of the transaction, will have a
market value of two times the exercise price of the Rights.
The foregoing description of the Rights Agreement does not purport to
be complete and is qualified in its entirety by reference to the Rights
Agreement. A copy of the Rights Agreement will be filed shortly with the
Securities and Exchange Commission.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
(c) Exhibits
Exhibit No. Exhibit
99.2 Press Release dated January 27, 2000
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
PRISM FINANCIAL CORPORATION
By: /s/ DAVID A. FISHER
------------------------
Date: February 4, 2000 Name: David A. Fisher
Title: Senior Vic President,
Chief Financial Officer
and Secretary
EXHIBIT INDEX
Exhibit No. Exhibit
99.2 Press Release dated January 27, 2000
EXHIBIT 99.2
FOR IMMEDIATE RELEASE
PRISM FINANCIAL CORPORATION ADOPTS
STOCKHOLDER RIGHTS PLAN
CHICAGO, IL: January 27, 2000 -- Prism Financial Corporation
(NASDAQ:PRFN) announced today that its board of directors adopted a
Stockholder Rights Plan designed to secure the long term value of the
stockholders' investment and to protect stockholders from coercive takeover
tactics.
Under the Stockholder Rights Plan, each stockholder of record as of
the close of business on February 7, 2000 will receive a dividend at the
rate of one right for each share of the Company's common stock, par value
$0.01 per share. Each right initially will entitle stockholders to buy one
unit of a share of preferred stock for $17.00. The rights will be
exercisable only if a person or group acquires beneficial ownership of 15
percent or more of the Company's common stock or commences a tender offer
that would result in that person or group owning 15 percent or more of the
common stock. If such a person or group acquires 15 percent or more of the
common stock, the rights are triggered. The rights may also be triggered
if the board of directors determines that a person or group having obtained
beneficial ownership of at least 10% of the Company's common stock, is
seeking short-term financial gain which would not serve the long-term
interests of the Company. Each right will entitle the stockholders (other
than such person or group discussed above) to purchase the number of shares
of the Company's common stock having a then current market value of twice
the right's exercise price. The rights will expire on January 27, 2010.
The Company will generally be entitled to redeem the rights at $0.001
per right at any time prior to 10 days (subject to extension) following a
public announcement that a 15 percent position has been acquired. The
Company will not be entitled, however, to redeem the rights following a
determination by the board of directors that any person or group is trying
to initiate coercive takeover tactics or cause a material adverse impact on
the Company.
The rights distribution is not taxable to the Company or its
stockholders and has no dilutive effect unless exercised.
About Prism Financial Corporation
Prism Financial Corporation is a leading national retail mortgage
banking company that originated more than $8 billion in loans in 1998, on a
pro forma basis, making it the 11th largest retail originator in the
country. Based in Chicago, Prism is nationally licensed, with more than
1,200 loan officers in 27 states. Prism operates through more than 150
retail branches as well as through partnerships with major Internet
companies. Prism's lines of business include growing e-commerce and
ancillary services divisions and an affordable housing and historic tax
credit syndication business. Prism Financial's common stock trades on
NASDAQ under the ticker symbol PRFN. Prism Financial's subsidiaries
include Prism Mortgage Company of Chicago; Pacific Guarantee Mortgage Corp.
of Point Richmond, Calif.; Mortgage Market Inc. of Lake Oswego, Ore.; First
City Financial Corp. of Englewood, Colo.; PointSource Financial, L.L.C. of
Dallas, Texas; and Apollo Housing Capital, L.L.C. of Cleveland Ohio.
Safe Harbor Provision
The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for certain forward-looking statements. This press release may
contain forward-looking statements that reflect the Company's current views
with respect to future events and financial performance. These forward-
looking statements are subject to certain risks and uncertainties, which
could cause future results to differ materially from historical results or
those anticipated. The words "believe," "expect," "anticipate," "intend,"
"estimate," "goals," "would," "could," "should," and other expressions
which indicate future events and trends identify forward-looking
statements. Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of their dates, and if no
date is provided, then such statements speak only as of today. The Company
undertakes no obligation to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or
otherwise. Several factors, including those disclosed in the Company's
prospectus filed as part of its registration statement (333-74883) filed
with the Securities and Exchange Commission, could cause future results to
differ materially from historical results or those anticipated.
CONTACT: Prism Financial Corporation
For Press Inquiries:
Lisa Morrell, 312/410-8662
or
For Investor Inquiries:
David Fisher, 312/410-8488
