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EXHIBIT 99.1
NON-QUALIFIED STOCK OPTION AGREEMENT
This Non-Qualified Stock Option Agreement, entered into as of the 15th
day of December, 1997, between Credit Store, Inc., a corporation organized and
existing under the laws of the State of Delaware (the "Corporation") with its
principal place of business at 3401 North Louise Avenue, Sioux Falls, South
Dakota 57107 and ________________, residing at ___________________ (the
"Optionee").
1. The Corporation, pursuant to the terms and conditions hereinafter set
forth, grants as of the date hereof to the Optionee a nonqualified stock option
to purchase an aggregate of ______________ shares of common stock, $.001 par
value per share of Credit Store, Inc. ("Common Stock") at an exercise price of
$_________ per share, being at least equal to the fair market value of such
shares of Common Stock as of the date hereof. The options granted herewith are
vested as of the date hereof. Shares of Common Stock to be issued upon the
exercise of this option may, at the election of the Corporation, be either
authorized and unissued shares or shares previously issued and reacquired by the
Corporation. This option shall not be treated as an "incentive stock option"
under Section 422 of the Internal Revenue Code of 1986, as amended.
2. This option shall be exercisable as to the total number of shares
subject to this option, in whole or in part, on or after the date hereof and
shall expire at the close of business on December 15, 2002 (the "Expiration
Date"). In the event the Expiration Date falls during a period in which an
underwriter has prohibited sale of shares issuable upon exercise of this Option
as provided in section 11(a), then the Expiration Date shall be extended to the
45th day following the end of the period in which such sales are prohibited. The
right to purchase
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shares of Common Stock under this Agreement shall be cumulative, so that if the
full number of shares purchasable at any given time shall not be purchased, then
the balance may be purchased at any time or from time to time thereafter, but
not after the Expiration Date (as defined in Paragraph 3).
3. This option shall expire at the close of business on December 15,
2002 (the "Expiration Date"), provided that this option shall terminate
immediately if the Optionee's employment is terminated for cause. In the event
the Expiration Date falls during a period in which an underwriter has prohibited
sales of shares issuable upon exercise of this Option as provided in Section
11(a), then the Expiration Date shall be extended to the ninetieth (90th) day
following the end of the period in which such sales are prohibited.
4. This option shall be exercised by the delivery by the Optionee (or
the executor, administrator, or other person who at the time is entitled by law
to exercise the rights of the deceased or incapacitated Optionee) of written
Notice of Exercise in the form annexed hereto to the Corporation at its
principal office, presently located at 3401 North Louise Avenue, Sioux Falls,
South Dakota 57107, Attention: Compensation/Stock Option Committee, stating that
the Optionee is exercising this non-qualified stock option, specifying the
number of shares being purchased and accompanied by payment in full of the
aggregate purchase price therefor (a) in cash or by certified check, (b) with
previously acquired shares of Common Stock which have been held by the Optionee
for at least six months having a Fair Market Value on the exercise date equal to
the aggregate exercise price, or (c) a combination of the foregoing. For this
purpose, the "Fair Market Value" of a share of Common Stock on any day shall
mean (a) if the principal market for the Common Stock is a national securities
exchange, the average of the highest and lowest sales prices per share of the
Common Stock
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on such day as reported by such exchange or on a composite tape reflecting
transactions on such exchange, (b) if the principal market for the Common Stock
is not a national securities exchange and the Common Stock is quoted on the
Nasdaq Stock Market ("Nasdaq"), and (i) if actual sales price information is
available with respect to the Common Stock, the average of the highest and
lowest sales prices per share of the Common Stock on such day on Nasdaq, or (ii)
if such information is not available, the average between the highest bid and
the lowest asked prices per share of Common Stock on such day on Nasdaq, or (c)
if the principal market for the Common Stock is not a national securities
exchange of the Common Stock is not quoted on Nasdaq, the average of the highest
bid and lowest asked prices per share for the Common Stock on such day as
reported on the Nasdaq OTC Bulletin Board Service or by National Quotation
Bureau, Incorporated or a comparable service; provided that if clauses (a), (b)
and (c) of this paragraph are all inapplicable, or if no trades have been made
or no quotes are available for such day, the fair market value of a share of
Common Stock shall be determined by the Board of Directors of the Corporation.
Notwithstanding the foregoing, the Corporation may, in its sole discretion,
permit payment of the exercise payment of the exercise price of this option by
delivery by the Optionee of a properly executed Notice of Exercise, together
with a copy of his irrevocable instructions to a broker designated by the
Corporation to deliver promptly to the Corporation the amount of sale proceeds
sufficient to pay such exercise price. In connection therewith, the Corporation
may enter into agreements for coordinated procedures with one or more brokerage
firms.
5. Notwithstanding the foregoing, this option shall not be exercisable
by the Optionee unless (a) a Registration Statement under the Securities Act of
1933, as amended (the "Securities Act") with respect to the shares of Common
Stock to be received upon the
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exercise of this option shall be effective and current at the time of exercise
or (b) there is an exemption from registration under the Securities Act for the
issuance of the shares of Common Stock upon exercise. The Optionee hereby
represents and warrants to the Corporation that, unless a Registration Statement
is effective and current at the time of exercise of this option, the shares of
Common Stock to be issued upon the exercise of this option will be acquired by
the Optionee for his own account, for investment only and not with a view to the
resale or distribution thereof. In any event, the Optionee shall notify the
Corporation of any proposed resale of the shares of Common Stock issued to him
upon exercise of this option. Any resale or distribution of such shares of
Common Stock by him may be made only pursuant to (c) a Registration Statement
under the Securities Act which is effective and current with respect to the
shares of Common Stock being sold, or (d) a specific exemption from the
registration requirements of the Securities Act, but in claiming such exemption,
the Optionee shall prior to any offer of sale or sale of such shares of Common
Stock provide the Corporation with a favorable written opinion of counsel
satisfactory to the Corporation, in form and substance satisfactory to the
Corporation, as to the applicability of such exemption to the proposed sale or
distribution. Such representations and warranties shall also be deemed to be
made by the Optionee upon each exercise of this option. Nothing herein shall be
construed as requiring the Corporation to register shares subject to this option
under the Securities Act.
6. Within six months of the date at which the Corporation shall have
become a registered company pursuant to section 12(g) of the Securities Exchange
Act of 1934, and shall have satisfied all other requirements for filing of a
Form S-8 registration statement with the Securities and Exchange Commission, the
Corporation shall make all commercially
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reasonable efforts to register the shares of Common Stock that are subject to
this Option by filing a Form S-8 with respect to such shares with the Securities
and Exchange Commission.
7. Nothing herein shall confer upon the Optionee any right to continue
as an employee of the Corporation, its parent of its subsidiaries or interfere
in any way with any right of the Corporation, its parent or any subsidiary to
terminate such relationship at any time for any reason without liability to the
Corporation, its parent or subsidiaries. Neither the Optionee nor his legal
representatives shall have any of the rights or privileges of a shareholder of
the Corporation in respect of any of the shares issuable upon the exercise of
this option, unless and until certificates representing such shares shall have
been issued and delivered; provided, however, that until such certificates are
issued, the Optionee shall be treated as owning any previously acquired shares
of Common Stock used to exercise such option.
8. The Corporation may withhold cash and/or shares of Common Stock in
the amount, if any, necessary to satisfy its obligations to withhold taxes or
other amounts by reason of the grant, exercise or disposition of the option or
the shares of Common Stock underlying the option, or may require the Optionee to
pay the Corporation such amount. The Optionee agrees to pay any such amount to
the Corporation in cash upon demand.
9. The Corporation may affix appropriate legends upon the certificates
for shares and may issue such "stop transfer" instructions to its transfer agent
in respect of such shares as it determines, in its discretion, to be necessary
or appropriate to (a) prevent a violation of, or to perfect an exemption from,
the registration requirements of the Securities Act, or (b) implement the
provisions of any agreement between the Corporation and the Optionee with
respect to such shares.
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10. The Optionee represents and agrees that he will comply with all
applicable laws relating to the grant and exercise of this option and the
disposition of the shares of Common Stock acquired upon exercise of this option,
including without limitation, Federal and state securities and "blue sky" laws.
11. (a) The Optionee agrees that the underwriter for a public offering
of the Corporation's shares of Common Stock, or the Corporation, shall each have
the right, in its sole discretion, to prohibit the sale, without prior written
consent, of all or any portion of the shares subject to this option for a period
not to exceed 12 months from the closing of a public offering of the
Corporation's securities. The provisions of this paragraph 11 shall apply to any
public offering of the Corporation's securities, regardless of whether any
shares of the Optionee are included in or registered concurrently with such
offering.
(b) Any sales of shares received by Optionee upon exercise of the
option may be sold only in compliance with applicable laws respecting the sale
of shares of securities of the Corporation by officers, directors and control
persons, and, without regard to the applicability of such limitations, only in
amounts that do not exceed the volume limitations on sales of securities by an
affiliate of an issuer imposed by Rule 144(e) promulgated under the Securities
Act of 1933.
12. This option is not transferable by the Optionee other than upon his
death by will or the laws of descent and distribution. Neither this option nor
any of the rights and privileges conferred hereby shall, except as specifically
permitted in the immediately preceding sentence, be transferred, assigned,
pledged (as collateral for a loan, or as security for the performance of an
obligation, or for any other purpose), or hypothecated in any way (whether
voluntarily, by operation of law or otherwise) or be subject to execution,
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attachment, or similar process. Any attempted transfer, assignment, pledge (as
collateral for a loan or as security for the performance of any obligation, or
for any other purpose), hypothecation, execution, attachment or similar process,
which is not specifically permitted hereunder, shall be null and void and of no
force or effect.
13. In the event that, prior to the issuance by the Corporation of all
the shares pursuant to this Option, there shall be any change in the outstanding
Common Stock of the Corporation by reason of a stock dividend, stock split,
spin-off, stock combination, recapitalization, merger in which the Corporation
is the surviving corporation or the like, the remaining number of shares still
subject to this option and the exercise price therefore shall be proportionally
adjusted by the Board of Directors of the Corporation to reflect such change.
Such adjustment may provide for the elimination of fractional shares which might
otherwise be subject to options, without payment therefor. The determination of
the Board of Directors with respect thereto shall be conclusive and binding on
the parties, provided the Board of Directors was acting in good faith in making
such determination. In the event of (a) a consolidation, (b) a merger (or a
similar transaction) in which the Corporation is not the surviving corporation ,
(c) a merger (or a similar transaction) in which the Corporation is the
surviving corporation but more than 50% of the outstanding Common Stock is
transferred or exchanged for other consideration or in which the shares of
Common Stock are issued in an amount in excess of the number of shares of Common
Stock outstanding immediately preceding the merger (or similar transaction), or
(d) a sale of all or substantially all of the Corporation's assets, then, in
each such case, the Optionee, upon exercise of this option at any time after the
consummation of such consolidation, merger sale, or similar transaction, shall
be entitled to receive the stock or other securities or property to which the
Optionee
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would have been entitled upon such consummation if the Optionee had exercised
this option immediately prior thereto; and in each such case, the terms of this
option shall be applicable to the shares of stock or other securities or
property receivable upon exercise of this option after such consummation. Upon
the liquidation or dissolution of the Corporation, this option shall terminate,
unless other provisions is made therefor.
14. The invalidity, unenforceability or illegality of any provision
herein shall not affect the validity, enforceability or legality of any other
provision.
15. This Agreement shall be binding upon and inure to the benefit of any
successor or assign of the Corporation and to any heir, distributee, executor,
administrator or legal representative entitled by law to the Optionee's rights
hereunder. This Agreement may not be amended except in writing signed by the
parties.
16. Whenever notice is required to be given under the terms of this
Agreement, such notice shall be in writing and shall be deemed delivered:
(a) If to the Corporation, upon receipt by the Corporation, at
the Corporation's address set forth above, Attention: Compensation/Stock Option
Committee, or such other address as the Corporation may designate by notice to
the Optionee, effective upon receipt of such notice by the Optionee.
(b) If to the Optionee, as of the day it is personally delivered,
or 5 days after mailing, by registered or certified mail, return receipt
requested, postage prepaid, at the Optionee's address set forth above, or such
other address as the Optionee may designate by notice to the Corporation,
effective upon receipt of such notice by the Corporation.
17. This Agreement shall be governed by and construed in accordance with
the laws of the State of Delaware, without regard to conflict of law provisions.
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18. This Agreement constitutes the entire understanding between the
parties with respect to the subject matter hereof and supersedes any prior
agreements with respect thereto.
19. The Corporation shall pay all issuance taxes with respect to the
shares of Common Stock upon exercise of this option, as well as all expenses
incurred by the Corporation in connection therewith.
20. This option shall not be construed or interpreted with any
presumption against the Corporation by reason of the Corporation causing this
Agreement to be drafted.
21. This option agreement supersedes any option previously granted
pursuant to any Contract or other agreement between the Optionee and the
Corporation with respect to stock options of the Corporation. The Optionee
confirms that the only option Optionee has with the corporation is the option
granted herein pursuant to this agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above set forth.
CREDIT STORE, INC.
By
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Name:
Title:
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Optionee
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