GREAT PLAINS SOFTWARE, INC.
NONEMPLOYEE DIRECTOR STOCK OPTION AGREEMENT
THIS AGREEMENT, made this ____ day of __________, by and between
Great Plains Software, Inc., a Minnesota corporation (the "Company"), and
__________________, a nonemployee director of the Company (the "Director").
In consideration of the agreements hereinafter set forth, the parties
hereto hereby agree as follows:
1. GRANT OF OPTION
The Company hereby grants to the Director the right and option (the
"option") to purchase all or any part of an aggregate of _______ shares (the
"Shares") of Common Stock, par value $.01 per share (the "Common Stock"), of the
Company at the price of $____ per Share on the terms and conditions set forth
herein. This option is not intended to be an incentive stock option within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code").
2. TERM AND EXERCISE
(a) This option shall in all events terminate ______ years from the
date of grant.
(b) Subject to the provisions of Section 3 below, this option may
be exercised only as follows: (i) until ________________, this option may
not be exercised, (ii) after ____________________, this option may be
exercised with respect to ____% of the Shares to which this option relates,
(iii) after _____________, this option may be exercised with respect to an
additional ____% of the Shares to which this option relates, (iv) after
_____________, this option may be exercised with respect to an additional
____% of the Shares to which this option relates and (v) after
______________, this option may be exercised with respect to an additional
____% of the Shares to which this option relates. In the event that the
Director does not purchase in any of the above-described periods the full
number of Shares to which he or she is entitled under this option, the
Director may, subject to the terms and conditions of Section 3 hereof,
purchase such remaining Shares at any subsequent time during the term of this
option. During the lifetime of the Director, this option shall be
exercisable only by the Director and shall not be transferable by the
Director otherwise than by will or the laws of descent and distribution.
(c) Notwithstanding the provisions of Section 2(b) above, this option
shall automatically become fully exercisable in the event of (i) a dissolution
or liquidation of the Company, (ii) a merger in which the Company is not the
surviving corporation, (iii) a transaction or series of related transactions in
which 100% of the then outstanding voting stock of the Company is sold or
otherwise transferred or (iv) a sale of substantially all of the assets of the
Company.
3. EFFECT OF TERMINATION OF SERVICE
(a) If the Director ceases to serve as a director, the Director may,
but only within five years after the date the Director ceases to be a director
of the Company, or by the date of termination of this option, whichever is
earlier, exercise this option to the extent that the Director was entitled to
exercise the option at the date of such termination. To the extent that the
Director was not entitled to exercise this option at the date of such
termination, or if the Director does not exercise this option (which the
Director was entitled to exercise) within the time specified herein, the option
shall terminate.
(b) Notwithstanding the provisions of Section 3(a) above, in the
event the Director is unable to continue the Director's service as a director
with the Company as a result of the Director's total and permanent disability
(as defined in Section 22(e)(3) of the Code), the Director may, but only within
seven months from the date of termination, exercise this option to the extent
the Director was entitled to exercise it at the date of such termination. To
the extent that the Director was not entitled to exercise this option at the
date of termination, or if the Director does not exercise this option (which the
Director was entitled to exercise) within the time specified herein, this option
shall terminate.
(c) Notwithstanding the provisions of Section 3(a) above, in the
event of the death of the Director
(i) who is at the time of the Director's death a director of the
Company, this option may be exercised, at any time within six months following
the date of death, by the Director's estate or by a person who acquired the
right to exercise this option by bequest or inheritance, but only to the extent
of the right to exercise that would have accrued had the Director continued
living and remained a director for six months after the date of death; or
(ii) who dies within 30 days after the Director ceases to be a
director, this option may be exercised, at any time within six months following
the date of death, by the Director's estate or by a person who acquired the
right to exercise this option by bequest or inheritance, but only to the extent
of the right to exercise that had accrued at the date the Director ceased to be
a director.
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4. MANNER OF EXERCISE
(a) This option can be exercised only by the Director or other proper
party (as set forth in Section 3(c) hereof) within the option period by
delivering written notice to the Company at its principal office in Fargo, North
Dakota, stating the number of Shares as to which this option is being exercised
and accompanied by payment in full of the option price for all Shares designated
in the notice.
(b) The Director may pay the option price in cash or by check (bank
check, certified check or personal check) or by delivering to the Company shares
of Common Stock owned by the Director (and with the certificates therefor
registered in the Director's name) having a fair market value equal to the
option price. For these purposes, the fair market value of the Common Stock
shall be determined by the Board of Directors in it discretion; provided,
however, that in the event the Common Stock is traded on the Nasdaq National
Market System or listed on a stock exchange, the fair market value per share
shall be the closing price on such system or exchange on the day preceding the
date of exercise of the option, as reported in THE WALL STREET JOURNAL.
5. ADJUSTMENTS
If the Director exercises all or any portion of this option subsequent
to any change in the number of shares or character of the Common Stock through
merger, consolidation, reorganization, recapitalization, stock dividend or
otherwise, the Director shall then receive for the aggregate price paid on such
exercise of this option the number and type of securities or other consideration
which he or she would have received if this option had been so exercised prior
to the event changing the number or character of outstanding shares.
6. SECURITIES LAW MATTERS
The Director hereby represents and agrees that any Shares which the
Director may acquire pursuant to the exercise of this option will be acquired
for the Director's own account, and not with a view toward the distribution
thereof in violation of federal or applicable state securities laws. The
Director agrees that the effectiveness of any exercise hereof and the issuance
of any Shares to the Director upon any exercise of this option may be delayed in
order to permit the Company to comply with any federal and state securities laws
applicable to such issuance. The Director acknowledges that the Company is not,
and will at no time be, under any obligation to the Director to register any of
the Shares issued or issuable upon exercise hereof under any federal or state
securities laws and that consequently: (a) at the time of acquisition any such
Shares may not be registered under either federal or applicable state securities
laws, (b) the Company will be relying upon the foregoing representations of the
Director in agreeing to issue such Shares to the Director, (c) the
transferability of such Shares may be subject to restrictions imposed
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by all applicable federal and state securities laws on unregistered shares
and (d) the certificates evidencing such Shares may be imprinted with an
appropriate legend setting forth such restrictions on transferability.
7. DEFINITION OF SHARES
References to Shares herein shall be deemed to include, in addition to
the Shares described in Section 1 hereof, any securities received in respect of
such Shares in a stock split, stock dividend, reorganization, reclassification
or recapitalization or in a merger or consolidation involving the Company or a
sale of all or substantially all of the Company's assets.
8. MISCELLANEOUS
(a) This Agreement shall not confer on the Director any right with
respect to continuance of service as a director of the Company. The Director
shall have none of the rights of a shareholder of the Company with respect to
the Shares subject to this option until such Shares shall have been issued to
the Director upon exercise of this option.
(b) The Company shall at all times during the term of this option
reserve and keep available such number of shares of Common Stock as shall be
sufficient to satisfy the requirements of this Agreement.
(c) This Agreement shall be construed and enforced in accordance with
the laws of the State of North Dakota.
(d) This Agreement evidences the entire understanding and agreement
of the parties hereto relative to the purchase of the Shares by the Director.
This Agreement supersedes any and all other agreements and understandings,
whether written or oral, relative to the matters discussed herein. This
Agreement may only be amended by a written document signed by both of the
parties hereto.
(e) This Agreement shall bind and inure to the benefit of the
parties, their personal representatives, successors and assigns.
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed on the date first set forth above.
GREAT PLAINS SOFTWARE, INC.
By
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Xxxxxxx X. Xxxxxx
Chairman of the Board, President
and Chief Executive Officer
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[Name of Director]
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