Exhibit 10.20

 

MANIFESTO STOCK OPTION AGREEMENT

 

LAWSON SOFTWARE, INC.

2001 STOCK INCENTIVE PLAN

(MANIFESTO OPTION GRANT JANUARY 17, 2005)

 

1.             Option Grant and Option Exercise Price.  Pursuant to the Lawson
Software, Inc. 2001 Stock Incentive Plan (the “Plan”), Lawson Software, Inc., a
Delaware corporation (the “Company” or “Lawson”) grants to the participant
(“Participant”) whose name is specified on the Certificate of Stock Option Grant
on the Salomon Smith Barney website at www.benefitaccess.com (the
“Certificate”), an option to purchase shares of common stock (“Common Stock”) of
the Company as follows:

 

The Company grants to Participant an option (the “Option” or “Stock Option”) to
purchase the number of full shares of Common Stock shown on the Certificate (the
“Shares”) at an exercise and purchase price in United States dollars (the “Grant
Price”) per Option Share equal to the Grant Price listed on the Certificate
(which is the closing price for the Common Stock on Nasdaq (symbol:  LWSN) on
the Grant Date), subject to the terms and conditions set forth in the Plan, this
Stock Option Agreement (“Agreement”) and the Certificate.  The Grant Date of
this Stock Option is stated on the Certificate.  The Option will be in effect
commencing on the Grant Date and terminating on the Grant Expiration Date listed
on the Certificate or such earlier date and time described in this Agreement
(the “Option Period”).  This Option is an “Incentive Stock Option (ISO)” or a
“Nonqualified Stock Option,” as identified on the Certificate under “Type of
Stock Option.”

 

2.             Option Subject to Plan; Definitions.  This Stock Option and its
exercise are subject to the terms and conditions of the Plan, and the terms of
the Plan shall control to the extent not otherwise inconsistent with the
provisions of this Agreement.  This Stock Option is subject to any rules
promulgated pursuant to the Plan by the Board of Directors of the Company or the
Committee.  The capitalized terms not otherwise defined in this Agreement have
the same meanings assigned to them in the Plan.

 

2.1           The term “Cause” means Termination of Participant’s Service
initiated by the Company or its Subsidiaries because of:  (1) if Participant has
entered into any written and executed contract(s) with the Company or its
Subsidiaries, any breach by  Participant of such contract that has a material
adverse effect on the Company or any Subsidiary (as reasonably determined by the
Company) and which is not or cannot reasonably be cured within 10 days after
written notice from the Company to Participant; (2) any violation by Participant
of the Company’s or a Subsidiary’s policies, rules or regulations that has a
material adverse effect on the Company or any Subsidiary (as reasonably
determined by the Company) and which is not or cannot be cured within 10 days
after written notice from the Company to Participant; (3) commission of any act
of fraud, embezzlement or dishonesty by Participant that is materially injurious
to the Company or any Subsidiary (as reasonably determined by the Company); or
(4) any other intentional misconduct by Participant adversely affecting the
business or affairs of the Company or any Subsidiary in any material manner (as
reasonably determined by the Company).

 

2.2           The term “Change in Control Transaction” means (1) the closing of
a tender offer

 

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or exchange offer for the ownership of 50% or more of the outstanding voting
securities of the Company, (2) the Company shall have entered into a definitive
agreement with respect to a tender offer, exchange offer or  merger, 
consolidation or other business combination with another corporation and as a
result of such tender offer, exchange offer, merger, consolidation or
combination 50% or fewer of the outstanding voting securities of the surviving
or resulting corporation are owned in the aggregate by the former stockholders
of the Company, other than affiliates (within the meaning of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)) of any party to such
merger or consolidation, as the same shall have existed immediately prior to
such merger or consolidation, (3) the Company shall have entered into a
definitive agreement to sell substantially all of its assets to another
corporation which is not a direct or indirect wholly owned Subsidiary of the
Company, (4) a person, within the meaning of Section 3(a)(9) or of Section
13(d)(3) (as in effect on the date of this Agreement) of the Exchange Act, shall
acquire 50% or more of the outstanding voting securities of the Company (whether
directly, indirectly, beneficially or of record) (for purposes hereof, ownership
of voting securities shall take into account and shall include ownership as
determined by applying the provisions of Rule 13d-3(d)(1)(i) as in effect on the
date of this Agreement) pursuant to the Exchange Act, (5) individuals who
constitute the Company’s Board of Directors on the date of this Agreement (the
“Incumbent Board”) cease for any reason to constitute at least a majority
thereof, provided that any person becoming a director subsequent to the date of
this Agreement whose election, or nomination for election by the Company’s
stockholders, was approved by a vote of at least 50% of the directors comprising
the Incumbent Board shall be, for purposes of this clause (5), considered as
though such person were a member of the Incumbent Board, or (6) approval by the
stockholders of the Company of a complete liquidation or dissolution of the
Company.

 

2.3           The term “Disability” means Termination of Participant’s Service
because of a permanent disability as defined under any retirement plan of the
Company or its Subsidiaries.

 

2.4           The term “Fair Market Value” has the meaning described in Section
6 of the Plan.

 

2.5           The term “Good Reason” means:  (1) the assignment to the
Participant of any duties inconsistent in any respect with the Participant’s
position (including status, offices, titles and reporting requirements),
authority, duties or responsibilities in effect as of the date of this
Agreement, or any diminution in such position, authority, duties or
responsibilities (whether or not occurring solely as a result of the Company
ceasing to be a publicly traded entity or becoming a subsidiary), excluding for
this purpose an isolated, insubstantial and inadvertent action not taken in bad
faith and that is remedied by the Company promptly after receipt of notice
thereof given by the Participant; (2) any reduction in Participant’s annual base
salary or annual target incentive compensation compared with the annual base
salary and annual target incentive compensation in effect for Participant for
the Company’s most recent fiscal year ended before the date of termination,
other than an isolated, insubstantial and inadvertent failure not occurring in
bad faith and that is remedied by the Company promptly after receipt of notice
thereof given by the Participant; (3) the Company’s requiring the Participant to
be based at any office or location other than in the Minneapolis-St. Paul
Metropolitan Area in Minnesota or the Company’s requiring the Participant to
travel on Company business to a substantially greater extent than required
immediately prior to the date of this Agreement; or (4) any material reduction
in Participant’s executive benefits compared with the

 

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Participant’s benefits provided by the Company to Executive during the Company’s
most recent fiscal year ended before the date of termination.  The Participant’s
mental or physical incapacity following the occurrence of an event described
above in clauses (1) through (4) above shall not affect the Participant’s
ability to terminate employment for Good Reason.  Any determination of “Good
Reason” made by the Participant under this Agreement shall be in good faith.

 

2.6           The term “Retirement” means Termination of Participant’s Service
(1) at or after age 55 provided Participant has been employed by the Company or
its Subsidiaries for at least ten years or (2) at or after age 62.

 

2.7           The term “Subsidiary” or “Subsidiaries” means a subsidiary
corporation of the Company as defined in the Plan.

 

2.8           The term “Termination of Participant’s Service” means the last day
of Participant’s regular full time or part time employment with the Company and
its Subsidiaries.

 

3.             Vesting and Acceleration of Vesting.  Except as specifically
provided in this Agreement and the Plan, this Stock Option will vest and first
become exercisable on January 17, 2011, but only if Participant has at all times
been a regular full time or part time employee of the Company or any Subsidiary
from the Grant Date to the applicable vesting date.  Vested Option Shares may be
exercised and purchased during the Option Period, until termination under
Section 4 below.  No vesting of the Option shall occur after Termination of
Participant’s Service, except only to the extent described in Sections 3.1, 3.2
or 3.3 below.

 

3.1           Automatic 100% Acceleration of Vesting Upon Death, Disability or
Retirement.  If there is a Termination of Participant’s Service because of
Participant’s death, Disability or Retirement, all conditions of vesting will be
assumed to have been met immediately before such death, Disability or
Retirement, and Participant or Participant’s estate will have the right to
exercise one hundred percent (100%) of the number of Shares remaining under the
Option, whether or not vested, during the applicable time period in Section 4
below.  If Termination of Participant’s Service is due to death, Disability or
Retirement, the acceleration of vesting under this Section 3.1 will be deemed to
have occurred prior to such Termination of Participant’s Service.

 

3.2           Automatic 100% Acceleration of Vesting if Options are Terminated
In Connection with a Change in Control Transaction.  If the Option is to be
terminated upon the completion of a Change in Control Transaction, then (i) all
conditions of vesting will be assumed to have been met for one hundred (100%) of
the then current total unvested Option Shares and (ii) Participant will have the
right to exercise all vested Option Shares during the applicable time period in
Section 4 below.  The acceleration of vesting under this Section 3.2 will be
deemed to have occurred immediately before the completion of the Change in
Control Transaction.

 

3.3           Automatic 100% Acceleration of Vesting Under Certain Conditions
Within Two Years After a Change in Control Transaction.  If within two years
after the completion of a Change in Control Transaction, there is a Termination
of Participant’s Service initiated by the Company or any Subsidiary (or
successor) other than for Cause or by the Participant for Good Reason, then (i)
all conditions of vesting will be assumed to have been met for one hundred
(100%) of the then current total unvested Option Shares and (ii) Participant

 

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will have the right to exercise all vested Option Shares during the applicable
time period in Section 4 below.  The acceleration of vesting under this Section
3.3 will be deemed to have occurred immediately before Termination of
Participant’s Service.

 

3.4           Leave of Absence.  The Company’s leave of absence procedure
concerning stock options, that is in effect as of the date of this Agreement,
will also govern the vesting of the Option during a Company approved leave of
absence.

 

3.5           FY 2006 Loyalty Metric.  The term “FY2006 Loyalty Metric” means
that Lawson has achieved a “client champion loyalty score” of at least 90% of
the industry benchmark as of May 31, 2006.  If Lawson meets or exceeds the
FY2006 Loyalty Metric as of May 31, 2006, then on the date of that achievement,
16.5% of the Option (rounded up to the nearest whole share) shall automatically
vest and become exercisable for the remainder of the applicable time period in
Section 4 below,

 

3.6           FY 2008 Loyalty Metric.  The term “FY2008 Loyalty Metric” means
that Lawson has achieved a “client champion loyalty score” of at least 105% of
the industry benchmark as of May 31, 2008.  If Lawson meets or exceeds the
FY2008 Loyalty Metric as of May 31, 2008, then on the date of that achievement: 
(a) 16.5% of the Option (rounded up to the nearest whole share) shall
automatically vest and become exercisable for the remainder of the applicable
time period in Section 4 below and (b) if the 16.5% of the Option did not
previously vest pursuant to Section 3.5 above, then that portion of the Option
shall automatically vest and become exercisable for the remainder of the
applicable time period in Section 4 below.

 

3.7           FY 2006 Revenue Metric.  The term “FY2006 Revenue Metric” means
that Lawson has achieved 90% or more of the average annual growth rate of
financial competitor companies (as selected by the Compensation Committee) as of
May 31, 2006.  If Lawson meets or exceeds the FY2006 Revenue Metric as of May
31, 2006, then on the date of that achievement, 33.5% of the Option (rounded up
to the nearest whole share) shall automatically vest and become exercisable for
the remainder of the applicable time period in Section 4 below,

 

3.8           FY 2008 Revenue Metric.  The term “FY2008 Revenue Metric” means
that Lawson has achieved 105% or more of the average annual growth rate of
financial competitor companies (as selected by the Compensation Committee) as of
May 31, 2008.  If Lawson meets or exceeds the FY2008 Revenue Metric as of May
31, 2008, then on the date of that achievement:  (a) 33.5% of the Option
(rounded up to the nearest whole share) shall automatically vest and become
exercisable for the remainder of the applicable time period in Section 4 below
and (b) if the 33.5% of the Option did not previously vest pursuant to Section
3.7 above, then that portion of the Option shall automatically vest and become
exercisable for the remainder of the applicable time period in Section 4 below.

 

4.             Termination and Forfeiture.  The Stock Option, whether or not
vested, automatically expires at 5:00 p.m. United States Central Time on the
Grant Expiration Date, unless terminated on an earlier date as described in this
Agreement or the Plan.  No vesting of the Stock Option shall occur after the
date of Termination of Participant’s Service and all such unvested Option Shares
will be forfeited as of 5:01 p.m. United States Central on the date of
Termination of Participant’s Service.  The unexercised portion of the Stock
Option that is vested will

 

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automatically terminate and be forfeited at the first of the following to occur:

 

(1)                                  5:00 p.m. United States Central Time on the
date of Termination of Participant’s Service initiated by the Company or any
Subsidiary for Cause;

(2)                                  5:00 p.m. United States Central Time on the
date that is 90 days after Termination of Participant’s Service for any reason
or no reason, other than for (a) Cause, (b) death, (c) Disability or (d)
Retirement;

(3)                                  5:00 p.m. United States Central Time on the
date that is one year after the date of Termination of Participant’s Service due
to death, Disability or Retirement; or

(4)                                  5:00 p.m. United States Central Time on the
Grant Expiration Date.

 

5.             No Fractional Shares.  This Stock Option may be exercised only in
whole Shares and not fractional Shares.  Any fraction of a Share that would
otherwise vest on any vesting date will be rounded down to the nearest whole
Share.

 

6.             Manner of Exercise.  Before the end of the Option Period, this
Stock Option may be exercised only by Participant (or by Participant’s guardian
or legal representative, or by Participant’s estate (if Participant is
deceased)) up to the extent then vested and exercisable by delivering to the
Company’s stock option administrator an irrevocable notice of exercise in the
form required by the Company.  The notice of exercise shall state the number of
Shares for which the Option is being exercised and shall be accompanied by
payment in full of the Grant  Price for those Shares (under Section 7 below) and
applicable tax withholdings (under Section 10 below).

 

7.             Payment of Grant Price.  Participant may pay the Grant Price by
wire transfer or check (bank check, certified check or personal check) or by
delivering to the Company for cancellation, in accordance with the rules of the
Committee, shares of Common Stock which have a Fair Market Value in United
States dollars equal to the Grant Price and which either (i) were purchased on a
national stock exchange or on the NASDAQ NMS system or (ii) have been issued and
outstanding more than six months.  The Grant Price is payable in United States
dollars.

 

8.             Delivery of Shares.  The Company will deliver to Participant the
Shares (either in certificate or electronic form as requested by Participant)
promptly after proper exercise of the Option and receipt of the Grant Price and
applicable tax withholdings.  Notwithstanding any provision in this Agreement to
the contrary, the obligation of the Company to deliver Shares is subject to the
condition that if at any time the Committee shall determine in its discretion
that the listing, registration, or qualification of the Stock Option or the
Shares upon any securities exchange or under any state or federal law, or the
consent or approval of any governmental regulatory body, is necessary as a
condition of, or in connection with, the Stock Option or the issuance or
purchase of Shares thereunder, then the Stock Option may not be exercised in
whole or in part unless such listing, registration, qualification, consent or
approval shall have been effected or obtained free of any conditions not
reasonably acceptable to the Committee.

 

9.             Tax Requirements for Incentive Stock Options; Disqualifying
Disposition.  This Section 9 will apply only if this Stock Option is identified
as an Incentive Stock Option or ISO on the Certificate.  If this Section 9
applies, then subject to the provisions of the Plan, this Stock Option is an
Incentive Stock Option.  To the extent the number of Shares exceeds the limit
set forth in Section 4 of the Plan, such Shares shall be deemed granted pursuant
to a Nonqualified Stock Option.  In such event, then unless otherwise indicated
by Participant in the notice of exercise

 

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pursuant to Section 6 above, upon any exercise of this Stock Option, the number
of exercised Shares that shall be deemed to be exercised pursuant to an
Incentive Stock Option shall equal the total number of Shares so exercised
multiplied by a fraction, (a) the numerator of which is the number of
unexercised Option Shares that could then be exercised pursuant to an Incentive
Stock Option and (b) the denominator of which is the then total number of
unexercised Option Shares that could then be exercised.  If Common Stock
acquired upon exercise of this Stock Option is disposed of by Participant in a
“Disqualifying Disposition,” such Participant shall notify the Company in
writing within 30 days after such disposition of the date and terms of such
disposition.  For purposes hereof, “Disqualifying Disposition” means a
disposition of Common Stock that is acquired upon the exercise of an Incentive
Stock Option prior to the expiration of either two years from the Grant Date of
such Incentive Stock Option or one year from the transfer of Shares to
Participant pursuant to the exercise of such Incentive Stock Option.  If a
Disqualifying Disposition occurs, the tax requirements described in Section 10
will apply.

 

10.           Tax Requirements and Withholdings for Nonqualified Stock Options. 
This Section 10 will apply only if this Stock Option is identified as a
Nonqualified Stock Option or NQ on the Certificate or is considered a
Nonqualified Stock Option under Section 9 above.  In order to provide the
Company and its Subsidiaries with the opportunity to claim the benefit of any
income tax deduction in any jurisdiction which may be available to it upon the
exercise of the Nonqualified Stock Option, and in order to comply with all
applicable income tax laws or regulations of any applicable country, state or
other jurisdiction, the Company and its Subsidiaries may take such action as it
deems appropriate to ensure that, if necessary, all applicable payroll,
withholding, income, NIC or other taxes (of any applicable country, state or
other jurisdiction) are withheld or collected from Participant.  Participant may
elect to satisfy Participant’s minimum income tax withholding obligations under
such laws or regulations upon exercise of the Option by (i) paying that amount
by wire transfer or check (bank check, certified check or personal check), (ii)
having the Company or its Subsidiaries withhold a portion of the shares of
Shares otherwise to be delivered upon exercise of such Option having a Fair
Market Value in United States dollars (on the date of exercise of Option) equal
to the minimum amount of such taxes required to be withheld on such exercise, in
accordance with the rules of the Committee, or (iii) delivering to the Company
for cancellation, in accordance with the rules of the Committee, shares of
Common Stock which have a Fair Market Value equal to such tax withholdings and
which either (a) were purchased on a national stock exchange or on the NASDAQ
NMS system or (b) have been issued and outstanding more than six months.  The
Company may, at its discretion, require Participant to pay the withholding taxes
under clause (i) above in lieu of the alternatives in clauses (ii) or (iii)
above.

 

11.           Investment Representation.  Unless the Common Stock is issued to
Participant in a transaction registered under applicable federal and state
securities laws, Participant represents and warrants to the Company that all
Common Stock which may be purchased hereunder will be acquired by Participant
for investment purposes for Participant’s own account and not with any intent
for resale or distribution in violation of federal or state securities laws. 
Unless the Common Stock is issued to Participant in a transaction registered
under the applicable federal and state securities laws, all certificates issued
with respect to the Common Stock shall bear an appropriate restrictive
investment legend.

 

12.           Impact on Employment Status.  This Agreement, the Certificate and
the Plan are not an employment contract.  Nothing contained in this Agreement,
the Certificate or the Plan shall confer on Participant any right to continue in
the employ of the Company or any Subsidiary or other affiliate of the Company or
affect in any way the right of the Company or any Subsidiary or

 

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other affiliate to terminate the employment of Participant at any time.

 

13.           Adjustments.  In the event of any stock split, stock dividend,
recapitalization or combination of shares by the Company after the Grant Date,
the number of Shares subject to the Option and the Grant Price per Share shall
be equitably adjusted in the same manner as the outstanding shares of Common
Stock, in accordance with the rules of the Committee.  The number of Option
Shares designated in the Certificate has been adjusted for all stock splits that
were effective before the Grant Date.

 

14.           Non-Transferability of Option.  This Stock Option is not
assignable or transferable by Participant except by will or by the laws of
descent and distribution.

 

15.           Consent to Internal Use of Personal Data.  Participant consents to
the Company’s and its Subsidiaries’ (and the Company’s stock option
administrator) receiving and using personal data related to Participant for
employment-related purposes only and for gathering and making required reports
to government authorities.

 

15.           No Right of Future Stock Option Grants.  Nothing contained in this
Agreement, the Certificate or the Plan shall confer on Participant any right to
receive any additional stock options in the future from the Company, Subsidiary
or any other affiliate of the Company or affect in any way the right of the
Company, Subsidiary or any other affiliate to terminate the granting of stock
options at any time.

 

16.           Interpretation of Terms; General.  The Committee shall interpret
the terms of the Option and this Agreement, the Certificate and Plan and all
determinations shall be final and binding.  The Option and this Agreement, the
Certificate and Plan (1) are governed by the laws of the State of Minnesota, (2)
may be amended only in writing, signed by an executive officer of the Company,
and (3) supersede any other verbal or written agreements or representations
concerning the Option.

 

17.           Official Language.  The official language of the Option and this
Agreement, the Certificate and Plan is English.  Documents or notices not
originally written in English shall have no effect until they have been
translated into English, and the English translation shall then be the
prevailing form of such documents or notices.  Any notices or other documents
required to be delivered to the Company (or stock option administrator) under
this Notice, shall be translated into English, at Participant’s expense, and
provided promptly to the Company in English (to the attention of the Company’s
Corporate Secretary).  The Company may also request an untranslated copy of such
documents.

 

18.           Signature and Validity.  An executive officer of the Company has
signed this Agreement electronically on behalf of the Company.   The Participant
is deemed to have signed this Agreement and agreed to all of its terms by having
electronically indicated Participant’s acceptance and agreement on the
Certificate on the Salomon Smith Barney website at www.benefitaccess.com.  If
there is any discrepancy between the number of Option Shares

 

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shown in the Certificate and the number shown in the records of the Company’s
Corporate Secretary, the records of the Company’s Corporate Secretary shall
prevail.

 

Lawson Software, Inc.

 

 

By

/s/ Jay Coughlan

 

 

Jay Coughlan,

 

President and Chief Executive Officer

 

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