EXHIBIT 10.12


                         NATIONAL COMPUTER SYSTEMS, INC.
                  1999 NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN


1.       Purpose of Plan

                  This plan shall be known as the  "National  Computer  Systems,
Inc. 1999 Non-Employee  Director Stock Option Plan" and is hereinafter  referred
to as the  "Plan."  The  purpose  of the Plan is to  promote  the  interests  of
National Computer  Systems,  Inc., a Minnesota  corporation (the "Company"),  by
enhancing  its ability to attract and retain the  services  of  experienced  and
knowledgeable  non-employee  directors and by providing additional incentive for
such directors to increase their interest in the Company's long-term success and
progress.  Options granted under this Plan shall be  nonqualified  stock options
which do not qualify as incentive  stock  options  within the meaning of Section
422A of the Internal Revenue Code of 1986, as amended (the "Code").

2.       Stock Subject to Plan

                  Under this  Plan,  options  may be  granted  for shares of the
Company's  Common  Stock,  $.03 par value.  The Common Stock  subject to options
shall be authorized but unissued  shares.  Subject to the adjustment as provided
in Section  10 hereof,  the  maximum  number of shares of Common  Stock on which
options may be exercised under this Plan shall be 100,000  shares.  If an option
under the Plan  expires,  or for any reason is terminated  or  unexercised  with
respect  to any  shares,  such  shares  shall  again be  available  for  options
thereafter granted during the term of the Plan.

3.       Administration of Plan

                  The Plan shall be administered by the  Compensation  Committee
(the  "Committee")  of the Board of Directors of the Company (the "Board").  The
Committee shall have the authority,  in its  discretion,  subject to the express
provisions of this Plan, to interpret the Plan, to prescribe, amend, and rescind
rules and regulations relating to the Plan, and to make all other determinations
necessary or  advisable  for the  administration  of the Plan.  The  Committee's
determinations on the foregoing matters shall be final and conclusive.

4.       Eligibility

                  Upon  approval  of the  Plan  by the  Board,  but  subject  to
approval  of the Plan by  shareholders  of the  Company  pursuant  to Section 12
hereof,  each  director of the Company who is not  otherwise  an employee of the
Company  or any  subsidiary  of  the  Company  (an  "Eligible  Director")  shall
automatically  be granted,  on each date  (beginning with the date of the annual
meeting of shareholders in May, 2000), that he or she is elected or reelected as
a director of the  Company,  an option to acquire  3,500  shares of Common Stock
under the Plan.

5.       Price

                  The option price for all options  granted under the Plan shall
be the fair  market  value of the  shares  covered by the option on the date the
option is  granted.  For  purposes of this Plan,  the fair  market  value of the
Common  Stock on a given date  shall be (i) the last  trade  price of the Common
Stock as reported on The Nasdaq Stock  Market on such date,  if the Common Stock
is then quoted on The Nasdaq  Stock  Market;  or (ii) the  closing  price of the
Common Stock on such date on a national securities exchange, if the Common Stock
is then being  traded on a national  securities  exchange.  If on the date as of
which  the fair  market  value  is being  determined,  the  Common  Stock is not
publicly traded, then the next preceding date on which there was a trade will be
used.

6.       Term

                  Each option and all rights and obligations  thereunder  shall,
subject to the provisions of Section 8 herein, expire ten years from the date of
granting of the option.

7.       Exercise of Option

                  (a) Options  granted  under the Plan shall not be  exercisable
for a period of six months after date of grant, or until shareholder approval of
the Plan has been  obtained,  whichever  occurs later,  but  thereafter  will be
exercisable  in full at any  time or from  time to time  during  the term of the
option, subject to the provisions of Section 8 hereof.

                  (b) The exercise of any option granted hereunder shall only be
effective at such time as counsel to the Company shall have  determined that the
issuance and delivery of Common Stock pursuant to such exercise will not violate
any state or federal  securities or other laws. An optionee desiring to exercise
an option may be required by the Company, as a condition of the effectiveness of
any exercise of an option granted hereunder, to agree in writing that all Common
Stock to be acquired  pursuant to such exercise shall be held for his or her own
account  without  a  view  to  any  further  distribution   thereof,   that  the
certificates for such shares shall bear an appropriate legend to that effect and
that such shares  will not be  transferred  or disposed of except in  compliance
with applicable federal and state securities laws.

                  (c) An optionee  electing  to  exercise  an option  shall give
written  notice to the  Company  of such  election  and of the  number of shares
subject  to such  exercise.  The full  purchase  price of such  shares  shall be
tendered  with such  notice of  exercise.  Payment  shall be made to the Company
either (i) in cash  (including  check,  bank draft or money  order),  or (ii) by
delivering  the Company's  Common Stock  already owned by the optionee  having a
fair market value on the date of exercise  equal to the full  purchase  price of
the shares, or (iii) by any combination of cash and the method specified in (ii)
of this sentence.  For purposes of the preceding sentence, the fair market value
of Common Stock  tendered shall be determined as provided in Section 5 hereof as
of the date of  exercise.  Until such  person has been issued a  certificate  or
certificates for the shares subject to such exercise, he or she shall possess no
rights as a shareholder with respect to such shares.

8.       Effect of Termination of Directorship or Death

                  (a) In the event that an optionee shall cease to be a director
of the Company for any reason other than his or her gross and willful misconduct
or his or her death,  such optionee  shall have the right to exercise the option
at any time within the remaining term of the option.

                  (b) In the event that an optionee shall cease to be a director
of the Company by reason of his or her gross and willful  misconduct  during the
course of his or her service as a director  of the  Company,  including  but not
limited to wrongful appropriation of funds of the Company or the commission of a
gross misdemeanor or felony, any unexercised option granted pursuant to the Plan
shall be terminated as of the date of the misconduct.

                  (c) If the optionee shall die and such optionee shall not have
fully  exercised any option granted under the Plan, such option may be exercised
at any  time  within  twelve  months  after  his or her  death  by the  personal
representatives,  administrators or, if applicable,  by any person or persons to
whom the option is  transferred  by will or the  applicable  laws of descent and
distribution,  to the extent of the full number of shares he or she was entitled
to purchase under the option on the date of death,  and subject to the condition
that no option  shall be  exercisable  after the  expiration  of the term of the
option.

                  (d) Nothing in this Plan or in any agreement  hereunder  shall
confer on any  optionee  any right to  continue  as a director of the Company or
affect  in any  way  any  legal  rights  with  respect  to  termination  of such
directorship or removal of such optionee as a director.

9.       Transferability

                  (a) No options granted under the Plan shall be transferable by
optionee, other than as provided in Section 8(c) or in Section 9(b) herein.

                  (b) During the lifetime of an optionee,  an outstanding option
may be transferred to (i) the spouse, children, grandchildren, nieces or nephews
of the optionee  ("Immediate  Family  Members"),  (ii) a trust or trusts for the
exclusive  benefit of such Immediate  Family Members,  or (iii) a partnership in
which such Immediate  Family  Members are the only  partners,  provided that (a)
there may be no consideration for any such transfer and (b) subsequent transfers
of transferred options shall be prohibited except for transfers required by will
or the laws of descent and distribution.  Following transfer, such options shall
continue  to be  subject  to the same terms and  conditions  as were  applicable
immediately  prior to  transfer;  provided  that  for  purposes  of each  option
agreement, the term "optionee" shall be deemed to refer to the transferee.


10.      Dilution or Other Adjustments

                  If there  shall be any  change  in the  Common  Stock  through
merger,  consolidation,  reorganization,  recapitalization,  stock  dividend (of
whatever  amount),  stock  split or other  change  in the  corporate  structure,
appropriate  adjustments in the Plan and  outstanding  options shall be made. In
the event of any such changes,  adjustments  shall include,  where  appropriate,
changes in the  aggregate  number of shares  subject to the Plan,  the number of
shares subject to outstanding  options and the exercise  prices thereof in order
to prevent dilution or enlargement of option rights.

11.      Amendment or Discontinuance of Plan

                  The Board may amend, alter, suspend,  discontinue or terminate
the Plan; provided,  however,  that,  notwithstanding any other provision of the
Plan or any award  agreement,  without the approval of the  shareholders  of the
Company,  no  such  amendment,   alteration,   suspension,   discontinuation  or
termination   shall  be  made  that  requires  the  approval  of  the  Company's
shareholders  under any rules or  regulations  of the  National  Association  of
Securities  Dealers,  Inc. or any securities exchange that are applicable to the
Company.  The Board  shall not alter or impair  any option  theretofore  granted
under the Plan without the consent of the holder of the option.

12.      Effective Date and Termination of Plan

                  (a) The Plan was  approved by the Board on March 2, 1999,  and
shall be approved by shareholders of the Company within 12 months thereafter.

                  (b) Unless the Plan shall have been  discontinued  as provided
in Section 11 hereof,  the Plan shall  terminate on January 31, 2009.  No option
may be granted after such  termination,  but  termination  of the Plan shall not
without consent of the optionee, alter or impair any rights or obligations under
any option theretofore granted.




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Plan approved by stockholders on May __, 1999.