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STOCK OPTION
AGREEMENT
This is a Stock Option Agreement, which has been entered into and is
effective as of February 1, 1994, by and between Ronald D. Offutt ("Offutt")
and Allan F. Knoll ("Knoll"), and acknowledged by RDO Equipment Co. ("RDO").
A. Knoll and Offutt have previously entered into an arrangement whereby
Knoll provides services to various entities owned or controlled by Offutt, in
exchange for certain compensation, including earning on a deferred payment
basis, for each year of service, .25% of Offutt's net worth, with the
understanding that payment of such deferred compensation would be deferred
until such time as Knoll's employment with such Offutt entities was
terminated, voluntarily or involuntarily for any reason.
B. One of the entities owned or controlled by Offutt is RDO, and Knoll
and Offutt have determined that the previously existing arrangement should be
modified by removing RDO from the deferred compensation arrangement.
C. Knoll and Offutt have agreed that in lieu of any previously existing
deferred compensation arrangement as to Knoll owning or earning a percentage
of RDO, Knoll will instead be granted by Offutt an option to acquire a stated
number of shares of RDO that are owned by Offutt.
D. The previously existing deferred compensation arrangement shall
continue as it currently exists, other that as to RDO.
Accordingly, Knoll and Offutt agree as follows:
1. GRANT OF OPTIONS. Offutt hereby grants to Knoll the right, privilege,
and option (the "Option") to Purchase thirteen thousand six hundred
seventy-five (13,675) shares (the "Option Shares") of RDO's Common
Stock, according to the terms and condition hereinafter set forth.
2. OPTION EXERCISE PRICE. The per share price to be paid by Knoll in the
event of an exercise of the Option will be $135.00.
3. OFFUTT REPRESENTATIONS. Offutt warrants and represents that as of
February 1, 1996, he owned more shares of RDO Common Stock than the
Option Shares, and that he will at all times have available for
delivery to Knoll sufficient number of shares of RDO Common Stock to
deliver to Knoll in the event of exercise of the Option. Offutt
further represents that he has good and marketable title to the
Option Shares, subject to no liens.
Offutt further represents that, without being required to obtain the
consent or approval of any person or other entity, he has full right,
power, and authority to
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enter into this Agreement and to sell and convey, as provided herein,
the entire right, title, and interest in and to all of the Option
Shares. He further represents that this Agreement has been duly
executed delivered by him and is binding upon and enforceable against
him, and upon his death his estate, in accordance with its terms. He
further represents that he shall continue to own, beneficially, all
right, title and interest in and to the Option Shares, subject to no
liens, attachments or other encumbrances, and also shall continue to
have, undiminished, the full right, power, and authority to sell and
convey the Option Shares as provided herein.
4. TERM AND EXERCISE ABILITY. The Option is immediately exercisable with
respect to all of the Option Shares, and shall be exercisable until
February 1, 2020.
5. MANNER OF OPTION EXERCISE. This Option may be exercised by Knoll in
whole or in part from time to time, subject to the conditions
contained in this Agreement, by delivery, in person, by facsimile or
electronic transmission or through the mail, to Offutt at his
principal executive office, of a written Notice of Exercise, with a
copy to RDO at its principal executive office. Such notice will
identify this Option, will specify the number of Option Shares with
respect to which the Option is being exercised, and will be signed by
the person so exercising the Option. Such notice shall be accompanied
by payment in full of the total purchase price of the Option Shares
purchased. In the event that the Option is being exercised by any
person or persons other than Knoll, the Notice will be accompanied by
appropriate proof of right of such person or persons to exercise the
Option. As soon as practicable after the effective exercise of the
Option, Offutt will deliver to the person exercising this Option one
or more duly issued stock certificates evidencing such ownership,
together with an assignment separate from the certificate duly
endorsed by him evidencing the transfer of the Option Shares with
respect to which the Option is being exercised. Upon receipt of the
foregoing, RDO will deliver to the transferee one or more duly issued
stock certificates bearing such transfer restrictions as may then be
appropriate based upon advice of RDO's legal counsel.
6. PAYMENT AT THE TIME OF EXERCISE OF THIS OPTION. Knoll will pay the
total purchase price of the Option Shares to be purchased solely in
cash (including a check, bank draft or money order, payable to the
order of Offutt), or as may otherwise be agreed by Knoll and Offutt.
7. NO RIGHTS AS A SHAREHOLDER. Knoll will have no rights as a
shareholder of RDO with respect to the Option Shares unless and until
all conditions to the effective exercise of this Option have been
satisfied and Knoll has become the holder of record of such shares. No
adjustment will be made for dividends or distributions with respect
to this Option as to which there is a record date preceding the date
Optionee becomes the holder of record of such shares. Any distributions
to shareholders of the Company, with respect to the Option Shares,
prior to the exercise of the Option, shall be paid to Offutt and
Knoll shall have no right thereto.
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8. ADJUSTMENTS. In the event of any reorganization, merger,
consolidation, recapitalization, liquidation, reclassification, stock
dividend, stock split, combination of shares, rights offering,
divestiture or extraordinary dividend (including a spin-off), or any
other change in the corporate structure or shares of RDO (including any
such change for which any stock option plan or arrangements of RDO are
adjusted), this Option will be appropriately adjusted in order to
prevent the diminution or enlargement of the rights of Knoll as to the
number, kind and exercise price of securities subject to this Option.
9. WITHHOLDING. Knoll understands and acknowledges that the exercise of
this Option may result in taxable income to him, and may subject RDO to
withholding requirements under federal, state, or local tax laws.
Accordingly, as a condition to the exercise of this Option, Knoll
agrees that he will, at the time of Option exercise, reimburse RDO for
any amounts that RDO would be required to withhold from Knoll under
federal, state, or local tax laws. Knoll specifically authorizes RDO
to (i) withhold and deduct from wages of Knoll (or from other amounts
that may be due and owing to Knoll from RDO or a subsidiary), or make
other arrangements for the collection of, all legally required amounts
necessary to satisfy any and all federal, state, or local withholding
and employment-related tax requirements attributable to the Option or
the exercise thereof, or (ii) require Knoll promptly to remit the
amount of such withholding to RDO before taking any action, including
issuing any shares of Common Stock, with respect to the Option. RDO
may, in its sole discretion and upon terms and conditions it specifies,
permit or require Knoll to satisfy, in whole or in part, any
withholding or employment-related tax obligations by a promissory note
(on terms acceptable to RDO in its sole discretion), or as may
otherwise be agreed.
10. MISCELLANEOUS.
10.1. BINDING EFFECT. This Agreement will be binding upon the heirs,
executors, administrators and successors of the parties to this
Agreement.
10.2. GOVERNING LAW. This Agreement and all rights and obligations in
this Agreement will be governed by the laws of the State of North
Dakota, without regard to the conflict of laws provisions in any
other jurisdictions.
10.3. ENTIRE AGREEMENT. This Agreement sets forth the entire Agreement
understanding of the parties to this Agreement with respect to the
grant and exercise of this Option and supersedes all prior
agreements, arrangements, plans and understandings relating to the
grant and exercise of this Option.
10.4. AMENDMENT AND WAIVER. This Agreement may be amended, waived,
modified or canceled only by a written instrument executed by the
parties hereto or, in the case of a waiver, by the party waiving
compliance.
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10.5. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original and all of
which together will constitute one in the same Agreement.
10.6. RESTRICTIONS ON TRANSFER. Except pursuant to testamentary will
or the laws of descent and distribution, no right or interest of
Knoll in this Option prior to the exercise may be assigned or
transferred, or subjected to any lien, during the lifetime of
Knoll, either voluntarily or involuntarily, directly or
indirectly, by operation of law or otherwise. Knoll will,
however, be entitled to designate a beneficiary to receive this
option upon his death, and in the event of his death, exercise of
this Option may be made by his legal representatives, heirs and
legatees, until the Option expires pursuant to Section 4 hereof.
10.7. CONDITION PRECEDENT TO EFFECTIVENESS. Notwithstanding anything
contained herein to the contrary, this Agreement and the Option are
specifically conditioned upon, on or before July 31, 1997, the
completion and documentation by Knoll to the satisfaction of
Offutt of all previous transactions between Knoll and other
entities owned or controlled by Knoll, on one hand, and Offutt and
other entities owned by Offutt, on the other hand.
Failure to complete the foregoing on or before July 31, 1997,
shall render this Agreement and the Option null and void and
without further force and effect. Upon completion of the
foregoing, Offutt will provide to Knoll and RDO a letter stating
that the conditions set forth in this Section 10.7 have been
completed to his satisfaction.
The parties to this Agreement have executed this Agreement effective as
of February 1, 1994.
/s/ Ronald D. Offutt
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Ronald D. Offutt
/s/ Allan F. Knoll
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Allan F. Knoll
Acknowledged:
RDO Equipment Co.
By: /s/ Paul T. Horn
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Paul T. Horn
An Officer
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AMENDMENT TO STOCK OPTION AGREEMENT
This is an amendment to the Stock Option Agreement that was entered into
and effective as of February 1, 1994, by and between Ronald D. Offutt
("Offutt") and Allan F. Knoll ("Knoll"), and acknowledged by RDO Equipment Co.
("RDO").
A. RDO intends to reincorporate in Delaware pursuant to a merger and,
pursuant to such merger and a resulting stcok exchange, RDO will have
outstanding shares of Class A Common Stock and Class B Common Stock. The
Option Shares will be split into a greater number of shares, will be for
Class A Common Stock, and the per share exercise price for the Option will
accordingly decrease.
B. The parties desire to reflect and acknowledge such changes in the
number of Option Shares and per share exercise price for the Option.
Accordingly, Knoll and Offutt agree as follows:
Effective upon the reincororation merger and stock split:
1. The number of Option Shares shall increase from Thirteen Thousand Six
Hundred Seventy-Five (13,675) to Six Hundred Eight Thousand Five Hundred
Ninety-Five (608,595) shares.
2. The Option Shares shall be with respect to Class A Common Stock of
RDO, and Knoll acknowledges that upon exercise of the Option, any shares
of Class B Common Stock owned by Offutt and used by him to satisfy
the Option will convert automatically to Class A Common Stock.
3. The per share price to be paid by Knoll in th event of an exercise
of the Option will be $3.03.
4. All other terms of the Option Agreement shall continue.
The Parties have executed this Agreement effective as of January
10, 1997.
/s/ Ronald D. Offutt
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Ronald D. Offutt
/s/ Allan F. Knoll
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Allan F. Knoll
Acknowledged:
PDO Equipment Co.
/s/ Paul T. Horn
By ------------------
Paul T. Horn
Its President
