<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 11-K
Annual Report pursuant to Section 15(s) of the
Securities Exchange Act of 1934 for the fiscal year ended
December 31, 1999
Commission file number: 000-22703
A. Full title of the plan and address of the plan, if difference from that
of the issuer named below:
GREAT PLAINS SOFTWARE, INC.
401(k) PROFIT SHARING PLAN
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
GREAT PLAINS SOFTWARE, INC.
1701 S.W. 38th Street
Fargo, ND 58103
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GREAT PLAINS SOFTWARE, INC.
401(k) PROFIT SHARING PLAN
FINANCIAL STATEMENTS
DECEMBER 31, 1999 AND 1998
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GREAT PLAINS SOFTWARE, INC.
401(k) PROFIT SHARING PLAN
INDEX TO FINANCIAL STATEMENTS
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PAGES(S)
Report of Independent Accountants 1
Financial Statements:
Statement of Net Assets Available for Benefits 2
Statement of Changes in Net Assets Available for Benefits 3
Notes to Financial Statements 4-7
Supplementary Schedules:*
Line 27a - Schedule of Assets Held for Investment 8
Line 27d - Schedule of Reportable Transactions 9
* Other schedules required by 29 CFR 2520.103-10 of the Department of Labor's
Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974 have been omitted because they are not
applicable.
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REPORT OF INDEPENDENT ACCOUNTANTS
To the Participants and Administrator
of the Great Plains Software, Inc.
401(k) Profit Sharing Plan:
In our opinion, the accompanying statements of net assets available for benefits
and related statements of changes in net assets available for benefits present
fairly, in all material respects, the net assets available for benefits of the
Great Plains Software, Inc. 401(k) Profit Sharing Plan (the Plan) at December
31, 1999 and 1998, and the changes in net assets available for benefits for the
years then ended, in conformity with accounting principles generally accepted in
the United States. These financial statements are the responsibility of the
Plan's management; our responsibility is to express an opinion on these
financial statements based on our audits. We conducted our audits of these
statements in accordance with auditing standards generally accepted in the
United States, which require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by management, and
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for the opinion expressed above.
Our audits were conducted for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules of Assets Held
for Investment and Reportable Transactions are presented for purposes of
additional analysis and are not a required part of the basic financial
statement, but are supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. The supplemental schedules have been
subjected to the auditing procedures applied in the audits of the basic
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
PricewaterhouseCoopers LLP
Minneapolis, Minnesota
April 17, 2000
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GREAT PLAINS SOFTWARE, INC.
401(k) PROFIT SHARING PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR BENEFITS
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<TABLE>
<CAPTION>
DECEMBER 31,
1999 1998
<S> <C> <C>
Investments $32,450,842 $22,611,993
Other assets:
Contributions receivable from employer 29,783 -
Contributions receivable from participants 162,398 -
----------- -----------
Net assets available for plan benefits $32,643,023 $22,611,993
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
2
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GREAT PLAINS SOFTWARE, INC.
401(k) PROFIT SHARING PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
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<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
1999 1998
<S> <C> <C>
Additions to net assets attributed to:
Net investment income $ 6,860,829 $ 3,916,458
Contributions:
Participants 3,335,866 2,268,092
Employer 648,467 473,539
Rollover contributions 648,469 431,059
------------ ------------
4,632,802 3,172,690
------------ ------------
Total additions 11,493,631 7,089,148
------------ ------------
Deductions from net assets attributed to:
Benefits paid to participants 1,192,936 710,126
Administrative expenses 60,550 54,683
Other 209,075 (10,896)
------------ ------------
Total deductions 1,462,561 753,913
------------ ------------
Net increase in net assets 10,031,070 6,335,235
Net assets available for benefits:
Beginning of the year 22,611,993 16,276,758
------------ ------------
End of the year $ 32,643,063 $ 22,611,993
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
GREAT PLAINS SOFTWARE, INC.
401(k) PROFIT SHARING PLAN
NOTES TO FINANCIAL STATEMENTS
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1. DESCRIPTION OF THE PLAN
GENERAL
The Great Plains Software, Inc. 401(k) Profit Sharing Plan (the Plan) is
a defined contribution plan covering all full-time employees of the
Company who have completed six months of service and are at least 18
years of age. It is subject to the provisions of the Employee Retirement
Income Security Act of 1974 (ERISA), as amended.
CONTRIBUTIONS
Each eligible employee who elects to become a participant of the Plan
authorizes a deduction of 1% to 18% of their compensation for each pay
period. The participant has the option of having the funds invested in
any of the available funds, or a combination thereof. Great Plains
Software, Inc. (the Company) contributes a matching cash contribution,
currently 25% of the participant's contributions (up to 8% of the
participant's annual income). The Company may also make a discretionary
profit sharing contribution in shares of Company stock. There were no
Company profit sharing contributions during the plan years ended December
31, 1999 and 1998.
PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's
contribution and an allocation of (a) the Company's contribution, (b)
Plan earnings, and (c) forfeitures of terminated participant's nonvested
accounts and charged with an allocation of administrative expenses.
VESTING
Employee contributions to the Plan are fully vested at all times. The
employee vests in employer matching and profit sharing contributions
based on credited years of service (1,000 hours worked per year) under
the following schedule:
<TABLE>
<CAPTION>
VESTING
YEARS OF SERVICE PERCENTAGE
<S> <C>
1 year 20%
2 years 40%
3 years 60%
4 years 80%
5 years 100%
</TABLE>
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA. In the event of
Plan termination, participants will become 100% vested in their accounts.
BENEFIT PAYMENTS
The Plan allows for participants to make withdrawals from the Plan upon
reaching age 59 1/2 or in the case of serious financial hardship, as
approved by the administrator. Additionally, participant balances may be
distributed in total upon termination of employment with the Company.
Upon termination of employment, participants are entitled to receive
their total vested balance.
4
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PARTICIPANT NOTES RECEIVABLE
Under the Plan agreement, participants may borrow against their balances
as allowed by the Internal Revenue Service (IRS) regulations and Company
policy. The administrator may authorize a loan to a participant in an
amount not to exceed the lesser of $50,000 or 50% of the vested portion
of the participant's account. Loan maturities are generally 5 years or
less, but can be for longer terms for home loans, and carry interest at
the prime rate plus 1% at the time of origination.
ADMINISTRATIVE EXPENSES
Administrative expenses, which include investment management, record
keeping, trustee fees and expenses of the Company incurred in
administering the Plan, are paid by the Plan.
FORFEITED ACCOUNTS
At December 31, 1999, forfeited nonvested accounts totaled $6,405. These
amounts will be allocated to remaining participants based on the ratio of
each participant's current year match to all remaining participants'
match for the 1999 Plan year. This allocation was made in April 2000. At
December 31, 1998, forfeited nonvested accounts totaled $4,121. This
amount was allocated to remaining participants in April 1999.
2. SUMMARY OF ACCOUNTING POLICIES
BASIS OF ACCOUNTING
The accounting records of the Plan are maintained on the accrual basis of
accounting.
USE OF ESTIMATES
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires Plan
management to make estimates and assumptions that affect the reported
amounts of assets, liabilities, and changes therein, and disclosure of
contingent assets and liabilities. Actual results could differ from those
estimates.
VALUATION OF INVESTMENTS
Investments are reflected in the financial statements at fair market
value as determined by the Trustee. Participant notes receivable are
valued at cost which approximates fair value.
NET INVESTMENT INCOME
Net investment income includes interest and dividend income, as well as
realized and unrealized gains and losses.
RISKS AND UNCERTAINTIES
The Plan provides for various investment options in any combination of
stocks, bonds and other investment securities. Investment securities are
exposed to various risks, such as interest rate, market and credit. Due
to the level of risk associated with certain investment securities and
the level of uncertainty related to changes in the value of investment
securities, it is at least reasonably possible that changes in risks in
the near term would materially affect participants' account balances and
the amounts reported in the statement of assets available for plan
benefits and the statement of changes in assets available for plan
benefits.
5
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RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS
On September 15, 1999, the Accounting Standards Executive Committee of
the American Institute of Certified Public Accountants issued Statement
of Position 99-3 (SOP 9-33), "Accounting for and Reporting of Certain
Defined Contribution Benefit Plan Investments and Other Disclosure
Matters." SOP 99-3 is effective for financial statements of Plan years
ending after December 15, 1999 with earlier application encouraged. The
SOP 99-3 revised the requirements for disclosure of separate fund
information for individual investment options and other investment
related disclosures, but had no effect on net assets available for plan
benefits. The Plan elected to implement SOP 99-3 effective January 1,
1999.
3. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of net assets available for benefits
per the financial statements to the Form 5500:
<TABLE>
<CAPTION>
1999 1998
<S> <C> <C>
Net assets available for benefits per the financial statements $ 32,643,023 $ 22,611,993
Amounts allocated to withdrawing participants (47,360) -
------------ ------------
Net assets available for benefits per the Form 5500 $ 32,595,663 $ 22,611,993
============ ============
</TABLE>
The following is a reconciliation of benefits paid to participants per
the financial statements to the Form 5500:
<TABLE>
<CAPTION>
YEAR ENDED
DECEMBER 31,
1999
<S> <C>
Benefits paid to participants per the financial statements $1,192,936
Add amounts allocated to withdrawing participants at December 31, 1999 47,360
Less amounts allocated to withdrawing participants at December 31, 1998 -
----------
Benefits paid to participants per the Form 5500 $1,240,296
==========
</TABLE>
Amounts allocated to withdrawing participants are recorded on the Form
5500 for benefit claims that have been processed and approved for payment
prior to year end but not been paid as of that date.
The amounts allocated to withdrawing participants by fund option are as
follows:
6
<PAGE>
<TABLE>
<CAPTION>
DECEMBER 31,
1999 1998
<S> <C> <C>
Diversified Equity $31,286 $ -
Great Plains Software, Inc. Common Stock Fund 16,074 -
------- -----
$47,360 $ -
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</TABLE>
7
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4. INCOME TAX STATUS
The IRS has determined and informed the Company by letter dated September
21, 1995, that the Plan and related trust are designed in accordance with
Section 401(a) of the Internal Revenue Code (IRC). The Plan has been
amended since receiving the determination letter. However, the plan
administrator believes that the Plan is designed and is currently being
operated in compliance with the applicable requirements of the IRC.
5. RELATED PARTY TRANSACTIONS
Certain Plan investments are in shares of mutual funds managed by Norwest
(Wells Fargo). Norwest (Wells Fargo) is the trustee as defined by the
Plan and, therefore, these transactions qualify as party-in-interest.
Fees paid by the Plan for investment management services amounted to
$60,550 and $54,683 for the years ended December 31, 1999 and 1998,
respectively.
One of the Plan's investment options, the Great Plains Software, Inc.
Common Stock Fund, only invests in shares of Company common stock. This
fund purchases shares of Company common stock in the open market. As of
December 31, 1999 and 1998, investments included 185,286 and 57,089
shares of Company common stock with a fair market value of $4,204,433 and
$2,754,544, respectively.
6. INVESTMENTS
The following table presents the Plan's investments that represent 5
percent or more of the Plan's net assets:
<TABLE>
<CAPTION>
FAIR VALUE AT DECEMBER 31,
1999 1998
<S> <C> <C>
Norwest (Wells Fargo) Growth Equity Fund $ 8,619,350 $ 7,111,397
Norwest (Wells Fargo) Diversified Equity Fund 5,628,854 3,845,460
Norwest (Wells Fargo) Growth Balance Fund 5,421,461 4,453,436
Janus Worldwide Fund 4,314,395 1,830,397
Great Plains Software, Inc. Common Stock Fund 4,204,433 2,754,544
Pimco Stockplus Fund 1,638,425 537,299
Other 2,623,924 2,079,460
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$32,450,842 $22,611,993
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</TABLE>
8
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SUPPLEMENTAL SCHEDULES
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GREAT PLAINS SOFTWARE, INC.
401(k) PROFIT SHARING PLAN
LINE 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT
DECEMBER 31, 1999
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<TABLE>
<CAPTION>
IDENTITY DESCRIPTION OF FAIR MARKET
OF ISSUER INVESTMENT COST VALUE
<S> <C> <C> <C>
* Norwest (Wells Fargo) Diversified Equity -- 108,816 shares $ 5,052,378 $ 5,628,854
* Norwest (Wells Fargo) Growth Balance -- 175,619 shares 5,283,496 5,421,461
* Norwest (Wells Fargo) Growth Equity -- 226,328 shares 8,032,345 8,619,350
* Norwest (Wells Fargo) Moderate Balance -- 33,724 shares 797,163 780,839
* Norwest (Wells Fargo) Stable Income -- 90,221 shares 921,172 914,777
Janus Worldwide -- 56,865 shares 2,886,140 4,314,395
Heartland Value -- 13,788 shares 410,276 503,510
Pimco Stockplus -- 107,768 shares 1,685,872 1,638,425
* Great Plains Software, 185,286 shares of restricted
Inc. common stock 2,521,528 4,204,433
* Participant Loans Notes receivable from participants,
interest rate ranging from 6% to
10% and maturities ranging from
1 to 18 years 424,798
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$ 27,590,370 $ 32,450,842
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</TABLE>
* As the Plan's trustee, Norwest Trust (Wells Fargo) is a party-in-interest
with respect to the Plan and, as the Plan's sponsor, Great Plains Software,
Inc. is a party-in-interest with respect to the Plan.
8
<PAGE>
GREAT PLAINS SOFTWARE, INC.
401(k) PROFIT SHARING PLAN
LINE 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
YEAR ENDED DECEMBER 31, 1999
--------------------------------------------------------------------------------
<TABLE>
<CAPTION>
CURRENT
VALUE
OF ASSET ON NET
IDENTITY OF DESCRIPTION OF PURCHASE SELLING COST OF TRANSACTION GAIN
PARTY INVOLVED ASSETS PRICE PRICE ASSETS DATE (LOSS)
Category (iii) -- A series of transactions in a security issue aggregating 5% of
the Plan assets' market value as of January 1, 1999.
<S> <C> <C> <C> <C> <C> <C>
Wells Fargo Purchase 35,369 units $ 1,735,313
Diversified
Equity Fund Sold 10,713 units $ 530,279 $ 494,401 $ 530,279 $ 35,878
Wells Fargo Growth Purchase 42,137 units 1,308,465
Balance Fund Sold 15,764 units 487,184 474,987 487,184 12,197
Janus Worldwide Purchase 22,495 units 1,229,111
Fund Sold 3,829 units 201,198 186,926 201,198 14,272
Pimco StockPlus Purchase 77,348 units 1,077,484
Fund Sold 9,917 units 141,606 139,821 141,606 1,785
Wells Fargo Growth Purchase 60,824 units 2,247,973
Equity Fund Sold 35,606 units 1,315,888 1,257,742 1,315,888 58,146
</TABLE>
There were no Category (i), (ii) or (iv) reportable transactions during 1999.
9
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the trustees (or other persons who administer the employee benefit plan) have
duly caused this annual report to be signed on its behalf by the undersigned
thereto duly authorized.
GREAT PLAINS SOFTWARE, INC.
401(k) PROFIT SHARING PLAN
By: /s/ Tami L. Reller
----------------------------------------
Name: Tami L. Reller
Title: Vice President and Chief Financial
Officer (Principal Financial Officer)
