AMENDED AND RESTATED EMPLOYMENT
AGREEMENT
This Amended and
Restated Employment Agreement (this “Agreement”), dated
as of May 1, 2009 (the “Effective Date”), is by
and between SPSS Inc., a Delaware corporation having its principal
offices at 233 South Wacker Drive, 11th Floor, Chicago, Illinois
60606 (“SPSS” or the “Company”), and
Raymond H. Panza (the “Employee”).
WHEREAS, the
Company and the Employee are parties to that certain Amended and
Restated Employment Agreement dated December 17, 2007 (the
“Current Agreement”); and
WHEREAS, it is now
desirable to amend the Current Agreement to reflect clarifying
changes to conform to changes in the Company’s incentive plan
and to make certain other technical and conforming
changes;
NOW THEREFORE, in
consideration of the foregoing, the mutual covenants and conditions
contained herein, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the
parties hereto agrees as follows:
1. Employment.
The Employee shall continue to be employed by SPSS as Executive
Vice President, Corporate Operations, Chief Financial Officer and
Secretary for the Term of Employment (as defined in Section 4
below), and on the terms and conditions set out herein. In each of
these capacities, the Employee shall report directly to the
President and Chief Executive Officer of SPSS.
2. Employment
Services. The Employee shall be responsible for the management and
direction of all aspects of the Company’s financing,
accounting, financial reporting and financial information systems
for carrying out corporate policy as established by the Board of
Directors of SPSS (the “Board”). These duties shall
include, but not be limited to, oversight and management of
financial and strategic planning, budgeting and forecasting;
compliance with all applicable accounting, securities and other
government regulations; initiating internal audits and financial
controls; establishing and managing credit; establishment and
maintenance of receivable and payable systems; and development and
maintenance of internal systems to track, analyze and control costs
related to the business of SPSS.
The Employee shall
also be responsible for the management and direction of all aspects
of the Company’s legal department, the corporate secretary
function, human resources, information technology and the
Company’s corporate administration, including without
limitation, its facilities, risk management department; and product
fulfillment department.
In addition, the
Employee shall faithfully perform other executive and managerial
duties, or special assignments, as may be delegated to the Employee
by or on behalf of the Board, the Audit Committee or the Chief
Executive Officer of SPSS. During the Term of Employment, the
Employee shall work for SPSS and its Affiliates (as hereinafter
defined) and shall devote substantially all of his business efforts
and time to fulfill the duties of his employment.
For purposes of
this Agreement, the term “Affiliate” as used herein
shall mean SPSS, any other corporation owned or controlled by SPSS,
directly or indirectly, and any subsidiary of SPSS.
(a) Base
Salary. In consideration for aforementioned services and subject to
the due performance thereof, the Employee shall receive an annual
salary of $440,000 (payable semi-monthly in arrears) during the
Term of Employment.
(b) Incentive
Payments. The Employee shall be eligible to participate in the
executive incentive cash compensation program for executive
officers of SPSS (the “Incentive Plan”) and to receive
incentive cash payments in connection therewith. The
Employee’s annual incentive target shall be no less than the
greater of $300,000 or 40% of his base pay; provided, however, that
the actual payout will depend upon SPSS company performance
measured against defined metrics. Incentive cash payments shall be
calculated and paid in accordance with the Incentive Plan;
provided, however, that in no event shall the incentive cash
payments for any portion of a year be paid later than two and
one-half (2-1/2) months after the year in which they are
earned.
(c) Reviews.
The Employee shall be reviewed by the Compensation Committee of the
Board (the “Compensation Committee”) with regard to
salary, bonus and incentive payments on no less frequent than an
annual basis and/or in conjunction with the Compensation
Committee’s review of the Company’s Chief Executive
Officer and/or other executive officers. Any increase in salary or
the award of a bonus or an incentive payment shall be made in the
sole discretion of the Compensation Committee, taking into account,
at the sole discretion of the Compensation Committee, whether the
Employee has attained the applicable performance goals, financial
and other, established for the Employee by the Compensation
Committee or the Board.
(d) Equity
Awards. The Employee shall, subject to the approval of the
Compensation Committee, participate in the equity incentive program
available to other executive officers of SPSS. For the avoidance of
doubt, no equity awards will actually be issued to the Employee
unless and until approval of the specific grant and issuance has
been obtained from the Compensation Committee.
(e) Benefits.
The Employee shall be entitled to:
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(i)
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reimbursement from SPSS of
reasonable and necessary business expenses incurred by the Employee
in connection with his performance of services under this Agreement
so long as such expenses are consistent with the Company’s
expense reimbursement policy/practice (which is incorporated into
this Agreement by reference), upon the Employee’s
presentation from time to time of an itemized account of such
expenses by the Employee; provided, however, that, the
reimbursement of any such expenses that are taxable to the Employee
shall be made on or before the last day of the year following the
year in which the expense was incurred and the amount of
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the expenses
eligible for reimbursement during one year will not affect the
amount of expenses eligible for reimbursement in any other
year;
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(ii)
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five (5) weeks of paid vacation
time during each year of employment;
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(iii)
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ten
(10) days of sick leave during each year of
employment;
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(iv)
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the
holidays observed by SPSS in the United States; and
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(v)
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receive, enjoy, and/or participate
as applicable in the other benefits customarily received by
executive officers and employees of SPSS; provided, however, that
nothing herein shall require SPSS to maintain the benefits
currently provided to SPSS employees.
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4. Term of
Employment. The Employee’s term of employment by SPSS (the
“Term of Employment”) shall commence on the date hereof
and shall continue through the Date of Termination as defined
below. The date on which the Employee’s employment with the
Company and its Affiliates terminates for any of the reasons set
forth in Section 5 below (and the Agreement terminates as a
result thereof) shall be referred to as the “Date of
Termination.” Except as specifically agreed to in writing by
the parties, all provisions of this Agreement shall remain in full
force and effect during the entire Term of Employment.
(a) The Term
of Employment shall be terminated when the Employee’s
employment with the Company and its Affiliates terminates for any
of the following reasons:
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(i)
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by
mutual written agreement of SPSS and the Employee, effective as
mutually agreed;
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(ii)
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by
SPSS with Good Cause (as defined hereunder), effective immediately
(subject, if applicable, to the cure period provided under Section
5(b)(i));
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(iii)
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by
the Employee for Good Reason (as defined hereunder), effective as
specified in an advance written notice by the Employee to the
Company; provided, however, that the Employee’s termination
shall not be treated as a termination by the Employee for Good
Reason unless (A) within ninety (90) days after the
initial existence of the applicable condition that is purported to
give rise to a basis for a Good Reason termination, the Employee
provides written notice of the existence of such condition to the
Company, (B) such condition is not cured within thirty
(30) days after the date of the written notice from the
Employee to the Company, and (C) the Employee terminates
employment no later than sixty (60) days after the expiration
of the applicable cure period;
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(iv)
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by
SPSS without Good Cause, effective as specified in an advance
written notice by the Company to the Employee but in no event later
than sixty (60) days after the date of the written notice (the
“SPSS Notice Period”);
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(v)
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by
the Employee without Good Reason, effective on the earlier of a
mutually agreed Date of Termination or sixty (60) days after
written notice to SPSS (the “Employee Notice
Period”);
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(vi)
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by
reason of the Employee’s death;
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(vii)
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by
reason of the Employee’s Disability (as defined herein);
or
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(viii)
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by
the Employee for any reason (or no reason) effective within the
thirty (30) day period beginning on the first anniversary of
the Change of Control Effective Date (the “Special
Termination Provision”).
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The SPSS Notice
Period and the Employee Notice Period are collectively referred to
herein as the “Notice Period”.
(b) For
purposes of this Agreement, “Good Cause” is defined
as:
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(i)
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the
Employee’s willful and continued failure to substantially
perform his duties for the Company (other than any such failure
resulting from the Employee’s Disability) which is not cured
within a reasonable period (not exceeding thirty (30) days)
following the date on which the Company provides to the Employee
written notice which specifies the condition or behavior that forms
the Company’s basis for a Good Cause termination pursuant to
this Section 5(b)(i);
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(ii)
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the
Employee’s willful engagement in conduct which is
demonstrably and materially injurious to the Company or its
reputation, monetarily or otherwise;
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(iii)
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the
Employee’s engagement in fraud, theft or
embezzlement;
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(iv)
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the
Employee’s conviction of, or the Employee’s entry of a
plea of nolo contendre to, a felony (determined under
applicable state law); or
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(v)
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the
Employee’s illegal use of a controlled substance.
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For purposes of
Sections 5(b)(i) and (ii) above under this definition of
Good Cause, no act, or failure to act, on the part of the Employee
shall be deemed “willful” unless done, or omitted to be
done, by the Employee not in good faith and without reasonable
belief that his action or omission was in the best interest of the
Company.
(c) For
purposes of this Agreement, “Good Reason” is defined as
any of the following conditions:
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(i)
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a
material diminution of the Employee’s job assignment, duties,
responsibilities or reporting relationships which is inconsistent
with his initial position hereunder, or any later agreed-upon
amendment of that position;
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(ii)
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a
material reduction in the Employee’s base compensation or
annual incentive cash target as in effect immediately prior to the
Date of Termination;
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(iii)
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a
material breach of the terms of this Agreement by SPSS;
and
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(iv)
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a
change in the Employee’s principal assigned location of
employment by more than fifty (50) miles from the
Employee’s principal assigned location of employment on the
Effective Date, which change in assigned location has been
determined by the parties to constitute a material change in the
geographic location at which the Employee is required to provide
his duties.
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(d) For
purposes of this Agreement, “Disability” means that the
Employee has suffered a disability such that the Employee is
physically or mentally unable to substantially perform the duties
required of him under this Agreement for a period of six
(6) consecutive months or more.
(e) If the
Date of Termination occurs as a result of termination either by
SPSS for Good Cause pursuant to Section 5(a)(ii) or by the
Employee without Good Reason pursuant to Section 5(a)(v)
above, SPSS will pay and/or provide (as applicable) the following
to the Employee (except as otherwise provided in Section 7 of
this Agreement):
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(i)
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any
earned but unpaid base salary, any other earned but unpaid
compensation plus any earned (as described in Section 5(j) below)
but unpaid incentive cash award as of the Date of
Termination;
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(ii)
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any
accrued, unpaid and unused vacation pay as of the Date of
Termination; and
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(iii)
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reimbursement of any business
expenses properly incurred by the Employee pursuant to
Section 3(e)(i) above and unreimbursed as of the Date of
Termination.
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All
payments to be made pursuant to this Section 5(e) shall be paid
within 15 days following the Date of Termination.
(f) If the
Date of Termination occurs as a result of termination either by the
Employee for Good Reason pursuant to Section 5(a)(iii) above
or by SPSS without Good Cause pursuant to Section 5(a)(iv) above
and if the Date of Termination does not occur under circumstances
described in Section 5(h)(ii) hereof, SPSS will pay and/or
provide (as applicable) the following to the Employee (except as
otherwise provided in Section 7 of this Agreement):
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(i)
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the
full amount of the salary and benefits earned by the Employee
during the Notice Period and unpaid as of the Date of Termination,
if applicable;
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(ii)
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any
earned but unpaid base salary, any other earned but unpaid
compensation plus any earned (as described in Section 5(j) below)
but unpaid incentive cash award as of the Date of
Termination;
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(iii)
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any
accrued, unpaid and unused vacation pay as of the Date of
Termination;
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(iv)
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reimbursement of any business
expenses properly incurred by the Employee pursuant to
Section 3(e)(i) above and unreimbursed as of the Date of
Termination;
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(v)
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a
lump sum cash payment equal to the sum of:
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(A)
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eighteen (18) months of the
Employee’s monthly base salary (annual base salary divided by
twelve (12)) in effect at the Date of Termination; and
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(B)
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the
product of (I) one and one-half (1.5), multiplied by
(II) the quotient of (x) the aggregate incentive cash
payments that the Employee received for the two (2) fiscal
years of the Company ending immediately prior to the Date of
Termination (determined after giving effect to the provisions of
Section 5(f)(ii)), divided by (y) two (2);
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(vi)
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to
the extent the Employee was participating in the Company’s
group health plans as of the Date of Termination:
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(A)
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for
the Employee and his dependents who were covered under the
Company’s group health plans as of the Date of Termination,
continuing coverage under the group health plans at the
Company’s cost and on a non-taxable basis for twenty four
(24) months following the Date of Termination; and
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(B)
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for
the Employee and his dependents who were covered under the
Company’s group health plans throughout the twenty four
(24) month period described in clause (A) above,
continuing coverage under the group health plans at the
Employee’s full cost (determined as the applicable premium
charged for COBRA for the applicable level of coverage under the
Company’s group health plan), for up to twenty four
(24) months;
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provided,
however, that the benefits described in clause (A) and/or (B)
above shall terminate as of the first day on which the Employee
becomes employed by another employer and becomes eligible for
benefits (or, in the case of benefits under clause (B), if earlier,
the date on which the Employee fails to pay the full cost of the
benefits); all coverage under
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clauses
(A) and (B) shall be considered part of, and not in
addition to, any coverage required under COBRA (or applicable state
law); and for periods after the termination of benefits due to
other employment, the Employee (and his dependents) shall have the
right to any remaining period of coverage under the Company’s
group medical plans to the extent and in accordance with the terms
of COBRA (or applicable state law);
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(vii)
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in
the event that the Date of Termination occurs before the date on
which any outstanding equity awards (or portion thereof) previously
granted by SPSS to the Employee would have otherwise vested (each,
a “Vesting Date”), immediate vesting will occur with
respect to all then yet unvested equity awards (or portions
thereof) that would have vested had the Employee been employed with
the Company as of the relevant Vesting Date and, to the extent
applicable, all such equity awards shall be deemed to be exercised
in full upon the Date of Termination by means of a cashless
exercise;
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(viii)
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professional outplacement services,
but not to exceed a term of twelve (12) months, at a level
customary for an executive officer, to be provided by a firm
mutually acceptable to SPSS and the Employee;
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(ix)
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continuation of professional dues
and subscriptions otherwise paid by SPSS prior to the Date of
Termination for a period of eighteen (18) months following the
Termination Date and, for a period of ninety (90) days
following the Date of Termination, continued use of a mobile
telephone provided for and paid by the Company, access to the
Employee’s office telephone number and voice mailbox that
exist at the Date of Termination, access to and use of the
Employee’s personal Company email address and access to and
use of the Employee’s personal Company electronic equipment
including, without limitation, computer and wireless hand-held
phone and email device; provided, however, that the aggregate value
of the benefits provided under this Section 5(f)(ix) shall not
exceed the applicable dollar limit under section 402(g)(1) of the
Internal Revenue Code of 1986, as amended (the “Code”),
for the year in which the Date of Termination occurs;
and
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(x)
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acceptable employment references, as
reasonably requested by the Employee, which employment references
shall include information regarding the Employee’s dates of
employment with SPSS, job title, pay rate and any such additional
information as SPSS and the Employee may agree to at the time such
references are requested and, for the avoidance of doubt, SPSS
shall in all instances act in good faith to avoid negative comments
regarding the Employee.
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If the Date of
Termination occurs pursuant to this Section 5(f) and, at such time,
SPSS is unable to provide to the Employee the benefits set forth in
Section 5(f)(vi) above, SPSS shall
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