Exhibit 10.1
CHANGE OF CONTROL AGREEMENT
This Change of Control Agreement (this "Agreement"), dated as of ____, 2007
(the "Effective Date"), is by and between SPSS Inc., a Delaware corporation
having its principal offices at 000 Xxxxx Xxxxxx Xxxxx, Xxxxxxx, Xxxxxxxx 00000
("SPSS" or the "Company"), and _________________, a senior management employee
of SPSS (the "Employee").
WHEREAS, the Employee is presently serving as the ______________of SPSS;
and
WHEREAS, SPSS desires to provide the Employee with the benefits set forth
herein in consideration of the Employee's continued employment with the Company,
and the Employee is willing to continue his employment with SPSS and enter into
this Agreement on the terms and conditions set forth herein.
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
mutually agree as follows:
1. Certain Defined Terms.
(a) The term "Change of Control," as used herein, shall mean any one or
more of the following:
(i) the accumulation, by any individual, entity or group (within the
meaning of Section 13(d) (3) or 14(d) (2) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) of thirty
three percent (33%) or more of the then outstanding common stock
of SPSS;
(ii) a merger or consolidation of SPSS in which SPSS does not survive
as an independent public company;
(iii) a sale of all or substantially all of the assets of SPSS;
(iv) a triggering event under that certain Amended and Restated Rights
Agreement, dated as of August 31, 2004, by and between SPSS and
Computershare Investor Services, LLC or any amendment,
restatement or replacement thereof;
(v) a liquidation or dissolution of SPSS; or
(vi) a change in the composition of the Board of Directors of SPSS
(the "Board") not previously endorsed by the Board existing as of
the Effective Date or the directors' endorsed successors, as a
result of which fewer than a majority of the directors are
Incumbent Directors ("Incumbent Directors" are directors who
either (A) are directors of SPSS as of the Effective Date, or (B)
are nominated for election to the Board by
the Nominating and Corporate Governance Committee and endorsed by
the Board existing as of the Effective Date or the directors'
endorsed successors).
Notwithstanding the foregoing, the following acquisitions shall not
constitute a Change of Control for the purposes of this Agreement: (I) any
acquisitions of common stock or securities convertible into common stock
directly from SPSS, or (II) any acquisition of common stock or securities
convertible into common stock by any employee benefit plan (or related trust)
sponsored or maintained by SPSS.
(b) "Constructive Termination," as used herein, shall mean any of the
following conditions:
(i) a material reduction in the Employee's base compensation or annual
incentive cash target, which reduction occurs during any twelve month
period beginning on or after the Change of Control Effective Date and
ending on or prior to the second anniversary date of the Change of Control
Effective Date; or
(ii) any action taken by the Company or the Surviving Entity (as
defined herein) following a Change of Control, for a reason other than Good
Cause, which results in a material diminution of the Employee's job
assignment, duties, responsibilities, or reporting relationships which is
inconsistent with his position with SPSS as it existed immediately prior to
the Change of Control Effective Date; or
(iii) 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 (as the same may be
changed prior to the Change in Control Effective Date with the Employee's
consent), which change in assigned location the Company has determined
would constitute a material change in the geographic location at which the
Employee is required to provide his duties.
The Employee's termination of employment shall not be treated as a
Constructive Termination unless (A) within 90 days after the initial existence
of the applicable condition that is purported to give rise to a basis for a
termination on account of Constructive Termination, the Employee provides
written notice of the existence of such condition to the Company (or the
Surviving Entity), (B) such condition is not cured within 30 days after the date
of the written notice from the Employee to the Company (or the Surviving
Entity), and (C) the Employee terminates employment no later than 60 days after
the expiration of the applicable cure period.
(c) "Change of Control Effective Date," as used herein, shall mean the date
on which a Change of Control becomes effective.
(d) "Good Cause," as used herein, shall mean:
(i) 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
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specifies the condition or behavior that forms the Company's basis for a
Good Cause termination;
(ii) the Employee's willful engagement in conduct which is
demonstrably and materially injurious to the Company or its reputation,
monetarily or otherwise;
(iii) the Employee's engagement in fraud, theft or embezzlement;
(iv) 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
(v) the Employee's illegal use of a controlled substance.
For purposes of clauses (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.
(e) "Surviving Entity," as used herein, shall mean the entity surviving a
transaction between SPSS and another company (with the term "company" to include
but not be limited to any individual, group of individuals, partnership,
corporation, or other similar entities).
2. Treatment of Stock Options, Restricted Stock Units, Restricted Stock and
Stock Appreciation Rights upon Change of Control. In the event of a Change of
Control (regardless of whether the Employee's employment is terminated in
connection with such Change of Control), the Employee shall be entitled to the
following benefits (which benefits shall be distributed only in compliance with
the terms of Paragraph 5 hereof):
(a) all of the Employee's stock options (vested and unvested) granted by
SPSS prior to the Change of Control Effective Date (i) shall accelerate and
shall be deemed to be exercised in full upon the Change of Control Effective
Date by means of a cashless exercise and (ii) if applicable, with regard to the
underlying stock, shall be exchanged, on the Change of Control Effective Date,
for a proportionate share of any consideration to be paid to the shareholders
generally in connection with the Change of Control;
(b) all of the Employee's restricted stock units (vested and unvested)
granted by SPSS prior to the Change of Control Effective Date (i) shall
accelerate and be deemed to be fully vested upon the Change of Control Effective
Date and (ii) if applicable, with regard to the underlying stock, shall be
exchanged, on the Change of Control Effective Date, for a proportionate share of
any consideration to be paid to the shareholders generally in connection with
the Change of Control;
(c) all restrictions on transferability of restricted stock held by the
Employee on the Change of Control Effective Date shall accelerate and shall be
deemed to have terminated immediately prior to the Change of Control Effective
Date, and, if applicable, such restricted stock shall be exchanged, on the
Change of Control Effective Date, for a proportionate share of any consideration
to be paid to the shareholders generally in connection with the Change of
Control; and
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(d) all of the stock appreciation rights (vested and unvested) granted by
SPSS prior to the Change of Control Effective Date (i) shall accelerate, shall
be deemed to be exercised in full upon the Change of Control Effective Date and
the value thereof shall be exchanged for SPSS stock at the market value of such
stock immediately prior to the Change of Control Effective Date and (ii) if
applicable, with regard to the underlying stock, shall be exchanged, on the
Change of Control Effective Date, for a proportionate share of any consideration
to be paid to the shareholders generally in connection with the Change of
Control.
If any of the payments set forth above would be subject to section 409A of
the Internal Revenue Code of 1986, as amended (the "Code"), payments on the
Change of Control Effective Date shall be permitted only if the Change of
Control is a change in control event as defined in section 409A and applicable
regulations issued thereunder and only if payments would be permitted to the
Employee as a result of the change in control event as a service provider to the
relevant corporation undergoing the applicable change in control event. If
payments would not be permitted under the foregoing provisions, all vesting
provisions and accelerated transfer provisions shall continue to apply but any
payments will not be accelerated and shall instead be made as of the original
payment date as determined under the applicable award.
3. Termination in Connection with a Change of Control. If, upon the Change
of Control Effective Date or within twenty four (24) months after the Change of
Control Effective Date, SPSS or the Surviving Entity terminates the Employee's
employment without Good Cause or a Constructive Termination occurs, the Employee
shall be entitled to the following severance package (the "Severance Package"):
(a) a lump sum payment, to be paid by the Surviving Entity within thirty
(30) days following the date on which the Employee's employment is terminated,
equal to the sum of:
(i) the greater of (A) the Employee's base salary from SPSS in the
full fiscal year immediately preceding the year in which the Change of
Control Effective Date occurred or (B) the base salary to be received by
the Employee for the then-current fiscal year, as approved by the Board,
SPSS or the Surviving Entity, as the case may be; and
(ii) the product of (A) four (4) multiplied by (B) the quotient of (I)
the aggregate incentive cash payments that the Employee received for the
eight (8) full fiscal quarters ending immediately prior to the Employee's
termination date, divided by (II) eight (8);
(b) for a period of eighteen (18) months following the date on which the
Employee's employment was terminated, at the cost of the Surviving Entity, the
same health and welfare benefits that the Employee was receiving at the time the
Employee's employment was terminated; and
(c) professional outplacement services, but not to exceed a term of twelve
(12) months, at a level customary for an executive, to be provided by a firm
mutually acceptable to SPSS and the Employee.
Benefits provided pursuant to Section 3(b) shall be considered part of, and
not in addition to, any benefits required to be provided to the Employee
pursuant to COBRA. For purposes of
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calculating the payment to be made to the Employee pursuant to Section 3(a)(ii),
the aggregate incentive cash payments for the eight (8) full fiscal quarters
ending immediately prior to the Employee's termination date shall be calculated
by taking into account the incentive cash award that would have been awarded to
the Employee for the full fiscal quarter ending immediately prior to the
Employee's termination date had the Employee's termination date not occurred
prior to the date on which incentive cash awards were awarded to executives for
that fiscal quarter.
4. Non-Competition
(a) The Employee hereby covenants and agrees that, for a period of eighteen
(18) months following the Employee's termination of employment under
circumstances which entitle the Employee to the Severance Package provided in
Section 3 above, the Employee shall not (i) directly or indirectly (whether
through a partnership of which the Employee is a partner or through any other
individual or entity in which the Employee has any interest, legal or
equitable), engage in any business competitive with the business of the
Surviving Entity, (ii) directly or indirectly (whether through a partnership of
which the Employee is a partner or through any other individual or entity in
which the Employee has any interest, legal or equitable), solicit or otherwise
engage with any customers or clients of the Surviving Entity, in any
transactions which are competitors with the software business of the Surviving
Entity which the Surviving Entity did engage in with those customers or clients,
or (iii) directly or indirectly (whether through a partnership of which the
Employee is a partner or through any other individual or entity in which the
Employee has an interest, legal or equitable), assist any person in the
development, programming, servicing, maintenance, manufacture, sale, licensing,
distribution or marketing (including, without limitation, giving away software)
of software and related products in competition with the Surviving Entity's
products, in each case in the United States of America or any country where the
Surviving Entity, or its subsidiaries or affiliates, are doing business with
respect to the Surviving Entity's products and services, in each case excluding
passive investment interests of less than two percent (2%) in corporations whose
stock is registered under the Exchange Act.
(b) The Employee understands that a breach by him of this Section 4 may
cause substantial injury to the Surviving Entity, which may be irreparable
and/or in amounts difficult or impossible to ascertain, and that in the event
the Employee breaches this Section 4, the Surviving Entity shall have, in
addition to all other remedies available in the event of a breach of this
Agreement, the right to injunctive or other equitable relief. Further, the
Employee acknowledges and agrees that the restrictions and commitments set forth
in this Agreement are necessary to protect the Surviving Entity's legitimate
interests and are reasonable in scope, area and time, and that if, despite this
acknowledgement and agreement, at the time of the enforcement of any provision
of this Agreement a court of competent jurisdiction shall hold that the period
or scope of such provision is unreasonable under the circumstances then
existing, the maximum reasonable period or scope under such circumstances shall
be substituted for the period or scope stated in such provision.
(c) Should the Employee breach this Section 4, any severance payments which
have not yet been paid or have not yet otherwise been provided to the Employee
shall not be paid or provided, and the Surviving Entity shall be entitled to
pursue all other available legal or equitable remedies.
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5. 409A Compliance. Notwithstanding any other provision of this Agreement
to the contrary, if any payment hereunder is subject to section 409A and if such
payment is to be paid on account of the Employee's separation from service
(within the meaning of section 409A of the Code) and if the Employee is a
specified employee (within the meaning of section 409A(a)(2)(B) of the Code),
such payment shall be delayed until the first day of the seventh month following
the Employee's separation from service. To the extent that any payments or
benefits under this Agreement are subject to section 409A of the Code and are
paid or provided on account of the termination of the Employee's employment, the
determination as to whether the Employee has had a termination of employment
shall be made in accordance with section 409A and the guidance issued
thereunder.
6. Prior Agreements. SPSS and the Employee hereby agree that the terms of
this Agreement shall supersede and replace the terms of any prior change of
control agreement(s) or arrangement(s) between SPSS and the Employee and, upon
execution of this Agreement, the terms of such prior change of control
agreement(s) or arrangement(s) shall no longer be in effect.
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IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first written above.
SPSS INC.
By:
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Name: Xxxx Xxxxxx
Its: President and Chief Executive
Officer
EMPLOYEE
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[Employee]
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