exv10w7






Exhibit 10.7




SPS COMMERCE, INC.




Incentive Stock Option Agreement 

Under the 2010 Equity Incentive Plan



     SPS Commerce, Inc. (the “Company”), pursuant to its 2010 Equity Incentive Plan (the
“Plan”), hereby grants an Option to purchase shares of the Company’s common stock to you, the
Optionee named below. The terms and conditions of the Option Award are set forth in this
Agreement, consisting of this cover page and the Option Terms and Conditions on the following
pages, and in the Plan document which is attached.



	 	 	 
	Name of Optionee:
	 	 
	 
	 	 
	No. of Shares Covered:

	 	Date of Grant:      , 20
	 
	 	 
	Exercise Price Per Share: $

	 	Expiration Date:      , 20
	 
	 	 
	Vesting and Exercise Schedule:
	 	 
	 
	 	 
	Dates

	 	Portion of Covered Shares as to Which 

Option Becomes Vested and Exercisable






     By signing below, you agree to all of the terms and conditions contained in this Agreement and
in the Plan document, a copy of which is attached. You acknowledge that you have reviewed these
documents and that they set forth the entire agreement between you and the Company regarding your
right to purchase shares of the Company’s common stock pursuant to this Option.



	 	 	 	 	 	 
	OPTIONEE:  	 	SPS COMMERCE, INC.
 	 
	 	 	 	 	 
	 	 	By:  	




 	 
	 	 	 	Title:	 	 
	 	 	 	 	 
	 



			
	 	 	 
	Incentive Stock Option Agreement (2010 Equity Incentive Plan)
	 	Page 1






 









 







SPS Commerce, Inc.

2010 Equity Incentive Plan

Incentive Stock Option Agreement




Option Terms and Conditions*




	1.	 	Incentive Stock Option. This Option is intended to be an “incentive stock option”
within the meaning of Section 422 of the Internal Revenue Code (the “Code”) and will be
interpreted accordingly. To the extent that, for any reason, the Option does not qualify as
an incentive stock option under Code Section 422, the Option will be treated as a
non-statutory stock option, subject to the tax consequences applicable to such options.






	2.	 	Vesting and Exercise Schedule. This Option will vest and become exercisable as to
the number of Shares and on the dates specified in the Vesting and Exercise Schedule on the
cover page to this Agreement, so long as your Service to the Company does not end. The
Vesting and Exercise Schedule is cumulative, meaning that to the extent the Option has not
already been exercised and has not expired, terminated or been cancelled, you or the person
otherwise entitled to exercise the Option as provided in this Agreement may at any time
purchase all or any portion of the Shares that may then be purchased under that Schedule.






	 	 	**[Notwithstanding the foregoing, if and to the extent this Option is continued, assumed or
replaced in connection with a Change in Control that constitutes a Corporate Transaction,
and if within one year after the Corporate Transaction you experience an involuntary
termination of Service for reasons other than Cause, then this Option shall immediately
become exercisable in full and shall remain exercisable for one year following your
termination of Service.]






	 	 	In addition, vesting and exercisability of this Option may be accelerated during the term of
the Option under the circumstances described in Section 12(c) of the Plan, and at the
discretion of the Committee in accordance with Section 3(b)(2) of the Plan.






	3.	 	Expiration. This Option will expire and will no longer be exercisable at 5:00 p.m.
Central Time on the earliest of:






	 	(a)	 	The expiration date specified on the cover page of this Agreement;
	 
	 	(b)	 	Upon your termination of Service for Cause;
	 
	 	(c)	 	Upon the expiration of any applicable period specified in Section 6(e) of the
Plan or Section 2 of this Agreement during which this Option may be exercised after
your termination of Service; or
	 
	 	(d)	 	The date (if any) fixed for termination or surrender of this Option pursuant to
Sections 12(b)(3), (c) or (d) of the Plan.






	4.	 	Service Requirement. Except as otherwise provided in Section 6(e) of the Plan or
Section 2 of this Agreement, this Option may be exercised only while you continue to provide
Service to the Company or any Affiliate, and only if you have continuously provided such
Service since the date this Option was granted.







 




			
	*	 	Unless the context indicates otherwise, terms
that are not defined in this Agreement shall have the meaning set forth in the
Plan as it currently exists or as it is amended in the future.





			
	 	 	 
	Incentive Stock Option Agreement (2010 Equity Incentive Plan)
	 	Page 2






 









 







	5.	 	Exercise of Option. Subject to Section 4, the vested and exercisable portion of this
Option may be exercised at any time during the Option term by delivering a written notice of
exercise to the Company at its principal executive office, and by providing for payment of the
exercise price of the Shares being acquired and any related withholding taxes. The notice of
exercise, in the form attached to this Agreement, shall be provided to the Company’s Chief
Financial Officer. The notice shall state the number of Shares to be purchased, and shall be
signed by the person exercising the Option. If you are not the person exercising the Option,
the person submitting the notice also must submit appropriate proof of his/her right to
exercise the Option.






	6.	 	Payment of Exercise Price. When you submit your notice of exercise, you must include
payment of the exercise price of the Shares being purchased through one or a combination of
the following methods:






	 	(a)	 	Cash (including personal check, cashier’s check or money order);
	 
	 	(b)	 	To the extent permitted by the Committee, by means of a broker-assisted
cashless exercise in which you irrevocably instruct your broker to deliver proceeds of
a sale of all or a portion of the Shares to be issued pursuant to the exercise to the
Company in payment of the exercise price of such Shares; or
	 
	 	(c)	 	By delivery to the Company of Shares (by actual delivery or attestation of
ownership in a form approved by the Company) already owned by you that are not subject
to any security interest and that have an aggregate Fair Market Value on the date of
exercise equal to the exercise price of the Shares being purchased.






	 	 	However, if the Committee determines, in any given circumstance, that payment of the
exercise price with Shares is undesirable for any reason, you will not be permitted to pay
any portion of the exercise price in that manner.






	7.	 	Tax Consequences. You hereby acknowledge that if any Shares received pursuant to the
exercise of any portion of this Option are sold within two years from the Date of Grant or
within one year from the effective date of exercise of this Option, or if certain other
requirements of the Code are not satisfied, such Shares will be deemed under the Code not to
have been acquired by you pursuant to an “incentive stock option” as defined in the Code. You
agree to promptly agree to notify the Company if you sell any Shares received upon the
exercise of this Option within the time periods specified in the previous sentence. The
Company shall not be liable to you if this Option for any reason is deemed not to be an
“incentive stock option” within the meaning of the Code.






	8.	 	Delivery of Shares. As soon as practicable after the Company receives the notice and
exercise price provided for above, and has determined that all conditions to exercise,
including Sections 7 and 9 of this Agreement, have been satisfied, it shall deliver to the
person exercising the Option, in the name of such person, the Shares being purchased, as
evidenced by issuance of a stock certificate or certificates, electronic delivery of such
Shares to a brokerage account designated by such person, or book-entry registration of such
Shares with the Company’s transfer agent. The Company shall pay any original issue or
transfer taxes with respect to the issue or transfer of the Shares and all fees and expenses
incurred by it in connection therewith. All Shares so issued shall be fully paid and
nonassessable.






	9.	 	Compliance with Laws. This Option may be exercised only if the issuance of Shares
upon such exercise complies with all applicable legal requirements, including compliance with
the provisions of applicable federal and state securities laws.





			
	 	 	 
	Incentive Stock Option Agreement (2010 Equity Incentive Plan)
	 	Page 3






 









 







	10.	 	Transfer of Option. During your lifetime, only you (or your guardian or legal
representative in the event of legal incapacity) may exercise this Option. You may not assign
or transfer this Option except for a transfer upon your death in accordance with your will, by
the laws of descent and distribution or pursuant to a beneficiary designation submitted in
accordance with Section 6(d) of the Plan. The Option held by any such transferee will
continue to be subject to the same terms and conditions that were applicable to the Option
immediately prior to its transfer and may be exercised by such transferee as and to the extent
that the Option has become exercisable and has not terminated in accordance with the
provisions of the Plan and this Agreement.






	11.	 	No Stockholder Rights Before Exercise. Neither you nor any permitted transferee of
this Option will have any of the rights of a stockholder of the Company with respect to any
Shares subject to this Option until a certificate evidencing such Shares has been issued,
electronic delivery of such Shares has been made to your designated brokerage account, or an
appropriate book entry in the Company’s stock register has been made. No adjustments shall be
made for dividends or other rights if the applicable record date occurs before your stock
certificate has been issued, electronic delivery of your Shares has been made to your
designated brokerage account, or an appropriate book entry in the Company’s stock register has
been made, except as otherwise described in the Plan.






	12.	 	Governing Plan Document. This Agreement and Option are subject to all the provisions
of the Plan, and to all interpretations, rules and regulations which may, from time to time,
be adopted and promulgated by the Committee pursuant to the Plan. If there is any conflict
between the provisions of this Agreement and the Plan, the provisions of the Plan will govern.






	13.	 	Choice of Law. This Agreement will be interpreted and enforced under the laws of the
state of Delaware (without regard to its conflicts or choice of law principles).






	14.	 	Binding Effect. This Agreement will be binding in all respects on your heirs,
representatives, successors and assigns , and on the successors and assigns of the Company.






	15.	 	Other Agreements. You agree that in connection with the exercise of this Option, you
will execute such documents as may be necessary to become a party to any stockholder, voting
or similar agreements as the Company may require.






	16.	 	Restrictive Legends. The Company may place a legend or legends on any certificate
representing Shares issued upon the exercise of this Option summarizing transfer and other
restrictions to which the Shares may be subject under applicable securities laws, other
provisions of this Agreement, or other agreements contemplated by Section 15 of this
Agreement. You agree that in order to ensure compliance with the restrictions referred to in
this Agreement, the Company may issue appropriate “stop transfer” instructions to its transfer
agent.





By signing the cover page of this Agreement, you agree to all the terms and conditions described
above and in the Plan document.




			
	 	 	 
	Incentive Stock Option Agreement (2010 Equity Incentive Plan)
	 	Page 4






 









 






NOTICE OF EXERCISE

Incentive Stock Option




                                        , 20___



SPS Commerce, Inc.

333 South Seventh Street, Suite 1000

Minneapolis, Minnesota 55402

Attention: Chief Financial Officer




Ladies and Gentlemen:



I hereby exercise the following option (the “Option”) granted to me under the SPS Commerce, Inc.
2010 Equity Incentive Plan (as amended from time to time, the “Plan”) with respect to the number of
shares of common stock of SPS Commerce, Inc. (the “Company”) indicated below:




	 	 	 
	 

	Name:  	 
	 

	 	 
	 
	 	 
	 

	Date of Grant of Option:  	 
	 

	 	 
	 
	 	 
	 

	Exercise Price Per Share:  	 
	 

	 	 
	 
	 	 
	 

	Number of Shares With Respect to Which

the Option is Hereby Exercised:  	 
	 

	 	 
	 
	 	 
	 

	Total Exercise Price:  	 
	 

	 	 






	 	o 	 	 Enclosed with this Notice is a check, cashier’s check or money order in the amount
of the Total Exercise Price.
	 
	 	o 	 	 Enclosed with this Notice is a copy of my irrevocable instruction to my broker,
                                                            , to deliver to the Company proceeds of the sale of some or all
of the Shares being acquired in an amount equal to the Total Exercise Price.
	 
	 	o 	 	 Enclosed with this Notice is a certificate evidencing unencumbered Shares (duly
endorsed in blank) having an aggregate Fair Market Value (as defined in the Plan) equal
to or in excess of the Total Exercise Price or an affidavit of ownership (in the form
of Exhibit A attached hereto) attesting to my ownership of unencumbered Shares having
an aggregate Fair Market Value (as defined in the Plan) equal to or in excess of the
Total Exercise Price.






 











 




In connection with this exercise, I represent, warrant and acknowledge that I am the owner of all
Shares delivered with this Notice or attested to on the attached affidavit of ownership, free and
clear of all liens, security interests and other restrictions or encumbrances.



Please issue the number of Shares with respect to which the Option is being exercised in the manner
indicated below:




	 	 	 
	o

	 	Issue a certificate (the “Certificate”) for the Shares in the name of the
person(s) indicated below and deliver the Certificate to the address indicated:






	 	 	 	 	 
	 

	 	Name(s) in Which to Issue Certificate:
	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Address to Which Certificate
	 	 
	 

	 	 	 	 
	 

	 	Should be Delivered:
	 	 
	 

	 	 	 	 
	 

	 	 	 	 
	 

	 	 	 	 
	 

	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Principal Mailing Address for
	 	 
	 

	 	 	 	 
	 

	 	Holder of the Certificate (if
	 	 
	 

	 	 	 	 
	 

	 	different from above):
	 	 
	 

	 	 	 	 
	 

	 	 	 	 
	 

	 	 	 	 





	 	 	 
	o

	 	Electronic delivery of the Shares to my brokerage account as indicated below:






	 	 	 	 	 
	 

	 	Name of Brokerage Firm:
	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	My Account Number:
	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Brokerage Firm DWAC Participant Number:
	 	 
	 

	 	 	 	 






	 	 	 
	o

	 	Create a book-entry registration of the Shares in the name of the person(s)
indicated below:






	 	 	 	 	 
	 

	 	Name(s) in Which to Create Book-Entry
Registration:
	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Mailing Address for Book-Entry Holders:
	 	 
	 

	 	 	 	 
	 

	 	 	 	 
	 

	 	 	 	 
	 

	 	 	 	 
	 

	 	 	 	 
	 

	 	 	 	 
	 

	 	 	 	 
















 









	 	 	 	 	 
	 	Very truly yours,
	 
	 	 	 	 	 
	 
	 	Signature 
	 
	 	 	 	 	 
	 
	 	Name, please print 
	 
	 	 	 	 	 
	 
	 	Social Security Number 
	 














 







	 	 	 	 	 



Exhibit A




Affidavit of Ownership of

SPS Commerce, Inc. Common Stock



Pursuant to the Notice of Exercise that I have submitted to SPS Commerce, Inc. (the “Company”), I
am electing to pay the Total Exercise Price for the option shares by attesting to ownership of the
shares listed below and hereby tender for accounting purposes such shares in payment thereof. I
hereby certify that:





	1.	 	I beneficially own                      shares of Company common stock (the “Swap Shares”) as of the
date hereof. These Swap Shares are:






	 	o	 	 Held in my name individually and a photocopy of the stock certificate
evidencing my ownership is attached.
	 
	 	o	 	Held in my name and                                          as joint tenants and a photocopy
of the stock certificate evidencing ownership is attached.
	 
	 	o	 	 Held in a brokerage account in the name of                                         . A
photocopy of a brokerage statement of account, dated within the preceding two months
and showing evidence of ownership of Company stock, is attached. (The option holder may
block out information not relevant to Company stock ownership on the account
statement.)






	2.	 	The Swap Shares are held by me as described above and are not held for my benefit by a
Trustee or custodian in the SPS Commerce, Inc. 401(k) Retirement Savings Plan, in an IRA
account or in any other type of employee benefit or tax deferral plan.





	 	 	 	 
	 

	 
	 	 
	 
	 	 	 
	 

	     Date
	 	Signature