Document:

exv10w20

Exhibit 10.20

SPS COMMERCE, INC.

EMPLOYMENT, NONCOMPETITION AND NONDISCLOSURE AGREEMENT

     This Amended and Restated Employment, Noncompetition, and Nondisclosure Agreement (the
“Agreement”), dated as of October 31, 2008 (the “Effective Date”), is entered into by and between
SPS Commerce, Inc., a Delaware corporation, and any successor company or corporation thereto (the
“Company”), and Archie C. Black, a Minnesota resident (the “Employee”).

WITNESSETH

     WHEREAS, the Employee has certain skills, experience, and abilities that are critical to the
success of the Company’s operations and future profitability;

     WHEREAS, the Employee and the Company previously entered into that certain Employment,
Noncompetition and Nondisclosure Agreement dated January 1, 2002, the “Prior Agreement”);

     WHEREAS, the Company desires to continue to employ and retain the services of the Employee,
and the Employee desires to continue to work for and be employed by the Company;

     WHEREAS, the Company and the Employee desire to set forth the terms and conditions pursuant to
which the Employee will continue to be employed by the Company; and

     WHEREAS, Employer and Employee agree that it is in their mutual best interest to amend,
modify, and restate the Prior Agreement to comply with the requirements of Section 409A of the
Internal Revenue Code of 1986, as amended (the “Code”), so as to avoid additional taxes and
penalties under Code Section 409A(a)(1).

     NOW, THEREFORE, in consideration of the foregoing premises and of the mutual covenants and
undertakings contained herein, and for such other good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, the parties to this Agreement hereby agree as
follows:

ARTICLE I — DUTIES AND COMPENSATION

     1.01 (A) Initial Term of Employment and Duties. The Company and the Employee hereby
agree that for the period commencing on the Effective Date and continuing until December 31, 2009
(the “Initial Term”), at which point the period will automatically be extended for additional
one-year terms (each an “Additional Term” and together with the Initial Term, the “Term”) unless
and until terminated by either party pursuant to Article II, the Company shall employ the Employee
and the Employee shall perform services for the Company as its Chief Executive Officer under the
terms and conditions set forth herein. In such capacity, the Employee shall be entitled to
exercise all rights and powers and shall have all the privileges and
authorities commensurate with his office, as established by the Board of Directors of the Company
(the “Board”).

 

 

          (B) Compensation. During the first period of this Agreement beginning with the
Effective Date through December 31, 2008, the Employee’s annual gross base salary shall be
$270,000, payable in bi-monthly installments (prorated for any portion of a year), in accordance
with the regular payroll policies and practices of the Company. Employee’s annual gross base
salary for services rendered during the second year of this Agreement (i.e. January 1, 2009 through
December 31, 2009) will be reviewed in January 2009, as part of Employee’s annual performance
review and shall be increased or maintained, but not decreased, as the Compensation Committee of
the Board (the “Compensation Committee”), in its sole discretion, shall determine. In the event
this Agreement is extended beyond December 2009, Employee’s annual gross base salary will be
reviewed in January each year, as part of Employee’s annual performance review (each such annual
performance review, a “Review”) and shall be increased or maintained, but not decreased, as the
Compensation Committee, in its sole discretion, shall determine.

          (C) Discretionary Bonuses. During the period the Employee is employed by the Company
(the “Employment Period”), the Employee shall be eligible for annual bonuses as the Compensation
Committee, in its sole discretion, shall determine.

          (D) Expenses. During the Employment Period, the Employee shall be entitled to receive
reimbursement, in accordance with the Company’s usual and customary practices, for all reasonable
and necessary out-of-pocket business expenses incurred by Employee in performing services
hereunder, including all expenses of travel and living expenses while away from home on Company
business or at the request and in the service of the Company, provided that such expenses are
incurred and accounted for in accordance with the policies and procedures established by the
Company.

          (E) Insurance. During the Employment Period, the Employee and his dependents shall be
entitled to participate in hospitalization/medical insurance coverage maintained by the Company for
its employees in accordance with the terms of that coverage, as to scope and eligibility of
participants.

          (F) Other Benefits; Options.

               (i) Employee Benefits. The Employee shall be entitled to participate in, or receive
benefits under, any employee benefit plan or arrangement generally made available by the Company to
its Employees and key management employees on the date hereof or, upon approval of the Compensation
Committee, in the future, subject to and on a basis consistent with the terms, conditions and
overall administration of such plans and arrangements. Unless the Employee hereafter agrees,
nothing paid to the Employee under any such plan or arrangement shall be deemed to be in lieu of
the salary payable to the Employee pursuant to paragraph (B) of this Section (except as to any
deferred compensation plan in which the Employee elects to participate, which shall be in lieu of
the salary payable to the Employee to the extent of the amount deferred).

               (ii) Options. Prior to the Effective Date, Employee has been granted options to
acquire shares of the capital stock of the Company. All such options, as well as any

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such options granted in the future, shall be governed by the terms set forth in the respective option agreements
related to such grants.

               (iii) Vacation. Employee shall be entitled to 4 weeks paid vacation each year.

ARTICLE II — RIGHTS ON TERMINATION OF EMPLOYMENT

     2.01 Termination. The Employee’s employment hereunder may be terminated only under
the following circumstances:

          (A) Death. The Employee’s employment hereunder shall terminate upon his death.

          (B) Permanent Disability. If the Employee, due to a Permanent Disability (as
hereinafter defined) is, for a period of 180 consecutive days, unable to perform his work-related
duties and obligations to the Company, the Company may terminate the Employee’s employment
hereunder within 10 days after written notice of termination is given to the Employee by the
Company. A disability shall be a “Permanent Disability” if it is so characterized under applicable
employee benefit plans of the Company in effect at that time. If no plan defining “Permanent
Disability” is in effect and the Company and the Employee are unable to agree as to whether the
Employee has suffered a Permanent Disability, the question of Permanent Disability shall be
submitted to a physician expert in the complaint, disease or injury from which the Employee suffers
and in disability matters generally appointed by the Board, and his or her decision shall be final
and binding. Upon termination under this subparagraph, the Employee shall receive payment for any
unused vacation time remaining for the year in which said termination occurred, which shall be paid
to the Employee at his per diem salary rate then in effect.

          (C) Cause. The Company may terminate Employee’s employment hereunder for Cause (as
hereinafter defined). For purposes of this Agreement, the Company shall have “Cause” to terminate
the Employee’s employment hereunder upon (i) conviction of Employee for commission of any felony;
(ii) dishonesty or gross misconduct by Employee in the performance of his duties under this
Agreement or action by him in the course of the performance of his duties hereunder with intent to
cause or that results in substantial harm to Company; or (iii) material breach by Employee of his
duties, responsibilities or agreements hereunder (other than by reason of Permanent Disability),
which breach is not cured as promptly as practicable but in any event within 30 days after written
notice thereof containing the specifics of such material breach from the Board to Employee;
provided, however, that the Employee shall not be permitted to cure any such breach if it is the
second breach.

          (D) Without Cause. The Company may terminate the Employment Period and Employee’s
employment hereunder without Cause by notice to Employee.

          (E) Termination by Employee. The Employee may terminate his employment hereunder for
Good Reason (as hereinafter defined). For purposes of this Agreement, “Good
Reason” shall mean (i) a Change in Control (as hereinafter defined) of the Company, (ii) a failure
by the Company to comply with any material provision of this Agreement which has not

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been cured within 30 days after written notice of such noncompliance has been given by the Employee to the
Board, or (iii) Employee providing the Board with written notice of intent to terminate within 10
days of a Review. For purposes of this Agreement, a “Change in Control” shall mean: (aa) the Board
fails to appoint the Employee as its Chief Executive Officer, (bb) the Board removes the Employee
as its Chief Executive Officer, (cc) the Board fails to vest the Employee with the powers and
authority of the Chief Executive Officer, or (dd) the occurrence of any transaction or event
(including, without limitation, any sale, transfer, or issuance or related series of sales,
transfers, and/or issuances of shares of capital stock by the Company or any holder thereof) which
results in the holders of the Company’s outstanding capital stock immediately prior to such
transaction or event (or series of such transactions or events) ceasing to hold shares of capital
stock of the Company possessing the voting power (under normal circumstances) to elect a majority
of the Board or otherwise control the Company following such transaction or event.

          (F) Notice of Termination. Any termination of the Employee’s employment by the
Company or by the Employee other than termination pursuant to subsection (A) above shall be
communicated by written notice of termination to the other party hereto. A notice of termination
tendered by the Employee pursuant to subsection (E) above shall be delivered to the Board not less
than 45 days prior to the Date of Termination.

          (G) Date of Termination. “Date of Termination” shall mean (i) if the Employee’s
employment is terminated by his death, the date of his death, (ii) if the Employee’s employment is
terminated pursuant to subsection (B) above, 10 days after Notice of Termination is given, (iii) if
the Employee’s employment is terminated pursuant to subsection (C) or (D) above, the date specified
in the notice of termination, and (iv) if the Employee’s employment is terminated pursuant to
subsection (E) above, the date stated in the notice of termination provided under subsection (F)
above, which date shall be at least 45 days following the date on which such notice of termination
is given to the Board. For purposes of Article III of this Agreement only, with respect to the
timing of payments thereunder, Date of Termination shall mean the date on which a “separation from
service” has occurred for purposes of Section 409A of the Code and the regulations and guidance
thereunder.

ARTICLE III — COMPENSATION UPON TERMINATION OR DURING DISABILITY

     3.01 Termination or Disability.

          (A) During any period that the Employee fails to perform his duties hereunder as a result of
incapacity due to the impairment of his physical and/or mental condition (“Disability Period”),
Employee shall continue to receive his full salary at the rate then in effect for such period,
until his employment is terminated.

          (B) If the Employee’s employment is terminated by his death, the Company shall pay to the
Employee’s spouse, or if he leaves no spouse, his estate or such other
beneficiaries as he shall designate any amount due and owing to the Employee through the date of
his death.

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          (C) If the Employee’s employment shall be terminated for Cause, the Company shall pay the
Employee his full salary through the Date of Termination at the rate in effect at the time notice
of termination is given and the Company shall have no further obligations to the Employee under
this Agreement; provided, however, that if the termination is attributable to dishonesty, fraud,
embezzlement or other defalcation, the Company may exercise such legal rights as it may have to set
off any damages or losses it has suffered as a result of the Employee’s conduct against the amount
owed to the Employee and pursue any other legal remedies available to the Company.

          (D) If (i) the Company shall terminate the Employee’s employment without Cause or (ii) the
Employee shall terminate his employment for Good Reason, then, subject to the conditions set forth
in Section 3.01 (G):

     (a) the Company shall pay the Employee his base salary for a period of time
equal to 12 months (payable in bi-monthly installments commencing on the first
regular payroll date of the Company to occur following the Date of Termination) and
any unused vacation accrued as of the Date of Termination, in accordance with the
provisions of Sections 1.01(B) and (F), provided, however, that if the Company
determines Employee is a “specified employee” as of the Termination Date (within the
meaning of Code § 409A(a)(2)(B)(i) and determined in accordance with Treas. Reg. §
1.409A-1(i) and the Company’s specified employee identification policy, if any, in
effect on the Date of Termination), the bi-monthly installments of base salary shall
commence on the first regular payroll date of the Company to occur following the
date that is six (6) months after the Date of Termination; and

     (b) the Company shall also provide health care benefits to Employee and his
family, on the same terms as they were provided on the Date of Termination,
commencing on the Date of Termination and continuing for 12 months thereafter.

          (E) Except as provided in Section 3.01(F), if the Employee shall terminate his employment for
any reason other than Good Reason, the Company shall pay the Employee his full salary through the
Date of Termination at the rate in effect at the time notice of termination is given and the
Company shall have no further obligations to the Employee under this Agreement.

          (F) If the Employee’s employment is terminated due to Permanent Disability, the Company shall
maintain in full force and effect, for the continued benefit of the Employee and on the same terms,
all employee health benefit plans in which the Employee was entitled to participate immediately
prior to the Date of Termination, provided that the Employee’s continued participation is possible
under the general terms of such plans and programs, commencing on the Date of Termination and
continuing for 12 months thereafter.

          (G) The Employee shall not be required to mitigate the amount of any payment provided for in
this Article III by seeking other employment or otherwise, nor shall any compensation from any
other such employment reduce any amounts payable hereunder, except

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that the continued health care coverage provided under subsection 3.01(D)(b) and Section 3.01(F) shall end on the date Employee
(and his covered dependents) is provided comparable coverage by a subsequent employer or the date
Employee would no longer otherwise be entitled to continuation of coverage under Code Section 4980B
(COBRA), if such date occurs prior to expiration of the 12-month period. Employee and the Company
intend the continued health care coverage provided by subsection 3.01(D)(b) and Section 3.01(F) to
be excluded from deferred compensation as a reimbursement of medical benefits under Treas. Reg. §
1.409A-1(b)(9)(v).

ARTICLE IV — COMPETITIVE PROTECTIONS/CONFIDENTIALITY

     4.01 Confidentiality; Nondisclosure; Competitive Disparagement. Other than is
required in discharging his obligations under this Agreement in the ordinary course of business,
the Employee hereby agrees that he will not, either during the term of this Agreement or at any
time following the termination hereof for any reason, do or cause to have done any of the
following: (i) use for his own purposes or disclose to any person, other than pursuant to a final
judicial order, any Confidential Information (as hereinafter defined) of the Company; or (ii)
disparage the Company, any officer or employee of the Company, or any business practice employed by
the company or any officer or employee thereof. For purposes of this Agreement, “Confidential
Information” shall mean all information relating to or arising out of the business of the Company
or any of its affiliates, including without limitation, inventions, trademarks, designs,
copyrightable works, source codes, all sales and marketing information, customer lists and data,
personnel records, pricing information, financial information, and all other information that would
be considered a trade secret under the Trade Secret Act by or furnished, disclosed, or
disseminated, to the Company, or any of its affiliates or obtained, assembled, or complied by it,
and all physical embodiments of the foregoing, all of which are hereby agreed to be confidential,
but the Employee shall not be required to treat as Confidential Information any of the foregoing to
the extent such information is or becomes publicly known through no fault or breach of this
Agreement or other by the Employee. Employee acknowledges that all Confidential Information is the
exclusive property of the Company. Employee agrees that, upon the termination of this Agreement
for any reason, Employee will not disclose, take with him or retain, without express, written
consent of an officer of the Company other than Employee, any Confidential Information in original
or reproduced form, belonging to the Company or otherwise pertaining to the business or financial
condition of the Company.

     4.02 Invention by Employee. All ideas, inventions, trademarks, designs, copyrightable
work and other developments or improvements conceived by Employee, alone or with others, during the
term of his employment, whether or not during working hours, that are within the scope of the
Company’s business operations or that relate to any Company work or projects, are the exclusive
property of the Company. Employee agrees to assist the Company, at its expense, to obtain patents
or to apply for registration of copyrights or trademarks on any such patentable ideas, inventions,
trademarks, designs, copyrightable works and other developments, and agrees to execute all
documents necessary to obtain such patents or to apply for such registrations in the name of the
Company. Any and all patentable or copyrightable material, or other intellectual
property, developed by Employee as described in the preceding paragraph, shall be considered work
for hire and shall be solely the property of the Company.

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     4.03 Reasonableness of Covenants. The Employee hereby agrees that the covenants and
restrictions of this Article IV are reasonable in their terms and do not impose any undue hardship
on the Employee’s current or future employment prospects. The Employee further agrees that if the
laws of the State of Minnesota applicable to the provisions set forth in this Article IV should
change, or if any court of competent jurisdiction should hold any term or provision of this Article
IV invalid or unenforceable, then the Employee agrees that there shall be substituted in the place
of such changed, invalid, or unenforceable term or provision a new term or provision that most
nearly fulfills or promotes the purpose and intention of this Article IV and is consistent with
such law or judicial decision.

ARTICLE V — MISCELLANEOUS

     5.01 Further Assurances. Each party hereto agrees to perform any further acts and to
execute and deliver any further documents that may be reasonably necessary to carry out the
provisions of this Agreement.

     5.02 Severability. In the event that any of the provisions, or portions thereof, of
this Agreement are held to be unenforceable or invalid by any court of competent jurisdiction, the
validity and enforceability of the remaining provisions, or portions thereof, shall not be affected
thereby.

     5.03 Construction. Whenever used herein, the singular number shall include the
plural, and the plural number shall include the singular.

     5.04 Gender. Any references herein to the masculine gender, or to the masculine form
of any noun, adjective, or possessive, shall be construed to include the feminine or neuter gender
and form, vice versa.

     5.05 Headings. The headings contained in this Agreement are for purposes of reference
only and shall not limit or otherwise affect the meaning of any of the provisions contained herein.

     5.06 Facsimile Signature and Counterparts. This Agreement may be executed by
facsimile signature and in multiple counterparts, each of which shall be deemed to be an original
but all of which together shall constitute one and the same instrument.

     5.07 Governing Law and Choice of Forum. This agreement has been executed in and shall
be governed by the laws of the State of Minnesota. The parties hereto submit themselves to the
state courts of Hennepin County, Minnesota for resolution of any dispute hereunder.

     5.08 Legal Remedies; Specific Performance. The parties to this Agreement understand
and agree that it will be impossible to measure in money the damages that may accrue to a party to
this Agreement or to his or its heirs, personal representatives, or assigns by reason of a failure
to perform any of the obligations under this Agreement, and that any such money damages would be an
insufficient remedy for such failure of performance. Therefore, each party hereto
hereby consents to be subject to the remedy of specific performance of any provision of this
Agreement if such party shall have been found to be in violation of such provision by any court of
competent jurisdiction. If any party or his or its heirs, personal representatives, or assigns

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institute any action or proceeding to specifically enforce the provisions of this Agreement, any
person against whom such action or proceeding is brought hereby waives the claim or defense in such
action or proceeding that such party has an adequate remedy at law, and such person shall not urge
in any such action or proceeding a claim or defense that such remedy at law exists.

     5.09 Inurement. Subject to the restrictions against transfer or assignment as herein
contained, the provisions of this Agreement shall inure to the benefit of, and shall be binding on,
the assigns, successors in interest, personal representatives, estates, heirs, and legatees of each
of the parties hereto.

     5.10 Waivers. No waiver of any provision or condition of this Agreement shall be
valid unless executed in writing and signed by the party to be bound thereby, and then only to the
extent specified in such waiver. No waiver of any provision or condition of this Agreement shall
be construed as a waiver of any other provision or condition of this Agreement, and no present
waiver of any provision or condition of this Agreement shall be construed as a future waiver of
such provision or condition. Any waiver by the Company shall not be effective unless signed by an
officer of the Company other then the Employee at the direction of the Board.

     5.11 Amendment. This Agreement may be amended only by the written consent of the
parties hereto. Any amendment shall not be effective unless signed by an officer of the Company
other than the Employee at the direction of the Board.

     5.12 Entire Agreement. This Agreement and any stock option agreement between Employee
and the Company, including without limitation the Amendment to Option Agreements and Covenant
Regarding Future Options between the parties dated January 1, 2002, contain the entire
understanding between the parties hereto concerning the subject matter contained herein. There are
no representations, agreements, arrangements, or understandings, oral or written, between or among
the parties hereto relating to the subject matter of this Agreement that are not fully expressed
herein. Without limiting the foregoing, this Agreement supercedes and replaces the Prior
Agreement.

     5.13 Construction of Agreement. Each party and its counsel have participated fully in
the review and revision of this Agreement. Any rule of construction to the effect that ambiguities
are to be resolved against the drafting party shall not apply in the interpretation of this
Agreement.

     5.14 Execution. Each party to this Agreement hereby represents and warrants to the
other parties hereto that such party has full power and capacity to execute, deliver, and perform
this Agreement, which has been duly executed and delivered by, and which evidences the valid and
binding obligation of, such party enforceable in accordance with its terms subject to applicable
liquidation, conservatorship, bankruptcy, insolvency, reorganization moratorium, or similar laws
affecting the enforcement of creditor’s rights from time to time in effect and to general
principles of equity.

     5.15 Notification. All notification to the Employee shall be by certified mail to:
Archie C. Black, 924 Adeline Lane North, Golden Valley, Minnesota 55422 or to such other address as
the Employee may direct by written notification to the Company. All notification to

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the Company shall be by certified mail to: SPS Commerce, Inc., 333 South Seventh St., Suite 1000, Minneapolis,
MN 55402, Attention: Board of Directors, with copies to each member of the Board (at the address on
the books of the Company) or to such other address as the Board may direct by written notification
to the Employee.

     5.16 No Assignment. The Employee may not assign his rights or delegate his
obligations under this Agreement to any other party.

     5.17 Section 409A. This Agreement is intended to satisfy, or be exempt from, the
requirements of Section 409A(a)(2)(3) and (4) of the Code, including current and future guidance
and regulations interpreting such provisions, and should be interpreted accordingly.

     5.18 Taxes. The Company may withhold from any amounts payable under this Agreement
such federal, state and local income and employment taxes as the Company shall determine are
required to be withheld pursuant to any applicable law or regulation. Employee shall be solely
responsible for the payment of all taxes due and owing with respect to wages, benefits, and other
compensation provided to him hereunder.

     5.19 Survival. The provisions of Articles IV and V shall survive the termination of
this Agreement or the termination of Employee’s employment for any reason.

     IN WITNESS WHEREOF, the parties to this Agreement have set their respective hands hereto as of
the date first written above.

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	SPS COMMERCE, INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	EMPLOYEE	 	 	 	EMPLOYER	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	/s/ Archie C. Black
	 	 	 	By:
	 	/s/ Kimberly K. Nelson	 	 
	 

	 	 

	 	 
	 	 	 	 

	 	 
	 

	 	 	 	 	 	Its:
	 	Chief Financial Officer	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Date: November 4, 2008	 	 	 	Date: November 4, 2008	 	 

9exv10w21

Exhibit 10.21

AT-WILL CONFIDENTIALITY AGREEMENT

REGARDING

CERTAIN TERMS AND CONDITIONS

OF EMPLOYMENT

AT SPS COMMERCE, INC.

     THIS AMENDED AND RESTATED AGREEMENT (the “Agreement”) dated as of      ,
2008 (the “Effective Date”) is made between            ,              ,              ,
MN (hereinafter referred to as “Employee”) and SPS Commerce, Inc., a Delaware corporation,
with offices at 333 South Seventh Street, Suite 1000, Minneapolis, Minnesota 55402 (hereinafter
referred to as “Employer”);

     WHEREAS, Employer is engaged in the business of developing, marketing and distributing
computer software products and services;

     WHEREAS, Employee has knowledge and experience in the above-designated business;

     WHEREAS, Employee and Employer are parties to an At-Will Confidentiality Agreement Regarding
Certain Terms and Conditions of Employment at SPS Commerce, Inc.,
dated
           (the “Prior Agreement”), which the parties desire to amend and restate in its entirety with this
Agreement;

     WHEREAS, Employer and Employee desire to amend, modify, and restate the Prior Agreement to
comply with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended (the
“Code”), and with the intent to exclude amounts payable as severance from deferred compensation
under Code Section 409A(a)(1); and

     WHEREAS, Employee acknowledges the receipt of good and valuable consideration from Employer in
support of the Prior Agreement, and Employee further acknowledges and agrees that such
consideration shall, together with the benefits hereunder, support the restatement of his/her
obligations in this Agreement.

     For the reasons set forth above, and in consideration of the mutual promises and agreements
hereinafter set forth, Employer and Employee agree as follows:

     1. EMPLOYMENT. Employee shall serve as            , subject to
the general supervision and pursuant to the order, advice, and direction of Employer. Employee
shall perform such duties as are customarily performed by one holding such position in other, same,
or similar businesses or enterprises as that engaged in by Employer, and shall also additionally
render such other and unrelated services and duties as may reasonably be assigned to him/her from
time to time by Employer.

     2. BEST EFFORTS OF EMPLOYEE. Employee agrees that he/she will at all times
faithfully, industriously, and to the best of his/her ability, experience and talents, perform all
of the duties that may be required of and from his/her pursuant to the express and implicit terms
hereof, to the reasonable satisfaction of Employer.

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     3. OTHER EMPLOYMENT. Employee shall devote all of his/her time, attention, knowledge,
and skills solely to the business and interest of Employer.

     4. CONFIDENTIALITY AND TRADE SECRETS. Employee will not disclose, use, reveal,
disseminate or transfer any confidential information acquired by Employee to any outside party,
except as directly required in the performance of Employee’s duties for Employer or as required by
law. Confidential information includes, but is not limited to, information regarding Employer’s
products, processes, services, research, development, inventions, computer media, operations,
manufacture, purchasing, accounting, financial data, engineering, sales, marketing, merchandising,
selling, payroll, customer lists, credit classification, record, statistics, contracts and
suppliers which was obtained by Employee while employed by Employer or as a consequence of such
employment with Employer and not generally known. The foregoing is all deemed as confidential
information and/or a trade secret, whether or not such information is clearly marked as
“Confidential” or as a “Trade Secret”, the parties hereto stipulating that as between them the same
are important, material, confidential and constitute trade secrets, and as such gravely affect the
effective and successful conduct of Employer’s business and goodwill. Confidential information
also includes similar information belonging to Employer’s customers which Employee may gain access
to in rendering services to any such customer on behalf of Employer.

     5. DISCLOSURE AND ASSIGNMENT. Employee agrees that all trade secrets, all inventions
and patents, except those excluded from any obligation to assign to Employer as a matter of law by
any applicable state statute existing at the time such invention was made, all works of authorship
(including, but not limited to, illustrations, writing, mask works, software and computer programs,
and other programming documentation) and all other business or technical information created,
prepared or conceived by Employee, either alone or with others, while employed by Employer and
related to the existing or contemplated business or research of Employer, or resulting from
Employee’s work with Employer or from Employee’s knowledge of any proprietary, technical or
business information possessed or owned by Employer under paragraph 4 above, belongs to Employer.
All such works of authorship shall be works made for hire. Until proven otherwise, any invention
shall be presumed to have been conceived during such employment if, within one (1) year after
termination of such employment, it is disclosed to others, completed, or it has a copyright notice
affixed thereto or a patent application filed thereon.

     Employee will promptly disclose to Employer all trade secrets, inventions, works of
authorship, and information which belong to Employer as set forth herein; and Employee will assign
to Employer, or to others as directed by Employer, all of Employee’s interest in such inventions
and works of authorship, and will execute any papers and do any acts which Employer may consider
necessary to secure to it any and all rights relating to such inventions and works of authorship,
including all patents and copyrights (and renewals thereof) in any country.

     Pursuant to Minnesota Statute 181.78, Subd. 1, the assignment provisions of this paragraph
shall not apply to any ideas, discoveries, inventions or improvement for which no equipment,
supplies, facility or trade secret information of the Employer was used, and which was
developed entirely on Employee’s own time, and (1) which does not relate (a) directly to
the

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business of the Employer or (b) to the Employer’s actual or demonstrably anticipated research
or development; or (2) which does not result from any work performed by Employee for the Employer.

     6. ASSISTANCE TO EMPLOYER. Employee shall give Employer, at Employer’s expense, all
assistance Employer reasonably requires to perfect, protect, and exercise the rights to all ideas,
discoveries, inventions or improvements acquired by Employer pursuant to the assignment provisions
of paragraph 5 of this Agreement.

     7. RETURN OF DOCUMENTS. All documents or other property relating in any way to the
business of Employer which are conceived or generated by Employee or come into Employee’s
possession during Employee’s employment shall be and remain Employer’s exclusive property.
Employee will, upon termination of employment, leave with or deliver to Employer’s possession all
copies of documents, records, notes, books, directories, telephone and/or address listings,
computer media, and similar repositories containing any confidential information whether prepared
or maintained by Employee or another.

     8. NON-COMPETITION AND NON-SOLICITATION. During the term of employment with Employer
and for one (1) year thereafter, Employee will not act as a Competing Person or Organization, act
as an employee, owner, partner, consultant, or agent of any Competing Person or Organization or
render any services, directly or indirectly, to any Competing Person or Organization.

     “Competing Person or Organization” includes any person or organization engaged in, or about to
become engaged in, research, development, production, marketing or selling of any product, process
or service in which the Employee was involved in any capacity, or about which Employee obtained
confidential information while employed by Employer. Competing Person or Organization does not
include:

	 	(A)	 	A person or organization involved solely in a business substantially different
from those in which Employee was engaged, and about which Employee obtained no
confidential information while employed by Employer; or
	 
	 	(B)	 	A person or organization involved in a business similar to that in which
Employee was engaged while employed by Employer but which markets and sells exclusively
to persons or organizations: (i) which have not purchased any product, process or
service from Employer within two (2) years prior to Employee’s separation from
employment; and (ii) about which Employee obtained no confidential information while
employed by Employer.

     During the term of employment with Employer and for one (1) year thereafter, Employee will
not, individually or in combination with any Competing Person or Organization, market, produce,
solicit orders, sell, deliver, create or provide any product, process, or service which resembles
or competes with a product, process or service with which Employee was involved in any capacity
while employed by Employer to any person or organization that was a customer or identified prospect
of Employer within the two (2) year period prior to the date of Employee’s

-3-

 

separation from employment or was contacted by the Employee within two (2) years prior to the
date of Employee’s separation from employment.

     Employee further agrees that during the term of employment and for one (1) year thereafter,
Employee shall not directly or indirectly in any manner solicit, assist, or encourage (or assist
any other person or entity in soliciting or encouraging) any other officer or employee of Employer
to work or otherwise provide services to Employee or to any entity in which Employee participates
in the ownership, management, operation, or control of, or is connected with in any manner as an
independent contractor, consultant, or otherwise.

     9. REASONABLENESS OF TERMS. Employee acknowledges that compliance with the covenants
contained herein upon separation from employment with Employer shall not impair Employee’s ability
to earn a livelihood. Employee further acknowledges that the time and area restrictions contained
herein are reasonable and not unduly burdensome.

     10. AT-WILL EMPLOYMENT; TERMINATION. Employee understands that Employer is an at-will
employment employer. This means the employment relationship may be terminated by either party at
any time and for any reason. This Agreement is not a contract for employment for any specific
length of time. Notwithstanding the foregoing, if either Employee or Employer desire to terminate
the employment of Employee, each such party shall give at least 30 days notice to the other party
prior to the effective date of such termination (except in the case of a termination by Employer
for Cause (as defined in paragraph 11(c) below), in which case Employer shall be permitted to
terminate Employee’s employment immediately upon notice thereof).

     11. SEVERANCE.

          a. Involuntary Termination without Cause. In the event that Employer terminates Employee’s
employment without Cause, and provided that such termination of employment does not occur upon or
within twelve (12) months after a Change in Control, Employer shall pay Employee severance equal to
six (6) months of Employee’s then current base salary, provided that such severance shall not
exceed two times the lesser of (a) the Code § 401(a)(17) compensation limit for the year in which
the Termination Date occurs, or (b) Employee’s annualized compensation based upon the annual rate
of pay for services to Employer for the calendar year prior to the calendar year in which the
Termination Date occurs (adjusted for any increase during that year that was expected to continue
indefinitely if the Employee had not separated from service). Payment of such severance will be
conditioned on Employee’s execution (and non-rescission) of a standard release of claims in the
form provided by Employer at the time of such termination. Severance will be paid to Employee over
the six (6) month severance period commencing from and after the Termination Date, in accordance
with Employer’s normal payroll schedule. Severance payments shall be subject to normal payroll
withholdings. The Employer and Employee intend the severance payments under this paragraph 11(a)
to be a “separation pay plan due to involuntary separation from service” under Treas. Reg. §
1.409A-1(b)(9)(iii).

          b. Involuntary Termination After Change in Control. In the event that Employer terminates
Employee’s employment without Cause upon or within twelve (12) months

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after a Change in Control, or in the event that Employee quits for Good Reason upon or within
twelve (12) months after a Change in Control, Employer shall pay Employee severance equal to twelve
months of Employee’s then current base salary, as follows:

               (i) Limitation on Payment Amount. Such severance shall not exceed a maximum amount
of two times the lesser of (x) the Code § 401(a)(17) compensation limit for the year in which the
Termination Date occurs, or (y) Employee’s annualized compensation based upon the annual rate of
pay for services to the Service Recipient for the calendar year prior to the calendar year in which
the Termination Date occurs (adjusted for any increase during that year that was expected to
continue indefinitely if the Employee had not separated from service). Severance will be paid to
Employee over the twelve-month severance period commencing from and after the Termination Date, in
accordance with Employer’s normal payroll schedule. Employer and Employee intend the severance
payments under this paragraph 11(b)(i) to be a “separation pay plan due to involuntary separation
from service” under Treas. Reg. § 1.409A-1(b)(9)(iii).

               (ii) Alternative Form of Payment. If the severance otherwise payable to Employee is
reduced to zero (0) by application of the maximum limitation under paragraph 11(b)(i)(y), then
Employer shall in the alternative pay Employee severance equal to twelve months of Employee’s
then-current base salary commencing from and after the Termination Date, in accordance with the
normal payroll schedule of Employer, except that any amounts that remain payable as of the
Short-Term Deferral Deadline shall be paid in a lump sum no later than the Short-Term Deferral
Deadline. Employer and Employee intend the severance payments under this paragraph 11(b)(ii) to
constitute a short-term deferral under Treas. Reg. § 1.409A-1(b)(4).

               (iii) Other Conditions. Payment of such severance under this paragraph 11(b) will be
conditioned on Employee’s execution (and non-rescission) of a standard release of claims in the
form provided by Employer at the time of such termination. If Employee’s employment is terminated
without Cause under conditions such that he/she is entitled to severance payments under this
paragraph 11(b), then Employee shall be entitled to severance payments only under this paragraph
11(b) and shall not be entitled to any severance payments under paragraph 11(a) of this Agreement.
Severance payments shall be subject to normal payroll withholdings.

          c. Definitions. For purposes of this Agreement, the following terms shall have the following
meanings:

               (i) “Cause” and “Change in Control” shall have the meanings ascribed to those terms as set
forth in the SPS Commerce, Inc. 2001 Stock Option Plan (the “Stock Option Plan”), as amended.

               (ii) “Employer” shall include any current or future successor, parent, subsidiary, affiliate
or other joint venture partner to which any right or obligation has been assigned or delegated by
SPS Commerce, Inc. or by operation of law.

-5-

 

               (iii) “Good Reason” shall mean a material reduction in Employee’s then-current base salary at
the time of the Change in Control or a material reduction in Employee’s employment responsibilities
following such Change in Control, in each case without Employee’s consent, provided that Employee
first gives notice of the material reduction giving rise to Good Reason to the Employer within
ninety (90) days of the first occurrence of the reduction, and provided further that upon giving
notice Employee provides Employer 30 days in which to remedy the reduction and not be required to
pay the severance amount set forth in paragraph 11(b). Notwithstanding anything to the contrary in
this paragraph 11(c), Employee shall not be deemed to have quit for Good Reason, and Employee shall
not be entitled to payments upon his/her resignation under this Agreement, unless Employee’s
Termination Date following his/her resignation for Good Reason occurs within two (2) years
following the first occurrence of the reduction.

               (iv) “Service Recipient” shall have the meaning set forth in Treas. Reg. § 1.409A-1(g).

               (v) “Short-Term Deferral Deadline” shall mean the date that is the 15th day of the third month
following the end of the later of the calendar year, or the Service Recipient’s taxable year, in
which the Termination Date occurs.

               (vi) “Termination Date” shall mean the date upon which Employee’s termination of employment
with Employer is effective. For purposes of paragraph 11 of this Agreement only, the Termination
Date shall mean the date on which a “separation from service” has occurred for purposes of Section
409A of the Code and the regulations and guidance thereunder.

     12. SURVIVAL OF OBLIGATIONS. All provisions of this Agreement relating to
discoveries, confidential information, trade secrets, competitive activities, and ownership of
proprietary property, shall survive termination of the employment relationship between Employee and
Employer.

     13. MODIFICATION OF AGREEMENT. No waiver or modification of this Agreement or of any
covenant, condition, or limitation herein contained shall be valid unless in writing and duly
executed by both parties.

     14. CHOICE OF LAW, JURISDICTION, AND VENUE. The validity, construction and
performance of this Agreement shall be governed by, and construed in accordance with, the laws of
the State of Minnesota, without reference to any choice of laws provisions thereof. The parties
further agree that any litigation or proceeding arising out of, or relating to, this Agreement
(whether the same sounds in tort or contract or both) shall be commenced and maintained in a
federal or state court located in Hennepin County, Minnesota, and for such purpose the parties
consent to any such court’s exercise of personal jurisdiction over them.

     15. INJUNCTIVE RELIEF — ATTORNEY’S FEES. In recognition of the irreparable harm that
violation of this Agreement could cause Employer, Employee agrees that, in addition to any relief
afforded by law, an injunction against such violation or violations may

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be issued against Employee, it being understood by the parties that both damages and an
injunction shall be proper modes of relief and not considered alternative remedies. In the event
of any such violation(s), Employee agrees to pay the reasonable attorneys’ fees incurred by
Employer in the enforcement of any of its rights with respect to said violation(s), in addition to
the actual damages sustained by Employer as a result thereof.

     16. ASSIGNMENTS. This Agreement is personal in nature and cannot be assigned by
Employee. The terms, conditions, covenants, and representations herein shall inure to and be
binding upon the heirs and representatives of Employee and shall inure to the benefit of and shall
be binding upon the successors and assigns of Employer.

     17. SEVERABILITY. Agreements and covenants contained herein are severable, and in the
event any of them shall be held to be invalid by any competent court, this Agreement shall be
interpreted as if such invalid agreement or covenants were not contained herein.

     18. INTERPRETATION. This Agreement is intended to satisfy, or be exempt from, the
requirements of Section 409A(a)(2), (3), and (4) of the Code, including current and future guidance
and regulations interpreting such provisions, and should be interpreted accordingly.

     19. TAXES. Employer may withhold from any amounts payable under this Agreement such
federal, state and local income and employment taxes as Employer shall determine are required to be
withheld pursuant to any applicable law or regulation. Employee shall be solely responsible for
the payment of all taxes due and owing with respect to wages, benefits, and other compensation
provided to him/her hereunder.

     20. COMPLETE AGREEMENT. This Agreement and any
 stock option agreements between Employer and Employee contain the complete agreement
concerning the terms and conditions of the employment arrangement between the parties and shall, as
of the effective date hereof, supersede all other agreements between the parties, including without
limitation the Prior Agreement. The parties stipulate that neither of them has made any
representation with respect to the subject matter of this Agreement or any representations
including the execution and delivery hereof except such representations as are specifically set
forth herein and the parties hereto acknowledge that they have relied on their own judgment in
entering into this Agreement.

	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	SPS COMMERCE, INC.	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	EMPLOYEE	 	 	 	EMPLOYER	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	 	 	 	 	By:	 	 	 	 
	 
	 	 

	 	 	 	 	 	 

	 	 
	 

	 	 	 	 	 	Its:	 	 	 	 
	 

	 	 
	 	 	 	 	 	 

	 	 
	Date:

	 	 	 	 	 	Date:	 	 	 	 
	 

	 	 

	 	 	 	 	 	 

	 	 

-7-

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