Document:

exv10w3

 

Exhibit 10.3

CHANGE OF CONTROL AGREEMENT

     THIS CHANGE OF CONTROL AGREEMENT, dated as of September 13, 2006 is between ARI Network
Services, Inc. (the “Company”) and Roy W. Olivier (the “Employee”).

WITNESSETH:

     WHEREAS, the Employee has been employed by the Company since September 12, 2006 and currently
serves as its Vice President of Global Sales and Marketing; and

     WHEREAS, the Board of Directors of the Company has determined that it wishes to assure the
continued availability of the Employee as Vice President of Global Sales and Marketing of the
Company by entering into this Change of Control Agreement (the “Agreement”); and

     WHEREAS, the Board of Directors of the Company wants to assure that, in the event of a Change
of Control (as hereinafter defined), the Employee’s service to the Company will be recognized.

     NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth herein, the
Company and the Employee hereby agree as follows:

     1. Definitions. For Purposes of this Agreement:

          (a) Cause. “Cause” means (i) the willful and continued failure by the Employee to
substantially perform the Employee’s duties with the Company (other than any such failure resulting
from the Employee’s incapacity due to physical or mental illness) for a period of at least ten days
after a written demand for substantial performance is delivered to the Employee which specifically
identifies the manner in which the Employee has not substantially performed his duties, or (ii) the
willful engaging by the Employee in misconduct which is demonstrably and materially injurious to
the Company, monetarily or otherwise. For purposes of this Agreement, no act or failure to act on
the Employee’s part shall be considered “willful” unless done or omitted to be done by the Employee
not in good faith and without reasonable belief that such action or omission was in the best
interest of the Company. Notwithstanding the foregoing, the Employee shall not be deemed to have
been terminated for Cause unless and until there shall have been delivered to the Employee a copy
of a resolution, duly adopted by the affirmative vote of not less than a majority of the Board of
Directors of the Company at a meeting of the Board called and held for such purposes (after
reasonable notice to the Employee and an opportunity for the Employee, together with the Employee’s
counsel, to be heard before the Board), stating that in the good faith opinion of the Board the
Employee was guilty of conduct constituting Cause as set forth above and specifying the particulars
thereof in detail.

 

 

          (b) Change in Control. A “Change in Control” shall mean the first to occur of the
following:

          (i) the acquisition by an individual, entity or group, acting individually or in
concert (a “Person”) of beneficial ownership of more than 50% of the then outstanding
shares of common stock of the Company (the “Outstanding Common Stock”); provided,
however, that for purposes of this Subsection 1(b)(i), the following acquisitions
shall not constitute a Change in Control: (A) any acquisition directly from the Company,
(B) any acquisition by the Company, (C) any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by the Company or any corporation controlled by the
Company, or (D) any acquisition by any corporation pursuant to a transaction which complies
with clauses (A), (B) and (C) of Subsection 1(b)(ii) below; or

          (ii) consummation of a reorganization, merger or consolidation, share exchange, or
sale or other disposition of all or substantially all of the assets of the Company (a
“Business Combination”), in each case, unless, immediately following such Business
Combination, (A) all or substantially all of the individuals and entities who were the
beneficial owners of the Outstanding Common Stock immediately prior to such Business
Combination beneficially own, directly or indirectly, more than 50% of, respectively, the
then outstanding shares of common stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in the election of directors, as
the case may be, of the corporation resulting from such Business Combination (including,
without limitation, a corporation which as a result of such transaction owns the Company or
all or substantially all of the Company’s assets either directly or through one or more
subsidiaries) in substantially the same proportions as their ownership, immediately prior
to such Business Combination of the Outstanding Common Stock, (B) no Person (excluding any
employee benefit plan (or related trust) of the Company or such corporation resulting from
such Business Combination) beneficially owns, directly or indirectly, more than 50% of,
respectively, the then outstanding common stock of the corporation resulting from such
Business Combination or the combined voting power of the then outstanding voting securities
of such corporation except to the extent that such ownership existed prior to the Business
Combination, and (C) at least a majority of the members of the Board of the corporation
resulting from such Business Combination were members of the Board of the Company at the
time of the execution of the initial agreement providing for such Business Combination; or

          (iii) approval by the shareholders of the Company of a complete liquidation or
dissolution of the Company.

          (c) Date of Termination. “Date of Termination” means the date specified in the Notice
of Termination where required (which date shall be on or after the date of the Notice of
Termination) or in any other case during the Term, upon the Employee’s ceasing to perform services
for the Company.

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          (d) Effective Date. “Effective Date” means the date on which the Change of Control
occurs.

          (e) Good Reason. “Good Reason” means, without the Employee’s written consent, the
occurrence of one or more of the following during the Term:

          (i) a material diminution of or interference with the Employee’s duties and
responsibilities as Vice President of Global Sales of the Company, including, but not
limited to a material demotion of the Employee, a material reduction in the number or
seniority of other Company personnel reporting to the Employee, or a material reduction in
the frequency with which, or in the nature of the matters with respect to which, such
personnel are to report to the Employee;

          (ii) a change in the principal workplace of the Employee to a location outside of a
50-mile radius from Milwaukee, Wisconsin;

          (iii) a reduction or adverse change in the salary, bonus, perquisites, benefits,
contingent benefits or vacation time which had theretofore been provided to the Employee; or

          (iv) an unreasonable increase in the workload of the Employee.

     For purposes hereof, any good faith determination made by the Employee that he has Good Reason
to terminate his employment with the Company shall be conclusive. The Employee’s continued
employment or failure to give Notice of Termination will not constitute consent to, or a waiver of
rights with respect to, any circumstance constituting Good Reason hereunder.

          (f) Notice of Termination. Any termination of the Employee’s employment by the
Company without Cause, or termination by the Employee for Good Reason, during the Term will be
communicated by a Notice of Termination to the other party hereto. A “Notice of Termination” means
a written notice which specifies a Date of Termination (which date shall be on or after the date of
the Notice of Termination), indicates the provision in this Agreement applying to the termination
and, if applicable, sets forth in reasonable detail the facts and circumstances claimed to provide
a basis for termination of the Employee’s employment under the provision so indicated.

          (g) Term. The “Term” means a period beginning on the Effective Date and ending on the
date two years after the occurrence of a Change of Control.

     2. Termination of Employment During the Term.

          (a) Termination by the Company Without Cause or by the Employee for Good Reason. If
the Employee’s employment is terminated during the Term by the Company without Cause or by the
Employee for Good Reason, the Employee shall be entitled to the following:

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          (i) the Company shall pay the Employee his full base salary and commissions (if
applicable) through the Date of Termination at the rate in effect at the time the Notice of
Termination is given;

          (ii) as the annual current year bonus for the year in which the Date of Termination
occurs, the Company will pay the Employee an amount (not less than zero) equal to (A) the
product of (i) the average of the Employee’s annual current year bonus for the three fiscal
years of the Company ending prior to the Date of Termination and (ii) a fraction, the
numerator of which is the actual number of days the Employee was employed by the Company
during the fiscal year in which the Date of Termination occurs and the denominator of which
is 365, minus (B) the aggregate payments previously made by the Company, if any, with
respect to the current year annual bonus;

          (iii) the Company shall pay to the Employee as a severance benefit a lump-sum amount
equal to two (2) times the sum of (a) the Employee’s annual base salary as in effect
on the Effective Date or Date of Termination, whichever is greater, without reduction for
any mandatory or voluntary deferrals, (b) 100% of the targeted commissions, if any,
for the year in which the Effective Date or Date of Termination occurs, whichever is
greater, and (c) 100% of the targeted short-term annual bonus and long-term bonus for the
year in which the Effective Date or Date of Termination occurs, whichever is greater, or,
where the targeted short-term annual bonus or long-term bonus amounts have not been set as
of the Effective Date or Date of Termination, 100% of the average of the Employee’s targeted
annual short-term and long-term bonus for the three fiscal years of the Company ending prior
to the Date of Termination, without reduction for any amounts that would otherwise be
deferred to future fiscal years, within thirty days after the Date of Termination;

          (iv) any unpaid annual installments of long-term bonuses from prior fiscal years, which
installments shall become immediately vested as if the targeted performance levels for
future years were met; and

          (v) for a 24-month period after the Date of Termination starting with the month
immediately after the month in which the Date of Termination occurs, the Company will
arrange to provide the Employee and the Employee’s eligible dependents, at the Company’s
expense, with benefits under the medical and dental plans of the Company, or, if such
benefits are not available, benefits substantially similar to the benefits the Employee was
receiving during the 90-day period immediately prior to the Date of Termination;
provided, however, that benefits otherwise receivable by the Employee
pursuant to this Subsection 2(a)(iv) will be reduced to the extent other comparable benefits
are actually received by the Employee from subsequent employment during the 24-month period
following the Date of Termination, and any such benefits actually received by the Employee
will be reported to the Company; and provided, further that any access to
insurance continuation coverage that the Employee may be entitled to receive under the
Consolidated Omnibus Budget Reconciliation Act of 1986 (“COBRA”) will commence on the Date
of Termination.

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          (b) Termination for Any Other Reason. If the Employee’s employment with the Company
is terminated during the Term for any reason not specified in Subsection 2(a) above, the Employee
will be entitled to the following:

          (i) the Company will pay the Employee his full base salary and commissions (if
applicable) through the Date of Termination at the rate in effect on the Date of
Termination; and

          (ii) as the annual current year bonus for the year in which the Date of Termination
occurs, the Company will pay the Employee an amount (not less than zero) equal to (A) the
product of (i) the average of the Employee’s annual current year bonus for the three fiscal
years of the Company ending prior to the Date of Termination and (ii) a fraction, the
numerator of which is the actual number of days the Employee was employed by the Company
during the fiscal year in which the Date of Termination occurs and the denominator of which
is 365, minus (B) the aggregate payments previously made by the Company, if any, with
respect to the current year annual bonus. Notwithstanding the foregoing, no bonus will be
paid to the Employee under this Subsection 2(b)(ii) if the Employee’s employment is
terminated for Cause.

          (c) Timing of Payments. Where a payment of benefits under any of Subsections
2(a)(ii), (iii) and (iv) or Subsection 2(b)(ii) is required to be delayed for six months after the
Date of Termination under Internal Revenue Code Section 409A, the Company shall make payment of
such amounts to the Employee on the date that is six months after the Date of Termination. Where a
payment of benefits under Subsections 2(a)(ii), (iii) and (iv) and Subsection 2(b)(ii) is not
required to be delayed for six months after the Date of Termination under Internal Revenue Code
Section 409A, the Company shall make payment of such amounts to the Employee within thirty (30)
days after the Date of Termination.

     3. Restrictions. As of the Effective Date, all restrictions limiting the exercise,
transferability or other incidents of ownership of any outstanding award, including but not limited
to restricted stock, options, stock appreciation rights, or other property or rights of the Company
granted to the Employee shall lapse, and such awards shall become fully vested and be held by the
Employee free and clear of all such restrictions. Notwithstanding the foregoing, the term during
which any vested option held by an Employee is permitted to be exercised shall not be extended.
This provision shall apply to all such property or rights notwithstanding the provisions of any
other plan or agreement to the contrary.

     4. Limitation on Payments. Subsections 2(a)(iii), (iv) and (v) and Section 3, above,
provide for certain payments to be made or benefits to be given to the Employee if the Employee’s
employment with the Company terminates during the Term (the “Change of Control Payments”).
Notwithstanding such subsections, the Change of Control Payments will be reduced such that the
present value of the payments to the Employee or for the Employee’s benefit, receipt of which is
deemed to be contingent on a change of control under Section 280G(b)(2) of the Internal Revenue
Code of 1986, as amended (the “Code”), shall not exceed an amount equal to the maximum which the
Company may pay without loss of deduction under

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Section 280G(a) of the Code (the “Golden Parachute Threshold”). If the Golden Parachute Threshold is
exceeded, the payments made pursuant to Subsections 2(a)(iii) and (iv) will be reduced, but not
below zero, so that the total amount paid to the Employee or for the Employee’s benefit is not in
excess of the Golden Parachute Threshold. Notwithstanding the foregoing, if not reducing the
Change of Control Payments would result in a greater after-tax amount to the Employee, such
payments shall not be reduced. All calculations required pursuant to this Section 4 shall be made
in accordance with proposed, temporary or final regulations promulgated under Section 280G of the
Code or other applicable authority by the Company’s public accountants, the Company’s lawyers or
such other third party as is mutually agreed between the Employee and the Company. In the event
that the provisions of Sections 280G and 4999 of the Code or any successor provision are repealed
without succession this Section 4 shall be of no further force or effect.

     5. No Mitigation. The Employee shall not be required to mitigate the amount of any
salary or other payment or benefit provided for in this Agreement by seeking other employment or
otherwise, nor shall the amount of any payment or benefit provided for in this Agreement be reduced
by any compensation earned by the Employee as a result of employment by another employer other than
as provided in subsection 2(a)(v), above, by retirement benefits distributed after the Date of
Termination, or otherwise.

     6. No Assignments.

          (a) Successors and Assigns. This Agreement is personal to the Employee, and the
Employee may not assign or delegate any of the Employee’s rights or obligations hereunder without
first obtaining the written consent of Company. The Company will require any successor or assign
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company, by an assumption agreement in form
and substance satisfactory to the Employee, to expressly assume and agree to perform this Agreement
in the same manner and to the same extent that the Company would be required to perform it if no
such succession or assignment had taken place. If such succession or assignment does not take
place, and if this Agreement is not otherwise binding on the Company’s successors or assigns by
operation of law, the Employee is entitled to compensation from the Company in the same amount and
on the same terms as the compensation pursuant to Subsection 2(a) hereof.

          (b) Inurement. This Agreement and all rights of the Employee hereunder shall inure to
the benefit of and be enforceable by the Employee’s personal and legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If the Employee should die
while any amount would still be payable to the Employee hereunder if the Employee had continued to
live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the
terms of this Agreement to the Employee’s devisee, legatee or other designee or if there is no such
designee, to the Employee’s estate.

     7. Notice. For the purposes of this Agreement, notices and all other communication
provided for in the Agreement shall be in writing and shall be deemed to have been duly given when
personally delivered or sent by fax with confirmation printed on the sending fax machine,

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or five days after mailing certified mail, return receipt requested, postage prepaid, addressed to
the respective addresses set forth opposite the parties’ signatures to this Agreement
(provided that all notices to the Company shall be directed to the attention of the Board of
Directors of the Company with a copy to the Secretary of the Company), or to such other address as
either party may have furnished to the other in writing in accordance herewith.

     8. Prior Agreements. This Agreement shall replace and supersede all prior agreements
between the Company and the Employee relating to the subject matter hereof.

     9. Amendments. No amendments or additions to this Agreement shall be binding unless
in writing and signed by both parties hereto.

     10. Severability. The provisions of this Agreement shall be deemed severable and the
invalidity or unenforceability of any provision shall not affect the validity or enforceability of
the other provisions hereof.

     11. Governing Law. This Agreement shall be governed by the laws of the State of
Wisconsin, without giving effect to its principles of conflicts of laws.

     12. Arbitration. Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration by a single arbitrator mutually agreed to by
the disputing parties in accordance with the rules of the American Arbitration Association then in
effect. Such arbitration shall be held in Milwaukee, Wisconsin, or such other place as is mutually
agreeable to the parties hereto. Judgment may be entered on the Arbitrator’s award in any court
having jurisdiction.

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     IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first
above written.

	 	 	 	 	 
	 	ARI NETWORK SERVICES, INC.
 	 

11425 West Lake Park Drive, Suite 900

Milwaukee, Wisconsin 53224

	 	 	 	 	 
	 	 	 
	 	By:  	                                              /s/ Brian E. Dearing,
 	 
	 	 	Chairman of the Board and 
    Chief Executive Officer 	 
	 

	 	 	 	 	 
	 	 EMPLOYEE

 	 

2869 Clary Hill Drive

Roswell, GA 30075

	 	 	 	 	 
	 	 	 
	 	     /s/ Roy W. Olivier
 	 
	 	(Signature) 	 
	 	 	 
	 	     Roy W. Olivier
 	 
	 	(Print Name) 	 
	 	 	 
	 

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                                                                    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 233 South Wacker Drive, Chicago, Illinois 60606
("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

<PAGE>

               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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<PAGE>

     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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<PAGE>

     (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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<PAGE>

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.

                                        5

<PAGE>

     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.

                                        6

<PAGE>

     IN WITNESS WHEREOF, the parties have executed this Agreement on the date
first written above.

                                        SPSS INC.

                                        By:
                                            ------------------------------------
                                        Name: Jack Noonan
                                        Its: President and Chief Executive
                                             Officer

                                        EMPLOYEE

                                        ----------------------------------------
                                        [Employee]

                                        7

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