Employment Agreement - SPSS Inc. and Edward Hamburg
EMPLOYMENT AGREEMENT
This Employment Agreement (this "Agreement"), dated December 7, 2004,
effective as of August 16, 2004, is by and between SPSS Inc. ("Employer") and
Edward Hamburg (hereinafter "Employee"). In consideration of the agreements and
provisions contained herein, Employer and Employee hereby agree as follows:
1. Employee resigned from his position as Executive Vice President, Corporate
Operations, Chief Financial Officer and Secretary (the "Resignation") of
Employer, effective as of August 16, 2004 (the "Resignation Effective
Date"), and Employer accepted Employee's Resignation as of the Resignation
Effective Date. Employee and Employer agree that, following the
Resignation Effective Date, Employee has been employed as and will
continue to be employed as an Executive Vice President of Employer through
December 31, 2004, at which time Employee shall resign his position as an
officer of Employer.
2. Employer agrees to employ the Employee, effective as of January 1, 2005,
in an executive staff position at the Employer, and Employee shall accept
employment as an employee of Employer in an executive staff position (the
"Position") during the term of this Agreement and subject to the terms of
this Agreement. The term of the Position shall commence and Employee's
employment as an employee of Employer in an executive staff position shall
commence on January 1, 2005 and shall terminate on January 31, 2007 or any
earlier date arising pursuant to Section 4 below (the "Position Term"),
and Employee waives the right to continued employment or rehiring after
such date. During the Position Term, Employee shall report directly to the
Company's Chief Executive officer.
3. In full consideration for all of the services rendered by Employee during
the Position Term and in lieu of any other payments owed to Employee:
(a) Employee shall receive a monthly salary as follows:
(i) From August 16, 2004 through January 31, 2005, Employee shall
receive the regular monthly base salary to which he was
entitled in his position as the Executive Vice President,
Corporate Operations, Chief Financial Officer and Secretary of
the Company, payable in regular installments in accordance
with Employer's general payroll practices and subject to
customary withholding; and
(ii) From February 1, 2005 through the end of the Position Term,
Employee shall receive a monthly salary in the amount of
$17,625 per month (the "Monthly Salary"), payable in regular
installments in accordance with Employer's general payroll
practices and subject to customary withholding.
(b) Employee will be eligible for bonuses for the fiscal quarters ended
September 30, 2004 and December 31, 2004, which bonuses shall be
based on Employer's management bonus plan for 2004 and shall be
subject to approval by the Employer's Board of Directors if 2004
bonuses for the Employer's other executive officers are subject to
Board approval. Unless otherwise determined by Employer, Employee
will not be eligible for bonuses with regard to any fiscal quarter
ended after December 31, 2004.
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(c) Unless terminated for Cause (as defined in Section 4(a) below) or
Employee accepts a position either full or part-time with another
organization or starts his own company, Employee shall receive the
following benefits:
(i) From August 16, 2004 through the end of the Position Term,
Employee will be eligible for the then current benefit program
of Employer offered to other employees.
(ii) Following the end of the Position Term, Employee shall be
responsible for paying all of Employee's own COBRA expenses,
and only those benefits covered by COBRA shall be available to
Employee.
(d) Employee's stock options shall be exercisable in accordance with the
terms of the applicable stock option agreement. For purposes of each
of Employee's stock option agreements, Employee shall be an employee
throughout the Position Term. At the sole discretion of Employer,
Employee may continue to participate in Employer's employee stock
option program throughout the Position Term.
(e) If Employee or Employer terminates Employee's Staff Position for any
reason other than pursuant to 4(a) below, upon termination of the
Position Term, Employee shall receive, as his sole severance
benefit, a severance payment in an amount equal to all of the salary
payments that would otherwise be payable to Employee pursuant to
Section 3(a) hereof from the effective date of such termination
through January 31, 2007, subject to required withholding, provided
that Employee, at such time, executes and delivers to Employer a
release in the form set forth in Sections 8 and 9 hereof and abides
by the terms of the noncompetition agreement referred to in Section
6 hereof.
4. The Position Term may be terminated prior to January 31, 2007 as follows:
(a) By the Employer for Cause. For purposes of this Agreement, "Cause"
shall mean any deliberate act which causes harm to Employer,
including without limitation, theft, fraud or intentional damage to
the Employer's reputation. If Employer terminates the Position Term
pursuant to this Section 4(a), Employee shall not be entitled to any
salary payments that would otherwise be payable to Employee pursuant
to Section 3(a) for any months following the effective date of such
termination or any other compensation, benefits or severance under
this Agreement (except for COBRA coverage, which will be available
to Employee at his own cost).
(b) By the Employer or Employee without Cause: (i) upon mutual written
agreement; or (ii) if Employee accepts a position either full or
part-time with another organization or starts his own company.
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5. Change of Control.
(a) Definitions. For purposes of this Section 5, the following terms
shall be defined as follows:
(i) "Cause" shall have the meaning ascribed to such term in
Section 4(a) above.
(ii) "Change of Control" 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")) not previously owning common stock of the Company, of
fifteen percent (15%) or more of the shares of the then
outstanding common stock of Employer (the "Outstanding Common
Stock"), (ii) a merger or consolidation of Employer in which
Employer does not survive as an independent public company,
(iii) a sale of all or substantially all of the assets of
Employer, (iv) a triggering event under that certain Amended
and Restated Rights Agreement, dated as of August 31, 2004, by
and between Employer and Computershare Investor Services, LLC
or any amendment, restatement or replacement thereof, or (v) a
liquidation or dissolution of Employer; provided, however,
that 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 Employer, 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 Employer.
(iii) "Effective Date" shall mean the date on which a Change of
Control becomes effective.
(iv) "Surviving Entity" shall mean the entity surviving a
transaction between Employer 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).
(b) Change of Control. Effective as of August 16, 2004 through the
termination of the Position Term, in the event of a Change of
Control, the following provisions shall apply:
(i) Continuation of Employee's Employment by Surviving Entity. If,
upon the Effective Date of a Change of Control, the Surviving
Entity continues Employee's employment, the terms of this
Agreement shall continue in full force and effect, and
Employee shall be entitled to all rights and benefits
hereunder.
(ii) Termination of Employee's Employment by Surviving Entity. If,
upon the Effective Date of a Change of Control, or within
twelve (12) months thereafter, the Surviving Entity terminates
the Employee's employment without Cause, the Employee shall be
entitled to the following benefits:
(A) Salary/Benefits. Employee shall be entitled to all
salary payments and
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benefits to which Employee would otherwise be entitled
under this Agreement if Employee was terminated without
Cause prior to the Change of Control.
(B) Treatment of Stock Options, Restricted Stock and Stock
Appreciation Rights upon Change of Control
(1) Change of Control in a Transaction with a Private
Company. In the event a Change of Control occurs
as the result of a transaction between Employer
and a company whose common stock is not publicly
traded on a domestic national stock exchange, the
NASDAQ national market, or their respective
successors or equivalents (a "Private Company"),
then:
(a) all of Employee's stock options (vested and
unvested) granted by Employer prior to the
Effective Date (1) shall be deemed to be
fully exercisable upon the Effective Date
and (2) shall be cashed out at the
transaction value as calculated as of the
Effective Date less the exercise price of
such stock options and paid by the Surviving
Entity to Employee on or within thirty (30)
days following the Effective Date;
(b) all restrictions on transferability of
restricted stock held by the Employee on the
Effective Date shall be deemed to have
terminated immediately prior to the
Effective Date; and
(c) all of the stock appreciation rights (vested
and unvested) granted by Employer prior to
the Effective Date (1) shall be deemed to be
fully exercisable upon the Effective Date
and (2) shall be cashed out at the
transaction value as calculated as of the
Effective Date and paid by the Surviving
Entity to Employee on or within thirty (30)
days following the Effective Date.
(2) Change of Control in a Transaction With a Public
Company. In the event a Change of Control occurs
between Employer and a company whose common stock
is publicly traded on the domestic national
exchange, the NASDAQ national market, or their
respective successors and equivalents (a "Public
Company"), then
(a) all of Employee's stock options (vested and
unvested) granted by Employer prior to the
Effective Date shall at the sole election of
Employee either (1) be (a) deemed to be
fully exercisable upon the Effective Date
and (b)
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cashed out at the transaction value as
calculated as of the Effective Date less the
exercise price of such stock options and
paid by the Surviving Entity to Employee on
or within thirty (30) days following the
Effective Date or (2) be converted into
stock options of the Surviving Entity, if
applicable, on substantially equivalent
economic terms and including the same
provisions regarding accelerated vesting in
connection with the termination of
employment following a Change of Control
(the "Replacement Options"). If Replacement
Options are granted, they shall continue to
vest at the same rate as under the
applicable equity incentive plan of Employer
and corresponding option agreement in effect
prior to the Change of Control.
(b) all restrictions on transferability of
restricted stock held by the Employee on the
Effective Date shall be deemed to have
terminated immediately prior to the
Effective Date, unless the Employee is
provided with stock of the Surviving Company
with transfer restrictions on substantially
equivalent economic terms; and
(c) all of the stock appreciation rights (vested
and unvested) granted by Employer prior to
the Effective Date shall at the sole
election of Employee either (1) be (a)
deemed to be fully exercisable upon the
Effective Date and (b) cashed out at the
transaction value as calculated as of the
Effective Date and paid by the Surviving
Entity to Employee on or within thirty (30)
days following the Effective Date or (2) be
converted into stock appreciation rights of
the Surviving Entity, if applicable, on
substantially equivalent economic terms and
including the same provisions regarding
accelerated vesting in connection with the
termination of employment following a Change
of Control (the "Replacement SARs"). If
Replacement SARs are granted, they shall
continue to vest at the same rate as under
the applicable equity incentive plan of
Employer and corresponding stock
appreciation right agreement in effect prior
to the Change of Control.
(c) This Section 5 shall supercede any other change of control agreement
or arrangement previously entered into by and between Employer and
Employee.
6. Employee agrees that the current noncompetition agreement between Employee
and Employer will remain in effect until three (3) years after the
termination of the Position Term.
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7. Employer denies that it is liable to Employee for any reason whatsoever,
and the entry into this Agreement shall not constitute any admission or
evidence of unlawful discrimination or improper conduct, and should not be
construed as constituting any admission of fault, wrongdoing, or
liability.
8. Employee releases, forever discharges and covenants not to sue Employer or
its current or former parent companies, subsidiaries, affiliates,
predecessors, successors, insurers, directors, officers, employees,
agents, or assigns, with respect to any and all claims, causes of action,
suits, debts, sums of money, controversies, agreements, promises, damages,
and demands whatsoever, including attorneys' fees and court costs, in law
or equity or before any federal, state or local administrative agency,
whether known or unknown, suspected or unsuspected, which Employee has,
had, or may have, based on any event occurring, or alleged to have
occurred, to the date of this Agreement. This release includes, but is not
limited to, claims under Title VII of the Civil Rights Act of 1964, as
amended, the Americans with Disabilities Act, the Rehabilitation Act, the
Age Discrimination in Employment Act, the Occupational Safety and Health
Act, the Family and Medical Leave Act, the Employee Retirement Income
Security Act, federal and state wage and hour laws, the Illinois
Constitution, any Illinois human rights acts, and any other federal, state
or local statute, law, regulation, ordinance, or order, and claims arising
under common law, contract, implied contract, public policy or tort.
Employee expressly waives his right to any relief of any kind should any
administrative agency pursue any claim on Employee's behalf.
Notwithstanding the foregoing release of all claims, it is understood and
agreed that Employee's claims for unemployment compensation, if any, are
not released.
9. Employee expressly waives and relinquishes all rights and benefits
provided to Employee by any statute or other law which prohibits release
of unspecified claims and acknowledges that this release is intended to
include all claims Employee has or may have up to and including the date
of this Agreement, whether Employee is aware of them or not, and that all
such claims are released by this Agreement.
10. Employee agrees as follows:
(a) Employee agrees to use reasonable efforts to cooperate with Employer
in regard to the transition of business matters handled by Employee
during his employment in the capacity of Executive Vice President,
Corporate Operations, Chief Financial Officer and Secretary with
Employer.
(b) Employee agrees to cooperate as practicable in regard to any
litigation brought against Employer arising out of matters involving
Employee. Employer acknowledges that Employee's obligations to his
subsequent employer may preclude his active participation in such
above-described litigation against Employer. Should Employer desire
Employee's cooperation in litigation, Employer shall contact
Employee and apprise him of the nature of the litigation, the
purpose for which Employer desires Employee's cooperation and the
anticipated time commitment. Employee shall have the right to
request reimbursement for all reasonable travel-related expenses
incurred at Employer's request in the performance of his obligations
under this Section 10(b).
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(c) Upon termination of his employment, Employee will return all
property of Employer within his possession and control to Employer.
11. Employee will direct all requests for references to Employer's Human
Resources Department. Employer's Human Resources Department will respond
to any written requests for references from prospective employers of
Employee with information as to Employee's dates of employment with
Employer, job title and pay rate only.
12. Neither Employer nor Employee shall make statements about the other or
engage in conduct that could reasonably be expected to adversely affect
Employee's or Employer's reputation or business, other than as required by
law.
13. Upon termination of his employment, Employee agrees that Employee shall
receive only the rights and benefits set forth in Section 3 above.
14. This Agreement will not take effect until eight days after Employee signs
it.
15. Employee may revoke this Agreement within seven days after signing it and
render it null and void. If Employee wishes to revoke this Agreement, he
should notify Anthony Ciro, Assistant Secretary and Vice President, Legal
Counsel and Operations in writing of Employee's intent to revoke within
seven days after signing this Agreement.
16. Employee acknowledges that he has fully read this Agreement, understands
its terms, has been advised to consult with an attorney prior to signing
this Agreement, has been given 45 days to consider this release and its
ramifications, has been given seven days after signing to rescind this
Agreement, and is entering into this Agreement knowingly and voluntarily.
17. Employer and Employee agree to amend this Agreement, as reasonably
necessary, to conform to the new Code Section 409A, which section was
created by the American Jobs Creation Act of 2004.
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THIS DOCUMENT IS A RELEASE OF
ALL CLAIMS READ CAREFULLY
BEFORE SIGNING
DATED: December 7, 2004 /s/ Edward Hamburg
-----------------------------
Edward Hamburg
SPSS INC.
DATED: December 7, 2004 /s/ Anthony Ciro
-----------------------------
Name: Anthony Ciro
Its: Assistant Secretary
Vice President, Legal
Counsel and Operations
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