Charter of the Compensation Committee of the Board of Directors
The purpose of the Compensation Committee (the "Committee") of the Board of Directors (the "Board") of SPSS Inc. (the "Company") is to assist the Board in discharging its responsibilities relating to executive compensation.
1. Composition. The Committee shall consist of at least three (3) members of the Board who satisfy the membership requirements set forth in Section 2(c) below.
2. Appointment; Removal. The Committee members shall be appointed by the Board, upon the recommendation of the Nominating Committee of the Board, to serve for a one (1) year term or until their successors shall be duly elected and qualified. Each Committee member may be removed by the Board in its sole discretion.
3. Membership Requirements . Each Committee member must
qualify as an “independent” director under the rules applicable to companies
listed on the NASDAQ.
Notwithstanding the membership requirements set forth in this Section 2(c), one director who does not qualify as “independent” under the rules applicable to companies listed on the NASDAQ may still serve as a member of the Committee if the Board determines that, under exceptional and limited circumstances, such individual’s membership on the Committee is required by the best interests of the Company and its stockholders and such individual meets certain alternate criteria established by the NASDAQ rules.(1)
4. Committee Chairman. The Board may designate a chairman of the Committee. If the Board does not designate a Chairman, the Committee members shall elect a Chairman by a vote of a majority of the Committee.
The Committee shall meet at least two (2) times per year, or more frequently, as circumstances dictate.
The Committee shall have the power and authority to perform the following duties:
1. To assist the Board in developing and evaluating potential candidates for executive positions, including the Chief Executive Officer.
2. To review director compensation levels and practices and, from time to time, to recommend changes in such compensation levels and practices, as appropriate.
3. To evaluate, on an annual basis, the Chief Executive Officer’s performance in light of certain established goals, and to establish the Chief Executive Officer’s compensation package based on such performance. This compensation package shall encompass base salary, cash bonuses, other incentive compensation, stock options, other equity-based compensation, and other benefit programs. This compensation package will be recommended to and reviewed by the entire Board.
4. To develop, on an annual basis, an executive compensation structure for the Company’s other senior executive officers. This structure shall encompass base salary, cash bonuses, other incentive compensation, stock options, other equity-based compensation, and other benefit programs. These compensation packages will be recommended to and reviewed by the entire Board.
5. To review and approve compensation decisions made by the Company’s Chief Executive Officer with respect to other officers and employees of the Company.
6. To assume responsibility for review and administration of the Company’s 2002 Equity Incentive Plan (the “2002 Plan”), if such authority is delegated to the Committee by the Board pursuant to the terms of the 2002 Plan.
7. To prepare and establish an annual executive compensation report in the Company’s Annual Report on Form 10-K and Proxy Statement.
8. Perform any other activities consistent with this Charter, the Company’s Certificate of Incorporation or By-laws and any other governing law, as the Committee or the Board deems necessary or appropriate.
The Committee shall have the authority to retain such consultants, outside counsel or other advisors as the Committee may deem appropriate, in its sole discretion.
The Committee shall report all material findings and all recommendations that may arise at a meeting of the Committee to the entire Board. Such report shall be made at the Board meeting immediately following the relevant Committee meeting.
On an annual basis, the Committee shall:
1. evaluate its performance and report its conclusions to the Board; and
2. review this Charter and recommend any proposed changes thereto to the Board for approval.
(1) Such individual must not be a current officer or employee of the Company or a family member of such officer or employee. Such individu al may be appointed to the Committee for a term of not more than two (2) years. If the foregoing exception is applied to any Committee member, the Company will be required to disclose in its next proxy statement the nature of the relationship and the reasons for the Board’s determination.