-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, Iau/DkU081GERYDMCRuQ9zm0dvdUfkZB76u/MHQXuL6aCbwACUEVQVlOaAuaVEP/ D9Q09NftkRPiBD9yDRHkgA== 0000950137-01-505092.txt : 20020412 0000950137-01-505092.hdr.sgml : 20020412 ACCESSION NUMBER: 0000950137-01-505092 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 20011212 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SPSS INC CENTRAL INDEX KEY: 0000869570 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 362815480 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: S-3 SEC ACT: 1933 Act SEC FILE NUMBER: 333-74944 FILM NUMBER: 1811958 BUSINESS ADDRESS: STREET 1: 233 S WACKER DR CITY: CHICAGO STATE: IL ZIP: 60606 BUSINESS PHONE: 3123292400 MAIL ADDRESS: STREET 1: 233 SOUTH WACKER DRIVE CITY: CHICAGO STATE: IL ZIP: 60606 S-3 1 c66483s-3.txt REGISTRATION STATEMENT AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON DECEMBER 12, 2001 REGISTRATION NO. 333- - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 --------------------- FORM S-3 REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 --------------------- SPSS INC. (Exact name of Registrant as specified in its charter) DELAWARE 36-2815480 (State or other jurisdiction of incorporation or (I.R.S. Employer Identification No.) organization)
233 SOUTH WACKER DRIVE CHICAGO, ILLINOIS 60606 (312) 651-3000 (Address, including zip code, and telephone number, including area code, of registrant's principal executive offices) EDWARD HAMBURG EXECUTIVE VICE PRESIDENT, CORPORATE OPERATIONS, CHIEF FINANCIAL OFFICER AND SECRETARY SPSS Inc. 233 South Wacker Drive Chicago, Illinois 60606 (312) 651-3000 (Name, address, including zip code, and telephone number, including area, code, of agent for service) Copies to: Lawrence R. Samuels, Esq. David S. Guin, Esq. Ross & Hardies 150 North Michigan Avenue Chicago, Illinois 60601 (312) 558-1000 APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE PUBLIC: As soon as practicable after the effective date of this Registration Statement. If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. [ ] If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, other than securities offered only in connection with dividend or interest reinvestment plans, check the following box. [X] If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering. [ ] If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [ ] CALCULATION OF REGISTRATION FEE
- -------------------------------------------------------------------------------------------------------------------------------- - -------------------------------------------------------------------------------------------------------------------------------- PROPOSED MAXIMUM PROPOSED MAXIMUM AMOUNT OF TITLE OF EACH CLASS OF AMOUNT TO BE AGGREGATE PRICE AGGREGATE REGISTRATION SECURITIES TO BE REGISTERED REGISTERED (1) PER SHARE (2) OFFERING PRICE(2) FEE - -------------------------------------------------------------------------------------------------------------------------------- Common Stock, $0.01 par value per share..... 200,000 $18.33 $3,666,000 $876.17 - -------------------------------------------------------------------------------------------------------------------------------- - --------------------------------------------------------------------------------------------------------------------------------
(1) This Registration Statement relates to common stock, par value $0.01 per share, of SPSS Inc. issued to America Online, Inc. (2) Estimated solely for purposes of calculating the registration fee pursuant to Rule 457(c) of the Securities Act of 1933 based upon the average of the high and low sale prices of the common stock on December 7, 2001. SPSS hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until SPSS shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the SEC, acting pursuant to Section 8(a) of the Securities Act of 1933, may determine. - -------------------------------------------------------------------------------- - -------------------------------------------------------------------------------- THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. THE COMMON STOCK TO WHICH THIS PROSPECTUS RELATES MAY NOT BE SOLD UNTIL THE REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO SELL THE COMMON STOCK AND IT IS NOT SOLICITING AN OFFER TO BUY THE COMMON STOCK IN ANY STATE WHERE THE OFFER OR SALE OF THE COMMON STOCK IS NOT PERMITTED PRIOR TO THE REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF THAT STATE. SUBJECT TO COMPLETION -- DATED DECEMBER 12, 2001 PROSPECTUS 173,724 SHARES SPSS INC. COMMON STOCK This prospectus relates to the offer and sale of up to 173,724 shares of SPSS common stock from time to time by the selling stockholder, America Online, Inc. ("AOL"). The selling stockholder has acquired the 173,724 shares of common stock being offered by means of this prospectus in a private transaction exempt from the registration requirements of the Securities Act of 1933 on October 22, 2001 under a stock purchase agreement by and between SPSS and AOL. SPSS is obligated to issue additional shares of our common stock under the terms of the stock purchase agreement as more fully described in the "SELLING STOCKHOLDER" section. Concurrent with the consummation of the transaction in which the selling stockholder acquired the common stock, SPSS and AOL entered into an acquisition and strategic online research services agreement whereby Digital Marketing Services, Inc., a division of AOL, will provide SPSS with access to members of AOL and other internet users that visit AOL's Opinion Place(R) market research portals to take online surveys and which will enable SPSS to act as the exclusive provider of AOL Sample to approved third parties. The shares of our common stock issued to the selling stockholder are being registered to permit the selling stockholder to sell the shares from time to time in the public market. The selling stockholder may sell the shares of common stock at prevailing market prices or at privately negotiated prices either directly or through agents or broker dealers, or through any other means described in the section "PLAN OF DISTRIBUTION" beginning on Page 9. The selling stockholder will receive all of the proceeds from the sale of the shares of common stock offered by means of this prospectus. As agreed in advance of SPSS's sale of the common stock to AOL, we are paying all of the expenses of registration incurred in connection with this offering. Our common stock is quoted on the Nasdaq National Market under the symbol "SPSS". On December 7, 2001, the last reported sale price of our common stock on the Nasdaq National Market was $18.05 per share. Our address is 233 South Wacker Drive, Chicago, Illinois 60606 and our phone number is (312) 651-3000. THE SHARES OFFERED BY MEANS OF THIS PROSPECTUS INVOLVE A HIGH DEGREE OF RISK. SEE "RISK FACTORS" BEGINNING ON PAGE 2. NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THE COMMON STOCK TO WHICH THIS PROSPECTUS RELATES OR PASSED UPON THE ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE. THE DATE OF THIS PROSPECTUS IS DECEMBER , 2001 TABLE OF CONTENTS
PAGE ---- FORWARD-LOOKING STATEMENTS.................................. 1 RISK FACTORS................................................ 2 USE OF PROCEEDS............................................. 7 SELLING STOCKHOLDER......................................... 7 PLAN OF DISTRIBUTION........................................ 9 LEGAL MATTERS............................................... 10 EXPERTS..................................................... 10 WHERE YOU CAN FIND MORE INFORMATION......................... 11 INFORMATION INCORPORATED BY REFERENCE....................... 11
FORWARD-LOOKING STATEMENTS This prospectus contains forward-looking statements within the meaning of section 27A of the Securities Act of 1933 and section 21E of the Securities Exchange Act of 1934. We may also make written forward-looking statements in our periodic reports to the SEC, in our press releases and other written materials and in oral statements made by our officers, directors or employees to third parties. Statements that are not historical facts, including statements about our beliefs and expectations, are forward-looking statements. These statements are based on the beliefs and assumptions of our management and on information currently available to us. Forward-looking statements include statements preceded by, followed by or that include the words "believes", "expects", "anticipates", "intends", "plans", "estimates", "designed" "may", "could", "predicts" or similar expressions. Because we are unable to control or predict many factors that will determine our future performance including financial results, forward-looking statements are not guarantees of future performance. They involve risks, uncertainties and assumptions. Our future results may differ materially from those expressed in the forward-looking statements contained in this prospectus and in the information incorporated by reference in this prospectus. See "WHERE YOU CAN FIND MORE INFORMATION." We caution you that a number of important factors could cause actual results to differ materially from those contained in any forward-looking statement. Specific factors that might cause these differences are discussed throughout this prospectus, including the section entitled "RISK FACTORS." SPSS's management believes these forward-looking statements are reasonable. However, because these statements are based on current expectations, you should not place undue reliance on these forward-looking statements. Forward-looking statements speak only as of the date they are made, and we undertake no obligation to update publicly any of them in light of new information or future events. 1 RISK FACTORS You should carefully consider the risks described below before making an investment decision. The risks and uncertainties described below are not the only ones facing our company. Additionally risks and uncertainties not presently known to us or that we currently believe are immaterial may also impair our business operations. If any of the following risks actually occur, our business, financial condition or results of operations could be materially adversely affected, the trading price of our common stock could decline, and you could lose all or part of your investment. OUR FINANCIAL RESULTS AND STOCK PRICE MAY BE AFFECTED BY QUARTERLY FLUCTUATIONS SPSS's quarterly revenue and operating results have varied in the past and may continue to do so in the future. Future revenues and operating results will depend upon, among other factors: - the number and timing of product updates and new product introductions; - delays in product development and introduction; - purchasing schedules of its customers; - changes in foreign currency exchange rates; - product and market development expenditures; - the timing of product shipments; - changes in product mix; - timing, costs and effects of acquisitions; and - general economic conditions. Because SPSS's expense levels are to a large extent based on its forecasts of future revenues, operating results may be adversely affected if our future revenues fall below expectations. Accordingly, SPSS believes that quarter-to-quarter comparisons of its results of operations may not be meaningful and should not be relied upon as an indication of future performance. SPSS has historically operated with very little backlog because its products are generally shipped as orders are received. As a result, revenues in any quarter are dependent on orders shipped and licenses renewed in that quarter. SPSS has experienced a seasonal pattern in its operating results with the fourth quarter typically having the highest operating income. For example, excluding acquisition and other non-recurring charges and the deferred revenue adjustment in 2000, the percentage of SPSS operating income realized in the fourth quarter was 36% in 1998, 39% in 1999 and 35% in 2000. We can provide no assurance that our operating income realized in any given fourth quarter will remain at historically high percentage levels, which could adversely affect revenues for an entire fiscal year. In addition, the timing and amount of SPSS's revenues may be affected by a number of factors that make estimation of operating results before the end of a quarter uncertain. A significant portion of SPSS's operating expenses are relatively fixed, and planned expenditures are based primarily on revenue forecasts. More specifically, in the fourth quarter, the variable profit margins on modest increases in sales volume at the end of the quarter are significant. Should SPSS fail to achieve these fourth quarter revenue increases, net income for the fourth quarter and the full year could be materially affected. Generally, if revenues do not meet SPSS's expectations in any given quarter, operating results will be adversely affected. SPSS was profitable in the ten quarters from December 31, 1994 through June 30, 1997, but had a net loss of $4,196,000 in the third quarter of 1997 due primarily to one-time acquisition charges of $2,911,000 and a charge from the revaluation of specified assets of $5,555,000. In 1998, SPSS was profitable in the first three quarters, but had a net loss of $1,355,000 in the fourth quarter of 1998 primarily due to a one-time merger-related charge and write-off of acquired in-process technology of $5,500,000 and a charge for revaluation of specified assets of $445,000. In 1999, SPSS was profitable in all four quarters. In 2000, SPSS had a net loss of $3,776,000 primarily due to the negative effects of deferring revenues in accordance with AICPA Technical Practice Aids regarding software 2 revenue recognition. This application resulted in a $16,975,000 reduction in net revenues. There can be no assurance that profitability on a quarterly or annual basis can be achieved or sustained in the future. SPSS MAY BE UNSUCCESSFUL IN INTEGRATING RECENT ACQUISITIONS In recent years, SPSS has made a significant number of acquisitions, including the acquisition of businesses based outside of the United States. SPSS faces challenges and business integration issues with its March 2001 merger of one of SPSS's wholly-owned subsidiaries with and into ShowCase Corporation, a Minnesota corporation and the October 2001 purchase of certain assets of and strategic alliance with America Online, Inc. If SPSS loses key personnel from ShowCase or in connection with the America Online strategic alliance or is unable to integrate ShowCase's business or technology or the assets acquired in connection with the America Online strategic alliance into its own effectively, SPSS may experience a material adverse impact on its financial condition. There can be no assurance that the recent acquisitions of ShowCase or the America Online assets or future acquisitions will be successfully integrated into SPSS. SPSS MAY NOT DERIVE BENEFITS FROM THE PENDING MERGER TRANSACTION WITH NETGENESIS CORP. On October 28, 2001, SPSS, Red Sox Acquisition Corp. and NetGenesis Corp. entered into an Agreement and Plan of Merger whereby Red Sox Acquisition Corp., a wholly-owned subsidiary of SPSS, shall be merged with and into NetGenesis. There can be no assurance that SPSS and NetGenesis will obtain all consents and approvals necessary to complete the merger or that the required conditions to closing will be satisfied. If the merger is successfully completed, there can be no assurance that SPSS will be able to retain the SPSS and NetGenesis employees that are critical to both its business and to the successful integration of the companies. The merger may foster increased competition and may have the effect of disrupting the companies' respective customer relationships, which disruption could cause sales of the combined company's software and services to decline. Moreover, it is uncertain whether SPSS can integrate NetGenesis' operations into its own operations without adversely affecting the business, results of operations, financial conditions or prospects of the combined company after the merger. SPSS MAY NOT RESPOND ADEQUATELY TO RAPID TECHNOLOGICAL CHANGES The computer software industry is characterized by rapid technological advances, changes in customer requirements, as well as frequent enhancements to and introductions of technologies. SPSS's future success will depend upon its ability to enhance its existing software and introduce new software products that keep pace with technological developments, respond to evolving customer requirements and achieve market acceptance. In particular, SPSS believes it must continue to respond quickly to users' needs for greater functionality, improved usability and support for new hardware and operating systems. Any failure by SPSS to respond adequately to technological developments and customer requirements, or any significant delays in software development or introduction, could result in loss of revenues. In the past, SPSS has, on occasion, experienced delays in the introduction of new software and enhancements to existing technology, primarily due to difficulties with particular operating environments and problems with software provided by third parties. The extent of these delays has varied depending upon the size and scope of the project and the nature of the problems encountered. These delays have most often resulted from "bugs" encountered in working with new versions of operating systems and other third party software, and bugs or unexpected difficulties in existing third party software which complicate integration with SPSS's software. From time to time, SPSS has discovered bugs in its software that are resolved through maintenance releases or through periodic updates depending upon the seriousness of the defect. There can be no assurance that SPSS will be successful in developing and marketing new software or enhancements to existing technology on a timely basis or that SPSS will not experience significant delays or defects in its software in the future, which could have a material adverse effect on SPSS. In addition, there can be no assurance that new software or enhancements to existing technology developed by SPSS will achieve market acceptance or that developments by others will not render SPSS's technologies obsolete or noncompetitive. 3 SPSS MAY FACE BUSINESS DECLINES DUE TO OUR INTERNATIONAL OPERATIONS Revenues from operations outside of North America accounted for approximately 44% of SPSS's revenues in 1998, 46% of SPSS's revenues in 1999 and 43% of SPSS's revenues in 2000. SPSS expects that revenues from international operations will continue to represent a large percentage of its net revenues and that this percentage may increase, particularly as SPSS further "localizes" products by translating them into additional languages and expands its operations through acquisitions of companies outside the United States. A number of risk factors may affect our international revenues, including: - greater difficulties in accounts receivable collection; - longer payment cycles; - exposure to currency fluctuations; - financial, tax and accounting impact of the European Union's adoption of the Euro as legal currency; - political and economic instability; and - the burdens of complying with a wide variety of foreign laws and regulatory requirements. SPSS also believes that it is exposed to greater levels of software piracy in international markets because of the weaker protection afforded to intellectual property in some foreign jurisdictions. As SPSS expands its international operations, the risks described above could increase and, in any event, could have a material adverse effect on SPSS. SPSS'S STOCK PRICE MAY EXPERIENCE VOLATILITY There has been significant volatility in the market prices of securities of technology companies, including SPSS, and, in some instances, this volatility has been unrelated to the operating performance of those companies. Market fluctuations may adversely affect the price of our common stock. SPSS also believes that, in addition to factors such as interest rates and economic conditions which affect stock prices generally, some, but not all, of the factors which could result in fluctuations in our stock price include: - announcements of new products by SPSS or its competitors; - quarterly variations in financial results; - recommendations and reports of analysts; - acquisitions; and - other factors beyond SPSS's control. SPSS RELIES ON THIRD PARTIES FOR CERTAIN SOFTWARE SPSS licenses software from third parties. Some of this licensed software is embedded in SPSS's products, and some is offered as add-on products. If these licenses are discontinued, or become invalid or unenforceable, there can be no assurance that SPSS will be able to develop substitutes for this software independently or to obtain alternative sources in a timely manner. Any delays in obtaining or developing substitutes for licensed software could have a material adverse effect on SPSS. SPSS RELIES ON THIRD PARTIES FOR SOFTWARE DISTRIBUTION In January 1997, SPSS entered into a Banta Global Turnkey Software Distribution Agreement under which Banta Global Turnkey manufactures, packages and distributes SPSS's software products to SPSS's domestic and international customers and various international subsidiaries. The Banta agreement had an initial three-year term and automatically renews thereafter for successive periods of one year. The Banta agreement was renewed in January 2001. Either party may terminate the Banta agreement for cause by 4 written notice if the other materially breaches its obligations. If Banta fails to perform adequately any of its obligations under the Banta agreement, SPSS's operating results could be materially adversely affected. CHANGES IN PUBLIC EXPENDITURES MAY ADVERSELY AFFECT SPSS A significant portion of SPSS's revenues comes from licenses of its software directly to foreign and domestic government entities. In addition, significant amounts of SPSS's revenues come from licenses to academic institutions, healthcare organizations and private businesses that contract with or are funded by government entities. Government appropriations processes are often slow and unpredictable and may be affected by factors outside SPSS's control. In addition, proposals are currently being made in various countries to reduce government spending. Reductions in government expenditures and termination or renegotiation of government-funded programs or contracts could have a material adverse effect on SPSS. In addition, declines in overall levels of economic activity could also have a material adverse impact on SPSS. SPSS MAY BE UNABLE TO CONTINUE TO COMPETE WITH COMPANIES IN ITS INDUSTRIES THAT HAVE FINANCIAL OR OTHER ADVANTAGES SPSS's historical market for statistical software is both highly competitive and fragmented. SPSS is among the largest companies in the statistical software market, and, based upon sales and comparative assessments in trade publications, SPSS believes that it competes effectively against its competitors, particularly on desktop computing platforms. SPSS considers its primary worldwide competitor to be the larger and better-financed SAS Institute, although SPSS believes that SAS's revenues are derived principally from products for purposes other than statistical analysis and operate on large systems platforms. StatSoft Inc. and Minitab, Inc. are also competitors, although their annual revenues from these statistical products are believed to be considerably less than the revenues of SPSS. In addition to competition from other statistical software companies, SPSS also faces competition from providers of software for specific statistical applications. In the data mining, customer relationship management and business performance measurement markets, SPSS faces competition from many larger and more well-funded companies, including SAS, IBM, Informix, NCR, Oracle, and others, as well as recent entrants, such as Attune, Broadbase, E.piphany and NetPerceptions, many of whom specialize in customer relationship management in e-commerce settings. With the exception of SAS, these competitors do not currently offer the range of analytical capability SPSS offers, and as a result are both competitors and potential partners for SPSS technology. In all markets, SPSS competes primarily on the basis of the usability, functionality, performance, reliability and connectivity of its software. The significance of each of these factors varies depending upon the anticipated use of the software and the analytical training and expertise of the customer. To a lesser extent, SPSS competes on the basis of price. SPSS maintains pricing and licensing policies to meet market demand. SPSS believes it is able to compete successfully because of the highly usable interfaces, comprehensive analytical capabilities, efficient performance characteristics, local language versions, consistent quality, and connectivity features of its software, as well as its worldwide distribution capabilities and widely recognized name. In the future, SPSS may face competition from new entrants into its markets. SPSS could also experience competition from companies in other sectors of the broader market for business intelligence software, like providers of OLAP (On-Line Analytical Processing) and analytical application software, as well as from companies in other sectors of the broader market for customer relationship management software, including providers of sales force automation and campaign management software, who could add advanced analytical functionality to their existing offerings. Some of these potential competitors have significantly more capital resources, marketing experience and research and development capabilities than SPSS. Competitive pressures from the introduction of new solutions and products by these companies or other companies could have a material adverse effect on SPSS. There can be no assurance that SPSS will be able to compete successfully in the future. 5 SPSS DEPENDS ON KEY EXECUTIVES. A LOSS OF THESE EXECUTIVES AND OTHER PERSONNEL COULD NEGATIVELY IMPACT OUR OPERATIONS SPSS is dependent on the efforts of various executives and key employees, including its President and Chief Executive Officer, Jack Noonan. SPSS's continued success will depend in part on its ability to attract and retain highly qualified technical, managerial, sales, marketing and other personnel. Competition for highly qualified personnel is intense. SPSS's inability to continue to attract or retain highly qualified personnel could have a material adverse effect on SPSS's financial position and results of operation. No life insurance policies are maintained on SPSS's key personnel. SPSS MAY NOT RECEIVE THE FULL BENEFITS OF ITS INTELLECTUAL PROPERTY PROTECTIONS The analytical algorithms incorporated in SPSS's software are not proprietary. SPSS believes that the proprietary technology constituting a portion of its software determines the speed and quality of displaying the results of computations, the ability of its software to work in conjunction with third party software, and the ease of use of its software. SPSS's success will depend, in part, on its ability to protect the proprietary aspects of its software. SPSS's attempts to protect its proprietary software with trade secret laws and internal nondisclosure safeguards, as well as copyright and trademark laws and contractual restrictions on copying, disclosure and transferability that are incorporated into its software license agreements. SPSS licenses its software only in the form of executable code, with contractual restrictions on copying, disclosures and transferability. SPSS licenses its software for use on mainframes, minicomputers, and distributed computer networks. SPSS licenses its products for personal computers to end-users by use of a "shrink-wrap" license that is not signed by licensees, as is customary in the packaged software industry. It is uncertain whether these license agreements are legally enforceable. The source code for all of SPSS's software is protected as a trade secret and as unpublished copyrighted work. In addition, SPSS has entered into confidentiality and nondisclosure agreements with its key employees. Despite these restrictions, it may be possible for competitors or users to copy aspects of SPSS's software or to obtain information which SPSS regards as a trade secret. SPSS has no patents, and judicial enforcement of copyright laws may be uncertain, particularly outside of North America. Preventing unauthorized use of computer software is difficult, and software piracy is expected to be a persistent problem for the packaged software industry. These problems may be particularly acute in international markets. In addition, the laws of various countries in which SPSS's software is or may be licensed do not protect SPSS's software and intellectual property rights to the same extent as the laws of the United States. Despite the precautions taken by SPSS, it may be possible for unauthorized third parties to reverse engineer or copy SPSS's products or obtain and use information that SPSS regards as proprietary. There can be no assurance that the steps taken by SPSS to protect its proprietary rights will be adequate to prevent misappropriation of its technology. Although SPSS's software has never been the subject of an infringement claim, there can be no assurance that third parties will not assert infringement claims against SPSS in the future or that any infringement assertion will not result in costly litigation or require SPSS to obtain a license to use the intellectual property of third parties. There can be no assurance that these licenses will be available on reasonable terms, or at all. There can also be no assurance that SPSS's competitors will not independently develop technologies that are substantially equivalent or superior to SPSS's technologies. CERTAIN STOCKHOLDERS AND OFFICERS AND DIRECTORS MAY CONTROL CORPORATE ACTIONS DUE TO THEIR OWNERSHIP OF SPSS STOCK As of October 31, 2001, SPSS's executive officers and directors owned beneficially approximately 22.4% of the outstanding shares of SPSS common stock. The Norman H. Nie Revocable Trust Dated March 15, 1991 (a trust beneficially controlled by Norman H. Nie, the chairman of our board of directors) and affiliates of the Norman H. Nie Trust are entitled to nominate a director for inclusion in the management slate for election to the Board of Directors if the Norman H. Nie Trust owns at least 12.5% of the outstanding shares of common stock. As of October 31, 2001, the Norman H. Nie Trust and affiliates of the Norman H. Nie Trust beneficially owned approximately 7.0% of the outstanding shares of common stock. 6 Because of the combined voting power of the officers and directors, these individuals acting as a group may be able to influence SPSS's affairs and business, including any determination with respect to a change in control of SPSS, future issuances of SPSS common stock or other securities, declaration of dividends on SPSS common stock and the election of directors. This influence could have the effect of delaying, deferring or preventing a change of control of SPSS which could deprive SPSS's stockholders of the opportunity to sell their shares of common stock at prices higher than prevailing market prices. ANTI-TAKEOVER PROTECTIONS MAY MAKE IT DIFFICULT FOR A THIRD PARTY TO ACQUIRE SPSS SPSS's Certificate of Incorporation and bylaws contain a number of provisions, including provisions requiring an 80% super-majority stockholder approval of specified actions and provisions for a classified Board of Directors, which would make the acquisition of SPSS, by means of an unsolicited tender offer, a proxy contest or otherwise, more difficult. SPSS's bylaws provide for a staggered board of directors so that only one-third of the total number of directors are replaced or re-elected each year. Therefore, potential acquirers of SPSS may face delays in replacing the existing directors. SPSS's senior executive officers may be entitled to substantial payments in the event of their termination without cause or constructive termination following a change of control of SPSS. These payments could have the effect of discouraging a potential acquirer from acquiring control of SPSS. SALES OF SPSS STOCK AVAILABLE FOR FUTURE USE COULD DEPRESS SPSS'S STOCK PRICE In addition to the shares of common stock which are outstanding, as of October 31, 2001, there were vested options outstanding held by management to purchase approximately 1,299,148 additional shares of common stock, with an average exercise price of $17.62 per share, and unvested options to purchase approximately 728,930 additional shares of common stock. SPSS has also established a stock purchase plan available to employees of SPSS, which permits employees to acquire shares of common stock at the end of each quarter at 85% of the market price of the common stock as of the day after the end of the quarter. No prediction can be made as to the effect, if any, that future sales, or the availability of shares of SPSS common stock for future sales, will have on the market price prevailing from time to time. Sales of substantial amounts of common stock by SPSS or by stockholders who hold "restricted securities," or the perception that these sales may occur, could adversely affect prevailing market prices for the common stock. USE OF PROCEEDS All of the shares of common stock being offered by means of this prospectus are being sold by the selling stockholder, who will receive all proceeds from any sales. We will not receive any of the proceeds from the sale of the shares of common stock offered by the selling stockholder. In addition, other than the completion and filing of this registration statement, we will not participate in the offering or sale of the shares of common stock by the selling stockholder. SELLING STOCKHOLDER Under the terms of a stock purchase agreement by and between SPSS and America Online, Inc., AOL acquired $3,000,000 of our common stock, or 173,724 shares, offered by means of this prospectus. The parties calculated the per share purchase price to be equal to the average of the closing prices of one share of SPSS common stock, as quoted on the NASDAQ National Market, for the five trading days preceding the date of execution of the stock purchase agreement. Under the terms of the stock purchase agreement, on each of October 22, 2002, October 22, 2003 and October 22, 2004, SPSS is also obligated to issue and deliver to AOL that number of shares of our common stock up to, but not to exceed, 4.9% of the issued and outstanding shares of SPSS common stock calculable by dividing $3,000,000 by the average of the closing prices of SPSS common stock, as quoted on the NASDAQ 7 National Market for the five (5) trading days preceding each of October 22, 2002, October 22, 2003 and October 22, 2004. Within two months of each of October 22, 2002, October 22, 2003 and October 22, 2004, SPSS is obligated to register AOL's resale of the shares of our common stock with the SEC. The stock purchase agreement provides that, to the extent the average closing price of SPSS common stock as determined above is less than the closing price of one share of SPSS common stock on the day preceding the date a corresponding registration statement registering AOL's resale of the shares of our common stock becomes effective, SPSS is obligated to either (a) issue additional shares of SPSS common stock to AOL to ensure a $3,000,000 fair market valuation of the shares of SPSS common stock held by AOL as of the date preceding the effective date of the applicable registration statement, (b) pay AOL a cash amount equal to the difference between the fair market value of the shares of SPSS common stock issued to AOL on each of October 22, 2001, October 22, 2002, October 22, 2003 and October 22, 2004, respectively, and the fair market value of those shares on the date preceding the date the corresponding registration statement becomes effective, or (c) a combination of the methods described in (a) and (b) above. In addition, to the extent the closing price of one share of SPSS common stock on the day preceding the date a registration statement registering AOL's resale of the shares of SPSS common stock becomes effective is greater than the average closing price of SPSS common stock as determined above, AOL is obligated to either (a) deliver to SPSS that number of shares of SPSS common stock which exceeds a $3,000,000 fair market valuation of the shares of SPSS common stock held by AOL as of the date preceding the effective date of the applicable registration statement, (b) pay SPSS a cash amount equal to the difference between the fair market value of the shares of SPSS common stock held by AOL on the date preceding the effective date of the applicable registration statement, and the fair market value of those shares on each of October 22, 2001, October 22, 2002, October 22, 2003 and October 22, 2004, respectively, or (c) a combination of the methods described in (a) and (b) above. If the number of shares of common stock issued to AOL on October 22, 2001 or proposed to be issued to AOL on any of October 22, 2002, October 22, 2003 and October 22, 2004 would cause AOL to hold greater than 4.9% of SPSS's issued and outstanding shares of common stock, taken together with all other shares of SPSS common stock held by AOL as of that date, the number of shares of SPSS common stock to be issued to AOL will be reduced so that AOL will own no more than 4.9% of SPSS's issued and outstanding shares of common stock as of the applicable date. In the event that SPSS fails to register AOL's resale of the shares of our common stock issued to AOL within the two-month period following each of October 22, 2002, October 22, 2003 and October 22, 2004, SPSS is obligated to pay $3,000,000 to AOL upon AOL's re-delivery of the shares to SPSS. Further, in the event that SPSS fails to maintain the effectiveness of any registration statement pursuant to which AOL has the right to resell any of the shares of SPSS common stock issued to AOL, AOL has the right to require SPSS to purchase that portion of the shares which AOL then currently owns at a per share purchase price equal to the closing price of SPSS common stock, as quoted on the NASDAQ National Market on the date AOL attempts to resell such shares. Concurrent with the consummation of the transaction in which the selling stockholder acquired the common stock being offered by means of this prospectus, SPSS and AOL entered into a strategic online research services agreement. Under the terms of the strategic online research services agreement, AOL will provide SPSS with access to AOL Members and other Internet users that visit AOL's Opinion Place(R) market research portal(s) for the purpose of participating in online surveys ("Sample"), and SPSS will become the exclusive distributor of AOL's Sample to approved companies in the market research industry (and acquire certain assets associated with the Sample distribution business, the right to transact business with its existing customers and the right to interview and extend offers to former AOL employees previously responsible for the external Sample distribution business). AOL, through its Digital Marketing Services division, will be responsible for the hosting and management of Opinion Place(R), while SPSS will be responsible for providing Sample and survey completion to approved partners. SPSS shall have no obligation to issue and deliver any portion of our shares of common stock to AOL on each of October 22, 2002, October 22, 2003 or October 22, 8 2004 if this strategic online research services agreement has been terminated before the date on which that portion of our shares of common stock is to be issued and delivered. Under the terms of the strategic online research services agreement, in addition to the $12,000,000 of SPSS common stock issued to AOL under the stock purchase agreement, as adjusted according to its terms, SPSS is obligated to pay AOL $30,000,000 as consideration for the Sample, certain assets associated with the Sample distribution business and other rights. This amount is payable in installments, with the first installment of $2,812,500 paid on October 22, 2001, the date that the strategic online research services agreement was executed. The balance is payable over the four-year term of the agreement in equal quarterly installments of $1,812,500. Moreover, in the event that AOL provides an amount of its Sample in excess of the threshold of AOL Sample that it is required to provide to SPSS in any given year, then SPSS shall be obligated to pay an additional AOL Sample-fee. The following table identifies (a) the number of shares of our common stock which the selling stockholder owned before the offering and the percentage of our total outstanding common stock which that number represents, (b) the maximum number of shares that the selling stockholder may offer by means of this prospectus, and (c) the number of shares of our common stock which the selling stockholder will own after the offering and the percentage of our total outstanding common stock which that number represents. The selling stockholder may from time to time offer the shares of common stock offered by means of this prospectus. We do not know when or in what amounts the selling stockholder may offer shares for resale and we cannot assure you that the selling stockholder will sell any or all of the shares offered by means of this prospectus.
SHARES BENEFICIALLY SHARES BENEFICIALLY OWNED BEFORE THE OWNED AFTER THE OFFERING(1) OFFERING(2) -------------------- NUMBER OF SHARES ------------------- SELLING STOCKHOLDER NUMBER PERCENTAGE OFFERED HEREBY NUMBER PERCENTAGE - ------------------- ------- ---------- ---------------- ------ ---------- America Online, Inc................... 173,724 1.1% 173,724 0 0
- --------------- (1) SPSS has relied on information provided by the selling stockholder to determine the number of shares of our common stock, if any, which the selling stockholder owned before receiving the shares of our common stock issued to them in connection with the stock purchase agreement. (2) Assumes the sale of all shares that may be sold in the offering. PLAN OF DISTRIBUTION AOL may, from time to time, sell all or a portion of the shares being offered by means of this prospectus by one or more of the following methods: - on the Nasdaq National Market, or such other exchange on which SPSS's common stock may from time to time be trading; - in privately negotiated transactions or otherwise; - at fixed prices that may be changed; - at market prices prevailing at the time of sale; - at prices related to such market prices or at prices otherwise negotiated; - block trades in which the broker or dealer will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction; - purchases by a broker or dealer as principal; - an exchange distribution in accordance with the rules of such exchange; - ordinary brokerage transactions and transactions in which the broker solicits purchasers; 9 - short sales; or - a combination of any of the above methods of sale. In effecting sales, brokers and dealers engaged by AOL may arrange for other brokers or dealers to participate. Brokers or dealers may receive commissions or discounts from AOL, or, if any broker-dealer acts as agent for the purchaser of the shares, from the purchaser, in amounts to be negotiated which are not expected to exceed those customary in the types of transactions involved. Broker-dealers may agree with AOL to sell a specified number of shares at a stipulated price per share. To the extent a broker-dealer is unable to sell a specified number of shares acting as agent for AOL, it will purchase as principal any unsold shares at the price required to fulfill the broker-dealer commitment to AOL. Broker-dealers who acquire shares as principal may resell the shares from time to time in transactions that may involve block transactions of the nature described above, in the over-the-counter market, at prices and on terms then prevailing at the time of sale, at prices related to the then-current market price or in negotiated transactions. In connection with resales, broker-dealers may pay to or receive from the purchasers of the shares commissions as described above. AOL may be deemed an "underwriter" as defined in the Securities Act of 1933 in connection with the sale of the shares offered by this prospectus. Any broker-dealers or agents that participate with AOL in sales of the shares may be considered to be "underwriters" within the meaning of the Securities Act in connection with sales in which they participate. If any broker-dealers or agents are considered to be "underwriters," then any commissions they receive and any profit on the resale of the shares purchased by them may be considered to be underwriting commissions or discounts under the Securities Act. From time to time AOL may engage in short sales, short sales against the box, puts and calls and other transactions in SPSS's common stock, and may sell and deliver the shares in connection with these transactions or to settle securities loans. If AOL engages in such transactions, the price of our common stock may be affected. From time to time AOL may pledge its shares pursuant to the margin provisions of its agreements with its brokers. Upon a default by AOL, the broker may offer and sell the pledged shares from time to time. AOL and any other persons participating in the sale or distribution of the shares will be subject to the Securities Exchange Act of 1934 and the related rules and regulations, including Regulation M, to the extent it applies. The Exchange Act and related rules may limit the timing of purchases and sales of any of the shares by AOL or any other person that may affect the marketability of the shares. AOL also must comply with the applicable prospectus delivery requirements under the Securities Act of 1933 in connection with the sale or distribution of the shares. We are required to pay certain fees and expenses incident to the registration and purchase of the shares by AOL. We have agreed to indemnify AOL in certain circumstances against certain liabilities, including liabilities under the Securities Act. AOL has agreed to indemnify us in certain circumstances against certain liabilities, including liabilities under the Securities Act. This offering will terminate on the date on which AOL has sold all shares offered by means of this prospectus. LEGAL MATTERS The legality of the shares of our common stock being offered by means of this prospectus has been passed on for SPSS by Ross & Hardies, Chicago, Illinois. EXPERTS The financial statements and schedule of SPSS as of December 31, 2000 and 1999 and for each of the years in the three-year period ended December 31, 2000, have been incorporated by reference herein and in the registration statement in reliance upon the report of KPMG LLP, independent certified public 10 accountants, incorporated by reference herein, and upon the authority of said firm as experts in accounting and auditing. WHERE YOU CAN FIND MORE INFORMATION We have filed a registration statement on Form S-3 with the SEC under the Securities Act of 1933 to allow the selling stockholder to resell the common stock offered by means of this prospectus. This prospectus, which is a part of the registration statement, does not contain all of the information identified in the registration statement. For further information about us and the common stock offered by means of this prospectus, we refer you to the registration statement and the exhibits filed as a part of the registration statement. Statements contained in this prospectus as to the contents of any contract or other document filed as an exhibit to the registration statement are not necessarily complete. If a contract or document has been filed as an exhibit to the registration statement, we refer you to the copy of the contract or document that has been filed. SPSS is subject to the information and periodic reporting requirements of the Securities Exchange Act of 1934. In accordance with those requirements, we file annual, quarterly and special reports, proxy statements and other information with the SEC. You can read and copy any document we file at the SEC's public reference rooms at the following location: Judiciary Plaza 450 Fifth Street, N.W. Room 1024 Washington, D.C., 20549 You can request copies of these documents upon payment of a duplicating fee, by writing to the SEC. Please call the SEC at 1-800-SEC-0330 for further information on the operation of the public reference rooms and the procedure for obtaining copies. The documents that SPSS files with the SEC, including the registration statement, are also available to you on the SEC's web site. You can log onto the SEC's web site at http://www.sec.gov. INFORMATION INCORPORATED BY REFERENCE The SEC allows us to "incorporate by reference" the information that we file with it, which means that we can disclose important information to you by referring to those documents. As a result, you may need to review other documents filed by SPSS with the SEC to obtain more information. Information is incorporated into this prospectus in two ways. First, if information is contained in a document that SPSS filed with the SEC before the date of this prospectus, the document is specifically identified below. Second, all of the information provided in a periodic or other report or proxy statement filed by SPSS with the SEC after the date of this prospectus is incorporated by reference. The information contained in the documents we incorporate by reference is considered a part of this prospectus. Additionally, because information concerning SPSS, whether contained in this prospectus or in a document incorporated by reference, will be amended or superseded by more current information contained in later filed documents, the information that we file with the SEC after the date of this prospectus will update and supersede older information contained in, or incorporated by reference into, this prospectus. We incorporate by reference into this prospectus all the documents listed below: - The annual report of SPSS Inc. on Form 10-K filed with the SEC for the fiscal year ended December 31, 2000 (the audited financial statements attached to the Form 10-K have been updated by the audited financial statements filed with the current report of SPSS Inc. on Form 8-K filed with the SEC on November 13, 2001); - The quarterly report of SPSS Inc. on Form 10Q filed with the SEC for the fiscal quarter ended September 30, 2001; 11 - The quarterly report of SPSS Inc. on Form 10-Q filed with the SEC for the fiscal quarter ended June 30, 2001; - The quarterly report of SPSS Inc. on Form 10-Q filed with the SEC for the fiscal quarter ended March 31, 2001; - The current report of SPSS Inc. on Form 8-K/A (Amendment No. 1) filed with the SEC on December 12, 2001; - The current report of SPSS Inc. on Form 8-K filed with the SEC on November 13, 2001; - The current report of SPSS Inc. on Form 8-K, dated October 28, 2001, filed with the SEC on October 29, 2001; - The current report of SPSS Inc. on Form 8-K, dated October 22, 2001, filed with the SEC on October 23, 2001; - The current report of SPSS Inc. on Form 8-K, dated September 28, 2001, filed with the SEC on October 12, 2001; - The proxy statement filed with the SEC on May 21, 2001, for SPSS's annual meeting of stockholders held on June 20, 2001, except for the compensation committee report contained therein; and - The description of the common stock of SPSS, Inc. contained in its registration statement filed with the SEC on a Form 8-A dated August 4, 1993 pursuant to Section 12 of the Securities Exchange Act of 1934. In addition to the documents listed above, SPSS incorporates by reference into this prospectus all documents filed by SPSS with the SEC under Sections 13(a), 13(c), 14 and 15(d) of the Securities Exchange Act of 1934 after the date of this prospectus and until all of the common stock being offered by means of this prospectus have been sold by the selling stockholder or the registration statement which SPSS has filed with the SEC relating to the common stock ceases to be effective. We will deliver a free copy of any document incorporated by reference into this prospectus but not delivered with this prospectus to anyone who receives this prospectus. Exhibits filed with the documents that are incorporated by reference into this prospectus will be delivered only if the exhibits have been specifically incorporated by reference. Requests for any of these documents may be made in writing or orally and should be directed to: Chief Financial Officer, SPSS Inc., 233 South Wacker Drive, Chicago, Illinois 60606, (312) 651-3000. Neither SPSS nor the selling stockholder has authorized any dealer, salesman or any other person to give any information or to make any representations not contained in this prospectus. As a result, any information or representation not contained herein must not be relied upon as having been authorized by SPSS. Neither SPSS nor the selling stockholder is making an offer of the common stock in any state where the offer is not permitted. You should not assume that the information in this prospectus is accurate as of any date other than the date on the front of this document. All selling stockholders that effect transactions in the shares of common stock offered by means of this prospectus are required to deliver a copy of their prospectus to any purchaser of the shares of common stock at or before the time a certificate representing the shares of common stock is delivered to the purchaser. 12 PART II INFORMATION NOT REQUIRED IN PROSPECTUS ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION We have agreed to bear the expenses of registering the shares for the selling stockholder under the federal and state securities laws. The following table sets forth the costs and expenses, other than underwriting discounts and commissions, payable by us in connection with the sale of common stock being offered. All amounts are estimated except the SEC registration fee. SEC registration fee........................................ $ 917 Printing expenses......................................... 2,500 Legal fees and expenses................................... 5,000 Accounting fees and expenses.............................. 2,000 Miscellaneous expenses.................................... 1,583 ------- Total....................................................... $12,000 =======
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS SPSS's Certificate of Incorporation provides for indemnification to the full extent permitted by the laws of the State of Delaware against and with respect to threatened, pending or completed actions, suits or proceedings arising from or alleged to arise from, a party's actions or omissions as a director, officer, employee or agent of SPSS or of any other corporation, partnership, joint venture, trust or other enterprise which has served in such capacity at the request of SPSS if the acts or omissions occurred or were or are alleged to have occurred, while said party was a director or officer of SPSS; provided, however, SPSS shall not indemnify any director or officer in an action against SPSS unless SPSS shall have consented to the action. Generally, under Delaware law, indemnification will only be available where an officer or director can establish that he/she acted in good faith and in a manner which was reasonably believed to be in or not opposed to the best interests of SPSS. Section 145 of the Delaware Law provides that a corporation may indemnify a director, officer, employee or agent made a party to an action by reason of the fact that the person was a director, officer, employee or agent of the corporation or was serving at the request of the corporation against expenses actually incurred by the person in connection with the action if the person acted in good faith and in a manner that the person reasonably believed to be in, or not opposed to, the best interest of the corporation with respect to any criminal action, and had no reasonable cause to believe his conduct was unlawful. Delaware Law does not permit a corporation to eliminate a director's duty of due care, and the provisions of SPSS's Certificate of Incorporation have no effect on the availability of equitable remedies such as injunction or rescission, based upon a director's breach of the duty of care. SPSS maintains a director's and officer's liability insurance policy which indemnifies directors and officers for specified losses arising from a claim by reason of a wrongful act, as defined, under specified circumstances where SPSS does not provide indemnification. ITEM 16. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS (a) Exhibits numbered in accordance with Item 601 of Regulation S-K
INCORPORATION BY EXHIBIT REFERENCE NUMBER DESCRIPTION OF DOCUMENT (IF APPLICABLE) - ------- ----------------------- ---------------- 2.1 Agreement and Plan of Merger among SPSS Inc., SPSS ACSUB, Inc., Clear Software, Inc. and the shareholders named therein, dated September 23, 1996. ......................... (1), Ex. 2.1 2.2 Agreement and Plan of Merger among SPSS Inc., SPSS Acquisition Inc. and Jandel Corporation, dated October 30, 1996. ...................................................... (2), Annex A
II-1
INCORPORATION BY EXHIBIT REFERENCE NUMBER DESCRIPTION OF DOCUMENT (IF APPLICABLE) - ------- ----------------------- ---------------- 2.3 Asset Purchase Agreement by and between SPSS Inc. and DeltaPoint, Inc., dated as of May 1, 1997. ................. (16), Ex. 2.3 2.4 Stock Purchase Agreement among the Registrant, Edward Ross, Richard Kottler, Norman Grunbaum, Louis Davidson and certain U.K.-Connected Shareholders or warrant holders of Quantime Limited named therein, dated as of September 30, 1997, together with a list briefly identifying the contents of omitted schedules. ......................................... (3), Ex. 2.1 2.5 Stock Purchase Agreement among the Registrant, Edward Ross, Richard Kottler, Norman Grunbaum, Louis Davidson and certain Non-U.K. Shareholders or warrant holders of Quantime Limited named therein, dated as of September 30, 1997, together with a list briefly identifying the contents of omitted schedules. ................................................. (3), Ex. 2.2 2.6 Stock Purchase Agreement by and among SPSS Inc. and certain Shareholders of Quantime Limited listed on the signature pages thereto, dated November 21, 1997. .................... (4), Ex. 2.1 2.7 Stock Purchase Agreement by and among Jens Nielsen, Henrik Rosendahl, Ole Stangegaard, Lars Thinggaard, Edward O'Hara, Bjorn Haugland, 2M Invest and the Shareholders listed on Exhibit A thereto, dated November 21, 1997. ................ (4), Ex. 2.2 2.8 Stock Purchase Agreement by and among SPSS Inc. and the Shareholders of Integral Solutions Limited listed on the signature pages hereof, dated as of December 31, 1998. ..... (18), Ex. 2.1 2.9 Share Purchase Agreement by and among SPSS Inc., Surveycraft Pty Ltd. and Jens Meinecke and Microtab Systems Pty Ltd., dated as of November 1, 1998. .............................. (20), Ex. 2.9 2.10 Stock Acquisition Agreement by and among SPSS Inc., Vento Software, Inc. and David Blyer, John Gomez and John Pappajohn, dated as of November 29, 1999. .................. (21), Ex. 2.1 2.11 Asset Purchase Agreement by and between SPSS Inc. and DataStat, S.A., dated as of December 23, 1999. ............. (24), Ex. 2.11 2.12 Agreement and Plan of Merger dated as of November 6, 2000, among SPSS, SPSS Acquisition Sub Corp., and ShowCase. ...... (25), Ex. 2.1 2.13 Agreement and Plan of Merger dated as of October 28, 2001, among SPSS, Red Sox Acquisition Corp. and NetGenesis Corp. ...................................................... (29), Ex. 99.1 3.1 Certificate of Incorporation of SPSS. ...................... (5), Ex. 3.2 3.2 By-Laws of SPSS. ........................................... (5), Ex. 3.4 5.1 Opinion of Ross & Hardies. ................................. 10.1 Employment Agreement with Jack Noonan. ..................... (8), Ex. 10.1 10.2 Agreement with Valletta. ................................... (6), Ex. 10.2 10.3 Agreement between SPSS and Prentice Hall. .................. (6), Ex. 10.5 10.4 Intentionally omitted. ..................................... 10.5 HOOPS Agreement. ........................................... (6), Ex. 10.7 10.6 Stockholders Agreement. .................................... (5), Ex. 10.8 10.7 Agreements with CSDC. ...................................... (5), Ex. 10.9 10.8 Amended 1991 Stock Option Plan. ............................ (5), Ex. 10.10 10.9 SYSTAT Asset Purchase Agreement. ........................... (9), Ex. 10.9 10.10 1994 Bonus Compensation. ................................... (10), Ex. 10.11 10.11 Lease for Chicago, Illinois Office. ........................ (10), Ex. 10.12 10.12 Amendment to Lease for Chicago, Illinois Office. ........... (10), Ex. 10.13 10.13 1995 Equity Incentive Plan. ................................ (11), Ex. 10.14
II-2
INCORPORATION BY EXHIBIT REFERENCE NUMBER DESCRIPTION OF DOCUMENT (IF APPLICABLE) - ------- ----------------------- ---------------- 10.14 1995 Bonus Compensation. ................................... (12), Ex. 10.15 10.15 Amended and Restated 1995 Equity Incentive Plan. ........... (13), Ex. 10.17 10.16 1996 Bonus Compensation. ................................... (14), Ex. 10.18 10.17 Software Distribution Agreement between SPSS Inc. and Banta Global Turnkey. ............................................ (14), Ex. 10.19 10.18 Lease for Chicago, Illinois in Sears Tower. ................ (15), Ex. 10.20 10.19 1997 Bonus Compensation. ................................... (17), Ex. 10.21 10.20 Norman H. Nie Consulting L.L.C. Agreement with SPSS. ....... (17), Ex. 10.22 10.21 Second Amended and Restated 1995 Equity Incentive Plan. .... (19),Ex. A 10.22 1998 Bonus Compensation. ................................... (20), Ex. 10.23 10.23 Third Amended and Restated 1995 Equity Incentive Plan. ..... (22), Ex. 10.1 10.24 Loan Agreement dated June 1, 1999 between SPSS and American National Bank and Trust Company of Chicago. ................ (23), Ex. 10.1 10.25 First Amendment to Loan Agreement dated June 1, 1999 between SPSS and American National Bank and Trust Company of Chicago. ................................................... (23), Ex. 10.2 10.26 1999 Bonus Compensation. ................................... (24), Ex. 10.27 10.27 2000 Equity Incentive Plan. ................................ (26), Ex. 10.45 10.28 SPSS Qualified Employee Stock Purchase Plan. ............... (26), Ex. 10.46 10.29 SPSS Nonqualified Employee Stock Purchase Plan. ............ (26), Ex. 10.47 10.30 2000 Bonus Compensation. ................................... (27), Ex. 10.30 10.31 Stock Purchase Agreement by and between SPSS Inc. and Siebel Systems, Inc. .............................................. (28), Ex. 10.31 10.32 1999 Employee Equity Incentive Plan. ....................... (30), Ex. 4.1 10.33 Stock Purchase Agreement by and between SPSS Inc. and America Online, Inc. ....................................... 10.34 Strategic Online Research Services Agreement by and between SPSS Inc. and America Online, Inc.*......................... (31), Ex. 99.1 21.1 Subsidiaries of SPSS. ...................................... (27), Ex. 21.1 23.1 Consent of KPMG LLP. ....................................... 23.2 Consent of Ross & Hardies (Included in Exhibit 5.1). ....... 24.1 Power of Attorney (Included in the Signature Page to this Registration Statement). ...................................
- --------------- * Portions of this Exhibit are omitted and have been filed separately with the Securities and Exchange Commission in connection with a pending request for confidential treatment of certain portions of the Exhibit pursuant to Rule 406 promulgated under the Securities Act of 1933. (1) Previously filed with SPSS Inc.'s Report on Form 8-K, dated September 26, 1996, filed on October 11, 1996, as amended on Form 8-K/A-1, filed November 1, 1996. (File No. 000-22194) (2) Previously filed with Amendment No. 1 to Form S-4 Registration Statement of SPSS Inc. filed on November 7, 1996. (File No. 333-15427) (3) Previously filed with SPSS Inc.'s Report on Form 8-K, dated September 30, 1997, filed on October 15, 1997. (File No. 000-22194) (4) Previously filed with the Form S-3 Registration Statement of SPSS Inc. filed on November 26, 1997. (File No. 333-41207) (5) Previously filed with Amendment No. 2 to Form S-1 Registration Statement of SPSS Inc. filed on August 4, 1993. (File No. 33-64732) II-3 (6) Previously filed with Amendment No. 1 to Form S-1 Registration Statement of SPSS Inc. filed on July 23, 1993. (File No. 33-64732) (7) Previously filed with Form 10-Q Quarterly Report of SPSS Inc. for the Quarterly period ended September 30, 1993. (File No. 000-22194) (8) Previously filed with the Form S-1 Registration Statement of SPSS Inc. filed on June 22, 1993. (File No. 33-64732) (9) Previously filed with the Form S-1 Registration Statement of SPSS Inc. filed on December 5, 1994. (File No. 33-86858) (10) Previously cited with the Form 10-K Annual Report of SPSS Inc. for the year ended December 31, 1994. (File No. 000-22194) (11) Previously filed with SPSS Inc.'s 1995 Proxy Statement. (File No. 000-22194) (12) Previously filed with the Form 10-K Annual Report of SPSS Inc. for the year ended December 31, 1995. (File No. 000-22194) (13) Previously filed with SPSS Inc.'s 1996 Proxy Statement. (File No. 000-22194) (14) Previously filed with the Form 10-K Annual Report of SPSS Inc. for the year ended December 31, 1996. (File No. 000-22194) (15) Previously filed with the Form 10-Q Quarterly Report of SPSS Inc. for the quarterly period ended March 31, 1997. (File No. 000-22194) (16) Previously filed with the Form 10-Q Quarterly Report of SPSS Inc. for the quarterly period ended June 30, 1997. (File No. 000-22194) (17) Previously filed with the Form 10-K Annual Report of SPSS Inc. for the year ended December 31, 1997. (File No. 000-22194) (18) Previously filed with SPSS Inc.'s Report on Form 8-K, dated December 31, 1998, filed on January 15, 1999, as amended on Form 8-K/A filed March 12, 1999. (File No. 000-22194) (19) Previously filed with SPSS Inc.'s 1998 Proxy Statement. (File No. 000-22194) (20) Previously filed with the Form 10-K Annual Report of SPSS Inc. for the year ended December 31, 1998. (File No. 000-22194) (21) Previously filed with SPSS Inc. Report on Form 8-K, dated November 29, 1999, filed December 10, 1999. (File No. 000-22194) (22) Previously filed with the Form 10-Q Quarterly Report of SPSS Inc. for the quarterly period ended June 30, 1999. (File No. 000-22194) (23) Previously filed with the Form 10-Q Quarterly Report of SPSS Inc. for the quarterly period ended September 30, 1999. (File No. 000-22194) (24) Previously filed with the Form 10-K Annual Report of SPSS Inc. for the year ended December 31, 1999. (File No. 000-22194) (25) Previously filed with SPSS Inc. Report on Form 8-K, filed November 15, 2000. (File No. 000-22194) (26) Previously filed with the Form S-4 Registration Statement of SPSS Inc. filed on December 19, 2000. (File No. 333-52216) (27) Previously filed with the Form 10-K Annual Report of SPSS Inc. for the year ended December 31, 2000. (File No. 000-22194) (28) Previously filed with the Form S-3 Registration Statement of SPSS Inc. filed on October 9, 2001. (File No. 33-71236) (29) Previously filed with SPSS Inc. Report on Form 8-K, dated October 28, 2001, filed on October 29, 2001. (File No. 000-22194) (30) Previously filed with the Form S-8 Registration Statement of SPSS Inc. filed on September 15, 2000. (File No. 333-45900) II-4 (31) Previously filed with SPSS Inc. Report on Form 8-K/A (Amendment No. 1) filed on December 12, 2001. (File No. 000-22194) ITEM 17. UNDERTAKINGS (a) SPSS hereby undertakes: (1) To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: (i) To include any prospectus required by section 10(a)(3) of the Securities Act of 1933; (ii) To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the "Calculation of Registration Fee" table in the effective registration statement. (iii) To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to this information in the registration statement. Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) above do not apply to this registration statement on Form S-3 if the information required to be included in a post-effective amendment by those paragraphs is contained in periodic reports filed with or furnished to the Commission by the registrant pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934 that are incorporated by reference in the registration statement. (2) That, for the purpose of determining any liability under the Securities Act of 1933, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of these securities at that time shall be deemed to be the initial bona fide offering thereof. (3) To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. (4) That, for purposes of determining any liability under the Securities Act of 1933, each filing of SPSS's annual report pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (and where applicable, each filing of an employee benefit plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934) that is incorporated by reference in this Registration Statement shall be deemed to be a new Registration Statement relating to the securities offered therein, and the offering of these securities at that time shall be deemed to be the initial bona fide offering thereof. (b) Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers or persons controlling SPSS under the foregoing provisions or otherwise, we have been advised that in the opinion of the Securities and Exchange Commission this indemnification is against public policy as expressed in the Act and is, therefore, unenforceable. If a claim for indemnification against such liabilities (other than the payment by us of expenses incurred or paid by a director, officer or controlling person of SPSS in the successful defense of any action, suit or proceeding) is asserted by a director, officer or controlling person in connection with the securities being registered, we will, unless in the opinion of our counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether this indemnification by SPSS is against public policy as expressed in the Act and will be governed by the final adjudication of the issue. II-5 SIGNATURES Pursuant to the requirements of the Securities Act of 1933, SPSS certifies that it has reasonable grounds to believe that it meets all of the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Chicago, State of Illinois, on December 12, 2001. SPSS INC. By: /s/ JACK NOONAN ------------------------------------ Jack Noonan President and Chief Executive Officer POWER OF ATTORNEY KNOWN TO ALL PERSONS BY THESE PRESENTS, that each person whose signature appears immediately below constitutes and appoints Jack Noonan and Edward Hamburg, or any one of them, his true and lawful attorney-in-fact and agent, each with full power of substitution for such person and in his name, place and stead, in any and all capacities, to sign any and all amendments (including post-effective amendments) to this Registration Statement, and to file the same with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto such attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as he might or could do in person, hereby ratifying and confirming all that such attorney-in-fact and agent or his substitute or substitutes may lawfully do or cause to be done by virtue hereof. Pursuant to the requirements of the Securities Act of 1933, this Registration Statement has been signed by the following persons in the capacities and on the dates indicated.
SIGNATURE TITLE DATE --------- ----- ---- /s/ NORMAN H. NIE Chairman of the Board of Directors December 12, 2001 - ----------------------------------- Norman H. Nie /s/ JACK NOONAN President, Chief Executive Officer December 12, 2001 - ----------------------------------- and Director Jack Noonan /s/ EDWARD HAMBURG Executive Vice President, Corporate December 12, 2001 - ----------------------------------- Operations, Chief Financial Officer Edward Hamburg and Secretary /s/ ROBERT BRINKMANN Vice President, Finance and December 12, 2001 - ----------------------------------- Controller, Chief Accounting Robert Brinkmann Officer and Assistant Secretary /s/ BERNARD GOLDSTEIN Director December 12, 2001 - ----------------------------------- Bernard Goldstein /s/ MERRITT LUTZ Director December 12, 2001 - ----------------------------------- Merritt Lutz
II-6
SIGNATURE TITLE DATE --------- ----- ---- /s/ MICHAEL BLAIR Director December 12, 2001 - ----------------------------------- Michael Blair /s/ KENNETH HOLEC Director December 12, 2001 - ----------------------------------- Kenneth Holec /s/ PROMOD HAQUE Director December 12, 2001 - ----------------------------------- Promod Haque /s/ WILLIAM BINCH Director December 12, 2001 - ----------------------------------- William Binch
II-7 SPSS INC. EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION - ----------- ----------- 5.1 Opinion of Ross & Hardies 10.33 Stock Purchase Agreement by and between SPSS Inc. and America Online, Inc. 23.1 Consent of KPMG LLP 23.2 Consent of Ross & Hardies (Included in Exhibit 5.1) 24.1 Power of Attorney (Included in the Signature Page to this Registration Statement).
EX-5.1 3 c66483ex5-1.txt OPINION OF ROSS & HARDIES EXHIBIT 5.1 [ROSS & HARDIES LETTERHEAD] December 12, 2001 SPSS Inc. 233 South Wacker Drive Chicago, Illinois 60606 RE: REGISTRATION STATEMENT ON FORM S-3 Ladies and Gentlemen: We refer to the Registration Statement on Form S-3 (the "Registration Statement") being filed by SPSS Inc., a Delaware corporation, (the "Company") with the Securities and Exchange Commission under the Securities Act of 1933, as amended (the "Securities Act"), relating to the offer and sale of up to 173,724 shares of Common Stock, $0.01 par value per share (the "Common Stock") of the Company by America Online, Inc., a Delaware Corporation. Each term used herein that is defined in the Registration Statement and not otherwise defined herein shall have the meaning specified in the Registration Statement. We are familiar with the proceedings to date with respect to the proposed offering of the Common Stock and have examined such records, documents and questions of law, and satisfied ourselves as to such matters of procedure, law and fact, as we have considered relevant and necessary as a basis for the opinion expressed in this letter. In such examination, we have assumed the genuineness of all signatures, the authenticity of all documents submitted to us as originals, the conformity to originals of all documents submitted to us as certified copies or photocopies and the authenticity of the originals of such documents. Based on the foregoing, and subject to the qualifications set forth hereinafter, we are of the opinion that the Common Stock has been duly authorized and, when issued and sold in accordance with the Registration Statement, will be legally issued, fully paid and nonassessable shares of Common Stock of the Company. This opinion is limited to the matters set forth herein. No opinion may be inferred or implied beyond the matters expressly contained herein. We hereby consent to the reference to our firm under the caption "Legal Matters" in the Registration Statement and the related Prospectus, and to the filing of this opinion as an Exhibit to the Registration Statement. Very truly yours, ROSS & HARDIES By: /s/ David S. Guin ---------------------------------- A Partner EX-10.33 4 c66483ex10-33.txt STOCK PURCHASE AGREEMENT EXHIBIT 10.33 STOCK PURCHASE AGREEMENT THIS STOCK PURCHASE AGREEMENT (the "Agreement"), dated as of October 22, 2001 (the "Effective Date"), is entered into by and between SPSS INC., a Delaware corporation, with headquarters located at 233 South Wacker Drive, Chicago, Illinois 60606 ("SPSS"), and America Online, Inc., a Delaware corporation, with headquarters located at 22000 AOL Way, Dulles, Virginia 20166 ("Buyer"). W I T N E S S E T H: WHEREAS, SPSS and Buyer are entering into that certain Strategic Online Research Services Agreement dated of even date herewith (the "Research Services Agreement"); WHEREAS, pursuant to the Research Services Agreement, SPSS is issuing to Buyer such number of newly issued, unregistered shares of SPSS Common Stock, $.01 par value per share (the "Common Stock"), as more fully described herein; and WHEREAS, SPSS and Buyer are executing and delivering this Agreement in accordance with and in reliance upon an exemption from securities registration afforded, inter alia, by Rule 506 under Regulation D ("Regulation D") as promulgated by the United States Securities and Exchange Commission (the "Commission") under the Securities Act of 1933, as amended (the "1933 Act" or the "Act"), and/or Section 4(2) of the 1933 Act. NOW THEREFORE, in consideration of the premises and the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: 1. ISSUANCE OF SHARES; SHARE CONSIDERATION. a. AGREEMENT TO ACQUIRE. The parties hereto acknowledge and agree that, in consideration of (i) the services being provided pursuant to the Research Services Agreement and (ii) the exclusivity and marketing support provided by Buyer described therein, SPSS shall, among other things, issue, and Buyer or Buyer's designee shall acquire, that number of shares of Common Stock calculated in accordance with the provisions of Section 1.b below (collectively, the "Shares"). In the event that any of the calculations performed in Section 1.b below yields an aggregate number of Shares owned by Buyer (calculated at the time of each such issuance) which is greater than 4.9% of SPSS's issued and outstanding shares of Common Stock, the number of such shares of Common Stock will be reduced to equal 4.9% of SPSS's issued and outstanding shares of Common Stock as of the Effective Date or the date of the applicable Subsequent Share Issuance (as defined in Section 1.b(ii)hereof), and SPSS will pay Buyer the Gap Amount (pursuant to and as defined in the Research Services Agreement) in immediately available funds to an account designated by Buyer. Notwithstanding anything to the contrary contained herein, fractional shares shall not be issued. In lieu of fractional shares, the Initial Share Consideration and/or any Subsequent Share Consideration (as each is defined in Section 1.b(i) and Section 1.b(ii), respectively) for the shares of Common Stock acquired by Buyer hereunder shall be adjusted such that only whole shares shall be issued hereunder. b. ISSUANCE AND DELIVERY OF SHARES. The Shares shall be issued and delivered to Buyer according to the following schedule: (i) On the Effective Date, SPSS shall deliver that number of shares of Common Stock (the "Initial Shares") up to, but not to exceed, 4.9% of the issued and outstanding shares of Common Stock (the "Initial Share Issuance") calculable by dividing THREE MILLION AND NO/100 dollars ($3,000,000) (subject to adjustment to prevent the issuance of fractional shares) (the "Initial Share Consideration") by the average of the closing prices of SPSS Common Stock, as quoted on the NASDAQ National Market ("NASDAQ") for the five (5) trading days preceding the Effective Date (the "Initial Share Consideration Closing Price"). In the event that the closing price of SPSS Common Stock, as quoted on the NASDAQ on the day (as it applies to this Section 1.b.(i), the "Preceding Date") preceding the date the Registration Statement required by Section 4.a(i)(A) becomes effective (the "Registration Statement Effective Date Closing Price"), is less than the Initial Share Consideration Closing Price, then at SPSS's option with notice of SPSS's election to be given to Buyer on the day preceding the Preceding Date, (A) SPSS shall deliver to Buyer a cash amount, in immediately available funds to an account designated by Buyer, equal to the difference between the Initial Share Consideration and the fair market value of the number of shares of SPSS Common Stock SPSS would have issued to Buyer had the Initial Share Consideration Closing Price equaled the Registration Statement Effective Date Closing Price, or (B) SPSS shall issue to Buyer that number of shares equal to the difference between (y) the number of shares of SPSS Common Stock SPSS would have issued to Buyer had the Initial Share Consideration Closing Price equaled the Registration Statement Effective Date Closing Price and (z) the number of Initial Shares actually issued to Buyer on the Effective Date, provided, however, that any shares of SPSS Common Stock to be issued to Buyer pursuant to this sentence shall be included within the Registration Statement required by Section 4.a(i)(A) hereof, or (C) any combination thereof. In the event that the Registration Statement Effective Date Closing Price is greater than the Initial Share Consideration Closing Price, then, at Buyer's option with notice of Buyer's election to be given to SPSS on the day preceding the Preceding Date, Buyer shall deliver to SPSS (A) a cash amount, in immediately available funds to an account designated by SPSS, equal to the difference between fair market value of the number of shares of SPSS Common Stock SPSS would have issued to Buyer had the Initial Share Consideration Closing Price equaled the Registration Statement Effective Date Closing Price and the Initial Share Consideration, or (B) that number of shares of SPSS Common Stock equal to the difference between the number of Initial Shares determined by dividing the Initial Share Consideration by the Initial Share Consideration Closing Price and the number of Initial Shares determined by dividing the Initial Share Consideration by the Registration Statement Effective Date Closing Price, provided, however, that SPSS is only obligated to make 2 effective the registration of Buyer's resale of that number of shares of SPSS Common Stock held by Buyer following the application of Buyer's delivery obligations set forth in this sentence, or (C) any combination thereof. (ii) On each of the first, second and third anniversary dates of the Effective Date, SPSS shall deliver that number of shares of Common Stock (the "Subsequent Shares") up to, but not to exceed, in the aggregate taken together with all other shares of Common Stock held by Buyer, 4.9% of the issued and outstanding shares of Common Stock on the date of issuance (each hereinafter referred to individually as a "Subsequent Share Issuance" and collectively as the "Subsequent Share Issuances") calculable by dividing THREE MILLION AND NO/100 DOLLARS ($3,000,000) (subject to adjustment to prevent the issuance of fractional shares) (each hereinafter referred to as a "Subsequent Share Consideration") by the average of the closing prices of SPSS Common Stock, as quoted on the NASDAQ for the five (5) trading days preceding each applicable anniversary date of the Effective Date (each such price a "Subsequent Share Consideration Closing Price"). In the event that the closing price of SPSS Common Stock, as quoted on the NASDAQ on the day (as it applies to this Section 1.b(ii), the "Subsequent Preceding Date") preceding the applicable date that any Registration Statement required by Section 4.a(i)(B) becomes effective (each such price a "Subsequent Registration Statement Effective Date Closing Price"), is less than the corresponding Subsequent Share Consideration Closing Price, then at SPSS's option with notice of SPSS's election to be given to Buyer on the day preceding the Subsequent Preceding Date, (A) SPSS shall deliver to Buyer a cash amount, in immediately available funds to an account designated by Buyer, equal to the difference between the Subsequent Share Consideration and the fair market value of the number of shares of SPSS Common Stock SPSS would have issued to Buyer had the applicable Subsequent Share Consideration Closing Price equaled the corresponding Subsequent Registration Statement Effective Date Closing Price, or (B) SPSS shall issue to Buyer that number of shares equal to the difference between (y) the number of shares of SPSS Common Stock SPSS would have issued to Buyer had the applicable Subsequent Share Consideration Closing Price equaled the corresponding Subsequent Registration Statement Effective Date Closing Price and (z) the number of Subsequent Shares actually issued to Buyer on the applicable date of such Subsequent Share Issuance, provided, however, that any shares of SPSS Common Stock to be issued to Buyer pursuant to this sentence shall be included within the applicable Registration Statement required by Section 4.a(i)(B) hereof, or (C) any combination thereof. In the event that any Subsequent Registration Statement Effective Date Closing Price is greater than any corresponding Subsequent Share Consideration Closing Price, then, at Buyer's option with notice of Buyer's election to be given to SPSS on the day preceding the Subsequent Preceding Date, Buyer shall deliver 3 to SPSS (A) a cash amount, in immediately available funds to an account designated by SPSS, equal to the difference between the fair market value of the number of shares of SPSS Common Stock SPSS would have issued to Buyer had any applicable Subsequent Share Consideration Closing Price equaled the corresponding Subsequent Registration Statement Effective Date Closing Price and the Subsequent Share Consideration, or (B) that number of shares of SPSS Common Stock equal to the difference between the number of Subsequent Shares determined by dividing the Subsequent Share Consideration by the Subsequent Share Consideration Closing Price and the number of Subsequent Shares determined by dividing the Subsequent Share Consideration by the Subsequent Registration Statement Effective Date Closing Price, provided, however, that SPSS is only obligated to make effective the registration of Buyer's resale of that number of shares of SPSS Common Stock held by Buyer following the application of Buyer's delivery obligations set forth in this sentence, or (C) any combination thereof. (iii) Any monetary payments to be made by either party pursuant to this Section 1.b shall be made within two (2) business days of the date that the Registration Statement required by Section 4.a(i) hereof becomes effective. (iv) Notwithstanding the provisions of Sections 1.b.(i) and (ii) above, SPSS shall have no obligation to issue and deliver, and Buyer shall have no right to receive, any portion of the Shares if the Research Services Agreement has been terminated prior to the date on which the Initial Share Issuance or any Subsequent Share Issuance occurs. In addition, in the event a dispute occurs between SPSS and Buyer with respect to the terms and provisions of the Research Services Agreement, SPSS shall have no obligation to issue and deliver, and Buyer shall have no right to receive, any portion of the Shares that are to be issued to Buyer on the Effective Date or on the date of any Subsequent Share Issuance, until such disputes have been mutually resolved by the parties. Further, the six (6) month and two (2) month time period set forth in Sections 4.a(i)(A) and 4.a(i)(B) below, pursuant to which SPSS is obligated to make effective Registration Statement(s) for Buyer's resale of any portion of the issued Shares, shall each be extended, as applicable, by the corresponding number of days that it takes for the parties to resolve any disputes that arise as described in the immediately preceding sentence. Subject to the provisions of Section 4 hereof, the Shares, when issued and delivered to Buyer, shall be unencumbered and freely tradable by Buyer. 4 2. BUYER REPRESENTATIONS AND WARRANTIES. Buyer represents and warrants to SPSS as follows: a. Without limiting Buyer's right to sell any portion of the Shares pursuant to a Registration Statement registering the sale of such Shares on account of Buyer, Buyer acknowledges that the sale and issuance of the Shares to be delivered to Buyer on the Effective Date or on the date of any applicable Subsequent Share Issuance may not have been registered pursuant to the 1933 Act and that, to the extent the sale and issuance of the Shares by SPSS to Buyer is not subject to an effective Registration Statement, Buyer is acquiring the Shares for its own account for investment only and not with a view towards the resale or distribution of any part thereof and not with a view to or for sale in connection with any distribution thereof. b. Buyer is (i) an "accredited investor" as that term is defined in Rule 501 of Regulation D as presently in effect, (ii) experienced in making investments of the kind described in this Agreement and the related documents, (iii) able, by reason of the business and financial experience of its officers (if an entity) and/or professional advisors (who are not affiliated with or compensated in any way by SPSS or any of its affiliates or selling agents), to protect its own interests in connection with the transactions described in this Agreement, and the related documents, and (iv) able to afford the entire loss of its investment in the Shares. c. Buyer understands that the Shares to be issued and delivered on the Effective Date or on the date of any applicable Subsequent Share Issuance may not have been registered under the 1933 Act, or any applicable state securities laws. Therefore, Buyer shall not sell or offer to sell all or any portion of the Shares except pursuant to registration of the Shares under the 1933 Act or an exemption from registration requirements of United States federal and state securities laws and in compliance with all applicable state securities laws. d. Buyer understands that the Shares to be issued and delivered to Buyer on the Effective Date or on the date of any applicable Subsequent Share Issuance may be offered and sold to it in reliance on specific exemptions from the registration requirements of United States federal and state securities laws and that SPSS is relying upon the truth and accuracy of, and Buyer's compliance with, the representations, warranties, agreements, acknowledgments and understandings of Buyer set forth herein in order to determine the availability of such exemptions and the eligibility of Buyer to acquire any portion of the Shares. e. Buyer and its advisors have been furnished with all materials relating to the business, finances and operations of SPSS and materials relating to the offer and sale of the Shares which have been requested by Buyer. Buyer and its advisors have been afforded the opportunity to ask questions of SPSS and have received complete and satisfactory answers to any such inquiries. f. Buyer understands that no United States federal or state agency or any other government or governmental agency has passed on or made any recommendation or endorsement of the Shares. 5 g. This Agreement has been duly and validly authorized, executed and delivered on behalf of Buyer and is a valid and binding agreement of Buyer enforceable in accordance with its terms, subject as to enforceability to general principles of equity and to bankruptcy, insolvency, moratorium and other similar laws affecting the enforcement of creditors' rights generally. 3. SPSS REPRESENTATIONS AND WARRANTIES. SPSS represents and warrants to Buyer that: a. SPSS STATUS. SPSS is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, and has the requisite corporate power to own its properties and to carry on its business as presently conducted and as proposed to be conducted by it. SPSS is duly qualified or licensed to do business and in good standing in each jurisdiction in which the nature of its business or properties makes such qualification or licensing necessary, except where the failure to so qualify or be licensed would not have a material adverse effect on the business, financial condition, results of operations, assets, liabilities or prospects of SPSS. b. AUTHORIZED AND OUTSTANDING STOCK; ISSUANCE OF SECURITIES. (i) The authorized capital stock of SPSS (immediately prior to the Initial Share Issuance) consists of Fifty Million (50,000,000) shares of Common Stock, $0.01 par value per share, 14,107,400 of which were issued and outstanding as of September 30, 2001. As of September 30, 2001, SPSS has granted options to acquire 4,991,790 shares of SPSS Common Stock upon the exercise thereof under SPSS's Third Amended and Restated 1995 Equity Incentive Plan, 1999 Employee Equity Incentive Plan and Amended 1991 Stock Option Plan. (ii) The offer, issuance and sale of the Shares pursuant to this Agreement have been duly authorized by all necessary corporate action on the part of SPSS. The Initial Shares, when so issued, sold and delivered against payment therefor in accordance with the provisions of this Agreement, and any Subsequent Shares, when issued in accordance with the terms of this Agreement, will be duly and validly issued, fully paid and nonassessable. None of the offer, issuance or sale of the Shares is subject to, or in violation of, any preemptive rights, rights of first refusal, or other rights to purchase such stock, pursuant to any agreement or commitment of SPSS. c. BINDING AGREEMENT. This Agreement and the transactions contemplated hereby have been duly and validly authorized by SPSS (including any actions to be taken by SPSS's officers, directors and stockholders), this Agreement has been duly executed and delivered by SPSS and this Agreement, when executed and delivered by SPSS, will be a valid and binding agreement of SPSS enforceable in accordance with its terms, subject as to enforceability to general principles of equity and to bankruptcy, insolvency, moratorium, and other similar laws affecting the enforcement of creditors' rights generally. 6 d. NON-CONTRAVENTION. The execution, delivery and performance of this Agreement by SPSS, the issuance of the Shares, and the consummation by SPSS of the transactions contemplated by this Agreement do not and will not conflict with or result in a material breach by SPSS of any of the terms or provisions of, or constitute a default under (i) SPSS's Certificate of Incorporation or by-laws, (ii) any agreement, contract, lease, license, equipment lease, indenture, mortgage, deed of trust, or other material agreement (oral or written) or instrument to which SPSS is a party or by which it or any of its properties or assets are bound, (iii) any existing applicable law, rule, or regulation or any applicable decree or judgment, except any such law, rule, regulation, decree or judgment which would not have a material adverse effect on the transactions contemplated herein, or (iv) any judgment, writ, decree, order, law, statute, ordinance, rule or regulation applicable to SPSS or any of its properties or assets, except any such conflict, breach or default which would not have a material adverse effect on the transactions contemplated herein. e. APPROVALS. No authorization, approval or consent of any court, governmental body, regulatory agency, self-regulatory organization, or stock exchange or market is required to be obtained by SPSS in connection with the execution and delivery of this Agreement or the consummation of any of the transactions contemplated hereby, including, but not limited to, the issuance and sale of the Shares to Buyer as contemplated by this Agreement, except such authorizations, approvals and consents that have been obtained. Based upon the representations made by Buyer in Section 2 of this Agreement, the offer and sale of the Shares to Buyer will be in compliance with applicable federal and state securities laws. f. COMMISSION DOCUMENTS; FINANCIAL INFORMATION. (i) SPSS has made all filings with the Commission required under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), or the 1933 Act, on a timely basis. SPSS has previously made available to Buyer complete and accurate copies, as amended or supplemented through the date hereof, of the following forms filed with the Commission: (A) Form 10-Q under the Exchange Act for the period ended March 31, 2001, (B) Form 10-Q under the Exchange Act filed for the period ended June 30, 2001, (C) Form 10-K, as amended, for the fiscal year ended December 31, 2000, and (D) each Form 8-K filed during fiscal year 2001 (such reports, including any Exchange Act reports to be filed by the Company after the date hereof, are collectively referred to herein as the "Company Reports"). As of their respective dates, the Company Reports did not contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading. (ii) The audited financial statements and unaudited interim financial statements of SPSS included in the Company Reports (A) comply as to form in all material respects with applicable accounting requirements and the published rules and regulations of the Commission with respect thereto, (B) have been prepared in accordance with United States generally accepted accounting principles ("GAAP") applied on a consistent basis throughout the periods covered thereby (except as may be 7 indicated therein or in the notes thereto, and in the case of quarterly financial statements, as permitted by Form 10-Q under the Exchange Act), and (C) fairly presented in all material respects (subject, in the case of the unaudited interim financial statements, to normal, year-end audit adjustments, none of which will be material) the consolidated financial condition, results of operations and cash flows of SPSS as of the respective dates thereof and for the periods referred to therein. g. ABSENCE OF CERTAIN CHANGES. Except as disclosed in the Company Reports, since June 30, 2001, there has been no change, event or effect that is materially adverse to the assets, business, financial condition or the results of operations of SPSS, except for those changes, events and effects that are disclosed in the Company Reports. h. LITIGATION. Except as otherwise set forth on Schedule 4(h), there is no action, suit or legal proceeding, or governmental inquiry or investigation, pending against SPSS, or, to SPSS's knowledge, threatened against SPSS which (a) questions the validity of this Agreement or the right of SPSS to enter into this Agreement or perform any of its obligations hereunder or (b) is reasonably likely to have a material adverse effect on the assets, business, financial condition or results of operations of SPSS. i. UNDISCLOSED LIABILITIES. SPSS has no liability (whether absolute, accrued, contingent or otherwise), except for (i) liabilities reflected in the Company Reports, (ii) liabilities which have arisen since June 30, 2001 in the ordinary course of business and that are consistent with past experience and (iii) contractual liabilities incurred in the ordinary course of business. j. PROPRIETARY ASSETS. (i) Except as otherwise set forth on Schedule 3(j), SPSS (A) owns or has the right to use all Proprietary Assets (as defined below) used in or necessary for its business as currently conducted and as proposed to be conducted, free and clear of all material liens, and all such Proprietary Assets are sufficient to enable SPSS to conduct its business in the manner in which such business has been and is being conducted free from liabilities or valid claims of infringement or misappropriation by third parties; and (B) has taken reasonable and customary measures and precautions necessary to protect and maintain the confidentiality and secrecy of all its Proprietary Assets (except the Proprietary Assets whose value would be unimpaired by public disclosure) and otherwise to maintain and protect the value of all its Proprietary Assets. (ii) Except where such infringement, misappropriation or unlawful use has not had or could not reasonably be expected to have a material adverse effect on the assets, business, financial condition or the results of operation of SPSS, SPSS is not infringing, misappropriating or making any unlawful use of any Proprietary Asset owned or used by any other individual, corporation, partnership, limited liability company, joint venture, trust or unincorporated organization or a government or agency or political subdivision thereof (each, a "Person"); and no claims or notices (in writing 8 or otherwise) with respect to Proprietary Assets have been communicated to SPSS: (A) to the effect that the manufacture, sale, license or use of any Proprietary Assets as now used or currently offered or proposed for use or sale by SPSS infringes or potentially infringes, or constitutes a misappropriation or unlawful use of any patent, trademark, trade name, service mark, copyright, maskwork, trade secret or other proprietary or intellectual property right of a third party, or (B) challenging the ownership or validity of any of the rights of SPSS to or its interest in such Proprietary Assets. SPSS has not received any notice to the effect that any patents or registered trademarks, service marks or copyrights held by SPSS are invalid or not subsisting. To SPSS's knowledge, no other Person is infringing, misappropriating or making any unlawful use of, and no Proprietary Asset owned or used by any other Person infringes or conflicts with, any Proprietary Asset used in or pertaining to the business of SPSS. (iii) SPSS has not licensed any of its Proprietary Assets to any Person on an exclusive basis or entered into any covenant not to compete or contract limiting its ability to sell its products or services in any market or geographical area or with any Person other than restrictions in a license agreement that are typical of those granted in the ordinary course of business in its industry. (iv) As used herein, the term "Proprietary Assets" means: (A) any patent, patent application, trademark (whether registered or unregistered), trademark application, trade name, fictitious business name, service mark (whether registered or unregistered), service mark application, copyright (whether registered or unregistered), copyright application, maskwork, maskwork application, trade secret, know-how, customer list, franchise, system, computer software, computer program, source code, databases, invention, design, blueprint, engineering drawing, proprietary product, technology, or other proprietary or intellectual property right or intangible asset, in any medium in whole or in part; and (B) any right to use or exploit any of the foregoing. k. COMPLIANCE WITH LAWS. SPSS is not (i) subject to the terms or provisions of any material judgment, decree, order, writ or injunction or (ii) in violation of any terms or provisions of any laws, rules, or regulations, except where such violations do not and are not likely to have a material adverse effect on the assets, business, financial condition or results of operations of SPSS or as disclosed in the Company Reports. 4. SECURITIES MATTERS a. REGISTRATION OF SPSS COMMON STOCK. (i) (A) SPSS will file one or more Registration Statements on Form S-3 (together with all amendments and supplements thereto, including post-effective amendments, and all materials incorporated by reference or deemed to be incorporated by reference therein) under 9 the 1933 Act and the rules and regulations promulgated thereunder, and shall make all commercially reasonable efforts to cause the Registration Statement to be declared effective by the Commission and to maintain the effectiveness of the Registration Statement, for the registration of the resale of the Initial Shares by Buyer, which such Registration Statement(s) shall be effective within six (6) months of the Effective Date; provided, however, that in no event shall SPSS cause the Registration Statement to be declared effective by the Commission within five (5) trading days of an announcement or other event relating to SPSS which has had a negative effect on SPSS's trading price during such five (5) day period. (B) Prior to the date of each Subsequent Share Issuance, SPSS will file one or more Registration Statements on Form S-3 or another form available for registration (together with all amendments and supplements thereto, including post-effective amendments, and all materials incorporated by reference or deemed to be incorporated by reference therein) under the 1933 Act and the rules and regulations promulgated thereunder, and shall make all commercially reasonable efforts to cause the Registration Statements to be declared effective by the Commission and to maintain the effectiveness of the Registration Statements, for the registration of the resale of the applicable portion of the Subsequent Shares by Buyer, which such Registration Statements shall be effective within two (2) months of the applicable Subsequent Share Issuance; provided, however, that in no event shall SPSS cause the Registration Statement to be declared effective by the Commission within five (5) trading days of an announcement or other event relating to SPSS which has had a negative effect on SPSS's trading price during such five (5) day period. (ii) If and to the extent necessary, Buyer shall cooperate with SPSS in connection with the registration of the Initial Shares issued on the Effective Date and the registration of the Subsequent Shares to be issued on the date of each Subsequent Share Issuance, and shall provide such information and execute such documents as SPSS shall reasonably request in connection with such registration. (iii) (A) In the event that the resale of the Initial Shares has not been registered under an effective Registration Statement within six (6) months of the Effective Date, SPSS shall be obligated to pay Buyer Three Million Dollars ($3,000,000) (the "Initial Payment") in accordance with the provisions of Section 4.a.(iv) below. 10 (B) In the event that the resale of any portion of the Subsequent Shares has not been registered under an effective Registration Statement within two (2) months of the date of any Subsequent Share Issuance, SPSS shall be obligated to pay Buyer Three Million Dollars ($3,000,000) (any such payment a `Subsequent Payment") in immediately available funds to an account designated by Buyer in lieu of the Subsequent Shares to be issued to Buyer on the date of such Subsequent Share Issuance. (iv) (A) With respect to SPSS's obligation to pay Buyer any monetary amounts in accordance with the provisions of Section 4.a.(iii) above, as of the Effective Date, SPSS will deliver to Buyer a letter of credit in the aggregate of $3,000,000, in the form attached hereto as Exhibit A and made a part hereof, within two (2) business days of the Effective Date. In the event SPSS fails to deliver the letter of credit to Buyer within two (2) business days of the Effective Date, Buyer shall have the right to either (a) automatically terminate the Agreement or (b) instruct SPSS to pay $3,000,000 to Buyer in immediately available U.S. funds to an account designated by Buyer, which such payment shall be made by SPSS within one (1) business day of Buyer's notification to SPSS of its election under this sentence of Section 4.a.(iv)(A). SPSS shall only be obligated to maintain the letter of credit until SPSS has effectively registered the resale of the Initial Shares within the six (6) month period following the Effective Date. (B) Notwithstanding the foregoing, in the event SPSS has not registered the resale of the Initial Shares as contemplated in Section 4.a.(iii)(A) above or registered the resale of any portion of the Subsequent Shares as contemplated by Section 4.a(iii)(B) above, SPSS shall be under no obligation to deliver the Initial Payment or any Subsequent Payment, as the case may be, to Buyer until Buyer has provided written confirmation evidencing the transfer of all of the Initial Shares or the applicable portion of the Subsequent Shares, as the case may be, from its broker-dealer to SPSS's transfer agent in accordance with the instructions provided by SPSS to Buyer in order to enable Buyer to effect properly such transfer. (v) In the event that SPSS fails to maintain the effectiveness of any Registration Statement pursuant to which Buyer has the right to resell any of the Initial Shares or any portion of the Subsequent Shares, as the case may be, Buyer shall have the right to require SPSS to purchase that portion of the Initial Shares or any portion of the Subsequent Shares, as the case may be, which Buyer then currently owns at a per share purchase price equal to the closing price of SPSS Common Stock, as quoted on the NASDAQ on the date Buyer attempts to resell such Initial Shares or the applicable portion of the Subsequent Shares, as the case may be. 11 (vi) SPSS shall be obligated to deliver to Buyer the Initial Payment, any Subsequent Payment and any purchase price calculated in accordance with the provisions of Section 4.a(v) above, as the case may be, within two (2) business days of the date on which such right accrued, provided that Buyer has tendered written confirmation evidencing the transfer of the applicable portion of the Shares in accordance with the provisions of Section 4.a(iv)(B) above. b. REGISTRATION EXPENSES. SPSS shall be responsible for and shall pay all fees, costs and expenses incurred by it relating to the registration of the issuance of the Shares by SPSS and/or the resale thereof by Buyer, including without limitation, all Commission and NASDAQ registration and filing fees, and all fees and expenses of compliance by SPSS with the federal securities laws or any applicable state blue sky laws, but not including (i) any fees and expenses of Buyer's counsel or other expenses of Buyer incurred in connection with the execution and delivery of this Agreement or the Research Services Agreement or (except as provided above) the resale of all or any portion of the Shares or pursuant to Section 4.a(iv)(A) above, and (ii) underwriters' fees or expenses, broker's costs, commissions and other similar disposition costs associated with the SPSS Common Stock owned by Buyer. c. POTENTIAL RESTRICTIONS. Buyer understands and agrees, as follows: (i) The Shares may not be subject to a Registration Statement under the 1933 Act, and may be issued pursuant to exemptions from registration under the 1933 Act which exemptions depend, among other things, on the bona fide nature of Buyer's investment intent. (ii) Buyer shall not transfer the Shares except in compliance with the provisions of the 1933 Act. Any proposed transferee of any of the Shares shall agree to take and hold such securities upon the conditions set forth in Section 4(c)(iii) hereof. (iii) Until a Registration Statement registering the resale of the Shares by Buyer is declared effective, such Shares may not be offered, sold or transferred in the absence of an effective Registration Statement or an exemption therefrom or in contravention of the terms and conditions of this Agreement. When the Registration Statement registering the resale of the Initial Shares and any portion of the Subsequent Shares, as the case may be, is declared effective by the Commission, that portion of the Shares subject to the effective Registration Statement shall be unencumbered and freely tradable by Buyer. (iv) Unless a Registration Statement under the 1933 Act covering transactions in the Shares has been declared effective by the Commission and such Registration Statement remains effective at the time of transfer, each transferee of Shares shall agree in writing to comply in all respects with the provisions of this Section 4(c). Prior to any proposed transfer of any such Shares, the holder thereof shall give written notice to SPSS of such 12 holder's intention to effect such transfer and shall comply with the requirements set forth in the balance of this section. Each such notice shall describe the manner and circumstances of the proposed transfer in reasonable detail, and shall be accompanied by (1) a "no action" letter from the Commission to the effect that the distribution of such Shares without registration will not result in a recommendation by the staff of the Commission that action be taken with respect thereto, or (2) such other showing reasonably satisfactory to SPSS and its counsel that the proposed transfer of such Shares may be effected without registration under the 1933 Act, including, but not limited to, Rule 144 eligibility, whereupon the holder of such Initial Shares shall be entitled to transfer such securities in accordance with the terms of the notice delivered by the holder to SPSS. None of Buyer nor any transferee of all or any portion of the Shares shall be required to comply with the provisions of this Section 4(c) from and after the date on which a Registration Statement registering the resale of the Shares shall be declared effective by the Commission. d. INDEMNIFICATION. If and to the extent that Buyer shall transfer any of the Initial Shares or any portion of the Subsequent Shares, as the case may be, pursuant to a Registration Statement as provided above: (i) SPSS will indemnify and hold harmless Buyer, any underwriter (as defined in the 1933 Act) for Buyer and each person, if any, who controls Buyer or underwriter within the meaning of the 1933 Act or the Exchange Act against any losses, claims, damages, or liabilities (joint or several) to which they may become subject under the 1933 Act, the Exchange Act or other federal or state law, insofar as such losses, claims, damages, or liabilities (or actions in respect thereof) arise out of or are based upon any of the following statements, omissions or violations (collectively a "Violation"): (i) any untrue statement or alleged untrue statement of a material fact contained in such Registration Statement, including any preliminary prospectus or final prospectus contained therein or any amendments or supplements thereto, (ii) the omission or alleged omission to state therein a material fact required to be stated therein, or necessary to make the statements therein not misleading, or (iii) any violation or alleged violation by SPSS of the 1933 Act, the Exchange Act, any state securities law or any rule or regulation promulgated under the 1933 Act, the Exchange Act or any state securities law; and SPSS will pay to Buyer, underwriter or controlling person, any and all legal or other expenses reasonably incurred by them in connection with investigating or defending any such loss, claim, damage, liability, or action; provided, however, that the indemnity agreement contained in this subsection 4(d)(i) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability, or action if such settlement is effected without the consent of SPSS, which consent shall not be unreasonably withheld or delayed, nor shall SPSS be liable in any such case for any such loss, claim, damage, liability, or action to the extent that it arises out of or is based upon a 13 Violation which occurs in reliance upon and in conformity with written information furnished by Buyer any controlling person of Buyer expressly for use in connection with such registration. (ii) Buyer will indemnify and hold harmless SPSS, each of its directors, each of its officers who has signed the Registration Statement, each person, if any, who controls SPSS within the meaning of the 1933 Act, any underwriter, and any controlling person of any such underwriter, against any losses, claims, damages, or liabilities (joint or several) to which any of the foregoing persons may become subject, under the 1933 Act, the Exchange Act or other federal or state law, insofar as such losses, claims, damages, or liabilities (or actions in respect thereto) arise out of or are based upon any Violation, in each case to the extent (and only to the extent) that such Violation occurs in reliance upon and in conformity with written information furnished by Buyer expressly for use in connection with such registration, and Buyer will pay, as incurred, any legal or other expenses reasonably incurred by any person intended to be indemnified pursuant to this subsection 4(d)(ii), in connection with investigating or defending any such loss, claim, damage, liability, or action; provided, however, that the indemnity agreement contained in this subsection 4(d)(ii) shall not apply to amounts paid in settlement of any such loss, claim, damage, liability or action if such settlement is effected without the consent of Buyer, which consent shall not be unreasonably withheld or delayed. (iii) Promptly after receipt by an indemnified party under this Section 4(d) of notice of any claim, demand or the commencement of any action (including any governmental action), such indemnified party will, if a claim in respect thereof is to be made against any indemnifying party under this Section 4(d), deliver to the indemnifying party a written notice of the claim, demand or action and the indemnifying party shall have the right to participate in, and, to the extent the indemnifying party so desires, jointly with any other indemnifying party similarly noticed, to assume the defense thereof with counsel mutually satisfactory to the parties; provided, however, that an indemnified party (together with all other indemnified parties which may be represented without conflict by one counsel) shall have the right to retain one separate counsel and local counsel, with the fees and expenses to be paid by the indemnifying party, if representation of such indemnified party by the counsel retained by the indemnifying party would be inappropriate due to a conflict of interests between such indemnified party and any other party represented by such counsel in such proceeding. The failure to deliver written notice to the indemnifying party within a reasonable time of receipt by the indemnified party of notice of such claim, demand or commencement of any such action, if prejudicial to its ability to defend such action, shall relieve such indemnifying party of any liability to the indemnified party under this Section 4(d). 14 (iv) If the indemnification provided for in this Section 4(d) from the indemnifying party is unavailable to an indemnified party hereunder in respect of any losses, claims, damages, liabilities or expenses referred to therein, then the indemnifying party, in lieu of indemnifying such indemnified party, shall contribute to the amount paid or payable by such indemnified party as a result of such losses, claims, damages, liabilities or expenses in such proportion as is appropriate to reflect the relative fault of the indemnifying party and indemnified party in connection with the actions which resulted in such losses, claims, damages, liabilities or expenses, as well as any other relevant equitable considerations. The relative faults of such indemnifying party and indemnified party shall be determined by reference to, among other things, whether any action in question, including any untrue or alleged untrue statement of a material fact or omission or alleged omission to state a material fact, has been made by, or relates to information supplied by, such indemnifying party or indemnified party, and the parties' relative intent, knowledge, access to information and opportunity to correct or prevent such action. The amount paid or payable by a party as a result of the losses, claims, damages, liabilities and expenses referred to above shall be deemed to include any fees, charges or expenses (including fees, disbursements and other charges of legal counsel) reasonably incurred by such party in connection with any investigation or proceeding. No person guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any person. e. ADDITIONAL OBLIGATIONS OF SPSS. With respect to any registration hereunder, SPSS shall: (i) furnish to Buyer such numbers of copies of a prospectus, including a preliminary prospectus, in conformity with the requirements of the 1933 Act, and such other documents as Buyer may reasonably request in order to facilitate the disposition by Buyer of any portion of the Shares, if any; (ii) use reasonable efforts to qualify the securities covered by any Registration Statement filed by SPSS pursuant to the terms of this Agreement under such other securities or Blue Sky laws of such jurisdictions as shall be reasonably appropriate for the distribution of the securities covered by the registration statement; (iii) to the extent required by NASDAQ requirements, notify NASDAQ of the issuance of the Shares of SPSS; and (iv) notify Buyer as promptly as possible, at any time when a prospectus relating to the resale of any portion of the Shares is required to be delivered under the 1933 Act, of the happening of any event of which SPSS has knowledge as a result of which the prospectus contained in such Registration Statement, as then in effect, includes an untrue statement of a 15 material fact or omits to state a material fact required to be stated therein or necessary to make the statements therein not misleading in light of the circumstances then existing. 5. REPORTS UNDER THE EXCHANGE ACT. With a view to making available to Buyer the benefits of Rule 144 promulgated under the 1933 Act and any other rule or regulation of the Commission that may at any time permit Buyer to sell securities of SPSS to the public without registration, SPSS agrees to use its reasonable efforts to (a) make and keep public information available, as those terms are understood and defined in Rule 144, at all times; (b) file with the Commission in a timely manner all reports and other documents required of SPSS under the 1933 Act and the Exchange Act; and (c) furnish to Buyer forthwith upon request a written statement by SPSS that it has complied with the reporting requirements of the Exchange Act, a copy of the most recent annual or quarterly report of SPSS, and such other reports and documents so filed by SPSS as may be reasonably requested in availing Buyer of any rule or regulation of the Commission permitting the sale of any securities of SPSS held by Buyer without registration. 6. CONDITIONS PRECEDENT. a. CONDITIONS TO BUYER'S OBLIGATION. The obligation of Buyer to acquire the Shares on the Effective Date and on the date of any Subsequent Share Issuance, as the case may be, is subject to the following conditions: (i) REPRESENTATIONS AND WARRANTIES. Each of the representations and warranties of SPSS set forth in Section 3 hereof shall be true, accurate and correct in all material respects on and as of the Effective Date, and shall be true, accurate and correct in all material respects on and as of each Subsequent Share Issuance, in each case with the same effect as though such representations and warranties had been made as of the Effective Date and on the date of each Subsequent Share Issuance. (ii) PERFORMANCE. SPSS shall have performed and complied with all agreements, obligations, and conditions contained in this Agreement and in the Research Services Agreement that are required to be performed or complied with by it on or before the Effective Date or the date of any applicable Subsequent Share Issuance, as the case may be. (iii) OPINION OF COUNSEL. SPSS shall have delivered to Buyer an opinion of counsel, in form and substance reasonably satisfactory to Buyer, with regard to the Shares, in the form attached hereto as Exhibit B. b. CONDITIONS TO SPSS'S OBLIGATION. The obligation of SPSS to issue the Shares to Buyer on the Effective Date and/or the date of any Subsequent Share Issuance, as applicable, is subject to the following conditions: (i) REPRESENTATIONS AND WARRANTIES. The representations and warranties of Buyer set forth in Section 2 hereof shall be true, accurate and correct on and as of the Effective Date and/or the date of any Subsequent Share 16 Issuance, as applicable, with the same effect as though such representations and warranties had been made as of the Effective Date and/or the date of any Subsequent Share Issuance, as applicable. (ii) SECURITIES LAW QUALIFICATION. The offer and sale to Buyer of the Shares shall be qualified or exempt from qualification under all applicable federal and state securities laws. (iii) PERFORMANCE. Buyer shall have performed and complied with all agreements, obligations and conditions contained in this Agreement and in the Research Services Agreement that are required to be performed or complied with by it on or before the Effective Date or the date of any applicable Subsequent Share Issuance, as the case may be. 7. EFFECTIVE DATE AND SUBSEQUENT ISSUANCE DATE DELIVERIES. a. DELIVERIES OF SPSS. Buyer shall have received prior to or on the Effective Date and/or the date of each Subsequent Share Issuance, as applicable, all of the following documents, each in form and substance reasonably satisfactory to Buyer and its counsel: (i) A certificate of the Chief Executive Officer and the Chief Financial Officer of SPSS stating: (A) with respect to the Effective Date, that the representations and warranties of SPSS set forth in Section 3 hereof are true, accurate and correct in all material respects on and as of the Effective Date. (B) with respect to the date of each Subsequent Share Issuance, that the representations and warranties of SPSS set forth in Section 3 hereof are true, accurate and correct in all material respects on and as of the date of such applicable Subsequent Share Issuance. (C) with respect to the Effective Date and the date of each Subsequent Share Issuance, that all agreements, obligations and conditions contained in this Agreement required to be performed and complied with by SPSS prior to or on the Effective Date or the date of such applicable Subsequent Share Issuance, as the case may be, have been performed or compiled with. (D) Written confirmation that the Initial Shares to be issued on the Effective Date have been issued and delivered by SPSS's transfer agent in accordance with the instructions provided by Buyer in order to enable SPSS to properly effect such issuance and delivery. Written confirmation that the Subsequent Shares to be issued on the applicable date of any Subsequent Share Issuance have been issued and delivered by SPSS's transfer agent in accordance with the instructions provided by Buyer in order to enable SPSS to effect properly such issuance and delivery. 17 b. DELIVERIES OF BUYER. SPSS shall have received prior to or on the Effective Date and/or the date of each Subsequent Share Issuance, as applicable, a certificate of an authorized officer of Buyer stating that (A) with respect to the Effective Date, that the representations and warranties of Buyer set forth in Section 2 hereof are true, accurate and correct on and as of the Effective Date, and (B) with respect to the date of each Subsequent Share Issuance, that the representations and warranties of Buyer set forth in Section 2 hereof are true, accurate and correct on and as of the date of such applicable Subsequent Share Issuance. 8. MISCELLANEOUS. a. NO WAIVER; CUMULATIVE REMEDIES. No failure or delay on the part of any party to this Agreement in exercising any right, power or remedy hereunder shall operate as a waiver thereof; nor shall any single or partial exercise of any such right, power or remedy preclude any other or further exercise thereof or the exercise of any other right, power or remedy hereunder. The remedies herein provided are cumulative and not exclusive of any remedies provided by law. b. AMENDMENTS, WAIVERS AND CONSENTS. This Agreement may be amended only by an instrument in writing signed by the party to be charged with enforcement. Any waiver or consent may be given subject to satisfaction of conditions stated therein and any waiver or consent shall be effective only in the specific instance and for the specific purpose for which given. c. BINDING EFFECT; ASSIGNMENT. This Agreement shall be binding upon and inure to the benefit of SPSS and Buyer and their respective heirs, successors and assigns d. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations and warranties made in this Agreement or any other instrument or document delivered in connection herewith, shall survive the execution and delivery hereof or thereof and shall terminate one year after the date of the last Subsequent Share Issuance. e. PRIOR AGREEMENTS. This Agreement and any related documents constitute the entire agreement between the parties hereto pertaining to the subject matter hereof, and any and all other written or oral agreements relating to the subject matter hereof existing between the parties hereto are expressly canceled. f. SEVERABILITY. If any provision of this Agreement shall be invalid or unenforceable in any jurisdiction, such invalidity or unenforceability shall not affect the validity or enforceability of the remainder of this Agreement or the validity or enforceability of this the Agreement in any other jurisdiction. g. GOVERNING LAW. This Agreement shall be governed by, and construed in accordance with the internal laws of the State of Illinois, without giving effect to its conflict of laws principles. h. HEADINGS. Article, section and subsection headings in this Agreement are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose. 18 i. COUNTERPARTS. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument, and any of the parties hereto may execute this Agreement by signing any such counterpart. j. FURTHER ASSURANCES. From and after the date of this Agreement, upon the request of SPSS, Buyer shall execute and deliver such instruments, documents and other writings as may be reasonably necessary or desirable to confirm and carry out and to effectuate fully the intent and purposes of this Agreement and the Shares. 9. NOTICES. Any notice required or permitted hereunder shall be given in writing (unless otherwise specified herein) and shall be deemed effectively given, (i) on the date delivered, (a) if by personal delivery, or (b) if advance copy is given by fax, (ii) seven business days after deposit in the United States Postal Service by regular or certified mail, or (iii) three business days mailing by international express courier, with postage and fees prepaid, addressed to each of the other parties thereunto entitled at the following addresses, or at such other addresses as a party may designate by ten days advance written notice to each of the other parties hereto: SPSS: SPSS Inc. 233 South Wacker Drive Chicago, Illinois 60606 Attention: Jack Noonan President and Chief Executive Officer Facsimile: 312-651-3558 with a copy to: Lawrence R. Samuels, Esq. Ross & Hardies 150 North Michigan Avenue Suite 2500 Chicago, Illinois 60601 Facsimile: 312-750-8600 BUYER: America Online, Inc. 22000 AOL Way Dulles, Virginia 20166 Attention: David M. Colburn, President, Business Affairs and Development Facsimile: 703-265-1202 with a copy to: America Online, Inc. 22000 AOL Way Dulles, Virginia 20166 Attention: General Counsel Facsimile: 703-265-2208 19 IN WITNESS WHEREOF, this Agreement has been duly executed by the parties hereto as of the date set forth below. BUYER: America Online, Inc., a Delaware corporation By: /s/ Lynda M. Clarizio ---------------------------------------- Name: Lynda M. Clarizio Title: Senior Vice President SPSS: SPSS INC., a Delaware corporation By: /s/ Jack Noonan ---------------------------------------- Jack Noonan President and Chief Executive Officer 20 EX-23.1 5 c66483ex23-1.txt CONSENT OF KPMG LLP EXHIBIT 23.1 CONSENT OF KPMG LLP The Board of Directors SPSS Inc.: We consent to the incorporation by reference of our report dated November 2, 2001, with respect to the consolidated balance sheets of SPSS Inc. as of December 31, 2000 and 1999, and the related consolidated statements of income, comprehensive income, stockholders' equity and cash flows for each of the years in the three-year period ended December 31, 2000 and the related financial statement schedule and to the reference to our firm under the heading "Experts" in the prospectus. /s/ KPMG LLP Chicago, Illinois December 11, 2001 -----END PRIVACY-ENHANCED MESSAGE-----