AMENDED AND RESTATED EMPLOYMENT AGREEMENT

      This Amended and Restated Employment Agreement (this "Agreement"), dated
as of August 16, 2004 (the "Agreement"), is by and between SPSS Inc., a Delaware
corporation having its principal offices at 233 South Wacker Drive, 11th Floor,
Chicago, Illinois ("SPSS" or the "Company"), and Raymond H. Panza (the
"Employee").

      WHEREAS, SPSS desires to retain the Employee's services, and the Employee
is willing to serve as an employee of SPSS on the terms and conditions set forth
herein;

      NOW THEREFORE, in consideration of the foregoing, the mutual covenants and
conditions contained herein, and other good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged, the parties hereto
agrees as follows:

      1. Employment. The Employee shall be employed by SPSS as Executive Vice
President, Corporate Operations, Chief Financial Officer and Secretary (CFO) for
the Term of Employment (as defined in Section 4 below), and on the terms and
conditions set out herein. In each of these capacities, the Employee shall
report directly to the President and Chief Executive Officer of SPSS.

      2. Employment Services. The Employee shall be responsible for the
management and direction of all aspects of the Company's financing, accounting,
financial reporting and financial information systems for carrying out corporate
policy as established by the Board of Directors of SPSS (the "Board"). These
duties shall include, but not be limited to, oversight and management of
financial and strategic planning, budgeting and forecasting; compliance with all
applicable accounting, securities and other government regulations; initiating
internal audits and financial controls; establishing and managing credit;
establishment and maintenance of receivable and payable systems; and development
and maintenance of internal systems to track,

<PAGE>

analyze and control costs related to the business of SPSS.

      The Employee shall also be responsible for the management and direction of
all aspects of the Company's legal department, the corporate secretary function,
human resources, and the Company's corporate administration, including without
limitation, its facilities, risk management department; and product fulfillment
department.

      In addition, the Employee shall faithfully perform other executive and
managerial duties, or special assignments, as may be delegated to the Employee
by or on behalf of the Board, the Audit Committee or the President of SPSS.
During the Term of Employment, the Employee shall work for SPSS and its
Affiliates (as hereinafter defined) and shall devote substantially all of his
business efforts and time to fulfill the duties of his employment.

      For purposes of this Agreement, the term "Affiliate" as used herein shall
mean SPSS, any other corporation owned or controlled by SPSS, directly or
indirectly, and any subsidiary of SPSS.

      3.    Compensation.

            (a) Base Salary. In full consideration for aforementioned services
and subject to the due performance thereof, the Employee shall receive an annual
salary of $335,000 (payable semi-monthly in arrears) during the Term of
Employment.

            (b) Bonus Payments. The Employee shall be eligible to participate in
the Annual Incentive Bonus program for senior executives of SPSS and to receive
incentive cash payments in connection therewith. Employee's annual incentive
target shall be no less than 40% of his base pay; however actual payout will
depend upon SPSS company performance measured against defined metrics. Incentive
cash payments shall be calculated quarterly and paid approximately eight (8)
weeks after the close of each calendar quarter. With regard to the fiscal

                                       2
<PAGE>

quarter ended September 30, 2004, Employee shall be entitled to a guaranteed
incentive payment of $16,750, representing 50% (46 days) of the quarterly
targeted amount.

            (c) Reviews. The Employee shall be reviewed by the Compensation
Committee of the Board of Directors (the "Compensation Committee") with regard
to salary and bonus on no less frequent than an annual basis and/or in
conjunction with the Compensation Committee's review of the Company's Chief
Executive Officer and/or other senior executive officers. Any increase in salary
or the award of a bonus shall be made in the sole discretion of the Compensation
Committee, taking into account, at the sole discretion of the Board, whether the
Employee has attained the applicable performance goals, financial and other,
established for the Employee by the Compensation Committee.

            (d) Equity Incentives. Employee shall, subject to the approval of
the Compensation Committee, participate in the Incentive Stock Options program
available to other senior executive officers of SPSS. Employee's initial grant
of options shall be 150,000 shares (the "Initial Option Grant"). With regard to
this Initial Option Grant and any potential future grants, no options will
actually be issued to the Employee unless and until approval of the specific
grant and issuance has been obtained from the Compensation Committee. The
Compensation Committee approved the Initial Option Grant on, and therefore, the
date of the Initial Option Grant is, October 28, 2004. The Initial Option Grant
shall vest as follows: 25% of the Initial Option Grant will become exercisable
on August 16, 2005, an additional 2.09% will become exercisable at the
conclusion of each month of the first, second and third calendar years following
August 16, 2005 other than the final month of the third year, and an additional
1.85% will become exercisable at the conclusion of the final month of the third
year following August 16, 2005.

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<PAGE>

            (e) Sign-On Bonus. Employee shall receive a one-time sign on bonus
of $100,000.00 (One Hundred Thousand Dollars and No Cents) to be paid in four
equal quarterly installments (the "Sign-On Bonus") payable on the last business
day of the quarter. The first such payment shall be made at the end of the
fourth quarter of calendar year 2004 with further payments made at the end of
each of the three succeeding calendar year quarters. Should Employee resign for
other than "Good Reason" (as defined in Section 5 below) or be terminated for
Good Cause (as defined in Section 5 below) before all payments of the Sign-On
Bonus have been made, the payments shall cease and no further payments shall
become due or payable. In the event of a "change of control" of SPSS (as defined
in Section 5(g) below) all remaining payments owed to Employee in connection
with the Sign-On Bonus shall be made in one lump sum, payable on the effective
date of the "change of control."

            (f) Benefits. The Employee shall be entitled to:

                  (i)   reimbursement from SPSS of reasonable and necessary
                        business expenses incurred by the Employee so long as
                        such expenses are consistent with the Company's expense
                        reimbursement policy/practice, upon the Employee's
                        presentation from time to time of an itemized account of
                        such expenses signed by the Employee;

                  (ii)  five (5) weeks of paid vacation time during each year of
                        employment;

                  (iii) ten (10) days of sick leave during each year of
                        employment;

                  (iv)  the holidays observed by SPSS in the United States; and

                  (v)   to receive, enjoy, and/or participate as applicable in
                        the other

                                       4
<PAGE>

                        benefits customarily received by senior executives and
                        employees of SPSS; provided, however, that nothing
                        herein shall require SPSS to maintain the benefits
                        currently provided to SPSS employees.

      4. Term of Employment. The Employee's term of employment by SPSS (the
"Term of Employment") shall commence on the date hereof and shall continue
through Date of Termination as defined below. The date on which the Term of
Employment ends pursuant to Section 5 below shall be referred to as the "Date of
Termination." Except as specifically agreed to in writing by the parties, all
provisions of this Agreement shall remain in full force and effect during the
entire Term of Employment.

      5. Termination.

            (a)   The Term of Employment may be terminated:

                  (i)   by mutual written agreement of SPSS and the Employee,
                        effective as mutually agreed,

                  (ii)  by SPSS with Good Cause (as defined hereunder),
                        effective immediately unless otherwise mutually agreed;

                  (iii) by Employee for Good Reason (as defined hereunder),
                        effective immediately unless otherwise mutually agreed;

                  (iv)  by SPSS without Good Cause, effective 90 days after
                        written notice to Employee (the "SPSS Notice Period");
                        or

                  (v)   by Employee without Good Reason, effective the earlier
                        of a mutually agreed Date of Termination or 90 days
                        after written notice to SPSS (the "Employee Notice
                        Period;" the SPSS Notice

                                       5
<PAGE>

                        Period and the Employee Notice Period are collectively
                        referred to herein as the "Notice Period").

            (b)   For purposes of this Agreement, "Good Cause" is defined as:

                  (i)   the conviction of a crime involving theft or fraud;

                  (ii)  illegal use of a controlled substance; or

                  (iii) the engagement in fraud or embezzlement.

            (c)   For purposes of this Agreement, "Good Reason" is defined as:

                  (i)   a material diminishment of Employee's job assignment,
                        duties, responsibilities or reporting relationships
                        which is inconsistent with his initial position
                        hereunder, or any later agreed upon amendment of that
                        position;

                  (ii)  a reduction in Employee's base compensation or total
                        compensation package, including benefit plans and
                        programs; or

                  (iii) a breach of the terms of this Agreement by SPSS.

            (d)   If this Agreement is terminated either by SPSS for Good Cause
pursuant to Section 5(a)(ii) or by the Employee without Good Reason pursuant to
Section 5(a)(v) above, SPSS will pay to Employee any outstanding amounts owed to
Employee by SPSS, including without limitation,

                  (i)   any earned but unpaid base salary plus any earned and/or
                        awarded but unpaid cash incentive as of the Date of
                        Termination,

                  (ii)  any accrued, unpaid and unused vacation pay as of the
                        Date of Termination; and

                  (iii) the reimbursement of any business expenses properly
                        incurred by

                                       6
<PAGE>

                        Employee pursuant to Section 3(f)(i) above.

            (e) If this Agreement is terminated either by the Employee for Good
Reason pursuant to Section 5(a)(iii) above or by SPSS without Good Cause
pursuant to Section 5(a)(iv) above, SPSS will pay and/or provide (as otherwise
reasonably applicable) to Employee (except as otherwise provided in Section 9 of
this Agreement):

                  (i)   the full amount of the salary and benefits earned by the
                        Employee during the Notice Period, if applicable;

                  (ii)  any earned but unpaid base salary plus any earned and/or
                        awarded but unpaid cash incentive as of the Date of
                        Termination;

                  (iii) the amount of the incentive cash payment to which the
                        Employee would have been entitled had the annual
                        incentive target been fully met, prorated for the number
                        of days during the relevant fiscal quarter for which the
                        Employee was employed prior to the Date of Termination;

                  (iv)  any accrued, unpaid and unused vacation pay as of the
                        Date of Termination;

                  (v)   the reimbursement of any business expenses properly
                        incurred by Employee pursuant to Section 3(f)(i) above.

                  (vi)  payments equal to:

                        (A)   Employee's monthly base salary (annual base salary
                              divided by 12) in effect at the Date of
                              Termination for a period of 18 months (not
                              including fringe benefits or bonus) payable as a
                              lump sum, and

                                       7
<PAGE>

                         (B)  A payment equal to the product of six (6)
                              multiplied by the amount of the incentive cash
                              payments to which the Employee would have been
                              entitled had the annual incentive target been
                              fully met for the full fiscal quarter during which
                              the Date of Termination occurred;

                  (vii)  continued benefits or value thereof for a period of 36
                         months (including all existing plans, programs and
                         practices for the first 18 months and including only
                         health and welfare benefits for the next 18 months)
                         following the Date of Termination (including a
                         continuation of professional dues and subscriptions
                         otherwise paid by SPSS), at no less than the level of
                         participation afforded to Employee immediately prior to
                         the Date of Termination;

                  (viii) professional outplacement services, but not to exceed a
                         term of 12 months, at a level customary for a senior
                         executive, to be provided by a firm mutually acceptable
                         to SPSS and the Employee;

                  (ix)   any then unpaid Sign-On Bonus as set forth in Section
                         3(e) above;

                  (x)    the continued use of a mobile telephone provided for
                         and paid by the Company, access to Employee's office
                         telephone number and voice mailbox that exist at the
                         Date of Termination, and access to and use of
                         Employee's personal Company email address for a
                         mutually agreed upon, reasonable period, which period
                         shall not be less than 90 days from the Date of
                         Termination; and

                  (xi)   acceptable employment references, as reasonably
                         requested by the

                                       8
<PAGE>

                        Employee, which employment references shall include
                        information regarding Employee's dates of employment
                        with SPSS, job title, pay rate and any such additional
                        information as SPSS and Employee may agree to at the
                        time such references are requested. For the avoidance of
                        doubt, SPSS shall in all instances act in good faith to
                        avoid negative comments regarding Employee.

      The parties hereto acknowledge that stock options granted by SPSS to the
Employee represent a material component of the Employee's total compensation
package. While each stock option vests pursuant to a predetermined vesting
schedule defined by the relevant stock option grant, the parties further
acknowledge that one of the purposes of a stock option vesting schedule is to
recognize the value of the Employee's continued employment. Accordingly, in the
event that the Employee is terminated pursuant to this Section 5(e) before the
date on which any stock option (or portion thereof) previously granted by SPSS
to the Employee would have otherwise vested (each, a "Vesting Date"), immediate
vesting will occur with respect to all then yet unvested stock options (or
portions thereof) that would have vested had the Employee been employed with the
Company as of the relevant Vesting Date. In the event that a legal, technical or
other reason arises that causes the Employee to be unable to exercise the vested
portion of such stock option, SPSS shall promptly pay to the Employee cash in
the amount equal to the product of (A) the number of shares subject to the
vested portion of the stock option and (B) the difference between (i) the
closing price on the Date of Termination and (ii) the grant price of such stock
option.

      If this Agreement is terminated pursuant to this Section 5(e) and, at such
time, SPSS is unable to provide to Employee the benefits set forth in Section
5(e)(vii) above, SPSS shall take

                                       9
<PAGE>

all actions reasonably necessary to provide Employee with the functional
equivalent of the benefits set forth in Section 5(e)(vii). SPSS and Employee
agree and acknowledge that the functional equivalent of the benefits set forth
in Section 5(e)(vii) may be provided in any of the following manners: (A) by
SPSS's benefits provider in accordance with the terms of SPSS's employee benefit
plans; (B) in connection with Employee's continued employment with SPSS in a
position other than the position set forth in Section 2 of this Agreement if, at
such time, SPSS desires to continue to retain Employee's services; or (C) by an
agreed upon lump-sum payment by SPSS to Employee, which payment shall be
intended to compensate Employee for the benefits set forth in Section 5(e)(vii).
For the avoidance of doubt, it is the intent of the parties that in no event
shall any of the alternatives set forth in the preceding sentence (relative to
the provision of benefits) result in a taxable event for the Employee. Should a
taxable event be caused to Employee, SPSS will make a cash payment to or on
behalf of the Employee in an amount necessary to keep Employee economically
whole (i.e. a tax gross-up). Furthermore, none of the above alternatives shall
result in a reduction of any rights or benefits (including but not limited to
COBRA) to which Employee is otherwise entitled.

            (f) If this Agreement is terminated due to death (Section 7) or
disability (Section 6(b)) as set forth below, SPSS will pay to Employee any
outstanding amounts owed to Employee by SPSS, including without limitation,

                  (i)   any earned but unpaid base salary plus any earned and/or
                        awarded but unpaid cash incentive as of the Date of
                        Termination,

                  (ii)  any accrued, unpaid and unused vacation pay as of the
                        Date of Termination;

                  (iii) the reimbursement of any business expenses properly
                        incurred by

                                       10
<PAGE>

                        Employee pursuant to Section 3(f)(i) above;

                  (iv)  target incentive cash bonus prorated for the quarter in
                        which the Date of Termination occurs; and

                  (v)   any then unpaid Sign-On Bonus as set forth in Section
                        3(e) above.

Unless otherwise specifically addressed above in this Section 5, all such
amounts payable or due under this Section 5 shall be paid promptly but in no
event later than 15 days following Date of Termination.

            (g) In the event of a Change of Control (as defined herein) of SPSS,
the Employee shall be entitled to the following benefits:

                  (i)   Treatment of Stock Options, Restricted Stock Units,
            Restricted Stock and Stock Appreciation Rights upon Change of
            Control

                        (A)   Change of Control in a Transaction with a Private
                              Company. In the event a Change of Control occurs
                              as the result of a transaction between SPSS and a
                              company whose common stock is not publicly traded
                              on a domestic national stock exchange, the NASDAQ
                              national market, or their respective successors or
                              equivalents (a "Private Company"), then:

                              (1)   all of Employee's stock options (vested and
                                    unvested) granted by SPSS prior to the
                                    Effective Date (as defined herein) (A) shall
                                    accelerate and shall be deemed to be
                                    exercised in full upon the Effective Date by
                                    means of a cashless exercise and

                                       11
<PAGE>

                              (B) with regard to the underlying stock, shall be
                              cashed out at the transaction value as calculated
                              as of the Effective Date and shall be paid by the
                              Surviving Entity to Employee on the Effective
                              Date;

                        (2)   all of Employee's restricted stock units (vested
                              and unvested) granted by SPSS prior to the
                              Effective Date (A) shall accelerate and shall be
                              deemed to be fully vested upon the Effective Date
                              and (B) with regard to the underlying stock, shall
                              be cashed out at the transaction value as
                              calculated as of the Effective Date and shall be
                              paid by the Surviving Entity to Employee on the
                              Effective Date;

                        (3)   all restrictions on transferability of restricted
                              stock held by the Employee on the Effective Date
                              shall accelerate and shall be deemed to have
                              terminated immediately prior to the Effective
                              Date, and such restricted stock shall be cashed
                              out at the transaction value as calculated as of
                              the Effective Date and shall be paid by the
                              Surviving Entity to the Employee on the Effective
                              Date; and

                        (4)   all of the stock appreciation rights (vested and
                              unvested) granted by SPSS prior to the Effective

                                       12
<PAGE>

                              Date (A) shall accelerate, shall be deemed to be
                              exercised in full upon the Effective Date and the
                              value thereof shall be exchanged for SPSS stock at
                              the market value of such stock immediately prior
                              to the Effective Date and (B) with regard to the
                              underlying stock, shall be cashed out at the
                              transaction value as calculated as of the
                              Effective Date and shall be paid by the Surviving
                              Entity to Employee on the Effective Date.

                  (B)   Change of Control in a Transaction With a Public
                        Company. In the event a Change of Control occurs between
                        SPSS and a company whose common stock is publicly traded
                        on the domestic national exchange, the NASDAQ national
                        market, or their respective successors and equivalents
                        (a "Public Company"), then

                        (1)   all of Employee's stock options (vested and
                              unvested) granted by SPSS prior to the Effective
                              Date (A) shall accelerate and shall be deemed to
                              be exercised in full upon the Effective Date by
                              means of a cashless exercise and (B) with regard
                              to the underlying stock, shall be exchanged, on
                              the Effective Date, for a proportionate share of
                              the

                                       13
<PAGE>

                              consideration to be paid in connection with the
                              Change of Control;

                        (2)   all of Employee's restricted stock units (vested
                              and unvested) granted by SPSS prior to the
                              Effective Date (A) shall accelerate and be deemed
                              to be fully vested upon the Effective Date and (B)
                              with regard to the underlying stock, shall be
                              exchanged, on the Effective Date, for a
                              proportionate share of the consideration to be
                              paid in connection with the Change of Control;

                        (3)   all restrictions on transferability of restricted
                              stock held by the Employee on the Effective Date
                              shall accelerate and shall be deemed to have
                              terminated immediately prior to the Effective
                              Date, and such restricted stock shall be
                              exchanged, on the Effective Date, for a
                              proportionate share of the consideration to be
                              paid in connection with the Change of Control; and

                        (4)   all of the stock appreciation rights (vested and
                              unvested) granted by SPSS prior to the Effective
                              Date (A) shall accelerate, shall be deemed to be
                              exercised in full upon the Effective Date and the
                              value thereof shall be exchanged for SPSS stock at

                                       14
<PAGE>

                              the market value of such stock immediately prior
                              to the Effective Date and (B) with regard to the
                              underlying stock, shall be exchanged, on the
                              Effective Date, for a proportionate share of the
                              consideration to be paid in connection with the
                              Change of Control.

                  (ii) Additional Benefit Package. If, upon the Effective Date,
            or within twelve (12) months after the Effective Date, the Surviving
            Entity terminates the Employee's employment without Good Cause, the
            Employee resigns for Good Reason, or a Constructive Termination (as
            defined herein) occurs, the Employee shall be entitled to all
            amounts to which the Employee would be entitled if the Employee's
            employment was terminated pursuant to Section 5(e) hereof.

      The term "Change of Control," as used herein, shall mean any one or more
of the following: (i) the accumulation, by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange
Act of 1934, as amended (the "Exchange Act")) (A) if not previously owning
common stock of the Company as of the date of this Agreement, of Fifteen Percent
(15%) or more of the shares of the then outstanding common stock of SPSS (the
"Outstanding Common Stock"), or (B) if previously owning common stock of the
Company as of the date of this Agreement, of Fifty Percent (50%) or more of the
shares of the Outstanding Common Stock, (ii) a merger or consolidation of SPSS
in which SPSS does not survive as an independent public company, (iii) a sale of
all or substantially all of the assets of SPSS, (iv) a triggering event under
that certain Amended and Restated Rights Agreement, dated as of August 31, 2004,
by and between SPSS and Computershare Investor Services, LLC or any

                                       15
<PAGE>

amendment, restatement or replacement thereof, or (v) a liquidation or
dissolution of SPSS; provided, however, that the following acquisitions shall
not constitute a Change of Control for the purposes of this Agreement: (i) any
acquisitions of common stock or securities convertible into common stock
directly from SPSS, or (ii) any acquisition of common stock or securities
convertible into common stock by any employee benefit plan (or related trust)
sponsored or maintained by SPSS.

      The term "Constructive Termination," as used herein, shall mean:

                  (i) a reduction for a reason other than Good Cause, in
      Employee's base compensation or total compensation package, including
      benefit plans and programs (as compared to the compensation package which
      the Employee received in the full fiscal year immediately preceding the
      year in which the Effective Date occurred), which reduction occurs during
      any twelve month period beginning on or after the Effective Date and
      ending on or prior to the later of (x) the second anniversary date of the
      Effective Date or (y) the date on which any SPSS stock options and stock
      appreciation rights then held by the Employee become fully vested; or

                  (ii) any action (an "Action") taken by the Company or the
      Surviving Entity following a Change of Control, for a reason other than
      Good Cause, which results in a material diminishment of the Employee's job
      assignment, duties, responsibilities, or reporting relationships which is
      inconsistent with his position with SPSS as it existed immediately prior
      to the Effective Date.

                  (iii) a change in Employee's principle location of employment
      by more than fifty (50) miles from that location of employment which
      existed immediately prior to the Effective Date.

                                       16
<PAGE>

In order for the events set forth in the immediately preceding sections (i) and
(ii) above to constitute a Constructive Termination, such events must be
followed within ninety (90) days by the resignation of the Employee.

      The term "Surviving Entity," as used herein, shall mean the entity
surviving a transaction between SPSS and another company (with the term
"company" to include by not be limited to any individual, group or individuals,
partnership, corporation or other similar entities).

      The term "Effective Date," as used herein, shall mean the date on which a
Change of Control becomes effective.

      6. Disability of the Employee.

            (a) Temporary Disability. The Employee shall be covered by the
Company's temporary disability policy.

            (b) Total and Permanent Disability. In the event that the Employee
suffers total and permanent disability during his Term of Employment hereunder,
then, effective on the date thereof, the Term of Employment shall conclude.
Total and permanent disability shall mean a disability because of which the
Employee is physically or mentally unable to substantially perform the duties
required of him or her under this Agreement for a period of six consecutive
months or more.

      7. Death of the Employee. If the Employee dies during the Term of
Employment hereunder, the Term of Employment shall conclude on the date thereof,
and the amounts due to the Employee hereunder shall be paid to the Employee's
designated beneficiary, or in the event no beneficiary has been designated or
survives the Employee, to the estate of the Employee.

      8. Effect of Expiration or Termination. In the event this Agreement is
terminated pursuant to Section 5 or is concluded as described in Section 6, the
Employee shall tender his

                                       17
<PAGE>

resignation to the board of directors of SPSS and any Affiliate of SPSS on which
he may then be serving. Following the Employee's resignation, Sections 9, 10 and
11 of this Agreement shall continue in accordance with the terms and conditions
of each respective section.

      9. Outstanding Amounts Owed to SPSS by Employee. In the event this
Agreement is terminated pursuant to Section 5, or is concluded as described in
Section 6(b) or Section 7, any outstanding amounts owed, due or payable to SPSS
by the Employee, which amounts are evidenced in writing by SPSS or are otherwise
agreed to by SPSS and the Employee, shall, unless otherwise agreed, become due
and immediately payable, and SPSS shall be entitled to withhold any payments
required to be made to the Employee herein, including without limitation,
payments in respect of any SPSS capital stock, severance payments, and other
similar items, until SPSS shall have been paid all amounts owing to it by the
Employee.

      10. Director and Officer Insurance. SPSS agrees that it shall indemnify
the Employee against any actual or threatened actions or proceedings brought
against the Employee by reason of the fact that he is or was an employee,
officer, consultant or agent of the Company, to the fullest extent permitted by
the Delaware General Corporation Law. Employee shall be covered by the Director
and Officer Insurance policies maintained by the Company, and the Company shall
make special arrangements, if necessary, to continue providing insurance
coverage for the Employee following the Date of Termination, unless the Employee
is terminated for Good Cause pursuant to Section 5(a)(ii) above.

      11. Non-Competition; Confidentiality; Work for Hire.

            (a) The Employee understands that the Company's business concerns
proprietary computer programs and related documentation (software) which
includes, but is not limited to, the SPSS mainframe/mini software product line
and the SPSS micro/PC software

                                       18
<PAGE>

product line. The Employee understands that in the course of his or her
employment with SPSS, SPSS and/or its Affiliates may provide the Employee with,
or access to, such software (including, without limitation, source listings
therefore), as well as confidential and/or proprietary prospect and customer
lists, data, research, specifications, memoranda, files, records, plans,
concepts, flow charts, drawings, designs, descriptions, formulations, trade
secrets and other confidential and/or proprietary information and property,
including but not limited to, information regarding SPSS operations, businesses,
affairs, management and market structure (all of the foregoing collectively
referred to as the "Confidential Property").

            (b) The Employee acknowledges and agrees that the Confidential
Property, and all information and intellectual property and other data which the
Employee develops in connection with his employment duties is the sole and
exclusive property of SPSS and is not available to any third parties.

            (c) The Employee will regard and preserve as confidential and as
trade secrets all the Confidential Property. During the Employee's employment
and thereafter, the Employee will not, directly or indirectly, communicate or
divulge to, or use for the benefit of himself or any other person, firm,
association or corporation, without the prior written consent of SPSS, any
Confidential Property. The Confidential Property shall remain the sole and
exclusive property of SPSS, and upon any expiration or termination of the Term
of Employment for any reason whatsoever, the Employee shall promptly return any
and all Confidential Property in his possession or control to SPSS.

            (d) The Employee shall have no right, title or interest of any kind
or nature in any of the Confidential Property or any proceeds therefrom. With
respect to any Confidential

                                       19
<PAGE>

Property which the Employee has developed or develops (either alone or with
others) during his employment with SPSS, the Employee agrees:

                  (i)   to disclose the same promptly to an officer of SPSS;

                  (ii)  to grant and assign to SPSS, without additional payment
                        or consideration of any kind, all of the Employee's
                        rights, titles and interests therein, as directed by
                        SPSS;

                  (iii) to execute any applications, assignments and other
                        instruments in writing that SPSS may prepare, at the
                        Company's expense, to apply for, obtain or maintain,
                        solely for the benefit of SPSS, any patents or
                        proprietary interests therein, in the United States and
                        any and all foreign countries; and

                  (iv)  to provide any and all assistance as SPSS may request,
                        at the Company's expense, in the prosecution of such
                        applications, in the prosecution or defense of any
                        patent interferences, and in any and all litigation in
                        which SPSS may be involved relating to the same.

The above shall not apply to the Employee's general skills and knowledge nor to
enhancement of the employee's general skills and knowledge as a result of his
employment, nor shall the above apply to protectible information which is or
becomes in the public domain through no fault of the Employee or protectible
information which bears no reasonable relation to the software business of SPSS
as described in subsection (a) hereof.

            (e)   The Employee further recognizes and agrees that:

                  (i)   SPSS licenses the use of various computer software
                        ("Licensed Software") from a variety of outside
                        companies. SPSS does not own the Licensed Software or
                        its related documentation and, unless authorized by the
                        licensor, does not have the right to reproduce it;

                  (ii)  The Employee will use Licensed Software only in
                        accordance with the terms of the applicable license
                        agreement;

                  (iii) If the Employee learns of any misuse of Licensed
                        Software or related documentation within SPSS, he shall
                        notify the appropriate party at SPSS of the misuse;

                                       20
<PAGE>

                  (iv)  SPSS employees caught making, acquiring or using
                        unauthorized copies of Licensed Software will be
                        disciplined as appropriate under the circumstances; and

                  (v)   According to the U.S. Copyright Law, illegal
                        reproduction of copyrighted Licensed Software can be
                        subjected to various substantial civil damages and/or
                        criminal penalties, including fines and imprisonment.
                        Other Licensed Software may be covered by trade
                        secret/confidentiality agreements which are protected
                        under state laws.

            (f) The Employee hereby further covenants and agrees that, during
the period of his employment with SPSS, and during the Agreed Period (as
hereinafter defined), the Employee shall not (i) be engaged or involved in any
manner in Prohibited Activities (as hereinafter defined) in any Prohibited
Territory (as hereinafter defined) or (ii) solicit or otherwise engage with
(except pursuant to the Employee's employment with SPSS) any customers or
clients of SPSS existing on the date of such expiration or termination, in any
transactions which are in direct competition with the statistical data analysis
software business of SPSS which SPSS did or could have engaged in with those
customers or clients at any time during the Employee's employment with SPSS. For
purposes of this Section 11, (i) "Prohibited Activities" shall mean any
development, sales, marketing, licensing and/or distribution of any statistical
data analysis software which is directly competitive with any products being
marketed by SPSS or any of its Affiliates as of the date of reference, and (ii)
"Prohibited Territory" mans the United States, Europe and/or any other country
or applicable geographic area where SPSS or its Affiliates are engaging, as of
the date of reference, in the marketing of any products. The term "Agreed
Period" shall mean a period of twelve (12) months after the date of any
expiration or termination of the Term of Employment; provided, however, if the
Employee intends to accept, and actually accepts, employment with a business
entity that has its principal place of business and headquarters in Europe, and
the Employee's place of work for such entity shall be within

                                       21
<PAGE>

Europe, then, with respect to Prohibited Activities in Europe and solicitation
of SPSS customers located in Europe, the Agreed Period shall be a period of six
(6) months after the date of any expiration or termination of the Term of
Employment.

      If SPSS is sold or merged into another company or other business entity,
or otherwise ceases to exist for any reason, and this Agreement is not assumed
in full by the company or other business entity to which SPSS is sold or merged
into, or the Employee is not offered a comparable position to the position then
held by the Employee at SPSS in lieu of the assumption of this Agreement, which
position is accepted by Employee, the provisions of this subsection 11(f) shall
terminate effective upon the occurrence of the events described in this
sentence. For the avoidance of doubt, in the event of a Change of Control (as
defined in Section 5(g)) and subsequent termination of Employee's employment for
any reason within twelve (12) months after the Effective Date of such Change of
Control, the Agreed Period shall not apply.

            (g) SPSS encourages its employees to author and publish papers and
articles related to their lines of work with SPSS. However, the Employee
acknowledges that SPSS reserves the right to approve such material prior to
publishing and, if necessary, to delete any portion that SPSS does not wish to
disclose to others outside of SPSS.

            (h) During the Agreed Period, the Employee will not directly or
indirectly employ, solicit for employment, or advise or recommend to any other
person that they employ or solicit for employment, any employee of SPSS or any
Affiliate.

            (i) During the Agreed Period, the Employee will not directly or
indirectly hire, engage, send any work to, place orders with, or in any manner
be associated with any supplier, contractor, subcontractor or other person or
firm which rendered manufacturing or other

                                       22
<PAGE>

services, or sold any products, to SPSS any Affiliate if such action by the
Employee would have a material adverse effect on the business, assets or
financial condition of SPSS or any Affiliate.

            (j) The Employee understands that a breach by him of any provision
of this Agreement may cause substantial injury to SPSS which may be irreparable
and/or in amounts difficult or impossible to ascertain, and that in the event
the Employee breaches any provision of this Agreement, SPSS shall have, in
addition to all other remedies available in the event of a breach of this
Agreement, the right to injunctive or other equitable relief. Further, the
Employee acknowledges and agrees that the restrictions and commitments set forth
in this Agreement are necessary to protect the Company's legitimate interests
and are reasonable in scope, area and time, and that if, despite this
acknowledgment and agreement, at the time of the enforcement of any provision of
this Agreement a court of competent jurisdiction shall hold that the period or
scope of such provision is unreasonable under the circumstances then existing,
the maximum reasonable period or scope under such circumstances shall be
substituted for the period or scope stated in such provision.

      In connection with the foregoing provisions of this Section 11, the
Employee represents that the Employee's experience, capabilities and
circumstances are such that such provisions will not prevent the Employee from
earning a livelihood. The Employee further agrees that the limitations set forth
in this Section 11 (including, without limitation, any time or territorial
limitations) are reasonable and properly required for the adequate protection of
the business of SPSS (and its Affiliates). In the event any such territorial or
time limitation is deemed to be unreasonable by a court of competent
jurisdiction, Employee agrees to the reduction of the territorial or time
limitation to the area or period which such court shall have deemed reasonable.

                                       23
<PAGE>

It is understood and agreed that the covenants made by the Employee in this
Section 11 shall survive the expiration or termination of this Agreement.

      12. Non-Waiver of Rights. The failure to enforce at any time any of the
provisions of this Agreement or to require at any time performance by the other
party of any of the provisions hereof shall in no way be construed do be a
waiver of such provisions or to affect either the validity of this Agreement, or
any part hereof, or the right of either party thereafter to enforce each and
every provision in accordance with the terms of this Agreement.

      13. Arbitration. Any dispute as to any claim under this Agreement shall be
settled by arbitration in Chicago, Illinois by a panel of three arbitrators, who
shall be appointed pursuant to the rules of the American Arbitration
Association. The arbitration shall be conducted promptly and expeditiously in
accordance with the applicable arbitration rules of the American Arbitration
Association. Any award issued as a result of such arbitration shall be final and
binding on the parties, and judgment upon the award rendered by the arbitrators
may be entered in any court having jurisdiction thereof.

      14 Severability. Whenever there may be a conflict between the provisions
of this Agreement and any statute, prevailing law, ordinance or regulation, the
latter shall prevail, but in such event the provisions of this Agreement so
affected shall be construed and limited only to the extent necessary to bring it
within the requirements of such law and in no event shall such illegality or
unenforceability offset the remaining provisions or remaining portions of this
Agreement.

      15 Notices. Any notice given by either party hereunder shall be in writing
and shall be personally delivered or shall be mailed, certified or registered
mail, postage prepaid, as follows:

                                       24
<PAGE>

        To SPSS:                     SPSS Inc.
                                     233 South Wacker Drive
                                     11th Floor
                                     Chicago, Illinois  60606
                                     Attention:  Jack Noonan

        With a copy to:              Lawrence R. Samuels
                                     McGuireWoods LLP
                                     77 West Wacker Drive
                                     Suite 4100
                                     Chicago, Illinois  60601

        To Employee:                 At the address of the Employee as
                                     set forth on the payroll records of
                                     SPSS.

or to such other address as may have been furnished to the other party by
written notice.

      16. Assignment. The rights and obligations of SPSS under this Agreement
shall inure to the benefit of and shall be binding upon the successors and
assigns of SPSS.

      17. Entire Agreement. This Agreement contains the entire agreement between
the parties and supersedes all prior agreements and representations, written or
oral. No representations or agreements, written or oral, other than those
representations and agreements contained in this Agreement, have been made to or
in favor of the Employee. This Agreement may not be changed orally, but only by
an agreement in writing signed by the party against whom enforcement of any
waiver, change, modification, extension or discharge is sought.

      18. Applicable Law. This Agreement shall be interpreted and enforced in
accordance with the laws of the State of Illinois, without regard to its
conflicts of law doctrine, and the Employee hereby consents to personal
jurisdiction in Illinois with regard to any dispute arising between the parties
hereto.

      19. Amendment for Code Section 409A. Notwithstanding any provision of this
Agreement to the contrary, SPSS and Employee agree that to the extent Code
section 409A

                                       25
<PAGE>

applies to this Agreement, this Agreement shall be timely amended
to conform to the requirements of paragraphs (2), (3), and (4) of Code section
409A, as interpreted by guidance issued by the Internal Revenue Service. SPSS
and Employee further agree that the Agreement shall be administered in
accordance with the requirements of Code section 409A, and all amounts payable
hereunder shall be distributed only in compliance with the requirements of
paragraphs (2), (3) and (4) of such Code section. No distribution under the
Agreement that would fail to meet the requirements of such paragraphs shall be
made. For the avoidance of doubt, SPSS and Employee will cooperate in good faith
in amending this Agreement pursuant to this Section 19. No amendments may be
made without the consent of the Employee.

                                       26
<PAGE>

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

EMPLOYEE:                           SPSS INC.:

/s/ Raymond H. Panza                By: /s/ Jack Noonan
------------------------------          ---------------------------------
Raymond H. Panza                        Jack Noonan
                                        President and Chief Executive Officer

                                       27
<PAGE>

                                Statutory Notice

      We are required, under the Employee Patent Act, Ill. Rev. Stat. ch. 140,
-302 (1987), to provide each employee who enters into an employment agreement
containing a "work-for-hire" provision with a written notification of the
following:

      The agreement does not apply to an invention for which no equipment,
      supplies, facility, or trade secret information of the employer was used
      and which was developed entirely on the employee's own time, unless (a)
      the invention relates (i) to the business of the employer, or (ii) to the
      employer's actual or demonstrably anticipated research or development, or
      (b) the invention results from any work performed by the employee for the
      employer.

      Please acknowledge that you have received a copy of this Notice as of
March 14, 2005, by signing below.

                                          Employee

                                          /s/ Raymond H. Panza
                                          --------------------------------------
                                          Raymond H. Panza

                                       28

Source: OneCLE Business Contracts.