Compensation Committee Charter

Adopted: January 28, 2010
Amended: February 25, 2013

The Compensation Committee (the “Committee”) assists the Board of Directors (the “Board”) of SPS Commerce, Inc. (the “Company”) in:

  • approving compensation and employment arrangements for executive officers;
  • administering compensation plans for employees;
  • considering nominees for election as corporate officers; and
  • evaluating the compensation structure for management employees and developing an implementation plan; and
  • determining the compensation of non-employee directors.

The Committee shall consist of two or more directors, who will be appointed by and may be removed by the Board.  Each member of the Committee shall (i) be independent in accordance with the listing standards of the stock exchange or automated quotation system upon which the Company’s common stock is listed, if any (as may be modified or supplemented) and any other applicable laws or regulations, (ii) be a “non-employee director” as defined in Rule 16b-3(b)(3) under the Securities Exchange Act, (iii) be an “outside director” as defined in regulations adopted under section 162(m) of the Internal Revenue Code and (iv) not accept directly or indirectly any consulting, advisory or other compensatory fee from the Company or any subsidiary thereof.  Compensatory fees shall not include: (I) fees received as a member of the Committee, the board of directors or any other board committee or (II) the receipt of fixed amounts of compensation under a retirement plan (including deferred compensation) for prior service with the Company (provided that such compensation is not contingent in any way on continued service).

To the extent a director on the Committee is affiliated with the Company, a subsidiary of the Company or an affiliate of a subsidiary of the Company, the Company’s board must determine that such affiliation would not impair such director’s judgment as a member of the Committee.

The Committee shall have the resources and authority to discharge its duties and responsibilities, including the authority, in its sole discretion, to retain or obtain advice from any compensation consultant, legal counsel or other advisors as the Committee may deem appropriate.  The Committee shall be directly responsible for the appointment, compensation and oversight of the work of any such compensation consultant, legal counsel and other adviser retained by the Committee.  The Company must provide for appropriate funding, as determined by the Committee, for payment of reasonable compensation to any such compensation consultant, legal counsel or any other adviser retained by the Committee.

Except for compensation consultants, legal counsel or other advisers (i) consulting on any broad-based plan that does not discriminate in scope, terms, or operation, in favor of executive officers or directors of the Company, and that is available generally to all salaried employees and/or (ii) providing information that either is not customized for the Company or that is customized based on parameters that are not developed by the adviser, and about which the adviser does not provide advice, the Committee may select, or receive advice from, any compensation consultant, legal counsel or other adviser to the Committee, other than in-house legal counsel, only after taking into consideration the following factors:

•     the provision of other services to the Company by the person that employs such compensation consultant, legal counsel or other adviser;

•     the amount of fees received from the Company by the person that employs such compensation consultant, legal counsel or other adviser, as a percentage of the total revenue of the person that employs such compensation consultant, legal counsel or other adviser;

•     the policies and procedures of the person that employs such compensation consultant, legal counsel or other adviser that are designed to prevent conflicts of interest;

•     any business or personal relationship of such compensation consultant, legal counsel or other adviser with a member of the Committee;

•     any stock of the Company owned by such compensation consultant, legal counsel or other adviser; and

•     any business or personal relationship of such compensation consultant, legal counsel, other adviser or the person employing the adviser with an executive officer of the Company.

To the extent permitted under the listing standards of the stock exchange or automated quotation system upon which the Company’s common stock is listed, if any (as may be modified or supplemented), and any other applicable laws or regulations, the Committee may form and delegate authority to subcommittees consisting of one or more members when deemed appropriate by the Committee.  The Committee may also delegate to the Chief Executive Officer (“CEO”) the authority, within pre-existing guidelines established by the Committee and as permitted by applicable law, to approve equity compensation awards to employees other than executive officers of the Company under established stock-based compensation plans of the Company. Any exercise of delegated authority will be reported to the Committee at its next regularly scheduled meeting.

The Committee may also delegate non-discretionary administrative authority under Company compensation and benefit plans in its discretion and consistent with any limitations specified in the applicable plans.

The Committee shall meet as often as it determines.  A majority of the members shall constitute a quorum.  The chairperson of the Committee shall be appointed by the Board.  The Committee shall regularly report its actions and recommendations to the Board. 

To fulfill its role, the Committee will have the following responsibilities:

Election of Officers

  1. Consider and recommend to the Board nominees for election as corporate officers, annually and as requested by the CEO.

Executive Compensation

  1. Review and approve on an annual basis the goals and objectives relevant to the CEO’s compensation, as well as the CEO’s compensation program.  The Committee will annually assess the performance and overall effectiveness of the CEO based on relevant and objective criteria and discuss the assessment with the CEO.  The Committee will evaluate the performance of the CEO, including the degree to which goals and objectives relevant to the CEO’s compensation have been achieved and such other factors as the Committee deems relevant to establish the CEO’s annual compensation, including salary, bonus, incentive and equity-based compensation.  The CEO may not be present during voting or deliberations on his or her compensation.
  2. Annually review the evaluation of the performance of the executive officers of the Company, and approve their annual compensation, including salary, bonus, incentive and equity-based compensation.  The Committee shall also provide general oversight of management’s decisions regarding the performance and compensation of other management employees. 
  3. Review and approve the terms of the compensation for newly hired and newly promoted executive officers.

Compensation Programs

  1. Periodically review the Company’s compensation structure for management employees, including incentive, deferred and equity-based compensation plans, and approve or recommend to the Board any changes as needed.
  2. Periodically review and approve the evaluations of senior management employees.
  3. Review and approve the annual incentive plan goals for executive officers, review actual performance against goals and approve annual incentive plan awards.
  4. Oversee and administer the Company’s incentive compensation, deferred compensation, profit sharing, equity-based compensation and supplemental retirement plans for employees, including the approval of participants and awards under equity-based compensation plans. 
  5. Periodically review the compensation paid to non-employee directors and recommend to the Board any adjustments in director compensation and related plans.

Employment and Compliance Matters

  1. Review and approve employment agreements, change in control agreements, severance arrangements and special or supplemental benefits for executive officers.
  2. Monitor compliance with prohibitions on personal loans to directors and executive officers.
  3. Monitor compliance with executive officer and director stock ownership policies and periodically review such policies.  Discuss compliance with the Board and recommend changes.

Other Matters

  1. Annually review and assess the adequacy of this charter and recommend any proposed changes to the Board for its approval.
  2. Periodically review and report to the Board on the performance of the Committee.
  3. As required by applicable rules of the Securities and Exchange Commission (“SEC”), produce a Compensation Committee Report for inclusion in the Company’s proxy statement for its annual meeting of stockholders.
  4. Review and discuss with Company management and advisors the compensation and employment related disclosures to be made in the Company’s filings with the SEC.

Committee Members

Philip E. Soran
Philip E. Soran
Director

Philip Soran has served as a director since July 2010 and Chairman since May 2014. Mr. Soran is currently the Executive Chairman of Flipgrid, Inc. Mr. Soran served as President, Chief Executive Officer, and a director of Compellent Technologies, Inc., a publicly traded company which he co-founded in March 2002, until its acquisition by Dell Inc. in February 2011, after which he served as the President of Dell Compellent from February 2011 to March 2012. Mr. Soran also serves on the board of directors for Piper Jaffray Companies, a publicly traded investment bank and asset management firm and Help Systems, LLC, a privately held software company. From July 1995 to August 2001, Mr. Soran served as President, Chief Executive Officer, and a member of the board of directors of Xiotech, which Mr. Soran co-founded in July 1995. Xiotech was acquired by Seagate in January 2000. From October 1993 to April 1995, Mr. Soran served as Executive Vice President of Prodea Software Corporation, a data warehousing software company. Mr. Soran also held a variety of management, sales, marketing, and technical positions with IBM, and served on the board of directors of Hutchinson Technology Incorporated, a public manufacturing company, from 2011 until its acquisition by TDK Corporation in the fall of 2016.

Martin J. Leestma
Martin J. Leestma
Director

Martin Leestma has served as a director since March 2006 and was Chairman from March 2011 to May 2014. Mr. Leestma is Chief Executive Officer and Chairman of the board of directors for Forthright Solutions, a solution provider for regulatory and legal compliance programs, and he has served as Chief Executive Officer since November 2011 and Chairman since 2008. Prior to Forthright, Mr. Leestma served as the President, Chief Executive Officer, and a member of the board of directors for Retek Information Systems, a software company, from 2003 to 2005, during which time Retek was a publicly traded company. Prior to joining Retek, he was Global Managing Partner of Retail Technology at Accenture from 1996 to 1999 and Managing Partner of North American Consumer Goods & Services from 1999 to 2002. He became Global Industry Managing Partner — Retail & CG&S industries in 2002. He became Global Industry Managing Partner – Retail & CG&S Industries in 2002 and served in this role until his departure in 2003. From 2005 to 2008, he served as an independent business consultant. Mr. Leestma also serves on the board of directors for Kipsu, a private texting and digital messaging company, and Xsell Technologies, a private digital dialogue company.

James Ramsey
James Ramsey
Director
James Ramsey has served a director since March 2014. Mr. Ramsey is co-founder and board member at Vlocity Inc., a provider of industry-specific cloud CRM applications. Mr. Ramsey also serves on the boards of Ambra Health (formerly DicomGrid) and Flipgrid, Inc. Previously, Mr. Ramsey served as the Executive Vice President of Worldwide Sales and Distribution at NetSuite Inc., a publicly traded SaaS company, from 2011 to 2013. Prior to NetSuite, Mr. Ramsey served in various sales management roles at Oracle Corporation