EXHIBIT 10.3

Exhibit A

CHANGE OF CONTROL AGREEMENT

Parties:
Analysts International Corporation
(“Company”)
 
3601 West 76th Street, Suite 600
   
Minneapolis, MN  55435
               
Robert E. Woods
(“Executive”)
                 
Date:
January 3, 2008
 

RECITALS:

1.            Executive has been employed by the Company since January 1, 2008,
and currently serves as the Senior Vice President, Secretary, and General
Counsel of the Company, and Executive has extensive knowledge and experience
relating to the Company’s business.

2.            The parties recognize that a “Change of Control” may materially
change or diminish Executive’s responsibilities and substantially frustrate
Executive’s commitment to the Company.

3.            The parties further recognize that it is in the best interests of
the Company and its stockholders to provide certain benefits payable upon a
“Change of Control Termination” to encourage Executive to continue in his/her
position in the event of a Change of Control, although no such Change of Control
is now contemplated or foreseen.

4.            The parties further desire to provide certain benefits payable
upon a termination of Executive’s employment following a Change of Control.

AGREEMENTS:

1.            Term of Agreement.  Except as otherwise provided herein, this
Agreement shall commence on the date executed by the parties and shall continue
in effect until the third anniversary of the date set forth above; provided,
however, that if a Change of Control of the Company shall occur during the term
of this Agreement, this Agreement shall continue in effect for a period of
twelve (12) months beyond the date of such Change of Control.  If, prior to the
earlier of the third anniversary of this Agreement or a Change of Control,
Executive’s employment with the Company terminates for any reason or no reason,
or if Executive no longer serves as an executive officer of the Company, this
Agreement shall immediately terminate, and Executive shall not be entitled to
any of the compensation and benefits described in this Agreement.  Any rights
and obligations accruing before the termination or expiration of this Agreement
shall survive to the extent necessary to enforce such rights and obligations.

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2.            “Change of Control.”  For purposes of this Agreement, “Change of
Control” shall mean any one or more of the following events occurring after the
date of this Agreement:

(a)            The purchase or other acquisition by any one person, or more than
one person acting as a group, of stock of the Company that, together with stock
held by such person or group, constitutes more than 50% of the total combined
value or total combined voting power of all classes of stock issued by the
Company; provided, however, that if any one person or more than one person
acting as a group is considered to own more than 50% of the total combined value
or total combined voting power of such stock, the acquisition of additional
stock by the same person or persons shall not be considered a Change of Control;

(b)            A merger or consolidation to which the Company is a party if the
individuals and entities who were shareholders of the Company immediately prior
to the effective date of such merger or consolidation have, immediately
following the effective date of such merger or consolidation, beneficial
ownership (as defined in Rule 13d-3 under the Securities Exchange Act of 1934)
of less than fifty percent (50%) of the total combined voting power of all
classes of securities issued by the surviving entity for the election of
directors of the surviving corporation;

(c)            Any one person, or more than one person acting as a group,
acquires  or has acquired during the twelve (12) month period ending on the date
of the most recent acquisition by such person or persons, direct or indirect
beneficial ownership (as defined in Rule 13d-3 under the Securities Exchange Act
of 1934) of stock of the Company constituting more than fifty-percent (50%) of
the total combined voting power of all classes of stock issued by the Company;

(d)            The purchase or other acquisition by any one person, or more than
one person acting as a group, of substantially all of the total gross value of
the assets of the Company during the twelve-month period ending on the date of
the most recent purchase or other acquisition by such person or persons.  For
purposes of this Section 2(d), “gross value” means the value of the assets of
the Company or the value of the assets being disposed of, as the case may be,
determined without regard to any liabilities associated with such assets;

(e)            A change in the composition of the Board of the Company at any
time during any consecutive twelve (12) month period such that the “Continuity
Directors” cease for any reason to constitute at least a sixty-six and
two-thirds percent (66-2/3%) majority of the Board. For purposes of this event,
“Continuity Directors” means those members of the Board who either:

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(1)            were directors at the beginning of such consecutive twelve (12)
month period; or

(2)            were elected by, or on the nomination or recommendation of, at
least a two-thirds (2/3) majority of the then-existing Board of Directors.
 
 
In all cases, the determination of whether a Change of Control has occurred
shall be made in accordance with Code Section 409A and the regulations, notices
and other guidance of general applicability issued thereunder.

3.            “Change of Control Termination.”  For purposes of this Agreement,
“Change of Control Termination” shall mean any of the following events occurring
upon or within twelve (12) months after a Change of Control:

(a)            The termination of Executive’s employment by the Company for any
reason, except for termination by the Company for “cause.”  For purposes of this
Agreement, “cause” shall have the same meaning as set forth in Executive’s
employment agreement with the Company, if any, as amended from time to
time.   If Executive does not have an employment agreement with the Company,
then “cause” shall mean (i) Executive’s substantial failure or neglect, or
refusal to perform, the duties and responsibilities of Executive’s position
and/or the reasonable direction of the Board of Directors;  (ii) the commission
by Executive of any willful, intentional or wrongful act that has the effect of
materially injuring the reputation, business or performance of the Company;
(iii) Executive’s conviction of, or Executive’s guilty or nolo contendere plea
with respect to, any crime punishable as a felony; (iv)  Executive’s conviction
of, or Executive’s guilty or nolo contendere plea with respect to, any crime
involving moral turpitude; or (v) any bar against Executive from serving as a
director, officer or executive of any firm the securities of which are
publicly-traded.

For purposes of this Section 3(a), an act or failure to act by Executive shall
not be “willful” unless it is done, or omitted to be done, in bad faith and
without any reasonable belief that Executive’s action or omission was in the
best interests of the Company.

(b)            The termination of employment with the Company by Executive for
“Good Reason.”  Such termination shall be accomplished by, and effective upon,
Executive giving written notice to the Company of his/her decision to
terminate.  “Good Reason” shall mean a good faith determination by Executive
that any one or more of the following events has occurred upon or within twelve
(12) months after a Change of Control; provided, however, that such event shall
not constitute Good Reason if Executive has expressly consented to such event in
writing or if Executive fails to provide written notice of his/her decision to
terminate within ninety (90) days of the occurrence of such event:

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(1)
A change in Executive’s reporting title(s), status, position(s), authority,
duties or responsibilities as an executive of the Company as in effect
immediately prior to the Change of Control which, in Executive’s reasonable
judgment, is material and adverse (other than, if applicable, any such change
directly attributable to the fact that the Company is not longer publicly
owned); provided, however, that Good Reason does not include such a change that
is remedied by the Company promptly after receipt of notice of such change is
given by Executive;

 
(2)
A reduction by the Company in Executive’s base salary or an adverse change in
the form or timing of the payment thereof, as in effect immediately prior to the
Change of Control or as thereafter increased;

 
(3)
the Company’s requiring Executive to be based more than fifty (50) miles from
where Executive’s office is located immediately prior to the Change of Control,
except for required travel on the Company’s business, and then only to the
extent substantially consistent with the travel obligations which Executive
undertook on behalf of the Company during the ninety-day period immediately
preceding the Change of Control (without regard to travel related to or in
anticipation of the Change of Control);

 
(4)
the Company’s failure to cover Executive under any pension, bonus, incentive,
stock ownership, stock purchase, stock option, life insurance, health, accident,
disability, or any other employee compensation or benefit plan, program or
arrangement (collectively referred to as the “Benefit Plans”) that, in the
aggregate, provide substantially similar benefits to Executive (and/or
Executive’s family and dependents) at a substantially similar total cost to
Executive (e.g., premiums, deductibles, co-pays, out-of-pocket maximums, and
required contributions) relative to the benefits and total costs under the
Benefit Plans in which Executive (and/or Executive’s family or dependents) was
participating at any time during the ninety-day period immediately preceding the
Change of Control;

 
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(5)
any purported termination by the Company of Executive’s employment that is not
properly effected pursuant to a written notice that specifies the provision
pursuant to which such notice is given and which complies with all other
requirements of this Agreement, and, for purposes of this Agreement, no such
purported termination will be effective; or
     

 
(6)
any refusal by the Company to continue to allow Executive to attend to matters
or engage in activities not directly related to the business of the Company
which, at any time prior to the Change of Control, Executive was not expressly
prohibited in writing by the Board from attending to or engaging in.

Termination for “Good Reason” shall not include Executive’s death or a
termination for any reason other than one of the events specified in clauses (1)
through (6) above.

4.            Compensation and Benefits.  Subject to the limitations contained
in this Agreement, upon a Change of Control Termination, Executive shall be
entitled to all of the following compensation and benefits:

 
(a)
Within ten (10) business days after a Change of Control Termination, the Company
shall pay to Executive:

 
(1)
All salary and other compensation earned by Executive through the date of the
Change of Control Termination at the rate in effect immediately prior to such
Termination;

 
(2)
All other amounts to which Executive may be entitled to receive under any
compensation plan maintained by the Company, subject to any distribution
requirements contained therein, including but not limited to amounts payable
under the Restated Special Executive Retirement Plan, or any successor plan;

 
(3)
A severance payment, payable in a lump sum in cash, equal to one (1) times the
annual cash compensation paid to Executive by the Company (or any predecessor
entity or related entity) and includible in Executive’s gross income for federal
income tax purposes for the calendar year immediately prior to the Change of
Control Termination.  For purposes of this paragraph, “annual cash compensation”
shall mean Executive’s annual base salary.  Further, for purposes of this
paragraph, “predecessor entity” and “related entity” shall have the meaning set
forth in Section 280G of the Internal Revenue Code of 1986, as amended, and the
regulations issued thereunder.

 
(b)
The Company shall provide Executive with continuation coverage (“COBRA
coverage”) under the Company’s life, health, dental and other welfare plans as
required by the Internal Revenue Code of 1986, as amended, the Employee
Retirement Income Security Act of 1974, as amended, and applicable state law.

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(c)
The Company shall provide Executive with outplacement services for twelve (12)
months following the Change of Control Termination or, if earlier, until
Executive has accepted employment with another employer.

 
Notwithstanding the foregoing, if any of the payments described in this Section
4 above are subject to the requirements of Code Section 409A and the Company
determines that Executive is a “specified employee” as defined in Code Section
409A as of the date of the Change of Control Termination, such payments shall
not be paid or commence earlier than the first day of the seventh month
following the Change of Control Termination, but shall be paid or commence
during the calendar year following the year in which the Change of Control
Termination occurs and within 30 days of the earliest possible date permitted
under Code Section 409A.  Further, in no event shall the benefits described in
Section 4(c) extend beyond December 31st of the second calendar year following
the calendar year in which the Change of Control Termination occurs.

5.            Limitation on Change of Control Payments.  Executive shall not be
entitled to receive any Change of Control Payment, as defined below, which would
constitute a “parachute payment” for purposes of Code Section 280G, or any
successor provision, and the regulations thereunder.  In the event any Change of
Control Payment payable to Executive would constitute a “parachute payment,”
Executive shall have the right to designate those Change of Control Payments
which would be reduced or eliminated so that Executive will not receive a
“parachute payment.”  For purposes of this Section 5, a “Change of Control
Payment” shall mean any payment, benefit or transfer of property in the nature
of compensation paid to or for the benefit of Executive under any arrangement
which is considered contingent on a Change of Control for purposes of Code
Section 280G, including, without limitation, any and all of the Company’s
salary, bonus, incentive, restricted stock, stock option, equity-based
compensation or benefit plans, programs or other arrangements, and shall include
benefits payable under this Agreement.

6.            Withholding Taxes.  The Company shall be entitled to deduct from
all payments or benefits provided for under this Agreement any federal, state or
local income and employment-related taxes required by law to be withheld with
respect to such payments or benefits.

7.            Successors and Assigns.  This Agreement shall inure to the benefit
of and shall be enforceable by Executive, his/her heirs and the personal
representative of his/her estate, and shall be binding upon and inure to the
benefit of the Company and its successors and assigns.  The Company will require
the transferee of any sale of all or substantially all of the business and
assets of the Company or the survivor of any merger, consolidation or other
transaction expressly to agree to honor this Agreement in the same manner and to
the same extent that the Company would be required to perform this Agreement if
no such event had taken place.  Failure of the Company to obtain such agreement
before the effective date of such event shall be a breach of this Agreement and
shall entitle Executive to the benefits provided in Sections 4 and 5 as if
Executive had terminated employment for Good Reason following a Change in
Control.

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8.            Notices.  For the purpose of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
certified or registered mail, return receipt requested, postage prepaid,
addressed to the respective addresses set forth on the first page of this
Agreement or to such other address as either party may have furnished to the
other in writing in accordance herewith, except that notice of change of address
shall be effective only upon receipt.  All notices to the Company shall be
directed to the attention of the Board of Directors of the Company.

9.            Captions.  The headings or captions set forth in this Agreement
are for convenience only and shall not affect the meaning or interpretation of
this Agreement.

10.            Governing Law.  The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
Minnesota.

11.            Construction.  Wherever possible, each term and provision of this
Agreement shall be interpreted in such manner as to be effective and valid under
applicable law.  If any term or provision of this Agreement is invalid or
unenforceable under applicable law, (a) the remaining terms and provisions shall
be unimpaired, and (b) the invalid or unenforceable term or provision shall be
deemed replaced by a term or provision that is valid and enforceable and that
comes closest to expressing the intention of the unenforceable term or
provision.

12.            Amendment; Waivers.  This Agreement may not be modified, amended,
waived or discharged in any manner except by an instrument in writing signed by
both parties hereto.  The waiver by either party of compliance with any
provision of this Agreement by the other party shall not operate or be construed
as a waiver of any other provision of this Agreement, or of any subsequent
breach by such party of a provision of this Agreement.  Notwithstanding anything
in this Agreement to the contrary, the Company expressly reserves the right to
amend this Agreement without Executive’s consent to the extent necessary or
desirable to comply with Code Section 409A, and the regulations, notices and
other guidance of general applicability issued thereunder.

13.            Entire Agreement.  This Agreement supersedes all prior or
contemporaneous negotiations, commitments, agreements (written or oral) and
writings between the Company and Executive with respect to the subject matter
hereof, including but not limited to any negotiations, commitments, agreements
or writings relating to any severance benefits payable to Executive, and
constitutes the entire agreement and understanding between the parties
hereto.  All such other negotiations, commitments, agreements and writings will
have no further force or effect, and the parties to any such other negotiation,
commitment, agreement or writing will have no further rights or obligations
thereunder.

14.            Counterparts.  This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.

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15.            Arbitration.  Any dispute arising out of or relating to this
Agreement or the alleged breach of it, or the making of this Agreement,
including claims of fraud in the inducement, shall be discussed between the
disputing parties in a good faith effort to arrive at a mutual settlement of any
such controversy.  If, notwithstanding, such dispute cannot be resolved, such
dispute shall be settled by binding arbitration.  Judgment upon the award
rendered by the arbitrator may be entered in any court having jurisdiction
thereof.  The arbitrator shall be a retired state or federal judge or an
attorney who has practiced securities or business litigation for at least 10
years.  If the parties cannot agree on an arbitrator within 20 days, any party
may request that the chief judge of the District Court for Hennepin County,
Minnesota, select an arbitrator.  Arbitration will be conducted pursuant to the
provisions of this Agreement, and the commercial arbitration rules of the
American Arbitration Association, unless such rules are inconsistent with the
provisions of this Agreement.  Limited civil discovery shall be permitted for
the production of documents and taking of depositions.  Unresolved discovery
disputes may be brought to the attention of the arbitrator who may dispose of
such dispute.  The arbitrator shall have the authority to award any remedy or
relief that a court of this state could order or grant; provided, however, that
punitive or exemplary damages shall not be awarded.  Unless otherwise ordered by
the arbitrator, the parties shall share equally in the payment of the fees and
expenses of the arbitrator.  The arbitrator may award to the prevailing party,
if any, as determined by the arbitrator, all of the prevailing party’s costs and
fees, including the arbitrator’s fees, and expenses, and the prevailing party’s
travel expenses, out-of-pocket expenses and reasonable attorneys’ fees.  Unless
otherwise agreed by the parties, the place of any arbitration proceedings shall
be Hennepin County, Minnesota.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered as of the day and year first above written.

 
ANALYSTS INTERNATIONAL CORPORATION
         
By:  ______________________________________
 
Its:   ______________________________________
         
__________________________________________
 
Executive

 

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