Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (“Agreement”) is made by and between Analysts
International Corporation (the “Company” or “AIC”) with headquarters at 3601 W.
76th Street, Minneapolis, Minnesota 55435 and James D. Anderson, 15124 Lynn
Terrace, Minnetonka, Minnesota  55345 (“Executive”).

 

RECITALS

 

WHEREAS, the Company desires to retain Executive as an employee of the Company,
and Executive desires to be so employed.

 

NOW, THEREFORE, in consideration of the mutual promises and agreements set forth
herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the Company and Executive hereby
agree as follows:

 

In consideration of the mutual promises contained herein, the parties, intending
to be legally bound, agree as follows:

 

AGREEMENT

 

1.             Terms of Employment

 

1.1           Commencement Date.  This Agreement shall become effective on
September 1, 2009 (the “Commencement Date”).

 

1.2           Position.  The Company will employ Executive in the capacity of
Senior Vice President, Client Services Operations, reporting to the Company’s
CEO.

 

1.3           Best Efforts.  During Executive’s employment by the Company,
Executive agrees to devote his full time and best efforts to the interests of
the Company and to refrain from engaging in other employment or in any
activities that may be in conflict with the best interests of the Company. 
Executive agrees to perform his duties to a level consistent with the highest
standards of one holding such position in similar businesses or enterprises. 
Executive agrees not to render services to anyone other than the Company (or its
parent or subsidiaries) for compensation as an employee, consultant or otherwise
during the term of this Agreement.

 

1.4           Personal Activities.  The provisions of Sections 1.2 and 1.3 of
this Agreement will not be deemed to prohibit Executive from devoting reasonable
time to personal matters.  Specifically, the Company acknowledges and agrees
that Executive may continue to provide advisory services to his former employer,
Element Consulting Group, through December 31, 2009.  Such services will be
limited to high-level strategic discussions which do not involve specific
clients of Element Consulting or clients that may be common to Element
Consulting and AIC, and will be provided by Executive to Element Consulting on a
no-charge basis.

 

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2.             Term of Employment.

 

2.1           Duration.  Subject to the provisions for termination set forth in
Sections 6, 7 and 8 below, the Original Term of this Agreement (“Original Term”)
will continue from the Commencement Date through the 31st day of August, 2011.

 

2.2           Extension of Provisions.  At the end of the Original Term, the
provisions of this Agreement will automatically renew for an additional one
(1) year term (“Additional Term”) commencing September 1, 2011, unless either
party gives notice of nonrenewal at least ninety (90) days before the scheduled
expiration of the term.  At the end of any Additional Term, the provisions of
the Agreement will automatically renew for an Additional Term, unless either
party gives notice of nonrenewable at least ninety (90) days before the
scheduled expiration of the term.

 

3.             Compensation and Benefits.

 

3.1           Salary.  For all services rendered by Executive pursuant to this
Agreement, the Company will pay Executive an annual base salary (“Base
Compensation”) equal to Two Hundred Seventy-five Thousand Dollars ($275,000). 
Payment will occur at regular payroll intervals in accordance with the Company’s
standard payroll practices.  The Company’s CEO and compensation committee of the
Board or the Board itself will review the Executive’s compensation annually and,
in its sole discretion, may determine to increase such base salary for the
following year but cannot decrease the annual salary below $275,000.

 

3.2           Incentive Compensation.

 

3.2.1        Balance of 2009:  In addition to Executive’s Base Compensation,
Executive will be eligible to earn a cash incentive payment for his work during
the balance of 2009, prorated on a 4/12 basis to reflect his actual employment
during calendar year 2009.  The target amount of Executive’s 2009 bonus is 50%
of Base Compensation (subject to proration).  One-half of said 2009 bonus will
be dependent on whether or not Executive achieves certain individual performance
goals, and the other half of said 2009 bonus will be dependent on whether or not
the Company achieves certain performance goals.  Such goals will be formulated
and determined in accordance with an incentive performance plan to be completed
and agreed upon between the parties (with a target completion date of within 30
days after the Commencement Date).  Such Incentive Performance Plan for the
balance of 2009 shall become Exhibit B to this Agreement when completed.

 

3.2.2        Other Years:  Commencing on January 1, 2010 and continuing through
the Original Term and any Additional Term of this Agreement, in addition to
Executive’s Base Compensation, Executive will be eligible to earn an annual cash
incentive payment in a target amount equal to 50% of Base Compensation.  Payment
of any such annual cash incentive will depend on

 

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whether and to what extent Executive achieves certain performance goals
consistent with the Annual Management Incentive Plan (AMIP) as approved annually
by the Compensation Committee of the Board of Directors.  Such performance goals
will be determined in accordance with an annual incentive performance plan to be
completed and agreed upon between the parties.  Each such incentive performance
plan shall become an exhibit to this Agreement when completed.

 

3.3           Long-Term Incentive Compensation.  In addition, Executive shall be
eligible to be awarded stock options or restricted shares from the Company’s
stock option and equity incentive plans at the sole discretion of the
compensation committee of the Board of Directors.

 

3.4           Stock Options.  Shortly after the Commencement Date and subject to
approval of the Company’s Compensation Committee or its Board of Directors,
Executive will be granted options to purchase 250,000 shares of the Company’s
common stock with one-quarter being vested immediately and the remainder vesting
on the anniversary date hereof in even increments over three years from the date
of the grant.

 

Such options shall be incentive stock options to the extent that such options
qualify as incentive stock options as defined in Internal Revenue Code
Section 422.  The Company may issue such options from the plans as it deems
appropriate but to the extent possible shall issue the options as incentive
stock options.  The stock option agreement shall provide that in the event of a
Change of Control on or after the effective date of this Agreement, any options
remaining unvested at the time of the Change of Control shall vest immediately. 
For purposes of this Section 3.4, “Change of Control” shall have the same
meaning as set forth in Exhibit A.  Executive shall sign an option agreement or
agreements containing the terms for the options outlined herein and such other
terms and conditions required of similarly situated executives by the Company as
determined by the Board or the compensation committee of the Board or as set
forth in the Company’s offer letter to Executive.

 

3.5           Deferred Compensation Plan.  Executive will be entitled to
participate in the Company’s deferred compensation plan (known as the “Restated
Special Executive Retirement Plan” or “Restated SERP”) at a participation rate
of fifteen percent (15%) of Base Compensation.

 

3.6           Fringe Benefits.  Executive will be entitled to participate in the
Company’s standard benefit programs, on the same terms as other senior
executives of the Company.  Notwithstanding the foregoing, the Company will also
provide Executive the following:

 

3.6.1        Medical Insurance Costs.  The Company will provide health insurance
coverage for Executive, Executive’s spouse, and Executive’s children (up to the
maximum age allowed by the Company’s plan, provided they meet the terms of
eligibility for participation in the plan).

 

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3.6.2        Paid Time Off.  Executive shall be entitled to paid time off at his
discretion and as business conditions warrant.  If necessary due to business
conditions of the Company, Executive agrees to obtain concurrence from the CEO
prior to taking the paid time off.

 

3.6.3        Paid Parking.  The Company will provide Executive with a paid
indoor, underground parking spot, if available, at the Company’s office building
presently located at 3601 West 76th Street, Minneapolis, Minnesota 55435.

 

3.6.4        Business Expenses.  Executive will be entitled to reimbursement of
all reasonable, business-related travel and other expenses incurred by Executive
in the ordinary course of business on behalf of the Company, so long as such
expenses are incurred, documented and authorized pursuant to the Company’s
expense reimbursement policies.

 

3.7           Signing Bonus.  The Company shall pay Executive a “Signing Bonus”
in the amount of $5,000, payable within fifteen days of the Commencement Date
and in accordance with the Company’s standard payroll practices and subject to
applicable withholdings.

 

4.             Insurance Policies.

 

The Company will keep all Directors and Officers insurance policies current and
will identify Executive, if appropriate, on all such policies.

 

5.             Location.

 

Executive will provide his services in the Minneapolis, Minnesota area. 
Notwithstanding the foregoing, the parties recognize and acknowledge that
Executive may be required to spend substantial business time in locations other
than the Minneapolis, Minnesota area.

 

6.             Termination of Employment by the Company.

 

6.1           For Cause.  For purposes of this Agreement, the Company will have
the right to terminate Executive’s employment for Cause.  For purposes of this
Agreement, “Cause” shall mean:

 

6.1.1        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 CEO;

 

6.1.2        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;

 

6.1.3        Executive’s conviction of, or Executive’s guilty or nolo contendere
plea with respect to, any crime punishable as a felony;

 

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6.1.4        Executive’s conviction of, or Executive’s guilty or nolo contendere
plea with respect to, any crime involving moral turpitude; or

 

6.1.5        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 6.1, 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.

 

6.2           Inability to Perform.  For purposes of this Agreement, the Company
will have the right to terminate Executive’s employment upon the occurrence of
any of the following events (“Inability to Perform”):

 

6.2.1        Executive becomes unable to perform the essential functions of
Executive’s position for a period of at least ninety (90) days to the extent
that, in the reasonable determination of the CEO, he is no longer able to report
to work and to carry on his duties on behalf of the Company; or

 

6.2.2        Executive dies.

 

6.2.3        Notwithstanding anything to the contrary in this Section 6.2, if
and to the extent the Company’s CEO and compensation committee of the Board
determine, in their sole discretion and in accordance with the performance
objectives to be set forth in Exhibit B, that Executive should be paid Incentive
Compensation for the portion of the fiscal year prior to any such termination
for Inability to Perform, Executive shall be paid such amount within thirty (30)
days after the Company’s CEO and compensation committee of the Board make such
determination.  For the avoidance of doubt, in the event of an Inability to
Perform, Executive understands that he shall have no right to any such Incentive
Compensation, and whether or not he receives Incentive Compensation in such
event is solely a matter of discretion for the Company’s CEO and compensation
committee of the Board to determine.

 

6.3           Notice.  In the event that the CEO determines that Cause for
termination exists, the CEO shall deliver to Executive written notice that an
event of Cause has occurred after which Executive shall have fifteen (15) days
to cure such event of Cause to the reasonable satisfaction of the CEO.

 

6.4           Termination for Cause/Inability to Perform.  The Company may
terminate Executive’s employment at any time for Cause as defined within this
Agreement after giving Executive the notice and Executive’s failure to cure
pursuant to Section 6.3 above and in any such case will have no further
obligation or liability to Executive.  Likewise, if the Company terminates
Executive for Inability to Perform, the Company will have no further obligation
or liability to Executive except (and only) as stated in Section 6.2.3 above and
except for offering continuation of

 

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benefits as required by the Consolidated Omnibus Budget Reconciliation Act
(“COBRA”) and the regulations promulgated thereunder.

 

6.5           Termination Without Cause.  Executive’s employment during the
Original Term or any Additional Term may be terminated by the Company without
Cause upon thirty (30) days’ notice.  No severance shall be payable if
Executive’s employment is terminated within the first 90 days of Executive’s
employment with the Company.  If Executive has been continuously employed by the
Company for at least 90 days after the Commencement Date and if the Company
thereafter terminates Executive’s employment without Cause during the Original
Term or during any Additional Term, Executive will continue to receive Base
Compensation for a period of twelve (12) months, provided that Executive signs
all appropriate paperwork, including a full release of all claims to the
Company, in a form acceptable to the Company.  The Company will also reimburse
Executive for medical insurance premium payments made under COBRA, for a period
of up to six (6) months following the date of termination, provided that the
Company receives sufficient evidence of proof of such payments during the COBRA
period.  For purposes of this Section 6.5, termination of Executive’s employment
due to nonrenewal of Executive’s employment agreement at the end of the Original
Term or any Additional Term, shall be deemed a termination without Cause and
entitle Executive to the payments and benefits set forth in this Section 6.5.

 

7.             Termination of Employment by Executive.

 

7.1           Resignation for Good Reason.  If Executive believes Good Reason to
resign exists, before resigning, he must first give the Company written notice
of the alleged Good Reason and an opportunity to cure within fifteen (15) days
of notice if feasible.  If Executive resigns from his employment for Good
Reason, he will continue to receive Base Compensation for a period of twelve
(12) months, provided that Executive signs all appropriate paperwork, including
a full release of all claims to the Company, in a form reasonably acceptable to
the Company.  The Company will also reimburse Executive for all medical
insurance premium payments, made under COBRA, for a period of up to six
(6) months following the date of resignation for Good Reason, provided that the
Company receives sufficient evidence of proof of such payments during the COBRA
period.

 

For purposes of this Section 7.1 (and not for the purpose of determining
compensation and benefits payable under Exhibit A, the Change in Control
Agreement), “Good Reason” will mean a good faith determination by Executive,
communicated in writing to the CEO, that any one or more of the following events
has occurred:

 

7.1.1        a reduction in Executive’s Base Salary below $275,000;

 

7.1.2        a requirement imposed on Executive that results in Executive being
based at a location that is outside of a fifty (50) mile radius of Executive’s
job location immediately prior to the change in location;

 

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7.1.3        any material breach or unilateral and material change in assignment
or job title, but not including a change in Executive’s reporting structure in
the event of a Change in Control.

 

7.2           Notice.  If Executive terminates his employment for Good Reason,
he must provide thirty (30) days’ prior written notice to the Company.

 

7.3           Resignation Without Good Reason.  If Executive resigns from his
employment (or elects not to renew the Agreement upon its expiration) without
Good Reason, the Company will have no further obligation or liability to
Executive.

 

8.             Change of Control Obligations; Deferred Compensation Payments.

 

8.1           Change of Control Obligations.  In the event of a change in
control in the ownership of the Company, the Company’s and Executive’s
obligations, and Executive’s benefits, shall be governed by the Change of
Control Agreement attached hereto as Exhibit A.  Notwithstanding the foregoing,
in the event of a change in control (as the term “Change of Control” is defined
in Exhibit A), Executive shall have the additional right at the six (6) month
anniversary date after the Change of Control to resign and receive the payments
outlined in Section 7.1 above, provided that Executive signs all appropriate
paperwork, including providing a full release of all claims to the Company in a
form acceptable to the Company.  To exercise this right to resign and receive
severance, Executive must give written notice of intent to resign no sooner than
four (4) months after a Change of Control, and no later than five (5) months
after a Change of Control.

 

8.2           Deferred Compensation Payments.  Deferred compensation covered by
the Company’s deferred compensation plan (Restated SERP) will be treated and
distributed in accordance with terms and conditions of the Restated SERP.

 

8.3           Limitation on Change of Control Severance Payments.  For the
avoidance of doubt, Executive acknowledges and agrees that the total amount of
severance payments payable to Executive upon any Change of Control for lost Base
Compensation shall not exceed 100% of his annual Base Compensation at the time
of the Change of Control.

 

9.             Delay of Payment.

 

Notwithstanding anything to the contrary, to the extent that Executive is a “key
employee” pursuant to the provisions of Section 409A of the Internal Revenue
Code as of the date that any severance benefits or other deferred compensation
becomes payable to the Executive hereunder, and such severance benefits are
required to be delayed until the date six months following Executive’s
termination of employment in order to avoid additional tax under Section 409A of
the Code, payment and provision of such severance benefits or other deferred
compensation shall be delayed until the date six months after Executive’s
termination of employment.

 

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10.          Intellectual Property Rights.

 

10.1         Non-Infringement.  Executive agrees that all original work products
created or produced by Executive during the course of his employment with the
Company will be Executive’s work and will not infringe upon or violate any
patent, copyright, trade secret, contractual or other proprietary right of any
third party.

 

10.2         Disclosure.  Executive agrees to disclose and describe to the
Company, on a timely basis, all works of authorship, inventions and all other
intellectual property that Executive may solely or jointly discover, conceive,
create, develop, produce or reduce to practice while employed by the Company
(“Company Inventions”).

 

10.3         Assignment.  Executive hereby assigns and agrees to assign to the
Company, or its designee, Executive’s entire right, title, and interest in and
to all Company Inventions.  Executive represents that the Company’s rights in
all such Company Inventions will be free and clear of any encumbrances, liens,
claims, judgments, causes of action or other legal rights or impediments.

 

10.4         Independent Development.  NOTICE: The Company is a Minnesota
corporation headquartered in Minneapolis, Minnesota.  Pursuant to Minnesota
Statutes § 181.78, Executive is hereby notified that the foregoing agreement
does not apply to an invention for which no equipment, supplies, facility or
trade secret information of the Company was used and which was developed
entirely on Executive’s own time, and (1) which does not relate (a) directly to
the business of the Company or (b) to the Company’s actual or demonstrably
anticipated research or development, or (2) which does not result from any work
performed by Executive for the Company.

 

10.5         Works for Hire.  Executive acknowledges and agrees that all
original works of authorship which are made by Executive (solely or jointly with
others) within the scope of his employment and which are protectable by
copyrights, are “works made for hire” as that term is defined in the United
States Copyright Act (17 U.S.C. § 101) and that, as such, all rights comprising
copyright under the United States Copyright laws will vest solely and
exclusively in his employer, the Company.  Executive hereby irrevocably and
unconditionally waives all so-called moral rights that may vest in Executive
(whether before, on or after the date hereof) in connection with Executive’s
authorship of any copyright works in the course of his employment with the
Company, wherever in the world enforceable, including without limitation the
right to be identified as the author of any such works and the right of
integrity (i.e., not to have any such works subjected to derogatory treatment),
and Executive agrees never to assert any such moral rights with respect to any
Company Invention.

 

10.6         Enforcement; Cooperation.  Executive agrees to perform, during and
after his employment, all acts deemed necessary or desirable by the Company to
permit and assist it, at its sole expense, in obtaining and enforcing the full
benefits, enjoyment, rights and title throughout the world in the Company
Inventions hereby

 

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assigned to the Company.  Such acts may include, but are not limited to,
execution of documents and assistance or cooperation in the registration and
enforcement of applicable patents, copyrights, maskworks or other legal
proceedings.

 

10.7         Attorney in Fact.  In the event that the Company is unable for any
reason, whether during or after Executive’s employment by the Company, to secure
Executive’s signature to any document required to apply for or execute any
patent, design rights, registered designs, trademarks, copyright, maskwork or
other applications with respect to any Company Inventions (including
improvements, renewals, extensions, continuations, divisions or continuations in
part thereof), Executive hereby irrevocably designates and appoints the Company
and its duly authorized officers and agents as Executive’s agents and
attorneys-in-fact to act for and on his behalf and instead of Executive, to
execute and file any such application and to do all other lawfully permitted
acts to further the prosecution and issuance of patents, copyrights, maskworks
or other rights thereon with the same legal force and effect as if executed by
Executive.

 

11.          Confidentiality.

 

11.1         Confidential Nature of Relationship.  Executive acknowledges that
his employment by the Company creates a relationship of confidence and trust
with respect to Confidential Information (as hereinafter defined).  During the
course of his employment with the Company, the Company agrees to provide
Executive with access to Confidential Information.  Executive expressly
undertakes to retain in strict confidence all Confidential Information
transmitted or disclosed to Executive by the Company or the Company’s clients,
and will never make any use of such information except as (and then, only to the
extent) required to perform Executive’s employment duties for the Company. 
Executive will take such protective measures as may be reasonably necessary to
preserve the secrecy and interest of the Company in the Confidential
Information.  If Executive becomes aware of any unauthorized use or disclosure
of Confidential Information by any person or entity, Executive will promptly and
fully advise the Company of all facts known to Executive concerning such
unauthorized use or disclosure.

 

11.2         Definition.  “Confidential Information” means all commercially
sensitive information and data of a confidential nature, in their broadest
context, originated by, on behalf of or within the knowledge or possession of
the Company or its clients (including any subsidiary, division or legal
affiliate thereof).  Without in any way limiting the foregoing, Confidential
Information includes, but is not limited to: information that has been
designated as proprietary and/or confidential; information constituting trade
secrets; information of a confidential nature that, by the nature of the
circumstances surrounding the disclosure, should in good faith be treated as
proprietary and/or confidential; and information and data conceived, discovered
or developed in whole or in part by Executive while employed by the Company.
Confidential Information also includes information of a confidential nature
relating to the Company’s clients, prospective clients, strategic business
relationships, business opportunities, products, services, suppliers, personnel,
pricing, recruiting

 

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strategies, job candidate information, employee information, sales strategies,
technology, methods, processes, research, development, systems, techniques,
finances, accounting, purchasing and business plans.

 

11.3         Exclusions.  Confidential Information does not include information
which: (A) is generic; (B) is or becomes part of the public domain through no
act or omission of Executive; (C) was in Executive’s lawful possession prior to
the disclosure and was not obtained by Executive in breach, either directly or
indirectly, of any obligation to the Company or any client of the Company’s;
(D) is lawfully disclosed to Executive by a third party without restriction on
disclosure; or (E) is independently developed by Executive using his own
resources, entirely on his own time, and without the use of any Confidential
Information.

 

11.4         Protected Health Information.  If during the course of his
employment with the Company, Executive receives any “protected health
information,” as that term is defined in 45 CFR, Part 164, Subpart E (“Privacy
of Individually Identifiable Health Information”): (A) Executive agrees to
maintain all such information in strict confidence with the Health Insurance
Portability and Accountability Act of 1996 (HIPAA); (B) Executive agrees that he
will make no use whatsoever of any such information except as required to
perform Executive’s employment duties; and (C) Executive agrees that he will
never record, store, file or otherwise maintain, in any computer or other
storage device owned by the Company or by Executive, any “protected health
information.” Executive agrees to alert the Company promptly if he becomes aware
of any misuse or unauthorized disclosure of any such information.

 

11.5         Additional Confidentiality Agreements.  Executive agrees to execute
such additional non-disclosure and confidentiality agreements as the Company or
its clients may from time to time request.

 

12.          Use of Confidential or Material Non-Public Information: Codes of
Conduct.

 

12.1         Confidential or Material, Non-Public Information.  Executive
acknowledges that he is prohibited from using or sharing any Confidential
Information for personal gain or advantage (in securities transactions or
otherwise), or for the personal gain or advantage of anyone with whom Executive
improperly shares such information.  Specifically as to material, non-public
information of the Company, Executive agrees to comply with the Company’s
insider trading policy in effect at the commencement of employment and as
amended from time to time.

 

12.2         Codes of Conduct.  Executive agrees to carefully review, sign and
fully comply with any Code of Conduct (or similar policy) of the Company either
having general applicability to its employees or specifically to Executive.

 

13.          Restrictions against Solicitation: Non-Interference.

 

During his employment by the Company and for a period of twelve (12) months
after termination of such employment for any reason, Executive agrees that he
will not engage

 

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in the following conduct.

 

13.1         Restrictions against Solicitation.  Executive will not, directly or
indirectly, hire or initiate any solicitation or recruitment effort for the
purpose of attempting to hire any employee of the Company or to induce any
employee of the Company to leave his or her employment with the Company.

 

With respect to job candidates with or about whom Executive, while employed by
the Company, had actual contact or knowledge, Executive will not, directly or
indirectly, initiate any solicitation or recruitment effort for the purpose of
attempting to hire any such candidate for or on behalf of his new employer or
any company in which Executive owns, directly or indirectly, an interest.

 

13.2         Non-Interference.  Executive will not, directly or indirectly,
disrupt, damage, impair, impede or interfere with the contractual relationship
between the Company and any of its clients.

 

14.          Restrictions Against Competition.

 

14.1         Restricted Period.  During his employment by the Company and for a
period of twelve (12) months after termination of such employment for any
reason, Executive agrees that he will not, on behalf himself, or on behalf of
any other person, company, entity, partnership or other entity or enterprise,
directly or indirectly, as an employee, proprietor, owner, partner, consultant,
contractor or otherwise, provide services of the same or similar type he
provided to the Company under this Agreement, to any Competitor of the Company,
anywhere in the United States.

 

14.2         Definitions.  For purposes of this Section 14, “Competitor” means
any third party offering consulting services within the United States that
compete with the Company or are similar in kind or nature to the services
provided by the Company during the Original Term or any Additional Term of this
Agreement.

 

15.          Reasonableness of Restrictions: Representations of Executive;
Extension of Restrictions; Enforcement.

 

15.1         Reasonableness of Restrictions.  Executive acknowledges that the
restrictions set forth in this Agreement are reasonable in terms of both the
Company’s need to protect its legitimate business interests and Executive’s
ability to pursue alternative employment opportunities in the event his
employment with the Company terminates.

 

15.2         Representations of Executive.  Executive represents that his
performance of all the terms of this Employment Agreement and his performance as
an employee of the Company does not and will not breach any agreement to keep in
confidence proprietary information, knowledge or data acquired by Executive
prior to his employment with the Company.  Executive will not disclose to the
Company, or induce the Company to use, any confidential or proprietary
information or material belonging to any previous employer of Executive or
others.  Executive is not

 

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a party to any other agreement or understanding that would interfere with his
full compliance with this Executive Agreement.  Executive agrees not to enter
into any agreement, whether written or oral, in conflict with the provisions of
this Agreement.

 

15.3         Extension of Restrictions.  The period of all restrictions under
this Agreement will automatically be extended by a period equal in length to any
period in which Executive violates his obligations under this Agreement.

 

15.4         Enforcement.  In addition to any other relief or remedies afforded
by law or in equity, if Executive breaches Sections 13 or 14 of this Agreement,
Executive agrees that the Company shall be entitled, as a matter of right, to
injunctive relief in any court of competent jurisdiction.  Executive recognizes
and hereby admits that irreparable damage will result to the Company if he
violates or threatens to violate the terms of Section 13 or 14 of this
Agreement.  This Section 15.4 shall not preclude the granting of any other
appropriate relief including, without limitation, money damages against
Executive for breach of Section 13 or 14 of this Agreement.

 

16.          Return of Property: Exit Interview.

 

16.1         Return of Property.  Upon any termination of his employment with
the Company, Executive agrees to promptly return to the Company: (A) all
materials of any kind in Executive’s possession (or under Executive’s control)
incorporating Confidential Information or otherwise relating to the Company’s
business (including but not limited to all such materials and/or information
stored on any computer or other storage device owned or used by Executive); and
(B) all Company property in Executive’s possession, including (but not limited
to) computers, cellular telephones, pagers, credit cards, keys, records, files,
manuals, books, forms, documents, letters, memoranda, data, tables, photographs,
video tapes, audio tapes, computer disks and other computer storage media, all
materials that include trade secrets, and all copies, summaries or notes of any
of the foregoing.

 

16.2         Exit Interview.  Upon any termination of his employment with the
Company and upon request, Executive agrees to participate in an exit interview
conducted by designated personnel and to provide a signed statement that all
Company materials and property have been returned to the Company.

 

17.          Assignment.

 

This Agreement sets forth personal obligations of Executive, which may not be
transferred, delegated or assigned by Executive.  The Company may assign this
Agreement to any successor or affiliate.

 

18.          Non-Disparagement.

 

During any period of time during which this Agreement is in effect, and for not
less than twelve (12) months thereafter, Executive agrees not to engage in any
form of conduct or

 

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make any statements or representations that disparage, characterize in demeaning
manner or question the Company’s business practices, products, advice, quality
of employees and staff, or otherwise harm the public reputation or good will of
the Company, its employees, or management.

 

19.          Indemnity; Cooperation in Legal Actions.

 

19.1         Indemnity.  The Company will indemnify Executive against any claims
arising from or related to his good faith performance of his duties and
obligations hereunder to the fullest extent allowed by Company By-laws and the
Minnesota Business Corporation Act.

 

19.2         Cooperation in Legal Actions.  In connection with any action or
proceeding against Executive, whether pending or threatened, for which the
Company is obliged to indemnify Executive, the Company will pay or reimburse
Executive in advance of the final disposition for reasonable expenses, including
reasonable attorneys’ fees, necessarily incurred by Executive.  Executive will
cooperate fully with the Company, at no expense to Executive, in the defense of
any action, suit, claim, or proceeding commenced or threatened against the
Company in conjunction with any action, suit, claim or proceeding commenced or
threatened against him.  In addition to the foregoing, Executive further agrees
to provide assistance to the Company, at the Company’s expense, as may be
reasonably requested by the Company or its attorneys in connection with the
litigation of any action, suit, claim, or proceeding involving the Company,
whether not pending or to be commenced, which arises out of or is related to any
matters in which Executive was involved or for which he was responsible during
the term of his employment with the Company.

 

20.          Survival.

 

The rights and obligations set forth in Sections 6.4, 6.5, 7.1, 8-11, 12.1,
13-19 and 24 shall survive the termination or expiration of this Agreement. 
Such provisions of this Agreement shall survive termination of Executive’s
employment regardless of whether Executive resigns or is involuntarily
discharged.

 

21.          Miscellaneous.

 

21.1         Headings; Construction.  The headings of Sections and paragraphs
herein are included solely for convenience of reference and shall not control
the meaning or interpretation of any of the provisions of this Agreement.  This
Agreement shall be construed without regard to any presumption or other
rule requiring construction hereof against the party causing this Agreement to
be drafted.

 

21.2         Benefit.  Subject to Section 17, nothing in this Agreement,
expressed or implied, is intended to confer on any person other than the parties
hereto, any rights, remedies, obligations or liabilities under or by reason of
this Agreement.

 

21.3         Waiver.  Any delay by either party in asserting a right under this
Agreement or

 

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any failure by either party to assert a right under this Agreement will not
constitute a waiver by the asserting party of any right hereunder, and the
asserting party may subsequently assert any or all of its rights hereunder as if
the delay or failure to assert rights had not occurred.

 

21.4         Severability.  If the final determination of a court of competent
jurisdiction declares, after the expiration of the time within which judicial
review (if permitted) of such determination may be perfected, that any term of
provision hereof is invalid or unenforceable, (a) the remaining terms and
provisions hereof 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 invalid or
unenforceable term or provision.

 

22.          Entire Agreement: Amendment.

 

22.1         Entire Agreement.  Both Executive and the Company agree that this
Agreement, the exhibits to this Agreement and any contemporaneous stock option
agreement between the Company and Executive, constitute the entire agreement
between them with respect to the subject matter thereof.  There were no
inducements or representations leading to the execution of this Agreement except
as stated in this Agreement.  Accordingly, this Agreement (together with the
exhibits to this Agreement and any contemporaneous stock option agreement
between the Company and Executive) expressly supersedes any and all prior oral
and written agreements, representations and promises between the parties
relating to Executive’s employment with the Company.

 

22.2         Amendment.  This Agreement may be amended or modified only with the
written consent of both Executive and the Company.  No oral waiver, amendment or
modification will be effective under any circumstances whatsoever.

 

23.          Notices.

 

Any notice hereunder by either party to the other shall be given in writing by
personal delivery or certified mail, return receipt requested.  If addressed to
Executive, the notice shall be delivered or mailed to Executive at the address
most recently communicated in writing by Executive to the Company, or if
addressed to the company, the notice shall be delivered or mailed to the Company
at its executive offices to the attention of the CEO of the Company.  A notice
shall be deemed given, if by personal delivery, on the date of such delivery or,
if by certified mail, on the date shown on the applicable return receipt.

 

24.          Governing Law; Disputes; Arbitration of Termination of Employment
for Cause.

 

24.1         Governing Law; Disputes.  The Company is headquartered in
Minneapolis, Minnesota and the parties expect that many of Executive’s contacts
with the Company will occur through or in connection with its Minneapolis
office.  Therefore, the parties agree that this Agreement shall be governed by,
and construed and interpreted in accordance with, the laws of the State of
Minnesota, as such laws are applied to agreements entered into and to be
performed entirely within Minnesota

 

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between Minnesota residents, without reference to principles of conflicts or
choice of law under which the law of any other jurisdiction would apply.  Except
(and only) as set forth in Section 24.2 below, the undersigned each irrevocably
consent to the jurisdiction of the United States District Court for the District
of Minnesota and the courts of the State of Minnesota in any suit, action or
proceeding brought under, based on or related to or in connection with this
Agreement, and each of the undersigned agrees that either of the aforesaid
courts will be the exclusive original forum for any such action.

 

24.2         Arbitration of Termination of Employment for Cause.  Any dispute
arising out of or relating to termination of Executive’s employment for Cause
pursuant to Section 6 of this Agreement, 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 business law 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.  The Company shall pay the
fees and expenses of the arbitrator.  Unless otherwise agreed by the parties,
the exclusive location of any arbitration proceedings shall be Hennepin County,
Minnesota.

 

24.3         The following exhibits are hereby incorporated by reference and
each is an integral part of this Agreement:

 

Exhibit A

Change of Control Agreement

 

 

Exhibit B

Incentive Performance Plan [to be supplied]

 

IN WITNESS WHEREOF, the parties have executed this Agreement by their signatures
below, to become effective on the Commencement Date noted above:

 

Analysts International Corporation

 

James D. Anderson (“Executive”)

 

 

 

 

 

 

By:

/s/ Elmer N. Baldwin

 

/s/ James D. Anderson

 

 

 

 

Title:

President and CEO

 

Date signed: September 1, 2009

 

 

 

 

Date signed:  September 1, 2009

 

 

 

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