ex10-2.htm


    EXHIBIT
10.2

     

    Exhibit
A

    CHANGE
OF CONTROL AGREEMENT

     

    
      	
              Parties:

            	
              Analysts
      International Corporation

              3601
      West 76th
      Street, Suite 600

              Minneapolis,
      MN  55435

            	
              (“Company”)

            
	 
      	
              –
      and –

            	 
      
	 
      	
              Robert
      E. Woods

              28
      North Deep Lake Road

              North
      Oaks, Minnesota  55127

            	
              (“Executive”)

            
	 
      	 
      	 
      
	
              Effective
      Date:

            	
              January
      1, 2008

            	 
      


    

    


    RECITALS:

     

    A.           This
Change of Control Agreement is Exhibit A to that certain Amended and Restated
Employment Agreement between the Company and Executive having a Commencement
Date of January 1, 2008 (the “Employment Agreement”), and is an integral part of
the Employment Agreement between the parties.

     

    B.           Executive
currently serves as the Senior Vice President, General Counsel and
Secretary.  Executive has extensive knowledge and experience relating
to the Company’s business.

     

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

     

    D.           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 position in the event of
a Change of Control.

     

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

     

    F.           This
Change of Control Agreement is an integral part of the Amended and Restated
Employment Agreement between the Company and Executive.  As such, the
parties acknowledge and agree that this Change of Control Agreement is
supplemental to, and does not supersede, the Employment Agreement (including but
not limited to Sections 8.1 and 8.2 thereof).

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    AGREEMENTS:

     

    1. Term of this Change of Control Agreement.  Except
as otherwise provided herein, this Change of Control Agreement shall commence on
the date specified above 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 Change of
Control Agreement, this Change of Control 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
Change of Control 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 Change of Control Agreement
shall immediately terminate, and Executive shall not be entitled to any of the
compensation and benefits described in this Change of Control
Agreement.  Any rights and obligations accruing before the termination
or expiration of this Change of Control Agreement shall survive to the extent
necessary to enforce such rights and obligations.

     

    2. “Change of
Control.”  For purposes of this Change of Control Agreement,
“Change of Control” shall mean any one or more of the following events occurring
after the date of this Change of Control 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 persons 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 all or 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 Directors 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 Company’s Board of Directors who
    either:

            


    

     

    
      	
              (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.

            


    

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    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.

     

    As used
in this Change of Control Agreement, “person” means and includes any individual,
partnership, corporation, business trust, limited liability company, limited
liability partnership, joint stock company, trust, unincorporated association,
persons acting as a group, joint venture or other entity, and any affiliate of
any of the foregoing.  “Affiliate” means and includes any entity that
directly or indirectly controls, is controlled by, or is under common control
with any such person, where “control” means (i) the power to direct (or cause
the direction of) the management and policies of an entity, whether through
ownership of voting securities, through contract or otherwise, or (ii) ownership
of at least twenty percent (20%) of the voting stock, shares or interests of
such entity.

     

    3. “Change of Control
Termination.”  For purposes of this Change of Control
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 Change of Control Agreement, “cause” shall have the same meaning
      as set forth in Executive’s employment agreement with the Company, as
      amended from time to time.

            


    

     

    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
      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 decision to terminate within ninety
      (90) days of the occurrence of such
event:

            


    

     

    
      	
              (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 no
      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;

            


    

     

    
      	
              (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.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    4. Compensation and
Benefits.  Subject to the limitations contained in this Change
of Control 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 Company’s Special Executive Retirement Plan, or any
      successor plan;

            


    

     

    
      	
              (3)  

            	
              A
      severance payment, payable in a lump sum in cash, equal to one hundred
      percent (100%) of  the amount of Executive’s annual Base
      Compensation (as such term is defined in the Employment
      Agreement)  payable by the Company (or any predecessor entity or
      related entity) for the calendar year immediately prior to the Change of
      Control Termination.  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 six (6) months of 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.

            


    

     

    
      	
              (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.

     

    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.

     

    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.

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    7. Successors and
Assigns.  This Change of Control Agreement shall inure to the
benefit of and shall be enforceable by Executive, his heirs and the personal
representative of his 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 material breach of
this Change of Control Agreement and shall entitle Executive to all of the
benefits provided in Sections 4 and 5 hereof as if Executive had terminated
employment for Good Reason following a Change in Control.

     

    8. Notices.  For the
purpose of this Change of Control 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 Change
of Control 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 Change of Control Agreement are for
convenience only and shall not affect the meaning or interpretation of this
Change of Control Agreement.

     

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

     

    11. Construction.  Wherever
possible, each term and provision of this Change of Control Agreement shall be
interpreted in such manner as to be effective and valid under applicable
law.  If any term or provision of this Change of Control 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 Change of Control 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 Change of Control Agreement by the other
party shall not operate or be construed as a waiver of any other provision of
this Change of Control Agreement, or of any subsequent breach by such party of a
provision of this Change of Control Agreement.  Notwithstanding
anything in this Change of Control Agreement to the contrary, the Company
expressly reserves the right to amend this Change of Control 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 Change of Control Agreement (together with the
Employment Agreement and any contemporaneous stock option agreement between the
parties) 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
Change of Control 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.

     

    15. Arbitration.  Any
dispute arising out of or relating to this Change of Control Agreement or the
alleged breach of it, or the making of this Change of Control 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
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 Change of Control Agreement, and the commercial arbitration rules of the
American Arbitration Association, unless such rules are inconsistent with the
provisions of this Change of Control 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.

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

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

     

    
      	 
      	
              ANALYSTS
      INTERNATIONAL CORPORATION

            
	 
      	
              By:
      /s/ Elmer N.
      Baldwin

              Its:  President and Chief
      Executive Officer

            
	 
      	
              ROBERT
      E. WOODS

              /s/
      Robert E. Woods

              (“Executive”)

            


    

    


     

     

    
      
        
          
             

          

        

         


      

      
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