ex10-1.htm


     

    
EXHIBIT 10.1

     

    AMENDED AND
RESTATED

    EMPLOYMENT
AGREEMENT

    This
Amended and Restated Employment Agreement (“Agreement”) is made by and between
Analysts International Corporation (the “Company”) with headquarters at 3601 W.
76th Street, Minneapolis, MN 55435 and Elmer Baldwin
(“Executive”).

     

    RECITALS

    WHEREAS,
the Company desires to retain Executive as an Employee of the Company, and
Executive desires to be so employed; and

     

    WHEREAS,
the Company and Executive previously executed an Employment Agreement on
November 1, 2007, which the parties wish to restate and amend as set forth
herein;

     

    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:

     

    AGREEMENT

    
      	
              1.  

            	
              Terms
      of Employment.

            


    

     

    
      	
              1.1  

            	
              Relation to Prior
      Agreement.  As this is an Amended and Restated Agreement,
      it replaces the prior Employment Agreement between the parities (dated
      November 1, 2007) (the “Prior Agreement”) in its entirety.  For
      the avoidance of doubt, the parties expressly acknowledge that any and all
      stock options granted to Executive in connection with the Prior Agreement,
      together with the agreements granting such options, shall remain in full
      force and effect notwithstanding execution of this Amended and Restated
      Employment Agreement.  As provided in Section 3.4 below,
      however, the applicable agreement granting such options to Executive shall
      be amended as soon as reasonably practicable after the execution of
      this Agreement to reflect the changes reflected in said Section
      3.4.

            


    

     

    
      	
              1.2  

            	
              Commencement
      Date.  This Agreement is effective as of November 1, 2007
      (the “Commencement Date”).

            


    

     

    
      	
              1.3  

            	
              Position.  The Company will
      employ Executive in the capacity of President and Chief Executive Officer.  The
      Company’s Board of
      Directors (“Board”) will also appoint or cause Executive to be appointed
      as a member of the Board upon his commencement of
      employment.  Executive will continue to be a member of the Board
      until the earlier of: (A) termination of Executive’s employment by the
      Company; (B) Executive’s resignation from employment with the Company; (C)
      Executive’s resignation as a member of the Board; (D) the Board’s failure
      to nominate Executive for re-election and the subsequent completion of
      Executive’s term; (E) Executive’s removal as a member of the Board
      pursuant to Minnesota Statute § 302A.223; or (F) failure of the Company’s
      shareholders to re-elect Executive to the
Board.

            


    

     

    
      	
              1.4  

            	
              Effective as of the date on which
      Executive is no longer a member of the Board, Executive will be deemed to
      have resigned from any of its committees and from all boards or other
      governing bodies (and committees) of each Company subsidiary, if and as
      applicable, without need of any further action by Executive, the Company,
      or any Company subsidiary.  Notwithstanding the foregoing,
      Executive agrees to take any action deemed necessary or desirable by the
      Company or any Company subsidiary to evidence his departure from the Board
      and such governing bodies and
committees.

            


    

     

    
      	
              1.5  

            	
              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.

            


    

     

    
      	
              1.6  

            	
              Personal
      Activities;
      Boards of Directors.  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, or from serving on the boards
      of directors of other companies, with or without compensation, including
      but not limited to Benilde St. Margaret’s School, Video Guidance, and
      Transport Security Boards of Directors, provided that such personal
      activities do not interfere with Executive’s primary duties to the
      Company, present a conflict with or divergence from the interests of the
      Company or violate the Board’s policies relating to service as a board
      member to publicly-held companies or codes of conduct for its employees.
      After the date of this agreement, Executive will accept an appointment or
      election to the board of another company only with the prior consent of
      the Company’s Board of
Directors.

            


    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
      	
              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 commence upon
      the 1st day of November, 2007 and will
      continue to and include the 31st day of October,
    2010.

            


    

     

    
      	
              2.2  

            	
              Extension of
      Provisions.  At the end of the Original Term, the
      provisions of the Agreement will automatically renew for an additional one
      (1) year term (“Additional Term”) commencing November 1, 2010, unless either party
      gives notice of non-­renewal 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 non-renewal 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
      $450,000.  Payment
      will occur at regular payroll intervals in accordance with the Company’s
      standard payroll practices.  The 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
      $450,000.

            


    

     

    
      	
              3.2  

            	
              Incentive
      Compensation.  In addition to Executive’s Base
      Compensation, Executive will be eligible to earn additional cash incentive
      compensation of between 30% and 70% of Base
      Compensation in each year of employment during the Original Term or any
      Additional Term (“Incentive Compensation”).  The potential Incentive
      Compensation will be determined annually by the compensation committee of
      the Board and shall be
      contingent upon the Company and Executive meeting company and individual performance objectives
      (“Performance Objectives”) determined by the compensation
      committee.  The compensation committee will consider Executive’s input in
      setting the annual Performance
  Objectives.

            


    

     

    
      	
              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.

            


    

     

    
      	
              3.4  

            	
              Stock
      Options.  In connection with the Prior Agreement and on
      or about November 1,
      2007, Executive was granted options to purchase 500,000 shares of the
      Company’s common stock with one-quarter being vested immediately and the
      remainder vesting in even increments over three years from the date of the
      grant.

            


    

     

     

    Such
options were 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 between the parties shall be amended to provide that in the
event of a Change of Control (as
defined in Exhibit A hereto) occurring on or after the effective date of
this Agreement, any and all options remaining unvested at the time of the Change
of Control shall vest immediately.  Such amendment shall be prepared
and executed as soon as reasonably practicable after the execution of this
Agreement.

     

    
      
        
        

      

      
        2

        
          

        

      

      
        
        

      

    

    
      	
              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 pay the full cost for family
      health insurance coverage, including co-pays and deductibles, if any, 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).  In addition, the
      Company will reimburse Executive for the unreimbursed cost of bi-annual
      physicals for Executive and his spouse at the clinic of Executive’s
      choice.  If the payments contemplated by this Section 3.6.1
      create income tax liability for Executive, the Company shall withhold all
      required taxes from such payments.

            


    

     

    
      	
              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 Chairman of the Board
      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  

            	
              Paid Legal
      Fees.  The Company will reimburse Executive (or pay
      directly if it prefers) Executive’s legal fees relating to services
      rendered in connection with the preparation, negotiation and final review
      of this Agreement.

            


    

     

    
      	
              3.6.5  

            	
              Business
      Expenses.  Executive will be entitled to reimbursement of
      all reasonable, business-related travel and other expenses (including spousal travel in
      promotion of the Company) 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.

            


    

     

    
      	
              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 considerable business time
in locations other than the Minneapolis, Minnesota area.

     

    
      
        
        

      

      
        3

        
          

        

      

      
        
        

      

    

    
      	
              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 Board of
      Directors;

            


    

     

    
      	
              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;

            


    

     

    
      	
              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 disabled for
      a period of at least ninety (90) days to the extent that, in the
      determination of the Board
      of Directors, 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.

            


    

     

    
      	
              6.3  

            	
              Notice.  In
      the event that the Board determines that
      Cause for termination exists, the Board 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 Board.

            


    

     

    
      	
              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 for offering
      continuation of 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.  If the Company 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 providing 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 the Consolidated Omnibus
      Reconciliation Act (“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.

            


    

     

    
      
        
        

      

      
        4

        
          

        

      

      
        
        

      

    

    
      	
              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 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 providing 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, “Good Reason” will mean a good faith determination
by Executive, communicated in writing to the Board of Directors, that any one
or more of the following events has occurred:

     

    
      	
              7.1.1  

            	
              a
      reduction in Executive’s Base Salary below $450,000;

            


    

     

    
      	
              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;

            


    

     

    
      	
              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; or

            


    

     

    
      	
              7.1.4  

            	
              Executive’s discontinuance as a
      member of the Board due to the events defined in Sections 1.2(D) and
      1.2(E) except if: (i) the Board’s failure to nominate Executive for
      re-election is due to the requirements of the rules or regulations of the
      Securities and Exchange Commission or The NASDAQ Stock Market; (ii)
      Executive’s removal under Minnesota Statute Section 302A.223 is pursuant
      to an act of the Company’s shareholders; or (iii) the parties to this
      Agreement mutually agree that Executive should no longer serve on the
      Board.

            


    

     

    
      	
              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, 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
      nonqualified deferred compensation plan (Restated SERP) will be treated
      and distributed in accordance with terms and conditions of the Restated
      SERP.

            


    

     

    
      
        
        

      

      
        5

        
          

        

      

      
        
        

      

    

    
      	
              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 (taking account of all applicable
authorities thereunder), payment and provision of such severance benefits
shall be delayed until the date six months after Executive’s termination of
employment.

     

    
      	
              10.  

            	
              Intellectual Property
      Rights.

            


    

     

    
      	
              10.1  

            	
              Non-infringement.  Executive
      agrees that all work products created or produced by Executive during the
      course of his employment with the Company will be Executive’s original 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:
      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 the employee’s own time, and
      (1) which does not relate (a) directly to the business of the Company (or
      its Client) or (b) to the Company’s (or its Client’s) actual or
      demonstrably anticipated research or development, or (2) which does not
      result from any work performed by the employee for the Company or its
      Clients.  For purposes of this Section 10.4, the term “Client”
      shall have the same meaning as set forth in Section 14.2 of this
      Agreement.

            


    

     

    
      	
              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 expense, in obtaining and
      enforcing the full benefits, enjoyment, rights and title throughout the
      world in the Company Inventions hereby 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.

            


    

     

    
      
        
        

      

      
        6

        
          

        

      

      
        
        

      

    

    
      	
              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, 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, products, services, suppliers, personnel, pricing,
      recruiting 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.

            


    

     

    
      
        
        

      

      
        7

        
          

        

      

      
        
        

      

    

    
      	
              13.  

            	
              Restrictions
      against Solicitation;
      Non-Interference. 

            


    

     

    During
his employment by the Company and for a period of eighteen (18) months after
termination of such employment for any reason, Executive agrees that he will not
engage 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 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 eighteen
      (18) months after termination of such employment for any reason,
      Executive agrees not to
      engage in any Competitive Acts with any Client or prospective Client of
      the Company within the
      prior 24 months prior to termination of Executive’s
      employment.

            


    

     

     

    
      	
              1.1  

            	
              Definitions.  For purposes of this
      Section 14, the following terms shall be defined as
      follows.

            


    

     

     

    “Competitive
Acts” means soliciting, selling, marketing, brokering, providing or managing any
Services for any Client, whether directly as an employee of a Client or
indirectly as an employee, subcontractor, partner or owner of a
Competitor.

     

     

    “Client”
means: (A) any Company client for whom Executive provided Services at any time
during the previous two years of Executive’s employment with the Company; or (B)
any Company client or prospective client to whom Executive solicited, proposed,
marketed or sold Services at any time during the previous two years of
Executive’s employment with the Company; (C) any third party having a written
partnership, alliance or teaming agreement or similar strategic business
relationship with the Company, for whom Executive provided Services at any time
during the previous two years of Executive’s employment with the
Company.

     

    
      	
              14.2  

            	
              “Competitor”
      means any third party offering technical 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.

            


    

     

    
      
        
        

      

      
        8

        
          

        

      

      
        
        

      

    

    
      	
              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 a
      party to any other agreement 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.

            


    

     

    
      
        
        

      

      
        9

        
          

        

      

      
        
        

      

    

    
      	
              17.  

            	
              Assignment.

            


    

     

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

     

    
      	
              18.  

            	
              Non-Disparagement.

            


    

     

    Executive
agrees not to engage in any form of conduct or make any statements or
representations to current or
prospective customers of the Company, media outlets, employees or management of
a corporation or business in direct competition with the Company, or otherwise
publish statements or representations to the public at large which may be
actionable, 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 Minnesota
      law.

            


    

     

    
      	
              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 6.5, 7.1, 8-11, 13-19 and 24 shall survive the termination or
expiration of this Agreement.  The provisions of this Agreement
shall survive termination of Executive’s employment regardless of whether
Executive resigns or is involuntarily discharged.

     

    Such
provisions of this Agreement shall survive termination of Executive’s employment
regardless of whether Executive resigns or is involuntarily
discharged.

     

    
      
        
        

      

      
        10

        
          

        

      

      
        
        

      

    

    
      	
              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 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, Exhibit A to this
      Agreement and the
      Executive’s stock option agreement 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 Exhibit A 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.  As noted in Section 1.1 above,
      this is an
      Amended and Restated Agreement which, with the attached Exhibit A ( Change
      of Control Agreement), replaces the prior Employment Agreement between the
      parities (dated November 1, 2007) (the “Prior Agreement”) in its
      entirety.  For the avoidance of doubt, however, the parties
      expressly acknowledge that any and all stock options granted to Executive
      in connection with the Prior Agreement, together with the agreements
      granting such options, shall remain in full force and effect
      notwithstanding execution of this Amended and Restated Employment
      Agreement.

            


    

     

    
      	
              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 Board of Directors of the Company with a copy to
the attention of the
General Counsel.  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.

     

    
      
        
        

      

      
        11

        
          

        

      

      
        
        

      

    

    
      	
              24.  

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

            


    

     

    
      	
              24.1  

            	
              Governing Law;
      Disputes.  This Agreement will be
      governed by and construed 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 between Minnesota
      residents.  Except 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 securities or
      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.

            


    

     

    IN WITNESS WHEREOF,
the parties have
executed this Amended and Restated Agreement by their signatures below, to be
effective as of November 1, 2007:

     

    
      	
              Analysts
      International Corporation

            	
              Elmer N. Baldwin
      (“Executive”)

            
	
              By: /s/ Krzysztof K.
      Burhardt

              Title:  Chairman of
      the Board of Directors

            	
              By:  /s/ Elmer N.
Baldwin

              Date signed: August 19,
  2008

            
	
              Date signed: 
      August 19, 2008

            	 
      


    

    


     

    
      
        
        

      

      
        12