Exhibit 10.2


 


Exhibit A


 


CHANGE OF
CONTROL AGREEMENT


 


	
  Parties:

  	
  Analysts International Corporation 

  3601 West 76th Street, Suite 600 

  Minneapolis, MN 55435

  	
  (“Company”)

  
	
   

  	
   

  	
   

  
	
   

  	
  – and –

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  James D. Anderson 

  15124 Lynn Terrace 

  Minnetonka, Minnesota 55345

  	
  (“Executive”)

  
	
   

  	
   

  	
   

  
	
  Effective Date:

  	
  September 1, 2009

  	
   

  



 


RECITALS:


 


A.            This Change of Control Agreement is Exhibit A
to that certain Employment Agreement between the Company and Executive having a
Commencement Date of September 1, 2009 (the “Employment Agreement”), and
is an integral part of the Employment Agreement between the parties.


 


B.            Executive currently serves as the
Senior Vice President, Client Services Operations of the Company.  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 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 


 


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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 


 


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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.


 


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 


 


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“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;


 


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


 


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


 


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


 


4.                                      Compensation and
Benefits.  Subject to the limitations contained in this
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 


 


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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.


 


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 


 


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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, 


 


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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.


 


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 CEO

  
	
   

  	
   

  
	
   

  	
  JAMES D. ANDERSON

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ James D. Anderson

  
	
   

  	
  (“Executive”)

  



 


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Exhibit B


 


INCENTIVE
PERFORMANCE PLAN

(Subject to the provisions and restrictions of Section 3.2 of the
Employment Agreement)


 


[To
be completed and agreed upon between the parties]


 


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