Document:

Exhibit 10.1

 

EMPLOYMENT
AGREEMENT

 

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

 

RECITALS

 

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

 

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

 

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

 

AGREEMENT

 

1.             Terms
of Employment

 

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

 

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

 

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

 

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

 

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2.             Term
of Employment.

 

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

 

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

 

3.             Compensation
and Benefits.

 

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

 

3.2           Incentive Compensation.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

4.             Insurance
Policies.

 

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

 

5.             Location.

 

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

 

6.             Termination
of Employment by the Company.

 

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

 

6.1.1        Executive’s substantial failure or neglect, or refusal
to perform, the duties and responsibilities of Executive’s position and/or the
reasonable direction of the CEO;

 

6.1.2        The commission by Executive of any willful,
intentional or wrongful act that has the effect of materially injuring the
reputation, business or performance of the Company;

 

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

 

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

 

6.1.5        Any bar against Executive from serving as a director,
officer or executive of any firm the securities of which are publicly traded.

 

For purposes of this Section 6.1,
an act or failure to act by Executive shall not be “willful” unless it is done,
or omitted to be done, in bad faith and without any reasonable belief that
Executive’s action or omission was in the best interests of the Company.

 

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

 

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

 

6.2.2        Executive dies.

 

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

 

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

 

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

 

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

 

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

 

7.             Termination
of Employment by Executive.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

8.             Change of Control Obligations; Deferred Compensation Payments.

 

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

 

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

 

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

 

9.             Delay
of Payment.

 

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

 

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10.          Intellectual Property Rights.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

11.          Confidentiality.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

13.          Restrictions against Solicitation:
Non-Interference.

 

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

 

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in the following conduct.

 

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

 

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

 

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

 

14.          Restrictions Against Competition.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

16.          Return of Property: Exit
Interview.

 

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

 

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

 

17.          Assignment.

 

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

 

18.          Non-Disparagement.

 

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

 

12

 

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

 

19.          Indemnity; Cooperation in Legal
Actions.

 

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

 

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

 

20.          Survival.

 

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

 

21.          Miscellaneous.

 

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

 

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

 

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

 

13

 

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

 

21.4         Severability. 
If the final determination of a court of competent jurisdiction declares,
after the expiration of the time within which judicial review (if permitted) of
such determination may be perfected, that any term of provision hereof is invalid
or unenforceable, (a) the remaining terms and provisions hereof shall be
unimpaired, and (b) the invalid or unenforceable term or provision shall
be deemed replaced by a term or provision that is valid and enforceable and
that comes closest to expressing the intention of the invalid or unenforceable
term or provision.

 

22.          Entire Agreement: Amendment.

 

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

 

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

 

23.          Notices.

 

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

 

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

 

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

 

14

 

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

 

24.2         Arbitration of
Termination of Employment for Cause.  Any dispute arising out of or relating to
termination of Executive’s employment for Cause pursuant to Section 6 of
this Agreement, shall be discussed between the disputing parties in a good
faith effort to arrive at a mutual settlement of any such controversy. 
If, notwithstanding, such dispute cannot be resolved, such dispute shall
be settled by binding arbitration. 
Judgment upon the award rendered by the arbitrator may be entered in any
court having jurisdiction thereof.  The
arbitrator shall be a retired state or federal judge or an attorney who has
practiced business law or business litigation for at least 10 years.  If the parties cannot agree on an arbitrator
within 20 days, any party may request that the chief judge of the District
Court for Hennepin County, Minnesota, select an arbitrator.  Arbitration will be conducted pursuant to the
provisions of this Agreement, and the commercial arbitration rules of the
American Arbitration Association, unless such rules are inconsistent with
the provisions of this Agreement. 
Limited civil discovery shall be permitted for the production of
documents and taking of depositions. 
Unresolved discovery disputes may be brought to the attention of the arbitrator
who may dispose of such dispute.  The
arbitrator shall have the authority to award any remedy or relief that a court
of this state could order or grant; provided, however, that punitive or exemplary
damages shall not be awarded.  The
Company shall pay the fees and expenses of the arbitrator.  Unless otherwise agreed by the parties, the
exclusive location of any arbitration proceedings shall be Hennepin County,
Minnesota.

 

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

 

	
  Exhibit A

  	
  Change
  of Control Agreement

  
	
   

  	
   

  
	
  Exhibit B

  	
  Incentive
  Performance Plan [to be supplied]

  

 

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

 

	
  Analysts International Corporation

  	
   

  	
  James D. Anderson (“Executive”)

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  By: 

  	
  /s/ Elmer N. Baldwin

  	
   

  	
  /s/ James D. Anderson

  
	
   

  	
   

  	
   

  	
   

  
	
  Title: 

  	
  President and CEO

  	
   

  	
  Date signed: September 1, 2009

  
	
   

  	
   

  	
   

  	
   

  
	
  Date signed:  September 1, 2009

  	
   

  	
   

  

 

15Exhibit 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 

 

1

 

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 

 

2

 

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 

 

3

 

“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;

 

4

 

(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 

 

5

 

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 

 

6

 

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, 

 

7

 

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”)

  

 

8

 

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]

 

9

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