Document:

ex10-2.htm

    EXHIBIT 10.2

     

    Exhibit
A

    

     

    CHANGE
OF CONTROL AGREEMENT

    

     

    Parties:                                 Analysts International
Corporation                                                                                     (“Company”)

    3601 West
76th Street, Suite 200 Minneapolis, MN 55435

    

                   Elmer
Baldwin                                                                                                 (“Executive”)

    

    

     

    Effective
Date:  November 1, 2007

     

    RECITALS:

     

     

    1. Executive
has been employed by the Company since November 1, 2007 and currently serves as
the Chief Executive Officer of the Company, and Executive has extensive
knowledge and experience relating to the Company’s business.

     

     

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

     

     

    3. 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/her position in the event
of a Change of Control, although no such Change of Control is now contemplated
or foreseen.

     

     

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

     

     

    5. The
parties further acknowledge and agree that this Agreement supersedes any and all
prior agreements relating to benefits payable upon a termination of Executive’s
employment following a Change of Control.

     

     

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    AGREEMENTS:

     

     

    1.           Term of
Agreement.  Except as otherwise provided herein, this Agreement
shall commence on the date executed by the parties and shall continue in effect
until the third anniversary of the date set forth above; provided, however, that
if a Change of Control of the Company shall occur during the term of this
Agreement, this 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 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
Agreement shall immediately terminate, and

     

     

    Executive
shall not be entitled to any of the compensation and benefits described in this
Agreement.  Any rights and obligations accruing before the termination
or expiration of this Agreement shall survive to the extent necessary to enforce
such rights and obligations.

     

     

    2.            “Change of
Control.”  For purposes of this Agreement, “Change of Control”
shall mean any one or more of the following events occurring after the date of
this 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 individuals and entities
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 substantially all of the total gross value of the assets of the
Company during the twelve-month period ending on the date of the most recent
purchase or other acquisition by such person or persons.  For purposes
of this Section 2(d), “gross value” means the value of the assets of the Company
or the value of the assets being disposed of, as the case may be, determined
without regard to any liabilities associated with such assets;

     

     

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    (e) A change
in the composition of the Board 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 Board 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.

     

     

    3.           “Change of Control
Termination.”  For purposes of this 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
Agreement, “cause” shall have the same meaning as set forth in Executive’s
employment agreement with the Company, if any, as amended from time to
time.  If Executive does not have an employment agreement with the
Company, then “cause” shall mean (i) Executive’s material failure or neglect, or
refusal to perform, the duties and responsibilities of Executive’s position
and/or the reasonable direction of the Board of Directors; (ii) Executive’s
material failure to comply with the reasonable policies, regulations and
directives of the Company as in effect from time to time; (iii) the commission
by Executive of any willful, intentional or negligent act that has the effect of
materially injuring the reputation, business or performance of the Company; or
(iv) Executive’s conviction of, or Executive’s guilty or nolo contendere plea
with respect to, any crime punishable as a felony; or Executive’s conviction of,
or Executive’s guilty or nolo contendere plea with respect to, any crime
involving moral turpitude; or 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 3(a), an act or failure to act by
Executive shall not be “willful” unless it is done, or omitted to be done, in
bad faith and without any reasonable belief that Executive’s action or omission
was in the best interests of the Company.

     

     

    (b) The
termination of employment with the Company by Executive for “Good
Reason.”  Such termination shall be accomplished by, and effective
upon, Executive giving written notice to the Company of his/her 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/her decision to terminate within ninety (90) days of the occurrence of such
event:

     

    
      
         

      

      
        3

        
          

        

      

      
         

      

    

     

    
      	
              (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 not
      longer publicly owned); provided, however, that Good Reason does not
      include such a change that is remedied by the Company promptly after
      receipt of notice of such change is given by
  Executive;

            

    

     

     

    
      	
              (2)  

            	
              A
      reduction by the Company in Executive’s base salary or an adverse change
      in the form or timing of the payment thereof, as in effect immediately
      prior to the Change of Control or as thereafter
  increased;

            

    

     

     

    
      	
              (3)  

            	
              the
      Company’s requiring Executive to be based more than fifty (50) miles from
      where Executive’s office is located immediately prior to the Change of
      Control, except for required travel on the Company’s business, and then
      only to the extent substantially consistent with the travel obligations
      which Executive undertook on behalf of the Company during the ninety-day
      period immediately preceding the Change of Control (without regard to
      travel related to or in anticipation of the Change of
      Control);

            

    

     

     

    
      	
              (4)  

            	
              the
      Company’s failure to cover Executive under any pension, bonus, incentive,
      stock ownership, stock purchase, stock option, life insurance, health,
      accident, disability, or any other employee compensation or benefit plan,
      program or arrangement (collectively referred to as the “Benefit Plans”)
      that, in the aggregate, provide substantially similar benefits to
      Executive (and/or Executive’s family and dependents) at a substantially
      similar total cost to Executive (e.g., premiums,
      deductibles, co-pays, out-of-pocket maximums, and required contributions)
      relative to the benefits and total costs under the Benefit Plans in which
      Executive (and/or Executive’s family or dependents) was participating at
      any time during the ninety-day period immediately preceding the Change of
      Control;

            

    

     

     

    
      	
              (5)  

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

            

    

     

     

    
      	
              (6)  

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

            

    

     

     

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

     

    
      
         

      

      
        4

        
          

        

      

      
         

      

    

     

    4.           Compensation and
Benefits.  Subject to the limitations contained in this
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 Restated Special Executive Retirement Plan, or any
      successor plan;

            

    

     

     

    
      	
              (3)  

            	
              A
      severance payment, payable in a lump sum in cash, equal to one and
      one-half (1-1/2) times the annual cash compensation paid to Executive by
      the Company (or any predecessor entity or related entity) and includible
      in Executive’s gross income for federal income tax purposes for the
      calendar year immediately prior to the Change of Control
      Termination.  For purposes of this paragraph, “annual cash
      compensation” shall mean Executive’s annual base
      salary.  Further, for purposes of this paragraph, “predecessor
      entity” and “related entity” shall have the meaning set forth in Section
      280G of the Internal Revenue Code of 1986, as amended, and the regulations
      issued thereunder.

            

    

     

     

    
      	
               
      

            	
              (b)

            	
              The
      Company shall provide Executive with six (6) months of continuation
      coverage (“COBRA coverage”) under the Company’s life, health, dental and
      other welfare plans as required by the Internal Revenue Code of 1986, as
      amended, the Employee Retirement Income Security Act of 1974, as amended,
      and applicable state law.

            

    

     

     

    
      	
               
      

            	
              (c)

            	
              The
      Company shall provide Executive with outplacement services for twelve (12)
      months following the Change of Control Termination or, if earlier, until
      Executive has accepted employment with another
  employer.

            

    

     

     

    Notwithstanding
the foregoing, if any of the payments described in this Section 4 above are
subject to the requirements of Code Section 409A and the Company determines that
Executive is a “specified employee” as defined in Code Section 409A as of the
date of the Change of Control Termination, such payments shall not be paid or
commence earlier than the first day of the seventh month following the Change of
Control Termination, but shall be paid or commence during the calendar year
following the year in which the Change of Control Termination occurs and within
30 days of the earliest possible date permitted under Code Section 409A.
Further, in no event shall the benefits described in Section 4(c) extend beyond
December 31st of the
second calendar year following the calendar year in which the Change of Control
Termination occurs.

     

    
      
         

      

      
        5

        
          

        

      

      
         

      

    

     

    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 Agreement shall inure to the benefit of and
shall be enforceable by Executive, his/her heirs and the personal representative
of his/her estate, and shall be binding upon and inure to the benefit of the
Company and its successors and assigns.  The Company will require the
transferee of any sale of all or substantially all of the business and assets of
the Company or the survivor of any merger, consolidation or other transaction
expressly to agree to honor this Agreement in the same manner and to the same
extent that the Company would be required to perform this Agreement if no such
event had taken place.  Failure of the Company to obtain such
agreement before the effective date of such event shall be a breach of this
Agreement and shall entitle Executive to the benefits provided in Sections 4 and
5 as if Executive had terminated employment for Good Reason following a Change
in Control.

     

     

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

     

     

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

     

    
      
         

      

      
        6

        
          

        

      

      
         

      

    

     

    11.           Construction.  Wherever
possible, each term and provision of this Agreement shall be interpreted in such
manner as to be effective and valid under applicable law.  If any term
or provision of this 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 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 Agreement by the other party shall not operate or be construed
as a waiver of any other provision of this Agreement, or of any subsequent
breach by such party of a provision of this
Agreement.  Notwithstanding anything in this Agreement to the
contrary, the Company expressly reserves the right to amend this 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 is Exhibit A to
that certain Amended and Restated Employment Agreement between the parties
having an effective date of November 1, 2007, and, as such, 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
with respect to the subject matter hereof.  All such other
negotiations, commitments, agreements and writings will have no further force or
effect, and the parties to any such other negotiation, commitment, agreement or
writing will have no further rights or obligations thereunder.

     

     

    14.           Counterparts.  This
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 Agreement or the alleged breach of
it, or the making of this 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 securities 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.  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.

     

    [SIGNATURES
ON FOLLOWING PAGE]

     

    
      
        
          
             

          

        

         

      

      
        7

        
          

        

      

      
         

      

    

     

    IN
WITNESS WHEREOF, the parties hereto have caused this Change of Control Agreement
(which is Exhibit A to the Amended and Restated Employment Agreement between the
parties) to be duly executed and delivered, with an effective date as of the day
and year first above written.

     

     

    

     

    
      	
              ANALYSTS
      INTERNATIONAL CORPORATION

            
	
              By:  /s/ Elmer N.
    Baldwin

            
	
              Its:
      President and Chief Executive Officer

            
	
              ELMER
      N. BALDWIN

            
	
              Executive

            

    

     

    

    

     

    

    
      
        
          
            

          

           

        

         

      

      
        8ex10-1.htm

    EXHIBIT 10.1

    

      AMENDED AND
RESTATED

      EMPLOYMENT
AGREEMENT

      

       

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

       

       

      RECITALS

       

       

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

       

       

      WHEREAS,
the Company and Executive previously executed an Employment Agreement on January
1, 2008, which the parties wish to restate and amend as set forth
herein.

       

       

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

       

       

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

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

      AGREEMENT

       

       

      1. Terms of
Employment.

       

       

      
        	
                1.1  

              	
                Relation to Prior
      Agreement.  As this is an Amended and Restated Agreement,
      it replaces the prior Employment Agreement between the parities (dated
      January 1, 2008) (the “Prior Agreement”) in its entirety.  For
      the avoidance of doubt, the parties expressly acknowledge that any and all
      stock options granted to Executive in connection with the Prior Agreement,
      together with the agreements granting such options, shall remain in full
      force and effect notwithstanding execution of this Amended and Restated
      Employment Agreement.  As provided in Section 3.4 below,
      however, the applicable agreement granting such options to Executive shall
      be amended as soon as reasonably practicable after the execution of this
      Agreement to reflect the changes reflected in said Section
      3.4.

              

      

       

       

      
        	
                1.2  

              	
                Commencement
      Date.  This Agreement is effective as of January 1, 2008
      (the “Commencement Date”).

              

      

       

       

      
        	
                1.3  

              	
                Position.  The
      Company will employ Executive in the capacity of Senior Vice President,
      General Counsel and Secretary, reporting to the Company’s
    CEO.

              

      

       

       

      
        	
                1.4  

              	
                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.

              

      

       

       

      
        	
                1.5  

              	
                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.

              

      

       

       

      2. Term of
Employment.

       

       

      
        	
                2.1  

              	
                Duration.  Subject
      to the provisions for termination set forth in Sections 6, 7 and 8 below,
      the Original Term of this Agreement (“Original Term”) will commence upon
      the 1st day of January, 2008 and will continue to and include the 31st
      day of October, 2010.

              

      

       

       

      
        	
                2.2  

              	
                Extension of
      Provisions.  At the end of the Original Term, the
      provisions of the Agreement will automatically renew for an additional one
      (1) year term (“Additional Term”) commencing November 1, 2010, unless
      either party gives notice of 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 non-renewal at
      least ninety (90) days before the scheduled expiration of the
      term.

              

      

       

       

      
        
           

        

        
          2

          
            

          

        

        
           

        

      

      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
      $250,000.  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
  $250,000.

              

      

       

       

      
        	
                3.2  

              	
                Incentive
      Compensation.  In addition to Executive’s Base
      Compensation, Executive will be eligible to earn additional cash incentive
      compensation of between 0% and 70% of Base Compensation in each year of
      employment during the Original Term or any Additional Term (“Incentive
      Compensation”).  The potential Incentive Compensation will be
      determined annually by the Company’s CEO and compensation committee of the
      Board and shall be contingent upon the Company and Executive meeting
      company and individual performance objectives (“Performance Objectives”)
      determined by the Company’s CEO and the compensation
      committee.  The Company’s CEO and the compensation committee
      will consider Executive’s input in setting the annual Performance
      Objectives.

              

      

       

       

      
        	
                3.3  

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

              

      

       

       

      
        	
                3.4  

              	
                Stock
      Options.  On or about January 1, 2008, Executive was
      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.

       

       

      
        	
                3.5  

              	
                Deferred Compensation
      Plan.  Executive will be entitled to participate in the
      Company’s Deferred Compensation Plan (the “Special Executive Retirement
      Plan” or “SERP”) at a participation rate of 15% of Base
      Compensation.

              

      

       

       

      
        
           

        

        
          3

          
            

          

        

        
           

        

      

      
        	
                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).

       

       

      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 76”‘ 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.

       

      
        
          
            
              

            

             

          

           

        

        
          4

          
            

          

        

        
           

        

      

       

      4. Insurance
Policies.

       

       

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

       

       

      5. Location.

       

       

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

       

       

      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;

       

       

      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.

              

      

       

       

      
        
           

        

        
          5

          
            

          

        

        
           

        

      

      
        	
                6.2  

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

              

      

       

       

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

       

       

      
        	
                6.3  

              	
                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.

              

      

       

       

      
        	
                6.5  

              	
                Termination Without
      Cause.  Executive’s employment during the Original Term
      or any Additional Term may be terminated by the Company without Cause upon
      thirty (30) days’ notice.  If the Company terminates Executive’s
      employment without Cause during the Original Term or during any Additional
      Term, Executive will continue to receive Base Compensation for a period of
      twelve (12) months, provided that Executive signs all appropriate
      paperwork, including providing a full release of all claims to the
      Company, in a form acceptable to the Company.  The Company will
      also reimburse Executive for medical insurance premium payments made under
      the Consolidated Omnibus Reconciliation Act (“COBRA”), for a period of up
      to six (6) months following the date of termination, provided that the
      Company receives sufficient evidence of proof of such payments during the
      COBRA period.  For purposes of this Section 6.5, termination of
      Executive’s employment due to nonrenewal of Executive’s employment
      agreement at the end of the Original Term or any Additional Term, shall be
      deemed a termination without Cause and entitle Executive to the payments
      and benefits set forth in this Section
6.5.

              

      

       

       

      
        
           

        

        
          6

          
            

          

        

        
           

        

      

      7. Termination of Employment by
Executive.

       

       

      
        	
                7.1  

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

              

      

       

       

      For
purposes of this Section 7.1, “Good Reason” will mean a good faith determination
by Executive, communicated in writing to the CEO, that any one or more of the
following events has occurred:

       

       

      7.1.1 a
reduction in Executive’s Base Salary below $250,000;

       

       

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

       

       

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

       

       

      
        	
                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
      a 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

              

      

       

      
        
           

        

        
          7

          
            

          

        

        
           

        

      

       

      9. Delay of
Payment.

       

       

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

       

       

      10. Intellectual Property
Rights.

       

       

      
        	
                10.1  

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

              

      

       

       

      
        	
                10.2  

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

              

      

       

       

      
        	
                10.3  

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

              

      

       

       

      
        	
                10.4  

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

              

      

       

       

      
        	
                10.5  

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

              

      

       

       

      
        	
                10.6  

              	
                Enforcement;
      Cooperation.  Executive agrees to perform, during and
      after his employment, all acts deemed necessary or desirable by the
      Company to permit and assist it, at its expense, in obtaining and
      enforcing the full benefits, enjoyment, rights and title throughout the
      world in the Company Inventions hereby assigned to the
      Company.  Such acts may include, but are not limited to,
      execution of documents and assistance or cooperation in the registration
      and enforcement of applicable patents, copyrights, maskworks or other
      legal proceedings.

              

      

       

       

      
        	
                10.7  

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

              

      

       

      
        
           

        

        
          8

          
            

          

        

        
           

        

      

       

      11. Confidentiality.

       

       

      
        	
                11.1  

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

              

      

       

       

      
        	
                11.2  

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

              

      

       

       

      
        	
                11.3  

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

              

      

       

       

      
        	
                11.4  

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

              

      

       

       

      
        	
                11.5  

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

              

      

       

       

      
        
           

        

        
          9

          
            

          

        

        
           

        

      

      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 eighteen (18) months after
termination of such employment for any reason, Executive agrees that he will not
engage in the following conduct.

       

       

      
        	
                13.1  

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

              

      

       

       

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

       

       

      
        	
                13.2  

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

              

      

       

       

      
        
           

        

        
          10

          
            

          

        

        
           

        

      

      14. Restrictions Against
Competition.

       

       

      
        	
                14.1  

              	
                Restricted
      Period.  During his employment by the Company and for a
      period of eighteen (18) months after termination of such employment for
      any reason, Executive agrees not to engage in any Competitive Acts with
      any client or prospective client of the Company within the prior 24 months
      prior to termination of Executive’s employment.  Nothing
      contained in this Agreement, however, creates any obligation on Executive
      that is inconsistent with, or would require Executive to violate, the
      Rules of Professional Conduct.

              

      

       

       

      
        	
                14.2  

              	
                Definitions.  For
      purposes of this Section 13, the following terms shall be defined as
      follows.

              

      

       

       

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

       

       

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

       

       

      “Competitor”
means any third party offering technical consulting services within the United
States that competes with the Company or is similar in kind or nature to the
services provided by the Company.

       

       

      
        	
                15.  

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

              

      

       

       

      
        	
                15.1  

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

              

      

       

       

      
        	
                15.2  

              	
                Representations of
      Executive.  Executive represents that his performance of
      all the terms of this Employment Agreement and his performance as an
      employee of the Company does not and will not breach any agreement to keep
      in confidence proprietary information, knowledge or data acquired by
      Executive prior to his employment with the Company.  Executive
      will not disclose to the Company, or induce the Company to use, any
      confidential or proprietary information or material belonging to any
      previous employer of Executive or others.  Executive is not a
      party to any other agreement that would interfere with his full compliance
      with this Executive Agreement.  Executive agrees not to enter
      into any agreement, whether written or oral, in conflict with the
      provisions of this Agreement.

              

      

       

       

      
        	
                15.3  

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

              

      

       

       

      
        	
                15.4  

              	
                Enforcement.  In
      addition to any other relief or remedies afforded by law or in equity, if
      Executive breaches Sections 12 or 13 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 12 or
      13 of this Agreement.  This Section 14.4 shall not preclude the
      granting of any other appropriate relief including, without limitation,
      money damages against Executive for breach of Section 12 or 13 of this
      Agreement.

              

      

       

      
        
           

        

        
          11

          
            

          

        

        
           

        

      

       

      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 or assigned by Executive.  The Company may assign this
Agreement to any successor or affiliate.

       

       

      18. Non-Disparagement.

       

       

      Executive
agrees not to engage in any form of conduct or make any statements or
representations to current or prospective customers of the Company, media
outlets, employees or management of a corporation or business in direct
competition with the Company, or otherwise publish statements or representations
to the public at large which may be actionable, that disparage, characterize in
demeaning manner, question the Company’s business practices, products, advice,
quality of employees and staff, or otherwise harm the public reputation or good
will of the Company, its employees, or management.

       

       

      19. Indemnity; Cooperation in
Legal Actions.

       

       

      
        	
                19.1  

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

              

      

       

       

      
        	
                19.2  

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

              

      

       

      
        
           

        

        
          12

          
            

          

        

        
           

        

      

       

      20. Survival.

       

       

      The
rights and obligations set forth in Sections 6.5, 7.1, 8-12, 13-19 and 24 shall
survive the termination or expiration of this Agreement.  The
provisions of this Agreement shall survive termination of Executive’s employment
regardless of whether Executive resigns or is involuntarily
discharged.

       

       

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

       

      
        
          
            
              

            

             

          

           

        

        
          13

          
            

          

        

        
           

        

      

       

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

              

      

       

       

      
        	
                21.3  

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

              

      

       

       

      
        	
                21.4  

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

              

      

       

       

      22. Entire Agreement;
Amendment.

       

       

      
        	
                22.1  

              	
                Entire
      Agreement.  Both Executive and the Company agree that
      this Agreement, Exhibit A to the Agreement and the Executive’s stock
      option agreement constitute the entire agreement between them with respect
      to the subject matter of this Agreement.  There were no
      inducements or representations leading to the execution of this Agreement
      except as stated in this Agreement.  Accordingly, this Agreement
      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 Analysts 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.

              

      

       

       

      
        
           

        

        
          14

          
            

          

        

        
           

        

      

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

       

       

      
        	
                24.1  

              	
                Governing Law;
      Disputes.  This Agreement will be governed by and
      construed in accordance with the laws of the State of Minnesota, as such
      laws are applied to agreements entered into and to be performed entirely
      within Minnesota between Minnesota residents.  Except as set
      forth in Section 23.2 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 place of any arbitration proceedings shall be Hennepin
      County, Minnesota.

              

      

       

       

      IN WITNESS WHEREOF, the
parties have executed this Amended and Restated Agreement by their signatures
below:

       

      
        	
                Analysts
      International Corporation

              	
                Robert
      E. Woods

              
	
                By:
      /s/ Elmer N.
      Baldwin

              	
                By:
      /s/ Robert E.
      Woods

              
	
                Date:  August
      19, 2008

              	
                Date:  August
      19, 2008

              

      

      
        
           
            
            
              
                

              

               

            

          

        

        
          15

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