Document:

Filed by Bowne Pure Compliance

 

Exhibit 10.2

GLOBAL CASH ACCESS HOLDINGS, INC. 2005 STOCK INCENTIVE PLAN

NOTICE OF STOCK OPTION AWARD

	 	 	 
	Grantee’s Name and Address:

	 	Scott Betts
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 

You (the “Grantee”) have been granted an option to purchase shares of Common Stock, subject to
the terms and conditions of this Notice of Stock Option Award (the “Notice”), the Global Cash
Access Holdings, Inc. 2005 Stock Incentive Plan, as amended from time to time (the “Plan”) and the
Stock Option Award Agreement (the “Option Agreement”) attached hereto, as follows. Unless
otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in
this Notice.

	 	 	 
	Award Number

	 	
 _____ 

	 
	 	 
	Date of Award

	 	October 31, 2007
	 
	 	 
	Vesting Commencement Date

	 	October 31, 2007
	 
	 	 
	Exercise Price per Share

	 	$9.99 
	 
	 	 
	Total Number of Shares Subject
to the Option (the “Shares”)

	 	40,040 
	 
	 	 
	Total Exercise Price

	 	$399,999.60 
	 
	 	 
	Type of Option:

	 	Incentive Stock Option
	 
	 	 
	Expiration Date:

	 	October 31, 2017
	 
	 	 
	Post-Termination Exercise Period:

	 	Three (3) Months

Vesting Schedule:

Subject to the Grantee’s Continuous Service and other limitations set forth in this Notice,
the Plan and the Option Agreement, the Option may be exercised, in whole or in part, in accordance
with the following schedule:

25% of the Shares subject to the Option shall vest twelve months after the Vesting
Commencement Date, and 1/36th of the remaining number of Shares subject to the Option shall vest on
each monthly anniversary of the Vesting Commencement Date thereafter.

In the event of termination of the Grantee’s Continuous Service for Cause, the Grantee’s right
to exercise the Option shall terminate concurrently with the termination of the Grantee’s
Continuous Service, except as otherwise determined by the Administrator.

In the event that, after the first anniversary of the Vesting Commencement Date, the Grantee’s
Continuous Service is terminated by the Company without Cause (as defined in that certain
Employment Agreement, dated as of October 31, 2007, by and between the Company and
Grantee) or by the Grantee for Good Reason (as defined in that certain Employment Agreement,
dated as of October 31, 2007, by and between the Company and Grantee), fifty percent (50%) of the
Shares subject to the Option that have not previously vested shall become vested and exercisable
upon such termination.

 

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In the event of a Corporate Transaction or a Change in Control, all of the Shares subject to
the Option shall become vested and exercisable immediately prior to the consummation of such
Corporate Transaction or Change in Control, provided that the Grantee’s Continuous Service has not
terminated prior to the consummation of such Corporate Transaction or Change in Control.

Effect of Acceleration on Incentive Stock Option. To the extent that the Option is an
Incentive Stock Option and is accelerated in connection with a Corporate Transaction or Change in
Control, the Option shall remain exercisable as an Incentive Stock Option under the Code only to
the extent the $100,000 dollar limitation of Section 422(d) of the Code is not exceeded.

During any authorized leave of absence, the vesting of the Option as provided in this schedule
shall be suspended after the leave of absence exceeds a period of ninety (90) days. Vesting of the
Option shall resume upon the Grantee’s termination of the leave of absence and return to service to
the Company or a Related Entity. The Vesting Schedule of the Option shall be extended by the
length of the suspension.

IN WITNESS WHEREOF, the Company and the Grantee have executed this Notice and agree that the
Option is to be governed by the terms and conditions of this Notice, the Plan, and the Option
Agreement.

	 	 	 	 	 
	 	 	Global Cash Access Holdings, Inc.

a Delaware corporation
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Karim Maskatiya, Co-Chairman of the Board

THE GRANTEE ACKNOWLEDGES AND AGREES THAT THE SHARES SUBJECT TO THE OPTION SHALL VEST, IF AT ALL,
ONLY DURING THE PERIOD OF THE GRANTEE’S CONTINUOUS SERVICE (NOT THROUGH THE ACT OF BEING HIRED,
BEING GRANTED THE OPTION OR ACQUIRING SHARES HEREUNDER). THE GRANTEE FURTHER ACKNOWLEDGES AND
AGREES THAT NOTHING IN THIS NOTICE, THE OPTION AGREEMENT, OR THE PLAN SHALL CONFER UPON THE GRANTEE
ANY RIGHT WITH RESPECT TO FUTURE AWARDS OR CONTINUATION OF THE GRANTEE’S CONTINUOUS SERVICE, NOR
SHALL IT INTERFERE IN ANY WAY WITH THE GRANTEE’S RIGHT OR THE RIGHT OF THE COMPANY OR RELATED
ENTITY TO WHICH THE GRANTEE PROVIDES SERVICES TO TERMINATE THE GRANTEE’S CONTINUOUS SERVICE, WITH
OR WITHOUT CAUSE, AND WITH OR WITHOUT NOTICE. THE GRANTEE ACKNOWLEDGES THAT UNLESS THE GRANTEE HAS
A WRITTEN EMPLOYMENT AGREEMENT WITH THE COMPANY TO THE CONTRARY, THE GRANTEE’S STATUS IS AT WILL.

 

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The Grantee acknowledges receipt of a copy of the Plan and the Option Agreement, and
represents that he or she is familiar with the terms and provisions thereof, and hereby accepts the
Option subject to all of the terms and provisions hereof and thereof. The Grantee has reviewed
this Notice, the Plan, and the Option Agreement in their entirety, has had an opportunity to obtain
the advice of counsel prior to executing this Notice, and fully understands all provisions of this
Notice, the Plan and the Option Agreement. The Grantee hereby agrees that all questions of
interpretation and administration relating to this Notice, the Plan and the Option Agreement shall
be resolved by the Administrator in accordance with Section 16 of the Option Agreement. The
Grantee further agrees to the venue selection and waiver of a jury trial in accordance with Section
17 of the Option Agreement. The Grantee further agrees to notify the Company upon any change in
the residence address indicated in this Notice.

	 	 	 	 	 	 	 
	Dated:

	 	 	 	Signed:	 	 
	 

	 	 
	 	 	 	 
	 

	 	 	 	 	 	Grantee

 

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Award Number: ___

GLOBAL CASH ACCESS HOLDINGS, INC. 2005 STOCK INCENTIVE PLAN

STOCK OPTION AWARD AGREEMENT

1. Grant of Option. Global Cash Access Holdings, Inc., a Delaware corporation (the
“Company”), hereby grants to the Grantee (the “Grantee”) named in the Notice of Stock Option Award
(the “Notice”), an option (the “Option”) to purchase the Total Number of Shares of Common Stock
subject to the Option (the “Shares”) set forth in the Notice, at the Exercise Price per Share set
forth in the Notice (the “Exercise Price”) subject to the terms and provisions of the Notice, this
Stock Option Award Agreement (the “Option Agreement”) and the Company’s 2005 Stock Incentive Plan,
as amended from time to time (the “Plan”), which are incorporated herein by reference. Unless
otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in
this Option Agreement.

If designated in the Notice as an Incentive Stock Option, the Option is intended to qualify as
an Incentive Stock Option as defined in Section 422 of the Code. However, notwithstanding such
designation, the Option will qualify as an Incentive Stock Option under the Code only to the extent
the $100,000 dollar limitation of Section 422(d) of the Code is not exceeded. The $100,000
limitation of Section 422(d) of the Code is calculated based on the aggregate Fair Market Value of
the Shares subject to options designated as Incentive Stock Options which become exercisable for
the first time by the Grantee during any calendar year (under all plans of the Company or any
Parent or Subsidiary of the Company). For purposes of this calculation, Incentive Stock Options
shall be taken into account in the order in which they were granted, and the Fair Market Value of
the shares subject to such options shall be determined as of the grant date of the relevant option.

2. Exercise of Option.

(a) Right to Exercise. The Option shall be exercisable during its term in accordance
with the Vesting Schedule set out in the Notice and with the applicable provisions of the Plan and
this Option Agreement. The Option shall be subject to the provisions of Section 11 of the Plan and
the Notice relating to the exercisability or termination of the Option in the event of a Corporate
Transaction or Change in Control. The Grantee shall be subject to reasonable limitations on the
number of requested exercises during any monthly or weekly period as determined by the
Administrator. In no event shall the Company issue fractional Shares.

(b) Method of Exercise. The Option shall be exercisable by delivery of an exercise
notice (a form of which is attached as Exhibit A) or by such other procedure as specified from time
to time by the Administrator which shall state the election to exercise the Option, the whole
number of Shares in respect of which the Option is being exercised, and such other provisions as
may be required by the Administrator. The exercise notice shall be delivered in person, by
certified mail, or by such other method (including electronic transmission) as determined from time
to time by the Administrator to the Company accompanied by payment of
the Exercise Price. The Option shall be deemed to be exercised upon receipt by the Company of
such notice accompanied by the Exercise Price, which, to the extent selected, shall be deemed to be
satisfied by use of the broker-dealer sale and remittance procedure to pay the Exercise Price
provided in Section 4(d), below.

 

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(c) Taxes. No Shares will be delivered to the Grantee or other person pursuant to the
exercise of the Option until the Grantee or other person has made arrangements acceptable to the
Administrator for the satisfaction of applicable income tax and employment tax withholding
obligations, including, without limitation, such other tax obligations of the Grantee incident to
the receipt of Shares. Upon exercise of the Option, the Company or the Grantee’s employer may
offset or withhold (from any amount owed by the Company or the Grantee’s employer to the Grantee)
or collect from the Grantee or other person an amount sufficient to satisfy such tax withholding
obligations.

3. Intentionally Omitted.

4. Method of Payment. Payment of the Exercise Price shall be made by any of the
following, or a combination thereof, at the election of the Grantee; provided, however, that such
exercise method does not then violate any Applicable Law, provided further, that the portion of the
Exercise Price equal to the par value of the Shares must be paid in cash or other legal
consideration permitted by the Delaware General Corporation Law:

(a) cash;

(b) check;

(c) if the exercise occurs on or after the Registration Date, surrender of Shares or delivery
of a properly executed form of attestation of ownership of Shares as the Administrator may require
which have a Fair Market Value on the date of surrender or attestation equal to the aggregate
Exercise Price of the Shares as to which the Option is being exercised, provided, however, that
Shares acquired under the Plan or any other equity compensation plan or agreement of the Company
must have been held by the Grantee for a period of more than six (6) months (and not used for
another Award exercise by attestation during such period); or

(d) if the exercise occurs on or after the Registration Date, payment through a broker-dealer
sale and remittance procedure pursuant to which the Grantee (i) shall provide written instructions
to a Company-designated brokerage firm to effect the immediate sale of some or all of the purchased
Shares and remit to the Company sufficient funds to cover the aggregate exercise price payable for
the purchased Shares and (ii) shall provide written directives to the Company to deliver the
certificates for the purchased Shares directly to such brokerage firm in order to complete the sale
transaction.

 

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5. Termination or Change of Continuous Service. In the event the Grantee’s Continuous
Service terminates, other than for Cause, the Grantee may, but only during the Post-Termination
Exercise Period, exercise the portion of the Option that was vested at the date of such termination
(the “Termination Date”). The Post-Termination Exercise Period shall commence on
the Termination Date. In the event of termination of the Grantee’s Continuous Service for
Cause, the Grantee’s right to exercise the Option shall, except as otherwise determined by the
Administrator, terminate concurrently with the termination of the Grantee’s Continuous Service
(also the “Termination Date”). In no event, however, shall the Option be exercised later than the
Expiration Date set forth in the Notice. In the event of the Grantee’s change in status from
Employee, Director or Consultant to any other status of Employee, Director or Consultant, the
Option shall remain in effect and the Option shall continue to vest in accordance with the Vesting
Schedule set forth in the Notice; provided, however, with respect to any Incentive Stock Option
that shall remain in effect after a change in status from Employee to Director or Consultant, such
Incentive Stock Option shall cease to be treated as an Incentive Stock Option and shall be treated
as a Non-Qualified Stock Option on the day three (3) months and one (1) day following such change
in status. Except as provided in Sections 6 and 7 below, to the extent that the Option was
unvested on the Termination Date, or if the Grantee does not exercise the vested portion of the
Option within the Post-Termination Exercise Period, the Option shall terminate.

6. Disability of Grantee. In the event the Grantee’s Continuous Service terminates as
a result of his or her Disability, the Grantee may, but only within twelve (12) months commencing
on the Termination Date (but in no event later than the Expiration Date), exercise the portion of
the Option that was vested on the Termination Date; provided, however, that if such Disability is
not a “disability” as such term is defined in Section 22(e)(3) of the Code and the Option is an
Incentive Stock Option, such Incentive Stock Option shall cease to be treated as an Incentive Stock
Option and shall be treated as a Non-Qualified Stock Option on the day three (3) months and one (1)
day following the Termination Date. To the extent that the Option was unvested on the Termination
Date, or if the Grantee does not exercise the vested portion of the Option within the time
specified herein, the Option shall terminate. Section 22(e)(3) of the Code provides that an
individual is permanently and totally disabled if he or she is unable to engage in any substantial
gainful activity by reason of any medically determinable physical or mental impairment which can be
expected to result in death or which has lasted or can be expected to last for a continuous period
of not less than twelve (12) months.

7. Death of Grantee. In the event of the termination of the Grantee’s Continuous
Service as a result of his or her death, or in the event of the Grantee’s death during the
Post-Termination Exercise Period or during the twelve (12) month period following the Grantee’s
termination of Continuous Service as a result of his or her Disability, the person who acquired the
right to exercise the Option pursuant to Section 8 may exercise the portion of the Option that was
vested at the date of termination within twelve (12) months commencing on the date of death (but in
no event later than the Expiration Date). To the extent that the Option was unvested on the date
of death, or if the vested portion of the Option is not exercised within the time specified herein,
the Option shall terminate.

 

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8. Transferability of Option. The Option, if an Incentive Stock Option, may not be
transferred in any manner other than by will or by the laws of descent and distribution and may be
exercised during the lifetime of the Grantee only by the Grantee. The Option, if a Non-Qualified
Stock Option, may not be transferred in any manner other than by will or by the laws of descent and
distribution, provided, however, that a Non-Qualified Stock Option may be transferred during the
lifetime of the Grantee to the extent and in the manner authorized by the Administrator.
Notwithstanding the foregoing, the Grantee may designate one or more beneficiaries of the
Grantee’s Incentive Stock Option or Non-Qualified Stock Option in the event of the Grantee’s death
on a beneficiary designation form provided by the Administrator. Following the death of the
Grantee, the Option, to the extent provided in Section 7, may be exercised (a) by the person or
persons designated under the deceased Grantee’s beneficiary designation or (b) in the absence of an
effectively designated beneficiary, by the Grantee’s legal representative or by any person
empowered to do so under the deceased Grantee’s will or under the then applicable laws of descent
and distribution. The terms of the Option shall be binding upon the executors, administrators,
heirs, successors and transferees of the Grantee.

9. Term of Option. The Option must be exercised no later than the Expiration Date set
forth in the Notice or such earlier date as otherwise provided herein. After the Expiration Date
or such earlier date, the Option shall be of no further force or effect and may not be exercised.

10. Stop-Transfer Notices. In order to ensure compliance with the restrictions on
transfer set forth in this Option Agreement, the Notice or the Plan, the Company may issue
appropriate “stop transfer” instructions to its transfer agent, if any, and, if the Company
transfers its own securities, it may make appropriate notations to the same effect in its own
records.

11. Refusal to Transfer. The Company shall not be required (i) to transfer on its
books any Shares that have been sold or otherwise transferred in violation of any of the provisions
of this Option Agreement or (ii) to treat as owner of such Shares or to accord the right to vote or
pay dividends to any purchaser or other transferee to whom such Shares shall have been so
transferred.

12. Tax Consequences. Set forth below is a brief summary as of the date of this
Option Agreement of some of the federal tax consequences of exercise of the Option and disposition
of the Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE
SUBJECT TO CHANGE. THE GRANTEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THE OPTION OR
DISPOSING OF THE SHARES.

(a) Exercise of Incentive Stock Option. If the Option qualifies as an Incentive Stock
Option, there will be no regular federal income tax liability upon the exercise of the Option,
although the excess, if any, of the Fair Market Value of the Shares on the date of exercise over
the Exercise Price will be treated as income for purposes of the alternative minimum tax for
federal tax purposes and may subject the Grantee to the alternative minimum tax in the year of
exercise.

(b) Exercise of Incentive Stock Option Following Disability. If the Grantee’s
Continuous Service terminates as a result of Disability that is not permanent and total disability
as such term is defined in Section 22(e)(3) of the Code, to the extent permitted on the date of
termination, the Grantee must exercise an Incentive Stock Option within three (3) months of such
termination for the Incentive Stock Option to be qualified as an Incentive Stock Option. Section
22(e)(3) of the Code provides that an individual is permanently and totally disabled if he or she
is unable to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in death or which
has lasted or can be expected to last for a continuous period of not less than twelve (12) months.

 

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(c) Exercise of Non-Qualified Stock Option. On exercise of a Non-Qualified Stock
Option, the Grantee will be treated as having received compensation income (taxable at ordinary
income tax rates) equal to the excess, if any, of the Fair Market Value of the Shares on the date
of exercise over the Exercise Price. If the Grantee is an Employee or a former Employee, the
Company will be required to withhold from the Grantee’s compensation or collect from the Grantee
and pay to the applicable taxing authorities an amount in cash equal to a percentage of this
compensation income at the time of exercise, and may refuse to honor the exercise and refuse to
deliver Shares if such withholding amounts are not delivered at the time of exercise.

(d) Disposition of Shares. In the case of a Non-Qualified Stock Option, if Shares are
held for more than one year, any gain realized on disposition of the Shares will be treated as
long-term capital gain for federal income tax purposes. In the case of an Incentive Stock Option,
if Shares transferred pursuant to the Option are held for more than one year after receipt of the
Shares and are disposed more than two years after the Date of Award, any gain realized on
disposition of the Shares also will be treated as capital gain for federal income tax purposes and
subject to the same tax rates and holding periods that apply to Shares acquired upon exercise of a
Non-Qualified Stock Option. If Shares purchased under an Incentive Stock Option are disposed of
prior to the expiration of such one-year or two-year periods, any gain realized on such disposition
will be treated as compensation income (taxable at ordinary income rates) to the extent of the
difference between the Exercise Price and the lesser of (i) the Fair Market Value of the Shares on
the date of exercise, or (ii) the sale price of the Shares.

13. Intentionally Omitted.

14. Entire Agreement: Governing Law. The Notice, the Plan and this Option Agreement
constitute the entire agreement of the parties with respect to the subject matter hereof and
supersede in their entirety all prior undertakings and agreements of the Company and the Grantee
with respect to the subject matter hereof, and may not be modified adversely to the Grantee’s
interest except by means of a writing signed by the Company and the Grantee. Nothing in the
Notice, the Plan and this Option Agreement (except as expressly provided therein) is intended to
confer any rights or remedies on any persons other than the parties. The Notice, the Plan and this
Option Agreement are to be construed in accordance with and governed by the internal laws of the
State of Nevada without giving effect to any choice of law rule that would cause the application of
the laws of any jurisdiction other than the internal laws of the State of Nevada to the rights and
duties of the parties. Should any provision of the Notice, the Plan or this Option Agreement be
determined to be illegal or unenforceable, such provision shall be enforced to the fullest extent
allowed by law and the other provisions shall nevertheless remain effective and shall remain
enforceable.

15. Construction. The captions used in the Notice and this Option Agreement are
inserted for convenience and shall not be deemed a part of the Option for construction or
interpretation. Except when otherwise indicated by the context, the singular shall include the
plural and the plural shall include the singular. Use of the term “or” is not intended to be
exclusive, unless the context clearly requires otherwise.

 

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16. Administration and Interpretation. Any question or dispute regarding the
administration or interpretation of the Notice, the Plan or this Option Agreement shall be
submitted by the Grantee or by the Company to the Administrator. The resolution of such question
or dispute by the Administrator shall be final and binding on all persons.

17. Venue and Waiver of Jury Trial. The Company, the Grantee, and the Grantee’s
assignees pursuant to Section 8 (the “parties”) agree that any suit, action, or proceeding arising
out of or relating to the Notice, the Plan or this Option Agreement shall be brought in the United
States District Court for the District of Nevada (or should such court lack jurisdiction to hear
such action, suit or proceeding, in a Nevada state court in the County of Clark) and that the
parties shall submit to the jurisdiction of such court. The parties irrevocably waive, to the
fullest extent permitted by law, any objection the party may have to the laying of venue for any
such suit, action or proceeding brought in such court. THE PARTIES ALSO EXPRESSLY WAIVE ANY RIGHT
THEY HAVE OR MAY HAVE TO A JURY TRIAL OF ANY SUCH SUIT, ACTION OR PROCEEDING. If any one or more
provisions of this Section 17 shall for any reason be held invalid or unenforceable, it is the
specific intent of the parties that such provisions shall be modified to the minimum extent
necessary to make it or its application valid and enforceable.

18. Notices. Any notice required or permitted hereunder shall be given in writing and
shall be deemed effectively given upon personal delivery, upon deposit for delivery by an
internationally recognized express mail courier service or upon deposit in the United States mail
by certified mail (if the parties are within the United States), with postage and fees prepaid,
addressed to the other party at its address as shown in these instruments, or to such other address
as such party may designate in writing from time to time to the other party.

END OF AGREEMENT

 

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EXHIBIT A

GLOBAL CASH ACCESS HOLDINGS, INC. 2005 STOCK INCENTIVE PLAN

EXERCISE NOTICE

 _____ 

Attention: Secretary

1. Effective as of today,
 _____ 

, the undersigned (the “Grantee”) hereby elects to
exercise the Grantee’s option to purchase
 _____ 

shares of the Common Stock (the “Shares”) of
Global Cash Access Holdings, Inc., (the “Company”) under and pursuant to the Company’s 2005 Stock
Incentive Plan, as amended from time to time (the “Plan”) and the [Incentive] [Non-Qualified] Stock
Option Award Agreement (the “Option Agreement”) and Notice of Stock Option Award (the “Notice”)
dated October 31, 2007. Unless otherwise defined herein, the terms defined in the Plan shall have
the same defined meanings in this Exercise Notice.

2. Representations of the Grantee. The Grantee acknowledges that the Grantee has
received, read and understood the Notice, the Plan and the Option Agreement and agrees to abide by
and be bound by their terms and conditions.

3. Rights as Stockholder. Until the stock certificate evidencing such Shares is
issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized
transfer agent of the Company), no right to vote or receive dividends or any other rights as a
stockholder shall exist with respect to the Shares, notwithstanding the exercise of the Option.
The Company shall issue (or cause to be issued) such stock certificate promptly after the Option is
exercised. No adjustment will be made for a dividend or other right for which the record date is
prior to the date the stock certificate is issued, except as provided in Section 10 of the Plan.

4. Delivery of Payment. The Grantee herewith delivers to the Company the full
Exercise Price for the Shares, which, to the extent selected, shall be deemed to be satisfied by
use of the broker-dealer sale and remittance procedure to pay the Exercise Price provided in
Section 4(d) of the Option Agreement.

5. Tax Consultation. The Grantee understands that the Grantee may suffer adverse tax
consequences as a result of the Grantee’s purchase or disposition of the Shares. The Grantee
represents that the Grantee has consulted with any tax consultants the Grantee deems advisable in
connection with the purchase or disposition of the Shares and that the Grantee is not relying on
the Company for any tax advice.

6. Taxes. The Grantee agrees to satisfy all applicable federal, state and local
income and employment tax withholding obligations and herewith delivers to the Company the full
amount of such obligations or has made arrangements acceptable to the Company to satisfy such
obligations. In the case of an Incentive Stock Option, the Grantee also agrees, as partial
consideration for the designation of the Option as an Incentive Stock Option, to notify the Company
in writing within thirty (30) days of any disposition of any shares acquired by exercise
of the Option if such disposition occurs within two (2) years from the Date of Award or within
one (1) year from the date the Shares were transferred to the Grantee.

 

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7. Intentionally Omitted.

8. Successors and Assigns. The Company may assign any of its rights under this
Exercise Notice to single or multiple assignees, and this agreement shall inure to the benefit of
the successors and assigns of the Company. Subject to the restrictions on transfer herein set
forth, this Exercise Notice shall be binding upon the Grantee and his or her heirs, executors,
administrators, successors and assigns.

9. Construction. The captions used in this Exercise Notice are inserted for
convenience and shall not be deemed a part of this agreement for construction or interpretation.
Except when otherwise indicated by the context, the singular shall include the plural and the
plural shall include the singular. Use of the term “or” is not intended to be exclusive, unless
the context clearly requires otherwise.

10. Administration and Interpretation. The Grantee hereby agrees that any question or
dispute regarding the administration or interpretation of this Exercise Notice shall be submitted
by the Grantee or by the Company to the Administrator. The resolution of such question or dispute
by the Administrator shall be final and binding on all persons.

11. Governing Law; Severability. This Exercise Notice is to be construed in
accordance with and governed by the internal laws of the State of Nevada without giving effect to
any choice of law rule that would cause the application of the laws of any jurisdiction other than
the internal laws of the State of Nevada to the rights and duties of the parties. Should any
provision of this Exercise Notice be determined by a court of law to be illegal or unenforceable,
such provision shall be enforced to the fullest extent allowed by law and the other provisions
shall nevertheless remain effective and shall remain enforceable.

12. Notices. Any notice required or permitted hereunder shall be given in writing and
shall be deemed effectively given upon personal delivery, upon deposit for delivery by an
internationally recognized express mail courier service or upon deposit in the United States mail
by certified mail (if the parties are within the United States), with postage and fees prepaid,
addressed to the other party at its address as shown below beneath its signature, or to such other
address as such party may designate in writing from time to time to the other party.

13. Further Instruments. The parties agree to execute such further instruments and to
take such further action as may be reasonably necessary to carry out the purposes and intent of
this agreement.

14. Entire Agreement. The Notice, the Plan and the Option Agreement are incorporated
herein by reference and together with this Exercise Notice constitute the entire agreement of the
parties with respect to the subject matter hereof and supersede in their entirety all prior
undertakings and agreements of the Company and the Grantee with respect to the subject matter
hereof, and may not be modified adversely to the Grantee’s interest except by means of a writing
signed by the Company and the Grantee. Nothing in the Notice, the Plan, the
Option Agreement and this Exercise Notice (except as expressly provided therein) is intended
to confer any rights or remedies on any persons other than the parties.

 

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	Submitted by:	 	Accepted by:
	 
	 	 	 	 
	GRANTEE:	 	GLOBAL CASH ACCESS HOLDINGS, INC.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Title:	 	 
	 

	 	 	 	 
	Scott Betts
	 	 	 	 
	 
	 	 	 	 
	Address:	 	Address:
	 
	 	 	 	 
	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 

 

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GLOBAL CASH ACCESS HOLDINGS, INC. 2005 STOCK INCENTIVE PLAN

NOTICE OF STOCK OPTION AWARD

	 	 	 
	Grantee’s Name and Address:

	 	Scott Betts
	 
	 	 
	 

	 	 
	 
	 	 
	 

	 	 

You (the “Grantee”) have been granted an option to purchase shares of Common Stock, subject to
the terms and conditions of this Notice of Stock Option Award (the “Notice”), the Global Cash
Access Holdings, Inc. 2005 Stock Incentive Plan, as amended from time to time (the “Plan”) and the
Stock Option Award Agreement (the “Option Agreement”) attached hereto, as follows. Unless
otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in
this Notice.

	 	 	 
	Award Number
	 	 
	 
	 	 
	Date of Award
	 	October 31, 2007
	 
	 	 
	Vesting Commencement Date
	 	October 31, 2007
	 
	 	 
	Exercise Price per Share
	 	$9.99
	 
	 	 
	Total Number of Shares Subject
to the Option (the “Shares”)
	 	959,960
	 
	 	 
	Total Exercise Price
	 	$9,590,000.40
	 
	 	 
	Type of Option:
	 	Non-Qualified Stock Option
	 
	 	 
	Expiration Date:
	 	October 31, 2017
	 
	 	 
	Post-Termination Exercise Period:
	 	Three (3) Months

Vesting Schedule:

Subject to the Grantee’s Continuous Service and other limitations set forth in this Notice,
the Plan and the Option Agreement, the Option may be exercised, in whole or in part, in accordance
with the following schedule:

25% of the Shares subject to the Option shall vest twelve months after the Vesting
Commencement Date, and 1/36th of the remaining number of Shares subject to the Option shall vest on
each monthly anniversary of the Vesting Commencement Date thereafter.

In the event of termination of the Grantee’s Continuous Service for Cause, the Grantee’s right
to exercise the Option shall terminate concurrently with the termination of the Grantee’s
Continuous Service, except as otherwise determined by the Administrator.

In the event that, after the first anniversary of the Vesting Commencement Date, the Grantee’s
Continuous Service is terminated by the Company without Cause (as defined in that certain
Employment Agreement, dated as of October 31, 2007, by and between the Company and
Grantee) or by the Grantee for Good Reason (as defined in that certain Employment Agreement,
dated as of October 31, 2007, by and between the Company and Grantee), fifty percent (50%) of the
Shares subject to the Option that have not previously vested shall become vested and exercisable
upon such termination.

 

1

 

In the event of a Corporate Transaction or a Change in Control, all of the Shares subject to
the Option shall become vested and exercisable immediately prior to the consummation of such
Corporate Transaction or Change in Control, provided that the Grantee’s Continuous Service has not
terminated prior to the consummation of such Corporate Transaction or Change in Control.

Effect of Acceleration on Incentive Stock Option. To the extent that the Option is an
Incentive Stock Option and is accelerated in connection with a Corporate Transaction or Change in
Control, the Option shall remain exercisable as an Incentive Stock Option under the Code only to
the extent the $100,000 dollar limitation of Section 422(d) of the Code is not exceeded.

During any authorized leave of absence, the vesting of the Option as provided in this schedule
shall be suspended after the leave of absence exceeds a period of ninety (90) days. Vesting of the
Option shall resume upon the Grantee’s termination of the leave of absence and return to service to
the Company or a Related Entity. The Vesting Schedule of the Option shall be extended by the
length of the suspension.

IN WITNESS WHEREOF, the Company and the Grantee have executed this Notice and agree that the
Option is to be governed by the terms and conditions of this Notice, the Plan, and the Option
Agreement.

	 	 	 	 	 
	 	 	Global Cash Access Holdings, Inc.

a Delaware corporation
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Karim Maskatiya, Co-Chairman of the Board

THE GRANTEE ACKNOWLEDGES AND AGREES THAT THE SHARES SUBJECT TO THE OPTION SHALL VEST, IF AT ALL,
ONLY DURING THE PERIOD OF THE GRANTEE’S CONTINUOUS SERVICE (NOT THROUGH THE ACT OF BEING HIRED,
BEING GRANTED THE OPTION OR ACQUIRING SHARES HEREUNDER). THE GRANTEE FURTHER ACKNOWLEDGES AND
AGREES THAT NOTHING IN THIS NOTICE, THE OPTION AGREEMENT, OR THE PLAN SHALL CONFER UPON THE GRANTEE
ANY RIGHT WITH RESPECT TO FUTURE AWARDS OR CONTINUATION OF THE GRANTEE’S CONTINUOUS SERVICE, NOR
SHALL IT INTERFERE IN ANY WAY WITH THE GRANTEE’S RIGHT OR THE RIGHT OF THE COMPANY OR RELATED
ENTITY TO WHICH THE GRANTEE PROVIDES SERVICES TO TERMINATE THE GRANTEE’S CONTINUOUS SERVICE, WITH
OR WITHOUT CAUSE, AND WITH OR WITHOUT NOTICE. THE GRANTEE ACKNOWLEDGES THAT UNLESS THE GRANTEE HAS
A WRITTEN EMPLOYMENT AGREEMENT WITH THE COMPANY TO THE CONTRARY, THE GRANTEE’S STATUS IS AT WILL.

 

2

 

The Grantee acknowledges receipt of a copy of the Plan and the Option Agreement, and
represents that he or she is familiar with the terms and provisions thereof, and hereby accepts the
Option subject to all of the terms and provisions hereof and thereof. The Grantee has reviewed
this Notice, the Plan, and the Option Agreement in their entirety, has had an opportunity to obtain
the advice of counsel prior to executing this Notice, and fully understands all provisions of this
Notice, the Plan and the Option Agreement. The Grantee hereby agrees that all questions of
interpretation and administration relating to this Notice, the Plan and the Option Agreement shall
be resolved by the Administrator in accordance with Section 16 of the Option Agreement. The
Grantee further agrees to the venue selection and waiver of a jury trial in accordance with Section
17 of the Option Agreement. The Grantee further agrees to notify the Company upon any change in
the residence address indicated in this Notice.

	 	 	 	 	 	 	 
	Dated:

	 	 	 	Signed:	 	 
	 

	 	 
	 	 	 	 
	 

	 	 	 	 	 	Grantee

 

3

 

Award Number: ___

GLOBAL CASH ACCESS HOLDINGS, INC. 2005 STOCK INCENTIVE PLAN

STOCK OPTION AWARD AGREEMENT

1. Grant of Option. Global Cash Access Holdings, Inc., a Delaware corporation (the
“Company”), hereby grants to the Grantee (the “Grantee”) named in the Notice of Stock Option Award
(the “Notice”), an option (the “Option”) to purchase the Total Number of Shares of Common Stock
subject to the Option (the “Shares”) set forth in the Notice, at the Exercise Price per Share set
forth in the Notice (the “Exercise Price”) subject to the terms and provisions of the Notice, this
Stock Option Award Agreement (the “Option Agreement”) and the Company’s 2005 Stock Incentive Plan,
as amended from time to time (the “Plan”), which are incorporated herein by reference. Unless
otherwise defined herein, the terms defined in the Plan shall have the same defined meanings in
this Option Agreement.

If designated in the Notice as an Incentive Stock Option, the Option is intended to qualify as
an Incentive Stock Option as defined in Section 422 of the Code. However, notwithstanding such
designation, the Option will qualify as an Incentive Stock Option under the Code only to the extent
the $100,000 dollar limitation of Section 422(d) of the Code is not exceeded. The $100,000
limitation of Section 422(d) of the Code is calculated based on the aggregate Fair Market Value of
the Shares subject to options designated as Incentive Stock Options which become exercisable for
the first time by the Grantee during any calendar year (under all plans of the Company or any
Parent or Subsidiary of the Company). For purposes of this calculation, Incentive Stock Options
shall be taken into account in the order in which they were granted, and the Fair Market Value of
the shares subject to such options shall be determined as of the grant date of the relevant option.

2. Exercise of Option.

(a) Right to Exercise. The Option shall be exercisable during its term in accordance
with the Vesting Schedule set out in the Notice and with the applicable provisions of the Plan and
this Option Agreement. The Option shall be subject to the provisions of Section 11 of the Plan and
the Notice relating to the exercisability or termination of the Option in the event of a Corporate
Transaction or Change in Control. The Grantee shall be subject to reasonable limitations on the
number of requested exercises during any monthly or weekly period as determined by the
Administrator. In no event shall the Company issue fractional Shares.

(b) Method of Exercise. The Option shall be exercisable by delivery of an exercise
notice (a form of which is attached as Exhibit A) or by such other procedure as specified from time
to time by the Administrator which shall state the election to exercise the Option, the whole
number of Shares in respect of which the Option is being exercised, and such other provisions as
may be required by the Administrator. The exercise notice shall be delivered in person, by
certified mail, or by such other method (including electronic transmission) as determined from time
to time by the Administrator to the Company accompanied by payment of
the Exercise Price. The Option shall be deemed to be exercised upon receipt by the Company of
such notice accompanied by the Exercise Price, which, to the extent selected, shall be deemed to be
satisfied by use of the broker-dealer sale and remittance procedure to pay the Exercise Price
provided in Section 4(d), below.

 

1

 

(c) Taxes. No Shares will be delivered to the Grantee or other person pursuant to the
exercise of the Option until the Grantee or other person has made arrangements acceptable to the
Administrator for the satisfaction of applicable income tax and employment tax withholding
obligations, including, without limitation, such other tax obligations of the Grantee incident to
the receipt of Shares. Upon exercise of the Option, the Company or the Grantee’s employer may
offset or withhold (from any amount owed by the Company or the Grantee’s employer to the Grantee)
or collect from the Grantee or other person an amount sufficient to satisfy such tax withholding
obligations.

3. Intentionally Omitted.

4. Method of Payment. Payment of the Exercise Price shall be made by any of the
following, or a combination thereof, at the election of the Grantee; provided, however, that such
exercise method does not then violate any Applicable Law, provided further, that the portion of the
Exercise Price equal to the par value of the Shares must be paid in cash or other legal
consideration permitted by the Delaware General Corporation Law:

(a) cash;

(b) check;

(c) if the exercise occurs on or after the Registration Date, surrender of Shares or delivery
of a properly executed form of attestation of ownership of Shares as the Administrator may require
which have a Fair Market Value on the date of surrender or attestation equal to the aggregate
Exercise Price of the Shares as to which the Option is being exercised, provided, however, that
Shares acquired under the Plan or any other equity compensation plan or agreement of the Company
must have been held by the Grantee for a period of more than six (6) months (and not used for
another Award exercise by attestation during such period); or

(d) if the exercise occurs on or after the Registration Date, payment through a broker-dealer
sale and remittance procedure pursuant to which the Grantee (i) shall provide written instructions
to a Company-designated brokerage firm to effect the immediate sale of some or all of the purchased
Shares and remit to the Company sufficient funds to cover the aggregate exercise price payable for
the purchased Shares and (ii) shall provide written directives to the Company to deliver the
certificates for the purchased Shares directly to such brokerage firm in order to complete the sale
transaction.

 

2

 

5. Termination or Change of Continuous Service. In the event the Grantee’s Continuous
Service terminates, other than for Cause, the Grantee may, but only during the Post-Termination
Exercise Period, exercise the portion of the Option that was vested at the date of such termination
(the “Termination Date”). The Post-Termination Exercise Period shall commence on
the Termination Date. In the event of termination of the Grantee’s Continuous Service for
Cause, the Grantee’s right to exercise the Option shall, except as otherwise determined by the
Administrator, terminate concurrently with the termination of the Grantee’s Continuous Service
(also the “Termination Date”). In no event, however, shall the Option be exercised later than the
Expiration Date set forth in the Notice. In the event of the Grantee’s change in status from
Employee, Director or Consultant to any other status of Employee, Director or Consultant, the
Option shall remain in effect and the Option shall continue to vest in accordance with the Vesting
Schedule set forth in the Notice; provided, however, with respect to any Incentive Stock Option
that shall remain in effect after a change in status from Employee to Director or Consultant, such
Incentive Stock Option shall cease to be treated as an Incentive Stock Option and shall be treated
as a Non-Qualified Stock Option on the day three (3) months and one (1) day following such change
in status. Except as provided in Sections 6 and 7 below, to the extent that the Option was
unvested on the Termination Date, or if the Grantee does not exercise the vested portion of the
Option within the Post-Termination Exercise Period, the Option shall terminate.

6. Disability of Grantee. In the event the Grantee’s Continuous Service terminates as
a result of his or her Disability, the Grantee may, but only within twelve (12) months commencing
on the Termination Date (but in no event later than the Expiration Date), exercise the portion of
the Option that was vested on the Termination Date; provided, however, that if such Disability is
not a “disability” as such term is defined in Section 22(e)(3) of the Code and the Option is an
Incentive Stock Option, such Incentive Stock Option shall cease to be treated as an Incentive Stock
Option and shall be treated as a Non-Qualified Stock Option on the day three (3) months and one (1)
day following the Termination Date. To the extent that the Option was unvested on the Termination
Date, or if the Grantee does not exercise the vested portion of the Option within the time
specified herein, the Option shall terminate. Section 22(e)(3) of the Code provides that an
individual is permanently and totally disabled if he or she is unable to engage in any substantial
gainful activity by reason of any medically determinable physical or mental impairment which can be
expected to result in death or which has lasted or can be expected to last for a continuous period
of not less than twelve (12) months.

7. Death of Grantee. In the event of the termination of the Grantee’s Continuous
Service as a result of his or her death, or in the event of the Grantee’s death during the
Post-Termination Exercise Period or during the twelve (12) month period following the Grantee’s
termination of Continuous Service as a result of his or her Disability, the person who acquired the
right to exercise the Option pursuant to Section 8 may exercise the portion of the Option that was
vested at the date of termination within twelve (12) months commencing on the date of death (but in
no event later than the Expiration Date). To the extent that the Option was unvested on the date
of death, or if the vested portion of the Option is not exercised within the time specified herein,
the Option shall terminate.

 

3

 

8. Transferability of Option. The Option, if an Incentive Stock Option, may not be
transferred in any manner other than by will or by the laws of descent and distribution and may be
exercised during the lifetime of the Grantee only by the Grantee. The Option, if a Non-Qualified
Stock Option, may not be transferred in any manner other than by will or by the laws of descent and
distribution, provided, however, that a Non-Qualified Stock Option may be transferred during the
lifetime of the Grantee to the extent and in the manner authorized by the Administrator.
Notwithstanding the foregoing, the Grantee may designate one or more beneficiaries of the
Grantee’s Incentive Stock Option or Non-Qualified Stock Option in the event of the Grantee’s death
on a beneficiary designation form provided by the Administrator. Following the death of the
Grantee, the Option, to the extent provided in Section 7, may be exercised (a) by the person or
persons designated under the deceased Grantee’s beneficiary designation or (b) in the absence of an
effectively designated beneficiary, by the Grantee’s legal representative or by any person
empowered to do so under the deceased Grantee’s will or under the then applicable laws of descent
and distribution. The terms of the Option shall be binding upon the executors, administrators,
heirs, successors and transferees of the Grantee.

9. Term of Option. The Option must be exercised no later than the Expiration Date set
forth in the Notice or such earlier date as otherwise provided herein. After the Expiration Date
or such earlier date, the Option shall be of no further force or effect and may not be exercised.

10. Stop-Transfer Notices. In order to ensure compliance with the restrictions on
transfer set forth in this Option Agreement, the Notice or the Plan, the Company may issue
appropriate “stop transfer” instructions to its transfer agent, if any, and, if the Company
transfers its own securities, it may make appropriate notations to the same effect in its own
records.

11. Refusal to Transfer. The Company shall not be required (i) to transfer on its
books any Shares that have been sold or otherwise transferred in violation of any of the provisions
of this Option Agreement or (ii) to treat as owner of such Shares or to accord the right to vote or
pay dividends to any purchaser or other transferee to whom such Shares shall have been so
transferred.

12. Tax Consequences. Set forth below is a brief summary as of the date of this
Option Agreement of some of the federal tax consequences of exercise of the Option and disposition
of the Shares. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND THE TAX LAWS AND REGULATIONS ARE
SUBJECT TO CHANGE. THE GRANTEE SHOULD CONSULT A TAX ADVISER BEFORE EXERCISING THE OPTION OR
DISPOSING OF THE SHARES.

(a) Exercise of Incentive Stock Option. If the Option qualifies as an Incentive Stock
Option, there will be no regular federal income tax liability upon the exercise of the Option,
although the excess, if any, of the Fair Market Value of the Shares on the date of exercise over
the Exercise Price will be treated as income for purposes of the alternative minimum tax for
federal tax purposes and may subject the Grantee to the alternative minimum tax in the year of
exercise.

(b) Exercise of Incentive Stock Option Following Disability. If the Grantee’s
Continuous Service terminates as a result of Disability that is not permanent and total disability
as such term is defined in Section 22(e)(3) of the Code, to the extent permitted on the date of
termination, the Grantee must exercise an Incentive Stock Option within three (3) months of such
termination for the Incentive Stock Option to be qualified as an Incentive Stock Option. Section
22(e)(3) of the Code provides that an individual is permanently and totally disabled if he or she
is unable to engage in any substantial gainful activity by reason of any medically
determinable physical or mental impairment which can be expected to result in death or which
has lasted or can be expected to last for a continuous period of not less than twelve (12) months.

 

4

 

(c) Exercise of Non-Qualified Stock Option. On exercise of a Non-Qualified Stock
Option, the Grantee will be treated as having received compensation income (taxable at ordinary
income tax rates) equal to the excess, if any, of the Fair Market Value of the Shares on the date
of exercise over the Exercise Price. If the Grantee is an Employee or a former Employee, the
Company will be required to withhold from the Grantee’s compensation or collect from the Grantee
and pay to the applicable taxing authorities an amount in cash equal to a percentage of this
compensation income at the time of exercise, and may refuse to honor the exercise and refuse to
deliver Shares if such withholding amounts are not delivered at the time of exercise.

(d) Disposition of Shares. In the case of a Non-Qualified Stock Option, if Shares are
held for more than one year, any gain realized on disposition of the Shares will be treated as
long-term capital gain for federal income tax purposes. In the case of an Incentive Stock Option,
if Shares transferred pursuant to the Option are held for more than one year after receipt of the
Shares and are disposed more than two years after the Date of Award, any gain realized on
disposition of the Shares also will be treated as capital gain for federal income tax purposes and
subject to the same tax rates and holding periods that apply to Shares acquired upon exercise of a
Non-Qualified Stock Option. If Shares purchased under an Incentive Stock Option are disposed of
prior to the expiration of such one-year or two-year periods, any gain realized on such disposition
will be treated as compensation income (taxable at ordinary income rates) to the extent of the
difference between the Exercise Price and the lesser of (i) the Fair Market Value of the Shares on
the date of exercise, or (ii) the sale price of the Shares.

13. Intentionally Omitted.

14. Entire Agreement: Governing Law. The Notice, the Plan and this Option Agreement
constitute the entire agreement of the parties with respect to the subject matter hereof and
supersede in their entirety all prior undertakings and agreements of the Company and the Grantee
with respect to the subject matter hereof, and may not be modified adversely to the Grantee’s
interest except by means of a writing signed by the Company and the Grantee. Nothing in the
Notice, the Plan and this Option Agreement (except as expressly provided therein) is intended to
confer any rights or remedies on any persons other than the parties. The Notice, the Plan and this
Option Agreement are to be construed in accordance with and governed by the internal laws of the
State of Nevada without giving effect to any choice of law rule that would cause the application of
the laws of any jurisdiction other than the internal laws of the State of Nevada to the rights and
duties of the parties. Should any provision of the Notice, the Plan or this Option Agreement be
determined to be illegal or unenforceable, such provision shall be enforced to the fullest extent
allowed by law and the other provisions shall nevertheless remain effective and shall remain
enforceable.

15. Construction. The captions used in the Notice and this Option Agreement are
inserted for convenience and shall not be deemed a part of the Option for construction or
interpretation. Except when otherwise indicated by the context, the singular shall include the
plural and the plural shall include the singular. Use of the term “or” is not intended to be
exclusive, unless the context clearly requires otherwise.

 

5

 

16. Administration and Interpretation. Any question or dispute regarding the
administration or interpretation of the Notice, the Plan or this Option Agreement shall be
submitted by the Grantee or by the Company to the Administrator. The resolution of such question
or dispute by the Administrator shall be final and binding on all persons.

17. Venue and Waiver of Jury Trial. The Company, the Grantee, and the Grantee’s
assignees pursuant to Section 8 (the “parties”) agree that any suit, action, or proceeding arising
out of or relating to the Notice, the Plan or this Option Agreement shall be brought in the United
States District Court for the District of Nevada (or should such court lack jurisdiction to hear
such action, suit or proceeding, in a Nevada state court in the County of Clark) and that the
parties shall submit to the jurisdiction of such court. The parties irrevocably waive, to the
fullest extent permitted by law, any objection the party may have to the laying of venue for any
such suit, action or proceeding brought in such court. THE PARTIES ALSO EXPRESSLY WAIVE ANY RIGHT
THEY HAVE OR MAY HAVE TO A JURY TRIAL OF ANY SUCH SUIT, ACTION OR PROCEEDING. If any one or more
provisions of this Section 17 shall for any reason be held invalid or unenforceable, it is the
specific intent of the parties that such provisions shall be modified to the minimum extent
necessary to make it or its application valid and enforceable.

18. Notices. Any notice required or permitted hereunder shall be given in writing and
shall be deemed effectively given upon personal delivery, upon deposit for delivery by an
internationally recognized express mail courier service or upon deposit in the United States mail
by certified mail (if the parties are within the United States), with postage and fees prepaid,
addressed to the other party at its address as shown in these instruments, or to such other address
as such party may designate in writing from time to time to the other party.

END OF AGREEMENT

 

6

 

EXHIBIT A

GLOBAL CASH ACCESS HOLDINGS, INC. 2005 STOCK INCENTIVE PLAN

EXERCISE NOTICE

 _____ 

Attention: Secretary

1. Effective as of today,
 _____ 

, the undersigned (the “Grantee”) hereby elects to
exercise the Grantee’s option to purchase
 _____ 

shares of the Common Stock (the “Shares”) of
Global Cash Access Holdings, Inc., (the “Company”) under and pursuant to the Company’s 2005 Stock
Incentive Plan, as amended from time to time (the “Plan”) and the [Incentive] [Non-Qualified] Stock
Option Award Agreement (the “Option Agreement”) and Notice of Stock Option Award (the “Notice”)
dated October 31, 2007. Unless otherwise defined herein, the terms defined in the Plan shall have
the same defined meanings in this Exercise Notice.

2. Representations of the Grantee. The Grantee acknowledges that the Grantee has
received, read and understood the Notice, the Plan and the Option Agreement and agrees to abide by
and be bound by their terms and conditions.

3. Rights as Stockholder. Until the stock certificate evidencing such Shares is
issued (as evidenced by the appropriate entry on the books of the Company or of a duly authorized
transfer agent of the Company), no right to vote or receive dividends or any other rights as a
stockholder shall exist with respect to the Shares, notwithstanding the exercise of the Option.
The Company shall issue (or cause to be issued) such stock certificate promptly after the Option is
exercised. No adjustment will be made for a dividend or other right for which the record date is
prior to the date the stock certificate is issued, except as provided in Section 10 of the Plan.

4. Delivery of Payment. The Grantee herewith delivers to the Company the full
Exercise Price for the Shares, which, to the extent selected, shall be deemed to be satisfied by
use of the broker-dealer sale and remittance procedure to pay the Exercise Price provided in
Section 4(d) of the Option Agreement.

5. Tax Consultation. The Grantee understands that the Grantee may suffer adverse tax
consequences as a result of the Grantee’s purchase or disposition of the Shares. The Grantee
represents that the Grantee has consulted with any tax consultants the Grantee deems advisable in
connection with the purchase or disposition of the Shares and that the Grantee is not relying on
the Company for any tax advice.

6. Taxes. The Grantee agrees to satisfy all applicable federal, state and local
income and employment tax withholding obligations and herewith delivers to the Company the full
amount of such obligations or has made arrangements acceptable to the Company to satisfy such
obligations. In the case of an Incentive Stock Option, the Grantee also agrees, as partial
consideration for the designation of the Option as an Incentive Stock Option, to notify the Company
in writing within thirty (30) days of any disposition of any shares acquired by exercise
of the Option if such disposition occurs within two (2) years from the Date of Award or within
one (1) year from the date the Shares were transferred to the Grantee.

 

1

 

7. Intentionally Omitted.

8. Successors and Assigns. The Company may assign any of its rights under this
Exercise Notice to single or multiple assignees, and this agreement shall inure to the benefit of
the successors and assigns of the Company. Subject to the restrictions on transfer herein set
forth, this Exercise Notice shall be binding upon the Grantee and his or her heirs, executors,
administrators, successors and assigns.

9. Construction. The captions used in this Exercise Notice are inserted for
convenience and shall not be deemed a part of this agreement for construction or interpretation.
Except when otherwise indicated by the context, the singular shall include the plural and the
plural shall include the singular. Use of the term “or” is not intended to be exclusive, unless
the context clearly requires otherwise.

10. Administration and Interpretation. The Grantee hereby agrees that any question or
dispute regarding the administration or interpretation of this Exercise Notice shall be submitted
by the Grantee or by the Company to the Administrator. The resolution of such question or dispute
by the Administrator shall be final and binding on all persons.

11. Governing Law; Severability. This Exercise Notice is to be construed in
accordance with and governed by the internal laws of the State of Nevada without giving effect to
any choice of law rule that would cause the application of the laws of any jurisdiction other than
the internal laws of the State of Nevada to the rights and duties of the parties. Should any
provision of this Exercise Notice be determined by a court of law to be illegal or unenforceable,
such provision shall be enforced to the fullest extent allowed by law and the other provisions
shall nevertheless remain effective and shall remain enforceable.

12. Notices. Any notice required or permitted hereunder shall be given in writing and
shall be deemed effectively given upon personal delivery, upon deposit for delivery by an
internationally recognized express mail courier service or upon deposit in the United States mail
by certified mail (if the parties are within the United States), with postage and fees prepaid,
addressed to the other party at its address as shown below beneath its signature, or to such other
address as such party may designate in writing from time to time to the other party.

13. Further Instruments. The parties agree to execute such further instruments and to
take such further action as may be reasonably necessary to carry out the purposes and intent of
this agreement.

14. Entire Agreement. The Notice, the Plan and the Option Agreement are incorporated
herein by reference and together with this Exercise Notice constitute the entire agreement of the
parties with respect to the subject matter hereof and supersede in their entirety all prior
undertakings and agreements of the Company and the Grantee with respect to the subject matter
hereof, and may not be modified adversely to the Grantee’s interest except by means of a writing
signed by the Company and the Grantee. Nothing in the Notice, the Plan, the
Option Agreement and this Exercise Notice (except as expressly provided therein) is intended
to confer any rights or remedies on any persons other than the parties.

 

2

 

	 	 	 	 	 
	Submitted by:	 	Accepted by:
	 
	 	 	 	 
	GRANTEE:	 	GLOBAL CASH ACCESS HOLDINGS, INC.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	Title:	 	 
	 

	 	 	 	 
	Scott Betts
	 	 	 	 
	 
	 	 	 	 
	Address:	 	Address:
	 
	 	 	 	 
	 	 	 
	 
	 	 	 	 
	 
	 	 	 	 

 

3exhibit10_1.htm

    
      EXHIBIT
        10.1

      

      EMPLOYMENT
        AGREEMENT

      

      

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

       

      RECITALS

       

       

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

       

       

      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

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

              

      

       

      
        	
                 

              	
                1.2

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

              

      

       

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

       

      
        	
                 

              	
                1.3

              	
                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; Boards of Directors.  The provisions of Sections
                  1.2 and 1.3 of this Agreement will not be deemed to prohibit Executive
                  from devoting reasonable time to personal matters, or from serving
                  on the
                  boards of directors of other companies, with or without compensation,
                  including but not limited to Benilde St. Margaret’s School, Video
                  Guidance, and Transport Security Boards of Directors, provided
                  that such
                  personal activities do not interfere with Executive’s primary duties to
                  the Company, present a conflict with or divergence from the interests
                  of
                  the Company or violate the Board’s policies relating to service as a board
                  member to publicly-held companies or codes of conduct for its
                  employees.  After the date of this agreement, Executive will
                  accept an appointment or election to the board of another company
                  only
                  with the prior consent of the Company’s Board of
                  Directors.

              

      

       

      2.      Term
        of Employment.

       

      
        	
                 

              	
                2.1

              	
                Duration.  Subject
                  to the provisions for termination set forth in Sections 6, 7 and
                  8 below,
                  the Original Term of this Agreement (“Original Term”) will commence upon
                  the 1st day of  November, 2007 and will continue to and include
                  the 31st
                  day of October, 2010.

              

      

       

       

      
        	
                 

              	
                2.2

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

              

      

       

      3.      Compensation
        and Benefits.

       

      
        	
                 

              	
                3.1

              	
                Salary.  For
                  all services rendered by Executive pursuant to this Agreement,
                  the Company
                  will pay Executive an annual base salary (“Base Compensation”) equal to
                  $450,000.  Payment will occur at regular payroll intervals in
                  accordance with the Company’s standard payroll practices.  The
                  compensation committee of the Board or the Board itself will review
                  the
                  Executive’s compensation annually and, in its sole discretion, may
                  determine to increase such base salary for the following year but
                  cannot
                  decrease the annual salary below
                  $450,000.

              

      

       

      
        	
                 

              	
                3.2

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

              

      

       

      
        	
                 

              	
                3.3

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

              

      

       

      
        	
                 

              	
                3.4

              	
                Stock
                  Options.  On November 1, 2007, Executive will be granted
                  options to purchase 500,000 shares of the Company’s common stock with
                  one-quarter being vested immediately and the remainder vesting
                  in even
                  increments over three years from the date of the
                  grant.

              

      

       

      Such
        options 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 (as defined in Exhibit A hereto) on or after
        May 1,
        2009, any options remaining unvested at the time of the Change of Control
        shall
        vest immediately.

       

      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.

              

      

       

       

      
        	
                 

              	
                3.6

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

              

      

       

      
        	
                3.6.1

              	
                Medical
                  Insurance Costs.  The Company will pay the full cost for
                  family health insurance coverage, including co-pays and deductibles,
                  if
                  any, for Executive, Executive’s spouse, and Executive’s children (up to
                  the maximum age allowed by the Company’s plan, provided they meet the
                  terms of eligibility for participation in the plan).  In
                  addition, the Company will reimburse Executive for the unreimbursed
                  cost
                  of bi-annual physicals for Executive and his spouse at the clinic
                  of
                  Executive’s choice.  If the payments contemplated by this
                  Section 3.6.1 create income tax liability for Executive, the Company
                  shall
                  withhold all required taxes from such
                  payments.

              

      

       

      
        	
                3.6.2.

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

              

      

       

      
        	
                3.6.3.

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

              

      

       

      
        	
                3.6.4.

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

              

      

       

      
        	
                3.6.5.

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

              

      

       

      4.      Insurance
        Policies.

       

      The
        Company will keep all Directors and Officers insurance policies current and
        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 Board of Directors;

              

      

       

      
        	
                6.1.2.

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

              

      

       

      
        	
                6.1.3.

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

              

      

       

      
        	
                6.1.4.

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

              

      

       

      
        	
                6.1.5.

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

              

      

       

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

       

      
        	
                 

              	
                6.2

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

              

      

       

      
        	
                6.2.1.

              	
                Executive
                  becomes disabled for a period of at least ninety (90) days to the
                  extent
                  that, in the determination of the Board of Directors, he is no
                  longer able
                  to report to work and to carry on his duties on behalf of the Company;
                  or

              

      

       

       
         6.2.2.    Executive dies.

       

      
        	
                 

              	
                6.3

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

              

      

       

      
        	
                 

              	
                6.4

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

              

      

       

      
        	
                 

              	
                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.

              

      

       

      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 Board of Directors, that any
        one or
        more of the following events has occurred:

       

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

       

      
        	
                7.1.2.

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

              

      

       

      
        	
                7.1.3.

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

              

      

       

      
        	
                7.1.4

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

              

      

       

      
        	
                 

              	
                7.2

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

              

      

       

      
        	
                 

              	
                7.3

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

              

      

       

      8.      Change
        of Control Obligations; Deferred Compensation
        Payments.

       

      
        	
                 

              	
                8.1

              	
                Change
                  of Control Obligations.  In the event of a change in control
                  in the ownership of the Company, the Company’s and Executive’s
                  obligations, and Executive’s benefits, shall be governed by the Change of
                  Control Agreement attached hereto as Exhibit A.  Notwithstanding
                  the foregoing, in the event of a change in control (as the term
“Change of
                  Control” is defined in Exhibit A), Executive shall have the additional
                  right at the six (6) month anniversary date after the Change of
                  Control to
                  resign and receive the payments outlined in Section 7.1, provided
                  that
                  Executive signs all appropriate paperwork, including providing
                  a full 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 nonqualified deferred compensation plan (SERP) will be treated
                  and distributed in accordance with terms and conditions of the
                  SERP.

              

      

       

      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.

              

      

       

      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 securities clients,
                  prospective clients, strategic business relationships, products,
                  services,
                  suppliers, personnel, pricing, recruiting strategies, job candidate
                  information, employee information, sales strategies, technology,
                  methods,
                  processes, research, development, systems, techniques, finances,
                  accounting, purchasing and business
                  plans.

              

      

       

      
        	
                11.3

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

              

      

       

      
        	
                11.4

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

              

      

       

      
        	
                11.5

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

              

      

       

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

       

      
        	
                12.1

              	
                Confidential
                  or Material, Non-Public Information.  Executive acknowledges
                  that he is prohibited from using or sharing any Confidential Information
                  for personal gain or advantage (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.

              

      

       

      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.

              

      

       

      
        	
                14.2

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

              

      

       

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

       

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

       

      “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 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 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.

              

      

       

      20.           Survival.

       

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

       

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

       

      21.           Miscellaneous.

       

      
        	
                21.1

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

              

      

      

      
        	
                21.2

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

              

      

      

      
        	
                21.3

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

              

      

      

      
        	
                21.4

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

              

      

       

      22.           Entire
        Agreement; Amendment.

       

      
        	
                22.1

              	
                Entire
                  agreement.  Both Executive and the Company agree that this
                  Agreement, Exhibit A to 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 Board of Directors
        of
        the Company with a copy to the attention of the General Counsel.  A
        notice shall be deemed given, if by personal delivery, on the date of such
        delivery or, if by certified mail, on the date shown on the applicable return
        receipt.

       

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

       

      
        	
                24.1

              	
                Governing
                  Law; Disputes.  This Agreement will be governed by and
                  construed in accordance with the laws of the State of Minnesota,
                  as such
                  laws are applied to agreements entered into and to be performed
                  entirely
                  within Minnesota between Minnesota residents.  Except as set
                  forth in Section 24.2 below, the undersigned each irrevocably consent
                  to
                  the jurisdiction of the United States District Court for the District
                  of
                  Minnesota and the courts of the State of Minnesota in any suit,
                  action, or
                  proceeding brought under, based on or related to or in connection
                  with
                  this Agreement, and each of the undersigned agrees that either
                  of the
                  aforesaid courts will be the exclusive original forum for any such
                  action.

              

      

       

      
        	
                24.2

              	
                Arbitration
                  of Termination of Employment for Cause.  Any dispute arising
                  out of or relating to termination of Executive’s employment for Cause
                  pursuant to Section 6 of this Agreement, shall be discussed between
                  the
                  disputing parties in a good faith effort to arrive at a mutual
                  settlement
                  of any such controversy.  If, notwithstanding, such dispute
                  cannot be resolved, such dispute shall be settled by binding
                  arbitration.  Judgment upon the award rendered by the arbitrator
                  may be entered in any court having jurisdiction thereof.  The
                  arbitrator shall be a retired state or federal judge or an attorney
                  who
                  has practiced securities or business 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 Agreement by their
        signatures below:

       

      

      
        	
                Analysts
                  International Corporation

              	
                Elmer
                  Baldwin

              
	 	 
	 	 
	
                By: 
                  __________________________________

              	
                By: 
                  __________________________________

              
	 	 
	
                Title: 
                  _________________________________

              	
                Date: 
                  _________________________________

              
	 	 
	
                Date: 
                  _________________________________

              	 
	 	 

      

       

      

       

      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

      Exhibit
        A

      

      CHANGE
        OF CONTROL AGREEMENT

      

      

      
        	
                Parties:

              	
                Analysts
                  International Corporation

                3601
                  West 76th
                  Street, Suite 200

                Minneapolis,
                  MN  55435

              	
                (“Company”)

              
	 	 	 
	 	
                Elmer
                  Baldwin

              	
                (“Executive”)

              

      

      

      

      

      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;

      

      (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:

      

      (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;

      

      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
        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 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.           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.

      

      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 Agreement supersedes all prior or
        contemporaneous negotiations, commitments, agreements (written or oral) and
        writings between the Company and Executive with respect to the subject matter
        hereof, including but not limited to any negotiations, commitments, agreements
        or writings relating to any severance benefits payable to Executive, and
        constitutes the entire agreement and understanding between the parties
        hereto.  All such other negotiations, commitments, agreements and
        writings will have no further force or effect, and the parties to any such
        other
        negotiation, commitment, agreement or writing will have no further rights
        or
        obligations thereunder.

      

      14.           Counterparts.  This
        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.

      

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

      

      

      
        	 	
                ANALYSTS
                  INTERNATIONAL CORPORATION

              
	 	 
	 	 
	 	
                By:
                  ____________________________________

              
	 	
                       Its:
                  Chairman of the Board            

              
	 	 
	 	 
	 	 ______________________________________
	 	
                Executive

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