Document:

Exhibit 10.1

 

EMPLOYMENT AGREEMENT

 

This Employment Agreement (“Agreement”) is entered into effective as of July 2, 2012 (the “Effective Date”), by and between Analysts International Corporation, a Minnesota corporation (the “Company”) and Lynn L. Blake (“Executive”).

 

RECITALS:

 

The Company and Executive hereby agree that Executive shall serve as the Senior Vice President, Chief Financial Officer and Treasurer of the Company pursuant to the terms and conditions set forth in this Agreement;

 

NOW, THEREFORE, in consideration of the premises and the agreements contained herein, and for other good and valuable consideration, the receipt and adequacy of which the parties hereby acknowledge, the parties agree as follows:

 

1.                                      EMPLOYMENT

 

The Company hereby agrees to employ Executive as the Senior Vice President, Chief Financial Officer and Treasurer of the Company, and Executive, in consideration of such employment and the other consideration set forth herein, hereby accepts employment, upon the terms and conditions set forth herein, with such employment to begin on Monday, July 2, 2012.

 

2.                                      POSITION AND DUTIES

 

During the term of this Agreement, Executive shall be employed as the Senior Vice President, Chief Financial Officer and Treasurer (“CFO”) of the Company, reporting to the Company’s President and CEO.  While employed hereunder, Executive shall do all things necessary, legal and incident to the above position, and otherwise shall perform such functions as the Company’s President and CEO or its Board of Directors (the “Board”) may establish from time to time.  In that capacity, and without limitation, Executive shall perform such duties and responsibilities on behalf of the Company as are customary of the chief financial officer of a publicly traded company of similar size and operations, to a level consistent with the highest standards of one holding such position in similar businesses or enterprises, and agrees not to render services to anyone other than the Company for compensation as an employee or consultant during the term of this Agreement, without prior written consent of the Company’s President and CEO and the Board.

 

3.                                      TERM

 

Unless earlier terminated pursuant to Section 5 hereof, the initial term of this Agreement (the “Initial Term”) shall commence on the Effective Date and shall continue in effect for one year thereafter (the “Expiration Date”).  On the Expiration Date, and on each annual Expiration Date thereafter (each such date being hereinafter referred to as the “Renewal Date”), the term of employment hereunder shall automatically renew for an additional one (1) year period (each, a “Renewal Term”) unless the Company or Executive provides notice in writing to the other at least 30 days prior to the applicable Renewal Date that the Company or Executive as applicable does not wish to renew this Agreement beyond the expiration of the then-current term.  Unless waived in writing by the Company, the requirements of Section 5(g) (Return of Property), 6 (Confidentiality), 8 (Intellectual Property Rights) and 9 (Restrictions Against Competition, Etc.) shall survive the expiration or termination of this Agreement for any reason.

 

4.                                      COMPENSATION AND BENEFITS

 

(a)                                 Base Salary.  The Company shall pay Executive an annualized base salary of Two Hundred Fifty Thousand and no/100 Dollars ($250,000.00) (“Base Salary”).  The Base Salary shall be paid at regular payroll intervals in accordance with the Company’s standard payroll practices, subject to applicable withholdings.

 

(b)                                 Incentive Compensation.  In addition to Executive’s Base Salary, Executive will be eligible to receive cash incentive compensation in the target amount of 50% of Base Salary in each year of employment

 

 

during any Renewal Term (“Incentive Compensation”).  The specific amount of any such potential Incentive Compensation, which may be more or less than the target amount, will be determined annually by the Compensation Committee of the Board in its discretion based on the CEO’s input and evaluation, and shall be contingent upon the Company and Executive meeting company and individual performance objectives during the immediately preceding fiscal year (“Performance Objectives”) as determined by the Compensation Committee.  The Compensation Committee will consider Executive’s input in setting the annual Performance Objectives.  Executive’s Incentive Compensation (if any) shall be payable in cash, subject to applicable withholdings, within 30 days of the Company’s receipt of its audited financial statements for the relevant fiscal year.  For the Company’s fiscal year 2012, which ends on December 31, 2012, Executive will be eligible to receive a bonus in an amount to be established by the Compensation Committee based on the achievement of certain performance goals to be mutually agreed within 90 days after the Effective Date.

 

(c)                                  Stock Option Grant and Restricted Stock Unit Award.  Subject to approval of the Board and contingent upon mutual execution of appropriate agreements in the Company’s standard form, Executive will be granted twenty-five thousand (25,000) stock options and awarded twenty-five thousand (25,000) restricted stock units.  The Company may issue such options and units from such plans as it deems appropriate but to the extent practicable shall endeavor to issue the options as incentive stock options.

 

(d)                                 Employee Benefits.  In addition to the Base Salary and payments under any incentive compensation arrangement that are payable hereunder, Executive shall be eligible during the Term to participate in all regular employee benefits as set forth in the Company’s Employee Handbook, except the Paid Time Off policies.  As an officer of the Company Executive will be allowed discretionary time-off consistent with her responsibilities to the Company; and, if necessary or appropriate due to business conditions of the Company, Executive agrees to obtain concurrence from the CEO prior to taking time off.

 

(e)                                  Business Expenses.  Executive will be entitled to reimbursement of all reasonable, business-related travel and other expenses incurred by Executive in the ordinary course of business on behalf of the Company, so long as such expenses are incurred, documented and authorized pursuant to the Company’s expense reimbursement policies.  Reimbursements will be made in accordance with Company policies, but in no event later than December 31 of the calendar year after the year in which the expense was incurred.  Reimbursements in one year will not affect the expenses available for reimbursement in any subsequent year.  The right to reimbursement is not subject to liquidation or exchange for any other benefit.

 

(f)                                   Insurance Policies.  The Company will keep all Directors and Officers insurance policies current and will identify Executive, if appropriate, on all such policies.

 

(g)                                  Employee Handbook.  From time to time the Company may prepare and make available to its employees an employee handbook.  The sole purpose of any such employee handbook is to communicate general statements of policy to employees.  The Company reserves the right, in its sole discretion, from time to time and with or without notice, to interpret, discontinue, modify, amend or replace any such employee handbook and the guidelines stated therein.

 

5.                                     TERMINATION

 

(a)                                 Death.  This Agreement and Executive’s employment thereunder shall be terminated on the death of Executive, effective as of the date of Executive’s death.

 

(b)                                 Continued Disability.  This Agreement and Executive’s employment hereunder may be terminated, at the option and in the discretion of the Company, upon a Continued Disability of Executive, effective as of the date of the determination of Continued Disability as that term is hereinafter defined.  For the purposes of this Agreement, “Continued Disability” shall be defined as the inability or incapacity (either mental or physical) of Executive to continue to perform Executive’s duties hereunder for a continuous period of sixty (60) working days, or if, during any calendar year of the Term hereof because of disability, Executive shall have been unable to perform Executive’s duties hereunder for a total period of ninety (90) working days regardless of whether or not such days are consecutive.  The determination as to whether Executive is unable to perform the essential functions of Executive’s job as CFO shall be made exclusively by the CEO in

 

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the exercise of reasonable discretion.  If the Company terminates Executive’s employment hereunder upon a Continued Disability of Executive, no severance shall be payable and the Company will have no further obligation or liability to Executive.

 

(c)                                  Termination For Cause.  Notwithstanding any other provision of this Agreement, the Company may at any time immediately terminate this Agreement and Executive’s employment hereunder for Cause.  For this purpose, “Cause” shall include any of the following: the current use of illegal drugs; use of alcohol or other drugs in a manner which affects the performance of Executive’s duties, responsibilities and obligations as an employee of Company; indictment for any crime involving moral turpitude, fraud or misrepresentation; commission of any act which would constitute a gross misdemeanor or felony and which would adversely affect the business or reputation of the Company; dishonesty or fraud; misappropriation or embezzlement of Company funds or property; misconduct or negligent or reckless conduct which is injurious to the reputation, business, affairs or business relationships of the Company; breach of any written policies of the Company including but not limited to any applicable codes of ethics; material violation or default of any of the provisions of this Agreement; failure to perform Executive’s duties hereunder; failure or refusal to perform the reasonable and lawful instructions of Executive’s supervisors; frequent or extended, and unjustifiable (not as a result of incapacity or disability) absenteeism; incompetence or negligence in performing Executive’s duties hereunder; or any material failure to meet reasonable performance criteria or reasonable standards of conduct as established from time to time by the CEO or the Board.  The initial determination as to whether Cause exists shall be made by the CEO, who shall then provide input and recommendations to the Board.  The Board in the exercise of reasonable discretion shall make the final determination as to whether Cause exists.  If the Company terminates Executive’s employment hereunder for Cause, it shall deliver a notice of termination in writing to Executive, which notice shall include the basis for such Cause; and in any such case Executive’s employment with the Company shall terminate on the date specified in the notice (or if no date is specified in the notice, immediately).  If the Company terminates Executive’s employment hereunder for Cause, no severance shall be payable and the Company will have no further obligation or liability to Executive.

 

(d)                                 Termination Without Cause.  The Company may terminate Executive’s employment at any time, whether or not for Cause and for any reason or no reason.  In the event that, during the original term or any renewal term, the Company terminates Executive’s employment without Cause, the Company will pay severance to Executive by continuing to pay her Base Salary (at the same time and on the same schedule as salary payments are generally made to employees of the Company, at Executive’s then-current rate of pay and subject to normal withholdings) for six (6) months after any such termination, provided that Executive first signs all appropriate paperwork, including providing a full release (not later revoked within the statutory period) of all claims against the Company, in form and substance acceptable to the Company; and provided, further, that if Executive has successfully completed three years of service under this Agreement, the amount of severance payable shall be twelve (12) months of Base Salary then in effect.

 

(e)                                  Resignation.  If Executive resigns from her employment or elects not to renew this Agreement, no severance shall be payable and the Company will have no further obligation or liability to Executive.

 

(f)                                   Failure to Renew by the Company.  If for any reason or no reason the Company elects not to renew this Agreement beyond expiration of the then-current term, the Company will pay severance to Executive by continuing to pay her Base Salary (at the same time and on the same schedule as salary payments are generally made to employees of the Company, at Executive’s then-current rate of pay and subject to normal withholdings) for four (4) months after the Expiration Date, provided that Executive first signs all appropriate paperwork, including providing a full release (not later revoked within the statutory period) of all claims against the Company, in form and substance acceptable to the Company.

 

(g)                                  Return of Property.  Upon any termination of her employment with the Company, Executive agrees to promptly return to the Company: (1) 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

 

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(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 (2) 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.

 

(h)                                 Advice to Prospective Employers.  If Executive seeks or is offered employment by any other company, firm or person, she will notify the prospective employer of the existence and terms of the confidentiality and non-competition provisions set forth in Sections 6 and 9 hereof.

 

6.                                      CONFIDENTIALITY

 

(a)                                 Confidential Nature of Relationship.  Executive acknowledges that her employment by the Company creates a relationship of confidence and trust with respect to Confidential Information (as hereinafter defined).  During the course of her 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.

 

(b)                                 Definition.  “Confidential Information” means all confidential or proprietary information and data, in their broadest context, originated by, on behalf of the Company or its clients and within the knowledge or possession of the Company (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 Company Inventions.  Confidential Information also includes information of a confidential nature relating to the Company’s clients, prospective clients, strategic business relationships, products, services, suppliers, personnel, pricing, recruiting strategies, job candidate information, employee information, sales strategies, technology, methods, processes, research, development, systems, techniques, finances, accounting, purchasing and business plans.  Without limiting the foregoing, Confidential Information includes the identity of the Company’s customers, subcontractors and employees, mental or written customer lists, customer prospect lists, customer requirements, transactions, work orders, pricing policies and plans.

 

(c)                                  Exclusions.  Confidential Information does not include information which: (1) is generic; (2) is or becomes part of the public domain through no act or omission of Executive; (3) was in Executive’s 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; (4) is disclosed to Executive by a third party without restriction on disclosure; or (5) is independently developed by Executive using her own resources, entirely on her own time, and without the use of any Confidential Information.

 

(d)                                 Protected Health Information.  If during the course of her employment with the Company, Executive receives any “protected health information” regarding any individual other than Executive, as that term is defined in 45 CFR, Part 164, Subpart E (“Privacy of Individually Identifiable Health Information”): (1) Executive agrees to maintain all such information in strict confidence in accordance with the requirements of the Health Insurance Portability and Accountability Act of 1996 (HIPAA); (2) Executive agrees that she will make no use whatsoever of any such information except as required to perform Executive’s employment duties; and (3) Executive agrees that she 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” 

 

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other than in accordance with Company policy. Executive agrees to alert the Company promptly if she becomes aware of any misuse or unauthorized disclosure of any such information.

 

(e)                                  Additional Confidentiality Agreements.  Executive agrees to execute such additional non-disclosure and confidentiality agreements as the Company’s clients may from time to time request the Company to have its key employees execute in order for the Company to conduct business with its clients.

 

(f)                                   Independent Development.  NOTICE: Pursuant to Minnesota Statutes § 181.78, Executive is hereby notified that the provisions of Section 8 of this agreement do 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 [as such term is defined in Section 9(c)(ii) of this Agreement]) 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.

 

7.                                   USE OF CONFIDENTIAL OR MATERIAL NON-PUBLIC INFORMATION; CODES OF CONDUCT

 

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

 

(b)                                 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.

 

8.                                      INTELLECTUAL PROPERTY RIGHTS

 

All ideas, inventions, discoveries, proprietary information, know-how, processes and other developments and, more specifically improvements to existing inventions, conceived by the Executive, alone or with others, during the term of the Executive’s employment, whether or not during working hours and whether or not while working on a specific project, that are within the scope of the Company’s business operations or that relate to any work or projects of the Company, are and shall remain the exclusive property of the Company. Inventions, improvements and discoveries relating to the business of the Company conceived or made by the Executive, either alone or with others, while employed with the Company are conclusively and irrefutably presumed to have been made during the period of employment and are the sole and exclusive property of the Company.  The Executive shall promptly disclose in writing any such matters to the Company but to no other person without the consent of the Company.  The Executive hereby assigns and agrees to assign all right, title, and interest in and to such matters to the Company.  The Executive will, upon request of the Company, execute such assignments or other instruments and assist the Company in the obtaining, at the Company’s sole expense, of any patents, trademarks or similar protection, if available, in the name of the Company.

 

9.                                   RESTRICTIONS AGAINST SOLICITATION; INTERFERENCE; COMPETITION AND DISPARAGEMENT

 

During her employment by the Company and for a period of twelve (12) months after termination of such employment for any reason, Executive agrees that she will not engage in the following conduct.

 

(a)                                 Restrictions Against Solicitation.  Executive will not, directly or indirectly, 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 her or her employment with the Company other than through general solicitation or advertisement not directed at Company employees.

 

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

 

(c)                                  Restrictions Against Competition.

 

(i)                                     During the Initial Term or any Renewal Term of Executive’s employment, whether under this Agreement or at will, and for a period of twelve (12) months after the termination date of Executive’s employment, (whether such termination be with or without Cause), Executive agrees that she will not engage in any Competitive Acts with any Client of the Company.

 

(ii)                                  For purposes of this Section 9, the following terms shall be defined as follows.

 

“Competitive Acts” means soliciting, selling, marketing, brokering, providing or managing any services of the sort that the Company provides to its Clients (“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 current client of the Company during the previous twelve (12) months of Executive’s employment with the Company; or (B) any prospective client of the Company with whom Executive was involved in soliciting, proposing, marketing or selling Services at any time during the previous twelve (12) months of Executive’s employment with the Company; and (C) any third party having a written partnership, alliance or teaming agreement or similar strategic business relationship with the Company.

 

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

 

(iii)                               The foregoing restrictions against competition shall not, however, prohibit Executive from owning not more than 5% of the outstanding stock of a corporation subject to the reporting requirements of the Securities Exchange Act of 1934.

 

(d)                                 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 (1) which may be actionable, (2) that disparage, characterize in demeaning manner or question the Company’s business practices, products, advice, quality of employees and staff, or (3) that otherwise harm the public reputation or good will of the Company, its employees, or management.

 

10.                            REASONABLENESS OF RESTRICTIONS; REPRESENTATIONS OF EXECUTIVE; EXTENSION OF RESTRICTIONS; ENFORCEMENT

 

(a)                                 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 her employment with the Company terminates.

 

(b)                                 Representations of Executive.  Executive represents that her performance of all the terms of this Employment Agreement and her 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 her 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 her 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.

 

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(c)                                  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 materially violates her obligations under this Agreement.

 

(d)                                 Enforcement.  In addition to any other relief or remedies afforded by law or in equity, if Executive breaches Section 9 of this Agreement (or any subpart thereof), 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 she violates or threatens to violate any of the provisions of Section 9 of this Agreement.  This Section 10(d) shall not preclude the granting of any other appropriate relief including, without limitation, money damages against Executive for breach of any part of Section 9 of this Agreement.

 

11.                             DELAY OF PAYMENT; CODE SECTION 409A

 

Notwithstanding anything in this Agreement to the contrary, the parties intend that this Agreement will satisfy the applicable requirements, if any, of Code Section 409A in a manner that will preclude the imposition of additional taxes and interest imposed under Code Section 409A.  If any of the payments described in this Agreement 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 Executive’s termination of employment (which will have the same meaning as “separation from service” as defined in Code Section 409A), all or a portion of such payments will not be paid or commence earlier than the first day of the seventh month following the date of Executive’s termination of employment, but only to the extent such delay is required for compliance with Code Section 409A and the notices and other guidance of general applicability issued thereunder.

 

12.                             INDEMNITY; COOPERATION IN LEGAL ACTIONS

 

(a)                                 Indemnity.  The Company will indemnify Executive against any claims arising from or related to her good faith performance of her duties and obligations hereunder to the fullest extent allowed by Company’s By-Laws and Minnesota law.

 

(b)                                 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 she was responsible during the term of her employment with the Company.

 

13.                             MISCELLANEOUS

 

(a)                                 Headings; Construction; Counterparts.  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.  This Agreement may be signed in counterparts and each of such counterparts shall constitute an original document and such counterparts, taken together, shall constitute one and the same instrument.

 

(b)                                 No Third Party Beneficiaries; Assignment.  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.  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 to substantially all of its assets or business, or affiliates of any such successor.

 

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(c)                                  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.

 

(d)                                 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, (1) the remaining terms and provisions hereof shall be unimpaired, and (2) 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.

 

(e)                                  Entire Agreement.  This Agreement constitutes the entire agreement between the Company and Executive with respect to the subject matter hereof.  There were no inducements or representations leading to the execution of this Agreement except as stated in this Agreement.

 

(f)                                   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.

 

(g)                                  Notices.  Any notice hereunder by either party to the other shall be given in writing by personal delivery or certified mail, return receipt requested.  If addressed to Executive, the notice shall be delivered or mailed to Executive at the address most recently communicated in writing by Executive to the Company, or if addressed to the Company, the notice shall be delivered or mailed to the Company at its executive offices to the attention of the Board of Directors of the Company with a copy to the attention of the General Counsel.  A notice shall be deemed given, if by personal delivery, on the date of such delivery or, if by certified mail, on the delivery date shown on the applicable return receipt.

 

(h)                                 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.  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.

 

IN WITNESS WHEREOF, the parties have executed this Employment Agreement by their signatures below:

 

	
Analysts International Corporation
    	
 
    	
Lynn L. Blake (“Executive”)
    
	
 
    	
 
    	
 
    
	
By: 
    	
/s/   Brittany B. McKinney
    	
 
    	
By: 
    	
/s/   Lynn L. Blake
    
	
 
    	
 
    	
 
    
	
Title:
    	
President & CEO
    	
 
    	
Date signed: June 8, 2012
    
	
 
    	
 
    	
 
    
	
Date signed: June 8, 2012
    	
 
    	
 
    
						

 

8Exhibit 10.1

 

Form of RSU Performance Award Agreement

(Chief Executive Officer)

 

GT ADVANCED TECHNOLOGIES INC.

 

PERFORMANCE RESTRICTED STOCK UNIT AGREEMENT

 

THIS PERFORMANCE RESTRICTED STOCK UNIT AGREEMENT (this “Agreement”) is made as of [                  ], by and between GT Advanced Technologies Inc., a Delaware corporation (the “Company”), and «Employee» (“Employee”), in accordance with the 2011 Equity Incentive Plan of the Company, as the same may be amended from time to time (the “Plan”).  Certain definitions are set forth in Section 7 of this Agreement.

 

On [                      ], the Company granted to Employee «Number_of_RSU» performance-based restricted stock units (the “Performance RSUs”) under the Plan.  Each Performance RSU entitles Employee to receive from the Company one share of the Company’s common stock, par value $.01 per share (“Common Stock”) for each Performance RSU granted hereunder that becomes vested under the terms described herein and in the Plan.  All of such shares of Common Stock that may hereafter be delivered to Employee pursuant to this Agreement are referred to herein as “Employee Stock.”

 

The parties hereto agree as follows:

 

1.     Incorporation by Reference; Plan Document Receipt.  This Agreement is subject in all respects to the terms and provisions of the Plan (including, without limitation, any amendments thereto adopted at any time and from time to time unless such amendments are expressly intended not to apply to the award provided hereunder), all of which terms and provisions are made a part of and incorporated in this Agreement as if they were expressly set forth herein.  Any capitalized term not defined in this Agreement shall have the same meaning as is ascribed thereto in the Plan.  Employee hereby acknowledges receipt of a true copy of the Plan and that Employee has read the Plan carefully and fully understands its content.  In the event of a conflict between the terms of this Agreement and the terms of the Plan, the terms of the Plan shall control.

 

2.     Grant of the Performance RSUs.

 

(a)   The Company granted to Employee, as of [                  ], «Number_of_RSU» Performance RSUs, subject to the terms and conditions hereunder.  Employee agrees and understands that nothing contained in this Agreement provides, or is intended to provide, Employee with any protection against potential future dilution of Employee’s stockholder interest in the Company for any reason.  Employee shall not have the rights of a stockholder in respect of the shares of Common Stock underlying these Performance RSUs until such Common Stock is delivered to the Participant in accordance with Section 4.

 

(b)   The grant of the Performance RSUs by the Company is subject to Employee’s execution and delivery of the attached Proprietary Rights and Confidentiality Agreement

 

 

between Employee and the Company (or, at the discretion of the Board, a similar agreement containing such terms as the Board, or a duly designated committee thereof, shall determine) (the “Employee Confidentiality Agreement”), if Employee is not currently subject to such an agreement.  These Performance RSUs and all shares of the Employee Stock shall be subject to the terms and conditions of the Employee Confidentiality Agreement or such similar agreement (whether executed in connection herewith or prior to the date hereof).

 

(c)   In connection with the receipt of the Performance RSUs and the delivery of any Employee Stock hereunder, Employee represents and warrants to, and agrees with, the Company that:

 

(i)            The Performance RSUs and the Employee Stock to be acquired by Employee pursuant to this Agreement shall be acquired for Employee’s own account and not with a view to, or intention of, distribution thereof in violation of the Securities Act, or any applicable state securities laws, and the Performance RSUs and the Employee Stock shall not be disposed of in contravention of the Securities Act or any applicable state securities laws.

 

(ii)           This Agreement constitutes the legal, valid and binding obligation of Employee, enforceable in accordance with its terms, and the execution, delivery and performance of this Agreement by Employee do not and shall not conflict with, violate or cause a breach of any agreement, contract or instrument to which Employee is a party or any judgment, order or decree to which Employee is subject.

 

(iii)          Employee has not taken any action that constitutes a conflict with, violation or breach of, and the execution and delivery of this Agreement and the other agreements contemplated hereby will not conflict with, violate or cause a breach of, any noncompete, nonsolicitation or confidentiality agreement to which Employee is a party or by which Employee is bound.  Employee agrees to notify the Board of any matter (including, but not limited to, any potential acquisition by the Company) which, to Employee’s knowledge, might reasonably be expected to violate or cause a breach of any such agreement.

 

(iv)          Employee is a resident of the State of «Residence».

 

(v)           Employee has been advised and encouraged in writing (via this Agreement) to consult with an attorney and a tax advisor prior to signing this Agreement.

 

(d)   As an inducement to the Company to issue any Performance RSUs to Employee, and as a condition thereto, Employee acknowledges and agrees that neither the issuance of the Performance RSUs or the delivery of any Employee Stock nor any provision contained herein shall entitle Employee to employment with the Company or any of the Subsidiaries, or affect the right of the Company or any of its Subsidiaries to terminate Employee’s employment at any time, with or without cause.

 

(e)   The Company and Employee acknowledge and agree that this Agreement has been executed and delivered, the Performance RSUs have been granted and any Employee Stock that may be delivered hereunder will be delivered, in connection with and as a part of the

 

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compensation and incentive arrangements between the Company (together with its Subsidiaries) and Employee.

 

(f)    In connection with the issuance of any Employee Stock hereunder, Employee hereby agrees and acknowledges that all of the shares of the Employee Stock are subject in all respects to the terms of this Agreement.

 

3.     Eligibility to Receive Employee Stock and Vesting of Employee Stock.

 

(a)   Except as otherwise provided in this Section 3, the Performance RSUs shall become vested in accordance with the schedule set forth on Exhibit A attached hereto.

 

(b)   Except as otherwise provided in this Section 3, if Employee’s employment with the Company (or any of its direct or indirect wholly owned Subsidiaries, as applicable) terminates for any reason (including upon the death or disability of Employee prior to the vesting of all or any portion of the Performance RSUs awarded under this Agreement), such unvested portion of the Performance RSUs shall immediately be cancelled and Employee (and Employee’s estate, designated beneficiary or other legal representative) shall forfeit any rights or interests in and with respect to any such Performance RSUs.

 

(c)   In addition to Section 3(a) above, upon a termination by the Company (or any of its direct or indirect wholly owned Subsidiaries, as applicable) without Cause or by Employee with Good Reason of Employee’s employment with the Company (or any of its direct or indirect wholly owned Subsidiaries, as applicable) that also constitutes a “separation from service” within the meaning of Code Section 409A within twelve months following a Change in Control of the Company (a “Change in Control Termination”), all remaining unvested Performance RSUs shall vest (for the avoidance of doubt, the vesting described in this Section 3(c) is in addition to, and not in lieu of, any vesting described in Section 3(a) above).

 

4.     Delivery of Common Stock.  Subject to the terms of the Plan and Section 6 below, if the Performance RSUs awarded by this Agreement become vested, the Company shall promptly distribute to Employee the number of shares of Common Stock equal to the number of the Performance RSUs that so vested; provided that to the extent required by Code Section 409A, delivery of shares of Common Stock upon a Participant’s “separation from service” within the meaning of Code Section 409A shall be deferred until the six month anniversary of such separation from service.  In connection with the delivery of the shares of Common Stock pursuant to this Agreement, the Participant agrees to execute any documents reasonably requested by the Company and provide therein customary representations and warranties related to the receipt of such shares of Common Stock.

 

5.     Certificates.  The shares of Employee Stock may be in certificated or uncertificated form, as permitted by the Company’s Bylaws.

 

6.     Corporate Event.  In the event any dividend or distribution of Common Stock, recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, change of control or exchange of Common Stock or other securities of the Company, or other corporate transaction or event affects the Common Stock, or in the event of the sale, transfer or other disposition of all or substantially all of the business and assets of the

 

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Company, whether by sale of assets, merger or otherwise (determined on a consolidated basis) to a Third Party (or group of affiliated Third Parties) (each, a “Corporate Event”), the Board shall, in such manner as it in good faith deems equitable, (i) adjust any or all of the number of shares of Employee Stock or other securities of the Company (or number and kind of other securities or property) subject to the Performance RSUs, or (ii) make provision for an immediate cash payment to Employee in consideration for the cancellation of the Performance RSUs, to the extent allowed under Code Section 409A.  Notwithstanding the provisions of this Section 6 or Section 3(c), in the event (x) any Performance RSUs would otherwise vest pursuant to Section 3(c) and (y) the Company is not the surviving entity in any Change in Control or the Company sold, transferred or otherwise disposed of all or substantially all of its business or assets pursuant to such Change in Control, then the Company may provide that any successor to the Company and/or its assets pursuant to such Change in Control shall provide the Employee with the same per share consideration provided to a holder of Common Stock in connection with such Change in Control in lieu of otherwise allowing such Performance RSUs to vest pursuant to Section 3(c).

 

7.     Definitions.

 

“Board” means the Company’s Board of Directors.

 

“Cause” shall have the meaning set forth in Employee’s Employment Agreement. If Employee does not have an Employment Agreement or if such Employment Agreement does not contain a definition of “Cause” then “Cause” shall mean with respect to Employee one or more of the following:  (i) the commission of a felony or other crime involving moral turpitude or the commission of any other act or omission involving dishonesty, disloyalty or fraud with respect to the Company or any of its Subsidiaries or any of their customers or suppliers, (ii) repeatedly reporting to work under the influence of alcohol or illegal drugs, the use of illegal drugs in the workplace or other repeated conduct causing the Company or any of its Subsidiaries substantial public disgrace or disrepute or substantial economic harm, (iii) substantial and repeated failure to perform duties as reasonably directed by the Board, (iv) any act or omission aiding or abetting a competitor, supplier or customer of the Company or any of its Subsidiaries to the material disadvantage or detriment of the Company and its Subsidiaries, (v) breach of fiduciary duty, gross negligence or willful misconduct with respect to the Company or any of its Subsidiaries, or (vi) any breach of the Proprietary Rights and Confidentiality Agreement between the Company and GTAT Corporation, or any material breach of any other agreement between the Company and Employee.

 

“Change in Control” means (i) the consummation of any transaction or series of transactions resulting in a Third Party (or group of affiliated Third Parties) owning, directly or indirectly, securities of the Company possessing the voting power to elect a majority of the Company’s board of directors (whether by merger, consolidation or sale or transfer of the Company’s securities) or (ii) the sale, transfer or other disposition of all or substantially all of the business and assets of the Company, whether by sale of assets, merger or otherwise (determined on a consolidated basis) to a Third Party (or group of affiliated Third Parties).

 

“Employment Agreement” means, if Employee is party to an employment agreement with the Company (or a subsidiary of the Company), the employment agreement

 

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between Employee and the Company (or a subsidiary of the Company, as applicable) as currently in effect on the date of this Agreement.

 

“Good Reason” shall have the meaning set forth in Employee’s Employment Agreement.  If Employee does not have an Employment Agreement or if such Employment Agreement does not contain a definition of “Good Reason” then “Good Reason” shall mean if Employee resigns from employment with the Company and its Subsidiaries prior to the end of the employment period as a result of the occurrence of one or more of the following events:  (i) the Company reduces the amount of the base salary (other than as a result of a general across-the-board salary reduction applicable to all senior executives of the Company) or elects to eliminate the Executive Incentive Program of the Company (“EIP”) without permitting Employee to participate in an annual incentive bonus plan in place of the EIP which offers a potential bonus payment comparable to that earnable at 100% of plan target by Employee under the EIP, (ii) the Company changes Employee’s title and reduces his responsibilities or authority in a manner materially inconsistent with that of the position of Chief Executive Officer or (iii) the Company changes Employee’s place of work to a location outside of «GT_Location»; provided that in order for Employee’s resignation for Good Reason to be effective hereunder, Employee must provide written notice to the Company stating Employee’s intent to resign for Good Reason and the grounds therefor within thirty (30) days after such grounds exist and grant the Company thirty (30) days from receipt of such notice to remedy or otherwise remove the grounds supporting Employee’s resignation for Good Reason.

 

“Securities Act” means the Securities Act of 1933, as amended from time to time, and the rules and regulations promulgated thereunder.

 

“Subsidiary” means any corporation of which the Company owns securities having a majority of the ordinary voting power in electing the board of directors directly or through one or more subsidiaries.

 

8.     Notices.  Any notice provided for in this Agreement must be in writing and must be either personally delivered, mailed by first class mail (postage prepaid and return receipt requested) or sent by reputable overnight courier service (charges prepaid) to the recipient at the address below indicated:

 

To the Company:

 

GT Advanced Technologies Inc.
 20 Trafalgar Square
 Nashua, New Hampshire 03063
 Attention: General Counsel

 

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To Employee:

 

«Employee»
 «Residential_Address_1»
 «Residential_Address_2»

 

or such other address or to the attention of such other person as the recipient party shall have specified by prior written notice to the sending party.  Any notice under this Agreement shall be deemed to have been given when so delivered or sent or, if mailed, five days after deposit in the U.S. mail.

 

9.     General Provisions.

 

(a)   Transferability.  The Performance RSUs shall not be transferable by Employee other than by the laws of will or descent.  All provisions of this Agreement shall in any event continue to apply to any Performance RSU transferred as permitted by this Section 9(a), and any transferee shall be bound by all provisions of this Agreement as and to the same extent as Employee.  Any transfer or attempted transfer of any Performance RSUs in violation of any provision of this Agreement shall be void, and the Company shall not record such transfer on its books or treat any purported transferee of such Performance RSUs as the owner of such stock for any purpose.

 

(b)   Withholding Taxes.  The Company shall be entitled to withhold from any amounts due and payable by the Company and/or any of its Subsidiaries to Employee the amount of any federal, state, local or other tax which, in the opinion of the Company, is required to be withheld in connection with the vesting of the Performance RSUs, the delivery of shares of the Employee Stock or the delivery of cash, securities or other property as provided in Section 6.  To the extent that the amounts available to the Company for such withholding are insufficient, it shall be a condition to the delivery or vesting, as applicable, of such shares of the Employee Stock that Employee make arrangements satisfactory to the Company for the payment of the balance of such taxes required to be withheld.  The Board, upon the written request of Employee, in the Board’s sole discretion and pursuant to such procedures as it may specify from time to time, may permit Employee to  satisfy all or part of the tax obligations in connection with the vesting of the Performance RSUs or the delivery of the shares of Employee Stock by (i) having the Company withhold otherwise deliverable shares, or (ii) delivering to the Company shares that have been held by Employee for at least six months, in each case having a Fair Market Value (as defined in the Plan) equal to the amount sufficient to satisfy such tax obligations.

 

(c)   Severability.  Whenever possible, each provision of this Agreement shall be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under any applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability shall not affect any other provision, but this Agreement shall be reformed, construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision had never been contained herein.

 

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(d)   Complete Agreement.  This Agreement, the Plan, those documents expressly referred to herein and therein and other documents of even date herewith embody the complete agreement and understanding among the parties and supersede and preempt any prior understandings, agreements or representations by or among the parties, written or oral, which may have related to the subject matter hereof in any way.

 

(e)   Counterparts.  This Agreement may be executed in separate counterparts, each of which is deemed to be an original and all of which taken together constitute one and the same agreement.

 

(f)    Successors and Assigns.  Except as otherwise provided herein, this Agreement shall bind and inure to the benefit of and be enforceable by Employee, the Company and their respective successors and assigns (including subsequent permitted holders of the Performance RSUs or the Employee Stock); provided that the rights and obligations of Employee under this Agreement shall not be assignable except in connection with a permitted transfer of the Employee Stock hereunder.

 

(g)   Choice of Law.  All questions concerning the construction, validity, enforcement and interpretation of this Agreement and the exhibits hereto shall be governed by, and construed in accordance with, the internal law, and not the law of conflicts, of the State of Delaware, without giving effect to any choice of law or conflict of law rules or provisions (whether of the State of Delaware or any other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware.

 

(h)   Remedies.  Each of the parties to this Agreement shall be entitled to enforce its rights under this Agreement specifically, to recover damages and costs (including reasonable attorney’s fees) caused by any breach of any provision of this Agreement and to exercise all other rights existing in its favor.  The parties hereto agree and acknowledge that money damages would not be an adequate remedy for any breach of the provisions of this Agreement and that any party shall be entitled to specific performance and/or other injunctive relief from any court of law or equity of competent jurisdiction (without posting any bond or deposit) in order to enforce or prevent any violations of the provisions of this Agreement.

 

(i)    Amendment and Waiver.  The provisions of this Agreement may be amended and waived only with the prior written consent of the Company and Employee.

 

*      *      *      *

 

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IN WITNESS WHEREOF, the parties hereto have executed this Restricted Stock Unit Agreement on the date first written above.

 

	
 
    	
GT ADVANCED TECHNOLOGIES   INC.
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
Name:
    	
Hoil Kim  
    
	
 
    	
 
    	
 
    
	
 
    	
Title:
    	
Vice President, Chief Administative 
   Officer and General Counsel
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
«Employee»
    
				

 

[Signature Page – Performance Restricted Stock Unit Agreement with «Employee»]

 

 

EXHIBIT A

 

Performance Goals

 

(a)          Eligibility to Receive Employee Stock.  The actual number of Performance RSUs that shall be earned by the Employee shall be:

 

1.               100% of the Performance RSUs, if the Company’s Incentive Net Income (as defined below) for the fiscal period ending December 31, 2013 equals or exceeds $[              ] (the “Target Incentive Net Income”); and

 

2.               0% of the Performance RSUs, if the Company’s Incentive Net Income (as defined below) for the fiscal period ending December 31, 2013 is equal to or less than $[          ] (the “Threshold Incentive Net Income”).

 

If the Company’s Incentive Net Income (as defined below) for the fiscal period ending December 31, 2013 falls between the Threshold Incentive Net Income and the Target Incentive Net Income rounded up or down to the nearest whole number.

 

(b)                  Vesting of the Employee Stock.  In no event shall any shares of Employee Stock subject to this Award vest prior to the filing of the Company’s Annual Report on Form 10-K for the fiscal year ending December 31, 2013.  On the date that the Company’s Annual Report on Form 10-K for the fiscal year ending December 31, 2013 is filed, fifty percent (50%) of the shares that the Participant is eligible to receive pursuant to paragraph (a) above shall vest.  On the date that the Company’s Annual Report on Form 10-K for the fiscal year ending December 31, 2014 is filed, the remaining fifty percent (50%) of the shares that the Participant is eligible to receive pursuant to paragraph (a) above shall vest.  In order to receive the shares of Employee Stock that have vested pursuant to this Agreement, the Employee must have been continually employed by the Company (or a subsidiary of the Company) through the date that such shares vest.

 

Performance Measure

 

“Incentive Net Income” shall mean, on a consolidated basis, net income as reported in the Consolidated Statement of Operations in the Company’s Form 10-K for the fiscal year ending December 31, 2013, adjusted to exclude the effect of each of the following:

 

(1) amortization of intangible assets;

 

(2) share-based compensation expense;

 

 

(3) acquisitions and dispositions (or divestitures) occurring after December 31, 2011 (including acquisitions of less than all of the outstanding securities of a target) other than effects due to amortization in connection therewith; and

 

(4) changes in accounting principles effective after December 31, 2011.

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