EXHIBIT 10.1
AMENDED AND
RESTATED
EMPLOYMENT
AGREEMENT
This Amended and Restated Employment Agreement
(“Agreement”) is made by and between Analysts
International Corporation (the “Company”) with
headquarters at 3601 W. 76th Street, Minneapolis, MN 55435 and
Elmer Baldwin (“Executive”).
RECITALS
WHEREAS, the Company desires to retain Executive
as an Employee of the Company, and Executive desires to be so
employed; and
WHEREAS, the Company and Executive previously
executed an Employment Agreement on November 1, 2007, which the
parties wish to restate and amend as set forth herein;
NOW, THEREFORE, in consideration of the mutual
promises and agreements set forth herein, and for other good and
valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the Company and Executive hereby agree as
follows:
AGREEMENT
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Relation to
Prior Agreement . As this is an Amended and Restated
Agreement, it replaces the prior Employment Agreement between the
parities (dated November 1, 2007) (the “Prior
Agreement”) in its entirety. For the avoidance of
doubt, the parties expressly acknowledge that any and all stock
options granted to Executive in connection with the Prior
Agreement, together with the agreements granting such options,
shall remain in full force and effect notwithstanding execution of
this Amended and Restated Employment Agreement. As
provided in Section 3.4 below, however, the applicable agreement
granting such options to Executive shall be amended as soon as
reasonably practicable after the execution of this Agreement to
reflect the changes reflected in said Section 3.4.
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Commencement
Date. This
Agreement is effective as of November 1, 2007 (the
“Commencement Date”).
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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.
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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.
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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.
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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.
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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.
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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.
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Compensation and Benefits.
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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.
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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.
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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.
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Stock
Options . In
connection with the Prior Agreement and on or about November 1,
2007, Executive was 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.
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Such options
were 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 between the parties shall be amended to provide
that in the event of a Change of Control (as defined in Exhibit A
hereto) occurring on or after the effective date of this Agreement,
any and all options remaining unvested at the time of the Change of
Control shall vest immediately. Such amendment shall be
prepared and executed as soon as reasonably practicable after the
execution of this Agreement.
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Deferred
Compensation Plan . Executive will be entitled to
participate in the Company’s deferred compensation plan
(known as the “Restated Special Executive Retirement
Plan” or “Restated SERP”) at a participation rate
of fifteen percent (15%) of Base Compensation.
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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:
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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.
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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.
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Paid
Parking . The
Company will provide Executive with a paid indoor, underground
parking spot, if available, at the Company’s office building
presently located at 3601 West 76 th Street, Minneapolis, Minnesota 55435.
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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.
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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.
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The Company
will keep all Directors and Officers insurance policies current and
will identify Executive, if appropriate, on all such
policies.
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.
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Termination of Employment by the
Company.
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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:
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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;
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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;
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Executive’s conviction of, or
Executive’s guilty or nolo contendere plea with respect to,
any crime punishable as a felony;
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Executive’s conviction of, or
Executive’s guilty or nolo contendere plea with respect to,
any crime involving moral turpitude; or
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Any bar against
Executive from serving as a director, officer or executive of any
firm the securities of which are publicly traded.
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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.
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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”):
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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
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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.
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Termination
for Cause/Inability to Perform . The Company may terminate
Executive’s employment at any time for Cause as defined
within this Agreement after giving Executive the notice and
Executive’s failure to cure pursuant to Section 6.3 above and
in any such case will have no further obligation or liability to
Executive. Likewise, if the Company terminates Executive
for Inability to Perform, the Company will have no further
obligation or liability to Executive except for offering
continuation of benefits as required by the Consolidated Omnibus
Budget Reconciliation Act (“COBRA”) and the regulations
promulgated thereunder.
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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.
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Termination of Employment by
Executive.
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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
reasonably acceptable to the Company. The Company will
also reimburse Executive for all medical insurance premium
payments, made under COBRA, for a period of up to six (6) months
following the date of resignation for Good Reason, provided that
the Company receives sufficient evidence of proof of such payments
during the COBRA period.
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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:
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a reduction in
Executive’s Base Salary below $450,000;
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a requirement
imposed on Executive that results in Executive being based at a
location that is outside of a fifty (50) mile radius of
Executive’s job location immediately prior to the change in
location;
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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
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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.
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Notice . If Executive terminates his
employment for Good Reason, he must provide thirty (30) days’
prior written notice to the Company.
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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.
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Change of
Control Obligations; Deferred Compensation
Payments.
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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,
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