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AMENDED AND RESTATED EMPLOYMENT AGREEMENT

Employee Retention Agreement

AMENDED AND RESTATED EMPLOYMENT AGREEMENT | Document Parties: Analysts International Corporation You are currently viewing:
This Employee Retention Agreement involves

Analysts International Corporation

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Title: AMENDED AND RESTATED EMPLOYMENT AGREEMENT
Governing Law: Minnesota     Date: 8/22/2008
Industry: Software and Programming     Sector: Technology

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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. 76 th Street, Minneapolis, MN 55435 and Robert E. Woods (“Executive”).

 

 

RECITALS

 

 

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

 

 

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

 

 

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

 

 

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

 

 

 


 

AGREEMENT

 

 

1.   Terms of Employment .

 

 

1.1  

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

 

 

1.2  

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

 

 

1.3  

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

 

 

1.4  

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

 

 

1.5  

Personal Activities .  The provisions of Sections 1.2 and 1.3 of this Agreement will not be deemed to prohibit Executive from devoting reasonable time to personal matters.

 

 

2.   Term of Employment .

 

 

2.1  

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

 

 

2.2  

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

 

 

 

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3.   Compensation and Benefits .

 

 

3.1  

Salary .  For all services rendered by Executive pursuant to this Agreement, the Company will pay Executive an annual base salary (“Base Compensation”) equal to $250,000.  Payment will occur at regular payroll intervals in accordance with the Company’s standard payroll practices.  The Company’s CEO and compensation committee of the Board or the Board itself will review the Executive’s compensation annually and, in its sole discretion, may determine to increase such base salary for the following year but cannot decrease the annual salary below $250,000.

 

 

3.2  

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

 

 

3.3  

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

 

 

3.4  

Stock Options .  On or about January 1, 2008, Executive was granted options to purchase 250,000 shares of the Company’s common stock with one-quarter being vested immediately and the remainder vesting on the anniversary date hereof in even increments over three years from the date of the grant.

 

 

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

 

 

3.5  

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

 

 

 

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3.6  

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

 

 

 

4


 

 

 

4.   Insurance Policies .

 

 

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

 

 

5.   Location .

 

 

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

 

 

6.   Termination of Employment by the Company .

 

 

6.1  

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

 

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

 

 

 

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6.2  

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

 

 

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

 

 

6.2.2   Executive dies.

 

 

6.3  

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

 

 

6.4  

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

 

 

6.5  

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

 

 

 

6


 

7.   Termination of Employment by Executive .

 

 

7.1  

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

 

 

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

 

 

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

 

 

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

 

 

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

 

 

7.2  

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

 

 

7.3  

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

 

8.   Change of Control Obligations; Deferred Compensation Payments .

 

8.1  

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

 

 

8.2  

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

 

 

8.3  

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

 

 

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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 d


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