Exhibit 10.1
EMPLOYMENT
AGREEMENT
This EMPLOYMENT AGREEMENT
(“Agreement”) is entered into effective as of
March 1, 2011, by and among Analysts International
Corporation, a Minnesota corporation (the “Company”)
and Brittany B. McKinney (“Executive”).
RECITALS:
The Company and Executive hereby
agree that Executive shall serve as the President and Chief
Executive Officer (“CEO”) 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, and Executive, in consideration of such employment and
other consideration set forth herein, hereby accepts employment,
upon the terms and conditions set forth herein.
2.
POSITION AND
DUTIES
(a)
During the Term of this Agreement,
Executive shall be employed as the CEO of the Company, reporting to
the Board of Directors. While employed hereunder, Executive
shall do all things necessary, legal and incident to the above
position, and otherwise shall perform such functions as the Board
of Directors (the “Board”) of the Company 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 executive 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 Board.
(b)
In the Company’s 2011 proxy
statement the Company’s Board of Directors (the
“Board”) will also nominate Executive as a candidate
for service as a member of the Board for a term of one year
beginning on or about May 24, 2011, if so elected by the
shareholders at the annual meeting of shareholders to be held on
such date. Executive will continue to be a member of the
Board until the earlier of: (1) any termination of
Executive’s employment with the Company;
(2) Executive’s resignation from employment with the
Company; (3) Executive’s resignation as a member of the
Board; (4) the Board’s failure to nominate Executive for
re-election and the subsequent completion of Executive’s
term; (5) Executive’s removal as a member of the Board
pursuant to Minnesota Statute § 302A.223; or (6) failure
of the Company’s shareholders to re-elect Executive to the
Board.
(c)
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 her departure from the Board and such
governing bodies and committees.
3.
TERM
Unless earlier terminated pursuant
to Section 5 hereof, the term of this Agreement (the
“Term”) shall commence on March 1, 2011 (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 unless the Company or Executive provide notice
in writing to the other at least 90 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(e) (Return of Property), 6
(Confidentiality) 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
. During the Employment
Period, the Company shall pay Executive an annualized base salary
of $325,000.00 (“Base Salary”). The Base Salary
shall be payable in cash, subject to applicable withholdings, in
accordance with the then-current payment policies of the Company
for its executives.
(b)
Incentive Compensation
Bonus . In addition
to Executive’s Base Salary, Executive will be eligible to
earn additional cash incentive compensation in the target amount of
50% of Base Salary in each year of employment during the original
term or any renewal 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. The Executive’s Incentive Compensation
Bonus 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. The
Company will pay Executive’s Incentive Compensation Bonus on
April 1 of each calendar year.
(c)
Stock Options and Restricted
Stock Awards .
Simultaneously with executing this Agreement, AIC is also granting
Executive 50,000 stock options and 50,000 restricted stock awards
as set forth in the Incentive Stock Option Agreement and the
Restricted Stock Unit Agreement attached hereto as Exhibits A and
B, respectively.
(d)
Fringe 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 for all employee benefits offered to the Company’s
senior executives. The Company will also provide Executive
the following:
(i)
Medical Insurance
Costs, Etc.
The Company will pay the full cost for family health insurance
coverage, including co-pays and deductibles, if any, for
Executive. The Company will continue to pay premiums on
executive’s existing life insurance policy consistent with
its prior practice.
(ii)
Paid Time Off
. Executive shall be entitled
to paid time off at her 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 paid time off of more than five
(5) consecutive business days.
(iii)
Paid Parking
. The Company will provide
Executive with a paid indoor parking spot, if available from the
building, at the Company’s headquarters office.
(iv)
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
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is not subject to liquidation or
exchange for any other benefit.
(e)
Insurance Policies
. The Company will keep all
Directors and Officers insurance policies current and will identify
Executive, if appropriate, on all such policies
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 thereunder may be terminated, at the
option 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 one hundred twenty
(120) 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
one hundred eighty (180) 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 shall be made by the Board in its reasonable
discretion; provided, however , that if Executive is not
satisfied with the decision of the Board, Executive will submit to
examination by three competent physicians who practice in the
metropolitan area in which the Company then resides, one of whom
shall be selected by the Company, another of whom shall be selected
by Executive, with the third to be selected by the physicians so
selected. The decision of a majority of the physicians so selected
shall supersede the decision of the Board and shall be final and
conclusive.
(c)
Termination For Good
Cause .
Notwithstanding any other provision of this Agreement, the Company
may at any time immediately terminate this Agreement and
Executive’s employment thereunder for Good Cause. For
this purpose, “Good Cause” shall include the following:
the current use of illegal drugs; indictment for any crime
involving moral turpitude, fraud or misrepresentation; commission
of any act which would constitute a felony and which would
adversely affect the business or reputation of the Company; fraud;
misappropriation or embezzlement of Company funds or property;
willful misconduct or grossly negligent or reckless conduct which
is materially injurious to the reputation, business or business
relationships of the Company; material violation or default on any
of the provisions of this Agreement; or material failure to meet
reasonable performance criteria or reasonable standards of conduct
as established from time to time by the Board, which failure
continues for at least 10 days after written notice from the
Company to the Executive. Any alleged cause for termination shall
be delivered in writing to Executive stating the basis for such
cause along with any notice of such termination.
(d)
Termination Without Good
Cause . The Company
may terminate Executive’s employment or elect not to renew
this Agreement prior to the Expiration Date at any time, whether or
not for Good Cause (as “Good Cause” is defined in
Section 5 (c) above). In the event Executive
terminates employment pursuant to Section 5(e) below, or
the Company terminates Executive or elects not to renew this
Agreement for reasons other than Good Cause, Executive’s
Death or Executive’s Disability, the Company will pay
Executive a lump sum amount equal to the Executive’s Base
Salary of $325,000 or such higher base salary as may be in effect
as of the date of such separation from employment, which shall be
paid as soon as practicable following Executive’s execution
(and non-revocation) of a general release of claims in form and
substance acceptable to the Board. In such case the Company
will also (a) pay Executive the Incentive Compensation Bonus
for the then-current fiscal year, prorated over the portion of the
fiscal year for which Executive was employed, to the extent accrued
as of the date of termination without Cause, and (b) 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. During
such six (6) month period, Executive shall also be entitled to
the continuation at Company’s
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expense of the then-current Company benefits to
the extent continuation of such benefits is expressly provided for
under the applicable plans.
(e)
Constructive Termination Without
Cause .
Notwithstanding any other provision of this Agreement,
Executive’s employment under this Agreement may be terminated
during the Term by Executive, which shall be deemed to be
constructive termination by the Company without Cause, if one of
the following events shall occur without the written consent of
Executive: (i) a material change of the Executive’s
functions, duties or responsibilities which change would reduce the
ranking or scope of Executive’s position with the Company;
(ii) a material reduction in Executive’s Base Salary of
$325,000; (iii) the liquidation, dissolution, consolidation or
merger of the Company, or transfer of all or substantially all of
its assets, other than a transaction in which a successor
corporation with a net worth substantially the same as or greater
than that of the Company assumes this Agreement and all obligations
and undertakings of the Company hereunder; (iv) the
notification by the Company of the Company’s intention not to
observe or perform one or more of the material obligations of the
Company under this Agreement; (v) the failure by the Company
to indemnify, pay or reimburse the Executive at the time and under
the circumstances required by Section 12(a) of this
Agreement; or (vi) the occurrence of any other material breach
of this Agreement by the Company or any of its affiliates.
Any such termination pursuant to this Section 5(e) shall
be made by Executive providing written notice to the Company
specifying the event relied upon for such termination and given
within thirty (30) days after such event. Any constructive
termination pursuant to this Section 5(e) shall be
effective thirty (30) days after the date Executive has given the
Company such written notice setting forth the grounds for such
termination with specificity; provided, however , that
Executive shall not be entitled to terminate this Agreement in
respect of any of the grounds set forth above if within thirty (30)
days after such notice the action constituting such ground for
termination has been cured and is no longer continuing.
(f)
Resignation
. If Executive resigns from
her employment (or elects not to renew the Agreement upon its
expiration), other than a constructive termination pursuant to
Section 5(e) above, the Company will have no further
obligation or liability to Executive except such obligation or
liability that has accrued through the last date of employment and
except as otherwise provided in this Agreement.
(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 (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
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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” 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 foregoing agreement does not apply to an
invention for which no equipment, supplies, facility or trade
secret information of the Company was used and which was developed
entirely on the employee’s own time, and (1) which does
not relate (a) directly to the business of the Company (or its
Client [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.
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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 employment with the Company other than through
general solicitation or advertisement not directed at Company
employees.
(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 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, directly or
indirectly, whether as an employee, agent, consultant, director,
officer, investor, partner, shareholder, proprietor, lender or
otherwise own, operate or otherwise work for or participate in any
Competitive Business; and during such period of time Executive
further agrees not to engage in any Competitive Acts with any
Client or prospective Client of the Company.
(ii)
For purposes of this Section 9,
the following terms shall be defined as follows.
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“ 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 client of the Company for whom Executive provided
Services at any time during the previous two years of
Executive’s employment with the Company; or (B) any
client or prospective client of the Company to whom Executive
solicited, proposed, marketed or sold Services at any time during
the previous two years 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.
“ Competitive Business
” means any competitive business, anywhere in the world,
which provides, develops, manages or markets any product or service
that in any way competes with the Company’s business,
products or services as conducted, or planned to be conducted, on
the date of Executive’s termination of employment.
(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 disparag