EXHIBIT
10-ee
AGREEMENT
This Agreement (this “ Agreement
”), effective as of December 18, 2000, is between Analysts
International Corporation, a Minnesota corporation located at 3601
West 76 th Street, Minneapolis, Minnesota 55439-0898
(the “ Company ”) and Paulette Quist
(the “ Executive
”).
A. The Executive is currently employed as the
Company’s Senior Vice President .
B. The Board considers the establishment and
maintenance of a sound and vital management to be essential to
protecting and enhancing the best interests of the Company and its
shareholders, and in this connection recognizes that the
possibility of a Change in Control may raise uncertainty and
questions among management which may result in the departure or
distraction of management personnel to the detriment of the Company
and its shareholders.
C. The Company currently has in place various
arrangements with certain categories of executives that provide
certain economic benefits to those executives in the event of a
Change in Control.
D. The Board has put these arrangements in place
to minimize the risk that Company executive management will depart
prior to a Change in Control, thereby leaving the Company without
adequate executive management personnel during such a critical
period, and to reinforce and encourage the continued attention and
dedication of members of the Company’s executive management
to their assigned duties without distraction in circumstances
arising from the possibility of a Change in Control.
E. The Board has recognized that continuance of an
executive’s position with the Company involves a substantial
commitment to the Company in terms of the executive’s
personal life and professional career and the possibility of
foregoing present and future career opportunities, for which the
Company receives substantial benefits.
F. The Board believes that it is necessary and
appropriate to harmonize the various currently outstanding
arrangements that provide economic benefits to executives in the
event of a Change in Control, update and revise these arrangements
to include additional provisions consistent with arrangements of
this type and to enter into such arrangements with executives who
currently are not party to such arrangements but who are at a level
of responsibility or position similar to the Company executives who
are party to such arrangements.
G. To induce the Executive to remain in the employ
of the Company, this Agreement, which has been approved by the
Board, sets forth the benefits that the Company agrees will be
provided to the Executive in the event the Executive’s
employment with the Company is terminated in connection with a
Change in Control under the circumstances described
below.
H. Certain capitalized terms that are used in this
Agreement are defined in Exhibit A, which is an integral part of
this Agreement.
Accordingly, the Company and Employee each
intending to be legally bound, agree as follows:
1. Term of Agreement . This Agreement is effective immediately and
will have an initial term ending on December 31, 2003. After this
initial term, this Agreement will automatically continue for
consecutive one-year terms (“Renewal Periods”) unless
and until the Company or the Executive has given notice to the
other at least 90 calendar days prior to the commencement of the
next Renewal Period that this Agreement will not be extended past
such next Renewal Period. For example, if the Company notifies the
Executive on September 1, 2003 of its intent not to renew this
Agreement, the term of this Agreement will end at the end of the
next Renewal Period, which will be on December 31, 2004.
Notwithstanding anything in the foregoing to the contrary, if a
Change in Control has occurred during the term of this Agreement,
this Agreement will continue in effect beyond the termination date
then in effect for a period of 36 months following the month during
which the Change in Control occurs or, if later, until the date on
which the Company’s obligations to the Executive arising
under or in connection with this Agreement have been satisfied in
full.
2. Benefits upon a Change in Control
Termination . The
Executive will become entitled to the benefits described in this
Section 2 if and only if (i) the Executive terminates the
Executive’s employment with the Company for any reason within
the period beginning on the first day of the 11 th month
that begins after the month during which the Change in Control
occurs and ending on the last day of such month or (ii) (x) the
Company terminates the Executive’s employment for any reason
other than the Executive’s death or Cause, or the Executive
terminates the Executive’s employment with the Company for
Good Reason, and (y) the termination occurs either within the
period beginning on the date of a Change in Control and ending on
the last day of the 36 th month that begins after the
month during which the Change in Control occurs or prior to a
Change in Control if the Executive’s termination was either a
condition of the Change in Control or was at the request or
insistence of a Person related to the Change in Control.
(a) Cash Payment . Not more than 10 days following the Date of
Termination, or, if later, not more than 10 days following the date
of the Change in Control, the Company will make a lump-sum cash
payment to the Executive in an amount equal to (i) 2.99 times the
Executive’s Eligible Earnings, less (ii) any incentive
compensation payments made to the Executive for the year ending
after the Executive’s Date of Termination.
(b) Special Executive Retirement Plan
. The termination of the
Executive’s employment will be deemed a “separation
from service” pursuant to Section 5 of the Company’s
Restated Special Executive Retirement Plan and the Company will pay
the applicable monthly benefit to the Executive pursuant to Section
4 of the Company’s Restated Special Executive Retirement
Plan. The Company will provide for payment of the benefit pursuant
to this Section 2(b) and Section 4 of the Company’s Restated
Special Executive Retirement Plan through a trust. The trust must
(1) be a grantor trust with respect to which the Company is treated
as the grantor, (2) not cause benefits under this Section 2(b) to
be funded for federal income tax purposes or for purposes of ERISA,
and (3) provide that trust assets will, upon the Company’s
insolvency, be used to satisfy the
claims of the
Company’s general creditors. Neither the Executive nor the
Executive’s surviving spouse will have any interest in the
assets of the trust.
(c) Group Health and Dental Plans
. During the continuation period (as
defined below), the Company will maintain a group health and dental
plan(s) which by its terms covers the Executive (and the
Executive’s family members and dependents who were eligible
to be covered at any time during the 90-day period immediately
prior to the date of the Change in Control for the period after the
Change in Control in which such family members and dependents would
otherwise continue to be covered under the terms of the plan in
effect immediately prior to the Change in Control) under the same
terms and at the same cost to the Executive and the
Executive’s family members and dependents as similarly
situated individuals who continue to be employed by the Company
(without regard to any reduction in such benefits that constitutes
Good Reason). The “continuation period” is the period
beginning on the Executive’s Date of Termination and ending
on the earlier of (i) the last day of the 18 th month
that begins after the Executive’s Date of Termination or (ii)
the date after the Executive’s Date of Termination on which
the Executive first becomes eligible to participate as an employee
in a plan of another employer providing group health and dental
benefits to the Executive and the Executive’s eligible family
members and dependents which plan does not contain any exclusion or
limitation with respect to any pre-existing condition of the
Executive or any eligible family member or dependent who would
otherwise be covered under the Company’s plan but for this
clause (ii). To the extent the Executive incurs a tax liability
(including federal, state and local taxes and any interest and
penalties with respect thereto) in connection with a benefit
provided pursuant to this Section 2(c) which the Executive would
not have incurred had the Executive been an active employee of the
Company participating in the Company’s group health and
dental plan, the Company will make a payment to the Executive in an
amount equal to such tax liability plus an additional amount
sufficient to permit the Executive to retain a net amount after all
taxes (including penalties and interest) equal to the initial tax
liability in connection with the benefit. For purposes of applying
the foregoing, the Executive’s tax rate will be deemed to be
the highest statutory marginal state and federal tax rate (on a
combined basis) then in effect. The payment pursuant to this
Section 2(c) will be made within 10 days after the
Executive’s remittal of a written request for payment
accompanied by a statement indicating the basis for and amount of
the liability.
(d) Other Welfare Benefits . During the period beginning on the
Executive’s Date of Termination and ending on the earlier of
(i) the last day of the eighteenth (18 th ) month that
begins after the Executive’s Date of Termination, or (ii) the
date after the Executive’s Date of Termination on which the
Executive first becomes eligible to participate as an employee in a
plan of another employer providing substantially similar welfare
benefits to the Executive in the aggregate (and the
Executive’s family members and dependents who were eligible
to be covered at any time during the 90-day period immediately
prior to the date of a Change in Control for the period after the
Change in Control in which such family members and dependents would
otherwise continue to be covered under the terms of the applicable
Benefit Plan in effect immediately prior to the Change in Control),
the Company will provide, or arrange to provide, to the extent such
policies or coverages can be obtained on commercial reasonable
terms, the same or
equivalent
accidental death and dismemberment, short and long-term disability,
life insurance coverages, and all other insurance policies and
health and welfare benefits (other than benefits pursuant to any
cafeteria plan maintained by the Company pursuant to Section 125 of
the Code) to the Executive (and the Executive’s family
members and dependents who were eligible to be covered at any time
during the 90-day period immediately prior to the date of a Change
in Control for the period after the Change in Control in which such
family members and dependents would otherwise continue to be
covered under the terms of the applicable Benefit Plan in effect
immediately prior to the Change in Control) under the same terms
and at the same cost to the Executive and the Executive’s
family members and dependents as similarly situated individuals who
continue to be employed by the Company (without regard to any
reduction in such benefits that constitutes Good Reason). To the
extent the Executive incurs a tax liability (including federal,
state and local taxes and any interest and penalties with respect
thereto) in connection with a benefit provided pursuant to this
Section 2(d) which the Executive would not have incurred had the
Executive been an active employee of the Company participating in
the Company’s welfare benefit plans, the Company will make a
payment to the Executive in an amount equal to such tax liability
plus an additional amount sufficient to permit the Executive to
retain a net amount after all taxes (including penalties and
interest) equal to the initial tax liability in connection with the
benefit. For purposes of applying the foregoing, the
Executive’s tax rate will be deemed to be the highest
statutory marginal state and federal tax rate (on a combined basis)
then in effect. The payment pursuant to this Section 2(d) will be
made within 10 days after the Executive’s remittal of a
written request for payment accompanied by a statement indicating
the basis for and amount of the liability.
(e) Termination of Non-Competition
Agreements . All
non-competition agreements (or non-competition provisions within
other agreements) restricting the activities of the Executive after
the termination of the Executive’s employment with the
Company will be null and void and of no further force and
effect.
If, on or after the date of a Change in Control,
an Affiliate is sold, merged, transferred or in any other manner or
for any other reason ceases to be an Affiliate or all or any
portion of the business or assets of an Affiliate are sold,
transferred or otherwise disposed of and the acquiror is not the
Parent Corporation or an Affiliate (a “ Disposition
”), and the Executive remains or becomes employed by the
acquiror or an “affiliate” of the acquiror (as defined
in this Agreement but substituting “acquiror” for
“Parent Corporation”) in connection with the
Disposition, the Executive will be deemed to have terminated
employment on the effective date of the Disposition for purposes of
this Section 2 and will be entitled to the benefits described in
this Section 2 unless (x) the acquiror and its affiliates jointly
and severally expressly assume and agree, in a manner that is
enforceable by the Executive, to perform the obligations of this
Agreement to the same extent that the Company would be required to
perform if the Disposition had not occurred and (y) the Successor
guarantees, in a manner that is enforceable by the Executive,
payment and performance by the acquiror.
(a) Anything in this Agreement to the contrary
notwithstanding, in the event it will be determined that any
payments or distributions by the Company to or for the benefit of
the Executive (whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise,
but determined without regard to any payments required under this
Section 3) (collectively, the “ Payments ”)
would be subject to the excise tax imposed by Section 4999 of the
Code or any interest or penalties are incurred by the Executive
with respect to such excise tax (such excise tax, together with any
such interest and penalties, are hereinafter collectively referred
to as the “ Excise Tax ”), then the Executive
will be entitled to receive an additional payment (a “
Gross-Up Payment ”) in an amount such that, after
payment by the Executive of all taxes (and any interest or
penalties imposed with respect to such taxes), including any income
taxes and Excise Tax imposed upon the Gross-Up Payment, the
Executive retains an amount of the Gross-Up Payment equal to the
Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 3(d), all
determinations required to be made under this Section 3, including
whether and when a Gross-Up Payment is required and the amount such
Gross-Up Payment and the assumptions to be used in arriving at such
determination, must be made by the Company’s external
auditors (the “ Accounting Firm ”), which must
provide detailed supporting calculations both to the Company and
the Executive within 15 business days of the receipt of notice from
the Executive that there has been a Payment, or such earlier time
as is requested by the Company. In the event that the Accounting
Firm is serving as accountant or auditor for the individual, entity
or group effecting the Change of Control, the Executive must
appoint another nationally recognized accounting firm to make the
determinations required hereunder (which accounting firm will then
be referred to as the “Accounting Firm” hereunder). All
fees and expenses of the Accounting Firm must be borne solely by
the Company. Any Gross-Up Payment, as determined pursuant to this
Section 3, must be paid by the Company to the Executive within five
days of the receipt of the Accounting Firm’s determination.
Any determination by the Accounting Firm will be binding upon the
Company and the Executive.
(c) As a result of uncertainty in the application
of Section 4999 of the Code at the time of the initial
determination by the Accounting Firm hereunder, it is possible that
Gross-Up Payments which should have been made by the Company will
not have been made (“ Underpayment ”),
consistent with the calculations required to be made hereunder. In
the event that the Company exhausts its remedies pursuant to
Section 3(d) and the Executive thereafter is required to make a
payment of any additional Excise Tax, the Accounting Firm must
determine the amount of the Underpayment that has occurred and any
such Underpayment must be promptly paid by the Company to or for
the benefit of the Executive.
(d) The Executive must notify the Company in
writing of any claim by the Internal Revenue Service or any other
taxing authority that, if successful, would require the payment by
the Company of any Gross-Up Payment. Such notification must be
given as soon as practicable but no later than 10 business days
after the Executive knows of
such claim and
must apprise the Company of the nature of such claim and the date
on which such claim is requested to be paid. The Executive must not
pay such claim prior to the expiration of the 30-day period
following the date on which it gives such notice to the Company (or
such shorter period ending on the date that any payment of taxes
with respect to such claim is due). If the Company notifies the
Executive in writing prior to the expiration of such period that it
desires to contest such claim, the Executive must:
(i) give the Company any information reasonably
requested by the Company relating to such claim;
(ii) take such action in connection with contesting
such claim as the Company will reasonably request in writing from
time to time, including accepting legal representation with respect
to such claim by an attorney reasonably selected by the
Company;
(iii) cooperate with the Company in good faith in
order to effectively contest such claim; and
(iv) permit the Company to participate in any
proceedings relating to such claim;
provided,
however, that the Company will bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in
connection with such contest and will indemnify and hold the
Executive harmless, on an after-tax basis, for any Excise Tax or
income tax (including interest and penalties with respect thereto)
imposed as a result of such representation and payment of costs and
expenses. Without limitation on the foregoing provisions of this
Section 3(d), the Company will control all proceedings taken in
connection with such contest and, at its sole option, may pursue or
forego any and all administrative appeals, proceedings, hearings
and conferences with the taxing authority in respect of such claim
and may, at its sole option, either direct the Executive to pay the
tax claimed and sue for a refund or contest the claim in any
permissible manner, and the Executive agrees to prosecute such
contest to a determination before any administrative tribunal, in a
court of initial jurisdiction and in one or more appellate courts,
as the Company will determine; provided further, however, that if
the Company directs the Executive to pay such claim and sue for a
refund, the Company will advance the amount of such payment to the
Executive on an interest-free basis and will indemnify and hold the
Executive harmless, on an after-tax basis, from any Excise Tax or
income tax (including interest or penalties with respect thereto)
imposed with respect to such advance or with respect to any imputed
income with respect to such advance; and provided further that any
extension of the statute of limitations relating to payment of
taxes for the taxable year of the Executive with respect to which
such contested amount is claimed to be due is limited solely to
such contested amount. Furthermore, the Company’s control of
the contest will be limited to issues with respect to which a
Gross-Up Payment would be payable hereunder and the Executive will
be entitled to settle or contest, as the case may be, any other
issue raised by the Internal Revenue Service or any other taxing
authority.
(e)
If, after the receipt by the
Executive of an amount advanced by the Company pursuant to Section
3(d), the Executive becomes entitled to receive any refund with
respect to such claim, the Executive must (subject to the
Company’s complying with the requirements of Section 3(d))
promptly pay to the Company the amount of such refund (together
with any interest paid or credited thereon after taxes applicable
thereto). If, after the receipt by the Executive of an amount
advanced by the Company pursuant to Section 3(d), a determination
is made that the Executive will not be entitled to any refund with
respect to such claim and the Company does not notify the Executive
in writing of its intent to contest such denial of refund prior to
the expiration of thirty days after such determination, then such
advance will be forgiven and will not be required to be repaid and
the
