Exhibit 6(e)
AGREEMENT
This Agreement (this "Agreement"), effective as of December 18, 2000, is
between Analysts International Corporation, a Minnesota corporation located at
3601 West 76th Street, Minneapolis, Minnesota 55439-0898 (the "Company") and
___________________ (the "Executive").
A. The Executive is currently employed as the Company's .
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. 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 11th 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 36th 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 18th
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) Supplemental Medicare Benefits. The termination of the
Executive's employment will be deemed a "separation from service" pursuant
to Section 4 of the Company's Supplemental Medicare Coverage Plan and the
Company will provide 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 Supplemental
Medicare Coverage Plan in effect immediately prior to the Change in
Control) the applicable benefits pursuant to Section 3 of the Company's
Supplemental Medicare Coverage Plan.
(e) Supplemental Dental Benefits. In the event the Executive is at
least 65 years of age on the Executive's Date of Termination, the
termination of the Executive's employment will be deemed a "separation
from service" pursuant to Section 4 of the Company's Supplemental Dental
Coverage Plan and the Company will provide 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 Supplemental Dental Coverage Plan in effect immediately
prior to the Change in Control) the applicable benefits pursuant to
Section 3 of the Company's Supplemental Dental Coverage Plan.
(f) 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 (18th) 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(f) 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(f) 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.
(f) 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 the 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.
3. Gross-Up Payments.
(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 amount of such advance will offset, to the extent thereof, the
amount of Gross-Up Payment required to be paid.
4. Indemnification. Following a Change in Control, the Company will indemnify
and advance expenses to the Executive for damages, costs and expenses
(including, without limitation, judgments, fines, penalties, settlements and
reasonable fees and expenses of the Executive's counsel) incurred in connection
with all matters, events and transactions relating to the Executive's service to
or status with the Company or any other corporation, employee benefit plan or
other Person for which the Executive served at the request of the Company to the
extent that the Company would have been required to do so under applicable law,
corporate articles, bylaws or agreements or instruments of any nature with or
covering the Executive, as in effect immediately prior to the Change in Control
and to any further extent as may be determined or agreed upon following the
Change in Control.
5. Miscellaneous.
(a) Successors. The Parent Corporation must seek to have any
Successor, by agreement in form and substance satisfactory to the
Executive, assent to the fulfillment by the Company of the Company's
obligations under this Agreement. Failure of the Parent Corporation to
obtain such assent at least three business days prior to the time a Person
becomes a Successor (or where the Parent Corporation does not have at
least three business days' advance notice that a Person may become a
Successor, within one business day after having notice that such Person
may become or has become a Successor) will constitute Good Reason for
termination by the Executive of the Executive's employment. The date on
which any such succession becomes effective will be deemed the Date of
Termination, and Notice of Termination will be deemed to have been given
on that date. A Successor has no rights, authority or power with respect
to this Agreement prior to a Change in Control.
(b) Binding Agreement. This Agreement inures to the benefit of, and
is enforceable by, the Executive, the Executive's personal and legal
representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If the Executive dies while any
amount would still be payable to the Executive under this Agreement if the
Executive had continued to live, all such amounts, unless otherwise
provided in this Agreement, will be paid in accordance with the terms of
this Agreement to the Executive's devisee, legatee or other designee or,
if there be no such designee, to the Executive's estate.
(c) No Mitigation. The Executive will not be required to mitigate
the amount of any benefits the Company becomes obligated to provide to the
Executive in connection with this Agreement by seeking other employment or
otherwise. The benefits to be provided to the Executive in connection with
this Agreement may not be reduced, offset or subject to recovery by the
Company by any benefits the Executive may receive from other employment or
otherwise.
(d) No Setoff. The Company has no right to setoff benefits owed to
the Executive under this Agreement against amounts owed or claimed to be
owed by the Executive to the Company under this Agreement or otherwise.
(e) Taxes. All benefits to be provided to the Executive in
connection with this Agreement will be subject to required withholding of
federal, state and local income, excise and employment-related taxes. The
Company's good faith determination with respect to its obligation to
withhold such taxes relieves it of any obligation that such amounts should
have been paid to the Executive.
(f) Notices. For the purposes of this Agreement, notices and all
other communications provided for in, or required under, this Agreement
must be in writing and will be deemed to have been duly given when
personally delivered or when mailed by United States registered or
certified mail, return receipt requested, postage prepaid and addressed to
each party's respective address set forth on the first page of this
Agreement
(provided that all notices to the Company must be directed to the
attention of the chair of the Board), or to such other address as either
party may have furnished to the other in writing in accordance with these
provisions, except that notice of change of address will be effective only
upon receipt.
(g) Disputes. If the Executive so elects, any dispute, controversy
or claim arising under or in connection with this Agreement will be
settled exclusively by binding arbitration administered by the American
Arbitration Association in Minneapolis, Minnesota in accordance with the
Commercial Arbitration Rules of the American Arbitration Association then
in effect; provided that the Executive may seek specific performance of
the Executive's right to receive benefits until the Date of Termination
during the pendency of any dispute or controversy arising under or in
connection with this Agreement. Judgment may be entered on the
arbitrator's award in any court having jurisdiction. If any dispute,
controversy or claim for damages arising under or in connection with this
Agreement is settled by arbitration, the Company will pay, or if elected
by the Executive, reimburse, all fees, costs and expenses incurred by the
Executive related to such arbitration unless the arbitrators decide that
the Executive's claim was frivolous or advanced by the Executive in bad
faith. If the Executive does not elect arbitration, the Executive may
pursue all available legal remedies. The Company will pay, or if elected
by the Executive, reimburse the Executive for, all fees, costs and
expenses incurred by the Executive in connection with any actual,
threatened or contemplated litigation relating to this Agreement to which
the Executive is or reasonably expects to become a party, whether or not
initiated by the Executive, if the Executive is successful in recovering
any benefit under this Agreement as a result of such action. The parties
agree that any litigation arising under or in connection with this
Agreement must be brought in a court of competent jurisdiction in the
State of Minnesota, and hereby consent to the exclusive jurisdiction of
said courts for this purpose and agree not to assert that such courts are
an inconvenient forum. The Company will not assert in any dispute or
controversy with the Executive arising under or in connection with this
Agreement the Executive's failure to exhaust administrative remedies.
(h) Effect of Plan Benefits on Other Severance Plans. In the event
the Executive receives any payment under the terms of this Agreement, the
Executive will not be eligible to receive benefits under any other
severance pay plan sponsored or maintained by the Company, including
without limitation the Analysts International, Inc. Executive Change in
Control Severance Pay Plan and the Analysts International, Inc. Change in
Control Severance Pay Plan.
(i) Other Arrangements. This Agreement, including Exhibit A attached
hereto and incorporated as an integral part of this Agreement, constitutes
the entire agreement of the parties with respect to the subject matter
hereof, and no agreements or representations, oral or otherwise, express
or implied, with respect to the subject matter to this Agreement have been
made by any party which are not expressly set forth in this Agreement. To
the extent that any provision of any Other Arrangement limits, qualifies
or is inconsistent with any provision of this Agreement, then for purposes
of this Agreement, while such
Other Arrangement remains in force, the provision of this Agreement will
control and such provision of such Other Arrangement will be deemed to
have been superseded, and to be of no force or effect, as if such Other
Arrangement had been formally amended to the extent necessary to
accomplish such purpose. Nothing in this Agreement prevents or limits the
Executive's continuing or future participation in any Other Arrangement
for which the Executive may qualify, and nothing in this Agreement limits
or otherwise affects the rights the Executive may have under any Other
Arrangement. Amounts that are vested benefits or which the Executive is
otherwise entitled to receive under any Other Arrangement at or subsequent
to the Date of Termination will be payable in accordance with such Other
Arrangement.
(j) No Employment or Service Contract. Nothing in this Agreement is
intended to provide the Executive with any right to continue in the employ
of the Company for any period of specific duration or interfere with or
otherwise restrict in any way the Executive's rights or the rights of the
Company.
(k) Payment; Assignment. Benefits payable under this Agreement will
be paid only from the general assets of the Company. No person has any
right to or interest in any specific assets of the Company by reason of
this Agreement. To the extent benefits under this Agreement are not paid
when due to any individual, he or she is a general unsecured creditor of
the Company with respect to any amounts due. Benefits payable pursuant to
this Agreement and the right to receive future benefits may not be
anticipated, alienated, sold, transferred, assigned, pledged, encumbered
or subject to any charge.
(l) Late Payments. Benefits not paid under this Agreement when due
will accrue interest at the rate of 18% per year or the maximum rate
permitted under applicable law.
(m) Survival. The respective obligations of, and benefits afforded
to, the Company and the Executive which by their express terms or clear
intent survive termination of the Executive's employment with the Company
or termination of this Agreement, as the case may be, will survive
termination of the Executive's employment with the Company or termination
of this Agreement, as the case may be, and will remain in full force and
effect according to their terms.
(n) Amendments; Waivers. No provision of this Agreement may be
modified, waived or discharged unless such modification, waiver or
discharge is agreed to in a writing signed by the Executive and a duly
authorized officer of the Parent Corporation. No waiver by any party to
this Agreement at any time of any breach by another party to this
Agreement of, or of compliance with any condition or provision of this
Agreement to be performed by such party will be deemed a waiver of similar
or dissimilar provisions or conditions at the same or at any prior or
subsequent time.
(o) Governing Law. This Agreement and the legal relations among the
parties as to all matters, including, without limitation, matters of
validity, interpretation, construction, performance and remedies, will be
governed by and construed exclusively
in accordance with the internal laws of the State of Minnesota (without
regard to the conflict of laws principles of any jurisdiction).
(p) Further Assurances. The parties to this Agreement agree to
perform, or cause to be performed, such further acts and deeds and to
execute and deliver or cause to be executed and delivered, such additional
or supplemental documents or instruments as may be reasonably required by
the other party to carry into effect the intent and purpose of this
Agreement.
(q) Interpretation. The invalidity or unenforceability of all or any
part of any provision of this Agreement will not affect the validity or
enforceability of the remainder of such provision or of any other
provision of this Agreement, which will remain in full force and effect.
(r) Counterparts. This Agreement may be executed in several
counterparts, each of which will be deemed to be an original, but all of
which together will constitute one and the same instrument.
[Remainder of page intentionally left blank]
The Company and the Executive have executed this Agreement as of the date
first above written.
ANALYSTS INTERNATIONAL CORPORATION
By:______________________________________________
Agreed to as of this _____ day of January, 2001
_________________________________________________
[Executive]
Exhibit A
DEFINITIONS
For purposes of the Agreement, the following terms will have the meaning
set forth below in this Exhibit A unless the context clearly requires otherwise.
Terms defined elsewhere in the Agreement will have the same meaning throughout
the Agreement.
1. "Affiliate" means (i) any corporation at least a majority of whose
outstanding securities ordinarily having the right to vote at elections of
directors is owned directly or indirectly by the Parent Corporation or (ii) any
other form of business entity in which the Parent Corporation, by virtue of a
direct or indirect ownership interest, has the right to elect a majority of the
members of such entity's governing body.
2. "Base Pay" means the Executive's annual base salary from the Company at the
rate in effect immediately prior to a Change in Control or at the time Notice of
Termination is given, whichever is greater. Base Pay includes only regular cash
salary (plus the amount of any automobile allowance paid to the Executive or any
automobile lease payments made by the Company on behalf of the Executive) and is
determined before any reduction for deferrals pursuant to any nonqualified
deferred compensation plan or arrangement, qualified cash or deferred
arrangement or cafeteria plan.
3. "Benefit Plan" means any
(a) employee benefit plan as defined in Section 3(3) of ERISA;
(b) cafeteria plan described in Code Section 125;
(c) plan, policy or practice providing for paid vacation, other paid
time off or short-or long-term profit sharing, bonus or incentive payments
or perquisites; or
(d) stock option, stock purchase, restricted stock, phantom stock,
stock appreciation right or other equity-based compensation plan with
respect to the securities of any Affiliate
that is sponsored, maintained or contributed to by the Company for the benefit
of employees (and/or their families and dependents) generally or the Executive
in particular (and/or the Executive's family and dependents).
4."Board" means the board of directors of the Parent Corporation duly qualified
and acting at the time in question. On and after the date of a Change in
Control, any duty of the Board in connection with this Agreement is nondelegable
and any attempt by the Board to delegate any such duty is ineffective.
5. "Cause" means:
(a) the Executive's gross misconduct that is materially and
demonstrably injurious to the Company;
(b) the Executive's willful and continued failure to perform
substantially the Executive's duties with the Company (other than any such
failure (1) resulting from the Executive's incapacity due to bodily injury
or physical or mental illness or (2) relating to changes in the
Executive's duties after a Change in Control that constitute Good Reason)
after a demand for substantial performance is delivered to the Executive
by the chair of the Board which specifically identifies the manner in
which the Executive have not substantially performed the Executive's
duties and provides for a reasonable period of time within which the
Executive may take corrective actions; or
(c) the Executive's conviction (including a plea of nolo contendere)
of willfully engaging in illegal conduct constituting a felony or
gross misdemeanor under federal or state law which is materially and
demonstrably injurious to the Company or which impairs the
Executive's ability to perform substantially the Executive's duties
for the Company.
An act or failure to act will be considered "gross or willful" for this
purpose only if done, or omitted to be done, by the Executive in bad faith and
without reasonable belief that it was in, or not opposed to, the best interests
of the Company. Any act, or failure to act, based upon authority given pursuant
to a resolution duly adopted by the Board (or a committee thereof) or based upon
the advice of counsel for the Company will be conclusively presumed to be done,
or omitted to be done, by the Executive in good faith and in the best interests
of the Company. It is also expressly understood that the Executive's attention
to matters not directly related to the business of the Company will not provide
a basis for termination for Cause so long as the Board did not expressly
disapprove in writing of the Executive's engagement in such activities either
before or within a reasonable period of time after the Board knew or could
reasonably have known that the Executive engaged in those activities.
Notwithstanding the foregoing, the Executive may not be terminated for Cause
unless and until there has been delivered to the Executive a copy of a
resolution duly adopted by the affirmative vote of not less than a majority of
the entire membership of the Board at a meeting of the Board called and held for
the purpose (after reasonable notice to the Executive and an opportunity for the
Executive, together with the Executive's counsel, to be heard before the Board),
finding that in the good faith opinion of the Board the Executive were guilty of
the conduct set forth above in clauses (a), (b) or (c) of this definition and
specifying the particulars thereof in detail.
6. "Change in Control" means the occurrence of any of the following on or after
December 18, 2000:
(a) the sale, lease, exchange or other transfer, directly or
indirectly, of all or substantially all of the assets of the Parent
Corporation, in one transaction or in a series of related transactions, to
any Person;
(b) the approval by the shareholders of the Parent Corporation of
any plan or proposal for the liquidation or dissolution of the Parent
Corporation;
(c) any Person, other than a "bona fide underwriter," becomes, after
the date of this Agreement, the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act),
directly or indirectly, of (i) 20 percent or more, but not more than 50
percent, of the combined voting power of the Parent Corporation's
outstanding securities ordinarily having the right to vote at elections of
directors, unless the transaction resulting in such ownership has been
approved in advance by the "continuity directors" or (ii) more than 50
percent of the combined voting power of the Parent Corporation's
outstanding securities ordinarily having the right to vote at elections of
directors (regardless of any approval by the continuity directors);
(d) a merger or consolidation to which the Parent Corporation is a
party if the shareholders of the Parent Corporation immediately prior to
the effective date of such merger or consolidation have, solely on account
of ownership of securities of the Parent Corporation at such time,
"beneficial ownership" (as defined in Rule 13d-3 under the Exchange Act)
immediately following the effective date of such merger or consolidation
of securities of the surviving corporation representing (i) 50 percent or
more, but not more than 80 percent, of the combined voting power of the
surviving corporation's then outstanding securities ordinarily having the
right to vote at elections of directors, unless such merger or
consolidation has been approved in advance by the continuity directors, or
(ii) less than 50 percent of the combined voting power of the surviving
corporation's then outstanding securities ordinarily having the right to
vote at elections of directors (regardless of any approval by the
continuity directors); or
(f) the continuity directors cease for any reason to constitute at
least a majority of the Board.
For purposes of the definition of a Change in Control, a "continuity
director" means any individual who is a member of the Board on the date of the
Agreement, while he or she is a member of the Board, and any individual who
subsequently becomes a member of the Board whose election or nomination for
election by the Parent Corporation's shareholders was approved by a vote of at
least a majority of the directors who are continuity directors (either by a
specific vote or by approval of the proxy statement of the Parent Corporation in
which such individual is named as a nominee for director without objection to
such nomination). For example, if a majority of the seven individuals
constituting the Board on December 18, 2000, approved a proxy statement in which
two different individuals were nominated to replace two of the individuals who
were members of the Board on December 18, 2000, the two newly elected directors
would join the five remaining directors who were members of the Board on
December 18, 2000 as continuity directors. Similarly, if a majority of those
seven directors approved a proxy statement in which three different individuals
were nominated to replace three other directors who were members of the Board on
December 18, 2000, the three newly elected directors would also become, along
with the other four directors, continuity directors. Individuals subsequently
joining the Board could become continuity directors under the principles
reflected in this example. For purposes of the definition of a Change in
Control, a "bona fide underwriter" means a Person engaged in business as an
underwriter of securities that acquires securities of the Parent Corporation
through such Person's participation in good faith in a firm commitment
underwriting until the expiration of 40 days after the date of such acquisition.
7."Code" means the Internal Revenue Code of 1986, as amended. Any reference to a
specific provision of the Code includes a reference to such provision as it may
be amended from time to time and to any successor provision.
8."Company" means the Parent Corporation, any Successor and any Affiliate.
9. "Date of Termination" following a Change in Control (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 any Person related to the Change
in Control) means:
(a) if the Executive's employment is to be terminated by the
Executive, the date specified in the Notice of Termination which in no
event may be a date more than 15 days after the date on which Notice of
Termination is given unless the Company agrees in writing to a later date;
(b) if the Executive's employment is to be terminated by the Company
for Cause, the date specified in the Notice of Termination;
(c) if the Executive's employment is terminated by reason of the
Executive's death, the date of the Executive's death; or
(d) if the Executive's employment is to be terminated by the
Company for any reason other than Cause or the Executive's
death, the date specified in the Notice of Termination, which
in no event may be a date earlier than 15 days after the date
on which a Notice of Termination is given, unless the
Executive expressly agrees in writing to an earlier date.
In the case of termination by the Company of the Executive's employment
for Cause, if the Executive has not previously expressly agreed in writing to
the termination, then within the 30-day period after the Executive's receipt of
the Notice of Termination, the Executive may notify the Company that a dispute
exists concerning the termination, in which event the Date of Termination will
be the date set either by mutual written agreement of the parties or by the
judge or arbitrators in a proceeding as provided in Section 5(g) of the
Agreement. During the pendency of any such dispute, the Executive will continue
to make the Executive available to provide services to the Company and the
Company will continue to pay the Executive the Executive's full compensation and
benefits in effect immediately prior to the date on which the Notice of
Termination is given (without regard to any changes to such compensation or
benefits that constitute Good Reason) and until the dispute is resolved in
accordance with Section 5(g) of the Agreement. The Executive will be entitled to
retain the full amount of any such compensation and benefits without regard to
the resolution of the dispute unless the judge or arbitrators decide(s) that the
Executive's claim of a dispute was frivolous or advanced by the Executive in bad
faith.
10. "Eligible Earnings" means the sum of (i) the average of the Executive's Base
Pay for the last five years of the Company ending on or before the Date of
Termination, or if the Executive was employed by the Company for fewer than five
years, for the number of years for which the
Executive was employed plus (ii) the average of any incentive compensation paid
by the Company to the Executive for the last five years of the Company ending on
or before the Date of Termination, or if the Executive was eligible to receive
such incentive compensation for fewer than five years, for the number of years
for which the Executive was eligible. If the Executive's Base Pay or incentive
compensation for a year relates to a period of less than 12 months, the amount
of the Base Pay or incentive compensation will be annualized in determining the
Executive's Eligible Earnings.
11."ERISA" means the Employee Retirement Income Security Act of 1974, as
amended. Any reference to a specific provision of ERISA includes a reference to
such provision as it may be amended from time to time and to any successor
provision.
12."Exchange Act" means the Securities Exchange Act of 1934, as amended. Any
reference to a specific provision of the Exchange Act or to any rule or
regulation thereunder includes a reference to such provision as it may be
amended from time to time and to any successor provision.
13. "Good Reason" means:
(a) a change in the Executive's title(s), status, position(s),
authority, duties or responsibilities as an executive of the Company as in
effect immediately prior to the Change in Control which, in the
Executive's reasonable judgment, is material and adverse (other than, if
applicable, any such change directly attributable to the fact that the
Parent Corporation is no longer publicly owned); provided, however, that
Good Reason does not include such a change that is remedied by the Company
promptly after receipt of notice of such change is given by the Executive;
(b) a reduction by the Company in the Executive's Base Pay, or an
adverse change in the form or timing of the payment thereof, as in effect
immediately prior to the Change in Control or as thereafter increased;
(c) the failure by the Company to cover the Executive under Benefit
Plans that, in the aggregate, provide substantially similar benefits to
the Executive and/or the Executive's family and dependents at a
substantially similar total cost to the Executive (e.g., premiums,
deductibles, co-pays, out of pocket maximums, required contributions and
the like) relative to the benefits and total costs under the Benefit Plans
in which the Executive (and/or the Executive's family or dependents) were
participating at any time during the 90-day period immediately preceding
the Change in Control;
(d) the Company's requiring the Executive to be based more than 30
miles from where the Executive's office is located immediately prior to
the Change in Control, except for required travel on the Company's
business, and then only to the extent substantially consistent with the
business travel obligations which the Executive undertook on behalf of the
Company during the 90-day period immediately preceding the
Change in Control (without regard to travel related to or in anticipation
of the Change in Control);
(e) the failure by the Company to obtain from any Successor the
assent to this Agreement contemplated by Section 4(a) of the Agreement;
(f) any purported termination by the Company of the Executive's
employment that is not properly effected pursuant to a Notice of
Termination and pursuant to any other requirements of this Agreement, and,
for purposes of this Agreement, no such purported termination will be
effective; or
(g) any refusal by the Company to continue to allow the Executive to
attend to matters or engage in activities not directly related to the
business of the Company which, at any time prior to the Change in Control,
the Executive were not expressly prohibited in writing by the Board from
attending to or engaging in.
The Executive's continued employment does not constitute consent to, or
waiver of any rights arising in connection with, any circumstances constituting
Good Reason. The Executive's termination of employment for Good Reason as
defined above will constitute Good Reason for all purposes of the Agreement
notwithstanding that the Executive may also thereby be deemed to have retired
under any applicable benefit plan, policy or practice of the Company.
14. "Notice of Termination" means a written notice given on or after the date of
a Change in Control (unless the Executive's termination before the date of the
Change in Control was either a condition of the Change in Control or was at the
request or insistence of any Person related to the Change in Control in which
case the written notice may be given before the date of the Change in Control)
which indicates the specific termination provision in the Agreement pursuant to
which the notice is given. Any purported termination by the Company or by the
Executive on or after the date of a Change in Control (or before the date of 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 any Person related to
the Change in Control) must be communicated by written Notice of Termination to
be effective; provided, that the Executive's failure to provide Notice of
Termination will not limit any of the Executive's rights under the Agreement
except to the extent the Company demonstrates that it suffered material actual
damages by reason of such failure.
15. "Other Arrangement" is any Benefit Plan or other plan, policy or practice of
the Company or any other agreement between the Executive and the Company, other
than this Agreement.
16."Parent Corporation" means Analysts International Corporation and any
Successor.
17."Person" means any individual, corporation partnership, group, association or
other person," as such term is used in Section 13(d) or Section 14(d) of the
Exchange Act, other than the Parent Corporation, any Affiliate or any benefit
plan(s) sponsored by the Parent Corporation or an Affiliate.
18. "Successor" means any Person that succeeds to, or has the practical ability
to control (either immediately or solely with the passage of time), the Parent
Corporation's business directly, by merger, consolidation or other form of
business combination, or indirectly, by purchase of the Parent Corporation's
outstanding securities ordinarily having the right to vote at the election of
directors or all or substantially all of its assets or otherwise.
ANALYSTS INTERNATIONAL CORPORATION
EXECUTIVE CHANGE IN CONTROL SEVERANCE PAY PLAN
As Adopted Effective December 18, 2000
ANALYSTS INTERNATIONAL CORPORATION
EXECUTIVE CHANGE IN CONTROL SEVERANCE PAY PLAN
Table of Contents
Page
----
ARTICLE 1 INTRODUCTION.........................................................4
1.1. Plan Name........................................................4
1.2. Plan Type........................................................4
1.3. Plan Purpose.....................................................4
ARTICLE 2 DEFINITIONS, CONSTRUCTION AND INTERPRETATIONS........................4
2.1. Affiliate........................................................4
2.2. Base Pay.........................................................4
2.3. Benefit Plan.....................................................4
2.4. Board............................................................5
2.5. Cause............................................................5
2.6. Change in Control................................................6
2.7. Code.............................................................7
2.8. Company..........................................................7
2.9. Date of Termination..............................................7
2.10. Eligible Participant.............................................7
2.11. ERISA............................................................8
2.12. Exchange Act.....................................................8
2.13. Good Reason......................................................8
2.14. Governing Law....................................................9
2.15. Headings.........................................................9
2.16. Notice of Termination............................................9
2.17. Number and Gender................................................9
2.18. Other Arrangement................................................9
2.19. Parent Corporation...............................................9
2.20. Participant......................................................9
2.21. Plan.............................................................9
2.22. Person...........................................................9
2.23. Qualified Employee..............................................10
2.24. Successor.......................................................10
2.25. Trust...........................................................10
2.26. Trustee.........................................................10
ARTICLE 3 PARTICIPATION AND ELIGIBILITY FOR BENEFITS..........................10
3.1. Commencement of Participation...................................10
3.2. Ceasing to be a Qualified Employee..............................11
3.3. Eligibility for Benefits........................................11
ARTICLE 4 BENEFITS............................................................11
4.1. Compensation and Benefits Before Date of Termination............11
4.2. Cash Payment....................................................11
4.3. Group Health and Dental Plans...................................12
4.4. Other Welfare Benefits..........................................12
4.5. Termination of Non-Competition Agreements.......................13
4.6. Excess Parachute Payments.......................................13
4.7. Indemnification.................................................15
ARTICLE 5 Administration and Enforcement of Rights............................15
5.1. Plan Administration.............................................15
5.2. Amendment and Termination.......................................15
5.3. Benefit Claims..................................................16
5.4. Disputes........................................................16
5.5. Funding and Payment.............................................17
ARTICLE 6 Miscellaneous.......................................................16
6.1. Successors......................................................17
6.2. Binding Plan....................................................17
6.3. Validity........................................................17
6.4. No Mitigation...................................................17
6.5. No Set-off......................................................18
6.6. Taxes...........................................................18
6.7. Notices.........................................................18
6.8. Effect of Plan Benefits on Other Severance Plans................18
6.9. Related Plans...................................................18
6.10. No Employment or Service Contract...............................18
6.11. Survival........................................................18
6.12. Effect on Other Plans...........................................19
6.13. Prohibition of Alienation.......................................19
6.14. Notice of Reemployment..........................................19
ANALYSTS INTERNATIONAL CORPORATION
EXECUTIVE CHANGE IN CONTROL SEVERANCE PAY PLAN
Article 1
INTRODUCTION
1.1. Plan Name.
The name of the Plan is the "Analysts International Corporation Executive
Change in Control Severance Pay Plan."
1.2. Plan Type.
The Plan is an unfunded plan maintained by the Company primarily for the
purpose of providing benefits for a select group of management or highly
compensated employees and, as such, is intended to be exempt from the provisions
of Parts 2, 3 and 4 of Subtitle B of Title I of ERISA, to the extent such
provisions would otherwise be applicable, by operation of Sections 201(2),
301(a)(3) and 401(a)(1) thereof, respectively. The Plan is also intended to be
unfunded for tax purposes. The Plan will be construed in a manner that gives
effect to such intent.
1.3. Plan Purpose.
The purpose of the Plan is to provide benefits to Qualified Employees
whose employment is terminated in connection with a Change in Control.
Article 2
DEFINITIONS, CONSTRUCTION AND INTERPRETATIONS
The definitions and rules of construction and interpretation set forth in
this Article 2 apply in construing the Plan unless the context otherwise
indicates.
2.1. Affiliate.
An "Affiliate" is:
any corporation at least a majority of whose outstanding securities ordinarily
having the right to vote at elections of directors is owned directly or
indirectly by the Parent Corporation; or any other form of business entity in
which the Parent Corporation, by virtue of a direct or indirect ownership
interest, has the right to elect a majority of the members of such entity's
governing body.
2.2. Base Pay.
The "Base Pay" of a Participant is his or her annual base salary from the
Company at the rate in effect immediately prior to the Change in Control or at
the time Notice of Termination is given, whichever is greater. Base Pay includes
only regular cash salary and is determined before any reduction for deferrals
pursuant to any nonqualified deferred compensation plan or arrangement,
qualified cash or deferred arrangement or cafeteria plan or deduction of any
kind.
2.3. Benefit Plan.
A "Benefit Plan" is any:
(a) employee benefit plan as defined in ERISA Section 3(3),
(b) cafeteria plan described in Code Section 125,
(c) plan, policy or practice providing for paid vacation, other paid time off
or short- or long-term profit sharing,
(d) bonus or incentive payments or perquisites, or
(e) stock option, stock purchase, restricted stock, phantom stock, stock
appreciation right or other equity-based
(f) compensation plan with respect to the securities of any Affiliate
that is sponsored, maintained or contributed to by the Company for the benefit
of employees (and/or their families and dependents) generally or a Participant
(and/or a Participant's family and dependents) in particular.
2.4 Board.
The "Board" is the board of directors of the Parent Corporation duly
qualified and acting at the time in question. On and after the date of a Change
in Control, any duty of the Board in connection with the Plan is nondelegable
and any attempt by the Board to delegate any such duty is ineffective.
2.5 Cause.
(a) Subject to Subsection (b), "Cause" with respect to a particular Participant
is any of the following:
(i)the Participant's gross misconduct that is materially and demonstrably
injurious to the Company;
(ii)the Participant's willful and continued failure to perform
substantially his or her duties with the Company (other than any such
failure (a) resulting from the Participant's incapacity due to bodily
injury or physical or mental illness or (b) relating to changes in the
Participant's duties after a Change in Control that constitute Good
Reason) after a demand for substantial performance is delivered to the
Participant by the Chair of the Board which specifically identifies the
manner in which the Board believes that the Participant has not
substantially performed his or her duties and provides for a reasonable
period of time within which the Participant may take corrective measures;
or
(iii) the Participant's conviction (including a plea of nolo contendere)
of willfully engaging in illegal conduct constituting a felony or gross
misdemeanor under federal or state law which is materially and
demonstrably injurious to the Company or which impairs the Participant's
ability to perform substantially his or her duties with the Company.
An act or failure to act will be considered "gross" or "willful" for this
purpose only if done, or omitted to be done, by the Participant in bad faith and
without reasonable belief that it was in, or not opposed to, the best interests
of the Company. Any act, or failure to act, based upon authority given pursuant
to a resolution duly adopted by the Board (or a committee thereof) or based upon
the advice of counsel for the Company will be conclusively presumed to be taken
or not taken by the Participant in good faith and in the best interests of the
Company. In addition, the Participant's attention to matters not directly
related to the business of the Company will not provide a basis for termination
for Cause so long as the Board did not expressly disapprove in writing to the
Participant's engagement in such activities either before or within a reasonable
time after the Board knew or reasonably should have known that the Participant
engaged in the activities.
(b) Notwithstanding Subsection (a), a Participant may not be terminated for
Cause unless and until there has been delivered to the Participant a copy of a
resolution duly adopted by the affirmative vote of not less than a majority of
the entire membership of the Board at a meeting of the Board called and held for
such purpose (after reasonable notice to such Participant and an opportunity for
the Participant, together with his or her counsel, to
be heard before the Board), finding that in the good faith opinion of the Board
the Participant was guilty of the conduct set forth in clause (i), (ii) or (iii)
of Subsection (a) and specifying the particulars thereof in detail.
2.6. Change in Control.
(a) "Change in Control" is the occurrence of any of the following on or after
December 18, 2000:
(i)the sale, lease, exchange or other transfer, directly or indirectly, of
all or substantially all of the assets of the Parent Corporation, in one
transaction or in a series of related transactions, to any Person;
(ii) the approval by the shareholders of the Parent Corporation of any
plan or proposal for the liquidation or dissolution of the Parent
Corporation;
(iii) any Person, other than a "bona fide underwriter," becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of (a) 20 percent or more, but not more than 50
percent, of the combined voting power of the Parent Corporation's
outstanding securities ordinarily having the right to vote at elections of
directors, unless the transaction resulting in such ownership has been
approved in advance by the "continuity directors," as defined at
Subsection 2.6(b), or (b) more than 50 percent of the combined voting
power of the Parent Corporation's outstanding securities ordinarily having
the right to vote at elections of directors (regardless of any approval by
the continuity directors);
(iv) a merger or consolidation to which the Parent Corporation is a party
if the shareholders of the Parent Corporation immediately prior to the
effective date of such merger or consolidation have, solely on account of
ownership of securities of the Parent Corporation at such time,
"beneficial ownership" (as defined in Rule 13d-3 under the Exchange Act)
immediately following the effective date of such merger or consolidation
of securities of the surviving corporation representing (a) 50 percent or
more, but not more than 80 percent, of the combined voting power of the
surviving corporation's then outstanding securities ordinarily having the
right to vote at elections of directors, unless such merger or
consolidation has been approved in advance by the continuity directors, or
(b) less than 50 percent of the combined voting power of the surviving
corporation's then outstanding securities ordinarily having the right to
vote at elections of directors (regardless of any approval by the
continuity directors); or
(v) the continuity directors cease for any reason to constitute at least a
majority the Board.
(b) For purposes of this section-
(i)"Continuity director" means any individual who was a member of the
Board on December 18, 2000, while he or she is a member of the Board, and
any individual who subsequently becomes a member of the Board whose
election, or nomination for election by the Parent Corporation's
shareholders, was approved by a vote of at least a majority of the
directors who are continuity directors (either by a specific vote or by
approval of the proxy statement of the Parent Corporation in which such
individual is named as a nominee for director without objection to such
nomination). For example, if a majority of the seven individuals
constituting the Board on December 18, 2000, approved a proxy statement in
which two different individuals were nominated to replace two of the
individuals who were members of the Board on December 18, 2000, the two
newly elected directors would join the five remaining directors who were
members of the Board on December 18, 2000 as continuity directors.
Similarly, if a majority of those seven directors approved a proxy
statement in which three different individuals were nominated to replace
three other directors who were members of the Board on December 18, 2000,
the three newly elected directors would also become, along with the other
four directors, continuity directors. Individuals subsequently joining the
Board could become continuity directors under the principles reflected in
this example.
(ii)"Bona fide underwriter" means a Person engaged in business as an
underwriter of securities that acquires securities of the Parent
Corporation from the Parent Corporation through such Person's
participation in good faith in a firm commitment underwriting until the
expiration of 40 days after the date of such acquisition.
2.7. Code.
The "Code" is the Internal Revenue Code of 1986, as amended. Any reference
to a specific provision of the Code includes a reference to such provision as it
may be amended from time to time and to any successor provision.
2.8. Company.
The "Company" is the Parent Corporation, any Successor and any Affiliate.
2.9. Date of Termination.
The "Date of Termination" with respect to a Participant following a Change
in Control (or prior to a Change in Control if the Participant's termination was
either a condition of the Change in Control or was at the request or insistence
of any Person related to the Change in Control) means:
(a) if the Participant's employment is to be terminated by the Participant
for Good Reason, the date specified in the Notice of Termination which in
no event may be a date more than 15 days after the date on which Notice of
Termination is given unless the Company expressly agrees in writing to a
later date;
(b) if the Participant's employment is to be terminated by the Company for
Cause, the date specified in the Notice of Termination;
(c) if the Participant's employment is terminated by reason of his or her
death, the date of his or her death; or
(d) if the Participant's employment is to be terminated by the Company for
any reason other than Cause or his or her death, the date specified in the
Notice of Termination, which in no event may be a date earlier than 15
days after the date on which a Notice of Termination is given, unless the
Participant expressly agrees in writing to an earlier date.
If the Company terminates a Participant's employment for Cause following a
Change in Control (or prior to a Change in Control if the Participant's
termination was either a condition of the Change in Control or was at the
request or insistence of any Person related to the Change in Control) and the
Participant has not previously expressly agreed in writing to the termination,
then within the 30-day period after the Participant's receipt of the Notice of
Termination, the Participant may notify the Company that a dispute exists
concerning the termination, in which event the Date of Termination will be the
date set either by mutual written agreement of the parties or by the arbitrators
or a court in a proceeding as provided in Section 5.4. During the pendency of
any such dispute, the Participant will continue to make himself or herself
available to provide services to the Company and the Company will continue to
pay the Participant his or her full compensation and benefits in effect
immediately prior to the date on which the Notice of Termination is given
(without regard to any changes to such compensation or benefits which constitute
Good Reason) and until the dispute is resolved in accordance with Section 5.4.
The Participant will be entitled to retain the full amount of any such
compensation and benefits without regard to the resolution of the dispute unless
the arbitrators or judge decide(s) that the Participant's claim of a dispute was
frivolous or advanced by the Participant in bad faith.
2.10. Eligible Participant.
An "Eligible Participant" is a Participant who has become eligible to
receive benefits pursuant to Section 3.3.
2.11. ERISA.
"ERISA" is the Employee Retirement Income Security Act of 1974, as
amended. Any reference to a specific provision of ERISA includes a reference to
such provision as it may be amended from time to time and to any successor
provision.
2.12. Exchange Act.
The "Exchange Act" is the Securities Exchange Act of 1934, as amended. Any
reference to a specific provision of the Exchange Act or to any rule or
regulation thereunder includes a reference to such provision as it may be
amended from time to time and to any successor provision.
2.13. Good Reason.
(a) Subject to Subsection (b), "Good Reason" with respect to a Participant is
any of the following:
(i) a change in the Participant's title(s), status, position(s),
authority, duties or responsibilities as an executive of the Company as in
effect immediately prior to the Change in Control which, in the
Participant's reasonable judgment, is material and adverse (other than, if
applicable, any such change directly attributable to the fact that the
Parent Corporation is no longer publicly owned); provided, however, that
Good Reason does not include a change in a Participant's title(s), status,
position(s), authority, duties or responsibilities that is remedied by the
Company promptly after receipt of notice of such change is given by the
Participant;
(ii) a reduction by the Company in the Participant's Base Pay, or an
adverse change in the form or timing of the payment thereof, as in effect
immediately prior to the Change in Control or as thereafter increased;
(iii) the failure by the Company to cover the Participant under Benefit
Plans that, in the aggregate, provide substantially similar benefits to
the Participant and/or his or her family and dependents at a substantially
similar total cost to the Participant (e.g., premiums, deductibles,
co-pays, out of pocket maximums, required contributions, taxes and the
like) relative to the benefits and total costs under the Benefit Plans in
which the Participant (and/or his or her family or dependents) is
participating at any time during the 90-day period immediately preceding
the Change in Control;
(iv) the Company's requiring a Participant to be based more than 30 miles
from where his or her office is located immediately prior to the Change in
Control, except for required travel on the Company's business, and then
only to the extent substantially consistent with the business travel
obligations which the Participant undertook on behalf of the Company
during the 90-day period ending on the date of the Change in Control
(without regard to travel related to or in anticipation of the Change in
Control);
(v) the failure of the Parent Corporation to obtain from any Successor the
assent to this Plan contemplated by Section 6.1;
(vi) any purported termination by the Company of a Participant's
employment which is not properly effected pursuant to a Notice of
Termination and pursuant to any other requirements of this Plan, and for
purposes of this Plan, no such purported termination will be effective; or
(vii) any refusal by the Company to continue to allow a Participant to
attend to matters or engage in activities not directly related to the
business of the Company which, at any time prior to the Change in Control,
the Participant was not expressly prohibited by the Company from attending
to or engaging in.
(b) A Participant's continued employment does not constitute consent to, or
waiver of any rights arising in connection with, any circumstance constituting
Good Reason. Termination by a Participant of his or her
employment for Good Reason as defined in this section will constitute Good
Reason for all purposes of this Plan, notwithstanding that the Participant may
also thereby be deemed to have "retired" under any applicable benefit plan,
policy or practice of the Company.
2.14. Governing Law.
To the extent that state law is not preempted by provisions of ERISA or
any other laws of the United States, all questions pertaining to the
construction, validity, effect and enforcement of this Plan will be determined
in accordance with the internal, substantive laws of the State of Minnesota,
without regard to the conflict of laws principles of the State of Minnesota or
of any other jurisdiction.
2.15. Headings.
The headings of articles and sections are included solely for convenience.
If there is a conflict between the headings and the text of the Plan, the text
will control.
2.16. Notice of Termination.
A "Notice of Termination" is a written notice given on or after the date
of a Change in Control (unless the termination before the date of the Change in
Control was either a condition of the Change in Control or was at the request or
insistence of any Person related to the Change in Control in which case the
written notice may be given before the date of the Change in Control) which
indicates the specific termination provision in this Plan pursuant to which the
notice is given. Any purported termination by the Company or by a Participant
for Good Reason on or after the date of a Change in Control (or before the date
of the Change in Control if the termination was either a condition of the Change
in Control or was at the request or insistence of any Person related to the
Change in Control) must be communicated by written Notice of Termination to be
effective; provided, that a Participant's failure to provide Notice of
Termination will not limit any of his or her rights under the Plan except to the
extent the Company demonstrates that it suffered material actual damages by
reason of such failure.
2.17. Number and Gender.
Wherever appropriate, the singular number may be read as the plural, the
plural number may be read as the singular and a reference to one gender may be
read as a reference to the other.
2.18. Other Arrangement.
An "Other Arrangement" is any Benefit Plan or other plan, policy or
practice of the Company or any other agreement between the Participant and the
Company, other than the Plan.
2.19. Parent Corporation.
The "Parent Corporation" is Analysts International Corporation and any
Successor.
2.20. Participant.
A "Participant" is a Qualified Employee who is participating in the Plan
pursuant to Article 3.
2.21. Plan.
The "Plan" is that set forth in this instrument as it may be amended from
time to time.
2.22. Person.
A "Person" includes any individual, corporation, partnership, group,
association or other "person," as such term is used in Section 13(d) or Section
14(d) of the Exchange Act, other than the Parent Corporation, any Affiliate or
any benefit plan sponsored by the Parent Corporation or an Affiliate.
2.23. Qualified Employee.
(a) A "Qualified Employee" is an individual who (i) is either (1) employed
by the Parent Corporation as an executive officer of the Parent
Corporation elected by the Board or (2) employed by the Company as a
management or highly compensated employee, as determined by the Chief
Executive Officer of the Parent Corporation, and selected as a Qualified
Employee by the Chief Executive Officer of the Parent Corporation and (ii)
is not a party to a separate written agreement with the Company which by
its express terms specifically provides that the individual is not
eligible to participate in the Plan.
(b) An individual who, during the 90-day period ending on the date of a
Change in Control, ceases to be an executive officer of the Parent
Corporation elected by the Board, will nevertheless remain a Qualified
Employee until his or her Date of Termination.
(c) In the case of an individual who is selected as a Qualified Employee
pursuant to Subsection (a)(i)(2), the Chief Executive Officer of the
Parent Corporation may at any time prior to a Change in Control, but not
thereafter, determine that the individual is no longer a Qualified
Employee but as to that individual, the Chief Executive Officer's
determination will be deemed to be an amendment to the Plan subject to the
provisions of Section 5.2(a).
2.24. Successor.
A "Successor" is any Person that succeeds to, or has the practical ability
to control (either immediately or solely with the passage of time), the Parent
Corporation's business directly, by merger, consolidation or other form of
business combination, or indirectly, by purchase of the Parent Corporation's
outstanding securities ordinarily having the right to vote at the election of
directors, all or substantially all of its assets or otherwise.
2.25. Trust.
"Trust" means the trust or trusts, if any, established by the Company
pursuant to Section 5.5.
2.26. Trustee.
"Trustee" means the one or more banks or trust companies which at the
relevant time has or have been appointed by the Company to act as Trustee of the
Trust.
ARTICLE 3
PARTICIPATION AND ELIGIBILITY FOR BENEFITS
3.1. Commencement of Participation.
(a) An individual who is employed by the Parent Corporation as an
executive officer of the Parent Corporation elected by the Board will
commence participation in the Plan on the first day on which he or she
performs services for the Parent Corporation as an executive officer of
the Parent Corporation elected by the Board.
(b) An individual who is selected by the Chief Executive Officer of the
Parent Corporation as a Qualified Employee pursuant to Section
2.24(a)(i)(2) will commence participation in the Plan as of the date
specified by the Chief Executive Officer of the Parent Corporation in a
notice to the individual regarding his or her selection.
(c) Notwithstanding any other provision of the Plan to the contrary, no
individual will commence participation in the Plan on or after the
date of a Change in Control.
3.2. Ceasing to be a Qualified Employee.
A Participant who ceases for any reason to be a Qualified Employee will, except
with respect to any current or future benefit to which he or she is then
entitled, thereupon cease his or her participation in the Plan. Notwithstanding
any other provision of the Plan to the contrary, a Participant will cease to be
a Qualified Employee if, prior to the date of a Change in Control: (i) 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 no Change in
Control occurs in connection therewith; (ii) the Participant's primary
employment duties are with the Affiliate at the time of the occurrence of such
event; and (iii) such Participant does not, in conjunction therewith, transfer
employment directly to the Parent Corporation or another Affiliate as a
Qualified Employee.
3.3. Eligibility for Benefits.
(a) A Participant will become eligible for the benefits provided in Article 4 if
and only if (i) (1) the Company terminates his or her employment for any reason
other than his or her death or Cause or (2) the Participant terminates
employment with the Company for Good Reason and (ii) the termination occurs
within the period beginning on the date of a Change in Control and ending on the
last day of the thirty-sixth month that begins after the month in which the
Change in Control occurs or prior to a Change in Control if the termination was
either a condition of the Change in Control or at the request or insistence of a
Person related to the Change in Control.
(b) 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 is
or are sold, transferred or otherwise disposed of and the acquiror is not the
Parent Corporation or an Affiliate (a "Disposition"), any individual who was a
Qualified Employee immediately prior to the Disposition and who remains or
becomes employed by the acquiror or any Person that, directly or indirectly,
through one or more intermediaries, controls or is controlled by, or is under
common control with, the acquiror (an "Acquiror Affiliate") in connection with
the Disposition will be deemed to have terminated employment on the effective
date of the Disposition for purposes of Subsection (a) unless (i) the acquiror
and the Acquiror Affiliates jointly and severally expressly assume and agree, in
a manner that is enforceable by the individual, to perform the obligations of
this Plan to the same extent that the Company would be required to perform if
the Disposition had not occurred and (ii) the Successor guarantees, in a manner
that is enforceable by the individual, payment and performance by the acquiror.
ARTICLE 4
BENEFITS
4.1. Compensation and Benefits Before Date of Termination.
During the period beginning on the date a Participant or the Company, as
the case may be, receives Notice of Termination and ending on the Date of
Termination, the Company will continue to pay the Participant his or her Base
Pay and cause his or her continued participation in all Benefit Plans in
accordance with the terms of such Benefit Plans.
4.2. Cash Payment.
The Company will make a cash payment to an Eligible Participant in an
amount equal to (a) 2.99 times the Eligible Participant's Base Pay, plus (b) any
incentive compensation payments made to the Executive for the year ending after
the Executive's Date of Termination, in a single lump sum within ten days after
the Eligible Participant's Date of Termination or, if later, within ten days
following the date of the Change in Control.
4.3. Group Health and Dental Plans.
(a) During the continuation period, the Company will maintain a group health and
dental plan(s) which by its terms covers the Eligible Participant (and the
Eligible Participant'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 Eligible Participant and the Eligible
Participant'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 under
applicable federal and state continuation laws will begin to run from the date
on which coverage pursuant to this Section 2(c) ends. The "continuation period"
is the period beginning on the Eligible Participant's Date of Termination and
ending on the earlier of (i) the last day of the 18th month that begins after
the Eligible Participant's Date of Termination or (ii) the date after the
Eligible Participant's Date of Termination on which the Eligible Participant
first becomes eligible to participate as an employee in a plan of another
employer providing group health and dental benefits to the Eligible Participant
and the Eligible Participant's eligible family members and dependents which plan
does not contain any exclusion or limitation with respect to any pre-existing
condition of the Eligible Participant or any eligible family member or dependent
who would otherwise be covered under the Company's plan but for this clause
(ii).
(b) To the extent the Eligible Participant 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 4.3
which the Eligible Participant would not have incurred had the Eligible
Participant 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
Eligible Participant in an amount equal to such tax liability plus an additional
amount sufficient to permit the Eligible Participant 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 Eligible Participant'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 4.3 will be made within 10 days
after the Eligible Participant's remittal of a written request for payment
accompanied by a statement indicating the basis for and amount of the liability.
4.4. Other Welfare Benefits.
(a) During the period beginning on the Eligible Participant's Date of
Termination and ending on the earlier of (i) the last day of the eighteenth
(18th) month that begins after the Eligible Participant's Date of Termination,
or (ii) the date after the Eligible Participant's Date of Termination on which
the Eligible Participant first becomes eligible to participate as an employee in
a plan of another employer providing substantially similar welfare benefits to
the Eligible Participant (and the Eligible Participant'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, 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 to the Eligible Participant
(and the Eligible Participant'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 Eligible
Participant and the Eligible Participant'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).
(b) To the extent the Eligible Participant 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 4.4
which the Eligible Participant would not have incurred had the Eligible
Participant been an active employee of the Company participating in the
Company's welfare benefit plans, the Company will make a payment to the Eligible
Participant in an amount equal to such tax liability plus an additional amount
sufficient to permit the Eligible Participant 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
Eligible Participant'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 4.4 will be made within 10 days after the
Eligible Participant's remittal of a written request for payment accompanied by
a statement indicating the basis for and amount of the liability.
4.5. Termination of Non-Competition Agreements.
After the termination of an Eligible Participant's employment with the
Company in connection with a Change in Control, all non-competition agreements
(or non-competition provisions within other agreements) restricting the
activities of the Eligible Participant will be null and void and of no further
force and effect.
4.6. Excess Parachute Payments.
(a) Notwithstanding anything in this Plan to the contrary, in the event it
shall be determined that any payments or distributions by the Company to
or for the benefit of an Eligible Participant (whether paid or payable or
distributed or distributable pursuant to the terms of this Plan or Other
Arrangement, but determined without regard to any payments required under
this Section 4.6) (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 Eligible Participant 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 Eligible Participant shall be entitled to receive an additional
payment (a "Gross-Up Payment") in an amount such that, after payment by
the Eligible Participant 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 Eligible Participant retains an
amount of the Gross-Up Payment equal to the Excise Tax imposed upon the
Payments.
(b) Subject to the provisions of Section 4.6(d), all determinations
required to be made under this Section 4.6, including whether and when a
Gross-Up Payment is required and the amount such Gross-Up Payment and the
assumptions to be utilized in arriving at such determination, shall be
made by the Company's external auditors (the "Accounting Firm"), which
shall provide detailed supporting calculations both to the Company and the
Eligible Participant within 15 business days of the receipt of notice from
the Eligible Participant 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 Eligible Participant shall appoint
another nationally recognized accounting firm to make the determinations
required hereunder (which accounting firm shall then be referred to as the
"Accounting Firm" hereunder). All fees and expenses of the Accounting Firm
shall be borne solely by the Company. Any Gross-Up Payment, as determined
pursuant to this Section 4.6, shall be paid by the Company to the Eligible
Participant within five days of the receipt of the Accounting Firm's
determination. Any determination by the Accounting Firm shall be binding
upon the Company and the Eligible Participant.
(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 4.6(d) and the Eligible
Participant thereafter is required to make a payment of any additional
Excise Tax, the Accounting Firm shall determine the amount of the
Underpayment that has
occurred and any such Underpayment shall be promptly paid by the Company
to or for the benefit of the Eligible Participant.
(d) The Eligible Participant shall 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 shall be given as soon as practicable but no
later than ten business days after the Eligible Participant knows of such
claim and shall apprise the Company of the nature of such claim and the
date on which such claim is requested to be paid. The Eligible Participant
shall not pay such claim prior to the expiration of the thirty-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 Eligible Participant in
writing prior to the expiration of such period that it desires to contest
such claim, the Eligible Participant shall:
(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 shall 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 shall
bear and pay directly all costs and expenses (including additional
interest and penalties) incurred in connection with such contest and
shall indemnify and hold the Eligible Participant 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 4.6(d), the
Company shall 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 Eligible Participant to pay the tax
claimed and sue for a refund or contest the claim in any permissible
manner, and the Eligible Participant 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 shall determine; provided further, however, that if
the Company directs the Eligible Participant to pay such claim and
sue for a refund, the Company shall advance the amount of such
payment to the Eligible Participant on an interest-free basis and
shall indemnify and hold the Eligible Participant 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 Eligible Participant 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 shall be limited
to issues with respect to which a Gross-Up Payment would be payable
hereunder and the Eligible Participant shall 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 Eligible Participant of an amount
advanced by the Company pursuant to Section 4.6(d), the Eligible
Participant becomes entitled to receive any refund with respect to such
claim, the Eligible Participant shall (subject to the Company's complying
with the requirements of Section 4.6(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 Eligible
Participant of an amount advanced by the Company pursuant to Section
4.6(d), a determination is made that the Eligible Participant shall not be
entitled to any refund with respect to such claim and the Company does not
notify the Eligible Participant in writing of its intent to contest such
denial of refund prior to the expiration of thirty days after such
determination, then
such advance shall be forgiven and shall not be required to be repaid and
the amount of such advance shall offset, to the extent thereof, the amount
of Gross-Up Payment required to be paid.
4.7. Indemnification.
Following a Change in Control, the Company will indemnify and advance
expenses to an Eligible Participant to the full extent permitted by law for
damages, costs and expenses (including, without limitation, judgments, fines,
penalties, settlements and reasonable fees and expenses of the Participant's
counsel) incurred in connection with all matters, events and transactions
relating to such Eligible Participant's service to or status with the Company or
any other corporation, employee benefit plan or other entity with whom the
Eligible Participant served at the request of the Company.
ARTICLE 5
ADMINISTRATION AND ENFORCEMENT OF RIGHTS
5.1. Plan Administration.
The Board has the power and authority to construe, interpret and
administer the Plan. Prior to the date of a Change in Control, the Board may
delegate such power and authority to any committee or individual but such
delegation will automatically cease to be effective on the date of a Change in
Control. Prior to (but not after) the date of a Change in Control, the power and
authority of the Board and any individual or committee to whom such power and
authority is in whole or in part delegated is discretionary as to all matters.
5.2. Amendment and Termination.
(a) Prior to the date of a Change in Control, the Board may amend the Plan from
time to time in such respects as the Board may deem advisable; provided, that
the effective date of any amendment that adversely affects a Qualified Employee
may not be less than one year after the date on which the amendment is approved
by the Board and, if a Change in Control occurs prior to the date on which the
amendment would otherwise be effective, the amendment automatically will be null
and void. On and after the date of a Change in Control, the Plan may be amended
only if each Participant and Eligible Participant is provided with written
notice of the amendment (which must include a complete and accurate description
of the amendment and its intended and potential impact on Participants and
Eligible Participants and a copy of the proposed amendment) at least 90 days
before the adoption of the amendment and the amendment is approved by the
affirmative vote of not less than 80 percent of all Participants and Eligible
Participants.
(b) The Board may terminate the Plan at any time; provided, first, that prior to
the date of a Change in Control, the effective date of the termination may not
be less than one year after the date on which the termination is approved by the
Board; and, second, that the Plan cannot be terminated, and no termination will
become effective, within the period beginning on the date of a Change in Control
and ending on the last day of the thirty-sixth month that begins after the month
in which the Change in Control occurs.
Any amendment or termination of the Plan must be set forth in a written
instrument approved by the Board and signed by at least two officers of the
Parent Corporation.
5.3. Benefit Claims.
A person whose employment relationship with the Company has terminated and
who has not been awarded benefits under the Plan or who objects to the amount of
the benefits so awarded may file a written request for benefits with the Board.
The Board will review such request and will notify the claimant of its decision
within 60 days after such request is filed. If the Board denies the claim for
benefits, the notice of the denial will contain:
(a) the specific reason for the denial,
(b) a specific reference to the provision of the Plan on which denial is
based,
(c) a description of any additional information or material necessary for
the person to perfect his or her claim (and an explanation of why such
information is material or necessary), and
(d) an explanation of the Plan's claim review procedure.
If the Board determines that a claimant is not eligible for benefits, or
if the claimant believes that he or she is entitled to greater or
different benefits, the claimant may file a petition for review with the
Board within 60 days after the claimant receives the notice issued by the
Board. Within 60 days after the Board receives the petition, the Board
will give the claimant (and his or her counsel, if any) an opportunity to
present his or her position to the Board orally or in writing, and the
claimant (or his or her counsel) will have the right to review the
pertinent documents. Within 60 days after the hearing (or the date of
receipt of the petition if the claimant presents his or her position in
writing) the Board will notify the claimant of its decision in writing,
stating the decision and the specific provisions of the Plan on which the
decision is based.
5.4. Disputes.
(a) If a Participant so elects, any dispute, controversy or claim arising
under or in connection with this Plan will be settled exclusively by
binding arbitration in Minneapolis, Minnesota in accordance with the
Employee Benefit Plan Claims Arbitration Rules of the American Arbitration
Association, incorporated by referenced herein; provided, that a
Participant may seek specific performance of his or her right to receive
benefits until the Date of Termination during the pendency of any dispute
or controversy arising under or in connection with the Plan. Judgment may
be entered on the arbitrator's award in any court having jurisdiction. If
any dispute, controversy or claim for damages arising under or in
connection with this Plan is settled by arbitration, the Company will pay,
or if elected by the Participant, reimburse, all fees, costs and expenses
incurred by a Participant related to such arbitration unless the
arbitrator decides that the claim was frivolous or advanced by the
Participant in bad faith.
(b) If a Participant does not elect arbitration, he or she may pursue all
available legal remedies. The Company will pay, or if elected by the
Participant, reimburse each Participant for, all fees, costs and expenses
incurred by such Participant in connection with any actual, threatened or
contemplated litigation relating to this Plan to which the Participant is
or reasonably expects to become a party, whether or not initiated by the
Participant, if the Participant is successful in recovering any benefit
under this Plan as a result of such action.
(c) In any dispute or controversy with any Participant arising under or in
connection with this Plan, the Company will not assert the Participant's
failure to exhaust administrative remedies.
5.5. Funding and Payment.
(a) The Company may establish a Trust with an independent corporate trustee. The
Trust must (i) be a grantor trust with respect to which the Company is treated
as grantor for purposes of Code Section 677, (ii) not cause the Plan to be
funded for purposes of Title I of ERISA and (iii) provide that Trust assets
will, upon the insolvency of the Company, be used to satisfy claims of the
Company's general creditors. The Company may from time to time transfer to the
Trust cash, marketable securities or other property acceptable to the Trustee.
(b) The Trustee will make distributions to Participants and Beneficiaries from
the Trust in satisfaction of the Company's obligations under the Plan in
accordance with the terms of the Trust. The Company is responsible for paying
any benefits that are not paid from the Trust.
(c) Nothing contained in the Plan or Trust is to be construed as providing for
assets to be held for the benefit of any Participant or any other person or
persons to whom benefits are to be paid pursuant to the terms of this Plan, the
Participant's or other person's only interest under the Plan being the right to
receive the benefits set forth herein. The Trust is established only for the
convenience of the Company and no Participant has any interest in the assets of
the Trust. To the extent the Participant or any other person acquires a right to
receive benefits under this Plan or the Trust, such right is no greater than the
right of any unsecured general creditor of the Company.
ARTICLE 6
MISCELLANEOUS
6.1. Successors.
The Parent Corporation will require any Successor to expressly assume and
agree to perform the obligations of this Plan in the same manner and to the same
extent that the Parent Corporation would be required to perform if no such
succession had taken place. Failure of the Parent Corporation to obtain such
assumption and agreement at least three business days prior to the time a Person
becomes a Successor (or where the Parent Corporation does not have at least
three business days' advance notice that a Person may become a Successor, within
one business day after having notice that such Person may become or has become a
Successor) will constitute Good Reason for termination of a Participant's
employment. The date on which any such succession becomes effective will be
deemed the Date of Termination and Notice of Termination will be deemed to have
been given on such date. A Successor has no rights, authority or power with
respect to the Plan prior to a Change in Control.
6.2. Binding Plan.
This Plan is for the benefit of, and is enforceable by, each Participant,
each Participant's personal and legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees, but a
Participant may not otherwise assign any of his or her rights or delegate any of
his or her obligations under this Plan. If a Participant dies after becoming
entitled to, but before receiving, any amounts payable under this Plan, all such
amounts, unless otherwise provided in this Plan, will be paid in accordance with
the terms of this Plan to such Participant's devisee, legatee or other designee
or, if there be no such designee, to such Participant's estate.
6.3. Validity.
The invalidity or unenforceability of any provision of the Plan does not
affect the validity or enforceability of any other provision of the Plan, which
will remain in full force and effect.
6.4. No Mitigation.
No Eligible Participant will be required to mitigate the amount of any
benefits the Company becomes obligated to provide in connection with this Plan
by seeking other employment or otherwise and the benefits to be provided in
connection with this Plan may not be reduced, offset or subject to recovery by
the Company by
any benefits an Eligible Participant may receive from other sources.
6.5. No Set-off.
The Company has no right to set-off benefits owed under this Plan against
amounts owed or claimed to be owed by an Eligible Participant to the Company
under this Plan or otherwise.
6.6. Taxes.
All benefits to be provided to each Eligible Participant in connection
with this Plan will be subject to required withholding of federal, state and
local income, excise and employment-related taxes.
6.7. Notices.
For the purposes of this Plan, notices and all other communications
provided for in, or required under, this Plan must be in writing and will be
deemed to have been duly given when personally delivered or when mailed by
United States registered or certified mail, return receipt requested, postage
prepaid and addressed to each Participant's or the Company's (as the case may
be) respective address (provided that all notices to the Company must be
directed to the attention of the chair of the Board). For purposes of any such
notice requirement, the Company will use the Participant's most current address
on file in the Company's personnel records. Any notice of a Participant's change
of address will be effective only upon receipt by the Company.
6.8. Effect of Plan Benefits on Other Severance Plans.
A Participant who receives any payment under the terms of this Plan will
not be eligible to receive benefits under any other severance pay plan sponsored
or maintained by the Company.
6.9. Related Plans.
To the extent that any provision of any Other Arrangement limits,
qualifies or is inconsistent with any provision of this Plan, then for purposes
of this Plan, while such Other Arrangement remains in force, the provision of
this Plan will control and such provision of such Other Arrangement will be
deemed to have been superseded, and to be of no force or effect, as if such
Other Arrangement had been formally amended to the extent necessary to
accomplish such purpose. Nothing in this Plan prevents or limits a Participant's
continuing or future participation in any Other Arrangement, and nothing in this
Plan limits or otherwise affects the rights Participants may have under any
Other Arrangement. Amounts that are vested benefits or which Participants are
otherwise entitled to receive under any Other Arrangement at or subsequent to
the Date of Termination will be payable in accordance with such Other
Arrangement.
6.10. No Employment or Service Contract.
Nothing in this Plan is intended to provide any Participant with any right
to continue in the employ of the Company for any period of specific duration or
interfere with or otherwise restrict in any way Participants' rights or the
rights of the Company, which rights are hereby expressly reserved, to terminate
a Participant's employment at any time for any reason or no reason whatsoever,
with or without cause.
6.11. Survival.
The respective obligations of, and benefits afforded to, the Company and
the Participants which by their express terms or clear intent survive
termination of a Participant's employment with the Company or termination of
this Plan, as the case may be, will remain in full force and effect according to
their terms notwithstanding the termination of a Participant's employment with
the Company or termination of this Plan, as the case may be.
6.12. Effect on Other Plans.
Unless otherwise expressly provided therein, benefits paid or payable
under the Plan will not be deemed to be salary or compensation for purposes of
determining the benefits to which a Participant may be entitled under any other
Benefit Plan sponsored, maintained or contributed to by the Company.
6.13. Prohibition of Alienation.
No Participant will have the right to alienate, assign, encumber,
hypothecate or pledge his or her interest in any benefit provided under the
Plan, voluntarily or involuntarily, and any attempt to so dispose of any
interest will be void.
6.14. Notice of Reemployment.
If an Eligible Participant commences full-time employment during his or
her Continuation Period, he or she must notify the Company not later than five
business days after he or she commences full-time employment.