AMENDMENT AND WAIVER
Exhibit 10.5
Amendment and Waiver dated as of July 7, 2005 (hereinafter “Agreement” or “Amendment and Waiver”) between Analysts International Corporation, a Minnesota corporation, (hereinafter “the Company”), and Xxxxx Xxxxxxxxxxx (hereinafter “Executive”).
WHEREAS, Executive is employed as Director of Development and Operations - New Equities of the Company pursuant to the terms of an Employment Agreement dated as of November 21, 2003 (hereinafter “Employment Agreement”); and
WHEREAS, Executive, as part of his employment with the Company, has executed an Agreement (hereinafter “Change in Control Agreement”) providing for certain payments and benefits under certain circumstances subsequent to a “Change in Control” as that term is defined therein; and
WHEREAS, Paragraph 2 of the Change in Control Agreement further provides, in part, that Executive may terminate his employment for any reason during a one-month period beginning on the first day of the eleventh month following a Change in Control (hereinafter “Eleventh Month Right to Terminate”) following a Change in Control and/or for “Good Reason” during the thirty-six month period following a Change in Control and receive, among other things, a cash payment (hereinafter the “Change in Control Payment”) equal to 2.99 times his “Eligible Earnings,” as that term is defined therein; and
WHEREAS, the Company has entered into an Agreement and Plan of Merger (hereinafter “Merger Agreement”), dated as of April 12, 2005, with Computer Horizons Corp. (hereinafter “CHC”) and JV Merger Corp., a wholly-owned subsidiary of CHC; and
WHEREAS, pursuant to the Merger Agreement, the Company will be merged with and into JV Merger Corp. and will become a wholly-owned subsidiary of CHC (the “Merger”); and
WHEREAS, the Merger contemplated by the Merger Agreement constitutes a Change in Control as defined in the Change in Control Agreement; and
WHEREAS, the Company and CHC have agreed and Executive has agreed in principle that, effective with the consummation of the Merger Executive will be employed by CHC or the Company as Director of Development and Operations - New Equities without reduction in Executive’s current gross base salary; and
WHEREAS, Executive and the Company have agreed that in exchange for the consideration set forth herein, Executive will forego and waive certain rights to receive the Change in Control Payment and other payments, rights and benefits under the Change in Control Agreement as further detailed herein; and
NOW, THEREFORE, in consideration of the foregoing, the agreements set forth below and other good and valuable consideration, the parties hereto, intending to be legally bound, agree as follows:
1. Waivers. In consideration of the benefits to be conferred on Executive pursuant to Section 3 below, Executive hereby agrees to the waivers set forth in this Section 1.
a. Waiver of Eleventh Month Right to Terminate. Executive hereby expressly waives his Eleventh Month Right to Terminate his employment and receive any Change in Control Payment as set forth in Section 2.(i) of the Change in Control Agreement.
b. Waiver of Good Reason. Executive hereby expressly waives his right to terminate his employment and receive any Change in Control Payment pursuant to Sections 13.(a), 13.(b), 13.(c) and 13.(d)(as it relates to travel only) of Exhibit A of the Change in Control Agreement. Executive’s waiver of Good Reason pursuant to Sections 13.(a) and 13.(b) is limited to the Merger and Executive’s employment with CHC or the Company immediately following completion of the Merger.
2. Consent to Amendment of Paragraph 2.(a) of the Change in Control Agreement. Paragraph 2.(a) of the Change in Control Agreement is hereby deleted in its entirety and in lieu thereof the following provision is inserted:
(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 Executive in an amount equal to (i) 2.99 times Executive’s Eligible Earnings, less (ii) any incentive compensation payments made to Executive for the year ending after Executive’s Date of Termination, less (iii) an amount equal to the cash payment(s) or restricted shares of Company stock awarded to Executive (the “Restricted Stock”) in exchange for certain waivers associated with the Company’s merger with Computer Horizons Corp. The value of the Restricted Stock shall be the price of CHC common stock shall be the price of CHC common stock at the close of the last regular NASDAQ trading session prior to the date of Executive’s Change in Control termination, as reported by The Wall Street Journal or a comparable reporting service, or, if no sale of such stock shall have occurred on such date, on the next preceding day on which a sale of stock occurred.
3. Consideration. In exchange for the waiver(s) and consents set forth in Paragraphs 1 and 2 of this Agreement, Executive shall receive the consideration set forth below.
a. Cash Payment. On the Effective Date, Executive shall receive a lump sum payment in the gross amount of $84,000 (eighty-four thousand dollars). Such payment will be subject to tax, benefits and other required or voluntary withholding.
b. Restricted Stock. On the Effective Date, Executive shall receive thirty-six thousand (36,000) shares of Restricted Stock issued pursuant to the Company’s 2004 Equity Incentive Plan
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and subject to a two-year vesting schedule for removal of the restrictive legend on the stock certificate issued after such award. Executive shall sign a standard Restricted Stock Award agreement containing the restrictions outlined herein and such other terms and conditions required by the Company as determined in the sole discretion of the Company’s Board of Directors or the Compensation Committee of the Company’s Board of Directors.
4. Effective Date. This Amendment and Waiver shall be effective after approval of the Merger by CHC’s and the Company’s respective shareholders. The parties agree that if the transaction between the Company and CHC is not consummated, the waivers and consents contained in this Amendment and Waiver shall be null and void, and Executive shall repay or surrender, as the case may be, any and all consideration received pursuant to this Amendment and Waiver. The parties agree that in the event that the transaction is consummated, but Executive is not employed after the consummation of the transaction as contemplated by this Amendment and Waiver, the terms of Executive’s Change in Control Agreement shall control, and the parties shall take all appropriate action necessary and cooperate to the fullest extent to give effect to the terms of the Change in Control Agreement.
5. Additional Covenants.
a. Consent of CHC. The provisions of this Agreement shall be subject to, and shall have no effect until, consent in writing by CHC.
b. Employment with CHC or the Company. It is contemplated by the Company and Executive that Executive’s employment agreement with CHC following the Merger shall include reasonable change in control provisions generally calling for, at a minimum, a cash payment of two times the sum of gross annual base salary plus targeted incentive compensation.
6. Advice of Counsel. Executive understands and acknowledges that he has been free to seek the advice of his own counsel and hereby acknowledges that he has either sought such advice and counsel prior to executing this Amendment and Waiver or has chosen to forego such right.
7. Effect of Amendment and Waiver. Except as expressly amended or waived as set forth in this Amendment and Waiver, all of the other provisions of Executive’s Change in Control Agreement and Employment Agreement shall remain in full force and effect without modification or waiver unless later agreed to in writing.
8. Governing Law. This Amendment and Waiver shall be governed by and construed in accordance with laws of the State of Minnesota.
9. Successors. This Amendment and Waiver shall be binding upon the Company’s successors and assigns and Executive’s personal and legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.
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IN WITNESS WHEREOF, the Company and Executive have executed this Amendment and Waiver.
EXECUTIVE |
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ANALYSTS INTERNATIONAL CORPORATION |
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/s/ Xxxxx Manivasgaer |
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By: |
/s/ Xxxxxxx X. XxXxxxx |
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Xxxxx Xxxxxxxxxxx |
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Xxxxxxx X. XxXxxxx |
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Its: |
Chairman and Chief Executive Officer |
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Agreed and consented to by: |
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COMPUTER HORIZONS CORPORATION |
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By: |
/s/ Xxxxxxx X. Xxxxxxxxx |
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Name |
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Its: |
General Counsel and Secretary |
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Date: |
July 8, 2005 |
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