8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT

Pursuant to Section 13 OR 15(d) of the Securities Exchange Act of 1934

Date of Report (date of earliest event reported): December 21, 2005 (December 15, 2005)

Analysts International Corporation
(Exact name of registrant as specified in its charter)
Minnesota	0-4090		41-0905408
(State or other jurisdiction of Incorporation)	(Commission File Number)		(IRS Employer Identification Number)
3601 West 76th Street, Minneapolis, Minnesota		55435-3000
(Address for principal executive offices)		(Zip Code)
Registrant’s telephone number, including area code: (952) 835-5900

Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-14(c) under the Exchange Act (17 CFR 240.13e-4(c))

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Item 1.01 Entry into and Amendment to Material Definitive Agreements

On December 15, 2005, the Board of Directors of Analysts International Corporation (the “Company”) approved the terms and conditions of the amendment to the employment agreement of Jeffrey P. Baker, the Company’s President. Effective January 2, 2006, Mr. Baker will become the Company’s President and CEO under the terms and conditions set forth in Exhibit 10.1 attached hereto and incorporated in this Current Report as if fully set forth herein.

On December 15, 2005, the Company’s Board of Directors also approved certain terms and conditions associated with Michael J. LaVelle’s retirement as CEO effective December 31, 2005 and terms of his subsequent employee-consulting agreement through June 30, 2006. The terms and conditions of Mr. LaVelle’s retirement and agreement with the Company are set forth in Exhibit 10.2 attached hereto and incorporated in this Current Report as if fully set forth herein.

On December 15, 2005, the Company’s Board of Directors approved restoring the base compensation of the Company’s executive officers to levels in effect prior to October 1, 2005. Effective October 1, 2005, the Company’s executive officers voluntarily reduced their base compensation by between five and ten percent as part of the Company’s previously announced cost-cutting initiative. The Board of Directors’ action in restoring compensation of the executive officers to levels prior to October 1, 2005 will take effect on January 1, 2006 and is detailed in Exhibit 10.3 attached hereto and incorporated in this Current Report as if fully set forth herein.

Item 9.01Financial Statements and Exhibits.

(a)Financial statements: None.

(b)Pro forma financial information: None.

(c)Exhibits:

10.1	Terms and Conditions of the Amendment to Mr. Baker’s Employment Agreement
10.2	Terms and Conditions of Mr. LaVelle's Retirement and Consulting Agreement
10.3	Executive Officer Base Compensation Levels

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

Date:	December 21, 2005	ANALYSTS INTERNATIONAL CORPORATION
		/s/ Colleen M. Davenport
		Colleen M. Davenport
		Secretary and General Counsel

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EX-10.1

Exhibit 10.1

Jeffrey P. Baker - Terms and Conditions of Amendment

to Employment Agreement

·   Appointment to position of President and CEO effective January 2, 2006.

·   All terms and conditions of employment contract remain in place except that: i) the term will be amended to a five-year term beginning January 2, 2006; ii) annual base salary will increase from $380,000 to $400,000; iii) annual target incentive will be up to 80% of annual base salary in effect on January 2, 2006; and iv) 100,000 options scheduled to be awarded June 21, 2006 will be awarded January 2, 2006.

·   250,000-share restricted stock award from the Company’s on January 2, 2006 vesting over a five-year period as follows: i) Year 1 - 25,000; ii) Year 2 - 25,000; iii) Year 3 - 50,000; iv) Year 4 - 75,000; and v) Year 5 - 75,000. In the event that employment is terminated by the Company for convenience or performance or by Mr. Baker for Good Reason,¹ the restricted shares will vest. The vesting of this award, along with a similar provision in Mr. Baker’s current employment agreement related to the restricted shares granted to Mr. Baker at the commencement of employment, will be the only type of severance to which Mr. Baker would be entitled in the event of termination for convenience, performance or Good Reason.

·   Performance will be reviewed on an annual basis and merit increases will be made as and if warranted based on the performance of the Company and other criteria established by the Compensation Committee.

·   Continued participation in all benefit, change of control and SERP plans.

¹“Good Reason” in Mr. Baker’s employment agreement is generally defined as: i) substantial reduction in the nature or status of responsibilities; ii) reduction by the Company in base salary, except in the case where the Company reduces the base salaries of its senior executives generally, provided that such reduction shall not exceed the average percentage reduction of all senior executives; iii) the Company’s failure to comply with Section 3.3 (granting of long-term incentives (options and restricted stock)) of the employment agreement; and iv) intentional failure by Analysts to allow full participation in all plans, programs or benefits in accordance with the employment agreement. “Good Reason” is not deemed to occur unless an event has not been corrected by the Company within two weeks of receipt of notice from Mr. Baker.

EX-10.2

Exhibit 10.2

Michael J. LaVelle - Terms and Conditions of

Retirement and Employee-Consulting Agreement

·   On December 31, 2005, Mr. LaVelle will receive a lump sum distribution of approximately $1.4 million from the Company’s Special Executive Retirement Plan (the "Plan") as specified by the terms and conditions of the Plan.

·   Mr. LaVelle will continue to serve as Chairman of the Board and receive compensation for such services as set by the Compensation Committee from time to time.

·   Mr. LaVelle will provide services as an employee-consultant concerning management transition until June 30, 2006 for a minimum average of twenty (20) hours per week at a monthly gross salary of $16,675.

·   Mr. LaVelle will maintain medical and dental insurance coverage for himself and his spouse in accordance with the Company’s Supplemental Medicare Coverage Plan and Supplemental Dental Coverage Plan.

·   Prior to termination of employment, the Company will study and arrange for 2004 restricted stock award to continue to vest as scheduled through 2007 and for continuation of currently held stock options in $3-$5 strike price range while a member of the Board or until such options expire.

·   Mr. LaVelle will continue to have use of company office space and a company car during his tenure as Chairman.

EX-10.3

Exhibit 10.3

Executive Officers - Analysts International Corporation

Base Compensation Levels

Executive Officer	2005 Base Salary in effect prior to October 1, 2005	Current Base Salary	Base Salary effective January 2, 2006
Jeffrey P. Baker - President and CEO	$380,000	$342,000	$400,0001
John D. Bamberger - Chief Operating Officer	$380,000	$342,000	$380,000
David J. Steichen - Chief Financial Officer	$210,000	$199,500	$210,000
Colleen M. Davenport - Secretary & General Counsel	$210,000	$199,500	$210,000

¹ Mr. Baker’s base compensation effective January 2, 2006 reflects his appointment as President and CEO.