AMENDEDAND RESTATED EMPLOYMENT AGREEMENT

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (this “Agreement”) is entered into as of December 11, 2008 (the “Effective Date”), by and between On Assignment, Inc. (the “Company”) and James Brill (“Executive”).

 

A.     The Company and Executive previously entered into an agreement, dated January 1, 2007, pursuant to which Executive is employed as the Senior Vice President and Chief  Financial Officer of the Company (the “Prior Agreement”).

 

B.      The Company and Executive wish to amend and restate the Prior Agreement to implement changes required under Internal Revenue Code Section 409A (together with the regulations and official interpretations thereof, “Section 409A”).

1.           Employment Term.  Subject to the provisions for earlier termination hereinafter provided, Executive’s employment shall continue for a term which commenced on January 1, 2007 and ends on December 31, 2008 (the “Initial Termination Date”); provided, that this Agreement shall be automatically extended for one additional year on the Initial Termination Date and on each subsequent anniversary of the Initial Termination Date unless either Executive or the Company elects not to so extend such term by notifying the other party, in accordance with Section 7 below, of such election not less than sixty days prior to the Initial Termination Date, or any anniversary thereof, as applicable (in any case, the “Employment Period”).

2.           Position and Duties.

 

(a)           Position.  During the Employment Period, Executive shall serve as Senior Vice President and Chief Financial Officer of the Company and shall perform such employment duties as are usual and customary for such position, including without limitation, oversight and management of the Company’s Finance and Accounting, Risk Management and Investor Relations departments.  Executive shall report to the Chief Executive Officer of the Company (“CEO”).  The Company shall retain full direction and control of the means and methods by which Executive performs the above services.  At the Company’s request, Executive shall serve the Company and/or its subsidiaries and affiliates in such other offices and capacities in addition to the foregoing as the Company shall designate, consistent with Executive’s position, without additional compensation beyond that specified in this Agreement.

 

 

(b)           Place of Employment.  During the Employment Period, Executive shall perform the services required by this Agreement at the Company’s principal offices in Calabasas, California, unless otherwise mutually agreed upon by the parties.  Notwithstanding the foregoing, Executive may from time to time be required to travel temporarily to other locations on the Company’s business.

(d)           Exclusivity.  During the Employment Period, except for such other activities as the Compensation Committee of the Board of Directors (the “Committee”) shall approve in writing in its sole discretion and as otherwise provided in this Section 2(d), Executive shall devote his entire business time, attention and energies to the business and affairs of the Company, to the performance of Executive’s duties under this Agreement and to the promotion of the Company’s interests, and shall not (i) accept any other employment, directorship or consultancy, or (ii) engage, directly or indirectly, in any other business activity (whether or not pursued for pecuniary advantage) that is or may be competitive with, or that might place Executive in a competing position to, that of the Company.  Notwithstanding the foregoing, (i) for a period not to exceed ninety days from and after the Effective Date, Executive may provide the consulting services described on Schedule A hereto to Diagnostic Products Corporation and the provision of such consulting services shall not constitute a breach of this Section 2(d), and (ii) provided that such activities do not interfere with the fulfillment of Executive’s obligations hereunder, Executive may (A) serve as an officer, director or trustee of any charitable or non-profit entity; (B) own a passive investment in any private company and own up to 5% of the outstanding voting securities of any public company; or (C) with the prior approval of the CEO, serve as a director of up to two other companies so long as such companies do not compete with the Company and Executive notifies the CEO in advance of accepting any such position.

3.           Compensation.

(a)           Base Salary.  During the Employment Period, the Company shall pay Executive a base salary (the “Base Salary”) set at $275,000 per year for calendar year 2007 and subject thereafter to annual review and increase (but not decrease) in the sole discretion of the Committee.  The Base Salary shall be payable in accordance with the Company’s normal payroll procedures applicable to senior executives of the Company, as in effect from time to time.

(b)           Annual Bonus.  In addition to the Base Salary, Executive shall be eligible to earn an annual cash bonus in respect of each calendar year during the Employment Period beginning in calendar year 2007, as described below (each, an “Annual Bonus”), subject in each case to Executive’s continued employment through the date on which annual bonuses are paid generally to the Company’s senior executives.  In respect of calendar year 2007, Executive shall be eligible to earn an Annual Bonus ranging from $0 - $275,000, determined by reference to the Company’s earnings before interest, tax, depreciation and amortization as reported on its consolidated financial statements for such period (“EBITDA”).  The EBITDA targets applicable to Executive’s 2007 Annual Bonus shall be consistent with those applicable to the determination of the CEO’s 2007 annual bonus and shall be determined by the Committee, after consultation with the CEO and Executive, no later than March 31, 2007.  In respect of calendar years during the Employment Period beginning after 2007, any Annual Bonus shall be determined by reference to the attainment of objective performance criteria, which criteria shall be determined by the Committee within sixty days after the start of the applicable calendar year.  Each Annual Bonus shall be paid to Executive, to the extent that any such Annual Bonus becomes payable, within thirty days after the date on which the Committee conclusively determines the extent to which the applicable performance criteria have (or have not) been met.

 

 

(c)           Stock Option.  Subject to approval by the Committee, as soon as practicable following the Effective Date, the Company shall grant to Executive a nonqualified option to purchase 100,024 shares of Company common stock (the “Option”).  The Option shall be granted to Executive at an exercise price per share equal to 100% of the fair market value of a share of Company common stock on the date of grant, as determined by the Committee. Subject to Executive’s continued employment with the Company through each such date, the Option shall vest and become exercisable with respect to 25,000 of the shares subject thereto on the first anniversary of the date of grant of the Option (the “Option Grant Date”) and with respect to 2,084 of the shares subject thereto on each monthly anniversary of the Option Grant Date thereafter, such that the Option shall be vested and exercisable with respect to all shares subject thereto (subject to Executive’s continued employment) on the fourth anniversary of the Option Grant Date.  Consistent with the foregoing, the terms and conditions of the Option, including the applicable vesting conditions, shall be set forth in an Option grant agreement to be entered into by the Company and Executive in a form prescribed by the Company which shall evidence the grant of the Option (the “Option Agreement”).  The Option shall, subject to the provisions of this Section 3(c), be governed in all respects by the terms of the applicable Option Agreement.

(d)           Restricted Stock Units.  Subject to approval by the Committee, as soon as practicable following the Effective Date, the Company shall grant to Executive, under the OA Restated 1987 Stock Option Plan (the “Equity Plan”), 60,000 restricted stock units (the “RSUs”).  Subject to Executive’s continued employment with the Company through each such date, the RSU grant shall vest with respect to 15,000 RSUs on the first anniversary of the date of grant of the RSUs (the “RSU Grant Date”) and with respect to 1,250 of the RSUs on each monthly anniversary of the RSU Grant Date thereafter, such that the RSU grant shall be vested with respect to all RSUs (subject to Executive’s continued employment) on the fourth anniversary of the RSU Grant Date.  Shares of Company common stock shall be delivered in respect of RSUs vesting in accordance with this Section 3(d) on or as soon as practicable after the applicable vesting date of such RSUs, but in no event more than fifteen days after such vesting date, with the exact payment date to be determined by the Company in its sole discretion. Consistent with the foregoing, the terms and conditions of the RSUs, including the applicable vesting and share delivery conditions, shall be set forth in a RSU grant agreement to be entered into by the Company and Executive which shall evidence the grant of the RSUs and, except as otherwise expressly provided herein, shall be consistent with the terms and conditions contained in RSU grant agreements provided to other key executives of the Company (the “RSU Agreement”). The RSUs shall, subject to the provisions of this Section 3(d), be governed in all respects by the terms of the Equity Plan and the applicable RSU Agreement.

 

(e)           Additional Incentive Bonus.  In addition to the Base Salary, any Annual Bonuses and the RSU and Option grants, the Company may, in its sole discretion, pay to Executive a one-time additional bonus of up to $50,000 (the “Additional Bonus”) upon the attainment of performance objectives relating to the post-transaction integration of the Company with each of Vista Staffing Solutions, Inc. and Oxford, Inc., including synergy savings and other criteria selected by the Committee (the “Additional Bonus Objectives”).  The Additional Bonus Objectives shall be established, after consultation with Executive, in the sole discretion of the Committee, and the Additional Bonus shall become payable, if at all, at such date or dates as are determined by the Committee, subject to Executive’s continued employment through any such date(s).  Determinations as to whether the Additional Bonus performance objectives have been attained shall be made in the sole discretion of the Committee.

 

 

             (f)           Benefit Plans.  During the Employment Period, Executive and Executive’s legal dependants shall be eligible to participate in the welfare benefit plans, policies and programs (including, if applicable, medical, dental, disability, life and accidental death insurance plans and programs) maintained by the Company for its senior executives.  In addition, Executive shall be eligible to participate in such incentive, savings and retirement plans, policies and programs as are made available to senior executives of the Company, provided, that the Company shall have no obligation, in any case, to adopt, maintain or continue any such plans, policies or programs.

(g)           Additional Perquisites.  In addition to the compensation and benefits described above in this Section 3, during the Employment Period, the Company shall (i) pay to Executive an automobile allowance of $450 per month and, (ii) pay or reimburse Executive for actual, properly substantiated expenses incurred by Executive in connection with (A) an annual physical examination, not to exceed $1,500 per calendar year; and (B) tax preparation and financial planning services, not to exceed $2,500 per calendar year.

(h)           Vacation.  During the Employment Period, Executive shall be entitled to four weeks of paid vacation per calendar year, pro rated for any service by Executive during any partial calendar year, provided, that Executive shall not accrue any vacation time in excess of four weeks.

(i)           Expenses.  During the Employment Period, Executive shall be entitled to receive prompt reimbursement of all reasonable business expenses incurred by Executive in accordance with the Company expense reimbursement policy applicable to senior executives of the Company, as in effect from time to time, provided that Executive properly substantiates such expenses in accordance with such policy.

4.           Termination of Employment.

 

Either the Company or Executive may terminate Executive’s employment at any time for any reason or no reason.  The following provisions shall control any such termination of Executive’s employment, subject to Section 8 below:

 

(a)           Termination Without Cause.  The Company may terminate Executive’s employment without Cause (as defined below) at any time during the Employment Period upon written notice to Executive provided in accordance with Section 7 below.  If Executive’s employment is terminated as provided in this Section 4(a), the Company shall promptly, or in the case of obligations described in clause (iv) below, as such obligations become due to Executive, pay or provide to Executive, (i) Executive’s earned but unpaid Base Salary accrued through such Date of Termination (as defined below), (ii) accrued but unpaid vacation time through such Date of Termination, (iii) reimbursement of any business expenses incurred by Executive prior to the Date of Termination that are reimbursable under Sections 3(g) or 3(i) above, and (iv) any vested benefits and other amounts due to Executive under any plan, program or policy of the Company (together, the “Accrued Obligations”).  In addition, subject to Section 4(h) below, Executive’s execution and non-revocation of a binding Release (as defined below) in accordance with Section 4(f) below and Executive’s continued compliance with the Confidentiality Agreement (as defined below), Executive shall be entitled to receive 100% of Executive’s Base Salary at the rate in effect as of the Date of Termination, in substantially equal installments, for a period of twelve months following the Date of Termination, in accordance with the Company’s normal payroll procedures applicable to senior executives of the Company, as in effect from time to time, (but no less often than monthly), (the “Severance”), provided, that payment of the amounts described in this Section 4(a) shall not commence until the Company’s first payroll date occurring on or after the 30th day following the Date of Termination (the “First Payroll Date”) and any amounts that would otherwise have been paid prior to the First Payroll Date shall instead be paid on the First Payroll Date.

(b)           Death; Disability.  If Executive dies during the Employment Period or Executive’s employment is terminated due to Executive’s total and permanent disability (that constitutes a “disability” within the meaning of Section 409A), Executive or Executive’s estate, as applicable, shall be entitled to receive the Accrued Obligations promptly or, in the case of benefits described in Section 4(a)(iv), as such obligations become due to Executive.  In addition, subject to Section 4(h) below, Executive’s (or Executive’s estate’s) execution and non-revocation of a binding Release in accordance with Section 4(g) below and Executive’s continued compliance with the Confidentiality Agreement (upon a disability termination), Executive (or Executive’s estate) shall be entitled to receive the Severance.

(c)           Cause.  If Executive’s employment becomes terminable by the Company for Cause, the Company may terminate Executive’s employment immediately and Executive shall be entitled to receive the Accrued Obligations promptly or, in the case of benefits described in Section 4(a)(iv), as such obligations become due to Executive.

(d)           Resignation.  Executive may terminate Executive’s employment upon sixty days’ notice to the Company provided in accordance with Section 7 below, subject to the Company’s right to waive any or all of such notice period.  If Executive so terminates Executive’s employment, Executive shall be entitled to receive the Accrued Obligations promptly, or, in the case of benefits described in Section 4(a)(iv), as such obligations become due to Executive.  If the Company elects to waive the notice period provided for in this Section 4(d), Executive shall not be entitled to any compensation in respect of such period.

(e)           Other Terminations.  If Executive’s employment terminates for any reason other than those specified in Sections 4(a), (b), (c) or (d) above (including without limitation, the Company’s election not to extend the Employment Period, if, at the time of such notice, Executive is willing and able to extend the Agreement and continue providing services on terms and conditions substantially similar to those contained in this Agreement), the Company shall promptly, or in the case of items described in Section 4(a)(iv), as such obligations become due to Executive, pay or provide to Executive the Accrued Obligations.

(f)           Release; Exclusivity of Benefits.  Notwithstanding anything in this Agreement to the contrary, it shall be a condition to Executive’s right to receive the Severance that Executive (or his estate) execute, deliver to the Company and not revoke a general release of claims in a form prescribed by the Company (the “Release”).  Except as expressly provided in this Section 4, upon the termination of Executive’s employment, the Company shall have no obligations to Executive in connection with his employment with the Company or the termination thereof.

(g)           Definitions.

“Cause” shall mean (i) a material breach of this Agreement by Executive; (ii) the willful or repeated failure or refusal by Executive substantially to perform Executive’s duties hereunder; (iii) the indictment of Executive for any felony or other crime involving moral turpitude, (iv) fraud, embezzlement or misappropriation by Executive relating to the Company or its funds, properties, corporate opportunities or other assets to the extent that the Company reasonably determines such act to be materially injurious to the Company, or (v) Executive repeatedly acting in a manner or repeatedly making any statements, in either case, which the Company reasonably determines to be detrimental or damaging to the reputation, operations, prospects or business relations of the Company.

 

“Date of Termination” shall mean the date on which Executive experiences a separation from service within the meaning of Section 409A(a)(2)(A)(i) of the Internal Revenue Code of 1986, as amended, and Treasury Regulation Section 1.409A-1(h) (a “Separation from Service”).

 

(h)           Potential Six-Month Delay.  Notwithstanding anything to the contrary in this Agreement, no compensation or benefits, including without limitation any Severance payments, shall be paid to Executive during the 6-month period following Executive’s “separation from service” (within the meaning of Section 409A(a)(2)(A)(i) of the Internal Revenue Code of 1986, as amended (the “Code”)) to the extent the Committee reasonably determines that Executive is a “specified employee” at the time of such Separation from Service (within the meaning of Section 409A) and paying such amounts at the time or times indicated in this Agreement would be a prohibited distribution under Section 409A(a)(2)(b)(i) of the Code and/or cause Executive to incur additional taxes under Section 409A of the Code.  If the payment of any such amounts is delayed as a result of the previous sentence, then on the first business day following the end of such 6-month period, (or such earlier date upon which such amount can be paid under Section 409A without being subject to such additional taxes, including as a result of Executive’s death), the Company shall pay Executive a lump-sum amount equal to the cumulative amount that would have otherwise been payable to Executive during such 6-month period, without interest thereon.

5.           Confidential Information and Employee Developments.  Concurrently herewith, Executive agrees to execute and comply with the terms of the Confidential Information and Employee Development Agreement attached hereto as Exhibit A (the “Confidentiality Agreement”).  The compensation and benefits provided under this Agreement, together with any Severance obligations arising hereunder and other good and valuable consideration are hereby acknowledged by the parties hereto to constitute adequate consideration for Executive’s entering into the Confidentiality Agreement.

 

 

6.           Representations.

 

(a)           No Violation of Other Agreements.  Executive hereby represents and warrants to the Company that (i) he is entering into this Agreement voluntarily and that the performance of his obligations hereunder will not violate any agreement between him and any other person, firm, organization or other entity, and (ii) he is not bound by the terms of any agreement with any previous employer or other party to refrain from competing, directly or indirectly, with the business of such previous employer or other party that would be violated by his entering into this Agreement and/or providing services to the Company pursuant to the terms of this Agreement.

 

(b)           No Disclosure of Confidential Information.  Executive’s performance of his duties under this Agreement will not require him to, and he shall not, rely on in the performance of his duties or disclose to the Company or any other person or entity or induce the Company in any way to use or rely on any trade secret or other confidential or proprietary information or material belonging to any previous employer of Executive.

 

7.           Notice.  Any notice or other communication required or permitted under this Agreement shall be effective only if it is in writing and delivered personally or sent by fax, email or registered or certified mail, postage prepaid, addressed as follows (or if it is sent through any other method agreed upon by the parties):

 

If to the Company:

 

On Assignment, Inc.

26651 W. Agoura Road

Calabasas, CA 91302

Tel: (818) 878-7900

Attention: Chief Executive Officer

 

If to Executive: to the most current home address on file with the Company’s Human Resources department, or to such other address as any party hereto may designate by notice to the other in accordance with this Section 7, and shall be deemed to have been given upon receipt.

 

8.           Change of Control Agreement.  Notwithstanding anything contained in this Agreement, the parties hereto acknowledge that Executive and the Company have entered into an Executive Change of Control Agreement of even date herewith (the “COC Agreement”) and, that, in the event that Executive becomes entitled to compensation or benefits under the COC Agreement (as determined solely under the terms of the COC Agreement), this Agreement shall be superseded by the COC Agreement and no further compensation or benefits in any form shall become payable under this Agreement.

 

 

9.           Section 409A.

 

(a)           General.  The payments and benefits provided hereunder are intended to be exempt from or compliant with the requirements of Section 409A.  Notwithstanding any provision of this Agreement to the contrary, in the event that following the effective date hereof, the Company reasonably determines that any payments or benefits hereunder are not either exempt from or compliant with the requirements of Section 409A, the Company and Executive shall work together to adopt such amendments to this Agreement or adopt such other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions that are necessary or appropriate (i) to preserve the intended tax treatment of the payments and benefits provided hereunder, to preserve the economic benefits with respect to such payments and benefits, and/or (ii) to exempt such payments and benefits from Section 409A or to comply with the requirements of Section 409A and thereby avoid the application of penalty taxes thereunder, provided that the Company shall have no obligation to take any action described in this Section 9(a) or to indemnify Executive for any failure to take any such action.

 

(b)         Certain Reimbursements.  To the extent that any reimbursements hereunder constitute taxable compensation to Executive, such reimbursements shall be made to Executive promptly, but in no event after December 31st of the year following the year in which the expense was incurred, the amount of any such amounts reimbursed in one year shall not affect the amount eligible for reimbursement in any subsequent year, and Executive’s right to reimbursement of any such expenses shall not be subject to liquidation or exchange for any other benefit.

10.           Miscellaneous.

 

(a)           Governing Law.  The rights and duties of the parties will be governed by the local law of the State of California, excluding any choice-of-law rules that would require the application of the laws of any other jurisdiction.  The parties hereto consent to the jurisdiction of the state and federal courts located in the state of California to adjudicate any disputes between such parties.

 

(b)           Captions.  The captions of this Agreement are not part of the provisions hereof, rather they are included for convenience only and shall have no force or effect.

 

(c)           Amendment.  The terms of this Agreement may not be amended or modified other than by a written instrument executed by the parties hereto or their respective successors.

 

(d)           Withholding.  The Company shall withhold from any amounts payable under this Agreement all federal, state, local and/or foreign taxes, as the Company determines to be legally required pursuant to any applicable laws or regulations.

 

(e)           No Waiver.  Failure by either party hereto to insist upon strict compliance with any provision of this Agreement or to assert any right such party may have hereunder shall not be deemed to be a waiver of such provision or right or any other provision or right of this Agreement.

 

 

(f)           Severability.  The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement.

 

(g)           Construction.  The parties hereto acknowledge and agree that each party has reviewed and negotiated the terms and provisions of this Agreement and has had the opportunity to contribute to its revision.  Accordingly, the rule of construction to the effect that ambiguities are resolved against the drafting party shall not be employed in the interpretation of this Agreement.  Rather, the terms of this Agreement shall be construed fairly as to both parties hereto and not in favor or against either party by the rule of construction abovementioned.

 

(h)           Assignment.  This Agreement is binding on and for the benefit of the parties hereto and their respective successors, heirs, executors, administrators and other legal representatives.  Neither this Agreement nor any right or obligation hereunder may be assigned by Executive.

 

(i)           Entire Agreement.  As of the Effective Date, this Agreement, together with the Confidentiality Agreement, any applicable Stock Option Agreement and RSU Agreement and the COC Agreement, constitute the final, complete and exclusive agreement and understanding between Executive and the Company with respect to the subject matter hereof and replace and supersede any and all other agreements, offers or promises, including the Prior Agreement, whether oral or written, made to Executive by the Company or any representative thereof.

 

(j)           Counterparts.  This Agreement may be executed in several counterparts, each of which shall be deemed an original, but all of which shall constitute one and the same instrument.

 

 

 

 

IN WITNESS WHEREOF, Executive has hereunto set his hand and, pursuant to the authorization from the Committee, the Company has caused these presents to be executed in its name on its behalf, all as of the day and year first above written.

 

 

 

 

During the first ninety days of the Employment Period, Executive shall be permitted to devote up to two business days per week to the performance of consulting services for Executive’s former employer, Diagnostic Products Corporation, relating to the successful transition of Executive’s former position at Diagnostic Products Corporation and the duties and responsibilities associated therewith to Executive’s successor at Diagnostic Products Corporation.

Exhibit A