def14a.htm

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
SCHEDULE 14A
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. ___ )
 
Filed by the Registrant  x
Filed by a Party other than the Registrant  o
Check the appropriate box:
o
Preliminary Proxy Statement
o
Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))
x
Definitive Proxy Statement
o
Definitive Additional Materials
o
Soliciting Material Pursuant to §240.14a-12

 
ON ASSIGNMENT, INC.
(Name of Registrant as Specified In Its Charter)
 
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
 
Payment of Filing Fee (Check the appropriate box):
x
No fee required.
o
Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
 
(1)
Title of each class of securities to which transaction applies:
     
 
(2)
Aggregate number of securities to which transaction applies:
     
 
(3)
Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
     
 
(4)
Proposed maximum aggregate value of transaction:
     
 
(5)
Total fee paid:
     
o
Fee paid previously with preliminary materials.
o
Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.
 
(1)
Amount Previously Paid:
     
 
(2)
Form, Schedule or Registration Statement No.:
     
 
(3)
Filing Party:
     
 
(4)
Date Filed:
     
     

 
 

 


 
26651 West Agoura Road
 Calabasas, California 91302
 
April 27, 2010
 
Dear Shareholder:
 
On behalf of your Board and management, you are cordially invited to attend the 2010 Annual Meeting of Shareholders of On Assignment, Inc. on Thursday June 3, 2010, at 10:00 a.m. Pacific Daylight Time, at our corporate headquarters located at 26651 West Agoura Road, Calabasas, California 91302.
 
The Notice of Annual Meeting of Shareholders and Proxy Statement accompanying this letter describe the business to be acted upon.
 
Your vote is important no matter how many shares you own. In order to ensure that your shares will be represented at the Annual Meeting, we have enclosed a proxy card by which you can direct the voting of your shares. Please sign and promptly return the enclosed proxy card whether or not you plan to attend the Annual Meeting. If you attend the Annual Meeting and desire to vote in person, you may do so even though you have previously submitted your proxy card.
 
We thank you for your continued interest in On Assignment, Inc. and look forward to seeing you at the Annual Meeting.
 
 
Sincerely,
 
 
Peter T. Dameris
President and Chief Executive Officer

 

 

 
 

 


 
26651 West Agoura Road
Calabasas, California 91302
 
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS
To Be Held on Thursday, June 3, 2010
 
The 2010 Annual Meeting of Shareholders of On Assignment, Inc. will be held on Thursday, June 3, 2010, at 10:00 a.m. Pacific Daylight Time, at our corporate headquarters located at 26651 West Agoura Road, Calabasas, California 91302, for the purpose of considering and voting upon:
 
 
1.
the election of Senator Brock as a director for a three-year term to expire at our 2013 Annual Meeting;
 
 
2.
the adoption of On Assignment’s 2010 Incentive Award Plan;
 
 
3.
the adoption of On Assignment’s 2010 Employee Stock Purchase Plan;
 
 
4.
the ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the fiscal year ending December 31, 2010; and
 
 
5.
such other business as may properly come before the Annual Meeting or any adjournments or postponements thereof.
 
    The foregoing items of business are more fully described in the Proxy Statement accompanying this notice. The expenses of printing proxy material, including expenses involved in forwarding materials to beneficial owners of stock will be paid by On Assignment.   We have retained Morrow & Co. to assist in the solicitation of proxies. Only shareholders of record at the close of business on April 15, 2010 are entitled to notice of and to vote at the Annual Meeting.
 
All shareholders are cordially invited to attend the Annual Meeting in person.  Please call (818) 878-7900 to obtain directions.  However, to ensure your representation at the Annual Meeting, you are urged to sign and return the enclosed proxy card as promptly as possible in the envelope enclosed for that purpose. Any shareholder of record attending the Annual Meeting may vote in person even if he or she has previously returned a proxy card. If you hold your shares in “street name,” you must obtain a proxy in your name from your bank, broker or other holder of record in order to vote by ballot at the Annual Meeting.
 
 
By Order of the Board,
 
 
 
Tarini Ramaprakash
Secretary
April 27, 2010
 
Calabasas, California
 

 



 

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE
ANNUAL MEETING OF SHAREHOLDERS TO BE HELD ON JUNE 3, 2010
    This Proxy Statement and our Annual Report on Form 10-K filed with the SEC on March 16, 2010 are available free of charge on our website (http://www.onassignment.com).

 
 

 


2010 PROXY STATEMENT
 
TABLE OF CONTENTS
 
Section
Page
General Information about the Annual Meeting and Voting
    1  
Security Ownership of Certain Beneficial Owners and Management
    5  
Proposal One—Election of Director
    8  
Approval of Proposal One
    8  
Nominee for Election with Term Ending in 2013
    8  
Continuing Directors
    9  
Independent Directors and Material Proceedings
    11  
Board Committees and Meetings
    12  
Communicating with the Board
    15  
Ethics
    15  
Proposal Two—Adoption of On Assignment’s 2010 Incentive Award Plan
    15  
     Description of the Incentive Award Plan
    17  
     Federal Income Tax Consequences
    20  
     New Plan Benefits
    22  
     Approval of Proposal Two
    23  
     Equity Compensation Plan Information
    23  
Proposal Three—Adoption of On Assignment’s 2010 Employee Stock Purchase Plan
    24  
     Description of the Employee Stock Purchase Plan
    24  
     Federal Income Tax Consequences
    26  
     Approval of Proposal Three
    26  
Compensation Discussion and Analysis
    27  
    Compensation Philosophy
    27  
Summary of Executive Compensation
    33  
Summary of Cash and Other Compensation
    41  
Summary of Grants of Plan Based Awards
    43  
Employment Contracts and Change in Control Arrangements
    45  
Summary of Outstanding Equity Awards
    50  
Summary of Option Exercises and Stock Vested
    52  
Payments Upon Termination or Change of Control
    53  
Equity Compensation Plan Information
    61  
Deferred Compensation
    61  
Director Compensation
    62  
    Compensation Committee Report
    63  
Proposal Four—Ratification of Appointment of Independent Accountants
    63  
Approval of Proposal Four
    64  
Report of the Audit Committee
    65  
Principal Accountant Fees and Services
    66  
Compensation Committee Interlocks and Insider Participation
    66  
Certain Relationships and Related Transactions
    66  
Section 16(a) Beneficial Ownership Reporting Compliance
    66  
Other Matters
    68  
Annual Report to Shareholders and Form 10-K
    68  
Proposals by Shareholders
    68  
Miscellaneous
    68  
Appendix A – On Assignment, Inc. 2010 Incentive Award Plan
    A-1  
Appendix B – On Assignment, Inc. 2010 Employee Stock Purchase Plan
    B-1  



 

 
 

 

 

 
On Assignment, Inc.
26651 West Agoura Road
Calabasas, California 91302
 
PROXY STATEMENT
 
For the Annual Meeting of Shareholders to be Held
Thursday, June 3, 2010
 
On Assignment, Inc. (the “Company,” “On Assignment,” “we,” “our,” “us”) is providing these proxy materials in connection with the solicitation by the Board of On Assignment, Inc. of proxies to be voted at On Assignment’s 2010 Annual Meeting of Shareholders to be held on Thursday, June 3, 2010 at 10:00 a.m.  Pacific Daylight Time, or at any adjournment or postponement thereof. This Proxy Statement, the proxy card and On Assignment, Inc.’s Annual Report to Shareholders will be mailed to each shareholder entitled to vote at the 2010 Annual Meeting of Shareholders commencing on or about May 3, 2010.
 
General Information about the Annual Meeting and Voting
 
Who is soliciting my vote?
 
The Board of On Assignment, Inc. is soliciting your vote at the 2010 Annual Meeting of Shareholders.
 
What proposals will be voted on at the Annual Meeting?
 
The items scheduled to be voted on at the Annual Meeting are:
 
n  
the election of  Senator Brock as a director for a three-year terms to expire at our 2013 Annual Meeting; and
 
n  
the adoption of the On Assignment 2010 Incentive Award Plan; and
 
n  
the adoption of the On Assignment 2010 Employee Stock Purchase Plan; and
 
n  
the ratification of the appointment of Deloitte & Touche LLP as our independent registered public accounting firm for the 2010 fiscal year; and
 
n  
such other business as may properly come before the Annual Meeting or any adjournments or postponements thereof.
 
If any such other matters properly come before the Annual Meeting or any adjournments or postponements thereof, the persons named as proxies shall vote the shares represented thereby in their discretion.
 
Who may vote at the Annual Meeting?
 
The Board has set April 15, 2010, as the record date for the Annual Meeting. If you were the owner of shares of On Assignment, Inc. common stock at the close of business on April 15, 2010, you may vote at the Annual Meeting. You are entitled to one vote for each share of common stock you held on the record date, including shares:
 
 
·
held directly in your name with our transfer agent as a “holder of record”; and
 
 
·
held for you in an account with a broker, bank or other nominee (shares held in “street name”).
 
A list of shareholders entitled to vote at the Annual Meeting will be open to the examination of any shareholder, for any purpose germane to the Annual Meeting, during normal business hours for a period of ten days before the Annual Meeting at our corporate offices at 26651 West Agoura Road, Calabasas, California 91302, and at the time and place of the Annual Meeting.
 
How many shares must be present to hold the meeting?
 
A majority of On Assignment’s outstanding shares of common stock as of the record date must be present at the Annual Meeting in order to hold the meeting and conduct business. This is called a quorum. Abstentions and

 
1

 
broker non-votes will be counted for purposes of establishing a quorum at the meeting. On April 15, 2010, there were 36,406,367 shares of On Assignment common stock outstanding. Your shares will be counted as present at the Annual Meeting if you:
 
 
·
are present and vote in person at the Annual Meeting; or
 
 
·
have properly submitted a proxy card prior to the Annual Meeting
 
How many votes are required to approve each item?
 
Directors are elected by a plurality of the votes cast at the Annual Meeting. This means that the nominee who receives the largest number of “FOR” votes cast will be elected as a director.
 
The proposed approval of the On Assignment 2010 Incentive Award Plan requires the “FOR” vote of a majority of the shares present in person or by proxy at the Annual Meeting and entitled to vote on that proposal.
 
The proposed approval of the On Assignment 2010 Employee Stock Purchase Plan requires the “FOR” vote of a majority of the shares present in person or by proxy at the Annual Meeting and entitled to vote on that proposal.
 
The ratification of the appointment of the independent accountants requires the “FOR” vote of a majority of the shares present in person or by proxy at the Annual Meeting and entitled to vote on that proposal.
 
How are votes counted?
 
You may either vote “FOR” or “WITHHOLD AUTHORITY TO VOTE” for the director nominee. You may vote “FOR,” “AGAINST” or “ABSTAIN” on the approval of the On Assignment 2010 Incentive Award Plan, the approval of the On Assignment 2010 Employee Stock Purchase Plan, and the ratification of the appointment of our independent accountants.
 
If you withhold authority to vote with respect to the director nominee, your shares will be counted for purposes of establishing a quorum, but will have no effect on the election of the nominee. If you abstain from voting on a proposal, your shares will be counted as present for purposes of establishing a quorum at the Annual Meeting, and the abstention will have the same effect as a vote against that proposal. If you sign and submit your proxy card without voting instructions, your shares will be voted “FOR” the director nominee put forth by the Board, “FOR” the approval of the On Assignment 2010 Incentive Award Plan, “FOR” the approval of the On Assignment 2010 Employee Stock Purchase Plan and “FOR” the appointment of Deloitte & Touche LLP as our independent accountants.
 
Broker non-votes are counted as present for purposes of determining the presence or absence of a quorum for the transaction of business but will not be counted for purposes of determining whether a proposal has been approved.
 
What is a broker non-vote?
 
If a broker does not have discretion to vote shares held in street name on a particular proposal and does not receive instructions from the beneficial owner on how to vote those shares, the broker may return the proxy card without voting on that proposal. This is known as a broker non-vote.
 
How does the Board recommend that I vote?
 
The Board recommends that you vote “FOR” Senator Brock, the director nominee named in this Proxy Statement, “FOR” the adoption of the On Assignment 2010 Incentive Award Plan, “FOR” the adoption of the On Assignment 2010 Employee Stock Option Plan and “FOR” the ratification of the appointment of Deloitte & Touche LLP as our independent accountants.

How do I vote my shares without attending the Annual Meeting?
 
Whether you hold shares directly or in “street name,” you may direct your vote without attending the Annual Meeting. If you are a shareholder of record, you may vote by signing and dating your proxy card and mailing it in the postage-paid envelope provided. You should sign your name exactly as it appears on the proxy card. If you are signing in a representative capacity (for example, as guardian, executor, trustee, custodian, attorney or officer of a corporation), you should indicate your name and title or capacity.

 
2

 
For shares held in “street name,” you should follow the voting directions provided by your broker or nominee. You may complete and mail a voting instruction card to your broker or nominee or, in most cases, submit voting instructions by telephone or the Internet. If you provide specific voting instructions by mail, telephone or the Internet, your shares will be voted by your broker or nominee as you have directed.
 
How do I vote my shares in person at the Annual Meeting?
 
Even if you plan to attend the Annual Meeting, we encourage you to vote by signing, dating and returning the enclosed proxy card so your vote will be counted if you later decide not to attend the Annual Meeting.
 
If you choose to vote in person at the Annual Meeting:
 
 
·
if you are a shareholder of record, you may vote by the ballot to be provided at the Annual Meeting; or
 
 
·
if you hold your shares in “street name,” you must obtain a proxy in your name from your bank, broker or other holder of record in order to vote by ballot at the Annual Meeting.
 
Please call (818) 878-7900 to obtain directions to attend the Annual Meeting.

What happens if my shares are held in more than one account?
 
If your shares are held in more than one account, you will receive a proxy card for each account. To ensure that all of your shares in each account are voted, you must sign, date and return each proxy card you receive.
 
If you and other residents at your mailing address own shares of On Assignment stock in “street name,” your bank, broker or other holder of record may have notified you that your household will receive only one Annual Report and Proxy Statement for each company in which you hold stock through that bank, broker or other holder of record. This practice is known as “householding.” Unless you responded that you did not want to participate in householding, you were deemed to have consented to the process. Therefore, your bank, broker or other holder of record will send only one copy of our Annual Report and Proxy Statement to your address. Each shareholder in your household will continue to receive a separate voting instruction form.
 
If you would like to receive your own set of our Annual Report and Proxy Statement in the future, or if you share an address with another On Assignment shareholder and together both of you would like to receive only a single set of On Assignment annual disclosure documents, please contact our Investor Relations department by telephone at (818) 878-3136. As a part of this process, you will be asked to provide your name, the name of your bank, broker or other holder of record, and your account number.  The revocation of your consent to householding should be effective 30 days following receipt of your instructions.
 
If you did not receive an individual copy of this year’s Annual Report or Proxy Statement, we will send a copy to you upon a written or oral request. Written requests for such copies should be addressed to On Assignment, Inc., Attention: Investor Relations, 26651 West Agoura Road, Calabasas, CA 91302.  Please contact our Investor Relations department by telephone at (818) 878-3136 with any oral requests for such copies.
 
May I revoke my proxy and change my vote?
 
You may revoke your proxy at any time before it is voted by:
 
 
·
submitting a properly signed proxy card with a later date;
 
 
·
delivering to the Secretary of On Assignment a written revocation notice bearing a later date than the proxy card; or
 
 
·
voting in person at the Annual Meeting.
 
3

Will my shares be voted if I do not provide my proxy card and do not attend the Annual Meeting?
 
If you do not provide a proxy card or vote your shares held in your name, your shares will not be voted.
 
If you hold your shares in street name, your broker may be able to vote your shares for certain “routine” matters even if you do not provide the broker with voting instructions. The ratification of Deloitte & Touche LLP as our independent accountants for 2010 is considered a routine matter.  Please note that because of a change in applicable rules on broker discretionary voting in director elections which are effective for the first time this year, your broker cannot vote on the election of directors unless you provide voting instructions to your broker.  Therefore, brokers cannot vote shares held on behalf of their clients on “non-routine” matters, such as Proposal One regarding the election of a director, Proposal Two regarding the approval of the On Assignment 2010 Incentive Award Plan and Proposal Three regarding the approval of the On Assignment 2010 Employee Stock Purchase Plan.
 

 
4

 
 
 
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
 
The following table sets forth, as of March 31, 2010, the beneficial ownership of On Assignment’s common stock for the following persons:
 
 
·
all shareholders known by us to beneficially own more than 5% of our common stock;
 
 
·
each of our directors;
 
 
·
each of our named executive officers, as identified; and
 
 
·
all of our directors and named executive officers as a group.
 
Certain information in the table concerning shareholders other than our directors and officers is based on information contained in filings made by such beneficial owner with the Securities and Exchange Commission.  Pursuant to Rule 13d-3 of the Securities Exchange Act of 1934, as amended, among other determining factors, shares are deemed to be beneficially owned by a person if that person has the right to acquire shares (for example, upon exercise of an option) within 60 days of the date that information is provided. In addition, we note that Section 16(a) of the Exchange Act requires the Company’s officers and directors, and persons who own more than ten percent of a registered class of the Company’s equity securities, to file reports of securities ownership and changes in such ownership with the SEC.  In determining the percentage ownership of any person, the amount of shares outstanding is deemed to include any shares beneficially owned by such person (and only such person) by reason of the acquisition rights described above, but excludes any securities held by or for the account of the Company or its subsidiaries. As a result, the percentage of outstanding shares held by any person in the table below does not necessarily reflect the person’s actual voting power.  As of March 31, 2010, there were 36,387,851 shares of On Assignment common stock outstanding.
 
The address of each person listed is in care of On Assignment, 26651 West Agoura Road, Calabasas, California 91302, unless otherwise set forth below such person’s name.  In addition, unless otherwise indicated, each person listed has sole voting power and sole investment power.
 

 

 
5

 


 
   
 
       
Shares Beneficially Owned
Right to
 
Percent of
      Shares of  
Acquire within 60 days of
Outstanding
   
Common Stock(1)
 
March 31, 2010(2)
Shares
Name
 
 
 
 
 
Wells Fargo & Co (3)
                 
420 Montgomery Street
                 
San Francisco, CA  94104
   
8,073,384
     
 
22.2
T. Rowe Price Associates, Inc. (6)
                 
100 E. Pratt Street
                 
Baltimore, ND  21202
   
4,283,950
     
 
11.8
TimesSquare Capital Management, LLC (4)
                 
1177 Avenue of the Americas – 39th Floor
                 
New York, NY  10036
   
3,182,150
     
 
8.7
BlackRock, Inc. (5)
                 
40 East 52nd Street
                 
New York, NY  10022
   
2,800,225
     
 
7.7
William Blair & Company, LLC (7)
                 
222 W Adams
                 
Chicago, IL  60606
   
1,911,929
     
 
5.3
                   
William E. Brock**
   
25,830
(8)
   
18,000
 
*
Jonathan S. Holman**
   
46,499
(9)
   
36,000
 
*
Jeremy M. Jones**
   
86,436
(10)
   
18,000
 
*
Edward L. Pierce**
   
17,049
(11)
   
12,000
 
*
Peter T. Dameris**
   
    193,158
(12)
   
703,199
 
2.5
James L. Brill**
   
95,289
(13)
   
85,852
 
*
Emmett B. McGrath**
   
67,844
(14)
   
119,375
 
*
Michael J. McGowan**
   
166,312
(15)
   
101,250
 
*
Mark S. Brouse**
   
97,418
(16)
   
24,375
 
*
All directors and executive officers as a group
(9 persons)
   
795,835
     
1,118,051
 
5.3
 

 
*
Represents less than 1% of the shares outstanding.
 
**
Directors’ and officers’ shares as of March 31, 2010.
 
(1)
Includes shares for which the named person has sole voting and investment power and/or has shared voting and investment power with a spouse or minor child.  Excludes shares that may be acquired through exercise of stock options, warrants and vesting of restricted stock units.
 
(2)
Includes shares that can be acquired upon the exercise of stock options which vested prior to or on March 31, 2010, but remain unexercised, as well as stock options which vest within 60 days after March 31, 2010 and restricted stock units that vest within 60 days after March 31, 2010.
 
(3)
Pursuant to a Schedule 13G/A filed with the Securities and Exchange Commission on January 13, 2010.   The reporting person has sole voting power for 4,070,137 and sole dispositive power for 7,961,972 shares.
 
(4)
Pursuant to a Schedule 13G/A filed with the Securities and Exchange Commission on February 9, 2010.   The reporting person has sole voting power for 2,946,150 and sole dispositive power for 3,182,150 shares.
 
(5)
Pursuant to a Schedule 13G filed with the Securities and Exchange Commission on January 29, 2010.  The reporting person has sole voting power for 2,800,225 shares and sole dispositive power for 2,800,225 shares.
 
(6)
Pursuant to a Schedule 13G filed with the Securities and Exchange Commission on February 12, 2010.  The reporting person has sole voting power for 2,292,600 shares and sole dispositive power for 2,313,950.
 
(7)
Pursuant to a Schedule 13G filed with the Securities and Exchange Commission on February 5, 2010.  The reporting person has sole voting power for 1,911,929 shares and sole dispositive power for 1,911,929 shares.
 

 
6

 


 
 (8)
The total number of shares beneficially owned does not include 6,281 unvested restricted stock units which were reported in a Form 4 at or around the time of the grant.  Senator Brock has sole voting and investment power over all shares.
 
 (9)
Includes 39,000 shares held in The Holman Group, Inc. Profit Sharing Trust for which Mr. Holman has sole voting and investment power.  Mr. Holman also has sole voting and investment power for the remaining shares.  The total number of shares beneficially owned does not include 6,281 unvested restricted stock units which were reported in a Form 4 at or around the time of grant.
 
 (10)
All shares are held by the Jones Family Trust for which Mr. Jones has sole voting and investment power.  The total number of shares beneficially owned does not include 6,281 unvested restricted stock units which were reported in a Form 4 at or around the time of grant.
 
(11)
The total number of shares beneficially owned does not include 6,281 unvested restricted stock units which were reported in a Form 4 at or around the time of the grant.  Mr. Pierce has sole voting and investment power for all shares.
 
(12)
Mr. Dameris has sole voting and investment power for all shares.  The total number of shares beneficially owned does not include 160,525 unvested restricted stock units which were reported in Form 4s filed at or around the time of the grants.  The total number of shares beneficially owned includes 51,789 restricted stock units that would vest and to which Mr. Dameris would be entitled to if he had been terminated by the Company without cause on March 31, 2010.
 
(13)
Mr. Brill and his wife share voting and investment power for all shares.   The total number of shares beneficially owned does not include 111,671 unvested restricted stock units which were reported in Form 4s filed at or around the time of the grants.
 
(14)
All shares are held by the McGrath Living Trust for which Mr. McGrath has sole voting and investment power.  The total number of shares beneficially owned does not include 53,604 unvested restricted stock units which were reported in Form 4s filed at or around the time of the grants.
 
 (15)
Includes 5,000 shares held by Mr. McGowan in a trust for which Mr. McGowan has sole voting and investment power.  The total number of shares beneficially owned does not include 70,711 unvested restricted stock units which were reported in Form 4s filed at or around the time of the grants.
 
(16)
Includes 4,250 shares that are held in a family trust for which Mr. Brouse and his wife share voting and investment power and 4,250 shares that are held in a family foundation for which Mr. Brouse and his wife share voting and investment power.  Mr. Brouse has sole voting and investment power over the remaining shares.  The total number of shares beneficially owned does not include 35,588 unvested restricted stock units which were reported in Form 4s filed at or around the time of the grants.
 

 

 
7

 


 
 
PROPOSAL ONE—ELECTION OF DIRECTOR
 
The Bylaws of On Assignment provide that our Board shall be comprised of not less than four or more than seven directors, and the exact number may be fixed by the Board. The Board fixed the authorized number of directors at five following the 2007 Annual Meeting. The Board is divided into three classes, as equal in number as possible. At each Annual Meeting, one class of directors is elected for a three-year term.
 
At this year’s Annual Meeting, one director will be elected to serve until our 2013 Annual Meeting or until his successor is elected and qualified.  Senator William E. Brock, who currently serves as an independent director and Chairman of the Nominating and Corporate Governance Committee and whose term is expiring, has been nominated to stand for re-election.  Unless otherwise instructed by shareholders, the persons named as proxies will vote the proxies received by them “FOR” the election of Senator Brock.  Senator Brock has consented to serve if elected, but if he is unable or unwilling to serve, the persons named as proxies may exercise their discretion to vote for substitute nominees.
 
Approval of Proposal One
 
The nominee receiving the highest number of “FOR” votes cast will be elected as director. Our Board unanimously recommends that our shareholders vote “FOR” the election of our nominee.
 
Set forth below is certain information regarding On Assignment’s director nominee including the age as of the Annual Meeting, term of office as director and business experience.
 



Nominee for Election with Term Ending in 2013
 
Name
Age
Principal Occupation and Directorship
Senator William E. Brock
79
Senator Brock has served as a director of the Company since April 1996. Senator Brock is the founder, and from 1994 to present, CEO of The Brock Offices, a consulting firm specializing in international trade and human resource development. From 1988 to 1991, Senator Brock served as Chairman of the National Endowment for Democracy, an organization he helped found in 1980. Senator Brock served in President Reagan's cabinet as Secretary of Labor from 1985 to 1987 and as United States Trade Representative from 1981 to 1985. As United States Trade Representative, Senator Brock organized the Quad Forum of trade and economic ministers from Europe, Japan and Canada and led the group to initiate the World Trade Organization.  From 1977 to 1981, Senator Brock served as National Chairman of the Republican Party. From 1970 to 1976, he was a member of the U.S. Senate and from 1962 to 1970, he was a member of the U.S. House of Representatives.  The National Academy of Human Resources has recognized Senator Brock for his outstanding contribution to human development in the United States.  Senator Brock is a member of the Board for Catalyst Health Solutions, Inc., a publicly traded company centered on the management of prescription drug benefits, and serves on its Executive and Audit Committees.  Senator Brock is a member of the Board of Strayer Education, Inc., a publicly traded education services holding company that owns Strayer University, which provided professional education to working adults, and serves on its Compensation Committee and its Nomination and Governance Committee.  Senator Brock is a member of the Board of ResCare, a publicly traded provider of home care, residential support services to the elderly and persons with disabilities as well as vocational training and job placement for people of all ages and skill levels, and serves on its Audit and Executive Compensation Committees.  Senator Brock provides our board with a wealth of business operations experience including direct experience with healthcare, government services, human resource development and public company corporate governance experience.
 

 
8




Continuing Directors
 
Set forth below is certain information regarding On Assignment’s continuing directors including the age as of the Annual Meeting, term of office as director and business experience.
 
Directors with Term Ending in 2011
 
Name
Age
Principal Occupation and Directorship
Peter T. Dameris
50
Peter Dameris was appointed our Chief Executive Officer and President as of September 28, 2004, and has served as a director since December 10, 2004. Prior to such appointment, Mr. Dameris had been Executive Vice President and Chief Operating Officer of On Assignment since November 2003. From February 2001 through October 2002, Mr. Dameris served as Executive Vice President and Chief Operating Officer of Quanta Services, Inc., a publicly-held provider of specialized contracting services for the electric and gas utility, cable and telecommunications industries. Mr. Dameris created a regional operating organization for 85 acquired businesses and developed materials to support marketing and a national corporate image to support outsourcing initiatives, established cash generation, credit management, balance sheet improvement initiatives.  From December 1994 through September 2000, Mr. Dameris served in a number of different positions at Metamor Worldwide, Inc., then an international, publicly-traded IT consulting/staffing company. Mr. Dameris’ positions at Metamor Worldwide included Chairman of the Board, President and Chief Executive Officer, Executive Vice President, General Counsel, Senior Vice President and Secretary.  Mr. Dameris negotiated the $1.9 billion sale of Metamor to PSINet.  Mr. Dameris was a member of the Board of Bindview Corporation, a publicly-traded network security software development company (acquired by Symantec Corporation in January 2006) from November 2002 to January 2006.  Mr. Dameris is currently a director of Seismic Micro-Technology, Inc. Mr. Dameris holds a Juris Doctorate from the University of Texas Law School and a Bachelor of Science degree in Business Administration from Southern Methodist University.  Mr. Dameris provides our board with extensive staffing industry experience, having served in various capacities at staffing companies with significant operational, legal and governance responsibilities.
 
 
Jonathan S. Holman
65
Jonathan Holman has served as a director since March 1994. Mr. Holman is the founder and since 1981 has been the President of The Holman Group, Inc., an executive search firm.  To date, Mr. Holman has recruited over 140 CEOs to public and private companies, ranging from start-ups to companies with over $1 billion in revenue and in a variety of industries.  Mr. Holman was named as one of the top 200 executive recruiters in the world in The Global 200 Executive Recruiters and named as one of the top 250 executive recruiters in The New Career Makers.  Mr. Holman regularly speaks at technology industry gatherings.  Prior to founding The Holman Group, Mr. Holman served in various human resources-related  positions.  Mr. Holman holds his Master of Business Administration from Stanford University and a Bachelor of Arts degree from Princeton University, both with high academic honors.   Mr. Holman provides our Board, including our Compensation Committee, with helpful insight regarding hiring and salary practices of publicly-traded companies.  In addition, Mr. Holman provides our Board with human resources experiences.

 

 
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Directors with Term Ending in 2012
 
Name
Age
Principal Occupation and Directorship
Jeremy M. Jones
 
 
68
Jeremy Jones has served as a director since May 1995 and was appointed Chairman of the Board in February 2003. Mr. Jones has been an investor and business development consultant since February 1998. From 1987 to 1995, Mr. Jones was Chief Executive Officer and Chairman of the Board of Homedco Group, Inc., a home healthcare services company, which became publicly traded in 1991. Homedco merged into Apria Healthcare Group, Inc. in 1995 and from 1995 through January 1998, Mr. Jones was Chief Executive Officer and Chairman of the Board of Apria Healthcare Group, Inc., which also provided  home healthcare services.  Mr. Jones served as Chairman of the Board of Byram Healthcare Centers, a provider of retail medical supplies and wholesale medical and hospital equipment, from February 1999 until its sale in March of 2008.  Mr. Jones was a director for Access Point Medical from May 2004 to December 2005.  Mr. Jones was a director of US Labs, an esoteric oncology and hematopathology laboratory from November 2003 through February 2005.  Since July 2003, Mr. Jones has served as a director for Lifecare Solutions, Inc., a provider of integrated home healthcare products and services.  Mr. Jones possesses significant business management and corporate governance experience and contributes an extensive understanding of the healthcare industry.
 
 
Edward L. Pierce
 
53
Edward Pierce has served as a director since December 2007.  From February 2008 to present, Mr. Pierce has served as the President of First Acceptance Corporation, a publicly-traded retailer, servicer and underwriter of non-standard private passenger automobile insurance.  Mr. Pierce served as Executive Vice President and Chief Financial Officer of First Acceptance Corporation from October 2006 through February 2008.  From May 2001 through February 2006, Mr. Pierce served as Executive Vice President and Chief Financial Officer and as a director of BindView Development Corporation, a publicly-traded network security software development company where he was responsible for accounting, finance, risk management, information technology, human resources and other administrative functions. From November 1994 through January 2001, Mr. Pierce held various financial management positions, including Executive Vice President and Chief Financial Officer, of Metamor Worldwide, Inc., then an international publicly-traded IT consulting/ staffing company.  Mr. Pierce also worked as a senior audit manager at Arthur Andersen & Co. where he planned, supervised and managed financial audits of publicly-traded companies.  Prior to that time, from November 1989 to November 1994, Mr. Pierce was the corporate controller of American Oil and Gas Corporation, a NYSE traded intra-state pipeline and natural gas liquids processor.  Mr. Pierce received his Bachelor of Science degree in Accounting from Harding University.  Mr. Pierce provides the board with business, corporate management, strategy and extensive finance experience as well as staffing industry experience.

 
10

Independent Directors and Material Proceedings
 
Following the Annual Meeting, the Board will continue to consist of five members, a majority of which are deemed by the Board to be “independent directors” under the current listing standards of the NASDAQ Stock Market. Our independent directors are Senator Brock,  Mr. Holman, Mr. Jones and Mr. Pierce.  The Board has made a subjective determination as to each independent director that no relationships exists which, in the opinion of the Board, would interfere with the exercise of independent judgment in carrying out his responsibilities as a director. In making these determinations, the Board discussed information provided by the directors and management with regard to the business and personal activities of each director as they may relate to On Assignment and members of management. There are no family relationships among our executive officers and directors.
 
There are no material legal proceedings to which the Company or any of its subsidiaries is a party or of which any of their property is subject.  There are no material legal proceedings to which any director, officer or affiliate of the Company, any owner of record or beneficially of more than five percent of the Company’s voting securities, or any associate of any such director, officer, affiliate of the Company or security holder is a party adverse to the Company or any of its subsidiaries or has a material interest adverse to the Company or any of its subsidiaries.
 
Role of Board
 
    The Board oversees the Company’s Chief Executive Officer and other executive officers in the competent and ethical operation of the Company.  The Board ensures that the long-term interests of the shareholders are considered in the operation of the Company.
 
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Board Committees and Meetings
 
The Board held eight meetings during the year ended December 31, 2009. The Board has a Compensation Committee, an Audit Committee, a Nominating and Corporate Governance Committee and a Stock Option Committee.  The Board has determined that the Chairmen and committee members of each of the Compensation Committee, the Audit Committee and the Nominating and Corporate Governance Committee are independent under the applicable NASDAQ and SEC rules.
 
Of the named executive officers, Mr. Dameris currently serves as a director of Seismic Micro-Technologies and Mr. Brill currently serves as a director of Onvia, Inc., where he is a member of the Audit Committee.  Mr. Brill served as a member of the Compensation Committee of Onvia, Inc. in 2007.
 
    Compensation Committee.The Compensation Committee consists of three directors, Senator Brock, Mr. Jones and Mr. Holman, who serves as Chairman of the committee. The Compensation Committee held ten meetings during 2009 and acted by unanimous written consent on six occasions. The Compensation Committee meets in executive session without management present on a regular basis. The Compensation Committee reviews our general compensation policies, sets the compensation levels for our executive officers, including the CEO, and administers our equity plans.  The Compensation Committee approves the compensation of certain senior executive officers of On Assignment and determines the terms of key agreements concerning employment, compensation and termination of employment.  The Board has determined that each member of the Compensation Committee is independent within the meaning of the NASDAQ Stock Market rules requiring members of compensation committees to be independent.
 
    The Compensation Committee Charter provides that the Compensation committee may delegate its authority, subject to the terms in the charter, but the Compensation Committee has never delegated such authority.
 
    Audit Committee.The Audit Committee consists of three directors, Mr. Holman, Mr. Jones and Mr. Pierce, who serves as Chairman of the committee. The Audit Committee held four meetings during 2009. The Audit Committee reviews, acts on and reports to the Board with respect to various auditing and accounting matters.  The Audit Committee performs functions required of audit committees of public companies under applicable laws, rules and regulations and the requirements of the NASDAQ Stock Market.  The primary functions of the Audit Committee are to assist the Board in its responsibility for oversight of:
 
-
the quality and integrity of our financial statements and our financial reporting and disclosure practices;
-
our systems of internal controls regarding finance and accounting compliance;
-
the independence and performance of our outside accountants appointment, compensation, evaluation, retention and oversight of On Assignment’s independent accountants and
-
our ethical compliance programs.

 
In addition to the functions stated above, the Audit Committee’s functions include, but are not limited to, reviewing compliance with and reporting under Section 404 of the Sarbanes-Oxley Act of 2002, reviewing matters of disagreement, if any, between management and our independent auditors, and regularly meeting with our independent auditors and internal audit staff to review the adequacy of our internal controls.
   
    Rules adopted by the NASDAQ Stock Market and the Securities and Exchange Commission (SEC) impose strict independence requirements for all members of the Audit Committee.  Audit Committee members are barred from accepting, directly or indirectly, any consulting, advisory or other compensatory fee from the Company or an affiliate of the Company, other than in the member’s capacity as a member of the Board and any Board committee. In addition, an Audit Committee member may not be an affiliated person, as defined in Securities Exchange Act of 1934, as amended, of the Company except in his capacity as a member of the Board and any Board committee. The Board has determined that each member of the Audit Committee meets all applicable independence requirements. The Board has determined that Mr. Pierce, based on his experience, skills and education as described above, is the Audit Committee financial expert, as that term is defined under the SEC rules and also meets the additional criteria for independence of audit committee members set forth in the Exchange Act.
 

 
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The Company has adopted a process, which the Audit Committee oversees,  for disclosing related-party transactions and identifying significant deficiencies each quarter in connection with filing our quarterly reports on Form 10-Q and our annual report on Form 10-K.
 
    Nominating and Corporate Governance Committee.The Nominating and Corporate Governance Committee consists of three directors, Mr. Holman,  Mr. Jones, and Senator Brock, who serves as Chairman of the committee.  The Nominating and Corporate Governance Committee evaluates director nominee candidates and makes recommendations to the Board with respect to the nomination of individuals for election to the Board and to serve as committee members. In addition, the Nominating and Corporate Governance Committee makes recommendations to the Board concerning the size, structure and composition of the Board and its committees.  The Board has determined that each member of the Nominating and Corporate Governance Committee is independent within the meaning of the NASDAQ Stock Market rules requiring members of nominating committees to be independent. The Nominating and Corporate Governance Committee met once in 2009. The Nominating and Corporate Governance Committee recommended the nomination of Senator Brock for election at this year’s Annual Meeting.
 
The Nominating and Corporate Governance Committee charter, and the Corporate Governance Guidelines established by the Nominating and Corporate Governance Committee, set forth certain criteria for the committee to consider in evaluating potential director nominees.  However, in considering potential director nominees, the Nominating and Corporate Governance Committee considers the entirety of each candidate’s credentials. Qualifications considered by the Nominating and Corporate Governance Committee vary according to the particular areas of expertise being sought as a complement to the existing composition of the Board and include:
 

 
-
personal and professional ethics and integrity;
-
sound judgment;
-
the ability to make independent analytical inquiries;
-
willingness and ability to devote adequate time and resources to diligently perform the duties of a director;
-
relevant business experience and acumen;
-
possesses specific industry expertise;
-
familiarity with general issues affecting our business;
-
qualifications as an audit committee financial expert;
-
diversity in a variety of areas;
-
qualifications as an independent director; and
-
areas of expertise that the Board should collectively possess such as board experience, CEO experience, human resources experience, accounting and financial oversight experience and corporate governance experience.

 
    The Nominating and Corporate Governance Committee relies primarily on recommendations for director candidates from its members, other directors, the Chief Executive Officer and third parties, including professional recruiting firms. In 2009, no professional recruiting firms or consultants were needed and, accordingly, no fees were paid in this regard to professional recruiting firms or consultants. Existing directors being considered for re-nomination will be evaluated based on their performance as directors, experience, skills, education and independence to ensure that they continue to meet the qualifications above.  In addition, On Assignment’s Corporate Governance Guidelines provide that the importance of a diversified Board membership, in terms of both the individuals involved and their various experiences and areas of expertise will be considered for purposes of nominating directors. The Nominating and Corporate Governance Committee considers diversity in identifying nominees, including differences in skill, viewpoints and experience as well as gender, race and nationality.
 

 
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The Nominating and Corporate Governance Committee will also consider timely written suggestions from our shareholders. Shareholders wishing to suggest a candidate for director nomination for the 2011 Annual Meeting should mail their suggestions to On Assignment, Inc., 26651 West Agoura Road, Calabasas, California 91302, Attn: Secretary. Pursuant to our Bylaws, suggestions must be received by the Secretary of On Assignment not less than thirty days or more than sixty days prior to the 2011 Annual Meeting. The manner in which director nominee candidates suggested in accordance with this policy are evaluated shall not differ from the manner in which candidates recommended by other sources are evaluated. There were no director candidates put forward by shareholders for consideration at the 2010 Annual Meeting.
 
In addition, the Nominating and Corporate Governance Committee evaluates the Board’s leadership structure and believes that separation of the CEO and Chairman of the board positions is in the best interest of the Company and is best aligned with the interests of its shareholders.
 
The written charters governing the Audit Committee, the Compensation Committee and the Nominating and Corporate Governance Committee are posted on the Investor Relations—Corporate Governance page of our website at http://www.onassignment.com. You may also obtain a copy of any of these documents without charge by writing to: On Assignment, Inc., 26651 West Agoura Road, Calabasas, California 91302, Attn: Secretary.
 
    Stock Option Committee.  The Stock Option Committee consists of one director, Mr. Dameris. The Stock Option Committee acted by written consent on 25 occasions during 2009. The Stock Option Committee has been delegated limited authority by our Board to grant stock options to eligible individuals who are not executive officers or directors within pre-approved limits.
   
    Board Leadership Structure.  The Board has consistently maintained an independent Chairman of the Board.  The Board has made a determination that the Board leadership structure is appropriate and that the structure allows the Board to fulfill its duties effectively and efficiently.  The Company has determined its leadership structure is appropriate because the Chairman of the Board is independent, as defined by NASDAQ and the SEC, and an officer of the Company.  An independent Chairman, like independent Board members, allows for an objective evaluation of the performance of the Company and its offices.  Nonetheless, the Board recognizes that the President and CEO has invaluable insight into the Company due to the nature of his position and recognizes the value of his position on the Board.  Accordingly, the Board believes that the Company’s shareholders and interests are best served by keeping the position of President/Chief Executive Officer and Chairman of the Board as separate and independent positions.
 
Upon evaluation, the Compensation Committee has determined that the Company’s compensation practices and policies are not reasonably likely to have a material adverse effect on the Company.  In making this determination, the Compensation Committee considered that none of the compensation policies and practices at a business unit carry a significant portion of the Company’s risk profile, has a significantly different compensation structure than other units, is significantly more profitable than other units, or pays compensation expense as a significant percentage of the unit’s revenues.
 
    Risk Oversight.  The Board has an active role, as a whole and at the committee level, in overseeing the management of the Company’s risks.  The Board regularly reviews and determines the Company’s risk management philosophies, policies and processes.  The Board is primarily responsible for overseeing the management of the Company’s risk associated with the Board’s governance and delegation decisions, including decisions about compensation.

    The Audit Committee is primarily responsible for overseeing the management of the Company’s accounting and financial reporting matters.  The Audit Committee charter provides that the Audit Committee’s responsibilities include inquiring of management and the Company’s outside auditors regarding key financial statement risk areas, including the Company’s processes for identifying and assessing such risk areas and the steps the Company has taken with regard to such risk areas.  In connection with these responsibilities, the Audit Committee routinely reviews and evaluates the Company’s processes for identifying and assessing key financial statement risk areas and for formulating and implementing steps to address such risk areas.  The Audit Committee is also responsible for inquiring of management and the Company’s outside auditors regarding significant business risks or exposures, including the Company’s processes for identifying and assessing such risks and exposures and the steps management has taken to minimize such risks and exposures.

 
14

 

    The Company’s officers that are responsible for the day-to-day risk management responsibilities of the Company regularly report to the Audit Committee with regard thereto.  The Audit Committee oversees such officers’ identification and management of risk management issues and regularly meet with such officers regarding risk management issues of the Company and the processes and procedures used for identifying and managing risk.  In addition, the Audit Committee also regularly reviews the reporting processes from those officers that are responsible for the day-to-day management of the Company’s risk to determine if these reporting processes or other flow of information to the could be improved.
 
    Meetings.  Each current director attended 100% of the meetings of the Board and Committees of the Board on which he served during 2009.  Our independent directors regularly meet as a group in executive sessions outside of the presence of management.
   
    Attendance of Directors at 2009 Annual Meeting of Shareholders.  On Assignment has not adopted a formal policy with respect to director attendance at the annual meetings of the shareholders and our Bylaws allow the annual meetings to be conducted by the presiding officer of such meeting. Of the current directors who were serving on our Board on June 1, 2009, Mr. Dameris and Mr. Jones attended our 2009 Annual Meeting of Shareholders.
 
Communicating with the Board
 
We invite shareholders and other interested parties to communicate any concerns they may have about On Assignment directly and confidentially with either the Chairman of the Board or the non-management directors as a group by writing to the attention of either the Chairman of the Board or the non-management Directors at On Assignment, Inc., 26651 West Agoura Road, Calabasas, California 91302. Any such communication will be forwarded, unopened, to Mr. Jeremy Jones, Chairman of the Board.
 
Ethics
 
On Assignment has adopted a Code of Business Conduct and Ethics that is applicable to all directors, officers and employees of On Assignment. It complies with the requirements of Section 406 of the Sarbanes-Oxley Act of 2002. More importantly, it reflects On Assignment’s policy for dealing with all persons, including its customers, employees, investors, regulators and vendors, with honesty and integrity. A copy of On Assignment’s Code of Business Conduct and Ethics can be found on the Investor Relations—Corporate Governance page of our website at http://www.onassignment.com. You may also obtain a copy of any of this document without charge by writing to: On Assignment, Inc., 26651 West Agoura Road, Calabasas, California 91302, Attn: Secretary.
 
Proposal Two—Adoption of the On Assignment 2010 Incentive Award Plan

The Board unanimously approved adoption of the On Assignment, Inc. 2010 Incentive Award Plan (the 2010 Plan) on March 18, 2010.  If the 2010 Plan is approved by our shareholders, the 2010 Plan will replace our On Assignment 1987 Stock Option Plan (the 1987 Plan) and we will not make any further grants of awards under the 1987 Plan.

Why the Board Believes You Should Vote for this Proposal
 
 The Board recommends a vote for the 2010 Plan because it believes it is in the best interest of On Assignment and its shareholders for the following reasons:
 
n  
Attracting, retaining and motivating talent are critical to our success.
 
o  
Through the 2010 Plan, we can offer talented and motivated officers, directors, employees and consultants, who are critical to our success, an opportunity to acquire or increase a direct proprietary interest in our operations and future success.   This aligns the interests of those service-providers with the interests of our shareholders.
 

 
15

 

n  
Our business is built around people.
 
o  
As a staffing company, our employees, not a product or process, are our most important asset.  The availability of equity incentives under our 2010 Plan is critical to retain and motivate those individuals who build and sustain important relationships on which the success of our business depends.  For this reason, our use of equity compensation may not fit within generic guidelines.
 
n  
Our executive compensation program supports shareholder value.
 
o  
Long-term incentive compensation is an integral component of our compensation philosophy, as described below, as the Company believes that long-term incentive compensation for our executive officers and key employees drives performance.  Providing long-term incentives in the form of equity awards is a way to drive performance while further aligning the interests of our employees and directors with the interest of our shareholders.
 
o  
It is important for us to offer and maintain a compensation package that is competitive within our industry, which we believe requires the use of equity awards as a substantial component of compensation.
 
n  
Replacing equity awards with cash payments may not be in the best interest of our shareholders.
 
o  
If shareholders do not approve the 2010 Plan, we will have only limited shares available under the 1987 Plan to grant equity awards to employees, executive officers and directors in the near term and we will have to revise our compensation philosophy and components, including substantially increasing cash incentive levels, to remain competitive with our peers.  We believe that our shareholders’ interests would be better served by the use of equity compensation incentives.
 
o  
Other sources of compensation, including cash bonuses, do not carry the same value in terms of long-term alignment of the interests of key employees with our shareholders’ interests and would cause us to direct more cash and other resources toward executive compensation and away from other useful development of our business.
 
n  
The 2010 Plan, in many cases, only pays out incentives based on the attainment of results.
 
o  
Many awards issued under the 2010 Plan vest and become payable only upon achievement of certain financial results or other performance objectives, the attainment of which benefits us and our shareholders.  We believe that the passage of the 2010 Plan is crucial to incentivizing key employees to achieve financial results for the Company.
 
n  
We believe that On Assignment has demonstrated reasonable equity compensation practices.
 
o  
Our shareholders approved a replenishment of 2.9 million shares under the 1987 Plan at our Annual Shareholders meeting on June 1, 2007.  We have utilized that replenishment responsibly such that 841,796 shares remain available under the 1987 Plan as of March 31, 2010.
 
o  
In early 2007, we acquired two new companies which doubled our number of employees and greatly expanded our need for capacity under our equity compensation program.
 
o  
If the new share authorization is approved by stockholders, the maximum dilution from the Company’s equity compensation program would not exceed 15% of the fully-diluted shares outstanding.
 

 
16

 


n  
The 2010 Plan is designed to protect shareholder interests.
 
o  
We believe that the following characteristics of the 2010 Plan will help to protect shareholder interests while providing us a vehicle to continue this vitally important component of our compensation program:
 
§  
Independent plan administrator.
 
§  
1.53:1 grant ratio on full value awards (meaning that each share subject to any equity award other than a stock option or stock appreciation right will reduce the number of shares available for grant under the 2010 Plan by 1.53 available shares).
 
§  
No discount stock options or stock appreciation rights (meaning that these awards may not be granted with an exercise or strike price lower than the fair market value of the shares of stock underlying such award on the grant date).
 
§  
No repricing or repurchasing of stock options without shareholder approval.
 
§  
No payment of dividends on unvested awards prior to the vesting of such awards.
 
§  
Extended vesting practices
 

Description of the On Assignment 2010 Incentive Award Plan
 
A description of the principal features of the 2010 Plan is set forth below and is qualified in its entirety by the terms of the 2010 Plan which is attached as Annex A.  If our shareholders vote to approve the 2010 Plan, no further grants of awards will be made under the 1987 Plan.
 
Eligibility; Administration.
 
 Employees, consultants and directors of the Company, and certain of its subsidiaries will be eligible to receive awards under the 2010 Plan.  The 2010 Plan will be administered by our Compensation Committee, which may delegate its duties and responsibilities to subcommittees of our director and/or officers, subject to certain limitations that may be imposed under applicable law or regulation, including Section 162(m) of the Internal Revenue Code of 1986, as amended (the Code), Section 16 of the Exchange Act and/or stock exchange rules, as applicable.  The Board will administer the 2010 Plan with respect to awards to non-employee directors.  In addition, the Board has delegated authority to the Stock Option Committee, which currently consists of one director, Mr. Dameris, to grant stock options to eligible employees who are not executive officers or directors, within pre-approved limits.  The plan administrator will have the authority to grant and set the terms of all awards under, make all determinations and interpretations under, prescribe all forms for use with, and adopt rules for the administration of, the 2010 Plan, subject to its express terms and conditions.
 
Limitation on Awards and Shares Available.
 
An aggregate of (i) 1,300,000 shares of our common stock, plus (ii) 841,796 shares which were available for issuance under the 1987 Plan on March 31, 2010 (or such lesser number as remain available under the 1987 Plan as of the date of shareholder approval of the 2010 Plan) will be available for issuance under awards granted pursuant to the 2010 Plan, which shares may be treasury shares, authorized but unissued shares, or shares purchased in the open market.  The number of authorized shares will be reduced by 1 share for each share issued pursuant to a stock option or stock appreciation right (SAR) and by 1.53 shares for each share subject to a “full-value” equity award (which generally include awards other than stock options and SARs, such as restricted stock and restricted stock units).
 
The following types of shares will be added back to the available share limit under the 2010 Plan: (x) shares subject to awards that are forfeited, expire or are settled for cash, (y) shares tendered or withheld to satisfy grant or exercise price or tax withholding obligations associated with an award, and (z) shares repurchased by the Company at the same price paid by a participant pursuant to the Company’s repurchase right with respect to restricted stock awards.  However, the following types of shares will not be added back to the available share limit under the 2010 Plan: (A) shares subject to a SAR that are not issued in connection with the stock settlement of the SAR on its exercise, and (B) shares purchased on the open market with the cash proceeds from the exercise of options.
 

 
17

 


 
Awards granted under the 2010 Plan upon the assumption of, or in substitution for, awards authorized or outstanding under a qualifying equity plan maintained by an entity with which the Company enters into a merger or similar corporate transaction will not reduce the shares authorized for grant under the 2010 Plan.  The maximum number of shares of our common stock that may be subject to one or more awards granted to any one participant pursuant to the 2010 Plan during any rolling three-year period is 2,000,000 and the maximum amount that may be paid in cash pursuant to the 2010 Plan to any one participant during any rolling three-year period is $10,000,000.
 
Awards

The 2010 Plan provides for the grant of stock options, including incentive stock options (ISOs) and nonqualified stock options (NSOs), restricted stock, dividend equivalent rights, stock payments, deferred stock, restricted stock units (RSUs), performance shares, other incentive awards, SARs and cash awards. Except with respect to certain awards to Mr. Dameris under his 2010 employment agreement, no determination has been made as to the types or amounts of awards that will be granted to specific individuals pursuant to the 2010 Plan.  Certain awards under the 2010 Plan may constitute or provide for a deferral of compensation, subject to Code Section 409A, which may impose additional requirements on the terms and conditions of such awards. All awards will be set forth in award agreements, which will detail all terms and conditions of the awards, including any applicable vesting and payment terms.  Awards other than cash awards will generally be settled in shares of our common stock, but the plan administrator may provide for cash settlement of any award.  A brief description of each award type follows.
 
n  
Stock Options.  Stock options provide for the purchase of shares of our common stock in the future at an exercise price set on the grant date. ISOs, by contrast to NSOs, may provide tax deferral beyond exercise and favorable capital gains tax treatment to their holders if certain holding period and other Code requirements are satisfied. The exercise price of a stock option may not be less than 100% of the fair market value of the underlying share on the date of grant (110% in the case of ISOs granted to certain significant shareholders), except with respect to certain substitute options granted in connection with a corporate transaction.  The term of a stock option may not be longer than ten years (or five years in the case of ISOs granted to certain significant shareholders).  Vesting conditions determined by the plan administrator may apply to stock options, may include continued service, performance and/or other conditions.
 
n  
Stock Appreciation Rights.  SARs entitle their holder, upon exercise, to receive from us an amount equal to the appreciation of the shares subject to the award between the grant date and the exercise date.  The exercise price of a SAR may not be less than 100% of the fair market value of the underlying share on the date of grant (except with respect to certain substitute SARs granted in connection with a corporate transaction) and the term of a SAR may not be longer than ten years.  Vesting conditions determined by the plan administrator may apply to SARs, and may include continued service, performance and/or other conditions.
 
n  
Restricted Stock; Deferred Stock; RSUs; Performance Shares.  Restricted stock is an award of nontransferable shares of our common stock that remain forfeitable unless and until specified conditions are met, and which may be subject to a purchase price.  Dividends will not be paid on restricted stock awards unless and until the shares vest. Deferred stock and RSUs are contractual promises to deliver shares of our common stock in the future, which may also remain forfeitable unless and until specified conditions are met.  Delivery of the shares underlying these awards may be deferred under the terms of the award or at the election of the participant, if the plan administrator permits such a deferral.  Performance shares are contractual rights to receive a range of shares of our common stock in the future based on the attainment of specified performance goals, in addition to other conditions which may apply to these awards. Conditions applicable to restricted stock, deferred stock, RSUs and performance shares may be based on continuing service with us or our affiliates, the attainment of performance goals and/or such other conditions as the plan administrator may determine.
 

 
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Stock Payments; Other Incentive Awards; Cash Awards. Stock payments are awards of fully vested shares of our common stock that may, but need not be, made in lieu of base salary, bonus, fees or other cash compensation otherwise payable to any individual who is eligible to receive awards.  Other incentive awards are awards other than those enumerated in this summary that are denominated in, linked to or derived from shares of our common stock or value metrics related to our shares, and may remain forfeitable unless and until specified conditions are met.  Cash awards are cash incentive bonuses subject to performance goals.
 
n  
Dividend Equivalent Rights. Dividend equivalent rights represent the right to receive the equivalent value of dividends paid on shares of our common stock and may be granted alone or in tandem with awards other than stock options or SARs.  Dividend equivalents are credited as of dividend payments dates during the period between the date an award is granted and the date such award vests, is exercised, is distributed or expires, as determined by the plan administrator.  Dividend equivalents may not be paid on awards under the 2010 Plan unless and until such awards have vested.
 
Performance Awards
 
All awards may be granted as performance awards (in addition to those identified above as performance awards), meaning that any such award will be subject to vesting and/or payment based on the attainment of specified performance goals. The plan administrator will determine whether performance awards are intended to constitute “qualified performance-based compensation” (QPBC) within the meaning of Code Section 162(m), in which case the applicable performance criteria will be selected from the list below in accordance with the requirements of Code Section 162(m).
 
Code Section 162(m) imposes a $1,000,000 cap on the compensation deduction that we may take in respect of compensation paid to our “covered employees” (which should include our CEO and our next four most highly compensated employees other than our CFO), but excludes from the calculation of amounts subject to this limitation any amounts that constitute QPBC.  In order to constitute QPBC under Code Section 162(m), in addition to certain other requirements, the relevant amounts must be payable only upon the attainment of pre-established, objective performance goals set by our Compensation Committee during the first ninety days of the relevant performance period and linked to shareholder-approved performance criteria.
 
For purposes of the 2010 Plan, one or more of the following performance criteria will be used in setting performance goals applicable to QPBC, and may be used in setting performance goals applicable to other performance awards: (i) net earnings (either before or after one or more of the following: (A) interest, (B) taxes, (C) depreciation and (D) amortization); (ii) gross or net sales or revenue; (iii) net income (either before or after taxes); (iv) adjusted net income; (v) operating earnings or profit; (vi) cash flow (including, but not limited to, operating cash flow and free cash flow); (vii) return on assets; (viii) return on capital; (ix) return on shareholders’ equity; (x) total shareholder return; (xi) return on sales; (xii) gross or net profit or operating margin; (xiii) costs; (xiv) funds from operations; (xv) expenses; (xvi) working capital; (xvii) earnings per share; (xviii) adjusted earnings per share; (xix) price per share of common stock; (xx) regulatory body approval for commercialization of a product; (xxi) implementation or completion of critical projects; (xxii) market share; and (xxiii) economic value, any of which may be measured either in absolute terms or as compared to any incremental increase or decrease or as compared to results of a peer group or to market performance indicators or indices.  The 2010 Plan also permits the plan administrator to provide for objectively determinable adjustments to the applicable performance criteria in setting performance goals for QPBC awards.
 
Certain Transactions
 
The plan administrator has broad discretion to equitably adjust the provisions of the 2010 Plan, as well as the terms and conditions of existing and future awards, to prevent the dilution or enlargement of intended benefits and facilitate necessary or desirable changes in the event of certain transactions and events affecting our common stock, such as stock dividends, stock splits, mergers, acquisitions, consolidations and other corporate transactions.  In addition, in the event of certain non-reciprocal transactions with our shareholders known as “equity restructurings,” the plan administrator will make equitable adjustments to the 2010 Plan and outstanding awards.  In the event of a change in control of On Assignment (as defined in the 2010 Plan), the surviving entity must assume outstanding awards or substitute economically equivalent awards for such outstanding awards; however, if the surviving entity refuses to assume or substitute for outstanding awards, then all awards will vest in full and be deemed exercised (as applicable) upon the transaction.  Individual award agreements may provide for additional accelerated vesting and payment provisions.
 

 
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Foreign Participants; Transferability; Participant Payments
   
    The plan administrator may modify award terms, establish subplans and/or adjust other terms and conditions of awards, subject to the share limits described above, in order to facilitate grants of awards subject to the laws and/or stock exchange rules of countries outside of the United States.  With limited exceptions for estate planning, domestic relations orders, certain beneficiary designations and the laws of descent and distribution, awards under the 2010 Plan are generally non-transferable prior to vesting and are exercisable only by the participant. With regard to tax withholding, exercise price and purchase price obligations arising in connection with awards under the 2010 Plan, the plan administrator may, in its discretion, accept cash or check, shares of our common stock that meet specified conditions, a “market sell order” or such other consideration as it deems suitable.
 
Plan Amendment and Termination

The Board may amend or terminate the 2010 Plan at any time; however, except in connection with certain changes in capital structure, shareholder approval will be required for any amendment that increases the number of shares available under the 2010 Plan or “reprices” any stock option or SAR (including any grant of cash or another award in respect of any stock option or SAR when the option or SAR price per share exceeds the fair market value of the underlying shares). No award may be granted pursuant to the 2010 Plan after the tenth anniversary of the date on which we adopt the 2010 Plan.
 
Federal Income Tax Consequences
 
The following is a general summary under current law of the material federal income tax consequences to participants in the 2010 Plan.  This summary deals with the general tax principles that apply and is provided only for general information.  Some kinds of taxes, such as state, local and foreign incomes taxes, are not discussed.
 
Incentive Stock Options.The grant of an ISO will not be a taxable event for the grantee or result in a business expense deduction for us.  A grantee will not recognize taxable income upon exercise of an ISO (except that the alternative minimum tax may apply), and any gain realized upon a disposition of our common stock received pursuant to the exercise of an ISO will be taxed as long-term capital gain if the grantee holds the shares of common stock for at least two years after the date of grant and for one year after the date of exercise (the “holding period requirement”). We will not be entitled to any business expense deduction with respect to the exercise of an ISO, except as discussed below.
 
For the exercise of an option to qualify for the foregoing tax treatment, the grantee generally must be our employee or an employee of our subsidiary from the date the option is granted through a date within three months prior to the date of exercise of the option.
 
If all of the foregoing requirements are met except the holding period requirement mentioned above, the grantee will recognize ordinary income upon the disposition of the common stock in an amount generally equal to the excess of the fair market value of the common stock at the time the option was exercised over the option exercise price (but not in excess of the gain realized on the sale). The balance of the realized gain, if any, will be a capital gain. We will be allowed a business expense deduction to the extent the grantee recognizes ordinary income, subject to our compliance with Code Section 162(m) and to certain reporting requirements.
 
Non-Qualified Options.The grant of NSO will not be a taxable event for the grantee or result in a compensation expense deduction for us. Upon exercising a NSO, a grantee will recognize ordinary income in an amount equal to the difference between the exercise price and the fair market value of the common stock on the date of exercise. Upon a subsequent sale or exchange of shares acquired pursuant to the exercise of a NSO, the grantee will have taxable capital gain or loss, measured by the difference between the amount realized on the disposition and the tax basis of the shares of common stock (generally, the amount paid for the shares plus the amount treated as ordinary income at the time the option was exercised).
 

 
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If we comply with applicable reporting requirements and subject to the restrictions of Code Section 162(m), we will be entitled to a business expense deduction in the same amount and generally at the same time as the grantee recognizes ordinary income.
 
Restricted Stock.  A grantee who is awarded shares of restricted stock will not recognize any taxable income for federal income tax purposes in the year of the award, provided that the shares of common stock are subject to restrictions requiring the restricted stock to be nontransferable and subject to a substantial risk of forfeiture. However, the grantee may elect under Code Section 83(b) to recognize compensation income in the year of the award in an amount equal to the fair market value of the common stock on the date of the award, less the purchase price, if any, determined without regard to the restrictions. If the grantee does not make such a Section 83(b) election, the fair market value of the common stock on the date the restrictions lapse, less the purchase price, if any, will be treated as compensation income to the grantee and will be taxable in the year the restrictions lapse. If we comply with applicable reporting requirements, subject to the restrictions of Code Section 162(m), we will be entitled to a business expense deduction in the same amount and generally at the same time as the grantee recognizes ordinary income.
 
Restricted Stock Units.  There are no immediate tax consequences of receiving an award of restricted stock units under the 2010 Plan. A grantee who is awarded restricted stock units will be required to recognize ordinary income in an amount equal to the fair market value of shares issued to such grantee at the end of the restriction period or, if later, the date on which shares are delivered in respect of RSUs.  If the delivery date of the shares is deferred more than a short period after vesting, employment taxes will be due in the year of vesting.  If we comply with applicable reporting requirements and, subject to the restrictions of Section 162(m), we will be entitled to a business expense deduction in the same amount and generally at the same time as the grantee recognizes ordinary income.
 
Dividend Equivalent Awards.  Grantees who receive dividend equivalent awards will be required to recognize ordinary income equal to the amount distributed to the grantee pursuant to the award. If we comply with applicable reporting requirements and, subject to the restrictions of Code Section 162(m), we will be entitled to a business expense deduction in the same amount and generally at the same time as the grantee recognizes ordinary income.
 
Stock Appreciation Rights.  There are no immediate tax consequences of receiving an award of SARs under the 2010 Plan. Upon exercising a SAR, a grantee will recognize ordinary income in an amount equal to the difference between the exercise price and the fair market value of the common stock on the date of exercise. If we comply with applicable reporting requirements and with the restrictions of Code Section 162(m), we will be entitled to a business expense deduction in the same amount and generally at the same time as the grantee recognizes ordinary income.
 
Performance Share Awards.  Grantees who receive performance share awards generally will not realize taxable income at the time of the grant of the performance shares, and we will not be entitled to a deduction at that time. When the award is paid, whether in cash or common stock, the grantee will have ordinary income, and, if we comply with applicable reporting requirements and, subject to the restrictions of Code Section 162(m), we will be entitled to a corresponding deduction.
 
Stock Payment Awards. Grantees who receive a stock payment in lieu of a cash payment that would otherwise have been made will be taxed as if the cash payment has been received, and, if we comply with applicable reporting requirements and subject to the restrictions of Section 162(m), we will have a deduction in the same amount.
 
Deferred Stock.  A grantee receiving deferred stock generally will not have taxable income upon the issuance of the deferred stock and we will not then be entitled to a deduction. However, when shares underlying the deferred stock are issued to the grantee, he or she will realize ordinary income and, if we comply with applicable reporting requirements and subject to the restrictions of Code Section 162(m), we will be entitled to a deduction in an amount equal to the difference between the fair market value of the shares at the date of issuance over the purchase price, if any, paid for the deferred stock.  Employment taxes with respect to these awards will generally be due in the year of vesting.
 

 
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Performance Awards.  The award of a performance or annual incentive award will have no federal income tax consequences for us or for the grantee. The payment of the award is taxable to a grantee as ordinary income. If we comply with applicable reporting requirements and, subject to the restrictions of Section 162(m) of the Internal Revenue Code, we will be entitled to a business expense deduction in the same amount and generally at the same time as the grantee recognizes ordinary income.
 
Code Section 409A. Certain types of awards under the 2010 Plan, including, but not limited to RSUs and deferred stock, may constitute, or provide for, a deferral of compensation subject to Code Section 409A.  Unless certain requirements set forth in Code Section 409A are complied with, holders of such awards may be taxed earlier than would otherwise be the case (e.g., at the time of vesting instead of the time of payment) and may be subject to an additional 20% penalty tax (and, potentially, certain interest penalties).  To the extent applicable, the 2010 Plan and awards granted under the 2010 Plan are intended to be structured and interpreted to comply with Code Section 409A and the Department of Treasury regulations and other interpretive guidance that may be issued under Code Section 409A.
 
Code Section 162(m).  In general, under Code Section 162(m) , income tax deductions of publicly-held corporations may be limited to the extent total compensation for certain executive officers exceeds $1 million (less the amount of any “excess parachute payments” as defined in Code Section 280G) in any taxable year of the corporation.  However, under Code Section 162(m), the deduction limit does not apply to certain “performance-based” compensation. Stock options and SARs will satisfy the “performance-based” exception if (a) the awards are made by a qualifying compensation committee, (b) the plan sets the maximum number of shares that can be granted to any person within a specified period and (c) the compensation is based solely on an increase in the stock price after the grant date.  The 2010 Plan has been designed to permit the plan administrator to grant stock options and SARs which will qualify as “performance-based compensation.”  In addition, other performance-based awards under the 2010 Plan may be intended to constitute QPBC, as discussed above.

 
New Plan Benefits
 
Future benefits under the 2010 Plan are generally discretionary and therefore not currently determinable, except with respect to certain awards to our independent directors in 2010 and to Mr. Dameris under his employment agreement entered into on November 4, 2009 and effective January 1, 2010 (2010 Employment Agreement, as referenced elsewhere in this Proxy).  These awards are described in the table below.   The number of shares under these awards will depend on the closing share price on the day of grant and are not determinable at this time.
 
Name and Position
 
Dollar Value of Awards under 2010 Incentive Award Plan
Peter T. Dameris  (1)
 
$
4,100,000
 
James L. Brill
 
$
 
Emmett McGrath
 
$
 
Michael McGowan
 
$
 
Mark Brouse
 
$
 
Executive Group
 
$
 
Non-Executive Director Group
 
$
240,000
 
Non-Executive Officer Employee Group
 
$
 

(1) Pursuant to his 2010 Employment Agreement, Mr. Dameris is entitled to the following equity award values under the 2010 Plan: $500,000 for 2010, $1,800,000 for 2011 and $1,800,000 for 2012.
 

 
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Approval of Proposal Two  
 
           The affirmative vote of the holders of a majority of On Assignment’s voting shares represented and entitled to vote on this proposal at the Annual Meeting is required for the adoption of the 2010 Plan.  Our Board unanimously recommends that our shareholders vote “FOR” the adoption of On Assignment’s 2010 Plan.
 

 
Equity Compensation Plan Information
 
The table below sets forth the following information as of December 31, 2009 for (i) all compensation plans previously approved by shareholders; and (ii) all compensation plans not previously approved by shareholders:
 
 
(1)
the number of securities to be issued upon the exercise of outstanding options, warrants and rights;
 
 
(2)
the weighted-average exercise price of such outstanding options, warrants and rights; and
 
 
(3)
other than securities to be issued upon the exercise of such outstanding options, warrants and rights, the number of securities remaining available for future issuance under the plan.
 
Plan Category
 
Number of
Securities
to be Issued
Upon Exercise of
Outstanding 
Options,
Warrants and 
Rights
(a)
 
Weighted-Average
Exercise Price of
Outstanding 
Options,
Warrants and 
Rights
(b)
 
Number of Securities
Remaining Available for
Future Issuance Under
Equity Compensation
Plans (Excluding Securities
Reflected in Column (a))
(c)
Equity compensation plans approved by shareholders
   
2,216,917
     
8.16
     
1,632,994
 
Equity compensation plans not approved by shareholders
   
220,024
     
12.38
     
 
Total
   
2,436,941
     
8.54
     
1,632,994
 


 
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Proposal Three —Adoption of the On Assignment 2010 Employee Stock Purchase Plan
 
    On March 18, 2010, the Board unanimously adopted the On Assignment 2010 Employee Stock Purchase Plan (ESPP) and directed that the ESPP be submitted to the shareholders for approval.  Under the ESPP , we may grant our employees and employees of designated subsidiaries the opportunity to purchase shares of our common stock at a discount.  The purpose of the ESPP is to facilitate purchases of our common stock by employees and to encourage employees to remain in the employment of the Company.  The ESPP allows eligible employees to purchase common stock of the Company through payroll deductions at eighty-five percent of the lower of the market price on the first day or the last day of semi-annual offering periods.  The ESPP is intended to qualify as an “employee stock purchase plan” under Code Section 423.
 
Prior Employee Stock Purchase Plan
 
    We previously maintained a shareholder-approved Employee Stock Purchase Plan which was originally adopted by our Board on March 1, 1993 (the Prior ESPP). The pool of shares available for issuance under the Prior ESPP was fully depleted on February 27, 2009.  As a result, the Prior ESPP was terminated and no additional shares will be issued under the Prior ESPP.
 
Description of the Employee Stock Purchase Plan
 
A summary of the principal features of the ESPP is set forth below and is qualified by reference to the full text of the ESPP, which is attached to this Proxy Statement as Annex B.
 
Administration.  The ESPP will be administered by a committee of Board which, initially, shall be the Compensation Committee.  The plan administrator will have broad authority to administer and construe the ESPP and to make determinations with respect to awards, eligible participants, designated subsidiaries and other matters pertaining to plan administration.
 
Common Stock Reserved for Issuance under the ESPP. Subject to approval by our shareholders of the ESPP, a total of 3,500,000 shares of our common stock will be authorized for grant under the ESPP.  The common stock made available for sale under the ESPP may be unissued shares, treasury shares or shares reacquired in private transactions or open market purchases. In computing the number of shares of common stock available for grant, shares relating to options which terminate prior to exercise will be available for future grants of options.
 
Participating Subsidiaries and Sub-plans.  The plan administrator may designate certain of our subsidiaries as participating subsidiaries in the ESPP and may change these designations from time to time. The following subsidiaries will be designated to participate in the ESPP for the initial offering under the ESPP (and thereafter unless changed by the plan administrator): (1) Assignment Ready, Inc., (2) Oxford Global Resources, Inc., and (3) VISTA Staffing Solutions, Inc.  The plan administrator may also adopt sub-plans in order to ensure that the terms of the ESPP, as applicable to any non-U.S. participating subsidiaries, comply with applicable foreign laws.
 
Eligible Employees.  Our employees and those of our participating subsidiaries are generally eligible to participate in the ESPP, though employees who own 5% or more of the combined voting power or value of all classes of our stock or the stock of one of our subsidiaries are not allowed to participate in the ESPP.   Under applicable tax rules, the plan administrator may also exclude certain categories of employees from participation in the ESPP. For the initial offering period (and thereafter unless changed by the plan administrator), the following employees will be excluded from participation in offerings under the ESPP: (1) employees who have been in our employ or in the employ of a designated subsidiary for less than 30 days and (2) employees whose customary employment with us or a designated subsidiary is twenty hours of less per week and/or not more than five months per calendar year.
 
    Participation.   Eligible employees may generally elect to contribute up to 50% of their base pay and commissions during an offering period under the terms of the ESPP (though the plan administrator may set a lower maximum percentage and will set the maximum at 25% for the initial offering period (and thereafter unless changed by the plan administrator)).  
 
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Options granted under the ESPP are exercisable on certain exercise dates only through funds accumulated by an employee through payroll deductions made during the applicable offering period and any such funds that are not used to purchase shares are returned to participants within thirty days after the end of the offering period.  Participants may not accrue the right to purchase stock under the ESPP (or any other tax-qualified stock purchase plan) with a fair market value exceeding $25,000 in any calendar year.  Participation in the ESPP is voluntary.
 
Offering Periods.  Under the ESPP, employees are offered the option to purchase shares of our common stock at a discount on the last trading day of each offering period (the exercise date).  The plan administrator may designate varying offering periods (including periods that overlap), but will designate that the initial offering period will run for six months, commencing on October 1, 2010, and ending on March 31, 2010. Thereafter, offering periods under the ESPP will run for semiannual periods from April 1 through September 31 and from October 1 through March 31, unless otherwise designated by the plan administrator in the future.
 
 
The option purchase price will be 85% of the closing price of our common stock on either the first trading day of the offering period or the last trading day of the offering period, which ever is lower, as reported on the NASDAQ Stock Market.  Unless a participant has previously canceled his or her participation in the ESPP, an amount equal to the amount credited to his or her ESPP account shall be used to purchase the maximum number of whole shares of our common stock that can be purchased for that offering period, subject to individual and aggregate share limitations under the ESPP.  No fractional shares will be issued.
 
 
A participant may cancel his or her payroll deduction authorization no later than fifteen calendar days prior to the end of any offering period.  Upon cancellation, the participant may elect either to withdraw all of the funds then credited to his or her ESPP account and withdraw from the ESPP or have the balance of his or her account applied to the purchase of whole shares of common stock that can be purchased for the offering period in which his or her cancellation is effective.
 
 
Termination of Employment.  If a participant dies during an offering period, the participant’s estate or beneficiary may elect to use amounts credited to the participant’s account to purchase shares at the end of the relevant offering period or may elect to have such amounts returned to the estate or beneficiary.  If a participant experiences a disability (as defined in the ESPP) within three months prior to the end of an offering period, the participant may elect to purchase shares at the end of the relevant offering period or to have amounts credited to the participant’s account returned.  Upon any other termination of employment, amounts credited to a participant’s account will be returned to the participant.
 
 
Transferability.  Options granted under the ESPP are not transferable and are exercisable only by the participant.  In addition, without the consent of the plan administrator, no shares of common stock purchased under the ESPP may be transferred by the participant before the first anniversary of the exercise date on which such shares were purchased, other than by will or pursuant to the laws of descent and distribution.  This transfer restriction on shares will not apply to any transfer of shares to us or in connection with a liquidation or corporate transaction involving us.
 
 
Adjustments.  In the event of any dividend or other distribution, recapitalization, reclassification, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase, liquidation, dissolution, sale, transfer, exchange or other disposition of all or substantially all of our assets, or exchange of shares of our common stock or other securities, issuance of warrants or other rights to purchase shares of our common stock or other securities, or other similar corporate transactions or events, the plan administrator has broad discretion to equitably adjust awards under the ESPP to prevent the dilution or enlargement of benefits under outstanding awards as a result of such transaction.
 
    Insufficient Shares.  If the total number of shares of common stock which are to be purchased under outstanding purchase rights on any particular date exceed the number of shares then available for issuance under the ESPP, the plan administrator will make a pro rata allocation of the available shares on a uniform and equitable basis, and unless additional shares are authorized under the ESPP, no further offering periods will take place.  In this event, excess payroll deductions will be refunded to participants.

 
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Amendment or Termination of the ESPP.  The plan administrator has the right to amend, suspend, or terminate the ESPP at any time and from time to time to any extent that it deems advisable.  However, absent the approval of our shareholders, the plan administrator may not amend the ESPP (1) to increase the maximum number of shares that may be purchased under the ESPP or (2) in any manner that would cause the ESPP to no longer be an “employee stock purchase plan” within the meaning of Code Section 423.  If the ESPP is approved, unless terminated earlier by the plan administrator, the ESPP will terminate automatically on March 18, 2020.  No further offerings will take place once all shares of common stock available for purchase thereunder have been purchased unless shareholders approve an amendment authorizing new shares under the ESPP.
 
 
Federal Income Tax Consequences
 
The ESPP is intended to be an "employee stock purchase plan" within the meaning of Code Section 423.  Under a plan which so qualifies, no taxable income will be recognized by a participant, and no deductions will be allowable to the Company, upon either the grant or the exercise of the purchase rights.  Taxable income will not be recognized until there is a sale or other disposition of the shares acquired under the ESPP or in the event that the participant dies while still owning the purchased shares.
 
If the participant sells or otherwise disposes of the purchased shares within two years after the date on which the purchase right relating to those shares was granted (which is typically the first day of the applicable offering period) or within one year after the purchase date of those shares, then the participant will recognize ordinary income in the year of sale or disposition equal to the amount by which the fair market value of the shares on the purchase date exceeded the purchase price paid for those shares, and the Company will be entitled to an income tax deduction in the taxable year in which such disposition occurs equal to the amount of such excess.  Any further gain or loss to the participant upon disposition will be capital gain or loss, and the amount of ordinary income recognized by the participant will be added to the participant’s basis in the common stock for purposes of determining such capital gain or loss.
 
If the participant sells or disposes of the purchased shares more than two years after the date on which the purchase right relating to those shares was granted and more than one year after the purchase date of those shares, then the participant will recognize ordinary income in the year of sale or disposition equal to the lesser of (i) the amount by which the fair market value of the shares on the sale or disposition date exceeded the purchase price paid for those shares, or (ii) fifteen percent (15%) of the fair market value of the shares on the date of grant of the purchase right.  The Company will not be entitled to an income tax deduction with respect to such disposition.  Any further gain or loss to the participant upon disposition will be capital gain or loss, and the amount of ordinary income recognized by the participant will be added to the participant’s basis in the Common Stock for purposes of determining such capital gain or loss.
 
If the participant still owns the purchased shares at the time of death, the lesser of (i) the amount by which the fair market value of the shares on the date of death exceeds the purchase price or (ii) fifteen percent (15%) of the fair market value of the shares on the applicable date of grant of the purchase right will constitute ordinary income in the year of death.
   
    New Plan Benefits.  No current non-employee directors will receive any benefit under the ESPP.  The benefits that will be received, or that would have been received during the fiscal year ended December 31, 2009 if the ESPP had been in effect during such fiscal year, under the ESPP by our current executive officers and by all eligible employees are not currently determinable because the benefits depend upon the degree of participation by employees and, with respect to future benefits, the trading price of our common stock in future periods.
 
Approval of Proposal Three
 
The affirmative vote of the holders of a majority of On Assignment’s voting shares represented and entitled to vote at the Annual Meeting is required to adopt the On Assignment 2010 Employee Stock Purchase Plan. Our Board unanimously recommends that our shareholders vote “FOR” the On Assignment 2010 Employee Stock Purchase Plan.
 
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EXECUTIVE AND DIRECTOR COMPENSATION
 
 
Compensation Discussion and Analysis
 
Compensation Philosophy
 
The Company seeks to attract, motivate and retain key talent needed to enable On Assignment to operate successfully in a competitive environment.  The Company’s fundamental policy is to offer On Assignment’s named executive officers (hereinafter referred to as “executive officers” or “executives”) competitive compensation opportunities based upon their relevant experience, their individual performance and the overall financial performance of On Assignment in a way that is aligned with the long-term interests of the Company’s shareholders.
 
The Compensation Committee, all three members of which are independent directors under applicable NASDAQ and SEC rules, oversees the executive compensation program and determines compensation for the Company’s executive officers.  The Compensation Committee recognizes that, from time to time, it is appropriate to enter into compensatory agreements with key executives, and has done so with each of its executive officers.  Through these agreements, On Assignment seeks to further motivate such individuals or retain their services as well as to secure confidentiality and nonsolicitation obligations from such executives, applicable both during and after their employment.   These agreements with executive officers include executive employment agreements and severance arrangements.
 
In exercising discretion to determine compensation, the Compensation Committee carefully considers the experience, responsibilities and performance of each executive officer and the Company’s overall financial performance.   At the Compensation Committee’s request, Mr. Dameris reviews with the Compensation Committee the performance of the other executive officers.  The Compensation Committee periodically reviews the effectiveness and competitiveness of On Assignment’s executive compensation structure with the assistance of compensation consultants and by conducting informal salary surveys.  The Compensation Committee works closely with the Chief Executive Officer in setting compensation for the executive officers, giving considerable weight to Mr. Dameris’ evaluation of the other executive officers because of his direct knowledge of their performance.  The Company believes that the compensation program for the executive officers is instrumental in the Company’s performance.
 
    In determining appropriate compensation for our executives, On Assignment considers numerous factors including, but not limited to:  rewarding results which are beneficial for the shareholders, competitive compensation, balancing cash and equity payments, recognizing external effects on our business (i.e. the economy), retention of executives and key employees, skills of the executive officers, the Company’s business and growth strategy and the overall reasonableness of compensation. The Compensation Committee strives to achieve a balance between cash and equity compensation as well as long-term and short-term incentive compensation which align with our shareholders’ interests.  The Compensation Committee balances various goals, longer-term performance objectives and vesting conditions and increases the range of performance.  The Company limits the size of compensation based on non-performance issues such as sign-on bonuses.
 
    Generally, as an executive officer’s level of responsibility increases, the Compensation Committee links a greater portion of the executive’s total compensation to On Assignment’s performance, quantified by measurements such as revenue, profitability, earnings before interest, taxes, depreciation and amortization (EBITDA), adjusted EBITDA and stock price appreciation, rather than solely upon the executive’s salary.  The Compensation Committee believes this structure is appropriate because as the executive’s level of responsibility increases, the impact of his efforts and business judgment upon the performance of the Company and the Company’s stock price also increases.  To that end, our executive officers receive annual cash incentive compensation opportunities with attainment targets set each year by the Compensation Committee, based on percentages of their annual salary, with those percentages ranging from 75% to 120%, depending upon the scope of the executive’s responsibilities.  Additionally, our executive officers receive restricted stock or restricted stock unit equity grants that increase as the executive’s level of responsibility and impact on overall Company performance increases.  The value of the equity grants are tied to the value of On Assignment’s common stock, with vesting schedules that are based on the passage of time and, in some cases, also upon the attainment of performance-based goals established by the Compensation Committee.

 
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The key factors considered in establishing the components of each executive officer’s compensation package for 2009 are summarized below.
 
 
Compensation Program
 
The key elements of executive compensation are:
 
n  
base salary
 
n  
performance-based cash incentive compensation
 
n  
long-term equity-based incentive awards, which may include time vesting and performance-based vesting grants
 
n  
fringe benefits and participation in Company-sponsored employee benefit plans
 
Base Salary
 
One important component of our compensation package is an annual salary commensurate with the each executive officer’s experience, scope of responsibility, skill in executing those responsibilities and overall value to the organization.  Other factors considered in determining base salary are individual performance as measured by the success of the executive’s business division or area of responsibility, competitiveness with salary levels of similarly sized companies evaluated through informal salary surveys, internal compensation parity standards and On Assignment’s ability to pay an appropriate and competitive salary. The amount and timing of any increase in base compensation depends upon, among other things, overall economic conditions, the Company’s performance, the individual’s performance, internal compensation parity and the time interval and any responsibilities assumed since the last salary increase.  While the Compensation Committee allocates a competitive base salary for each executive, base salary is only a portion of the overall compensation program.  Executives’ performance, including over-achievement, is rewarded through incentive programs, rather than base salary.
 
Incentive Compensation Philosophy
 
A fundamental objective of the Compensation Committee is to make a substantial portion of each executive officer’s compensation contingent upon On Assignment’s performance as well as upon his own individual level of performance such that each executive officer is compensated for results.  The Compensation Committee may further this objective through an annual performance-based incentive compensation program using multi-year, long-term incentive awards subject to achievement of specified goals tied to business criteria, including periodic equity grants with performance-based vesting components.  The Compensation Committee strives to align the remuneration potential for the executive officers with shareholder interests through the use of stock options and other equity awards.  The mechanics and attainment criteria for annual incentive awards and long-term incentive awards are discussed in greater detail below.
 
The Compensation Committee believes the use of both annual and long-term incentive awards encourages the executive officers to balance and manage short-term returns against long-term Company goals and investments in future opportunities.  Annual incentive awards are generally cash awards, intended to reward the executive for achieving growth on one or more designated business unit level or consolidated performance metrics.  Multi-year, long-term incentive awards are typically equity awards, with vesting triggered by the passage of time and/or by the attainment of designated levels of Company financial performance.  The Compensation Committee may specify the amount of the incentive award as a percentage of the executive’s annual salary or as another amount that need not bear a strictly mathematical relationship to the performance goals. The Compensation Committee may, in its discretion, reduce the amount of certain awards otherwise payable in connection with an incentive program if the Compensation Committee determines that the assumptions applied when setting the goals ultimately proved invalid, unanticipated factors not tied to executive performance resulted in the executive’s attainment of the targets, or the Compensation Committee determines that other considerations dictate that the award should be reduced.  Awards to individuals who are covered under Code Section 162(m) (discussed below) or who the Compensation Committee believes may be covered in the future, may be structured by the Compensation Committee, in its discretion, to constitute “qualified performance-based compensation” under Code Section 162(m) in order to preserve the deductibility of the awards.

 
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Annual Cash Incentive Compensation
 
Executive officers are eligible for annual incentive compensation payable in cash and tied to achievement of performance goals, which typically include components related to revenues and profitability, either at the divisional or corporate levels, or a combination, depending upon the executive’s area of responsibility.  By focusing on revenues and profitability measures, the Compensation Committee attempts to relate annual cash incentive compensation to performance measures that demonstrate appropriate growth and contribute to overall shareholder value.  Within the first 90 days of each fiscal year, the Compensation Committee establishes performance targets and corresponding incentive compensation, which is typically calculated as a percentage of the individual’s base salary, with higher level executives eligible for higher percentages. Currently these percentages range from 75% of annual salary to 120% of annual salary, assigned according to the rank and the scope of responsibilities of the executive.  For most of our officers, half or more of each annual compensation package is attached to attainment of the respective incentive compensation program targets.  The Compensation Committee feels this arrangement appropriately links the executives’ remuneration to the performance of the Company and the benefits derived by the shareholders.  Actual percentages and a detailed description of performance targets applicable to the 2009 annual incentive compensation program are set forth in more detail for each executive officer in the section below titled “Summary of Executive Compensation” section presented elsewhere in this Proxy Statement.   The targets are based on full year performance measures and are, therefore, determined at a time when attainment is substantially uncertain. In recent years, including 2009, this incentive bonus has consisted of two components:  a “target bonus” for the achievement of set objectives the Compensation Committee established at the beginning of the year and an additional bonus, paid incrementally, up to a pre-set level if an executive surpasses the set objectives.  Structuring the annual incentive compensation in this manner upholds On Assignment’s philosophy of paying for performance.  The target bonus is designed to be achievable based upon highly competent management performance on the executive’s part, assuming certain economic conditions and other circumstances at the time the goal was established.  The maximum additional target bonus is designed to be difficult to achieve under those circumstances and to reward truly exceptional performance.
 
As previously noted, the Compensation Committee may exercise negative discretion to reduce the amount of an award otherwise to be made in connection with certain incentive plans.  Subject to limitations imposed on certain awards under Code Section 162(m) (discussed below), the Compensation Committee may also award additional discretionary incentive compensation, based on such factors as substantial over-achievement of performance targets for which the annual incentive compensation program otherwise provides no award, upon a change in the executive officer’s employment status or in recognition of an executive’s success in implementing change or otherwise attaining results that delivered value to the Company, but were not captured in the annual incentive program performance targets.  The Compensation Committee reserves all of the foregoing discretion to avoid results that fail to serve the goal of paying for performance, based on a strict application of the program.
 
Long-Term Equity Incentive Compensation
 
The Compensation Committee periodically approves grants of stock options, restricted stock and restricted stock units to On Assignment’s executive officers.  The grants may occur in conjunction with On Assignment’s entry into an executive employment agreement or extension of an executive employment agreement, or as part of a periodic assessment of the degree to which equity continues to constitute an appreciable component of the executive officers’ compensation packages.  These grants are designed to balance the comparatively short-term goals of the annual incentive compensation targets with long- term stock price performance, to align the interests of each executive officer with those of the shareholders and to provide each individual with a significant incentive to manage their responsibilities from the perspective of an owner with an equity stake in the business. Each option grant allows the executive officer to acquire shares of common stock over a specified period of time of up to ten years.  Because our stock options are granted at fair market value, these grants provide a return to the executive officer only if the market price of the shares appreciates over the option term.  Due to volatility in the fair market value of the Company’s common stock, which can fail to reflect the actual financial performance of the Company, as well as periodic trading restrictions imposed on our executive officers as a result of their status as Company insiders, the Compensation Committee typically augments stock option awards to our executive officers with awards of restricted stock units as well as, in the case of Mr. Dameris, awards of restricted stock.  Because the restricted stock and restricted stock unit grants are generally made in exchange for nominal consideration only, these grants confer the full share value on their recipients and therefore continue to encourage the recipient to maximize the value of the Company’s common stock, even where short-term stock price drops may render awards based solely on stock appreciation (such as options and stock appreciation rights) worthless.

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The Company continues to rely primarily on long-term equity awards in the form of restricted stock units to ensure a strong connection between the executive compensation program and the long-term interests of the Company’s shareholders.  The Company believes that restricted stock units are effective compensation element for attracting executives and promoting their long-term commitment to the Company.  A restricted stock unit award vests only if the executive officer provides services to the Company until the vesting date.  On Assignment believes that granting equity awards with long vesting periods create a retention incentive and encourages the executive officers to focus on the Company’s long-term business objectives and long-term stock price performance.
 
Like stock options, restricted stock and restricted stock units vest over a specified period of time.  Unlike our typical grants of stock options, restricted stock and restricted stock unit grants may condition the vesting of some percentage of the award upon achievement of defined performance criteria within a specific timeframe.  Because options reward their recipients only for stock price increase (and are therefore inherently performance based), we believe that time-based vesting is generally appropriate for options, while conditioning some of the vesting of restricted stock and restricted stock unit awards (which confer full share value) on the attainment of performance objectives is appropriate.   This type of award creates an incentive for the executive to attain the designated performance criteria, for vesting purposes, as well as to execute business plans that increase the overall fair market value of our common stock and align the executives’ interests with the Company’s shareholders.
 
The size of the restricted stock award, option or restricted stock unit grant is set at a level that the Compensation Committee deems appropriate in order to create a meaningful opportunity for stock ownership based upon the executive’s current position and ability to impact the stock price.  The size of the award or grant is also generally linked to the executive officer’s annual salary and incentive compensation opportunity.  Equity awards or grants also take into account the scope and business impact of the executive’s position, the individual’s potential to assume future duties and responsibility on behalf of On Assignment over the vesting schedule and/or option term, the executive’s individual performance in recent periods and the executive’s current holdings of On Assignment stock and options received through previous equity grants as well as the per individual, per period award limits. We feel that taking all of these factors into consideration enhances our ability to provide meaningful and appropriate incentives.
 
Company-Sponsored Health and Welfare Benefits
 
Our executives and their legal dependents are eligible to participate in Company sponsored health and welfare plans.  These benefits are designed to be competitive with overall market practices and to attract and retain employees with the skills and experience needed to promote On Assignment’s goals.  The Compensation Committee believes that providing this coverage opportunity and enabling payment of the employee portion of such coverage costs through payroll deductions encourages our executives and their legal dependents to avail themselves of appropriate medical, dental and other health care services, as necessary, to help ensure our executives’ continued ability to contribute their efforts towards achieving On Assignment’s growth, profitability and other goals.
 
Severance and Change-in-Control Benefits
 
The executive employment agreements also provide for severance arrangements with each executive officer in the event of an involuntary termination without “cause” or, in some cases, a “constructive termination” or a termination by the executive for “good reason” as those terms are defined in the executive employment agreements.  Additionally, pursuant to our Executive Change of Control Agreements with Mr. Brill and Mr. Dameris and the On Assignment Change in Control Severance Plan in which our other executive officers participate, On Assignment provides for payments of the executive officer’s then-current annual salary and incentive compensation and continuation of health and welfare plan participation or lump-sum payment of the cost of such continued coverage for a pre-defined period of time, without cost to the executive, in the event the executive is terminated under certain defined circumstances following a change in control.   We feel that these severance triggers and levels are appropriate to ensure our executive officers’ financial security, commensurate with their positions, in order to ensure that they remain focused on their duties and responsibilities and promote the best interests of On Assignment in all circumstances.
 
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Pursuant to the Executive Change of Control Agreements with Mr. Brill and Mr. Dameris, immediately prior to a change of control (as defined in the agreements), all stock options and other unvested equity awards then held by the executive will become fully vested and exercisable subject, in Mr. Dameris’ case, to exceptions with respect to certain equity awards called for under his employment agreement.  Under the Executive Change of Control Agreements as well as the On Assignment Change in Control Severance Plan, in the event it is determined that any payment arising under such agreement or plan would be subject to the excise tax imposed by Code Section 4999, then the executive shall be entitled to receive an additional payment in an amount equal to the excise tax imposed upon the payments.  The Compensation Committee believes that the change in control arrangements serve to minimize any distraction to the executive officer resulting from a potential change in the control of the Company and decrease the risk that these individuals would leave On Assignment when a transaction was imminent, thereby reducing the value of On Assignment to a prospective buyer, or to the shareholders in the event the transaction failed to close.  Structuring the change in control severance benefits as primarily “double-trigger” (becoming payable only upon the occurrence of the executive’s involuntary or constructive termination following the change in control) appropriately serves these goals yet avoids bestowing a windfall on the executive officer in the event he is not involuntarily terminated following such an event.  The Compensation Committee believes use of the “single-trigger” accelerated vesting of stock options and other unvested equity awards held by Mr. Brill and Mr. Dameris (which occurs immediately prior to a change in control regardless of whether the executive is involuntarily terminated upon or following the transaction), properly acknowledges the direct link between the executive’s leadership of the Company and the value of the equity and recognizes that the link is greatly attenuated after a change in control, regardless of the executive’s actual employment status.  The single-trigger arrangement permits Mr. Brill and Mr. Dameris to receive the benefit of an increase in the fair market value of the equity resulting from their efforts to consummate a transaction approved by our shareholders.  The executive employment, severance and change of control arrangements are described under the heading “Employment Contracts and Change in Control Arrangements” below.
 
Perquisites
 
On Assignment also makes additional perquisites available to certain of its executive officers, consisting of a monthly automobile allowance, payment or reimbursement of actual expenses incurred by the executive officer in connection with an annual physical examination, (subject to specific limits) and payment or reimbursement of actual expenses incurred for tax preparation and financial planning services, (again, not to exceed specific limits).  The Compensation Committee acknowledges the considerable time and focus demanded of our executive officers by their work duties as well as their role as “ambassadors” of On Assignment and authorizes these benefits in order to limit the impact of attending to these personal responsibilities.  Additionally, the Compensation Committee believes the executives perceive these perquisites to be highly valuable and therefore helpful in attracting and retaining qualified leaders.
 
Deferred Compensation Plans
 
On Assignment offers tax-qualified 401(k) plans to its U.S. employees.  Some of our executives and other employees are not eligible to participate, or to fully participate up the maximum contribution levels permitted by the Code, in the applicable On Assignment 401(k) plan as a result of their status as “highly compensated” employees under the Code.  Therefore, On Assignment offers the On Assignment Deferred Compensation Plan, a separate non-qualified savings plan, for eligible employees which currently permits employees and directors determined to be eligible by the Compensation Committee to annually elect to defer up to 100% of their base salary, incentive compensation, and/or director fees on a pre-tax basis and earn tax-deferred income on these amounts.  The Company believes that these tax advantaged savings plans are valuable in recruiting talented executives.  The Deferred Compensation Plans permit matching Company contributions and other benefits similar to, though not as favorable for tax purposes, as the 401(k) plans.  The Compensation Committee maintains these programs in an effort to provide the executive officers with retirement benefits that are comparable to and competitive with the benefits available to similarly situated executives in the market.  The On Assignment Deferred Compensation Plans are described in more detail under the heading “Deferred Compensation” elsewhere in this Proxy Statement.
 
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Employee Stock Purchase Plan
 
As previously discussed in this Proxy statement, On Assignment maintained an Employee Stock Purchase Plan which terminated on February 27, 2009 (the Prior ESPP) due to the depletion of shares available for issuance. Since an employee stock purchase plan is designed to assist employees of the Company in acquiring stock ownership in the Company and to encourage employees to remain in the employment of the Company, the Company now seeks shareholder approval for the 2010 On Assignment Employee Stock Purchase Plan as described in this Proxy statement.  We believe that implementing an employee stock purchase plan helps incentivize our executive officers and provides the incentives of ownership generally to our employees.
 
Tax Provisions and Accounting Consequences
 
The Compensation Committee considers the anticipated tax consequences to us and our executive officers when reviewing our compensation programs, as the deductibility of some types of compensation payments or the amount of tax imposed on the payments can depend upon the timing of an executive’s vesting or exercise of previously granted rights or termination of employment.  The Compensation Committee considers the requirements of Code Sections 409A and 162(m) when structuring the executive compensation packages.  Code Section 162(m) limits the tax deductibility to the Company of annual compensation in excess of $1,000,000 that is paid to our Chief Executive Officer, and our three other most highly compensated executive officers (other than the Chief Financial Officer).  However, certain performance-based compensation is excluded from the $1,000,000 limit if, among other requirements, the compensation is payable only upon the attainment of pre-established, objective performance goals that are based on shareholder-approved performance criteria and the committee that establishes and certifies such goals consists only of “outside directors.” All members of our Compensation Committee, which establishes such goals, qualify as outside directors. Code Section 409A imposes an excise tax on employees with respect to compensation paid in contravention of certain requirements upon the timing of the payment(s) of amounts that are deemed to constitute “nonqualified deferred compensation” under the Code.  Changes in applicable tax laws and regulations, as well as other factors beyond the Compensation Committee’s control, also can affect the deductibility of compensation.
 
The Compensation Committee also endeavors to structure executive officers’ compensation based on the requirements of Code Section 280G.  Code Section 280G disallows a tax deduction with respect to excess parachute payments to certain executives of companies which undergo a change in control.  In addition, Code Section 4999 imposes a 20 percent penalty on the individual receiving the excess payment.  Parachute payments are compensation that is linked to or triggered by a change in control and may include, but are not limited to, bonus payments, severance payments, certain fringe benefits, and payments and acceleration of vesting from long-term incentive plans including stock options and other equity- based compensation.  Excess parachute payments are parachute payments that exceed a threshold determined under Code Section 280G based on the executive’s prior compensation.  In approving the compensation arrangements for our executive officers, our Compensation Committee considers all elements of the cost to our Company of providing such compensation, including the potential impact of Code Section 280G.  However, our Compensation Committee may, in its judgment, authorize compensation arrangements that could give rise to loss of deductibility under Code Section 280G and the imposition of excise taxes under Code Section 4999 when it believes that such arrangements are appropriate to attract and retain executive talent.
 
The Compensation Committee also regularly considers the accounting implications of significant compensation decisions, especially in connection with decisions that relate to equity compensation awards. In particular, ASC Topic 718 (formerly known as FASB 123R), requires us to recognize an expense for the fair value of equity-based compensation awards. As accounting standards change, we may revise certain programs to appropriately align accounting expenses of our awards with our overall executive compensation philosophy and objectives.
 
While the tax or accounting impact of any compensation arrangement is one factor to be considered in determining appropriate compensation, such impact is evaluated in light of the Compensation Committee’s overall compensation philosophy and objectives. The Compensation Committee will consider ways to maximize the deductibility of executive compensation, while retaining the discretion it deems necessary to compensate executive officers in a manner commensurate with performance and the competitive environment for executive talent. The Compensation Committee may award compensation which is not fully deductible to our executive officers if it determines that such award is consistent with its philosophy and is in our and our shareholders’ best interests.
 
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Like the 1987 Plan, the 2010 Plan described in this Proxy Statement and now presented to the shareholders for approval at the Annual Meeting, is designed to permit the Compensation Committee to grant awards that may qualify as performance-based for purposes of satisfying the conditions of Code Section 162(m), including stock options, other performance-vesting awards and cash incentive awards.  Other awards under the plan, including time-vesting restricted stock and restricted stock units may not qualify as performance-based awards.
 
Summary of Executive Compensation
 
Compensation paid to executive officers for 2009 consisted primarily of base salary, bonuses in connection with the annual incentive compensation program and long-term incentive compensation consisting of stock option grants and restricted stock units as described above.
 
Chief Executive Officer Compensation
 
Mr. Dameris’ 2009 compensation was determined based on principles applicable to executive officers generally: to offer base salary that equitably compensates the executive for the competent execution of his duties and responsibilities, to structure an overall compensation package that rewards superior performance, to balance attainment of near-term business objectives with long-term goals and to align the executive’s goals with those of our shareholders.  His 2009 compensation was also based on the terms of his November 2003 employment agreement, as amended through December 31, 2009.
 
Mr. Dameris’ salary was set at $635,250 as of August 2008, representing a 10% increase from his prior-year salary, and he did not receive a salary increase in 2009.  In determining not to apply a salary increase in 2009, the Compensation Committee considered the overall volume and value of Mr. Dameris’ equity grants, described below, his annual incentive compensation opportunity, described herein, the performance of the Company during the period since his last salary increase, the typical percentage increase applied to the other executive officers’ salaries, the performance of the staffing industry during 2009 and the overall economic climate.
 
Mr. Dameris’ target cash incentive compensation remained at 120% of his base salary as further described under “Employment Contracts and Change in Control Arrangements” in this Proxy Statement.  The targets are set by the Compensation Committee after consultation with Mr. Dameris.  For 2009, the targets were set such that Mr. Dameris would earn an annual incentive bonus equal to 60% of his annual base salary upon the Company’s attainment of a consolidated 2009 adjusted EBITDA of no less then $54,000,000; Mr. Dameris would earn an annual incentive bonus equal to of up to 42% of his annual base salary on a sliding scale, based on the Company’s attainment of an operating margin of at least 7.65% up to a maximum of 8.5%; and Mr. Dameris would earn an annual incentive equal to of up to 18% of his annual base salary with the actual award amount between 0% and 18% to be determined at the Committee’s discretion based on the Company attaining 2009 cash generation in excess of $28 million and/or the Company amending or replacing its existing credit facility on terms acceptable to the Board.  Mr. Dameris voluntarily waived his participation in the annual incentive compensation program for 2009 and thereby waived any cash incentive compensation to which he would otherwise have been entitled in 2009. Accordingly, Mr. Dameris was not paid any amount for his 2009 cash incentive compensation.
 
During 2009, Mr. Dameris received additional compensation of $7,115.35, which consisted of his monthly automobile allowance, healthcare-related reimbursement and tax preparation expense reimbursement.
 
In January 2009, pursuant to his employment agreement, Mr. Dameris was granted 90,252 restricted stock units with a fair market value of approximately $500,000 on the date of grant, with 11/36ths vesting on December 31, 2009 and the remainder vesting incrementally at the rate of 1/36th per month, through January 2, 2012, subject to Mr. Dameris’ continued employment through each such vesting date.  The Compensation Committee believes the restricted stock unit grant provides Mr. Dameris with incentive to focus on increasing the long-term value of the Company’s common stock, to the benefit of the Company’s shareholders.  Also in January 2009, pursuant to his employment agreement, Mr. Dameris was granted 90,252 restricted stock units, which vest as to a range of the units on a sliding scale on December 31, 2011, based on the Company’s stock price performance as compared to that of certain peer companies (designated by the Compensation Committee) during the performance period commencing January 1, 2009 and ending December 31, 2011, as measured over the first 20 days and last 20 days of such period.  The Compensation Committee believes this provides Mr. Dameris with incentive to focus on outperforming the Company’s peers, thereby ensuring that the Company is considered a premier performer in its sector.   In January 2009, pursuant to his employment agreement, Mr. Dameris was also granted a restricted stock award of 90,252 shares, with a fair market value of approximately $500,000 on the date of grant. Pursuant to the grant terms, Mr. Dameris earns 50% of the shares that are the subject of this grant if the Company attains adjusted EBITDA of at least $43,200,000 in 2009 and he earns the remaining 50% of the shares on a pro-rata basis if the Company’s 2009 adjusted EBITDA is at least $43,200,000 up to a maximum of $54,000,000, vesting in the number of shares earned on December 31, 2009, subject to his continued employment through such date.  As a result of the Company’s performance in 2009 following the global economic downturn, the Company attained $32,040,000 in adjusted EBITDA for 2009, and, consequently, Mr. Dameris did not earn this portion of his long-term equity incentive awards based on achievement of financial objectives.
 
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The Compensation Committee believes the performance conditions imposed on this award encouraged Mr. Dameris to strive for superior 2009 adjusted EBITDA results while the time-vesting component encourages Mr. Dameris to continue in service through the vesting date.  The use of adjusted EBITDA targets encourages Mr. Dameris to focus on producing financial results that align with the interests of the shareholders.  The Compensation Committee assigned equal weight to the time-vesting restricted stock units, the restricted stock units which vest based on our total shareholder return as compared with our peers and the restricted stock.  It did so in order to offer a balanced incentive and reward for an overall increase in the fair market value of our stock, the attainment of specific performance goals and superior stock performance relative to similar companies in our industry.
 
Chief Financial Officer Compensation
 
Mr. Brill’s 2009 compensation was determined based on the same factors applicable to Mr. Dameris and our other executive officers generally, as discussed as well as the terms of his January 1, 2007 employment agreement, as amended and restated on December 11, 2008.
 
Mr. Brill’s annual base salary for 2009 was set at $293,760, a 2% increase from 2008.   His salary was set after considering Mr. Brill’s past performance as the Company’s Chief Financial Officer, the annual salary increases awarded to the Company’s other employees and executive officers for the year, the range of the Company’s other executive officer salaries, the performance of the Company and the overall economic climate.
 
Pursuant to his employment agreement, Mr. Brill is eligible for an annual cash incentive award of up to 100% of his annual base salary.  The Compensation Committee established Mr. Brill’s annual incentive compensation percentage based on these same general factors that the Compensation Committee considered for his annual base salary.  The targets are set by the Compensation Committee after consultation with the Chief Executive Officer and represent a percentage attainment of the amount forecasted by the Company for the fiscal year as set forth in the 2009 Board-approved budget.  In addition, the Compensation Committee considers specific factors relevant to the Company’s success for that year.  For 2009, Mr. Brill would be eligible to receive 50% of his annual base salary contingent upon the Company achieving consolidated 2009 Adjusted EBITDA of no less than $54,000,000.  Mr. Brill would be eligible for up to 50% of his annual base salary determined as a linear pro ration of the extent to which the company achieves the following goals:  (i) up to 20% will  be earned based on the Company generating cash levels between $25,200,000 and $30,8000,000; (ii) up to 20% will be earned based on the Company’s attainment of a consolidated gross margin of at least 27.45% up to a maximum of 30.5%; (iii) up to 40% based on the Company’s attainment of a consolidated Adjusted EBITDA margin of at least 7.65% up to a maximum of 8.5%; (iv) 20% if the Company successfully negotiates an amendment to its existing credit facility or a complete replacement thereof.  Mr. Brill waived his participation in the annual incentive compensation program and thereby waived any incentive compensation to which he would otherwise have been entitled in 2009.  Accordingly, Mr. Brill was not paid any 2009 cash incentive compensation.
 
Mr. Brill received additional compensation of $3,115.35, which consisted of his monthly automobile allowance.
 
The Compensation Committee strives to align the remuneration potential for the executive officers with shareholder interests through the use of stock options and other equity awards.  In furtherance of this objective, on January 2, 2009, Mr. Brill received a grant of 77,601 restricted stock units. Sixty percent of the award (or 46,561 restricted stock units) vests in three equal, annual installments of approximately 15,521 units on each of on January 2, 2010, January 2, 2011 and January 2, 2012.  The remaining 40% of the award is performance-based, vesting in three equal, annual installments, on the first three anniversaries of the grant date as set forth above, subject to attainment of performance targets established by the Compensation Committee (the “Performance Vesting Grant”).

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The portion of Mr. Brill’s Performance Vesting Grant eligible to vest based on 2009 performance totaled 10,347 restricted stock units.  Fifty percent (or 5,175 restricted stock units) would have vested contingent upon the Company attaining adjusted EBITDA of $45,900,000 in 2009.  Thereafter, Mr. Brill would have vested in up to an additional 50% of the grant incrementally when the Company achieved adjusted EBITDA of between $45,900,000 up to a maximum of adjusted EBITDA of $59,400,000 in 2009.  As a result of the Company’s performance in 2009 following the global economic downturn, the Company achieved adjusted EBITDA of $32,040,000 in 2009 and Mr. Brill did not vest in this long-term equity incentive award.  Accordingly, 10,347 restricted stock units from the 2009 Performance Vesting Grant rolled forward to become part of the 2010 Performance Vesting Grant scheduled to vest, contingent upon attainment of the applicable adjusted EBITDA target, in January 2011.  Second and third installments of the Performance Vesting Grant shall vest, again, contingent upon attainment of adjusted EBITDA targets established by the Compensation Committee, on the second and third anniversaries of the grant date, respectively.  However, in the event Mr. Brill does not attain the targets necessary to vest the entire first year Performance Vesting Grant in January of 2010, the unvested Performance Vesting Grant for 2009 shall roll forward for one year only and shall be added to the 2010 Performance Vesting Grant potentially vesting in January of 2011. Vesting shall then be contingent upon Mr. Brill’s attainment of the adjusted EBITDA target established by the Compensation Committee for the year 2010.  Any unvested Performance Vesting Grant originally scheduled to vest in January of 2011 shall, likewise, roll forward for one year only and shall be added to the Performance Vesting Grant potentially vesting in January 2012.
 
    The use of adjusted EBITDA targets encourages Mr. Brill to focus on producing results that align with the interests of the shareholders.  The Compensation Committee chose restricted stock units because, unlike stock options, the restricted stock units are not at risk of becoming “underwater” during the three year vesting period and thereby failing in their fundamental purpose of providing an incentive to Mr. Brill to remain employed with the Company and focus efforts on achieving the performance targets necessary for vesting.  The Compensation Committee establishes the applicable performance targets within the first 90 days of each year.  Vesting as described above occurs only if Mr. Brill remains employed with the Company through the performance vesting date.  In the event of a change in control of the Company, the vesting of any unvested portion of the award shall be subject to the provisions of Mr. Brill’s executive change in control agreement.  If Mr. Brill’s employment with us is terminated for any other reason, the unvested portion of the restricted stock units will be forfeited as of the termination date.

 
           To arrive at the number of restricted stock units subject to the grant, the Compensation Committee considered Mr. Brill’s experience serving as the Chief Financial Officer of a publicly-traded company, the quality of his service to the Company, the number of restricted stock units granted to the Company’s other executive officers, and the then-current fair market value of the Company’s common stock.  Consistent with its overall compensation philosophy, the Compensation Committee believes that the time-vesting portion of the restricted stock unit grant rewards Mr. Brill for exercising business judgment that maximizes the trading price of the Company’s common stock over a multi-year period and the performance-vesting portion of the restricted stock unit grant encourages Mr. Brill to strive for superior adjusted EBITDA results.  The Compensation Committee also believes the multi-year vesting schedule encourages Mr. Brill’s continuation in service with the Company through those vesting dates.
 
President of Oxford Global Resources Compensation
 
Mr. McGowan’s 2009 compensation was determined based on the same factors described above for the other executive officers as well as the terms of his January 3, 2007 employment agreement, as amended and restated on December 30, 2008.  Under his employment agreement, Mr. McGowan was entitled to a minimum annual base salary of $345,000 for calendar year 2009.  Mr. McGowan did not receive a salary increase in 2009.  In determining not to apply a salary increase in 2009, the Compensation Committee considered Mr. McGowan’s experience as President of Oxford, current salary for serving as President of Oxford, the impact of Oxford’s performance on the Company’s overall performance, the range of the Company’s other executive officer salaries, the overall challenging economy as well as the performance of Oxford during 2009.
 
35

Pursuant to his employment agreement, Mr. McGowan is eligible for an annual cash incentive award of up to 100% of his annual base salary.  The Compensation Committee established Mr. McGowan’s annual incentive compensation percentage based on the same general factors that the Compensation Committee considered for his annual base salary.  For 2009, Mr. McGowan would be eligible to earn an annual incentive bonus up to 50% of his annual base salary contingent upon Oxford and/or the Company achieving the following goals:  (i) 40% based upon Oxford attaining 2009 Adjusted EBITDA of no less than $24,376,000 and (ii) 60% based upon the Company attaining consolidated 2009 Adjusted EBITDA of no less than $54,000,000.  Mr. McGowan would be eligible to earn up to 50% of his annual base salary determined as a linear pro ration of the extent to which Oxford and/or the Company achieve the following goals:  (i) up to 20% based on the Company generating cash levels between $25,200,000 and $30,800,000; (ii) up to 20% based on Oxford’s attainment of a gross margin of at least 33.43% up to a maximum of 37.14%  (iii) up to 20% based on the Company’s attainment of a consolidated gross margin of at least 27.45% up to a maximum of 30.5%; (iv) up to 15% based on Oxford’s attainment of an Adjusted EBITDA margin of at least 11.86% up to a maximum of 13.18%; (v) up to 15% based on the Company’s attainment of a consolidated Adjusted EBITDA margin of at least 7.65% up to a maximum of 8.5%; (vi) 10% if the Company successfully negotiates an amendment to its existing credit facility or a complete replacement thereof. The annual incentive compensation targets are set by the Compensation Committee after consultation with the Chief Executive Officer and represent a percentage attainment of the amount forecasted by the Company for the fiscal year as set forth in the 2009 Board-approved budget. In addition, the Compensation Committee considers specific factors relevant to the Company’s success for that year.  Mr. McGowan waived his participation in the annual incentive compensation program and thereby waived any incentive compensation to which he would otherwise have been entitled in 2009.  Accordingly, Mr. McGowan was not paid any 2009 cash incentive compensation.
 
During 2009, McGowan received additional compensation of $6,076.78, which consisted of monthly automobile allowance and tax preparation expense reimbursement.
 
The Compensation Committee strives to align the remuneration potential for the executive officers with shareholder interests through the use of stock options and other equity awards.  In furtherance of this objective, on January 2, 2009, Mr. McGowan received a grant of 44,092 restricted stock units. Sixty percent of the award (or 26,455 restricted stock units) vests in three equal, annual installments of 8,819 on January 2, 2010, January 2, 2011 and January 2, 2012.  The remaining 40% of the award is performance-based, vesting in three equal, annual installments, on the first three anniversaries of the grant date as set forth above, subject to attainment of performance targets established by the Compensation Committee (the “Performance Vesting Grant”).

The portion of Mr. McGowan’s Performance Vesting Grant eligible to vest based on 2009 performance totaled 5,879 restricted stock units.  Fifty percent (or 2,939 restricted stock units) would have vested contingent upon the Company attaining adjusted EBITDA of $45,900,00 in 2009.  Thereafter, Mr. McGowan would have vested in up to an additional 50% of the grant incrementally when the Company achieved adjusted EBITDA in excess of $45,900,000, up to a maximum of $59,400,000 in 2009.   As a result of the Company’s performance in 2009 following the global economic downturn, the Company achieved adjusted EBITDA of $32,040,000 in 2009 and Mr. McGowan did not vest in this long-term equity incentive award.  Accordingly, 5,879 restricted stock units from the 2009 Performance Vesting Grant rolled forward to become part of the 2010 Performance Vesting Grant scheduled to vest, contingent upon attainment of the applicable adjusted EBITDA target, in January 2011. Second and third installments of the Performance Vesting Grant shall vest, again, contingent upon attainment of adjusted EBITDA targets established by the Compensation Committee, on the second and third anniversaries of the grant date, respectively.  However, in the event Mr. McGowan does not attain the targets necessary to vest the entire first year Performance Vesting Grant in January of 2010, the unvested Performance Vesting Grant for 2009 shall roll forward for one year only and shall be added to the 2010 Performance Vesting Grant potentially vesting in January of 2011. Vesting shall then be contingent upon Mr. McGowan’s attainment of the adjusted EBITDA target established by the Compensation Committee for the year 2010.  Any unvested Performance Vesting Grant originally scheduled to vest in January of 2011 shall, likewise, roll forward for one year only and shall be added to the Performance Vesting Grant potentially vesting in January 2012.

36

The use of adjusted EBITDA targets encourages Mr. McGowan to focus on producing financial results that align with the interests of the shareholders.  The Compensation Committee chose restricted stock units because unlike stock options, the restricted stock units are not at risk of becoming “underwater” during the three year vesting period and thereby failing in their fundamental purpose of providing an incentive to Mr. McGowan to remain employed with the Company and focus efforts on achieving the performance targets necessary for vesting.  The Compensation Committee establishes the applicable performance targets within the first 90 days of each year. Vesting as described above occurs only if Mr. McGowan remains employed with the Company through the performance vesting date.  If Mr. McGowan’s employment with us is terminated for any reason, the unvested portion of the restricted stock units will be forfeited as of the termination date.

To arrive at the number of restricted stock units subject to the grant, the Compensation Committee considered Mr. McGowan’s experience serving as the President of Oxford, the quality of his service to the Company, the number of restricted stock units granted to the Company’s other executive officers, the overall equity awarded to the Company’s other executive officers as compared with Mr. McGowan, and the then-current fair market value of the Company’s common stock.   Consistent with its overall compensation philosophy, the Compensation Committee believes that the time-vesting portion of the restricted stock unit grant rewards Mr. McGowan for exercising business judgment that maximizes the trading price of the Company’s common stock over a multi-year period and the performance-vesting portion of the restricted stock unit grant encourages Mr. McGowan to strive for superior adjusted EBITDA results.  The Compensation Committee also believes the multi-year vesting schedule encourages Mr. McGowan’s continuation in service with the Company through those vesting dates.
 
President of Life Sciences and Allied Healthcare Compensation
 
Mr. McGrath’s 2009 compensation was determined based on the same factors described above for the other executive officers as well as the terms of his July 23, 2004 employment agreement, as amended on November 28, 2007 and amended and restated on December 11, 2008.  Mr. McGrath’s salary was set by the Compensation Committee after considering his experience, the anticipated impact of the Life Sciences and Allied Healthcare divisions’ performance on the Company’s overall performance, the range of the Company’s other executive officer salaries and the overall economic climate.  Mr. McGrath’s annual salary was set at $316,200, a 2% increase from 2008.
   
    Pursuant to his employment agreement, Mr. McGrath is eligible for an annual cash incentive award of up to 100% of his annual base salary.  The Compensation Committee established Mr. McGrath’s 2009 incentive compensation percentage based on the same general factors that the Compensation Committee considered for his annual base salary.  For 2009, Mr. McGrath would be eligible to earn an annual incentive bonus up to 50% of his annual base salary contingent upon the Life Sciences division, the Allied division and/or the Company achieving the following goals:  (i) 40% based upon attaining consolidated 2009 Adjusted EBITDA of no less than $54,000,000; (ii) 45% based upon attaining Life Sciences Branch contribution of $21,305,000; and (iii) 15% based upon attaining Allied Branch contribution of $4,634,000.  Mr. McGrath was eligible to earn an annual incentive bonus of up to 50% of his annual base salary determined as a linear pro ration of the extent to which the Life Sciences division, the Allied division and/or the Company achieve the following goals:  (i) up to 20% will be earned based on the Company generating cash levels between $25,200,000 and $30,800,000; (ii) up to 15% will be earned based on Life Sciences division’s attainment of a gross margin of at least 29.19% up to a maximum of 32.43%;  (iii)  up to 5% will be earned based on the Allied division’s attainment of a gross margin of at least 27.85% up to a maximum of 30.95%; (iv) up to 20% based on the Company’s attainment of a consolidated gross margin of at least 27.45% up to a maximum of 30.5%; (v) up to 11.25% based on the Life Sciences division’s attainment of Branch contribution margin of at least 16.24% up to a maximum of 18.05%; (vi) up to 3.75% based on the Allied division’s attainment of Branch contribution margin of at least 7.53% up to maximum of 8.37%; (vii) up to 15% based on the Company attaining Adjusted EBITDA margin of at least 7.65% up to a maximum of 8.5%; (viii) 10% if the Company successfully negotiates an amendment to its existing credit facility or a complete replacement thereof. The amount of Mr. McGrath’s annual incentive compensation consists of multiple components relating to attainment of adjusted EBITDA and branch contribution of the Company overall, the Life Sciences division and the Allied Healthcare division.  The targets are set by the Compensation Committee after consultation with the Chief Executive Officer and represent a percentage attainment of the amount forecasted by the Company for the fiscal year as set forth in the 2009 Board-approved budget.  Mr. McGrath waived his participation in the annual incentive compensation program and thereby waived any incentive compensation to which he would otherwise have been entitled in 2009.  Accordingly, Mr. McGrath was not paid any amount for his 2009 cash incentive compensation.
 
37

During 2009, Mr. McGrath also received additional compensation of $3,375 which consisted of his monthly automobile allowance.
 
The Compensation Committee strives to align the remuneration potential for the executive officers with shareholder interests through the use of stock options and other equity awards.  In furtherance of this objective, on January 2, 2009, Mr. McGrath received a grant of 44,092 restricted stock units. Sixty percent of the award (or 26,455 restricted stock units) vests in three equal, annual installments of approximately 8,819 units on each of January 2, 2010, January 2, 2011 and January 2, 2012.  The remaining 40% of the award is performance-based, vesting in three equal, annual installments, on the first three anniversaries of the grant date as set forth above, subject to attainment of performance targets established by the Compensation Committee (the “Performance Vesting Grant”).

The portion of Mr. McGrath’s Performance Vesting Grant eligible to vest based on 2009 performance totaled 5,879 restricted stock units.  Fifty percent (or 2,939 restricted stock units) would have vested contingent upon the Company attaining adjusted EBITDA of $45,900,000 in 2009.  Thereafter, Mr. McGrath vested in up to an additional 50% of the grant incrementally when the Company achieved adjusted EBITDA in excess of $45,900,000 up to a maximum of $59,400,000 in 2009.  As a result of the Company’s performance in 2009 following the global economic downturn, the Company achieved adjusted EBITDA of $32,040,000 in 2009 and Mr. McGrath did not vest in this long-term equity incentive award.  Accordingly, 5,879 restricted stock units from the 2009 Performance Vesting Grant rolled forward to become part of the 2010 Performance Vesting Grant scheduled to vest, contingent upon attainment of the applicable adjusted EBITDA target, in January 2011.  Second and third installments of the Performance Vesting Grant shall vest, again, contingent upon attainment of adjusted EBITDA and/or branch contribution targets established by the Compensation Committee, on the second and third anniversaries of the grant date, respectively.  However, in the event Mr. McGrath does not attain the targets necessary to vest the entire first year Performance Vesting Grant in January of 2010, the unvested Performance Vesting Grant for 2009 shall roll forward for one year only and shall be added to the 2010 Performance Vesting Grant potentially vesting in January of 2011. Vesting shall then be contingent upon Mr. McGrath’s attainment of the adjusted EBITDA target established by the Compensation Committee for the year 2010.  Any unvested Performance Vesting Grant originally scheduled to vest in January of 2011 shall, likewise, roll forward for one year only and shall be added to the Performance Vesting Grant potentially vesting in January 2012.

The use of adjusted EBITDA targets encourages Mr. McGrath to focus on producing financial results that align with the interests of the shareholders.  The Compensation Committee chose restricted stock units for this award because, unlike stock options, the restricted stock units are not at risk of becoming “underwater” during the three year vesting period and thereby failing in their fundamental purpose of providing an incentive to Mr. McGrath to remain employed with the Company and focus efforts on achieving the performance targets necessary for vesting.  The Compensation Committee establishes the applicable performance targets within the first 90 days of each year.  Vesting as described above occurs only if Mr. McGrath remains employed with Company through the performance vesting date.  If Mr. McGrath’s employment with us is terminated for any reason, the unvested portion of the restricted stock units will be forfeited as of the termination date.

To arrive at the number of restricted stock units subject to the grant, the Compensation Committee considered Mr. McGrath’s experience serving as the President of the Life Sciences division, his assumption of responsibility for oversight of the Allied Healthcare division in late 2007, the quality of his service to the Company, the number of restricted stock units granted to the Company’s other executive officers and the then-current fair market value of the Company’s common stock.   Consistent with its overall compensation philosophy, the Compensation Committee believes that the time-vesting portion of the restricted stock unit grant rewards Mr. McGrath for exercising business judgment that maximizes the trading price of the Company’s common stock over a multi-year period and the performance-vesting portion of the restricted stock unit grant encourages Mr. McGrath to strive for superior adjusted EBITDA results.  The Compensation Committee also believes the multi-year vesting schedule encourages Mr. McGrath’s continuation in service with the Company through those vesting dates.
 
38

President of Vista Staffing Solutions Compensation
 
Mr. Brouse’s 2009 compensation was determined based on the same factors described above for the other executive officers as well as the terms of his December 6, 2006 employment agreement, as amended on July 2, 2008 and further amended and restated on December 11, 2008.  Mr. Brouse’s annual base salary for 2009 was $271,440, a 4% increase from 2008.  Mr. Brouse’s base salary was set after considering his experience as President of VISTA, the anticipated impact of VISTA’s performance on the Company’s overall performance and the range of the Company’s other executive officer salaries.
 
Pursuant to his employment agreement, Mr. Brouse is eligible for an annual cash incentive award of up to 75% of his annual base salary.  The Compensation Committee established Mr. Brouse’s 2009 incentive compensation percentage based on the same general factors that the Compensation Committee considered for his annual base salary.  For 2009, Mr. Brouse could earn an annual incentive bonus up to 37.5% of his annual base salary contingent upon VISTA and/or the Company achieving the following goals:  (i) 40% based upon attaining consolidated 2009 Adjusted EBITDA of no less than $54,000,000 and (ii) 60% based upon attaining VISTA 2009 adjusted EBITDA of no less than $9,470,000.  Mr. Brouse could earn an annual incentive bonus of up to 37.5% of his annual base salary determined as a linear pro ration of the extent to which VISTA and/or the Company achieve the following goals:  (i) up to 20% based on the Company generating cash levels between $25,200,000 and $30,800,000; (ii) up to 20% based on VISTA’s attainment of a gross margin of at least 27.64% up to a maximum of 30.71%; (iii) up to 20% based on the Company’s attainment of a consolidated gross margin of at least 27.45% up to a maximum of 30.5%; (iv) up to 15% based on VISTA’s attainment of an Adjusted EBITDA margin of at least 8.59% up to a maximum of 9.54%; (v) up to 15% based on the Company’s attainment of a consolidated Adjusted EBITDA margin of at least 7.65% up to a maximum of 8.5%; (vi) 10% if the Company successfully negotiates an amendment to its existing credit facility or a complete replacement thereof.  Mr. Brouse waived his participation in the annual incentive compensation program and thereby waived any incentive compensation to which he would otherwise have been entitled in 2009.  Accordingly, Mr. Brouse was not paid any 2009 cash incentive compensation.

The Compensation Committee strives to align the remuneration potential for the executive officers with shareholder interests through the use of stock options and other equity awards.  In furtherance of this objective, on January 2, 2009, Mr. Brouse received a grant of 34,303 restricted stock units.  Sixty percent of the award (or 20,582 restricted stock units) vests in three equal, annual installments of approximately 6,860 units on each of January 2, 2010, January 2, 2011 and January 2, 2012.  The remaining 40% of the award is performance-based, vesting in three equal, annual installments, on the anniversary of the grant date as set forth above, subject to attainment of performance targets established by the Compensation Committee (the “Performance Vesting Grant”).

The portion of Mr. Brouse’s Performance Vesting Grant eligible to vest based on 2009 performance totaled 4,574 restricted stock units.  Fifty percent (or 2,287 restricted stock units) would have vested contingent upon the Company attaining adjusted EBITDA of $45,900,000 in 2009.  Upon attaining that threshold, Mr. Brouse vested in up to an additional 50% of the grant incrementally when the Company achieved adjusted EBITDA in excess of $45,900,000, up to a maximum of $59,400,000 in 2009.  As a result of the Company’s performance in 2009 following the global economic downturn, the Company achieved adjusted EBITDA of $32,040,000 in 2009 and Mr. Brouse did not vest in this long-term equity incentive award.  Accordingly, 4,574 restricted stock units from the 2009 Performance Vesting Grant rolled forward to become part of the 2010 Performance Vesting Grant scheduled to vest, contingent upon attainment of the applicable adjusted EBITDA target, in January 2011.   Second and third installments of the Performance Vesting Grant shall vest, again, contingent upon attainment of adjusted EBITDA targets established by the Compensation Committee, on the second and third anniversaries of the grant date, respectively.  However, in the event Mr. Brouse does not attain the targets necessary to vest the entire first year Performance Vesting Grant in January of 2009, the unvested Performance Vesting Grant for 2008 shall roll forward for one year only and shall be added to the 2009 Performance Vesting Grant potentially vesting in January of 2011. Vesting shall then be contingent upon Mr. Brouse’s attainment of the adjusted EBITDA target established by the Compensation Committee for the year 2010.  Any unvested Performance Vesting Grant originally scheduled to vest in January of 2011 shall, likewise, roll forward for one year only and shall be added to the Performance Vesting Grant potentially vesting in January 2012.

 
39

 

    The use of adjusted EBITDA targets encourages Mr. Brouse to focus on producing financial results that align with the interests of the shareholders.  The Compensation Committee chose restricted stock units because, unlike stock options, the restricted stock units are not at risk of becoming “underwater” during the three year vesting period and thereby failing in their fundamental purpose of providing an incentive to Mr. Brouse to remain employed with the Company and focus efforts on achieving the performance targets necessary for vesting.  The Compensation Committee establishes the applicable performance targets within the first 90 days of each year.  Vesting as described above occurs only if Mr. Brouse remains employed with the Company through the performance vesting date.  If Mr. Brouse’s employment with us is terminated for any other reason, the unvested portion of the restricted stock units will be forfeited as of the termination date.

 
           To arrive at the number of restricted stock units subject to the grant, the Compensation Committee considered Mr. Brouse’s experience serving as the President of VISTA, the quality of his service to the Company,  the number of restricted stock units granted to the Company’s other executive officers, and the then-current fair market value of the Company’s common stock.   Consistent with its overall compensation philosophy, the Compensation Committee believes that the time-vesting portion of the restricted stock unit grant rewards Mr. Brouse for exercising business judgment that maximizes the trading price of the Company’s common stock over a multi-year period and the performance-vesting portion of the restricted stock unit grant encourages Mr. Brouse to strive for superior adjusted EBITDA results.  The Compensation Committee also believes the multi-year vesting schedule encourages Mr. Brouse’s continuation in service with the Company through those vesting dates.
 

 
40

 

Summary of Cash and Other Compensation
 
The following table sets forth the compensation earned by our named executive officers for services rendered in all capacities to On Assignment for the year ended December 31, 2009.
 

 
Fiscal Year 2009 Summary Compensation Table
 
Name and Principal
Position(1)
 
Year
   
Salary (2)
   
Bonus
   
Stock
Awards
(3)
   
Option
Awards
(3)
   
Non-Equity Incentive
Plan Comp
   
Change in Pension Value
and Non-qualified Deferred Compensation
Earnings
 
All Other
Compensation (12)
 
Total
Peter Dameris
President and Chief Executive Officer
 
2009
 
$
635,250
 
$
 
$
3,154,507
 
$
 
$
366,621
(5)
$
433,866
(6)
$
 
$
4,598,529
   
2008
 
$
601,563
 
$
 
$
1,584,474
 
$
 
$
762,300
(4)
$
(493,236)
(7)
$
12,034
(9)
$
2,467,135
   
2007
 
$
561,458
 
$
 
$
1,559,568
 
$
747,864
 
$
693,000
(4)
$
96,518
(8)
$
 
$
3,658,408
James Brill
Senior Vice President and Chief Financial Officer
 
2009
 
$
293,760
 
$
 
$
257,948
 
$
 
$
141,281
(5)
$
 
$
 
$
696,878
   
2008
 
$
288,000
 
$
 
$
317,127
 
$
 
$
288,000
(4)
$
 
$
12,212
(10)
$
905,339
   
2007
 
$
275,000
 
$
 
$
705,000
 
$
459,410
 
$
325,000
(4)
$
 
$
20,327
(11)
$
1,784,737
Emmett McGrath
President—Life Sciences & Allied  Divisions
 
2009
 
$
316,200
 
$
 
$
146,561
 
$
 
$
149,312
(5)
$
 
$
 
$
620,245
   
2008
 
$
310,000
 
$
126,300
 
$
230,170
 
$
34,901
 
$
83,475
(4)
$
 
$
 
$
784,846
   
2007
 
$
270,521
 
$
 
$
 
$
 
$
278,250
(4)
$
 
$
 
$
548,771
Michael McGowan
President, Oxford Global Resources, Inc.
 
2009
 
$
345,000
 
$
 
$
146,561
 
$
 
$
143,304
(5)
$
 
$
 
$
640,942
   
2008
 
$
345,000
 
$
80,000
 
$
46,468
 
$
 
$
365,000
(4)
$
 
$
 
$
836,468
   
2007
 
$
320,000
 
$
80,000
 
$
774,000
 
$
605,100
 
$
307,903
(4)
$
 
$
 
$
2,087,003
Mark Brouse
President, VISTA Staffing Solutions, Inc.
 
2009
 
$
271,440
 
$
 
$
114,024
 
$
 
$
161,409
(5)
$
 
$
 
$
546,873
   
2008
 
$
261,000
 
$
 
$
140,184
 
$
 
$
195,750
(4)
$
 
$
 
$
596,934
   
2007
 
$
261,000
 
$
 
$
 
$
105,333
 
$
 
$
 
$
 
$
366,333

 
(1)
Mr. Dameris became Chief Executive Officer effective as of September 28, 2004.  Mr. Brill joined On Assignment as its Senior Vice President and Chief Financial Officer effective January 1, 2007.    Mr. McGrath became an executive officer in 2004, and in January 2008 assumed added responsibilities related to our Allied Healthcare Division. Mr. McGowan became an executive officer in January 2007, upon the closing of On Assignment’s acquisition of Oxford Global Resources, Inc. (“Oxford”).  Mr. Brouse became an executive officer in January 2007, upon the closing of On Assignment’s acquisition of VISTA Staffing Solutions, Inc. (“VISTA”).
 

 
41

 


 
 (2)
Represents amount of salary earned by executive in 2009, 2008 or 2007 as indicated above.
 
 (3)
Amounts shown in the table above reflect the aggregate grant date fair value of the awards, computed in accordance with FASB ASC Topic 718.  Assumptions used in the calculation of these amounts with respect to stock-based awards are included in Note 10 to the consolidated financial statements for the year ended December 31, 2009 included in our Annual Report on Form 10-K and are described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” under “Critical Accounting Policies-Stock-Based Compensation” in the Form 10-K.
 
 (4)
All non-equity incentive plan compensation amounts were earned based on performance in the year reported and payable, by their terms, in the subsequent year.
 
 (5)
Mr. Dameris, Mr. Brill, Mr. McGowan, Mr. McGrath and Mr. Brouse  waived their participation in their annual cash incentive compensation program for 2009 and did not receive any cash incentive compensation in 2009 for 2009 performance.
 
 (6)
Represents fiscal year 2009 gain on deferred compensation plan contributions.
 
 (7)
Represents fiscal year 2008 loss on deferred compensation plan contributions.
 
 (8)
Represents fiscal year 2007 gain on deferred compensation plan contributions.
 
 (9)
Includes automobile allowance, life insurance, tax preparation expense reimbursement and personal travel expense reimbursement.
 
(10)
Includes automobile allowance, life insurance, other taxable insurance coverage and tax preparation expense reimbursement.
 
(11)
Includes automobile allowance, life insurance, reimbursement of tax preparation expenses and reimbursement of personal travel expense as well as a special non-cash bonus consisting of a timepiece and tax gross-up thereon, totaling $10,132 presented for extraordinary work performed in relation to On Assignment’s acquisitions of VISTA and Oxford.
 
(12)            All other compensation totaling less than $10,000 for any executive officer is not disclosed.
 

 
42

 


 
Summary of Grants of Plan Based Awards
 
The following table sets forth summary information regarding all grants of plan-based awards made to our named executive officers for the year ended December 31, 2009.
 
Fiscal Year 2009 Grants of Plan Based Awards
 
   
Grant
 
Estimated Future Payouts 
Under
Non-Equity Incentive Plan 
Awards
($)(1)
 
Estimated Future Payouts 
Under
Equity Incentive Plan 
Awards
 
All
Other
Stock
Awards:
Number of
Shares
of Stock or 
 
All Other
Option
Awards:
Number 
of
Securities
Under- 
lying
 
Exercise
or Base
Price of
Option
Awards
 
Grant
Date Fair
Value of
Stock and
Option
   
Name
 
Date
 
Threshold
 
Target
 
Maximum
 
Threshold
 
Target
 
Maximum
 
Units(2)
 
Options(3)
 
($/Sh)
 
Awards(4)
 
Peter Dameris
       
   
381,150
   
762,300
                                                       
   
1/2/09
                                               
90,252
 
(5)
               
499,996
 
   
1/2/09
                                               
90,252
 
(5)
               
499,996
 
   
3/19/09
                                               
90,252
 
(6)
               
254,511
 
   
11/4/09
                                               
108,108
 
(5)
               
800,000
 
   
11/4/09
                                               
 
(7)
               
800,000
 
   
11/4/09
                                               
 
(8)
               
800,000
 
                                                                               
James Brill
       
   
146,880
   
293,760
                                                       
   
1/2/09
                                               
46,561
 
(5)
               
257,948
 
   
2/5/09
                                               
9,195
 
(5)
               
38,711
 
   
2/18/09
                                               
10,347
 
(5)
               
45,527
 
                                                                               
Emmett McGrath
       
   
158,100
   
316,200
                                                       
   
1/2/09
                                               
26,455
 
(5)
               
146,561
 
   
2/5/09
                                               
5,225
 
(5)
               
21,997
 
   
2/18/09
                                               
5,879
 
(5)
               
25,868
 
                                                                               
Michael McGowan
       
   
172,500
   
345,000
                                                       
   
1/2/09
                                               
26,455
 
(5)
               
146,561
 
   
2/5/09
                                               
1,600
 
(5)
               
6,736
 
   
2/18/09
                                               
5,879
 
(5)
               
25,868
 
Mark Brouse
       
   
101,790
   
203,580
                                                       
   
1/2/09
                                               
20,582
 
(5)
               
114,024
 
   
2/5/09
                                               
4,065
 
(5)
               
17,114
 
   
2/18/09
                                               
4,574
 
(5)
               
20,126
 

 
(1)
Executive annual incentive compensation is determined by the Compensation Committee of the Board. See “Compensation Discussion and Analysis—Annual Incentive Compensation” for a general description of the criteria used in determining incentive compensation paid to our executive officers.
 

 
43

 


 
(2)
Restricted stock granted under the Stock Option Plan as a part of long-term incentive compensation as determined by the Compensation Committee of the Board. See “Compensation Discussion and Analysis—Long-Term Equity Incentive Compensation” for a general description of the criteria used by the Compensation Committee in approving grants of restricted stock to our executive officers.
 
(3)
Stock options granted as a part of long-term incentive compensation as determined by the Compensation Committee of the Board.  See “Compensation Discussion and Analysis—Long-Term Equity Incentive Compensation” for a general description of the criteria used by the Compensation Committee in approving grants of stock options to our executive officers.
 
(4)
Amounts shown in the table above reflect the aggregate granted date fair value of the awards, computed in accordance with FASB ASC Topic 178. Assumptions used in the calculation of these amounts with respect to stock–based grants are included in Note 10 to the consolidated financial statements for the year ended December 31, 2009 included in our Annual Report of Form 10-K and are described in “Management’s Discussion and Analysis of Financial Condition and Results of Operations” under “Critical Accounting Policies-Stock-Based Compensation” in the Form 10-K.
 
(5)
Represents number of restricted stock units granted.
 
(6)
Represents number of restricted stock awards granted.
 
(7)
Number of shares awarded will be determined by dividing $800,000 by the January 2, 2011 closing price of On Assignment stock.
 
(8)
Number of shares awarded will be determined by dividing $800,000 by the January 2, 2012 closing price of On Assignment stock.
 
 
44


 
Employment Contracts and Change in Control Arrangements
 
Peter T. Dameris
 
On Assignment entered into an employment agreement with Mr. Dameris on October 27, 2003, subsequently amended, which continued through December 31, 2009.  On Assignment and Mr. Dameris entered into an amended and restated version of the employment agreement on December 11, 2008, which included certain changes designed to make the payments and benefits provided thereunder exempt from or compliant with the requirements of Code Section 409A.  The amended and restated employment agreement was subsequently amended on March 19, 2009. Under his employment agreement, during 2009, Mr. Dameris received an annual salary of $635,250, subject to annual merit increases.

Mr. Dameris is also eligible to receive annual cash incentive compensation of up to 120% of his annual salary, based 60% upon the Company’s attaining, and an additional 60% upon the Company’s exceeding, revenue and adjusted EBITDA performance objectives (which objectives exclude certain non-recurring events) set by the Compensation Committee in consultation with Mr. Dameris. However, pursuant to the March 19, 2009 amendment, Mr. Dameris was eligible to earn 2009 annual cash incentive compensation of up to 120% of his annual salary, based upon  three separate, stand-alone opportunities as described under “Summary of Executive Compensation” in this Proxy Statement.  In addition, Mr. Dameris and his family, as applicable, were entitled to participate in our incentive, savings, retirement and welfare plans.  Mr. Dameris also receives, pursuant to his employment agreement, a stipend of $450 per month for lease of an automobile and other related expenses; payment or reimbursement of up to $1,500 in actual, properly substantiated expenses incurred in connection with an annual physical examination; and payment or reimbursement of up to $2,500 per calendar year in actual, properly substantiated expenses incurred for tax preparation and financial planning services.
 
Under his current employment agreement, in addition to equity grants received prior to 2009, Mr. Dameris has or will receive the following equity grants, subject to his continued employment on each applicable grant date:
 
 
·
Restricted Stock Units.
 
· 
On January 2, 2009 Mr. Dameris  received the following awards:  (1) a grant of 90,252 restricted stock units with a fair market value of approximately $500,000 on the date of grant, of which 11/36ths vested on December 31, 2009, and the remainder vests incrementally at the rate of 1/36th per month, through January 2, 2012, subject to Mr. Dameris’ continued employment through each such vesting date; and (2) a grant of 90,252 restricted stock units, which vest on a sliding scale on December 31, 2011,  based on the Company’s stock price performance  as compared to that of certain peer companies (designated by the Compensation Committee) during the performance period commencing January 1, 2009 and ending December 31, 2011, as measured over the first 20 days and last 20 days of such period.
 
 
·
Restricted Stock.
 
·
On January 2, 2009, Mr. Dameris received a grant of 90,252 shares of restricted stock, with a fair market value of approximately $500,000 on the date of grant.  According to targets set by the Compensation Committee on March 19, 2009, Mr. Dameris would earn 50% of the shares that are the subject of this grant if the Company attains adjusted EBITDA of at least $43,200,000 in 2009.  Mr. Dameris would earn the remaining 50% of the shares on a pro-rata basis if the Company’s 2009 adjusted EBITDA is at least $43,200,000 up to a maximum of $54,000,000, vesting in the number of shares earned on December 31, 2009, subject to his continued employment through such date.  The Company attained $32,040,000 in adjusted EBITDA for 2009 and, consequently, Mr. Dameris did not earn any portion of the grant and no shares vested on December 31, 2009.
 
    On November 4, 2009, Mr. Dameris entered into an employment agreement with the Company that is effective from January 1, 2010 through January 31, 2013 (2010 Employment Agreement), with automatic renewals for one year periods, and provides for annual salary, cash incentive compensation and equity incentive awards.  The 2010 Employment Agreement controls Mr. Dameris’ compensation for periods beginning on January 1, 2010 and did not impact Mr. Dameris’ 2009 compensation.  Mr. Dameris received the following awards under the 2010 Employment Agreement: a grant of 108,108 restricted stock units with a fair market value of approximately $800,000 on January 4, 2010, which will vest on February 1, 2011 based on the Company attaining positive adjusted EBITDA for the 13-month period ending February 1, 2011; a grant of restricted stock units with a fair market value of approximately $800,000 on the first trading day of 2011, which will vest on February 1, 2012 based on the Company attaining positive adjusted EBITDA for the 13-month period ending February 1, 2012; and a grant of restricted stock units with a fair market value of approximately $800,000 on the  first trading day of 2012, which will vest on February 1, 2013 based on the Company attaining positive adjusted EBITDA for the 13-month period ending February 1, 2013.
 
45

 
Under Mr. Dameris’ current employment agreement, upon a termination of Mr. Dameris’ employment without “cause” or for “good reason” during the term of his employment agreement, Mr. Dameris will become entitled to continuation of his base salary for a period of 18 months following such termination, as well as a lump-sum payment representing the value of any accrued but unused vacation.  Additionally, in the event of such termination, the Company will pay to Mr. Dameris a cash amount equal to the aggregate premiums that the Company would have paid for basic life insurance, accidental death and dismemberment insurance and long- and short-term disability insurance, each as in effect on the date of termination (as defined in his employment agreement), had he remained employed by the Company for a period of 18 months following such termination.  Also, during that 18 month period, subject to Mr. Dameris’ proper election to continue healthcare coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), the Company will pay Mr. Dameris’ COBRA premiums except that if during the period of continuation coverage, any plan pursuant to which such benefits are to be provided ceases to be exempt from the application of Section 409A, then the Company shall pay Mr. Dameris an amount equal to each such remaining premium in substantially equal monthly installments over the remainder of the period.
 
In the event of a termination in connection with a change of control, the severance provisions of Mr. Dameris’ employment agreement will be superseded by his Executive Change of Control Agreement (described below).  In addition, those unvested restricted stock units which otherwise vest in part on December 31, 2009 and incrementally thereafter on a monthly basis through the third anniversary of their grant without regard to our total shareholder return will vest on a pro-rata basis in connection with such termination based on the time elapsed between grant and termination; those unvested restricted stock units which would otherwise vest on the third anniversary of their grant by reference to our total shareholder return will instead vest in connection with such termination based on our total shareholder return through such termination; those unvested shares of restricted stock with respect to which the applicable performance year has concluded prior to such termination shall vest based on our adjusted EBITDA results for the relevant performance year; and those unvested shares of restricted stock with respect to which the applicable performance year has not yet concluded at the time of termination shall vest on a pro-rata basis based on our adjusted EBITDA results to date in such year. These accelerated vesting provisions applicable upon termination shall also apply to any termination of employment occurring after the expiration of the employment agreement.
 
    See “Payments Upon Termination or Change in Control” for a discussion of benefits to which Mr. Dameris is entitled pursuant to his employment agreement and Executive Change of Control Agreement upon his termination of employment and/or change in control.
 
    Under the terms of his employment agreement, Mr. Dameris must comply with certain confidentiality and nonsolicitation requirements during and after his employment.
 
 
James Brill
 
Pursuant to the terms of his January 1, 2007 employment agreement, Mr. Brill serves as the Senior Vice President and Chief Financial Officer of On Assignment.  The Company and Mr. Brill entered into an amended and restated version of the employment agreement on December 11, 2008, which included certain changes designed to make the payments and benefits provided thereunder exempt from or compliant with the requirements of Code Section 409A.  According to the terms of his employment agreement as now in effect, Mr. Brill is entitled to a minimum annual base salary of $288,000, subject to annual increases thereafter.  Mr. Brill’s salary for 2009 was $293,760.  Under his employment agreement, Mr. Brill is eligible for an annual cash incentive award of up to 100% of his annual base salary.  The annual incentive compensation shall be determined by the Compensation Committee.   Mr. Brill and his legal dependents, as applicable, are entitled to participate in our incentive, savings, retirement and welfare plans.  Additionally, pursuant to his employment agreement, Mr. Brill receives an automobile allowance of $450 per month, payment or reimbursement of up to $1,500 in actual, properly substantiated expenses incurred in connection with an annual physical examination and payment or reimbursement of up to $2,500 per calendar year in actual, properly substantiated expenses incurred for tax preparation and financial planning services.
 
 
46

 
Upon termination of Mr. Brill’s employment by On Assignment without cause (as that term is defined in his employment agreement) he will receive continued payment of his base salary at the rate in effect as of the date his employment is terminated, for a period of 12 months, commencing on the effective date of the termination, paid in accordance with our normal payroll procedures applicable to our senior executives.  In the event of a termination in connection with a change of control, such provisions of Mr. Brill’s employment agreement will be superseded by his Executive Change of Control Agreement.  See “Payments Upon Termination or Change in Control” below for a discussion of certain benefits to which Mr. Brill is entitled pursuant to his employment agreement and/or Executive Change of Control Agreement.
 
Under the terms of his employment agreement, Mr. Brill must comply with certain confidentiality and nonsolicitation requirements during and after his employment.
 
 
Michael McGowan
 
Pursuant to the terms of his January 3, 2007 employment agreement, Mr. McGowan serves as President of Oxford, a wholly owned subsidiary of On Assignment.  The Company and Mr. McGowan entered into an amended and restated version of his employment agreement on December 30, 2008, which included certain changes designed to make the payments and benefits provided thereunder exempt from or compliant with the requirements of Code Section 409A.  Under the terms of his employment agreement as now in effect, Mr. McGowan is entitled to a minimum annual base salary of $345,000 for calendar year 2008, which amount is subject to annual increases thereafter.  Mr. McGowan’s base salary remained at $345,000 for calendar year 2009.  Mr. McGowan is eligible for an annual cash incentive award of up to 100% of his annual base salary.  Mr. McGowan and his legal dependents are entitled to participate in our incentive, savings, retirement and welfare plans.  Also pursuant to his employment agreement, Mr. McGowan receives a $500 monthly automobile allowance, payment or reimbursement of up to $1,500 in actual, properly substantiated expenses incurred in connection with an annual physical examination and payment or reimbursement of up to $2,500 per calendar year in actual, properly substantiated expenses incurred for tax preparation and financial planning services.
 
Upon termination of Mr. McGowan’s employment by On Assignment without cause (as such term is defined in his employment agreement) or by Mr. McGowan as a result of On Assignment imposing a change in his reporting relationship or requiring him to relocate to a principal work location that is more than 50 miles from Beverly, Massachusetts, he will receive salary continuation for a period of 12 months, at the rate in effect as of the date his employment is terminated, commencing on the effective date of the termination and paid in accordance with our normal payroll procedures applicable to our senior executives.  Additionally, in the event that Mr. McGowan’s employment is terminated as a result of either of the foregoing circumstances, and subject to his proper election to continue healthcare coverage under COBRA, for a period of 12 months from the date of termination, the Company will pay Mr. McGowan the difference between his COBRA premiums (for Mr. McGowan and his legal dependents to the extent each such individual received healthcare coverage provided by the Company immediately prior to such termination of employment), and the cost to Mr. McGowan of such coverage immediately prior to such termination (subject to premium increases generally affecting plan participants).  The Company shall provide this premium cost offset in a manner that causes such COBRA benefits to be exempt from the application of Code Section 409A except that if during the 12 month period, any plan pursuant to which such benefits are to be provided ceases to be exempt from the application of Code Section 409A, then an amount equal to each such remaining premium cost offset shall thereafter be paid to Mr. McGowan in substantially equal monthly installments over the remainder of the 12 month period.  In the event of a termination in connection with a change of control, such provisions of Mr. McGowan’s employment agreement will be superseded by the On Assignment Change in Control Severance Plan.  See “Payments Upon Termination or Change in Control” for a discussion of certain benefits to which Mr. McGowan is entitled pursuant to his employment agreement and/or  the Change in Control Severance Plan.
 
47

Under the terms of his agreement, Mr. McGowan must comply with certain confidentiality and nonsolicitation requirements during and after his employment.
 
 
Emmett McGrath
 
Pursuant to the terms of his July 23, 2004 employment agreement (as amended on November 27, 2007), Mr. McGrath serves as President of the Life Sciences and Allied Divisions of On Assignment. The Company and Mr. McGrath entered into an amended and restated version of his employment agreement on December 11, 2008, which included certain changes designed to make the payments and benefits provided thereunder exempt from or compliant with the requirements of Code Section 409A. Under his employment agreement, as now in effect, Mr. McGrath is entitled to a minimum base salary of $311,000, subject to annual increase.  Mr. McGrath earned a base salary for 2009 in the amount of $316,200.  Under his employment agreement, Mr. McGrath is also entitled to earn incentive compensation of up to 100% of his annual base salary. Mr. McGrath and his family, as applicable, are entitled to participate in our incentive, savings, retirement and welfare plans.  Additionally, pursuant to his employment agreement, Mr. McGrath receives a car allowance of $450 per month, which may be used in his discretion towards lease or financing payments, maintenance and/or other car-related expenses.  Additionally, Mr. McGrath receives payment or reimbursement of up to $1,500 in actual, properly substantiated expenses incurred in connection with an annual physical examination and payment or reimbursement of up to $2,500 per calendar year in actual, properly substantiated expenses incurred for tax preparation and financial planning services.
 
    Upon termination of Mr. McGrath’s employment by On Assignment without cause (as such term is defined in his employment agreement), he will receive payments of his annual base salary in effect at the time of termination in accordance with our normal payroll procedures for a period of 12 months, commencing on the effective date of the termination.  He will also receive a cash amount equal to the aggregate premiums that the Company would have paid for basic life insurance, accidental death and dismemberment insurance and long- and short-term disability insurance, each as in effect on the date of termination, had Mr. McGrath remained employed by the Company during the 12 month period.  In addition, during the 12 month period, subject to Mr. McGrath’s proper election to continue healthcare coverage under COBRA, the Company will pay Mr. McGrath’s COBRA premiums (for Mr. McGrath and his legal dependents to the extent each such individual received healthcare coverage provided by the Company immediately prior to such termination of employment) in a manner that causes such COBRA benefits to be exempt from the application of Code Section 409A except that if during the period of continuation coverage, any plan pursuant to which such benefits are to be provided ceases to be exempt from the application of Code Section 409A, then the Company shall pay to Mr. McGrath an amount equal to each such remaining premium in substantially equal monthly installments over the remainder of the continuation coverage period.  In the event of a termination in connection with a change of control, such provisions of Mr. McGrath’s employment agreement will be superseded by the On Assignment Change in Control Severance Plan.  See “Payments Upon Termination or Change in Control” for a discussion of certain benefits to which Mr. McGowan is entitled pursuant to his employment agreement and/or Change in Control Severance Plan.

Under the terms of his agreement, Mr. McGrath must comply with certain confidentiality and nonsolicitation requirements during and after his employment.
 
Mark Brouse
 
Pursuant to the terms of his employment agreement dated December 20, 2006, as amended July 2, 2008, Mr. Brouse serves as President of Vista Staffing Solutions, Inc., a subsidiary of On Assignment. The Company and Mr. Brouse entered into an amended and restated version of his employment agreement on December 11, 2008, which included certain changes designed to make the payments and benefits provided thereunder exempt from or compliant with the requirements of Code Section 409A.  Under the terms of his employment agreement as now in effect, Mr. Brouse is entitled to a minimum annual base salary of $261,000.  Mr. Brouse earned a base salary of $271,440 for 2009.  Under his employment agreement, Mr. Brouse is eligible for an annual cash incentive award of up to 75% of his annual base salary.  Mr. Brouse and his legal dependents, as applicable, are entitled to participate in our incentive, savings, retirement and welfare plans.  Also, to the extent that Mr. Brouse accrues miles (or comparable reward credit) based on his use of the corporate credit card furnished by the Company for expenses incurred directly by Mr. Brouse for his own work-related travel, lodging and/or other individual business expenses, Mr. Brouse is permitted to apply any miles or reward credit so accrued to personal and/or business use in his sole discretion.  If Mr. Brouse charges to the corporate credit card expenses incurred on behalf of other employees or consultants of the Company (including without limitation, other employees’ or consultants’ travel and lodging) or items or services purchased on behalf of the Company, he may apply the resulting miles or reward credit to the purchase of travel, lodging and/or related upgrades associated with business-related travel only.  Notwithstanding the foregoing permitted uses, such miles or reward credit shall be and remain the sole property of the Company.  In addition, for each calendar year during his employment, Mr. Brouse may designate a tax-exempt charitable organization to which On Assignment will contribute up to $5,000 prior to the end of such year, as directed by Mr. Brouse, contingent upon his continued employment with On Assignment through the end of such year.
  
48

    Upon termination of Mr. Brouse’s employment by On Assignment without cause (as such term is defined in his employment agreement), or by Mr. Brouse as a result of a constructive termination by On Assignment (as such term is defined in the agreement), he will receive continued payment of his base salary at the rate in effect as of the date his employment is terminated, for a period of 12 months, commencing on the effective date of the termination, paid in accordance with our normal payroll procedures applicable to our senior executives.  Additionally, Mr. Brouse will receive a pro-rata portion of his annual incentive compensation that would otherwise become payable in respect of the year in which the termination occurs, if and to the extent that, as of the termination date, On Assignment is on track to attain the performance objectives applicable to such annual incentive compensation.  Also, subject to Mr. Brouse’s proper election to continue healthcare coverage under COBRA, for a period of 12 months from the date of termination, the Company will pay Mr. Brouse the difference between his COBRA premiums (for Mr. Brouse and his legal dependents, to the extent each such individual received healthcare coverage provided by the Company immediately prior to such termination of employment), and the cost to Mr. Brouse of such coverage immediately prior to such termination (subject to premium increases generally affecting plan participants).  The Company shall provide this premium cost offset in a manner that causes such COBRA benefits to be exempt from the application of Code Section 409A except that if during the 12 month period, any plan pursuant to which such benefits are to be provided ceases to be exempt from the application of Code Section 409A, then the Company shall pay to Mr. Brouse an amount equal to each such remaining premium cost offset in substantially equal monthly installments over the remainder of the 12 month period.  In the event of a termination in connection with a change of control, such provisions of Mr. Brouse’s employment agreement will be superseded by the On Assignment Change in Control Severance Plan.  See “Payments Upon Termination or Change in Control” for a discussion of certain benefits to which Mr. Brouse is entitled pursuant to his employment agreement and/or the Change in Control Severance Plan.
 
Under the terms of his agreement, Mr. Brouse must comply with certain confidentiality and nonsolicitation requirements during and after his employment.
 
49

 
 
 
 
Summary of Outstanding Equity Awards
 
The following table sets forth outstanding equity award information with respect to each named executive officer as of December 31, 2009.
 
Fiscal Year 2009 Outstanding Equity Awards at Fiscal Year End
 
   
Option Awards
 
Stock Awards
 
Name
 
Number of
Securities
Underlying
Unexercised
Options
Exercisable(1)
 
Number of
Securities
Underlying
Unexercised
Options
Unexercisable(1)
Equity
Incentive
Plans
Awards:
Number of
Securities
Underlying
Unearned
Unexercised
Options
 
Option
Exercise
Price(2)
 
Option
Expiration
Date
 
Number
of Shares
or Units
of Stock That
Have Not
Vested(1)
Market
Value of
Shares or
Units of
Stock That
Have Not
Vested ($)
Equity
Incentive
Plan
Awards:
Number of
Unearned
Shares,
Units or
Other
Rights
That Have
Not Vested
Equity
Incentive
Plan
Awards:
Market or
Payout
Value of
Unearned
Shares, Units
or Other
Rights That
Have Not
Vested
 
Peter Dameris
   
130,091
     
       
5.22
     
11/12/13
                   
     
275,000
     
       
5.11
     
3/23/14
                   
     
50,000
     
       
4.45
     
9/27/14
                   
     
100,000
     
       
6.68
     
8/29/15
                   
     
82,500
     
55,000
(3)
     
11.39
     
12/14/16
                   
     
31,020
     
20,680
(4)
     
11.75
     
6/1/17
                   
                                       
62,675
(6)
448,126
78,369
(25)
560,338
 
                                       
42,553
(22)
304,254
90,252
(26)
645,302
 
                                       
28,300
(23)
202,345
108,108
(27)
800,000
 
                                       
10,466
(24)
74,832
   
800,000
(28)
                                                 
800,000
(29)
James Brill
   
72,932
     
27,092
(8)
     
11.75
     
1/1/17
                   
                                       
16,250
(10)
116,188
       
                                       
27,586
(11)
197,240
       
                                       
46,561
(12)
332,911
       
Emmett McGrath
   
74,209
     
       
4.97
     
8/30/14
                   
     
33,791
     
       
4.96
     
12/10/14
                   
     
7,187
     
7,813
(9)
     
6.38
     
1/2/18
                   
                                       
7,875
(15)
56,306
       
                                       
5,224
(16)
37,352
       
                                       
15,673
(17)
112,062
       
                                       
26,455
(18)
189,153
       
                                                     
Michael McGowan
  &#