Exhibit 10.18

 

EXECUTIVE AGREEMENT

 

THIS EXECUTIVE AGREEMENT (this “Agreement”) is made as of December 31, 2004,
between On Assignment, Inc., a Delaware corporation (the “Company”), and Ronald
W. Rudolph ( “Mr. Rudolph”).

 

Recitals

 

A.                                   Mr. Rudolph currently serves as the
Executive Vice President, Finance and Chief Financial Officer of the Company.

 

B.                                     Mr. Rudolph desires to retire from the
Company.

 

C.                                     The Company desires to retain Mr.
Rudolph’s services for a transition period and to provide certain retirement
benefits to Mr. Rudolph in accordance with the terms of this Agreement.

 

D.                                    Concurrently with the execution and
delivery of this Agreement, Mr. Rudolph and the Company are entering into a
separate, one-year consulting agreement (the “Consulting Agreement”) pursuant to
which Mr. Rudolph shall provide the Company with the consulting services
specified therein.

 

NOW, THEREFORE, the parties intending to be legally bound hereby agree as
follows:

 

ARTICLE 1
SEPARATION

 

1.1                                 Retirement.  Concurrently with the execution
and delivery of this Agreement, Mr. Rudolph is delivering to the Board of
Directors of the Company (the “Board”) notice of his intent to retire from the
Company and resign as Executive Vice President, Finance and Chief Financial
Officer, as well as from all positions he holds as an officer and employee of
the Company and as an officer and director of the Company’s subsidiaries as of
the close of business on January 31, 2005 (the “Retirement Date”).  From the
date hereof and through the Retirement Date, Mr. Rudolph shall continue to
receive all compensation, benefits, and other associated employee rights and
privileges to the same extent as in effect as of the date hereof.

 

1.2                                 Voluntary Termination.  Mr. Rudolph
represents that he has carefully read and fully understands all of the
provisions of this Agreement, that he is competent to execute and deliver this
Agreement and that he is knowingly and voluntarily terminating his employment
and entering into this Agreement of his own free will and accord, without
reliance upon any statement or representation of

 

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the Company or any affiliate, representative or agent thereof, other than
statements and representations expressly set forth in this Agreement.

 

ARTICLE 2
PAYMENTS AND BENEFITS

 

2.1                                 Retirement Payments.  Upon execution of this
Agreement by Mr. Rudolph, the Company shall pay Mr. Rudolph the sum of $25,000
(the “Lump Sum Payment”) and make additional payments (the “Continuation
Payments”) to him from the Retirement Date through January 31, 2006 (such date,
the “Ending Date” and such time period, the “Payment Period”).  The Company
shall make Continuation Payments to Mr. Rudolph equal in the aggregate to
$245,400.00, payable on a monthly or bi-weekly basis, consistent with the
Company’s practice during the Payment Period with respect to the timing of
salary payments to its employees.  The Lump Sum Payment shall be made
concurrently with the first Continuation Payment.  Such payments are not
conditional on Mr. Rudolph’s performance of the Consulting Agreement or Mr.
Rudolph’s employment through the Retirement Date.  In the event of Mr. Rudolph’s
death during the Payment Period, all Continuation Payments then remaining
unpaid, whether due or to become due, shall be paid in a lump sum to his estate
within sixty (60) days following receipt by the Company of notification of Mr.
Rudolph’s death from Mr. Rudolph’s executor or trustee of his estate.

 

2.2                                 Benefits Continuation.  During the Payment
Period, the Company shall provide benefits and pay the premiums with respect to
the insurance coverage set forth on Schedule I for Mr. Rudolph and, as
applicable, his family in the case of insurance premiums, on the same terms and
subject to the same conditions applicable immediately prior to the Retirement
Date, including without limitation employee contributions and co-payments.

 

2.3                                 Reconciliation of Expenses.  Within thirty
(30) days following the Retirement Date, Mr. Rudolph shall deliver to the
Company a final expense report, accompanied by supporting documentation
consistent with the Company’s current policies and practices.  Within twenty
(20) days following receipt of such expense report, the Company shall pay to Mr.
Rudolph any amount owing to him that is in excess of the advances against
expenses made by the Company to Mr. Rudolph prior to the Retirement Date.  In
the event that such advances against expenses exceed the amount set forth on the
expense report for which Mr. Rudolph is entitled to reimbursement, the Company
shall advise Mr. Rudolph of the amount of such excess (the “Expense Overage”),
and Mr. Rudolph shall pay the amount of the Expense Overage to the Company
within ten (10) days thereafter.  In the event that Mr. Rudolph does not pay
such amount within such 10-day period, the Company shall be entitled to deduct
the amount of the Expense Overage from any Continuation Payment owed to Mr.
Rudolph thereafter, to the extent permitted by law.

 

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ARTICLE 3
STOCK OPTIONS

 

3.1                                 Acceleration of Options.  The Company
granted to Mr. Rudolph the options to purchase common stock of the Company set
forth in Schedule II (collectively, the “Options”).  Mr. Rudolph does not hold
any options or other rights to purchase common stock of the Company, other than
the Options.

 

3.2                                 Acceleration of Certain Options.  The terms
of each of the options granted on July 18, 2003, and March 23, 2004 (the
“Continuing Options”), are hereby amended so that (a) each of the Continuing
Options shall be fully vested and exercisable as of the date hereof, and
(b) each of the Continuing Options shall expire and cease to be exercisable as
of the date that is ninety (90) days after the later of (i) the one-year
anniversary of the Retirement Date and (ii) the expiration or termination of the
Consulting Agreement or any other continued service relationship mutually agreed
to by the parties (the “Option Expiration Date”).  All Options other than the
Continuing Options shall expire as of the Retirement Date.

 

3.3                                 Other Terms Unchanged.  All other terms of
the Options shall remain unchanged and in full force and effect.

 

ARTICLE 4
OTHER BENEFITS

 

4.1                                 Communications Equipment.  Mr. Rudolph
acknowledges and understands that all communications and other equipment
provided to Mr. Rudolph by the Company, purchased by the Company for Mr. Rudolph
or purchased by Mr. Rudolph and reimbursed by the Company is property of the
Company and shall be returned to the Company on the Retirement Date or
immediately upon request after the Retirement Date; provided, however, that
Mr. Rudolph shall be entitled to retain usage of any communications or other
equipment that the Company agrees is reasonably necessary or appropriate in
connection with Mr. Rudolph’s provision of services to the Company pursuant to
the Consulting Agreement.

 

ARTICLE 5
RESTRICTIONS

 

5.1                                 Definitions and Interpretation.  For
purposes of this Article 5:

 

5.1.1                        References to the “Company” shall include the
Company and its subsidiaries. 

 

5.1.2                        “Proprietary Information” means any and all data
and information concerning the business affairs of the Company, other than
information released to or otherwise generally known by the public or within the
staffing industry.  Without limiting the generality of the foregoing,
“Proprietary

 

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Information” shall expressly include information relating to any of the
Company’s (a) past, present or prospective business opportunities, including
information concerning acquisition or merger opportunities, (b) current or
prospective clients, including current or prospective client lists, (c) manners
of operation, business plans and processes, or marketing and recruitment
efforts, (d) financial results and projections, (e) personnel records, or
(f) trade secrets, without regard to whether any of the foregoing matters are
deemed confidential, material or important.  “Proprietary Information” does not,
however, include any information that Mr. Rudolph has obtained from a person
other than an employee or director of the Company, which was disclosed to him
without a breach of a duty of confidentiality.

 

5.1.3                        “Records” means (i) any and all procedure manuals,
books, records and accounts; (ii) all papers, notebooks, tapes and similar
repositories containing Proprietary Information; (iii) all invoices and
commission reports; (iv) client lists, whether partial or complete; (v) data
layouts, magnetic tape layouts, and diskette layouts; (vi) promotional letters,
brochures and advertising materials; (vii) displays and display materials;
(viii) correspondence and/or proposals (whether or not current) to any former,
present or prospective customer of the Company; (ix) financial statements and
information concerning revenues and profitability and any other financial
results of the Company, other than financial statements and information publicly
released by the Company; (x) information concerning the Company which was input
by Mr. Rudolph or at his direction, under his supervision or with his knowledge,
including on any floppy disk, diskette, cassette or similar device used in, or
in connection with, any computer, recording devices or typewriter; (xi) data,
account information or other matters furnished by clients of the Company; and
(xii) all copies of any of the foregoing data, documents or devices whether in
the form of carbon copies, photocopies, copies of floppy disks, diskettes, tapes
or in any other manner whatsoever.

 

5.1.4                        “Third Party Information” means confidential and
proprietary information received by the Company from third parties, including
without limitation clients and vendors.

 

5.1.5                        “Work Product” means any inventions, innovations,
improvements, developments, methods, processes, programs, designs, analyses,
drawings, reports and all similar or related information (whether or not
patentable) that relate to the Company’s actual or anticipated business,
research and development, or existing or future products or services and that
were conceived, developed, contributed to, made, or reduced to practice by Mr.
Rudolph (either solely or jointly with others) while employed by the Company
(including any of the foregoing that constitutes any Proprietary Information or
Records).

 

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5.2                                 Confidentiality. 

 

5.2.1                        Mr. Rudolph acknowledges that any Proprietary
Information disclosed or made available to him or obtained, observed or known by
him as a direct or indirect consequence of his employment with the Company are
the property of the Company.  Therefore, Mr. Rudolph agrees that he will not at
any time (whether during or after the Payment Period) disclose or permit to be
disclosed to any person or, directly or indirectly, utilize for his own account
or permit to be utilized by any person any Proprietary Information or Records
for any reason whatsoever without the Board’s written consent. 

 

5.2.2                        Mr. Rudolph has delivered, or will deliver by the
end of the business day on the Retirement Date, or at any other time the Company
may reasonably request in writing (whether during or after the Payment Period),
all Records which he may then possess or have under his control.  

 

5.2.3                        The provisions of this Section 5.2 shall be in
addition to, and shall not in any way limit, any and all other confidentiality
agreements (or other agreements limiting the use of information) signed by Mr.
Rudolph  in connection with his employment with the Company (collectively, the
“Other Confidentiality Agreements”).

 

5.2.4                        If Mr. Rudolph is required by law or governmental
regulation or by subpoena or other valid legal process to disclose any
Proprietary Information or Third Party Information to any Person, Mr. Rudolph
will immediately provide the Company with written notice of the applicable law,
regulation or process so that the Company may seek a protective order or other
appropriate remedy.  Mr. Rudolph will cooperate fully with the Company and the
Company’s representatives in any attempt by the Company to obtain any such
protective order or other remedy.  If the Company elects not to seek, or is
unsuccessful in obtaining, any such protective order or other remedy in
connection with any requirement that Mr. Rudolph disclose Proprietary
Information or Third Party Information, and if Mr. Rudolph furnishes the Company
with a written opinion of reputable legal counsel acceptable to the Company
confirming that the disclosure of such Proprietary Information or Third Party
Information is legally required, then Mr. Rudolph may disclose such Proprietary
Information or Third Party Information to the extent legally required; provided,
however, that Mr. Rudolph will use his best efforts to ensure that such
Proprietary Information is treated confidentially by each person to whom it is
disclosed.

 

5.3                                 Assignment of Work Product.  Mr. Rudolph
acknowledges that all Work Product belongs to the Company, and Mr. Rudolph
hereby assigns, and agrees to assign, all Work Product to the Company.  Any
copyrightable work prepared in whole or in part by Mr. Rudolph in the course of
his work for the Company as an employee or a consultant shall be deemed a “work
made for hire” under all applicable copyright laws, and the Company shall own
all rights therein. To the extent that any such copyrightable work is not a
“work made for hire,” Mr. Rudolph

 

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hereby assigns and agrees to assign to the Company all of his right, title and
interest, including without limitation, copyright in and to such copyrightable
work.  Mr. Rudolph shall promptly disclose such Work Product and copyrightable
work to the Board and perform all actions reasonably requested by the Board
(whether during or after the Payment Period) to establish and confirm the
Company’s ownership therein (including, without limitation, execution of
assignments, consents, powers of attorney and other instruments). 
Notwithstanding anything contained in this Section 5.3 to the contrary, in
accordance with the provisions of Section 2870 of the California Labor Code, the
Company’s ownership of Work Product does not apply to any invention that (a) Mr.
Rudolph developed entirely on his own time without using the equipment, supplies
or facilities of the Company or any Proprietary Information (including trade
secrets) and (b) does not relate directly to the business of the Company. 

 

5.4                                 No Limitation on General Knowledge or Public
Information.  Nothing in this Agreement shall be construed to prevent Mr.
Rudolph from disclosing or using in future employment or business ventures (a)
any information known to him prior to his employment with the Company, (b) his
general knowledge and experience, or (c) information known or that becomes known
to and available for use by the public, other than as a direct or indirect
result of Mr. Rudolph’s acts or omissions in violation of this Article 5 or the
Other Confidentiality Agreement.

 

5.5                                 Enforcement; Injunctive Relief.  If, at the
time of enforcement of any provision of this Article 5, a court determines that
the restrictions stated herein are unreasonable under circumstances then
existing, the parties hereto agree that the maximum duration, scope or
geographical area reasonable under such circumstances as determined by the court
shall be substituted for the stated period, scope or area.  Because Mr.
Rudolph’s services are unique, because Mr. Rudolph has had access to Proprietary
Information and for other reasons set forth herein, the parties hereto agree
that money damages would be an inadequate remedy for any breach of this
Article 5.  Therefore, in the event of a breach or threatened breach of this
Article 5, the parties hereto or their successors or assigns may, in addition to
other rights and remedies existing in their favor, apply to any court of
competent jurisdiction for specific performance and/or injunctive or other
relief in order to enforce, or prevent any violations of, the provisions hereof
(without posting a bond or other security).

 

ARTICLE 6
RELEASE OF ALL CLAIMS

 

6.1                                 Release by the Company.  The Company,
intending to be legally bound, on behalf of itself and its directors, officers,
other affiliates, employees, representatives or agents (collectively, the
“Company Parties”), hereby irrevocably releases, acquits and forever discharges
Mr. Rudolph from any and all causes of actions, suits, debts, claims,
liabilities, obligations and demands whatsoever, in law

 

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or in equity (collectively, “Claims”) that the Company or any of the Company
Parties might have as of the date hereof (or might have had prior to the date
hereof) against Mr. Rudolph, whether known or unknown, in respect of his
employment with or separation from the Company. 

 

6.2                                 Release by Mr. Rudolph.  Effective as of the
date hereof, Mr. Rudolph, on behalf of himself and his heirs, executors,
assigns, affiliates, representatives and agents (the “Rudolph Parties”), hereby
irrevocably releases, acquits, and forever discharges the Company and the
Company Parties from any and all Claims that Mr. Rudolph or any of the Rudolph
Parties may have as of the date hereof against the Company or any of the Company
Parties, as well as any and all Claims resulting from an act which has been
taken, or a failure to act which has occurred, on or before the date hereof, in
respect of his employment with or separation from the Company (collectively, the
“Released Claims”).  The Released Claims shall include without limitation any
and all claims, demands and causes of action under federal, state or local law,
including without limitation, Claims under:

 

•                  the Civil Rights Acts of 1866 and 1964, as amended, 42 U.S.C.
§§ 1981 and 2000(e) et seq.;

 

•                  the Civil Rights Act of 1991;

 

•                  the Age Discrimination in Employment Act, as amended, 29
U.S.C. § 621 et seq.;

 

•                  the Americans with Disabilities Act of 1990, as amended, 42
U.S.C. §§ 12,101 et seq.;

 

•                  the Rehabilitation Act of 1973, as amended, 29 U.S.C. § 701
et seq.;

 

•                  the Family and Medical Leave Act of 1993, 29 U.S.C. § 2601 et
seq.;

 

•                  the Fair Labor Standards Act, 29 U.S.C. §§ 201 et seq.;

 

•                  the Employee Retirement Income Security Act, 29 U.S.C. § 1001
et seq.;

 

•                  the California Fair Employment and Housing Act, as amended,
Cal. Gov’t Code § 12900 et seq.;

 

•                  the California Labor Code;

 

•                  the California Family Rights Act of 1993, Cal. Gov’t Code
§ 12945.1 et seq.;

 

•                  the California Equal Pay Law, Cal. Lab. Code § 1197.5;

 

•                  the Unruh Civil Rights Act, Cal. Civ. Code § 51 et seq.; or

 

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•                  any other federal, state or local laws, regulations and
ordinances governing discrimination in employment.

 

6.3                                 Acknowledgement of Effect of Release.  Mr.
Rudolph acknowledges and confirms that he understands that, by signing this
Agreement, he will be waiving any right he may have had to pursue or bring a
lawsuit or make any legal claim against the Company or the Company Parties in
respect of the Released Claims.  Mr. Rudolph further acknowledges and confirms
that he understands that, by signing this Agreement, he will be specifically
releasing all claims he may have against the Company or any of the Company
Parties under the Age Discrimination In Employment Act, as amended, 29 U.S.C.
§ 621 et seq., which statute may provide him with substantial rights and
protections. 

 

6.4                                 Waiver of Unknown Claims.  Each of the
parties acknowledges that he or it is aware that he or it may hereafter discover
facts different from, or in addition to, what he or it now (or as of the date
hereof) knows or believes to be true.  Each of the parties nonetheless agrees
that the release provided by such party in or pursuant to this Article 6 shall
be and remain in full force and effect in all respects as a complete and general
release as to the matters so released.  Each party acknowledges that he or it
has been informed of Section 1542 of the California Civil Code, and does hereby
expressly waive and relinquish all rights and benefits that he or it may have
under such Section 1542 or under any similar statutes, laws, rules or principles
of any applicable jurisdiction.  Section 1542 of the California Civil Code reads
in its entirety as follows:

 

A general release does not extend to claims that the creditor does not know or
suspect to exist in his favor at the time of executing the release, which if
known by him must have materially affected his settlement with the debtor.

 

6.5                                 No Pending Suits; Covenant Not to Sue.  Mr.
Rudolph confirms that he has not filed any lawsuits or administrative complaints
against the Company and that he does not believe there is any reasonable basis
for any such lawsuit or complaint.  Mr. Rudolph knowingly and voluntarily
covenants not to sue or otherwise pursue legal action against the Company in
respect of any of the Released Claims.  In the event of any violation of this
Section 6.5, the Company’s obligation to make any payments to Mr. Rudolph
hereunder shall immediately cease. 

 

6.6                                 Contribution and Indemnification. The
parties specifically acknowledge that this Agreement shall not affect any right
to contribution and/or indemnification which Mr. Rudolph may have, whether
pursuant to insurance carried by the Company, the bylaws of the Company or
otherwise, or the Indemnification Agreement of April 1, 1995, by and between the
Company and Mr. Rudolph (the “Indemnification Agreement”) in connection with any
third-party

 

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claim (including shareholder derivative claims) insofar as such third-party
claims relate to events, actions or omissions which occurred on or before the
Retirement Date.  As of the date hereof, the Company is not aware of any
third-party or shareholder derivative claim against the Company or Mr. Rudolph
for which Mr. Rudolph is, or might in the future be, entitled to contribution or
indemnification from the Company.

 

6.7                                 Continuing Obligations.  Notwithstanding the
releases set forth in this Agreement, the parties acknowledge and confirm their
existing respective obligations under the provisions of this Agreement, the
Other Confidentiality Agreements, the written option agreements between Mr.
Rudolph and the Company in respect of the Options (as amended hereby), the
Company’s Deferred Compensation Plan, and the Indemnification Agreement.

 

ARTICLE 7
ACKNOWLEDGEMENTS

 

7.1                                 Advice of Counsel.  Mr. Rudolph acknowledges
and confirms that (a) the Company has advised him, and by this Agreement is
advising him in writing, to consult with his own legal, tax and financial
advisors in connection with the review, negotiation and execution of this
Agreement, (b) in reviewing, negotiating and determining to execute this
Agreement, he has and is relying on his own legal, tax and financial advisors,
and (c) neither the Company nor any of its directors, officers, employees or
representatives has made any statement to Mr. Rudolph that Mr. Rudolph has
construed, or is relying upon, as legal, tax or financial advice.  Mr. Rudolph
confirms that he has had sufficient time and opportunity to consult with the
legal, tax and financial advisors of his choice prior to executing this
Agreement.

 

7.2                                 Time for Review; Revocation.  Mr. Rudolph
acknowledges and confirms that he understands that:

 

(a)                  he had at least 21 days from the date this Agreement was
given to him within which to consider whether to enter into this Agreement;
however, after having an opportunity to consult with legal counsel, he has
freely and voluntarily elected to execute and deliver this Agreement prior to
the expiration of such 21-day consideration period;

 

(b)                 he may revoke this Agreement within seven (7) days after he
executes it by providing written notification of such revocation to the Company
as set forth in Section 8.1; provided that, in order for any revocation of this
Agreement to be effective, notice must be received by the Company no later than
5:00 p.m. on the seventh calendar day after the date on which Mr. Rudolph
executes this Agreement;

 

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(c)                  this Agreement will not be enforceable, unless and until
the seven day revocation period described in subpart (b) above has expired
without being revoked; and

 

(d)                 he would not be entitled to any payments or other benefits
hereunder, but for his execution and delivery of this Agreement; and he will not
be entitled to any payments or other benefits hereunder, if he revokes this
Agreement pursuant to subpart (c) above.

 

7.3                                 Payment for Past Services.  Mr. Rudolph
hereby acknowledges and confirms that he has received all salary, wages, and
other compensation due Mr. Rudolph to which he is entitled to receive as of the
date hereof.  Such acknowledgement and confirmation will not relate to any
payments that become payable by the Company pursuant to this Agreement, the
Options, the Company’s Deferred Compensation Plan or the Indemnification
Agreement.

 

ARTICLE 8
GENERAL PROVISIONS

 

8.1                                 Notices.  Any notice required or permitted
to be provided hereunder shall be in writing and shall be delivered either
personally, by facsimile (with the original sent by U.S. mail) or by a courier
service of national reputation to the recipient at the address and/or fax number
set forth below, or such other address as the recipient shall have specified by
prior notice in accordance herewith.  A notice shall be deemed to have been
given (a) when delivered, if delivered personally, (b) upon receipt of
confirmation of a successful send, if sent by facsimile, and (c) on the date
guaranteed for delivery, if sent by courier service.

 

If to Mr. Rudolph:

 

26651 West Agoura Road

Calabasas, CA  91302

Fax:  (818) 880-5245

 

with a copy to:

 

Heller Ehrman (Venture Law Group)

2775 Sand Hill Road

Menlo Park, CA  94025-7019

Attention:  Renee R. Deming

Fax:  (650) 324-0638

 

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If to the Company:

 

On Assignment, Inc.

26651 West Agoura Road

Calabasas, CA  91302

Attention:  Chief Executive Officer

Fax:  (818) 880-0056

 

with a copy to:

 

Hogan & Hartson LLP

2049 Century Park East, Suite 700

Los Angeles, CA  90067

Attention:  Carissa Coze, Esq.

Fax:  310-789-5400

 

8.2                                 Other Arrangements.  The compensation and
benefits to be provided hereunder shall be in lieu of, and not in addition to,
any other severance, separation or similar benefits to which Mr. Rudolph might
be entitled to receive from the Company, as of the date hereof or hereafter. 
Without limiting the generality of the foregoing, Mr. Rudolph acknowledges and
confirms that he shall not be entitled to any benefits under the Company’s
Change in Control Severance Plan. 

 

8.3                                 Deferred Compensation Plan.  This Agreement,
except to the extent that it confirms the termination of Mr. Rudolph’s
employment with the Company as of the Retirement Date, shall have no effect on
Mr. Rudolph’s rights under the Company’s Deferred Compensation Plan.

 

8.4                                 Integration.  This Agreement, including the
Exhibit and Schedules hereto, constitutes the entire agreement of the parties,
and supersedes any prior understandings, agreements or representations by the
parties, whether written or oral, with respect to the subject matter hereof;
provided, however, that this Agreement supplements but does not supersede the
Other Confidentiality Agreements, the Deferred Compensation Plan, the written
option agreements between Mr. Rudolph and the Company in respect of the Options
(as amended hereby), or the Indemnification Agreement.

 

8.5                                 Severability.  Each provision of this
Agreement shall be interpreted in a manner so as to be effective and legally
valid under applicable law.  If any provision of this Agreement is held to be
invalid, illegal or unenforceable in any circumstance, after taking into account
Section 5.5 if applicable, the offending provision shall be amended so as to be
valid, legal and enforceable in such circumstance, to the fullest extent
possible.  If the offending provision cannot be so amended, it shall be stricken
from this Agreement, but the remainder of the Agreement shall remain in full
force and effect.

 

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8.6                                 Counterparts; Facsimile Transmission. This
Agreement may be executed in two counterparts, each of which shall deemed to be
an original and both of which taken together shall constitute one and the same
agreement.  Each party to this Agreement agrees that it will be bound by its own
facsimile (telefax) signature and that it accepts the facsimile (telefax)
signature of the other party to this Agreement.

 

8.7                                 Choice of Law; Jurisdiction.  All questions
concerning the construction, validity and interpretation of this Agreement will
be governed by and construed in accordance with the internal laws of the State
of California, without giving effect to any choice of law or conflict of law
provision or rule (whether of the State of California or any other jurisdiction)
that would cause the application of the laws of any jurisdiction other than the
State of California. 

 

8.8                                 Arbitration.

 

8.8.1                        Except as provided in Section 8.8.5, the parties
agree that any dispute or controversy arising out of, relating to, or in any way
connected to this Agreement or the interpretation, validity, construction,
performance, breach, or termination thereof shall be settled by binding neutral
arbitration in accordance with the then in effect American Arbitration
Association National Rules for the Resolution of Employment Disputes (the “AAA
Rules”).  The arbitrator may grant injunctions or other relief in such dispute
or controversy.  The decision of the arbitrator shall be in writing, and shall
be final, conclusive, and binding on the parties to the arbitration.  Judgment
may be entered on the arbitrator’s decision in any court of competent
jurisdiction.

 

8.8.2                        Each of the parties understands that, by consenting
to the arbitration provisions of this Agreement, he or it is waiving their right
to a jury trial.

 

8.8.3                        The arbitrator shall apply California law to the
merits of any dispute or claim, without reference to rules of conflicts of law. 
The arbitration proceedings shall be governed by the United States Arbitration
Act, 9 U.S.C. Sections 1 et seq., and by the AAA Rules, without reference to
state arbitration law, except that each party shall be entitled to discovery of
essential documents and witnesses, as determined by the arbitrator.  Each party
shall also be entitled to pursue all remedies, damages or claims that would be
available if the case had been litigated in the judicial forum having
jurisdiction over it.

 

8.8.4                        Each of the parties hereby consents to the
exclusive jurisdiction and venue of the state and federal courts located in Los
Angeles County, California for any action or proceeding arising from or relating
to this Agreement, all disputes or issues arising from or relating in any way to
Mr. Rudolph’s relationship with the Company, or any action or proceeding
relating to any arbitration in which the

 

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Company and Mr. Rudolph are participants.  Any arbitration conducted pursuant to
this Agreement shall be held in Los Angeles County, California.

 

8.8.5                        Notwithstanding any other provision to this
Agreement, either party to this Agreement may apply to any court of competent
jurisdiction located in Los Angeles County, California for a temporary
restraining order, preliminary injunction, or other interim or conservatory
relief, as necessary, without breach of this arbitration agreement and without
abridgement of the powers of the arbitrator.

 

8.8.6                        Any arbitration proceedings conducted under the
terms of this Agreement will be conducted confidentially.  All documents,
testimony and records shall be received, heard and maintained by the
arbitrator(s) in confidence and under seal, and shall be available for
inspection only by the arbitrator(s), the parties and their respective attorneys
and their respective experts, who shall agree in advance and in writing to
receive and maintain all such information in confidence.

 

8.8.7                        The Company shall pay all expenses related to the
arbitration that would not have been incurred if the case had been brought in
court.  However, the prevailing party may recover his or its reasonable
attorneys’ fees and expenses to the extent permitted by law.

 

8.9                                 Successors and Assigns.  This Agreement
shall bind and inure to the benefit of and be enforceable by Mr. Rudolph, the
Company and their respective successors and permitted assigns; provided,
however, that the rights and obligations of Mr. Rudolph hereunder shall not be
assignable and, provided further that, the rights and obligations of the Company
may be assigned to any affiliate of the Company or any successor of the Company
by operation of law upon a merger or consolidation or any purchaser of all or
substantially all of the Company’s assets (a “Change in Control”).  In the event
of a Change in Control, the Company shall be obligated to (a) cause the
Company’s successor to assume all obligations under this Agreement or (b) pay
all then unpaid Continuation Payments in a lump sum within five (5) business
days following the consummation of the Change in Control. 

 

8.10                           Waivers; Remedies.  A party hereto may waive any
right or remedy hereunder only in writing.  A waiver by a party hereto of any
right or remedy hereunder on any one occasion shall not be construed as a bar to
any right or remedy that such party would otherwise have on any other occasion. 
No failure to exercise nor any delay in exercising on the part of any party
hereto, any right, power or privilege hereunder shall preclude any other or
further exercise thereof or the exercise of any other right, power or
privilege.  The rights and remedies herein provided are cumulative and may be
exercised singly or concurrently, and are not exclusive of any rights or
remedies provided by law.

 

13

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8.11                           Withholding.  The Company shall be entitled to
deduct or withhold from any payments hereunder any federal, state, local or
foreign withholding taxes, excise taxes, or employment taxes imposed with
respect to any payments hereunder by the Company.

 

8.12                           Amendment.  This Agreement may be amended only by
a writing duly executed by both the Company and Mr. Rudolph.

 

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date set forth in the preamble hereto.

 

 

ON ASSIGNMENT, INC.

 

 

 

 

 

By:

/s/ Peter Dameris

 

 

Peter Dameris, President and Chief Executive
Officer

 

 

 

 

 

/s/ Ronald W. Rudolph

 

 

Ronald W. Rudolph

 

14

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SCHEDULE I

Insurance Coverage and Other Benefits

 

Insurance

Medical

Dental

Life & ADD

Basic short-term disability

Basic long-term disability

 

Other Benefits

 

Annual physical examination (up to $1,500 to cover cost of examination to the
extent not covered by insurance)

 

Tax & Financial Planning (up to $2,500 for tax preparation services for the 2004
calendar year)

 

Legal Fees (up to $4,000 for legal services in connection with the negotiation
and preparation of the Executive Agreement and Consulting Agreement by and
between Mr. Rudolph and the Company)

 

15

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SCHEDULE II

Stock Options as of December 31, 2004

 

Options Held by Mr. Rudolph Immediately Prior to the date hereof (the
“Options”):

 

OPTION

 

Company
Ref. No.

 

Grant Date

 

Ex. Price

 

No. of Shares

 

ISO/NQ

 

Vested

 

Unvested

1.

 

000866

 

12/16/1997

 

 

$

11.37500

 

733.00

 

0.00

 

ISO

 

2.

 

010867

 

12/16/1997

 

 

$

11.37500

 

310.00

 

0.00

 

NQ

 

3.

 

001038

 

12/9/1998

 

 

$

16.21900

 

5,000.00

 

0.00

 

ISO

 

4.

 

001039

 

12/9/1998

 

 

$

16.21900

 

4,584.00

 

0.00

 

NQ

 

5.

 

001233

 

12/9/1999

 

 

$

13.68750

 

8,684.00

 

0.00

 

ISO

 

6.

 

001234

 

12/9/1999

 

 

$

13.68750

 

6,316.00

 

0.00

 

NQ

 

7.

 

001470

 

12/4/2000

 

 

$

23.75000

 

4,211.00

 

0.00

 

ISO

 

8.

 

001471

 

12/4/2000

 

 

$

23.75000

 

30,789.00

 

0.00

 

NQ

 

9.

 

001705

 

7/2/2001

 

 

$

17.97000

 

0.00

 

3,646.00

 

ISO

 

10.

 

001706

 

7/2/2001

 

 

$

17.97000

 

21,354.00

 

0.00

 

NQ

 

11.

 

001795

 

1/31/2002

 

 

$

19.86000

 

0.00

 

2,465.00

 

ISO

 

12.

 

001796

 

1/31/2002

 

 

$

19.86000

 

25,521.00

 

7,014.00

 

NQ

 

13.

 

002211

 

7/18/2003

 

 

$

5.25000

 

2.00

 

28,685.00

 

ISO

 

14.

 

002212

 

7/18/2003

 

 

$

5.25000

 

30,102.00

 

26,211.00

 

NQ

 

15.

 

002351

 

3/23/2004

 

 

$

5.11000

 

0.00

 

8,708.00

 

ISO

 

16.

 

002352

 

3/23/2004

 

 

$

5.11000

 

5,625.00

 

15,667.00

 

NQ

 

 

Options Vested and Exercisable as of the date hereof until the Option Expiration
Date, pursuant to Sections 3.2 of the Agreement (the “Continuing Options”):

 

OPTION

 

Company
Ref. No.

 

Grant Date

 

Ex. Price

 

No. of Shares
Vested and Exercisable

 

 

13

 

002211

 

7/18/2003

 

 

$

5.25000

 

28,687

 

 

14

 

002212

 

7/18/2003

 

 

$

5.25000

 

56.313

 

 

15

 

002351

 

3/23/2004

 

 

$

5.11000

 

8,708

 

 

16

 

002352

 

3/23/2004

 

 

$

5.11000

 

21,292

 

 

 

16

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