Exhibit 10.16


 


SENIOR EXECUTIVE AGREEMENT


 


THIS
AGREEMENT by and between ON ASSIGNMENT, INC., a Delaware corporation (the “Company”) and EMMETT MCGRATH (“Executive”)
is made as of July 23, 2004.


 


Recitals


 


A.            The
Company and Executive desire to enter into an agreement pursuant to which
Executive will be employed as the President of the Company’s U.S. Lab Support
Division (the “Division”), on the terms and
conditions set forth in this Agreement..


 


B.            Certain definitions are set forth in
Section 4 of this Agreement.


 


Agreement


 


The
parties hereto agree as follows:


 


1.             Employment.
 The Company shall engage
Executive as of August 30, 2004 (the “Start Date”) to
serve as the President of the Company’s U.S. Lab Support Division, and
Executive shall serve the Company, during the Service Term in the capacities,
and subject to the terms and conditions, set forth in this Agreement.


 


(a)           Services.  During the Service Term, Executive, as
President of the Company’s U.S. Lab Support Division, shall be responsible for
the day-to-day operations of the Company’s Lab Support line of business in the
United States and all other duties and responsibilities as may be reasonably
assigned to him from time to time by the Company’s Chief Executive Officer or
Chief Operating Officer (the “COO”).  Executive will report directly to the
COO.  Executive will devote his best
efforts and substantially all of his business time and attention (except for
vacation periods and periods of illness or other incapacity) to the business of
the Company and its Affiliates. 
Notwithstanding the foregoing, and provided that such activities do not
interfere with the fulfillment of Executive’s obligations hereunder, Executive
may (A) serve as an officer, director or trustee of any charitable or
non-profit entity; (B) own a passive investment in any private company
that is not a competitor of the Company and own up to 2% of the outstanding
voting securities of any public company; and/or (C) subject to the Company’s
reasonable approval, serve as a director of a for-profit company, provided that Executive reasonably believes that such
service would be in the interests of the Company.  Executive’s place of employment shall be one
of the Company’s offices in or around Santa Clara, California; provided, however, that Executive shall spend a minimum of
five (5) days per month in the Company’s headquarters in Calabasas, California
and shall travel to such other locations of the Company and its Affiliates as
may be reasonably necessary in order to discharge his duties hereunder.  Executive shall not be required to re-locate
his place of employment to the Company’s headquarters; however, in the event
that the COO and Executive mutually determine that it would be in the interests
of the Company for 


 





















 


Executive to re-locate
his place of employment to the Company’s headquarters, Executive shall be
entitled to reimbursement and/or compensation for certain costs and expenses
incurred in connection with such relocation, as negotiated by Executive and the
Company.


 


(b)           Salary, Bonus and Benefits.


 


(i)            Salary
and Bonus.  During
the Service Term, the Company will pay Executive a base salary (the “Annual Base Salary”) as the Board (or Compensation
Committee thereof) may designate from time to time, at the rate of not less
than $200,000 per annum; provided, however,
that the Annual Base Salary shall be subject to review annually (at the end of
each fiscal year of the Company) by the Board (or Compensation Committee
thereof) for upward increases thereto. 
Executive will be eligible to receive an annual bonus in an amount of up
to 100% of Executive’s Annual Base Salary for such fiscal year, as determined
by the Compensation Committee of the Board based upon the following:  Promptly following the Start Date and at the
beginning of each fiscal year of the Company that commences during the Service
Term, the COO and Executive shall cooperate with each other in good faith to
determine plan targets (the “Financial Targets”),
which shall be a combination of targets for revenue, gross profit and operating
margin of the Company’s U.S. Lab Support operations.  The Financial Targets shall be subject to
approval by the Compensation Committee of the Board.  Executive shall be entitled to a bonus of up
to 50% of the Annual Base Salary if the Financial Targets, as approved by the
Compensation Committee, are met. 
Executive shall be eligible for an additional bonus of up to 50% of the
Annual Base Salary (thereby making the total bonus opportunity 100% of the
Annual Base Salary), which may be awarded in the discretion of the COO in
consultation with the Compensation Committee, and shall be based upon
over-achievement of the Financial Targets and/or accomplishment of key
operating objectives determined by the COO.  
With respect to fiscal year 2004, Executive shall be entitled to the
foregoing bonus pro rated based upon the number of days remaining in the fiscal
year from and after the Start Date; provided, that
Executive shall be entitled to a minimum bonus of $50,000 for fiscal year 2004,
which shall be due and payable to Executive on or prior to March 30, 2005.  Executive’s bonus hereunder, if any, in any
subsequent year shall be due and payable to Executive prior to March 30 of the
following fiscal year.


 


(ii)           Benefits.  Executive shall be entitled to the benefits
set forth in this Section 1(b)(ii) during the Service Term, but only
during the Service Term unless explicitly provided to the contrary.  Executive shall be entitled to participate in
and shall receive all benefits under pension benefit plans provided by the
Company (including without limitation participation in any Company incentive,
savings and retirement plans, practices, policies and programs) to the extent
applicable generally to other peer executives of the Company.  In addition, the Executive and/or the
Executive’s family shall be entitled to participate and shall 


 


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receive
all benefits under welfare plans provided by the Company (including without
limitation medical prescriptions, dental, disability, employee life, group
life, accidental life and travel accident insurance plans) to the extent and on
the same basis applicable generally to other peer executives of the
Company.  In the event that Executive is
not eligible to participate in any of the Company’s welfare benefit plans as of
the Start Date, the Company shall reimburse Executive for any payments
Executive is required to make to his former employer to continue his
participation in each of such employer’s welfare benefit plans, until such time
as Executive is eligible to participate in the analogous welfare benefit plan
of the Company; provided, however,
that Executive shall be entitled to such reimbursement only (a) so long as his
eligibility for the Company’s welfare benefit plans relates to his time of
service with the Company, and (b) upon presentation of reasonably
acceptable documentation and evidence of payment; and provided
further that “analogous” shall relate to the subject matter covered
by such plan (e.g., medical or dental) and
shall not be construed to require the provision to Executive of identical or
substantially equivalent benefits to those provided by the former employer’s
plans.  Executive shall be reimbursed for
customary travel and other expenses, subject to standard and reasonable
documentation requirements.  Such travel
reimbursement shall apply to Executive’s travel to and from the Company’s
headquarters in Calabasas, California, for so long as Executive’s primary place
of business is outside of Calabasas, California.  In addition, Executive will receive a car
allowance of $450 per month, which allowance may be used in Executive’s
discretion toward lease or financing payments, maintenance and/or other
car-related expenses.  Executive shall
also be eligible to receive four weeks paid vacation per annum.


 


(iii)         Stock
Options.


 


(A)          On the Start Date, Executive shall
receive a non-qualified stock option grant for the purchase of 75,000 shares of
the common stock of the Company (the “Common
Stock”).  Such option shall
(i) have an exercise price of the fair market value of the Common Stock on
the date of grant, as determined in accordance with the Company’s Restated 1987
Stock Option Plan (the “Stock Plan”);
(ii) vest over a four-year period with 25% vesting on the first anniversary of
the date of grant and monthly thereafter at the rate of 1/36th of
the remainder of the grant (subject to accelerated vesting upon a change of
control or permanent disability to the extent permitted by the Stock Plan); and
(iii) expire not later than the tenth anniversary of the date of grant.


 


(B)           The
other terms and conditions of the foregoing option shall be set in accordance
with the Stock Plan and shall be consistent with the terms contained in stock
option agreements provided to other peer executives of the Company.


 


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(iv)          Change
of Control; Sale of Division.  Executive shall be entitled to participate in
the Company’s existing Change of Control Severance Plan as well as any
successor plan thereto. In the event the Company sells the Division to a third
party, Executive shall be entitled to a lump-sum payment equal to the then
applicable Annual Base Salary ($200,000 as of the Start Date), which payment
shall (A) be made within 30 days following the closing of the sale of the
Division, and (B) be in lieu of any other severance or similar payment to which
Executive may be entitled as a result of such sale or Executive’s termination
of employment with the Company in connection therewith, unless such other
payment is (or payments in the aggregate are) greater than the then applicable
Annual Base Salary, or unless Executive otherwise elects in his sole discretion
to receive such other payment(s), in either of which cases Executive shall be
entitled to such other payment(s) but not the lump-sum payment provided by this
Section 1(b)(iv).


 


(c)           Termination.


 


(i)            Events of Termination.  Executive’s employment with the Company shall
cease upon:


 


(A)          Executive’s death.


 


(B)           Executive’s voluntary retirement.


 


(C)           Executive’s permanent disability,
which means his incapacity due to physical or mental illness such that he is
unable to perform the essential functions of his previously assigned duties for
a period of six months in any twelve month period and such permanent incapacity
has been determined to exist by either (x) the Company’s disability insurance
carrier or (y) by the Board in good faith based on competent medical advice in
the event that the Company does not maintain disability insurance on Executive.


 


(D)          Termination by the Company by the
delivery to Executive of a written notice from the Board, the CEO or the COO
that Executive has been terminated (“Notice of Termination”)
with or without Cause.  “Cause” shall mean:


 


(1)           Executive’s (aa) conviction of a
felony; (bb) Executive’s commission of any other material act or omission
involving dishonesty or fraud with respect to the Company or any of its
Affiliates or any of the customers, vendors or suppliers of the Company or its
Subsidiaries; (cc) Executive’s misappropriation of material funds or assets of
the Company for personal use; or (dd) Executive’s engagement in unlawful
harassment or other 


 


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discrimination
with respect to the employees of the Company or its Subsidiaries;


 


(2)           Executive’s continued substantial and
repeated neglect of his duties, after written notice thereof from the Board,
the CEO or the COO, and such neglect has not been cured within 30 days after
Executive receives notice thereof;


 


(3)           Executive’s gross negligence or
willful misconduct in the performance of his duties hereunder that is
materially and demonstrably injurious to the Company; or


 


(4)           Executive’s engaging in conduct
constituting a breach of Sections 2 or 3 hereof that is not cured
in full within 15 days, and is materially and demonstrably injurious to the
Company, after notice of default thereof, from the Company, as determined by a
court of law.


 


The delivery by the Company of notice to Executive
that it does not intend to renew this Agreement as provided in Section 1(f)
shall constitute a termination by the Company without Cause unless such notice
fulfills the requirements of Section 1(c)(i)(D)(1), (2), (3)
or (4) above.


 


(E)           Executive’s voluntary resignation for
whatever reason by the delivery to the Company and the Board of at least 14
days’ prior written notice from Executive (or 90 days in the case of notice to
the Company that Executive does not intend to renew this Agreement as provided
in Section 1(f)).


 


(ii)           Date
of Termination.  “Date of Termination” means (A) if the
employment is terminated for Cause, the date of receipt of the Notice of
Termination or any later date specified therein, as the case may be; (B) if the
employment is terminated by the Company other than for Cause or Disability, the
Date of Termination shall be the date on which the Company notifies the
Executive of such termination; (C) if the employment is terminated by the
Executive’s resignation, the Date of Termination shall be the date which is fourteen
days following the date on which the Company receives notice of such
resignation; (D) if the Executive’s employment is terminated by reason of
death or disability, the Date of Termination shall be the date of death or the
disability effective date, as the case may be; or (E) if either the
Company or the Executive delivers a notice under Section 1(f)
indicating that it or he is not renewing the Service Term, the Date of
Termination shall be the last day of the then-current Service Term.


 


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(iii)         Rights on Termination.


 


(A)          In the event that termination is by
the Company without Cause (including by operation of the last paragraph of Section 1(c)(i)(D)
above), the Company will continue, for a period of six (6) months commencing on
the Date of Termination (the “Severance
Period”), to pay Executive a monthly or bi-weekly portion of the
Annual Base Salary on regular salary payment dates.  During the Severance Period, the Company will
also pay for Executive’s existing Company insurance coverage.  The payments of Annual Base Salary and
insurance premiums in accordance with this Section 1(c)(iii)(A) are
collectively referred to as “Severance
Payments”. This Section 1(c)(iii)(A) shall not apply
unless the Company and Executive have executed a general release in a form
acceptable to the Company.  In addition,
the Company will pay to Executive in a lump sum any accrued but unused vacation
time.


 


(B)           If
the Company terminates Executive’s employment for Cause, or if Executive
resigns for whatever reason (including by the Executive’s non-renewal of the
Service Term under Section 1(f) below), the Company’s obligations
to pay any compensation or benefits under this Agreement (other than accrued
but unused vacation time which shall be paid to Executive in a lump sum
payment) and all vesting under all stock options held by Executive will cease
effective as of the Date of Termination. 
In such event, Executive’s rights under stock options vested prior to
the Date of Termination shall not be affected, except to the extent that
Executive’s termination of employment accelerates the termination of such stock
options.  Executive’s right to receive
any other health or other benefits, if any, will be determined under the
provisions of applicable plans, programs or other coverages.


 


(C)           If
Executive’s employment terminates because of Executive’s death or permanent
disability, then Executive or his estate shall be entitled to any disability
income or life insurance payments from any insurance policies (other than
any  “key man” life insurance policy)
paid for by the Company.  In addition, if
such death or disability occurs while Executive is employed hereunder, for a
period of six (6) months commencing on the date of such death or such disability
is established, Executive or his estate shall be entitled to payment of his
monthly or bi-weekly portion of the Annual Base Salary on regular salary
payment dates.


 


Notwithstanding the
foregoing, the Company’s obligation to Executive for severance pay or other
rights under subparagraphs (A) or (B) above (the “Severance
Pay”) shall cease if Executive is found by a court of law to be in
material violation of the provisions of Sections 2 or 3 hereof.  Until 


 


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such time as Executive
has received all of his Severance Payments, he will be entitled to continue to
receive any health, life, accident and disability insurance benefits provided
by the Company to Executive under this Agreement.


 


(d)           Mitigation. The Company’s obligation to continue to provide
Executive with the Severance Payments pursuant to Section 1(c)(iii)(A)
above and the benefits pursuant to the second sentence of Section
1(c)(iii)(C) above shall cease if Executive becomes employed as a senior
executive by a third party.  Executive
shall be under no obligation to seek or accept any employment during the
Severance Period.


 


(e)           Liquidated Damages. The parties acknowledge
and agree that damages which may result to Executive for termination by the Company
without Cause would be extremely difficult or impossible to establish or prove,
and agree that the Severance Pay shall constitute liquidated damages for any
breach of this Agreement by the Company through the Date of Termination.  Executive agrees that, except for such other
payments and benefits to which Executive may be entitled as expressly provided
by the terms of this Agreement or any applicable Benefit Plan, such liquidated
damages shall be in lieu of all other claims that Executive may make by reason
of termination of his employment or any such breach of this Agreement and that,
as a condition to receiving the Severance Payments, Executive will execute a
contingent mutual release of claims in a form reasonably satisfactory to both
the Company and Executive.


 


(f)            Term of Employment.  Unless Executive’s employment under this
Agreement is sooner terminated as a result of Executive’s termination in
accordance with the provisions of Section 1(c) above, Executive’s
employment under this Agreement shall commence on the Start Date and shall
terminate on the second anniversary thereof (the “Service
Term”); provided, however,
that Executive’s employment under this Agreement, and the Service Term, shall
be automatically renewed for additional one-year periods commencing on such
second anniversary and, thereafter, on each successive anniversary of such date
unless either the Company or Executive notifies the other party in writing at
least ninety (90) days prior to any such anniversary that it or he desires not
to renew Executive’s employment under this Agreement.  All references herein to “Service
Term” shall include any renewals thereof after the second
anniversary of the Start Date.


 


2.             Confidential
Information; Proprietary Information, etc.


 


(a)           Obligation
to Maintain Confidentiality. Executive acknowledges that
any Proprietary Information disclosed or made available to Executive or
obtained, observed or known by Executive as a direct or indirect consequence of
his employment with or performance of services for the Company or any of its
Affiliates during the course of his performance of services for, or employment
with, any of the foregoing Persons (whether or not compensated for such
services) and during the period in which Executive is receiving Severance
Payments, are the property of the Company and its Affiliates.  Therefore, Executive agrees that he will not
at any time (whether during or after Executive’s term of employment) 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 


 


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whatsoever without the
Board’s consent.  Executive agrees to
deliver to the Company at the termination of his employment, as a condition to
receipt of the next or final payment of compensation, or at any other time the
Company may request in writing (whether during or after Executive’s term of
employment), all Records which he may then possess or have under his control.
Executive further agrees that any property situated on the Company’s or its
Affiliates’ premises and owned by the Company or its Affiliates, including
disks and other storage media, filing cabinets or other work areas, is subject
to inspection by Company or its Affiliates and their personnel at any time with
or without notice.


 


(b)           Ownership
of Property. Executive acknowledges that all 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 or any of its Affiliates’ actual
or anticipated business, research and development, or existing or future
products or services and that are conceived, developed, contributed to, made,
or reduced to practice by Executive (either solely or jointly with others)
while employed by the Company or any of its Affiliates (including any of the
foregoing that constitutes any Proprietary Information or Records) (“Work Product”) belong to the Company or such Affiliate and
Executive hereby assigns, and agrees to assign, all of the above Work Product
to the Company or such Affiliate.  Any
copyrightable work prepared in whole or in part by Executive in the course of
his work for any of the foregoing entities shall be deemed a “work made for
hire” under the copyright laws, and the Company or such Affiliate shall own all
rights therein. To the extent that any such copyrightable work is not a “work
made for hire,” Executive hereby assigns and agrees to assign to Company or
such Affiliate all right, title and interest, including without limitation,
copyright in and to such copyrightable work. 
Executive 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 Executive’s term of employment) to establish and
confirm the Company’s or its Affiliate’s ownership (including, without
limitation, execution of assignments, consents, powers of attorney and other
instruments).  Notwithstanding anything
contained in this Section 2(b) to the contrary, the Company’s ownership
of Work Product does not apply to any invention that Executive develops
entirely on his own time without using the equipment, supplies or facilities of
the Company or its Affiliates or Subsidiaries or any Proprietary Information
(including trade secrets), except that the Company’s ownership of Work Product
does include those inventions that:  (a)
relate to the business of the Company or its Affiliates or Subsidiaries or to
the actual or demonstrably anticipated research or development relating to the
Company’s business; or (b) result from any work that Executive performs for the
Company or its Affiliates or Subsidiaries.


 


(c)           Third
Party Information. Executive understands that the Company
and its Affiliates will receive from third parties confidential or proprietary
information (“Third Party Information”) subject
to a duty on the Company’s and its Affiliates’ part to maintain the
confidentiality of such information and to use it only for certain limited
purposes.  During the term of Executive’s
employment and thereafter, and without in any way limiting the provisions of Sections
2(a) and 2(b) above, Executive shall hold Third Party Information in
the strictest confidence and shall not disclose to anyone (other than personnel
of the Company or its 


 


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Affiliates who need to
know such information in connection with their work for the Company or its
Affiliates) or use, except in connection with his work for the Company or its
Affiliates, Third Party Information unless expressly authorized by a member of
the Board in writing.


 


(d)           No Restriction on Executive’s Use
of Prior Knowledge.  Nothing
in this Section 2 or in the definitions of Proprietary Information or
Third Party Information shall be construed to prevent Executive from disclosing
or using in future employment or business ventures (i) any information known
to him prior to the Start Date, (ii) his general knowledge and experience
or (iii) information known or which becomes generally known to and
available for use by the public other than as a direct or indirect result of
Executive’s acts or omissions to act.


 


(e)           Use of Confidential Information of
Prior Employers, etc.  Executive will abide by any
enforceable obligations contained in any agreements that Executive has entered
into with his prior employers or other parties to whom Executive has an
obligation of confidentiality.


 


(f)            Compelled Disclosure. If
Executive 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, Executive 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.  Executive 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 Executive disclose Proprietary Information
or Third Party Information, and if Executive 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 Executive may disclose such Proprietary Information
or Third Party Information to the extent legally required; provided, however, that Executive will use
his best efforts to ensure that such Proprietary Information is treated
confidentially by each Person to whom it is disclosed.


 


3.             Nonsolicitation.


 


(a)           Nonsolicitation.  As long as Executive is an
employee of the Company or any Affiliate thereof, and for one (1) year
thereafter, Executive shall not directly or indirectly through another Person:


 


(i)            induce or attempt to induce any
employee of the Company or any Affiliate to leave the employ of the Company or
such Affiliate, or in any way interfere with the employment relationship
between the Company or any Affiliate and any employee thereof;


 


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(ii)           hire or seek to hire any Person who
is or was an employee of the Company or any Affiliate as of the earlier of (A)
the date that notice of termination of Executive’s employment is given by
Executive or the Company pursuant to this Agreement, and (B) the Date of
Termination; provided, however, that Executive
shall be permitted to hire any such employee who, at his or her own initiative
and not at the direct or indirect suggestion or behest of Executive, approaches
Executive after the Date of Termination for the purpose of gaining employment
with Executive, or responds to a general employment advertisement that is not
specifically directed at the employee, the Company’s employees generally or any
subset of the Company’s employees; or


 


(iii)          induce or attempt to induce any
customer, client, supplier, licensee or other business relation of the Company
or any Affiliate (each, a “Business Relation”)
to cease doing business with the Company or such Affiliate, or in any other way
interfere with the business relationship between any Business Relation and the
Company or an Affiliate; provided, however,
that this restriction shall not apply to (A) Executive’s response
to an indication by a Business Relation, at his, her or its own initiative
and not at the direct or indirect suggestion or behest of Executive, of
interest in procuring services offered (directly or indirectly) by Executive,
or (B) any general advertisement that is not specifically directed at such
Business Relation, the Business Relations of the Company generally or any
subset of the Company’s Business Relations.


 


(b)           Acknowledgment. Executive
acknowledges that in the course of his employment with the Company and its
Affiliates, he has and will become familiar with the trade secrets and other
Proprietary Information of the Company and its Affiliates. It is specifically
recognized by Executive that his services to the Company and its Subsidiaries
are special, unique and of extraordinary value, that the Company has a
protectable interest in prohibiting Executive as provided in this Section 3,
that money damages are insufficient to protect such interests, that there is
adequate consideration being provided to Executive hereunder, that such
prohibitions are necessary and appropriate without regard to payments being
made to Executive hereunder and that the Company would not enter this Agreement
with Executive without the restrictions of this Section 3.  Executive further acknowledges that the
provisions of this Section 3 are separate and independent of the other
sections of this Agreement.


 


(c)           Enforcement,
etc.  If, at the time of enforcement of Section
2 or 3 of this Agreement, a court holds 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
Executive’s services are unique, because Executive has access to Proprietary
Information and for the other reasons set forth herein, the parties hereto
agree that money damages would be an inadequate remedy for any breach of this
Agreement.  Therefore, without limiting
the generality of Section 7(g), in the event of a breach or threatened
breach of this Agreement, the Company or its successors or assigns may, in
addition to other rights and remedies existing in their favor, apply to any
court of competent jurisdiction 


 


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for specific performance
and/or injunctive or other relief in order to enforce, or prevent any
violations of, the provisions hereof.


 


(d)           Submission to Jurisdiction.  The parties hereby: (i) submit to the jurisdiction
of any state or federal court sitting in California in any action or proceeding arising out of or relating to Section
2 and/or 3 of this Agreement; (ii) agree that all claims in respect
of such action or proceeding may be heard or determined in any such court; and
(iii) agree not to bring any action or proceeding arising out of or relating to
Section 2 and/or 3 of this Agreement in any other court.  The parties hereby waive any defense of
inconvenient forum to the maintenance of any action or proceeding so
brought.  The parties hereby agree that a
final judgment in any action or proceeding so brought shall be conclusive and
may be enforced by suit on the judgment or in any other manner provided by law.


 


GENERAL PROVISIONS


 


4.             Definitions.


 


“Affiliate”
of any Person means any other Person that directly or indirectly controls, is
controlled by or is under common control with such Person.


 


“Board”
means the Company’s board of directors or the board of directors or similar
management body of any successor of the Company.


 


“Person”
means an individual, a partnership, a limited liability company, a corporation,
an association, a joint stock company, a trust, a joint venture, an
unincorporated organization and a governmental entity or any department, agency
or political subdivision thereof.


 


“Proprietary
Information” means any and all data and information
concerning the business affairs of the Company or any of its Affiliates and not
generally known in the industry in which the Company or any of its Affiliates is
or may become engaged, and any other information concerning any matters
affecting or relating to the Company’s or its Affiliates businesses, but in any
event Proprietary Information shall include, any of the Company’s and its
Affiliates’ past, present or prospective business opportunities, including
information concerning acquisition opportunities in or reasonably related to
the Company’s or its Affiliates businesses or industries, customers, customer
lists, clients, client lists, the prices the Company and its Affiliates obtain
or have obtained from the sale of, or at which they sell or have sold, their
products, unit volume of sales to past or present customers and clients, or any
other information concerning the business of the Company and its Affiliates,
their manner of operation, their plans, processes, figures, sales figures,
projections, estimates, tax records, personnel history, accounting procedures,
promotions, supply sources, contracts, know-how, trade secrets, information
relating to research, development, inventions, technology, manufacture,
purchasing, engineering, marketing, merchandising or selling, or other data
without regard to whether all of the foregoing matters will be deemed
confidential, material or important. 
Proprietary Information does not 


 


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include any information
that Executive has obtained from a Person other than an employee of the
Company, which was disclosed to him without a breach of a duty of
confidentiality.


 


“Records”
means (i) any and all procedure manuals, books, records and accounts; (ii) all
property of the Company and its Affiliates, including papers, note books, tapes
and similar repositories containing Proprietary Information; (iii) all invoices
and commission reports; (iv) customer lists — partial and/or complete; (v) data
layouts, magnetic tape layouts, diskette layouts, etc.; (vi) samples; (vii)
promotional letters, brochures and advertising materials; (viii) displays and
display materials; (ix) correspondence and old or current proposals to any
former, present or prospective customer of the Company and its Affiliates; (x)
information concerning revenues and profitability and any other financial
conditions of the Company and its Affiliates; (xi) information concerning the
Company and its Affiliates which was input by Executive 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; (xii) data, account information or
other matters furnished by customers of the Company and its Affiliates; and
(xiii) all copies of any of the foregoing data, documents or devices whether in
the form of carbon copies, photo copies, copies of floppy disks, diskettes,
tapes or in any other manner whatsoever.


 


“Subsidiary”
means any corporation of which the Company owns securities having a majority of
the ordinary voting power in electing the board of directors directly or
through one or more subsidiaries.


 


5.             Notices.
Any notice provided for in this Agreement must be in writing and must be either
personally delivered, mailed by first class United States mail (postage
prepaid, return receipt requested) or sent by reputable overnight courier
service (charges prepaid) or by facsimile to the recipient at the address below
indicated:


 


If
to Executive:


 


	
  Emmett B. McGrath

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Tel No.:

  	
  (       )

  
	
  Fax No.:

  	
  (       )

  
						



 


If
to the Company:


 


26651
West Agoura Road


Calabasas,
California 91302




	
  Attention:

  	
  Chief Operating Officer

  
	
  Tel No.:

  	
  (818) 871-3300

  
	
  Fax No.:

  	
  (818) 880-0056

  






 


12





















 


with
a copy to:


 


Hogan
& Hartson, LLP


555
Thirteenth Street, N.W.


Washington,
D.C.  20004




	
  Attention:

  	
  J. Hovey Kemp

  
	
  Tel No.:

  	
  (202) 637-5623

  
	
  Fax No.:

  	
  (202) 637-5910

  






 


or such other address or
to the attention of such other person as the recipient party shall have
specified by prior written notice to the sending party.


 


6.             Executive’s
Representations and Warranties.  Executive represents and warrants
that he has full and authority to enter into this Agreement and fully to
perform his obligations hereunder, that he is not subject to any
non-competition agreement, and that his past, present and anticipated future
activities have not and will not infringe on the proprietary rights of others,
including, but not limited to, proprietary information rights or interfere with
any agreements he has with any prior employee. 
Executive further represents and warrants that he is not obligated under
any contract (including licenses, covenants or commitments of any nature) or
other agreement, or subject to any judgment, decree or order of any court or
administrative agency, which would conflict with or result in a breach of this
Agreement or which would in any manner interfere with the performance of his
duties for the Company.


 


7.             General Provisions.


 


(a)           Expenses.
Each party shall bear his or its own expenses in connection with the
negotiation and execution of this Agreement and the consummation of the
transactions contemplated by this Agreement.


 


(b)           Severability.  Whenever possible, each provision of this
Agreement will be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement is held to be invalid,
illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect
any other provision or any other jurisdiction, but this Agreement will be reformed,
construed and enforced in such jurisdiction as if such invalid, illegal or
unenforceable provision had never been contained herein.


 


(c)           Complete Agreement.
This Agreement, any documents expressly referred to herein and other documents
of even date herewith embody the complete agreement and understanding among the
parties and supersede and preempt any prior understandings, agreements or
representations by or among the parties, written or oral, which may have
related to the subject matter hereof in any way.


 


(d)           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 


 


13





















 


together shall constitute
one and the same agreement.  Each party
to this Agreement agrees that it will be bound by its own telecopied signature
and that it accepts the telecopied signature of each other party to this
Agreement.


 


(e)           Successors and Assigns.
Except as otherwise provided herein, this Agreement shall bind and inure to the
benefit of and be enforceable by Executive, the Company and their respective
successors and assigns; provided
that the rights and obligations of Executive under this Agreement shall not be
assignable and, provided further that, the rights
and obligations of the Company may be assigned to any Affiliate of the Company.


 


(f)            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 Delaware, without giving effect to any choice of law or
conflict of law provision or rule (whether of the State of Delaware or any
other jurisdiction) that would cause the application of the laws of any
jurisdiction other than the State of Delaware. 
The parties hereby: (i) submit to the jurisdiction of any state or
federal court sitting in California in any action or proceeding arising out of
or relating to Agreement; (ii) agree that all claims in respect of such action
or proceeding may be heard or determined in any such court; and (iii) agree not
to bring any action or proceeding arising out of or relating to this Agreement
in any other court. Executive hereby waives any defense of inconvenient forum
to the maintenance of any action or proceeding so brought and waives any bond,
surety or other security that might be required of any other party with respect
thereto. The parties hereby agrees that a final judgment in any action or
proceeding so brought shall be conclusive and may be enforced by suit on the
judgment or in any other manner provided by law.


 


(g)           Remedies.
Each of the parties to this Agreement will be entitled to enforce its rights
under this Agreement specifically to recover damages and costs (including
reasonable attorney’s fees) caused by any breach of any provision of this
Agreement and to exercise all other rights existing in its favor. The parties
hereto agree and acknowledge that money damages may not be an adequate remedy for
any breach of the provisions of this Agreement and that any party may in its
sole discretion apply to any court of law or equity of competent jurisdiction
(without posting any bond or deposit) for specific performance and/or other
injunctive relief in order to enforce or prevent any violations of the
provisions of this Agreement.


 


(h)           Amendment and Waiver.
The provisions of this Agreement may be amended or and waived only with the
prior written consent of the Company and Executive.


 


(i)            Business Days.
If any time period for giving notice or taking action hereunder expires on a
day which is a Saturday, Sunday or holiday in the state in which the Company’s
chief executive office is located, the time period shall be automatically
extended to the business day immediately following such Saturday, Sunday or
holiday.


 


14





















 


(j)            Termination.
This Agreement shall survive the termination of Executive’s employment with the
Company and shall remain in full force and effect after such termination.


 


(k)           No
Waiver. A
waiver by any 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 future 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.


 


(l)            Insurance.  The Company, at its discretion, may apply for
and procure in its own name for its own benefit life and/or disability
insurance on Executive in any amount or amounts considered available. Executive
agrees to cooperate in any medical or other examination, supply any
information, and to execute and deliver any applications or other instruments
in writing as may be reasonably necessary to obtain and constitute such
insurance. Executive hereby represents that he has no reason to believe that
his life is not insurable at rates now prevailing for healthy men of his age.


 


(m)          Offset.  Except as prohibited by applicable law, whenever
the Company or any of its Subsidiaries is obligated to pay any sum to Executive
or any Affiliate or related person thereof pursuant to this Agreement, any bona
fide debts that Executive or such Affiliate or related person owes to the
Company or any of its Subsidiaries may be deducted from that sum before
payment.


 


(n)           Withholding.  The Company and its Subsidiaries shall be
entitled to deduct or withhold from any amounts owing from the Company or any
of its Subsidiaries to Executive any federal, state, provincial, local or
foreign withholding taxes, excise taxes, or employment taxes (“Taxes”) imposed with respect to Executive’s compensation or
other payments from the Company or any of its Subsidiaries or Executive’s
ownership interest in the Company, including, but not limited to, wages,
bonuses, the receipt or exercise of stock options and/or the receipt or vesting
of restricted stock.


 


(o)           Insurance and Indemnification.  For
the period from the date of this Agreement through at least the tenth anniversary
of Executive’s termination of employment from the Company, the Company shall
maintain Executive as an insured party on all directors’ and officers’
insurance maintained by the Company for the benefit of its directors and
officers on at least the same basis as all other covered individuals and
provide Executive with at least the same corporate indemnification as it
provides to the peer executives of the Company.


 


[SIGNATURE PAGE FOLLOWS]


 


15





















 


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

  	
   

  
	
   

  	
  Name:

  	
  Peter Dameris

  	
   

  
	
   

  	
  Title:

  	
  Executive Vice
  President

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  /s/ Emmett
  McGrath

  	
   

  
	
   

  	
  Emmett McGrath

  



 


16