Exhibit
10.1


 


 


ON ASSIGNMENT, INC.


 


CHANGE IN
CONTROL SEVERANCE PLAN


 


AND


 


SUMMARY
PLAN DESCRIPTION


 


 


Plan Effective
Date:  February 12, 2004

As Amended: 
August 8, 2004


 
















 


ON
ASSIGNMENT, INC.

CHANGE IN CONTROL SEVERANCE PLAN

AND

SUMMARY PLAN DESCRIPTION


 


The On Assignment, Inc.
Change in Control Severance Plan (the “Plan”) is primarily designed to provide
eligible employees of On Assignment, Inc. (the “Company”) whose employment is
terminated on or after February 12, 2004 with separation pay in the event
of an involuntary termination.


 


This Plan is designed to
be an “employee welfare benefit plan,” as defined in Section 3(1) of the
Employee Retirement Income Security Act of 1974, as amended (“ERISA”).  This Plan is governed by ERISA and, to the
extent applicable, the laws of the State of California.  This document constitutes both the official
plan document and the required summary plan description under ERISA.


 


I.                                         ELIGIBILITY


 


You will be an Eligible
Employee for purposes of receiving severance benefits under the Plan if:


 


•                  you are a regular, full-time employee of the Company and are
identified on Exhibit A (to be supplied separately);


 


•                  your active employment with the Company is Involuntarily
Terminated (within the meaning set forth below) within the eighteen (18) month
period following a Change in Control;


 


•                  you
execute the General Release of All Claims (the “General Release”), a copy of
which is attached as Exhibit B, within five (5) business days after your
termination date or, if you are age forty (40) or over, you execute the General
Release, a copy of which is attached as Exhibit C, within forty-five (45)
business days after your termination; and


 


•                  you are not in one of the excluded categories listed
below.


 


Excluded
categories of employees. You are not eligible for
severance benefits under this Plan if:


 


•                  you
are a temporary employee, part-time employee working fewer than 30 hours per
week (no minimum number of hours shall apply to salaried employees),
probationary employee or student employee hired to be placed on assignment with
clients of the Company;


 


•                  you have a separate change in control, severance or similar
agreement or arrangement with the Company that specifically provides that you
are not eligible to participate in the Plan;


 
















 


•                  you voluntarily terminate your employment, unless your
termination constitutes an “Involuntary Termination” as defined below;


 


•                  you
are employed with a successor employer which directly or indirectly acquires (i) all or any portion of the assets or operations of the
Company or any subsidiary, (ii) all or any portion of the outstanding capital
stock of the Company, or (iii) fifty percent (50%) or more of the capital stock
of any subsidiary of the Company. However, you would be eligible for severance
benefits pursuant to the terms of the Plan upon a subsequent termination by the
successor employer within 18 months following a Change in Control; or


 


•                  you are dismissed for Cause, whether or not you prior to
your dismissal you received notice of a termination which would otherwise
qualify you for severance benefits.


 


II.                                     HOW
THE PLAN WORKS


 


If you are eligible for
severance benefits under the Plan, the amount of your severance pay will be
determined in accordance with the guidelines set forth below, subject to the Golden
Parachute Tax limitation set forth below. 
You will receive your severance pay in a lump-sum payment (with
appropriate taxes deducted or withheld) which will be made as soon as
administratively practicable after the occurrence of the following events:


 


•                  your Involuntary Termination within eighteen months after a
Change in Control;


 


•                  the Company’s receipt of your executed General Release; and


 


•                  the expiration of any rescission period applicable to your
executed General Release.


 


Severance Guidelines


 


If your
employment is Involuntarily Terminated within eighteen
(18) months after a Change in Control and you are an Eligible Employee, you
will be paid:


 


•                  all Accrued Compensation and a Pro-Rata Bonus;


 


•                  300%
of the Eligible Employee’s Annual Base Pay and Target Bonus, plus benefits
continuation for eighteen months, if the Eligible Employee was the Chief
Executive Officer of the Company immediately before the Change in Control;


 


•                  275%
of the Eligible Employee’s Annual Base Pay and Target Bonus plus benefits
continuation for eighteen months, if the Eligible Employee was an executive
vice president and Chief Operating Officer of the Company immediately before
the Change in Control;


 


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•                  250%
of the Eligible Employee’s Annual Base Pay and Target Bonus plus benefits
continuation for eighteen months, if the Eligible Employee was an executive
vice president and Chief Financial Officer of the Company immediately before
the Change in Control;


 


•                  200%
of the Eligible Employee’s Annual Base Pay and Target Bonus plus benefits
continuation for eighteen months, if the Eligible Employee was a senior vice
president of the Company and/or president of a division of the Company (whether
or not an executive officer) immediately before the Change in Control;


 


•                  75%
of the Eligible Employee’s Annual Base Pay and Target Bonus plus benefits
continuation for nine months, if the Eligible Employee was a vice president or
corporate controller (whether or not an executive officer), of the Company
immediately before the Change in Control;


 


•                  1
month of the Eligible Employee’s Annual Base Pay and Incentive Compensation for
each year or partial year of service to the Company as an employee, up to a
maximum of 6 months of Annual Base Pay, with a minimum of two months of Annual
Base Pay, if the Eligible Employee was a “director,” “assistant-director,”
“manager,” “regional manager,” or “Senior Staffing Consultant” immediately
before the Change in Control;


 


•                  1
month of the Eligible Employee’s Annual Base Pay for each year or partial year
of service to the Company as an employee, up to a maximum of 3 months of Annual
Base Pay, with a minimum of one month of Annual Base Pay, if the Eligible
Employee was an exempt employee of the Company (other than those employees
described above) immediately before the Change in Control; or


 


•                  1
week of the Eligible Employee’s Annual Base Pay for each year or partial year
of service to the Company as an employee, up to a maximum of 3 months of Annual
Base Pay, with a minimum of one week of Annual Base Pay, for all other Eligible
Employee not included in the above categories.


 


Accrued Compensation
shall mean an amount which shall consist of all amounts earned or accrued
through the termination date but not paid as of the termination date including
(i) Annual Base Pay, (ii) reimbursement for
reasonable and necessary expenses incurred by you on behalf of the Company
during the period ending on the termination date, (iii) vacation and sick leave
pay (to the extent provided by Company policy or applicable law), and (iv)
incentive compensation (if any) earned in respect of any period ended prior to
the termination date.  It is expressly
understood that incentive compensation shall have been “earned” as of the time
that the conditions to such incentive compensation have been met, even if not
calculated or payable at such time.


 


Annual Base Pay
generally means your annualized base salary at the rate in effect during the
last regularly scheduled payroll period immediately preceding the occurrence of
the Change in Control and does not include, for example, bonuses,
overtime compensation, incentive pay, fringe benefits, sales commissions or
expense allowances.


 


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Cause
means your willful breach of duty unless waived by the Company (which willful
breach is limited to your deliberate and consistent refusal to perform your
duties or the deliberate and consistent refusal to conform to or follow any
reasonable policy adopted by the Company provided you have had prior written
notice of such refusal and an opportunity of at least thirty (30) days to cure
such refusal), your unauthorized use or disclosure of confidential information
or trade secrets of the Company, your breach of non-competition or
non-solicitation agreements, your conviction of a felony under the laws of the
United States or any state thereof, or your gross negligence.


 


Change in Control
shall be deemed to occur upon the consummation of any of the following
transactions:


 


1.                                       a
merger or consolidation in which the Company is not the surviving entity,
except for a transaction the principal purpose of which is to change the state
of the Company’s incorporation or a transaction in which 50% or more of the
surviving entity’s outstanding voting stock following the transaction is held
by holders who held 50% or more of the Company’s outstanding voting stock prior
to such transaction; or


 


2.                                       the sale, transfer or other disposition of all or
substantially all of the assets of the Company; or


 


3.                                       any
reverse merger in which the Company is the surviving entity, but in which 50%
or more of the Company’s outstanding voting stock is transferred to holders
different from those who held the stock immediately prior to such merger; or


 


4.                                       the acquisition by any person (or entity) directly or
indirectly of 50% or more of the combined voting power of the outstanding
shares of Company capital stock; or


 


5.                                       during
any period of two (2) consecutive years (not including any period prior to
February 12, 2004), individuals who at the beginning of such period
constitute the Board (and any new director, whose election by the Company’s
stockholders was approved by a vote of at least two-thirds (2/3) of the
directors then still in office who either were directors at the beginning of
the period or whose election or nomination for election was so approved), cease
for any reason to constitute a majority thereof; provided,
however, that any individual becoming a director subsequent to the
date hereof whose election, or nomination for election by the Company’s
stockholders, was approved by a vote of at least a majority of the directors
then comprising the Board on the date hereof (the “Incumbent Board”)
shall be considered as though such individual were a member of the Incumbent
Board, but excluding, for purposes of this proviso, any such individual whose
initial assumption of office occurs as a result of an actual or threatened
election contest with respect to the election or removal of directors or other
actual or threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board.


 


Incentive Compensation
shall mean 100% of the commission, bonus or other incentive-type pay paid to
you (excluding stock options) for the fiscal year immediately preceding the
Change in Control.


 


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Involuntary Termination
shall mean the termination of your employment with the Company (or, if
applicable, successor entity) other than by reason of death or disability:


 


(A)                              involuntarily
upon your discharge or dismissal other than for Cause, or


 


(B)                                upon
your resignation following (I) a reduction in your level of Annual Base
Pay or any Target Bonus, (II) a material reduction in your benefits or
(III) a relocation of your place of employment which is more than 35 miles
from your place of employment prior to the Change in Control, provided and
only if such change or reduction is effected without your written
concurrence, or


 


(C)                                upon
your resignation in the case of an employee who was an executive officer or
vice president immediately before the applicable Change in Control following a
change in the employee’s position with the Company (or, if applicable, with the
successor entity) that is effected without the employee’s consent and
materially reduces his or her level of responsibility or authority.


 


Pro Rata Bonus
means an amount equal to 100% of the target bonus that you would have been
eligible to receive for the Company’s fiscal year in which your employment terminates
following a Change of Control, multiplied by a fraction, the numerator of which
is the number of days in such fiscal year through the Termination Date and the
denominator of which is 365.


 


Target Bonus
shall mean the bonus which would have been paid to you for full achievement of
specific performance objectives pertaining to the business of the Company or
any of its specific business units or divisions, or to individual performance
criteria applicable to you, which objectives have been established by the Board
of Directors (or the Compensation Committee thereof) for the year in
question.  “Target
Bonus” shall not mean the “maximum bonus” which you might have
been paid for overachievement of such performance objectives or criteria or any
purely discretionary bonus.


 


Golden Parachute Tax
Gross-Up


 


In the event that any
payment or benefit made or provided to or for your benefit in connection with
this Plan and/or your employment with the Company or the termination thereof (a
“Payment”) is determined to be subject to any excise tax (“Excise
Tax”) imposed by Section 4999 of the Code (or any successor to such
Section), the Company shall pay to you, prior to the time any Excise Tax is
payable with respect to such Payment (through withholding or otherwise), an
additional amount (a “Gross-Up Payment”) which, after the imposition of
all income, employment, excise and other taxes, penalties and interest thereon,
is equal to the sum of (i) the Excise Tax on such
Payment plus (ii) any penalty and interest assessments associated with
such Excise Tax.  The determination of
whether any Payment is subject to an Excise Tax and, if so, the amount and time
of any Gross-Up Payment pursuant to this Plan shall be made by an independent auditor
(the “Auditor”) selected and paid by the Company.  The parties shall cooperate with each other
in connection with any proceeding or claim relating to the existence or amount
of any liability for Excise Tax.


 


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III.                                 OTHER
IMPORTANT INFORMATION


 


Plan Administration.  As the Plan Administrator, the Company has
full discretionary authority to administer and interpret the Plan, including
discretionary authority to determine eligibility for benefits under the Plan
and the amount of benefits (if any) payable per participant. Any determination
by the Plan Administrator will be final and conclusive upon all persons.  When benefits are due, they will be paid from
the general assets of the Company.  The
Company is not required to establish a trust to fund the Plan.  The benefits provided under this Plan are not
assignable and may be conditioned upon your compliance with any confidentiality
agreement you have entered into with the Company or upon your compliance with
any Company policy or program communicated to you in writing.


 


Claims Procedure.  If you believe you are incorrectly denied a
benefit or are entitled to a greater benefit than the benefit you receive under
the Plan, you may submit a signed, written application to the Plan
Administrator within ninety (90) days of your termination.  You will be notified of the approval or
denial of this claim within ninety (90) days of the date that the Plan
Administrator receives the claim, unless special circumstances require an
extension of time for processing the claim. 
If your claim is denied, the notification will state specific reasons
for the denial and you will have sixty (60) days from receipt of the written
notification of the denial of your claim to file a signed, written request for
a review of the denial with the Plan Administrator.  This request should include the reasons you
are requesting a review, facts supporting your request and any other relevant
comments.  Pursuant to its discretionary
authority to administer and interpret the Plan and to determine eligibility for
benefits under the Plan, the Plan Administrator will generally make a final,
written determination of your eligibility for benefits within sixty (60) days
of receipt of your request for review.


 


Plan Terms.  Except as otherwise set forth herein, this
Plan supersedes any and all prior separation, severance and salary continuation
arrangements, programs and plans which were previously offered by the Company
for the purpose of paying benefits to any Eligible Employee upon a termination
following a Change in Control, including pursuant to an employment agreement or
offer letter.  Nothing in this Plan shall
affect an Eligible Employee’s right to severance benefits under circumstances
not involving a termination following a Change in Control.  In no event, however, shall any individual
receive severance benefits under both this Plan and
any other  separation, severance pay or salary
continuation program, plan or other arrangement with the Company.


 


Plan Amendment or
Termination.  The
Company reserves the right to terminate or amend the Plan at any time upon the
vote of a two-thirds majority of the Board of Directors; provided, however,
that no amendment which materially impairs the rights of an Eligible Employee
under the Plan may be made after the occurrence of a Change in Control or after
discussions have commenced with another entity which results in the occurrence
of a Change in Control within 270 days of when such discussions commenced.  Any termination or amendment of the Plan may
be made effective immediately with respect to any benefits not yet paid,
whether or not prior notice of such amendment or termination has been given to
affected employees.


 


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Taxes.  The Company will withhold all applicable
taxes and other payroll deductions from any payment made pursuant to this Plan.


 


No Right To Employment.  This Plan does not provide you with any right
to continue employment with the Company or affect the Company’s right, which
right is hereby expressly reserved, to terminate the employment of any
individual at any time for any reason with or without Cause.


 


IV.                                STATEMENT
OF ERISA RIGHTS


 


As a participant in the
Plan, you are entitled to certain rights and protections under the Employee
Retirement Income Security Act of 1974, as amended (“ERISA”).  ERISA provides that all Plan participants
shall be entitled to:


 


1.                                       Examine,
without charge, at the Plan Administrator’s office, all Plan documents,
including all documents filed by the Plan with the U.S. Department of Labor.


 


2.                                       Obtain
copies of all Plan documents and other Plan information upon written request to
the Plan Administrator.  The Plan
Administrator may make a reasonable charge for the copies.


 


3.                                       Receive
a summary of the Plan’s annual financial report.


 


4.                                       File
suit in a federal court, if you, as a participant, request materials and do not
receive them within thirty (30) days of your request.  In such a case, the court may require the
Plan Administrator to provide the materials and to pay you a fine of up to $110
for each day’s delay until the materials are received, unless the materials
were not sent because of reasons beyond the control of the Plan Administrator.


 


In addition to creating
rights for certain employees of the Company under the Plan, ERISA imposes
obligations upon the people who are responsible for the operation of the
Plan.  The people who operate the Plan
(called “fiduciaries”) have a duty to do so prudently and in the interest of
the Company’s employees who are covered by the Plan.


 


No one, including your
employer or any other person, may fire you or otherwise discriminate against
you in any way to prevent you from obtaining a benefit to which you are
entitled under the Plan or from exercising your rights under ERISA.


 


If your claim for a
severance benefit is denied or ignored, in whole or in part, you have a right
to file suit in a federal or a state court. 
If Plan fiduciaries are misusing the Plan’s assets (if any) or if you
are discriminated against for asserting your rights, you may seek assistance
from the U.S. Department of Labor or file suit in a federal court.  The court will decide who should pay court
costs and legal fees.  If you are successful
in your lawsuit, the court may, if it so decides, order the party you have sued
to pay your legal costs, including attorney fees.  However, if you lose, the court may order you
to pay these costs and fees, for example, if it finds that your claim or suit
is frivolous.


 


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If you have any questions
about the Plan, this statement or your rights under ERISA, you should contact
the Plan Administrator or the nearest Area Office of the  Employee Benefits Security
Administration, listed in your telephone directory, or the Division of Technical
Assistance and Inquiries, Employee Benefits Security Administration, U.S.
Department of Labor, 200 Constitution Avenue, N.W., Washington, D.C. 20210


 


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ADDITIONAL
PLAN INFORMATION


 


	
  Name of Plan:

  	
   

  	
  On Assignment, Inc.
  Change in Control Severance Plan

  
	
  Company Sponsoring
  Plan:

  	
   

  	
  On Assignment, Inc.

  26651 West Agoura Road

  Calabasas, California  91302

  
	
  Employer Identification
  Number:

  	
   

  	
  95-4023433

  
	
  Plan Number:

  	
   

  	
  505

  
	
  Plan Year:

  	
   

  	
  The calendar year; the
  first plan year is a short plan year starting February 12, 1998 and
  ending December 31, 1998

  
	
  Plan Administrator:

  	
   

  	
  On Assignment, Inc.

  26651 West Agoura Road

  Calabasas, California 91302

  (818) 878-7900

  
	
  Agent for Service of
  Legal Process:

  	
   

  	
  Plan Administrator

  
	
  Type of Plan:

  	
   

  	
  Severance Plan/Employee
  Welfare Benefit Plan

  
	
  Plan Costs:

  	
   

  	
  The cost of the Plan is
  paid by On Assignment, Inc.

  



 


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