Exhibit 10.6


 


	
  Date:

  	
   

  	
  August 3, 2005

  
	
   

  	
   

  	
   

  
	
  To:

  	
   

  	
  Michael Payne

  
	
   

  	
   

  	
   

  
	
  From:

  	
   

  	
  Peter Dameris, Chief Executive Officer and
  President

  
	
   

  	
   

  	
   

  
	
  RE:

  	
   

  	
  Notice of Contingent Restricted Stock Unit
  Award

  



 


You were
granted a Contingent Restricted Stock Unit Award (an “Award”) by On Assignment, Inc.
(the “Company”) on August 3, 2005. Your Award is subject to certain terms
and conditions in this letter.


 


1.                                       Amount
of your Award: The amount of your Award is $150,000, payable in stock units
or cash as specified in paragraph 2 below.


 


2.                                       Payment
of Your Award:  Subject to approval
of the Plan Amendment (as described in paragraph 3 below), if you remain
employed by the Company until the date of the Company’s 2006 Annual
Shareholders Meeting, you will be granted stock units representing shares of
the Company’s common stock with a value equal to the amount of your Award.  The value will be determined based on the
closing price of the Company’s common stock on the date immediately prior to
the Company’s 2006 Annual Shareholders Meeting.


 


Notwithstanding
the preceding paragraph, if the Company under goes a Change of Control (as
defined in the attachment to this letter) prior to the Company’s 2006 Annual
Shareholders Meeting and you remain employed by the Company (or its successor)
until the Change of Control, upon the consummation of the Change of Control,
you will receive a grant of stock units representing shares of the Company’s
common stock (or the common stock of the Company’s successor as determined by
the Company’s Board of Directors), with a value equal to the amount of your
Award.  The value will be determined
based on the closing price of the Company’s common stock on the date
immediately prior to the consummation of the Change of Control.


 


If in
connection with a Change of Control the Company fails to obtain the agreement
of the buyer to issue stock units in settlement of your Award or the Company
otherwise determines that stock units cannot be issued, in lieu of being
granted stock units, you will instead be paid an amount in cash (less
applicable withholding taxes) upon the consummation of the Change of Control
equal to the amount of your Award as shown in paragraph 1 above; provided,
that, you remain employed by the Company (or its successor) at the time of the
consummation of the Change of Control.


 





















 


3.                                       Other
Important Terms and Conditions:  Your
Award is contingent upon the approval by the Company’s Board of Directors (the “Board”)
and the shareholders of the Company of an amendment to the Restated 1987 Stock
Option Plan (the “Plan”) increasing the number of shares available for grant as
awards other than stock options (the “Plan Amendment”), except to the extent a
Change of Control occurs prior to the date of the Company’s 2006 Annual
Shareholders Meeting.  If the Board and
the shareholders of the Company do not approve the Plan Amendment at or prior
to the Company’s 2006 Annual Shareholders Meeting, and a Change of Control has
not occurred prior to the date of the Company’s 2006 Annual Shareholders
Meeting, you will not be granted stock units or receive a cash payment
in respect of your Award and your Award will immediately lapse.


 


If the Board and the Company’s shareholders
approve the Plan Amendment (or a Change of Control occurs) and you are granted
stock units in satisfaction of your Award, the stock units will be subject to
the terms and conditions determined by the Compensation Committee, including a
required vesting schedule of thirteen equal quarterly installments.  Any payment of your Award shall be reduced
for applicable withholding taxes.


 





















 


Definition of a Change of Control


 


A “Change of Control” shall be deemed to occur upon the consummation of
any of the following transactions:


 


(i)                                     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


 


(ii)                                  the
sale, transfer or other disposition of all or substantially all of the assets
of the Company; or


 


(iii)                               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


 


(iv)                              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


 


(v)                                 during
any period of two (2) consecutive years (not including any period prior to
the date of this letter), individuals who at the beginning of such period
constitute the Board of Directors of the Company (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 constituted a majority
thereof; provided, however, that any individual becoming a director subsequent
to the date of this letter 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 of this letter (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.