Document:

Exhibit
10.4

__________________________________________________________________

ON ASSIGNMENT, INC. EMPLOYEE
STOCK PURCHASE PLAN

(As Amended and Restated June 18, 2002)

__________________________________________________________________

 

 

ON
ASSIGNMENT, INC. EMPLOYEE STOCK PURCHASE PLAN

(As
Amended and Restated June 18, 2002)

THIS AGREEMENT adopted by On
Assignment, Inc., a Delaware corporation (the “Company”),

W I T N E S S E T H:

WHEREAS, effective March 1,
1993, the Company established the On Assignment, Inc. Employee Stock Purchase
Plan (the “Plan”);

WHEREAS, the Company desires to
amend and restate the Plan to extend the term of the Plan until August 31, 2022
and to effect certain technical revisions;

WHEREAS, the amendment and
restatement of the Plan shall neither provide for an increase in the number of
shares of the Company’s common stock available for issuance under the Plan nor
change the class of employees of the Company and its affiliates who may
participate in the Plan nor otherwise materially increase the benefits accruing
to Participants under the Plan.

NOW, THEREFORE, the Plan is
hereby amended and restated in its entirety as set forth below.

 

TABLE
OF CONTENTS

	
  

  	
   

  	
  Section

  
	
  ARTICLE I - PURPOSE, SHARE COMMITMENT AND INTENT

  	
   

  	
   

  
	
  Purpose

  	
   

  	
  1.1

  
	
  Share Commitment

  	
   

  	
  1.2

  
	
  Intent

  	
   

  	
  1.3

  
	
  ARTICLE II - DEFINITIONS

  	
   

  	
   

  
	
  Affiliate

  	
   

  	
  2.1

  
	
  Authorized Leave
  of Absence

  	
   

  	
  2.2

  
	
  Base Pay

  	
   

  	
  2.3

  
	
  Beneficiary

  	
   

  	
  2.4

  
	
  Board

  	
   

  	
  2.5

  
	
  Code

  	
   

  	
  2.6

  
	
  Committee

  	
   

  	
  2.7

  
	
  Company

  	
   

  	
  2.8

  
	
  Disability

  	
   

  	
  2.9

  
	
  Employee

  	
   

  	
  2.10

  
	
  Employer

  	
   

  	
  2.11

  
	
  Exercise Date

  	
   

  	
  2.12

  
	
  Fair Market
  Value

  	
   

  	
  2.13

  
	
  Five Percent
  Owner

  	
   

  	
  2.14

  
	
  Grant Date

  	
   

  	
  2.15

  
	
  Offering Period

  	
   

  	
  2.16

  
	
  Option

  	
   

  	
  2.17

  
	
  Option Price

  	
   

  	
  2.18

  
	
  Participant

  	
   

  	
  2.19

  
	
  Plan

  	
   

  	
  2.20

  
	
  Retirement

  	
   

  	
  2.21

  
	
  Stock

  	
   

  	
  2.22

  
	
  Trading Day

  	
   

  	
  2.23

  
	
  ARTICLE III - ELIGIBILITY

  	
   

  	
   

  
	
  General
  Requirements

  	
   

  	
  3.1

  
	
  Limitations Upon
  Participation

  	
   

  	
  3.2

  
	
  ARTICLE IV - PARTICIPATION

  	
   

  	
   

  
	
  Grant of Option

  	
   

  	
  4.1

  
	
  Payroll
  Deduction

  	
   

  	
  4.2

  
	
  Payroll
  Deductions Continuing

  	
   

  	
  4.3

  
	
  Right to Stop
  Payroll Deductions

  	
   

  	
  4.4

  
	
  Accounting for
  Funds

  	
   

  	
  4.5

  

 

 i
 

 

	
  Employer’s Use of Funds

  	
   

  	
  4.6

  
	
  ARTICLE V —
  PAYROLL DEDUCTION CANCELLATION, TERMINATION OF EMPLOYMENT OR LEAVE OF ABSENCE

  	
   

  	
   

  
	
  Payroll Deduction
  Cancellation

  	
   

  	
  5.1

  
	
  Termination of
  Employment for any Reason Other Than Death; or Retirement or Disability Which
  Occurs More Than Three Months Prior to the Exercise Date

  	
   

  	
  5.2

  
	
  Termination of
  Employment Due to Death

  	
   

  	
  5.3

  
	
  Termination of
  Employment Due to Retirement or Disability Within Three Months Prior to the
  Exercise Date

  	
   

  	
  5.4

  
	
  Authorized Leave
  of Absence

  	
   

  	
  5.5

  
	
  ARTICLE VI - EXERCISE OF OPTION

  	
   

  	
   

  
	
  Purchase of
  Shares

  	
   

  	
  6.1

  
	
  Accounting for
  Shares

  	
   

  	
  6.2

  
	
  Issuance of
  Shares

  	
   

  	
  6.3

  
	
  ARTICLE VII - ADMINISTRATION

  	
   

  	
   

  
	
  Powers

  	
   

  	
  7.1

  
	
  Quorum and
  Majority Action

  	
   

  	
  7.2

  
	
  Standard of
  Judicial Review of Committee Actions

  	
   

  	
  7.3

  
	
  ARTICLE VIII - ADOPTION OF PLAN BY OTHER EMPLOYERS

  	
   

  	
   

  
	
  Adoption
  Procedure

  	
   

  	
  8.1

  
	
  No Joint Venture
  Implied

  	
   

  	
  8.2

  
	
  ARTICLE IX - TERMINATION AND AMENDMENT OF THE PLAN

  	
   

  	
   

  
	
  Termination

  	
   

  	
  9.1

  
	
  Amendment

  	
   

  	
  9.2

  
	
  ARTICLE X -
  MISCELLANEOUS

  	
   

  	
   

  
	
  Designation of
  Beneficiary

  	
   

  	
  10.1

  
	
  Plan Not An
  Employment Contract

  	
   

  	
  10.2

  
	
  All
  Participants’ Rights Are Equal

  	
   

  	
  10.3

  
	
  Options Are Not
  Transferable

  	
   

  	
  10.4

  
	
  Voting of Shares

  	
   

  	
  10.5

  
	
  No Rights of
  Shareholder

  	
   

  	
  10.6

  
	
  Governmental
  Regulations

  	
   

  	
  10.7

  
	
  Notices

  	
   

  	
  10.8

  
	
  Indemnification
  of Committee

  	
   

  	
  10.9

  
	
  Tax Withholding

  	
   

  	
  10.10

  

 

 ii
 

 

	
  Gender and Number

  	
   

  	
  10.11

  
	
  Severability

  	
   

  	
  10.12

  
	
  Persons Based
  Outside of the United States

  	
   

  	
  10.13

  
	
  Governing Law;
  Parties to Legal Actions

  	
   

  	
  10.14

  

 

 iii

ARTICLE I

PURPOSE, SHARE COMMITMENT AND INTENT

1.1           Purpose.  The purpose of the Plan is to provide
Employees of the Company and its Affiliates that adopt the Plan an opportunity
to purchase Stock through periodic offerings of options to purchase Stock at a
discount and thus, develop a stronger incentive to work for the continued
success of the Company and its Affiliates.

1.2           Share
Commitment.  The aggregate
number of shares of Stock authorized to be sold pursuant to Options granted
under the Plan is 800,000, subject to adjustment as provided in this
Section.  In computing the number of
shares of Stock available for grant, any shares relating to Options which are
granted, but which subsequently lapse, are cancelled or are otherwise not
exercised by the final date for exercise, shall be available for future grants
of Options.

In the event of any stock dividend, split-up,
recapitalization, merger, consolidation, combination or exchange of Stock, or
the like, as a result of which Stock shall be issued in respect of the
outstanding shares of Stock, or the Stock shall be changed into the same or a
different number of the same or another class of stock, the total number of
shares of Stock authorized to be committed to the Plan, the number of shares of
Stock subject to each outstanding Option, the Option Price applicable to each
Option, and/or the consideration to be received upon exercise of each Option
shall be appropriately adjusted by the Committee.  In addition, the Committee shall, in its sole
discretion, have authority to provide for (a) acceleration of the Exercise Date
of outstanding Options or (b) the conversion of outstanding Options into cash
or other property to be received in certain of the transactions specified in
this paragraph above upon the completion of the transaction.

1.3           Intent.  It is the intention of the Company to have
the Plan qualify as an “employee stock purchase plan” under section 423 of the
Code.  Therefore, the provisions of the
Plan are to be construed to govern participation in a manner consistent with
the requirements of section 423 of the Code.

 

 I-1

 

ARTICLE
II

DEFINITIONS

The words and phrases defined in this Article shall
have the meaning set out in these definitions throughout the Plan, unless the
context in which any word or phrase appears reasonably requires a broader,
narrower, or different meaning.

2.1           “Affiliate”
means any parent corporation and any subsidiary corporation. The term “parent
corporation” means any corporation (other than the Company) in an unbroken
chain of corporations ending with the Company if, at the time of the action or
transaction, each of the corporations (other than the Company) owns stock
possessing 50 percent or more of the total combined voting power of all classes
of stock in one of the other corporations in the chain.  The term “subsidiary corporation” means any
corporation (other than the Company) in an unbroken chain of corporations
beginning with the Company if, at the time of the granting of the Option, each
of the corporations other than the last corporation in the unbroken chain owns
stock possessing 50 percent or more of the total combined voting power of all
classes of stock in one of the other corporations in the chain.

2.2           “Authorized Leave of Absence”  means a bona fide leave of absence from service with
the Company or an Affiliate if the period of the leave does not exceed 90 days,
or, if longer, so long as the individual’s right to reemployment with the
Company or an Affiliate is guaranteed either by statute or contract.

2.3           “Base Pay”  means regular straight-time earnings or base salary and
commissions paid to a Participant plus any salary deferral contributions made
by such individual to the Company’s 401(k) plan or nonqualified deferred
compensation plan but excluding all overtime payments, bonuses and other
incentive-type payments, and all contributions (other than contributions made
pursuant to sections 125 or 401(k) of the Code) made by the Company or its
Affiliates for such individual’s benefit under any employee benefit plan now or
hereafter established.

2.4           “Beneficiary”  means the person who is entitled to receive
amounts under the Plan upon the death of a Participant.

2.5           “Board”  means the board of directors of the Company.

2.6           “Code”  means the United States Internal Revenue Code of
1986, as amended from time to time.

2.7           “Committee”  means a committee of at least two persons, who are
non-Employee members of the Board and are appointed by the Board.

2.8           “Company”  means On Assignment, Inc., a Delaware
corporation, or any successor (by merger or otherwise).

 II-1
 

 

2.9           “Disability”  means
a permanent and total disability as defined in section 22(e)(3) of the
Code.

2.10 “Employee”  means any person who is a common-law employee of
the Company or any Affiliate.

2.11  “Employer”  means the Company and all Affiliates that have
adopted the Plan.  The Employers as of
the 18th day of June, 2002 are listed in attached Schedule A.

2.12 “Exercise Date” means the last day of each Offering
Period, which is the day that all Options granted for the Offering Period are
to be exercised.

2.13 “Fair Market Value” of one share of Stock
means the last reported sale price for the Stock on the principal exchange on
which the Stock is traded or if not traded on any exchange, the last reported
sale price for the Stock on the NASDAQ National Market System on the business
day for which the Fair Market Value is being determined (or, if the Stock was
not traded on such date, on the immediately preceding date on which the Stock
was so traded).  If the Fair Market Value
is to be determined on any date prior to the time the Stock is first registered
under Section 12(g) of the Securities Exchange Act of 1934, then the Fair
Market Value of the Stock shall be determined by the Committee after taking
into account such factors as the Committee deems appropriate.

2.14 “Five Percent Owner” means an owner of five
percent or more of the total combined voting power of all classes of stock of
the Company or any Affiliate.  An
individual is considered to own any stock that is owned directly or indirectly
by or for his brothers and sisters (whether by whole or half-blood), spouse,
ancestors and lineal descendants.  Stock
owned, directly or indirectly, by or for a corporation, partnership, estate or
trust is considered as owned proportionately by or for its shareholders,
partners, or beneficiaries.  An individual
is considered to own stock that he may purchase under outstanding options.  The determination of the percentage of the
total combined voting power of all classes of stock of the Company or any
Affiliate that is owned by an individual is made by comparing the voting power
or value of the shares owned (or treated as owned) by the individual to the
aggregate voting power of all shares actually issued and outstanding
immediately after the grant of the option to the individual.  The aggregate voting power or value of all
shares actually issued and outstanding immediately after the grant of the
option does not include the voting power or value of treasury shares or shares
authorized for issue under outstanding options held by the individual or any
other person.

2.15 “Grant Date” means the first day of each
Offering Period, which is the day the Committee grants all eligible Employees
an Option under the Plan.

2.16 “Offering Period” means the six-month
period, unless the Committee specifies another Offering Period, beginning on
the Grant Date and ending on the Exercise Date. 
The Offering Periods shall commence on the first Trading Day of March 

 II-2
 

and September and shall end on
the last Trading Day on or before the last day of August and February,
respectively, unless the Committee specifies another Offering Period (which may
not exceed 27 months).

2.17 “Option” means an option granted under the
Plan to purchase Stock at the Option Price on the Exercise Date.

2.18 “Option Price” means the price to be paid
for each share of Stock upon exercise of an Option, which shall be 85 percent
of the lesser of (a) the Fair Market Value of a share of Stock on the Grant
Date or (b) the Fair Market Value of a share of Stock on the Exercise Date.

2.19 “Participant” means a person who is
eligible to be granted an Option under the Plan and who elects to have payroll
deductions withheld under the Plan for the purpose of exercising that Option on
the Exercise Date.

2.20 “Plan” means the On Assignment, Inc.
Employee Stock Purchase Plan (As Amended and Restated June 18, 2002),  as set out in this document and as it may be
amended from time to time.

2.21  “Retirement” means a Participant’s
termination of employment with the Company and all Affiliates on or after the
date on which the Participant has either (a) attained the age of 65, or (b)
both attained the age of 55 and completed ten years of service.  For this purpose, a year of service means a
year of service which the Participant has earned under the Company’s Section
401(k) plan, without regard to whether the Participant is a participant
therein.

2.22 “Stock” means the shares of common stock,
par value $0.01 per share, of the Company, or, in the event that the
outstanding ordinary shares are later changed into or exchanged for a different
class of shares or securities of the Company or another corporation, those
other shares or securities.  Stock, when
issued, may be represented by a certificate or by book or electronic entry.

2.23  “Trading Day” means a day on which the
principal securities exchange on which the Stock is listed is open for trading.

 

 II-3

 

ARTICLE
III

ELIGIBILITY

3.1           General
Requirements.  Subject to
Section 3.2, each Employee of each Employer is eligible to participate in the
Plan for a given Offering Period if, prior to the Grant Date, (a) he has
completed one year of continuous employment or two years of employment (even if
such employment is not continuous) for the Company and/or its Affiliates, (b)
he is in the employ of an Employer on the Grant Date, (c) he completes a
payroll deduction form authorizing payroll deductions and files it with his
Employer or such other person as may be designated by the Committee prior to
the Grant Date and (d) his customary employment service is for more than twenty
hours per week and more than five months per calendar year.  For purposes of the Plan, an Employee’s
employment service with Health Personnel Options Corporation shall be treated
as employment service for the Company.

3.2           Limitations
Upon Participation.  No
Employee shall be granted an Option to the extent that the Option would:

(a)           cause the Employee to be a Five
Percent Owner immediately after the grant;

(b)           permit the Employee to purchase
shares of Stock under all employee stock purchase plans, as defined in section
423 of the Code, of the Company and all Affiliates, at a rate which exceeds
$25,000 in Fair Market Value of the shares of Stock (determined at the time the
Option is granted) for the calendar year in which the options granted to the
Employee are first exercisable as provided in sections 423 and 424 of the Code;

(c)           permit the Employee to purchase more
than 2,000 shares of Stock (as adjusted pursuant to Section 1.2) during any
six-month Offering Period, or more than 4,000 shares of Stock (as adjusted
pursuant to Section 1.2) during any twelve-month Offering Period; or

(d)           permit the Employee to purchase
shares of Stock in excess of the limit, if any, on the number of shares of
Stock imposed pursuant to Section 4.1.

In addition, no Option shall be granted to an Employee
who resides in a country whose laws make participation in the Plan impractical.

 

 III-1

 

ARTICLE
IV

PARTICIPATION

4.1           Grant
of Option.  Effective as
of the Grant Date of each Offering Period, the Committee shall grant an Option
to each Participant which shall be exercisable on the Exercise Date only
through funds accumulated by the Employee through payroll deductions made
during the Offering Period together with any funds remaining credited to the
Participant’s payroll deduction account at the beginning of the Offering
Period.  The Option shall be for that
number of whole shares of Stock that may be purchased by the amount credited to
the Participant’s payroll deduction account on the Exercise Date at the Option
Price.  If so determined by the Committee
and announced to Employees prior to an Offering Period, the Committee may
establish a maximum number of shares of Stock that may be purchased by a
Participant during the Offering Period which is lower than the maximum number
of shares of Stock specified in clause (c) of Section 3.2.

4.2           Payroll
Deduction.  For an
Employee to participate during a given Offering Period, he must complete a
payroll deduction form and file it with his Employer prior to the beginning of
the Offering Period and in accordance with procedures established by the
Committee.  The payroll deduction form
shall permit a Participant to elect to have withheld from his Base Pay a
specified portion of his Base Pay during the Offering Period in accordance with
procedures established by the Committee. 
A Participant may not increase his payroll deduction percentage more
than once during the Offering Period but may reduce his payroll deduction
percentage an unlimited number of times during the Offering Period.  Payroll deductions shall continue through the
last pay date prior to the Exercise Date. 
A Participant may not make additional payments to his Plan account.

4.3           Payroll
Deductions Continuing.  A
Participant’s payroll deduction election shall remain in effect for all ensuing
Offering Periods until changed by him by filing an appropriate amended payroll
deduction form prior to the commencement of the Offering Period for which it is
to be effective in accordance with procedures established by the Committee.

4.4           Right
to Stop Payroll Deductions. 
As further set forth in Section 5.1 below, a Participant shall have the
right to discontinue payroll deductions by filing a payroll deduction
cancellation form with the Company.  The
payroll deduction cancellation shall become effective with the first full
payroll period following the Company’s receipt of the payroll deduction
cancellation form in accordance with procedures established by the Committee.

4.5           Accounting
for Funds.  As of each
payroll deduction period, the Employer shall cause to be credited to the
Participant’s payroll deduction account in a ledger established for that purpose
the funds withheld from and attributable to the Employee’s cash compensation
for that period.  No interest shall be
credited to the Participant’s payroll deduction account at any time.  The obligation of the Employer to 

 IV-1
 

the Participant for this account shall be a general corporate
obligation and shall not be funded through a trust nor secured by any assets
which would cause the Participant to be other than a general creditor of the
Employer.

4.6           Employer’s
Use of Funds.  All payroll
deductions received or held by an Employer may be used by the Employer for any
corporate purpose, and the Employer shall not be obligated to segregate such
payroll deductions.

 

 IV-2

ARTICLE V

PAYROLL DEDUCTION CANCELLATION, TERMINATION 

OF EMPLOYMENT OR LEAVE OF ABSENCE

5.1           Payroll
Deduction Cancellation.  A
Participant may, at any time on or before the Exercise Date, elect to
discontinue payroll deductions as provided in Section 4.4.  With respect to payroll deductions credited
to his Plan account prior to the cancellation, the Participant has the right to
elect either to (a) withdraw all of the funds then credited to his Plan account
(and withdraw from the Plan) or (b) exercise the Option with his
then-accumulated deductions for the maximum number of whole shares of Stock
that can be purchased at the Option Price on the Exercise Date for the Offering
Period in which his cancellation is effective. 
If no such election is made, then such payroll deductions shall be
refunded as soon as practicable after the last day of the Offering Period.  Any election by a Participant to cancel his
payroll deduction during the Offering Period terminates his right to elect any
further payroll deductions for the then-current Offering Period.  If the Participant wishes to participate in
any future Offering Period, he must file a new payroll deduction election
within the time frame required by the Committee for participation for that
Offering Period.

5.2           Termination
of Employment for any Reason Other Than Death, or Retirement or Disability
Which Occurs More Than Three Months Prior to the Exercise Date. 
If a Participant’s employment with the Company and all Affiliates is
terminated for any reason other than death prior to the Exercise Date, or if
the Participant’s employment with the Company and all Affiliates is terminated
more than three months prior to the Exercise Date as a result of Retirement or
Disability, the Option granted to the Participant for that Offering Period
shall lapse.  If a Participant is on an
Authorized Leave of Absence, for purposes of the Plan, the Participant’s
employment with the Company and all Affiliates shall be deemed to be terminated
on the later of the 91st day of such leave
or the date through which the Participant’s employment is guaranteed either by
statute or contract. The Participant’s funds then credited to his Plan Account
shall be returned to him as soon as administratively feasible.

5.3           Termination of Employment Due to
Death.  If a Participant’s
employment with the Company and all Affiliates is terminated due to his death,
the Participant’s Beneficiary (or such other person as may be entitled to
amounts credited to the Participant’s account under Section 10.1) will have the
right to elect, either to:

(a)           withdraw all of the funds then
credited to his Plan account as of his termination date; or

(b)           exercise the Option for the maximum
number of whole shares of Stock that can be purchased at the Option Price on
the last day of the Offering Period (in which the Participant’s termination of
employment with the Company and all Affiliates occurs).

 V-1
 

 

The Participant (or, if applicable, such other person
designated in the first paragraph of this Section 5.3) must make such election
by giving written notice to the Committee in accordance with procedures
established by the Committee.  Any
accumulated funds credited to the Participant’s Plan account as of the date of
his termination of employment with the Company and all Affiliates will be
delivered to or on behalf of the Participant as soon as administratively
practicable thereafter.

5.4           Termination of Employment Due to
Retirement or Disability Within Three Months Prior to the Exercise Date.  If a Participant’s employment with the
Company and all Affiliates is terminated due to Retirement or Disability within
three months prior to the Exercise Date, the Participant (or the Participant’s
personal representative or legal guardian in the event of Disability) will have
the right to elect either to:

(a)           withdraw all of the funds then
credited to his Plan account as of his termination date; or

(b)           exercise the Option for the maximum
number of whole shares of Stock that can be purchased at the Option Price on
the last day of the Offering Period (in which the Participant’s termination of
employment with the Company and all Affiliates occurs).

The Participant (or, if applicable, such other person
designated in the first paragraph of this Section 5.4) must make such election
by giving written notice to the Committee in accordance with procedures
established by the Committee.  Any
accumulated funds credited to the Participant’s Plan account as of the date of
his termination of employment with the Company and all Affiliates will be
delivered to or on behalf of the Participant as soon as administratively
practicable thereafter.

5.5           Authorized Leave of Absence.  If a Participant begins an Authorized Leave
of Absence during an Offering Period, then he shall have the right to elect
either of the alternatives described in Section 5.3 (substituting references to
termination date with references to the date his leave of absence begins).  However, if the individual is deemed to have
incurred a termination of employment under Section 5.2, at that time the
provisions of Section 5.2 rather than this Section 5.5 shall apply to
the individual.

 V-2

ARTICLE VI

EXERCISE OF OPTION

6.1           Purchase
of Shares.  Subject to
Section 3.2, on the Exercise Date of each Offering Period, an amount equal to
the amount credited to each Participant’s Plan account shall be used to
purchase the maximum number of whole shares of Stock that can be purchased at
the Option Price for that Offering Period, subject to the Section 4.1
limitation on the maximum number of shares of Stock that may be purchased by a
Participant.  Any funds remaining
credited to a Participant’s Plan account after the exercise of his Option for
the Offering Period shall be refunded to the Participant as soon as practicable
following the Exercise Date.  If in any
Offering Period the total number of shares of Stock to be purchased by all
Participants exceeds the number of shares of Stock committed to the Plan, then
each Participant shall be entitled to purchase only his pro rata portion of the
shares of Stock remaining available under the Plan based on the balances
credited to each Participant’s Plan account as of the Exercise Date and any
amounts remaining credited to each Participant’s Plan account shall be refunded
to the Participant as soon as possible following the Exercise Date.  After the purchase of all shares of Stock
available on the Exercise Date, all Options granted for the Offering Period to
the extent not used are terminated.

6.2           Accounting
for Shares.  After the
Exercise Date of each Offering Period, a report shall be given to each
Participant stating the amount credited to his Plan account, the number of
shares of Stock purchased and the Option Price.

6.3           Issuance
of Shares.  As soon as
administratively feasible after the end of the Offering Period, the Committee
shall advise the appropriate officer of the Company that the terms of the Plan
have been complied with and that it is appropriate for the officer to cause to
be issued the shares of Stock upon which Options have been exercised under the
Plan.  The Committee may determine in its
discretion the manner of delivery of the shares purchased under the Plan, which
may be by electronic account entry into new or existing accounts, delivery of
share certificates or any other means as the Committee, in its discretion,
deems appropriate.  The Committee may, in
its discretion, hold the share certificate for any shares or cause it to be
legended in order to comply with the securities laws of the applicable
jurisdiction, or should the shares be represented by book or electronic account
entry rather than a certificate, the Committee may take such steps to restrict
transfer of the shares as the Committee considers necessary or advisable to
comply with applicable law.

 VI-1

ARTICLE VII

ADMINISTRATION

7.1           Powers.  The Committee has the exclusive
responsibility for the general administration of the Plan, and has all powers
necessary to accomplish that purpose, including but not limited to the
following rights, powers, and authorities:

(a)           to make rules for administering the
Plan so long as they are not inconsistent with the terms of the Plan;

(b)           to construe all provisions of the
Plan;

(c)           to correct any defect, supply any
omission, or reconcile any inconsistency which may appear in the Plan;

(d)           to select, employ, and compensate at
any time any consultants, accountants, attorneys, and other agents the
Committee believes necessary or advisable for the proper administration of the
Plan;

(e)           to determine all questions relating
to eligibility, Fair Market Value, Option Price and all other matters relating
to benefits or Participants’ entitlement to benefits;

(f)            to determine all controversies
relating to the administration of the Plan, including, but not limited to, any
differences of opinion arising between an Employer and a Participant, and any
questions it believes advisable for the proper administration of the Plan; and

(g)           to delegate any clerical or
recordation duties of the Committee as the Committee believes is advisable to
properly administer the Plan.

7.2           Quorum
and Majority Action.  A
majority of the Committee constitutes a quorum for the transaction of
business.  The vote of a majority of the
members present at any Committee meeting shall decide any question brought
before that meeting.  In addition, the
Committee may decide any question by a vote, taken without a meeting, of a
majority of its members via telephone, computer, fax or any other media of
communication.

7.3           Standard
of Judicial Review of Committee Actions.  The Committee has full and absolute
discretion in the exercise of each and every aspect of its authority under the
Plan.  Notwithstanding anything to the
contrary, any action taken, or ruling or decision made, by the Committee in the
exercise of any of its powers and authorities under the Plan shall be final and
conclusive as to all parties, including, without limitation, all Participants
and their beneficiaries, regardless of whether the Committee or one or more of
its members may have an actual or potential conflict of interest with respect
to the subject matter of the action, ruling or decision.  No final action, ruling, or decision of 

 VII-1
 

the Committee shall be subject to de novo review in
any judicial proceeding; and no final action, ruling, or decision of the
Committee may be set aside unless it is held to have been arbitrary and
capricious by a final judgment of a court having jurisdiction with respect to
the issue.

 VII-2

ARTICLE VIII

DESIGNATION OF PARTICIPATING SUBSIDIARIES

8.1           Designation
Procedure. The Committee may from time to time designate in its
sole discretion an Affiliate as one whose employees are eligible to and may
participate in the Plan.

8.2       
No Joint Venture Implied. 
The resolutions evidencing the designation of an Affiliate shall become
a part of the Plan.  However, neither the
designation of an Affiliate nor any act performed by the Company or the
Affiliate in relation to the Plan shall create a joint venture or partnership
relation between it and the Company or any other Affiliate.

 VIII-1

 

ARTICLE
IX

TERMINATION AND AMENDMENT OF THE PLAN

9.1           Termination.  The Company may, by action of the Board,
terminate the Plan at any time and for any reason.  The Plan shall automatically terminate upon
the purchase by Participants of all shares committed to the Plan, unless the
number of shares committed to the Plan is increased by the Committee or the
Board and approved by the shareholders of the Company as set forth in Section
9.2; provided that to the extent it has not previously terminated, the Plan
will terminate on August 31, 2022.  Upon
termination of the Plan, as soon as administratively feasible there shall be
refunded to each Participant the remaining funds in his Plan account.  The termination of the Plan shall not affect
the current Options already outstanding under the Plan to the extent there are
shares committed, unless the Participants agree.

9.2           Amendment.
The Board has the right to modify, alter or amend the Plan at any time and from
time to time to any extent that it deems advisable, including, without limiting
the generality of the foregoing, any amendment to the Plan deemed necessary to
ensure compliance with section 423 of the Code.  The Committee may suspend the operation of
the Plan for any period as it may deem advisable.  However, no amendment or suspension shall
operate to reduce any amounts previously allocated to a Participant’s payroll
deduction account, to reduce a Participant’s rights with respect to shares
previously purchased and held on his behalf under the Plan or to affect the
current Option a Participant already has outstanding under the Plan without the
Participant’s agreement.  Any amendment
changing the aggregate number of shares to be committed to the Plan, the class
of employees eligible to receive Options under the Plan or the group of
corporations eligible to be designated to participate in the Plan shall be
contingent upon the approval of the Company’s stockholders in accordance with
the requirements of section 423 of the Code. 
Further, any amendment that increases the number of shares of stock that
may be purchased during an Offering Period above the number of shares specified
in clause (c) of Section 3.2, any amendment that materially increases the
benefits accruing to Participants under the Plan, and any amendment that
materially modifies the requirements for eligibility to participate in the Plan
shall be contingent upon the approval of the Company’s stockholders.

 

 IX-1

 

ARTICLE X

MISCELLANEOUS

10.1         Designation of Beneficiary.  In accordance with procedures established
by the Committee, a Participant may designate a Beneficiary who is to receive
any cash and shares credited to the Participant’s account under the Plan.  If no such designation shall have been so
filed, or if no designated Beneficiary survives the Participant or can be
located by the Committee, using reasonable diligence, within six months of the
Participant’s death, then such cash and shares shall be distributed to the duly
appointed and serving personal representative of the Participant’s estate, but
only if that personal representative can provide the Committee with what the
Committee reasonably determines is satisfactory documentary proof of that
appointment and of the personal representative’s identity (collectively, “Documentary
Proof”); if, within six months of the Participant’s death, there is no duly
appointed and serving personal representative of the Participant’s estate who
has provided the Committee with Documentary Proof, or if such decedent left no
will, then such cash and shares shall be distributed to the Participant’s heirs
at law, determined in accordance with the laws of intestate succession of the
state in which the Participant was domiciled at the time of the Participant’s
death, provided that such heirs provide the Committee with what the Committee
reasonably determines is satisfactory Documentary Proof of information the
Committee believes it needs to make the distribution to such heirs.

10.2         Plan Not An Employment Contract.  The adoption and maintenance of the Plan is
not a contract between any Employer and its Employees which gives any Employee
the right to be retained in its employment. 
Likewise, it is not intended to interfere with the rights of any
Employer to discharge any Employee at any time or to interfere with the
Employee’s right to terminate his employment at any time.

10.3         All Participants’ Rights Are Equal.  All Participants will have the same rights and
privileges under the Plan as required by section 423 of the Code and Department
of Treasury Regulation section 1.423-2(f).

10.4         Options Are Not Transferable.  No Option granted a Participant under the
Plan is transferable by the Participant otherwise than by will or the laws of
descent and distribution, and must be exercisable, during his lifetime, only by
him.  In the event any Participant
attempts to violate the terms of this Section, any Option held by the
Participant shall be terminated by the Company and, upon return to the
Participant of the remaining funds in his Plan account, all of his rights under
the Plan will terminate.

10.5         Voting of Shares.  Shares of Stock held under the Plan for the
account of each Participant shall be voted by the holder of record of those shares
in accordance with the Participant’s instructions.

10.6         No Rights of Shareholder.  No eligible Employee or Participant shall by
reason of participation in the Plan have any rights of a shareholder of the
Company until he acquires shares of Stock as provided in the Plan.  No adjustments shall be made for 

 X-1
 

dividends, distributions or other rights for which the record date is
prior to the date a Participant acquires shares as provided in the Plan.

10.7         Governmental Regulations.  The obligation to sell or deliver the shares
under the Plan is subject to the approval of all governmental authorities
required in connection with the authorization, purchase, issuance or sale of
the shares.  The Company shall have no liability
for failure to sell or deliver shares under the Plan if it determines it cannot
do so and remain in compliance with applicable law.

10.8         Notices. 
All notices and other communication in connection with the Plan shall be
in the form specified by the Committee and shall be deemed to have been duly
given when sent to the Participant at his last known address or to his
designated personal representative or beneficiary, or to the Employer or its
designated representative, as the case may be.

10.9         Indemnification of Committee.  In addition to all other rights of
indemnification as they may have as directors or as members of the Committee,
the members of the Committee shall be indemnified by the Company against the
reasonable expenses, including attorneys’ fees, actually and necessarily
incurred in connection with the defense of any action, suit or proceeding, or
in connection with any appeal, to which they or any of them may be a party by
reason of any action taken or failure to act under or in connection with the
Plan or any Option granted under the Plan, and against all amounts paid in
settlement (provided the settlement is approved by independent legal counsel
selected by the Company) or paid by them in satisfaction of a judgment in any
action, suit or proceeding, except in relation to matters as to which it is
adjudged in the action, suit or proceeding, that the Committee member is liable
for gross negligence or willful misconduct in the performance of his duties.

10.10       Tax Withholding.  At the time a Participant’s Option is
exercised or at the time a Participant disposes of some or all of the shares
purchased under the Plan or, if applicable, becomes vested in any shares under
the Plan, the Participant must make adequate provision for the Employer’s
federal, state or other tax withholding obligations, if any, which arise upon
the exercise of the Option or the disposition of the shares.  At any time, the Employer may, but shall not
be obligated to, withhold from the Participant’s compensation the amount
necessary for the Employer to meet applicable withholding obligations.

10.11       Gender and Number.  If the context requires it, words of one
gender when used in the Plan shall include the other genders, and words used in
the singular or plural shall include the other.

10.12       Severability.  Each provision of the Plan may be
severed.  If any provision is determined
to be invalid or unenforceable by a court of competent jurisdiction, that
determination shall not affect the validity or enforceability of any other provision.

 X-2
 

 

10.13       Persons Based Outside of the United
States.  Notwithstanding
any provision of the Plan to the contrary, in order to comply with the laws in
other countries in which the Company and its Affiliates operate or have
Employees, the Committee, in its sole discretion, shall have the power and
authority to:

(a)   determine which Affiliates shall be covered
by the Plan;

(b)   determine which persons employed outside the
United States are eligible to participate in the Plan;

(c)   modify the terms and conditions of any Option
granted to persons who are employed outside the United States to comply with
applicable foreign laws;

(d)   establish subplans and modify exercise
procedures and other terms and procedures to the extent such actions may be
necessary or advisable.  Any subplans and
modifications to Plan terms and procedures established under this Section 10.13
by the Committee shall be attached to the Plan document as Appendices; and

(e)   take any action, before or after an Option is
granted, that it deems advisable to obtain or comply with any necessary local
government regulatory exemptions or approvals.

Notwithstanding the above, the Committee may not take
any actions hereunder, and no Options shall be granted, that would violate
section 423 of the Code, any securities law or governing statute or any other
applicable law.

10.14       Governing Law; Parties to Legal
Actions.  The provisions
of the Plan shall be construed, administered, and governed under the laws of
the State of California and, to the extent applicable, by the securities, tax,
employment and other laws of the United States.

 

 X-3

 

SCHEDULE
A TO THE ON ASSIGNMENT, INC.

EMPLOYEE STOCK PURCHASE PLAN (AS AMENDED

AND RESTATED JUNE 18, 2002)

On Assignment, Inc., a Delaware corporation

Assignment Ready, Inc., a Delaware corporation

Health Personnel Options Corporation, a Delaware
corporation

 

 A-1Exhibit
10.5

 

ON ASSIGNMENT, INC.

FIRST
AMENDMENT TO THE EMPLOYEE STOCK PURCHASE PLAN

(As
Amended and Restated June 18, 2002)

(First
Amendment dated January 23, 2007)

 

FIRST
AMENDMENT TO THE ON ASSIGNMENT, INC. EMPLOYEE STOCK PURCHASE PLAN,

AS AMENDED AND RESTATED JUNE 18, 2002

Pursuant to the
authority reserved to the Board of Directors (the “Board”) of On Assignment, Inc., a Delaware Company (the
“Company”), under
Section 9.2 of the Company’s Employee Stock Purchase Plan, as Amended and
Restated on June 18, 2002 (the “ESPP”),
the Board hereby amends the ESPP as follows (the “ESPP Amendment”):

1.    The
first sentence of Section 1.2 of the ESPP is deleted and replaced in its
entirety with the following:

“The aggregate number of shares of Stock authorized to
be sold pursuant to Options granted under the plan is 1,200,000, subject to
adjustment as provided in this Section.”

The remainder of Section 1.2 shall not be affected by this
amendment.

2.    Section 2.11
of the ESPP is deleted and replaced in its entirety with the following:

“2.11    ‘Employer’ means the Company and all Affiliates that are
specified on Schedule A to the Plan and that have adopted the Plan, as such
Schedule A may be revised by the Committee from time to time.”

3.    Section 3.1
of the ESPP is deleted and replaced in its entirety with the following:

“3.1       General Requirements.  
Subject to Section 3.2 below, each Employee of each Employer is eligible
to participate in the Plan for a given Offering Period if, prior to an
applicable Grant Date, (a) such Employee has completed thirty days of
continuous employment with one or more Employers, (b) such Employee is in
the employ of an Employer on the Grant Date, (c) such Employee completes a
valid payroll deduction form authorizing payroll deductions and files it with
such Employee’s Employer or such other person as may be designated by the
Committee prior to the Grant Date, and (d) such Employee’s customary
employment service is for more than twenty hours per week and more than five
months per calendar year.

Except as
expressly provided in this ESPP Amendment, all terms and conditions of the ESPP
and any awards outstanding thereunder shall remain in full force and effect.

IN
WITNESS WHEREOF, the Board has caused this ESPP Amendment to
be executed by a duly authorized officer of the Company as of the 23rd day of January, 2007.

	
  

  	
   

  	
  ON ASSIGNMENT, INC.

  
	
   

  	
   

  	
  /s/ PETER T. DAMERIS

  	
   

  
	
   

  	
   

  	
  Peter T. Dameris

  
	
   

  	
   

  	
  President and Chief Executive

  Officer

  
	
  Attest:

  	
   

  	
   

  
	
  /s/ JAMES L.
  BRILL

  	
   

  	
   

  
	
  James L. Brill

  	
   

  	
   

  
	
  Senior
  Vice President and Chief

  Financial Officer

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