Document:

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 

 

8

 

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

  

 

16Exhibit 10.18

 

EXECUTIVE
AGREEMENT

 

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

 

Recitals

 

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

 

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

 

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

 

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

 

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

 

ARTICLE 1

SEPARATION

 

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

 

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

 

1

 

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

 

ARTICLE 2

PAYMENTS AND BENEFITS

 

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

 

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

 

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

 

2

 

ARTICLE 3

STOCK OPTIONS

 

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

 

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

 

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

 

ARTICLE 4

OTHER BENEFITS

 

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

 

ARTICLE 5

RESTRICTIONS

 

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

 

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

 

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

 

3

 

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

 

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

 

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

 

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

 

4

 

5.2                                 Confidentiality.  

 

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

 

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

 

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

 

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

 

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

 

5

 

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

 

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

 

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

 

ARTICLE 6

RELEASE OF ALL CLAIMS

 

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

 

6

 

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

 

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

 

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

 

•                  the Civil Rights Act
of 1991; 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

•                  the California Labor
Code; 

 

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

 

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

 

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

 

7

 

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

 

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

 

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

 

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

 

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

 

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

 

8

 

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

 

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

 

ARTICLE 7

ACKNOWLEDGEMENTS

 

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

 

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

 

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

 

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

 

9

 

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

 

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

 

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

 

ARTICLE 8

GENERAL PROVISIONS

 

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

 

If to Mr.
Rudolph:

 

26651 West
Agoura Road

Calabasas,
CA  91302

Fax:  (818) 880-5245

 

with a copy
to:

 

Heller Ehrman
(Venture Law Group)

2775 Sand Hill
Road

Menlo Park,
CA  94025-7019

Attention:  Renee R. Deming

Fax:  (650) 324-0638

 

10

 

If to the
Company:

 

On Assignment,
Inc.

26651 West
Agoura Road

Calabasas,
CA  91302

Attention:  Chief Executive Officer

Fax:  (818) 880-0056

 

with a copy
to:

 

Hogan &
Hartson LLP

2049 Century
Park East, Suite 700

Los Angeles,
CA  90067

Attention:  Carissa Coze, Esq.

Fax:  310-789-5400

 

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

 

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

 

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

 

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

 

11

 

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

 

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

 

8.8                                 Arbitration.

 

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

 

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

 

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

 

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

 

12

 

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

 

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

 

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

 

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

 

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

 

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

 

13

 

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

 

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

 

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

 

	
   

  	
  ON ASSIGNMENT, INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Peter Dameris

  	
   

  
	
   

  	
  Peter
  Dameris, President and Chief Executive 

  Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Ronald
  W. Rudolph

  	
   

  
	
   

  	
  Ronald W.
  Rudolph

  

 

14

 

SCHEDULE I

Insurance
Coverage and Other Benefits

 

Insurance

Medical

Dental

Life & ADD

Basic short-term disability

Basic long-term disability

 

Other Benefits

 

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

 

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

 

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

 

15

 

SCHEDULE II

Stock Options
as of December 31, 2004

 

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

 

	
  OPTION

  	
   

  	
  Company

  Ref. No.

  	
   

  	
  Grant Date

  	
   

  	
  Ex. Price

  	
   

  	
  No. of Shares

  	
   

  	
  ISO/NQ

  	
   

  
	
  Vested

  	
   

  	
  Unvested

  
	
  1.

  	
   

  	
  000866

  	
   

  	
  12/16/1997

  	
   

  	
   

  	
  $

  	
  11.37500

  	
   

  	
  733.00

  	
   

  	
  0.00

  	
   

  	
  ISO

  	
   

  
	
  2.

  	
   

  	
  010867

  	
   

  	
  12/16/1997

  	
   

  	
   

  	
  $

  	
  11.37500

  	
   

  	
  310.00

  	
   

  	
  0.00

  	
   

  	
  NQ

  	
   

  
	
  3.

  	
   

  	
  001038

  	
   

  	
  12/9/1998

  	
   

  	
   

  	
  $

  	
  16.21900

  	
   

  	
  5,000.00

  	
   

  	
  0.00

  	
   

  	
  ISO

  	
   

  
	
  4.

  	
   

  	
  001039

  	
   

  	
  12/9/1998

  	
   

  	
   

  	
  $

  	
  16.21900

  	
   

  	
  4,584.00

  	
   

  	
  0.00

  	
   

  	
  NQ

  	
   

  
	
  5.

  	
   

  	
  001233

  	
   

  	
  12/9/1999

  	
   

  	
   

  	
  $

  	
  13.68750

  	
   

  	
  8,684.00

  	
   

  	
  0.00

  	
   

  	
  ISO

  	
   

  
	
  6.

  	
   

  	
  001234

  	
   

  	
  12/9/1999

  	
   

  	
   

  	
  $

  	
  13.68750

  	
   

  	
  6,316.00

  	
   

  	
  0.00

  	
   

  	
  NQ

  	
   

  
	
  7.

  	
   

  	
  001470

  	
   

  	
  12/4/2000

  	
   

  	
   

  	
  $

  	
  23.75000

  	
   

  	
  4,211.00

  	
   

  	
  0.00

  	
   

  	
  ISO

  	
   

  
	
  8.

  	
   

  	
  001471

  	
   

  	
  12/4/2000

  	
   

  	
   

  	
  $

  	
  23.75000

  	
   

  	
  30,789.00

  	
   

  	
  0.00

  	
   

  	
  NQ

  	
   

  
	
  9.

  	
   

  	
  001705

  	
   

  	
  7/2/2001

  	
   

  	
   

  	
  $

  	
  17.97000

  	
   

  	
  0.00

  	
   

  	
  3,646.00

  	
   

  	
  ISO

  	
   

  
	
  10.

  	
   

  	
  001706

  	
   

  	
  7/2/2001

  	
   

  	
   

  	
  $

  	
  17.97000

  	
   

  	
  21,354.00

  	
   

  	
  0.00

  	
   

  	
  NQ

  	
   

  
	
  11.

  	
   

  	
  001795

  	
   

  	
  1/31/2002

  	
   

  	
   

  	
  $

  	
  19.86000

  	
   

  	
  0.00

  	
   

  	
  2,465.00

  	
   

  	
  ISO

  	
   

  
	
  12.

  	
   

  	
  001796

  	
   

  	
  1/31/2002

  	
   

  	
   

  	
  $

  	
  19.86000

  	
   

  	
  25,521.00

  	
   

  	
  7,014.00

  	
   

  	
  NQ

  	
   

  
	
  13.

  	
   

  	
  002211

  	
   

  	
  7/18/2003

  	
   

  	
   

  	
  $

  	
  5.25000

  	
   

  	
  2.00

  	
   

  	
  28,685.00

  	
   

  	
  ISO

  	
   

  
	
  14.

  	
   

  	
  002212

  	
   

  	
  7/18/2003

  	
   

  	
   

  	
  $

  	
  5.25000

  	
   

  	
  30,102.00

  	
   

  	
  26,211.00

  	
   

  	
  NQ

  	
   

  
	
  15.

  	
   

  	
  002351

  	
   

  	
  3/23/2004

  	
   

  	
   

  	
  $

  	
  5.11000

  	
   

  	
  0.00

  	
   

  	
  8,708.00

  	
   

  	
  ISO

  	
   

  
	
  16.

  	
   

  	
  002352

  	
   

  	
  3/23/2004

  	
   

  	
   

  	
  $

  	
  5.11000

  	
   

  	
  5,625.00

  	
   

  	
  15,667.00

  	
   

  	
  NQ

  	
   

  

 

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

 

	
  OPTION

  	
   

  	
  Company

  Ref. No.

  	
   

  	
  Grant Date

  	
   

  	
  Ex. Price

  	
   

  	
  No. of Shares

  Vested and Exercisable

  	
   

  	
   

  
	
  13

  	
   

  	
  002211

  	
   

  	
  7/18/2003

  	
   

  	
   

  	
  $

  	
  5.25000

  	
   

  	
  28,687

  	
   

  	
   

  
	
  14

  	
   

  	
  002212

  	
   

  	
  7/18/2003

  	
   

  	
   

  	
  $

  	
  5.25000

  	
   

  	
  56.313

  	
   

  	
   

  
	
  15

  	
   

  	
  002351

  	
   

  	
  3/23/2004

  	
   

  	
   

  	
  $

  	
  5.11000

  	
   

  	
  8,708

  	
   

  	
   

  
	
  16

  	
   

  	
  002352

  	
   

  	
  3/23/2004

  	
   

  	
   

  	
  $

  	
  5.11000

  	
   

  	
  21,292

  	
   

  	
   

  

 

16

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