Exhibit 10.1
EXECUTIVE CHANGE OF CONTROL
AGREEMENT
This Executive Change of Control
Agreement (this “ Agreement ”), is made as of
the 1st day of January, 2007, by and between On Assignment, Inc., a
Delaware corporation (the “ Company ”), and
James Brill (the “ Executive ”).
Recitals
A.
The Executive has been hired as of the date hereof to serve as the
Chief Financial Officer of the Company, in connection with which,
the Executive has entered into an Employment Agreement of even date
herewith providing for severance and termination benefits in
certain circumstances.
B.
Absent the execution and delivery of this Agreement, pursuant to
the Company’s Change in Control Severance Plan (the “
ASGN Severance Plan ”), the Executive would be
entitled to receive certain severance benefits in the event of a
change in control (within the meaning set forth in the ASGN
Severance Plan).
C.
The Board of Directors of the Company (the “ Board
”) has determined that it is in the best interests of the
Company and its stockholders to assure that the Company will have
the continued dedication of the Executive, notwithstanding the
possibility, threat or occurrence of a Change of Control (as
defined herein). The Board believes it is imperative to
diminish the inevitable distraction of the Executive by virtue of
the personal uncertainties and risks created by a pending or
threatened Change of Control and to encourage the Executive’s
full attention and dedication to the current Company in the event
of any threatened or pending Change of Control, and to provide the
Executive with compensation and benefits arrangements upon a Change
of Control that ensure that the compensation and benefits
expectations of the Executive will be satisfied and that are
competitive with those of other corporations. Therefore, in
order to accomplish these objectives, the Board has caused the
Company to modify the ASGN Severance Plan to eliminate its coverage
of the Executive and to enter into this Agreement and has provided
that this Agreement will supersede the Employment Agreement in the
event that the Executive becomes entitled to any compensation or
benefits under this Agreement.
Agreement
In consideration of the foregoing
and the mutual covenants and promises contained herein, the parties
agree as follows:
1.
Certain Definitions
. In addition to the terms
defined elsewhere herein, the following terms shall have the
respective meanings set forth below:
(a)
“ Accrued Compensation ” means an amount
including all amounts earned or accrued through the termination
date but not paid as of the termination date including
(i) Base Salary, (ii) reimbursement for reasonable and
necessary expenses incurred by you on behalf of the Company during
the period ending on the termination date, (iii) vacation and sick
leave pay (to the extent provided by Company policy or applicable
law), and (iv) incentive
compensation (if any) earned in
respect of any period ended prior to the termination
date. It is expressly understood that incentive
compensation shall have been “earned” as of the time
that the conditions to such incentive compensation have been met,
even if not calculated or payable at such time.
(b)
“ Affiliated Company ” means any company
controlled by, controlling or under common control with the
Company.
(c)
“ Base Salary ” means the Executive’s
annual base salary at the rate in effect during the last regularly
scheduled payroll period immediately preceding the occurrence of
the Change in Control and does not include, for example, bonuses,
overtime compensation, incentive pay, fringe benefits, sales
commissions or expense allowances.
(d)
“ Cause ”
means any of the following:
(i)
the Executive’s (A) conviction of a felony; (B) commission of
any other material act or omission involving dishonesty or fraud
with respect to the Company or any of its Affiliated Companies or
any of the customers, vendors or suppliers of the Company or its
subsidiaries; (C) misappropriation of material funds or assets of
the Company for personal use; or (D) engagement in unlawful
harassment or other discrimination with respect to the employees of
the Company or its subsidiaries;
(ii)
the Executive’s continued substantial and repeated neglect of
his duties, after written notice thereof from the Board, and such
neglect has not been cured within 30 days after the Executive
receives notice thereof from the Board;
(iii)
the Executive’s gross negligence or willful misconduct in the
performance of his duties hereunder that is materially and
demonstrably injurious to the Company; or
(iv)
the Executive’s engaging in conduct constituting a breach of
his written obligations to the Company in respect of
confidentiality and/or the use or ownership of proprietary
information.
(e)
“ Change of Control ” shall be deemed to occur
upon the consummation of any of the following
transactions:
(i)
a merger or consolidation in which the Company is not the surviving
entity, except for a transaction the principal purpose of which is
to change the state of the Company’s incorporation or a
transaction in which 50% or more of the surviving entity’s
outstanding voting stock following the transaction is held by
holders who held 50% or more of the Company’s outstanding
voting stock prior to such transaction; or
(ii)
the sale, transfer or other disposition of all or substantially all
of the assets of the Company; or
(iii)
any reverse merger in which the Company is the surviving entity,
but in which 50% or more of the Company’s outstanding voting
stock is transferred to holders different from those who held the
stock immediately prior to such merger; or
(iv)
the acquisition by any person (or entity) directly or indirectly of
50% or more of the combined voting power of the outstanding shares
of Company capital stock; or
(v)
during any period of two (2) consecutive years (not including any
period prior to the date of this Agreement), individuals who at the
beginning of such period constitute the Board (and any new
director, whose election by the Company’s stockholders was
approved by a vote of at least two-thirds (2/3) of the directors
then still in office who either were directors at the beginning of
the period or whose election or nomination for election was so
approved), cease for any reason to constitute a majority thereof;
provided, however, that any individual becoming a director
subsequent to the date hereof whose election, or nomination for
election by the Company’s stockholders, was approved by a
vote of at least a majority of the directors then comprising the
Board on the date hereof (the “ Incumbent Board
”) shall be considered as though such individual were a
member of the Incumbent Board, but excluding, for purposes of this
proviso, any such individual whose initial assumption of office
occurs as a result of an actual or threatened election contest with
respect to the election or removal of directors or other actual or
threatened solicitation of proxies or consents by or on behalf of a
Person other than the Board.
(f)
“ Change of Control Period ” means the period
commencing on the date hereof and ending on the third anniversary
of the date hereof; provided, however, that, commencing on the date
two years after the date hereof, and on each annual anniversary of
such date (such date and each annual anniversary thereof, the
“ Renewal Date ”), the Change of Control Period
shall be automatically extended so as to terminate two years from
such Renewal Date, unless at least 60 days prior to the Renewal
Date the Company gives notice to the Executive that the Change of
Control Period shall not be extended.
(g)
“ Date of Termination ” means (i) if the
employment is terminated for Cause, the date of receipt by the
Executive of written notice from the Board or the CEO that the
Executive has been terminated, or any later date specified therein,
as the case may be, (ii) if the employment is terminated by
the Company other than for Cause, death or disability, the date
specified in the Company’s written notice to the Executive of
such termination, (iii) if the employment is terminated by
reason of the Executive’s death or disability, the date of
such death or the effective date of such disability, (iv) if
the employment is terminated by Executive’s resignation that
constitutes Involuntary Termination under this Agreement, the date
of the Company’s receipt of the Executive’s notice of
termination or any later date specified therein.
(h)
“ Good Reason ” means either of the
following:
(i)
the failure of the Company to pay an amount owing to the Executive,
which amount constitutes salary, bonus or other compensatory amount
related to his employment, after the Executive has provided the
Board with written notice of such failure and such payment has not
thereafter been made within 15 days of the delivery of such written
notice; or
(ii)
the relocation of the Executive from the corporate headquarters
metropolitan area (as of the date of this Agreement) without his
consent.
(i)
“ Involuntary Termination ” shall mean the
termination of Executive’s employment with the Company (or,
if applicable, successor entity) other than by reason of death or
disability:
(i)
upon Executive’s involuntary discharge or dismissal other
than for Cause,
(ii)
upon Executive’s resignation for Good Reason within 30 days
after the occurrence of the facts constituting Good
Reason,
(iii)
upon Executive’s resignation following (A) a reduction in
Executive’s level of Base Salary or any Target Bonus (unless,
in the case of a reduction in any Target Bonus, there is a
corresponding increase in the level of Base Salary such that, in
the aggregate, Executive is no worse off) or (B) a material
reduction in Executive’s benefits, provided and only
if such change or reduction is effected without
Executive’s written concurrence, or
(iv)
upon Executive’s resignation following a change in the
Executive’s position with the Company (or, if applicable,
with the successor entity) that is effected without the
Executive’s consent and that materially reduces his level of
responsibility or authority, other than reductions attributable to
the Company ceasing to be a publicly held company or becoming a
subsidiary or division of another company.
Except as provided in Section 2(b),
for purposes of this Agreement any determination of
“Involuntary Termination” made by the Company or the
Executive shall be made in good faith. Any dispute regarding same
shall be promptly resolved by arbitration in accordance with the
provisions of Sections 8(g) and (h)
below.
(j)
“ Pro Rata Bonus ” means an amount equal to 100%
of the Target Bonus that the Executive would have been eligible to
receive for the Company’s fiscal year in which the
Executive’s employment terminates following a Change of
Control, multiplied by a fraction, the numerator of which is the
number of days in such fiscal year through the Termination Date and
the denominator of which is 365.
(k)
“ Target Bonus ” shall mean the bonus which
would have been paid to the Executive for full achievement of the
Company’s base business plan or budget and/or for the
attainment of specific performance objectives pertaining to the
business of the Company or any of its specific business units or
divisions, or to individual performance criteria applicable to the
Executive or his position, which objectives have been established
by the Board of Directors (or the Compensation Committee thereof)
for the Executive relating to such plan or budget for the year in
question. “ Target Bonus ” shall not mean
the “maximum bonus” which the Executive might have been
paid for overachievement of such plan.
2.
Involuntary Termination of
Employment Following a Change in Control .
(a)
Subject to the terms of this Agreement, the Executive shall be
entitled to receive severance payments from the Company for
services previously rendered to the Company and its Affiliated
Companies if all of the following conditions are met:
(1) a Change of Control occurs during the Change of Control
Period, (2) the Executive’s employment is
terminated under circumstances
constituting an Involuntary Termination, and (3) the Date of
Termination occurs during the period commencing upon such Change of
Control and ending on the date that is six (6) months and ten (10)
business days following the Change of Control. In such event,
the severance provisions of this Agreement shall control and take
precedence over any inconsistent terms of any currently existing
employment or severance arrangement between the Company and the
Executive, and the Company shall:
(i)
within 30 days after the Date of Termination, pay to the Executive
the Executive’s Accrued Compensation and Pro-Rata
Bonus;
(ii)
within 30 days after the Date of Termination, pay to the Executive
the amount equal to the product of (i) 2.50 and (ii) the
sum of (A) the Executive’s Base Salary and (B) the
Executive’s Target Bonus;
(iii)
for eighteen (18) months after the Date of Termination, or such
longer period as may be provided by the terms of the appropriate
plan, program, practice or policy, continue to provide to the
Executive and/or the Executive’s family the benefits being
provided to the Executive and/or the Executive’s family
immediately prior to the Change of Control, including the welfare
benefit plans, practices, policies and programs provided by the
Company and its Affiliated Companies (including, without
limitation, medical, prescription, dental, disability, employee
life, group life, accidental death and travel accident insurance
plans and programs) and, if applicable, car allowance
(collectively, the “ Benefits ”), as if the
Executive’s employment had not been terminated; provided,
however , that if the Executive becomes reemployed with another
employer and is eligible to receive medical or other welfare
benefits under another employer provided plan, the Benefits shall
be secondary to those provided under such other plan during such
applicable period of eligibility; and provided further that
if the Executive becomes reemployed with another employer and is
eligible to receive a car allowance, the Company shall be relieved
of its obligation to pay the Executive’s car
allowance.
(iv)
during the eighteen (18) month period following the Date of
Termination, contribute to the Company’s retirement plans (if
any) on behalf of the Executive an amount equal to the
Company’s contribution (including matching contributions) to
the Company’s retirement plans (if any) which would have been
made for the benefit of the Executive if the Executive ‘s
employment continued for eighteen (18) months after the Date of
Termination, assuming for this purpose that all benefits under such
retirement plans are fully vested and that the Executive’s
compensation during such eighteen (18) months were the same as it
had been immediately prior to the Change of Control;
(v)
provide the Executive, at the Company’s expense, with
outplacement services reasonably selected by the Executive,
provided that the cost to the Compa
