AMENDED AND RESTATED EXECUTIVE CHANGE OF CONTROL AGREEMENT
AMENDED
AND RESTATED EXECUTIVE CHANGE OF CONTROL AGREEMENT
This
Executive Change of Control Agreement (this “Agreement”), made as
of the 1st day of January, 2007, by and between On Assignment, Inc., a Delaware
corporation (the “Company”), and Xxxxx
Xxxxx (the “Executive”), is
amended and restated as of December 11, 2008.
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 the date on which the Executive experiences a
Separation from Service.
(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) “Separation from
Service” means a “separation from service” within the meaning of Section
409A(a)(2)(A)(i) of the Code, and Treasury Regulation Section
1.409A-1(h).
(l) “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) calendar 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, subject to Section 8 below:
(i)
within 30 days after the Date of Termination (or such earlier date as may be
required by applicable law), pay to the Executive the Executive’s Accrued
Compensation and Pro-Rata Bonus;
(ii)
within 30 days after the Date of Termination (with the exact payment date to be
determined in the sole discretion of Company), 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 a period of eighteen (18) months after the Date of
Termination, continue to provide the Executive with his car allowance as in
effect immediately prior to the Change of Control, payable in substantially
equal monthly installments commencing on the Date of Termination, provided, however 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) 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,
subject to the Executive’s proper election to continue healthcare coverage under
the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), the Company
will pay the the Executive and/or the Executive’s COBRA premiums in
respect of COBRA benefits to be provided at the levels being provided to the
Executive and/or the Executive’s family immediately prior to the Change of
Control, through third-party insurance maintained by the Company under the
Company’s benefit plans in a manner that causes such COBRA benefits to be exempt
from the application of Section 409A under Treasury Regulation Section
1.409A-1(a)(5); 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 described in this Section 2(a)(iv) shall be secondary to
those provided under such other plan during such applicable period of
eligibility; and provided further,
that if during the period of continuation coverage, any plan pursuant to which
such benefits are to be provided ceases to be exempt from the application of
Section 409A under Treasury Regulation Section 1.409A-1(a)(5), then an amount
equal to each such remaining premium shall thereafter be paid to the Executive
as currently taxable compensation in substantially equal monthly installments
over the remainder of the continuation coverage period.
(v) within
30 days after the Date of Termination (with the exact payment date to be
determined in the sole discretion of the Company), subject to Section 8(c)
below, pay to the Executive a cash amount equal to the aggregate premiums that
the Company would have paid for basic life insurance, accidental death and
dismemberment insurance and long- and short-term disability insurance, each as
in effect on the Date of Termination, had the Executive remained employed by the
Company for eighteen (18) months after the
Date of Termination;
(vi) during
the eighteen (18) month period immediately following the Date of Termination,
pay to Executive, in substantially equal monthly installments, an amount equal
to the aggregate contribution (if any) to the Company’s Deferred Compensation
Plan and other retirement plans that the Company would
have made on behalf of the Executive (including matching
contributions) 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; and
(vii)
provide the Executive, at the Company’s expense, with outplacement services
reasonably selected by the Executive, provided,
however, that the cost to the Company shall not exceed $15,000
and such services shall be provided to Executive no later than the end of the
second calendar year following that in which the Date of Termination
occurs.
(b)
Anything in this Agreement to the contrary notwithstanding, a termination of
employment by the Executive for any reason or for no reason during the period
commencing on the date that is six months after the date of a Change of Control
and ending ten (10) business days thereafter shall be deemed to be an
“Involuntary Termination” for all purposes of this Agreement.
3. Termination of Employment
Following a Change of Control for Cause or Other Than in Connection with an
Involuntary Termination. If following a Change of Control the
Executive’s employment is terminated for Cause or the Executive resigns other
than in connection with an Involuntary Termination or due to the Executive’s
death or disability, this Agreement shall terminate without further obligations
to the Executive and all obligations and rights of the Executive and the Company
shall be governed by the appropriate provisions of any then existing employment
or severance agreement or arrangement between the Executive and the
Company. The Executive shall not be deemed to have been terminated for
Cause under this Agreement, unless the following procedures have been
observed. To terminate the Executive for Cause, the Board must deliver to
the Executive notice of such termination in writing, which notice must specify
the facts purportedly constituting Cause in reasonable detail. The
Executive will have the right, within 10 days of receipt of such notice, to
submit a written request for review by the Company. If such request is
timely made, within a reasonable time thereafter, the Board (with all directors
attending in person or by telephone) shall give the Executive the opportunity to
be heard (personally or by counsel). Following such hearing, a majority of
the directors then in office must confirm that the Executive’s termination was
for Cause, otherwise the executive’s termination shall be deemed to have been
made by the Company without Cause for purposes of this Agreement. The
Company’s compliance with the procedure set forth above shall not be in lieu of,
or otherwise deprive the Executive of, his right to challenge the Company’s
determination that such termination was for Cause in accordance with Sections 8(g), (h) and
(i).
4. Effect on Option, Restricted
Stock and Restricted Unit Agreements. Immediately prior to a Change
in Control, the vesting and exercisability of all stock options, restricted
stock and restricted unit grants made to the Executive by the Company which are
outstanding at the time of such event shall be accelerated with respect to all
shares subject thereto, provided, however, that
notwithstanding the foregoing, payment in respect of any restricted stock units
shall be made in accordance with the terms of such restricted stock units.
Accordingly, all stock options shall be exercisable at such time in accordance
with their terms. This Agreement is intended to amend all stock option,
restricted stock and restricted stock unit grants awarded to the Executive to
accelerate vesting as described above to the extent vesting would not otherwise
be accelerated under the terms of such stock option, restricted stock
and
restricted
stock unit grants. The Company agrees for purposes of determining the
continued exercisability of Executive’s stock option outstanding on the Date of
Termination, Executive shall be considered to have remained employed by the
Company until the date that is eighteen (18) months from the Date of
Termination.
5. Certain Additional Payments
by the Company.
(a)
Anything in this Agreement to the contrary notwithstanding and except as set
forth below, in the event it shall be determined that any Payment would be
subject to the Excise Tax, then the Executive shall be entitled to receive an
additional payment (the “ Gross-Up Payment ”)
in an amount such that, after payment by the Executive of all taxes (and any
interest or penalties imposed with respect to such taxes), including, without
limitation, any income taxes (and any interest and penalties imposed with
respect thereto) and Excise Tax imposed upon the Gross-Up Payment, the Executive
retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon
the Payments. The Company’s obligation to make Gross-Up Payments under
this Section
5 shall not be conditioned upon the Executive’s termination of
employment.
(b)
Subject to the provisions of Section 5(c), all
determinations required to be made under this Section 5, including
whether and when a Gross-Up Payment is required, the amount of such Gross-Up
Payment and the assumptions to be utilized in arriving at such determination,
shall be made by Deloitte & Touche, LLP, or such other nationally
recognized certified public accounting firm as may be designated by the
Executive (the “Accounting
Firm”). The Accounting Firm shall provide detailed supporting
calculations both to the Company and the Executive within 15 business days of
the receipt of notice from the Executive that there has been a Payment or such
earlier time as is requested by the Company. In the event that the
Accounting Firm is serving as accountant or auditor for the individual, entity
or group effecting the Change of Control, the Executive may appoint another
nationally recognized accounting firm to make the determinations required
hereunder (which accounting firm shall then be referred to as the Accounting
Firm hereunder). All fees and expenses of the Accounting Firm shall be
borne solely by the Company. Any determination by the Accounting
Firm shall be binding upon the Company and the Executive. As a result of
the uncertainty in the application of Section 4999 of the Code at the time
of the initial determination by the Accounting Firm hereunder, it is possible
that Gross-Up Payments that will not have been made by the Company should have
been made (the “Underpayment”),
consistent with the calculations required to be made hereunder. In the
event the Company exhausts its remedies pursuant to Section 5(c) and the
Executive thereafter is required to make a payment of any Excise Tax, the
Accounting Firm shall determine the amount of the Underpayment that has occurred
and any such Underpayment shall be paid by the Company to or for the benefit of
the Executive within ten (10) business days after the Accounting Firm has given
the Company notice of the amount it has determined to be the
Underpayment. Any Gross-Up Payment, as
determined pursuant to this Section 5, shall be paid by the Company to the
Executive within 5 days of the receipt of the Accounting Firm’s determination,
provided, however, that notwithstanding anything herein to the contrary, in
no event shall any Gross-Up Payment or any payment of any income or other taxes
to be paid by the Company under this Section 5 be made later than the end of the
Executive’s taxable year next following the Executive’s taxable year in which
the Executive remits the related taxes. Any costs and expenses
incurred by the Company on behalf of the Executive under this Section 5 due to
any tax contest, audit or litigation will be paid by the Company by the end of
the Executive’s taxable year following the Executive’s taxable year in which the
taxes that are the subject of the tax contest, audit or litigation are remitted
to the taxing authority, or where as a result of such tax contest, audit or
litigation no taxes are remitted, the end of the Executive’s taxable year
following the Executive’s taxable year in which the audit is completed or there
is a final and non-appealable settlement or other resolution of the contest or
litigation.
(c)
The Executive shall notify the Company in writing of any claim by the Internal
Revenue Service that, if successful, would require the payment by the Company of
the Gross-Up Payment. Such notification shall be given as soon as
practicable, but no later than 10 business days after the Executive is informed
in writing of such claim. The Executive shall apprise the Company of the
nature of such claim and the date on which such claim is requested to be
paid. The Executive shall not pay such claim prior to the expiration of
the 30-day period following the date on which the Executive
gives
such
notice to the Company (or such shorter period ending on the date that any
payment of taxes with respect to such claim is due). If the Company
notifies the Executive in writing prior to the expiration of such period that
the Company desires to contest such claim and the Company has a good faith basis
to contest the claim, the Executive shall:
(i)
give the Company any information reasonably requested by the Company relating to
such claim,
(ii)
take such action in connection with contesting such claim as the Company shall
reasonably request in writing from time to time, including, without limitation,
accepting legal representation with respect to such claim by an attorney
reasonably selected by the Company,
(iii)
cooperate with the Company in good faith in order effectively to contest such
claim, and
(iv)
permit the Company to participate in any proceedings relating to such
claim;
provided, however, that the
Company shall bear and pay directly all costs and expenses (including additional
interest and penalties) incurred in connection with such contest, and shall
indemnify and hold the Executive harmless, on an after-tax basis, for any Excise
Tax or income tax (including interest and penalties) imposed as a result of such
representation and payment of costs and expenses, which payments, if any, shall
be paid in accordance with the last sentence of Section 5(b) above.
Without limitation on the foregoing provisions of this Section 5(c), the
Company shall control all proceedings taken in connection with such contest,
and, at its sole discretion, may pursue or forgo any and all administrative
appeals, proceedings, hearings and conferences with the applicable taxing
authority in respect of such claim and may, at its sole discretion, either
direct the Executive to pay the tax claimed and xxx for a refund or contest the
claim in any permissible manner, and the Executive agrees that he will, to the
extent reasonably requested by the Company, prosecute such contest to a
determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Company shall
reasonably determine; provided,
however, that, if the Company directs the Executive to pay
such claim and xxx for a refund, the Company shall advance the amount of such
payment to the Executive, on an interest-free basis, and shall indemnify and
hold the Executive harmless, on an after-tax basis, from any Excise Tax or
income tax (including interest or penalties) imposed with respect to such
advance or with respect to any imputed income in connection with such advance;
and provided,
further, that any extension of the statute of limitations
relating to payment of taxes for the taxable year of the Executive with respect
to which such contested amount is claimed to be due is limited solely to such
contested amount. Furthermore, the Company’s control of the contest shall
be limited to issues with respect to which the Gross-Up Payment would be payable
hereunder, and the Executive shall be entitled to settle or contest, as the case
may be, any other issue raised by the Internal Revenue Service or any other
taxing authority.
(d)
If, after the receipt by the Executive of an amount advanced by the Company
pursuant to Section 5(c), the
Executive becomes entitled to receive any refund with respect to such claim, the
Executive shall (subject to the Company’s complying with the requirements
of Section
5(c)) pay to the Company the amount of such refund (together with any
interest paid or credited thereon after taxes applicable thereto), within ten
(10) business days after the Executive’s receipt thereof (which receipt shall
include without limitation the recordation by the applicable taxing authority of
any credit against the Executive’s taxes). If, after the receipt by the
Executive of an amount advanced by the Company pursuant to Section 5(c), a
determination is made that the Executive shall not be entitled to any refund
with respect to such claim and the Company does not notify the Executive in
writing of its intent to contest such denial of refund prior to the expiration
of 30 days after such determination, then such advance shall be forgiven and
shall not be required to be repaid and the amount of such advance shall offset,
to the extent thereof, the amount of Gross-Up Payment required to be
paid.
(e)
Notwithstanding any other provision of this Section 5, the
Company
may, in
its sole discretion, withhold and pay over to the Internal Revenue Service or
any other applicable taxing authority, for the benefit of the Executive, all or
any portion of the Gross-Up Payment, and the Executive hereby consents to such
withholding.
(f) Definitions.
The following terms shall have the following meanings for purposes of
this Section 5:
(i)
“Code” means
the Internal Revenue Code of 1986, as amended.
(ii)
“Excise Tax”
shall mean the excise tax imposed by Section 4999 of the Code, together with any
interest or penalties imposed with respect to such excise tax.
(iii)
“Parachute
Value” of a Payment shall mean the present value as of the date of the
change of control for purposes of Section 280G of the Code of the portion of
such Payment that constitutes a “parachute payment” under Section 280G(b)(2), as
determined by the Accounting Firm for purposes of determining whether and to
what extent the Excise Tax will apply to such Payment.
(iv)
A “Payment”
shall mean any payment or distribution in the nature of compensation (within the
meaning of Section 280G(b)(2) of the Code) to or for the benefit of the
Executive, whether paid or payable pursuant to this Agreement or
otherwise.
(v)
“Value” of a
Payment shall mean the economic present value of a Payment as of the date of the
change of control for purposes of Section 280G of the Code, as determined by the
Accounting Firm using the discount rate required by Section 280G(d)(4) of the
Code.
6. Full
Settlement. The Company’s obligation to make the payments provided
for in this Agreement and otherwise to perform its obligations hereunder shall
not be affected by any set-off, counterclaim, recoupment, defense, or other
claim, right or action that the Company may have against the Executive or
others. In no event shall the Executive be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable
to the Executive under any of the provisions of this Agreement, and subject to
the effect of the provisos at the end of Section 2(a)(iii)
above, such amounts shall not be reduced whether or not the Executive obtains
other employment. The Company agrees to pay as incurred (within 10 days
following the Company’s receipt of an invoice from the Executive), to the full
extent permitted by law, all legal fees and expenses that the Executive may
reasonably incur as a result of any contest (regardless of the outcome thereof)
by the Company, the Executive or others of the validity or enforceability of, or
liability under, any provision of this Agreement or any guarantee of performance
thereof (including as a result of any contest by the Executive about the amount
of any payment pursuant to this Agreement), plus, in each case, interest on any
delayed payment at the applicable federal rate provided for in Section
7872(f)(2)(A) of the Code.
7. Successors.
(a)
This Agreement is personal to the Executive, and, without the prior written
consent of the Company, shall not be assignable by the Executive other than by
will or the laws of descent and distribution. This Agreement shall inure
to the benefit of and be enforceable by the Executive’s legal
representatives.
(b)
This Agreement shall inure to the benefit of and be binding upon the Company and
its successors and assigns. Except as provided in Section 7(c), without
the prior written consent of the Executive this Agreement shall not be
assignable by the Company.
(c)
The Company will require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise) to all or substantially all of the business
and/or assets of the Company to assume expressly and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession had taken place.
For
purposes
hereof, “
Company ” means the Company as hereinbefore defined and any successor to
its business and/or assets as aforesaid that assumes and agrees to perform this
Agreement by operation of law or otherwise.
8. Code Section
409A.
(a) The
payments and benefits provided hereunder are intended to be exempt from or
compliant with the requirements of Code Section 409A. Notwithstanding
any provision of this Agreement to the contrary, in the event that following the
effective date hereof, the Company reasonably determines that any payments or
benefits hereunder are not either exempt from or compliant with the requirements
of Code Section 409A, the Company and the Executive shall work together to adopt
such amendments to this Agreement or adopt such other policies and procedures
(including amendments, policies and procedures with retroactive effect), or take
any other actions, that are necessary or appropriate (i) to preserve the
intended tax treatment of the payments and benefits provided hereunder, to
preserve the economic benefits with respect to such payments and benefits,
and/or (ii) to exempt such payments and benefits from Code Section 409A or to
comply with the requirements of Code Section 409A and thereby avoid the
application of penalty taxes thereunder, provided¸ however, that the Company
shall have no obligation to take any action described in this Section 8 or to
indemnify the Executive for any failure to take any such action.
(b) Notwithstanding
anything to the contrary in this Agreement, no compensation or benefits,
including without limitation any termination payments or benefits payable under
Section 2 above, shall be paid to the Executive during the 6-month period
following the Executive’s Separation from Service to the extent that the Company
reasonably determines that paying such amounts at the time or times indicated in
this Agreement would be a prohibited distribution under Section 409A(a)(2)(B)(i)
of the Code. If the payment of any such amounts is delayed as a
result of the previous sentence, then on the first business day following the
end of such 6-month period (or such earlier date upon which such amount can be
paid under Section 409A of the Code without resulting in a prohibited
distribution, including as a result of the Executive’s death), the Company shall
pay the Executive a lump-sum amount equal to the cumulative amount that would
have otherwise been payable to the Executive during such 6-month
period.
(c) To
the extent that any reimbursements hereunder constitute taxable compensation to
the Executives, including without limitation, any reimbursements made in
accordance with Section 6 above (but excluding any reimbursements made in
accordance with Sections 2 and 5 above, which reimbursements shall be provided
in accordance with such Sections), such reimbursements shall be made to the
Executive promptly, but in no event after December 31st of the
year following the year in which the expense was incurred, the amount of any
such amounts reimbursed in one year shall not affect the amount eligible for
reimbursement in any subsequent year, and the Executive’s right to reimbursement
of any such expenses shall not be subject to liquidation or exchange for any
other benefit.
9. Miscellaneous.
(a)
The captions of this Agreement are not part of the provisions hereof and shall
have no force or effect. This Agreement may not be amended or modified
other than by a written agreement executed by the parties hereto or their
respective successors and legal representatives.
(b)
All notices and other communications hereunder shall be in writing and shall be
given by hand delivery to the other party or by registered or certified mail,
return receipt requested, postage prepaid, addressed as follows:
if to the
Company:
On
Assignment, Inc.
00000
Xxxx Xxxxxx Xxxx
Xxxxxxxxx,
XX 00000
Attention:
Chief Executive Officer
if to the
Executive, to the most recent address on file with the Company’s Human Resources
Department,
or to
such other address as either party shall have furnished to the other in writing
in accordance herewith. Notice and communications shall be effective when
actually received by the addressee.
(c)
The invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this
Agreement.
(d)
The Company may withhold from any amounts payable under this Agreement such
United States federal, state or local or foreign taxes as shall be required to
be withheld pursuant to any applicable law or regulation.
(e)
The Executive’s or the Company’s failure to insist upon strict compliance with
any provision of this Agreement or the failure to assert any right the Executive
or the Company may have hereunder, including, without limitation, the right of
the Executive to terminate employment for Good Reason pursuant to Section 2, shall
not be deemed to be a waiver of such provision or right or any other provision
or right of this Agreement.
(f)
Simultaneously with the execution of this Agreement by a duly authorized officer
of the Company and the Executive, the Executive shall no longer be eligible to
participate in the ASGN Severance Plan.
(g)
All claims by the Executive for payments or benefits under this Agreement shall
first be directed to and determined by the Company’s Compensation Committee of
the Board of Directors and shall be in writing. Any denial by the
Compensation Committee of a claim for benefits under this Agreement shall be
delivered to the Executive in writing and shall set forth the specific reasons
for the denial and the specific provisions of this Agreement relied upon.
The Compensation Committee shall afford the Executive a reasonable opportunity
for a review of the decision denying a claim and shall further allow the
Executive make a written demand upon the Company to submit the disputed matter
to arbitration in accordance with the provisions of paragraph (h) below.
The Company shall pay all expenses of the Executive, including reasonable
attorneys and expert fees, in connection with any such arbitration. If for
any reason the arbitrator has not made his award within ninety (90) days from
the date of Executive’s demand for arbitration, such arbitration proceedings
shall be immediately suspended and the Company shall be deemed to have agreed to
Executive’s position and the Company shall, as soon as practicable and in any
event within 10 business days after the expiration of such 90 day period, pay
Executive his expenses and all amounts claimed by him that were the subject of
such dispute and arbitration proceedings.
(h)
Subject to the terms of paragraph (g) above, any dispute arising from, or
relating to, this Agreement shall be resolved at the request of either party
through binding arbitration in accordance with this paragraph (h).
Within 10 business days after demand for arbitration has been made by either
party, the parties, and/or their counsel, shall meet to discuss the issues
involved, to discuss a suitable arbitrator and arbitration procedure, and to
agree on arbitration rules particularly tailored to the matter in dispute, with
a view to the dispute’s prompt, efficient, and just resolution. Upon the
failure of the parties to agree upon arbitration rules and procedures within a
reasonable time (not longer than 15 business days from the demand), the
Commercial Arbitration Rules of the American Arbitration Association shall be
applicable. Likewise, upon the failure of the parties to agree upon an
arbitrator within a reasonable time (not longer than 15 business days from
demand), there shall be a panel comprised of three arbitrators, one to be
appointed by each party and the third one to be selected by the two arbitrators
jointly, or by the American Arbitration Association, if the two arbitrators
cannot decide on a third arbitrator. At least 30 days before the
arbitration hearing (which shall be set for a date no later than 60 days from
the demand), the parties shall allow each other reasonable written discovery
including the inspection and copying of documents and other tangible items
relevant to the issues that are to be presented at the arbitration
hearing. The arbitrator(s) shall be empowered to decide any disputes
regarding the scope of discovery. The award rendered by the arbitrator(s)
may include, without limitation, special, punitive and/or consequential damages,
if and to the extent deemed appropriate by the arbitrator(s). The award
rendered by the arbitrator(s) shall be final and binding upon both
parties. The arbitration shall be conducted in Los Angeles County,
California. The California State Superior Court located in Los Angeles
County, California shall have exclusive jurisdiction over disputes between the
parties in connection with such arbitration and the enforcement thereof, and the
parties consent to the jurisdiction and venue of such court for such
purpose.
(i)
This Agreement shall be governed by the laws of the State of Delaware, without
giving effect to any choice 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.
(j)
This Agreement shall terminate and be of no further force and effect immediately
upon the Executive’s voluntary termination of his employment with the Company
(irrespective of whether such termination constitutes retirement or
resignation), provided that
such termination is not with Good Reason and does not constitute an Involuntary
Termination.
IN
WITNESS WHEREOF, the Executive has hereunto set the Executive’s hand and,
pursuant to the authorization from the Board, the Company has caused these
presents to be executed in its name on its behalf, all as of the day and year
first above written.
| /s/ Xxxxx Xxxxx | ||||
|
Xxxxx
Xxxxx
|
||||
|
Chief
Financial Officer
|
||||
|
ON
ASSIGNMENT, INC.
|
||||
|
By:
|
/s/ Xxxxx Xxxxxxx | |||
|
Xxxxx
Xxxxxxx
|
||||
|
Chief
Executive Officer
|
||||
