<PAGE> 1
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
[ ] Preliminary Proxy Statement
[ ] Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to 240.14a-11(c) or 240.14a-12
ON ASSIGNMENT, INC.
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(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (Set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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[ ] Fee paid previously with preliminary materials.
[ ] Check box if any part of the fee is offset as provided by Exchange Act
Rule 0-11(a)(2) and identify the filing for which the offsetting fee was
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(4) Date Filed:
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<PAGE> 2
ON ASSIGNMENT LOGO
April 28, 1998
Dear Stockholder:
You are cordially invited to attend the 1998 Annual Meeting of Stockholders
of On Assignment, Inc. (the "Company") on Thursday, June 18, 1998, at 10:00
a.m., at the Company's corporate headquarters, 26651 West Agoura Road,
Calabasas, California 91302. The formal Notice of Annual Meeting of Stockholders
and Proxy Statement accompanying this letter describe the business to be acted
upon.
Please sign and return your Proxy now whether or not you plan to attend the
meeting. If you attend the meeting, you may still vote in person if you so
desire.
Sincerely,
H. Tom Buelter
Chairman of the Board and
Chief Executive Officer
YOUR VOTE IS IMPORTANT
SO THAT YOUR COMMON STOCK WILL BE REPRESENTED AT THE ANNUAL MEETING IN THE
EVENT YOU ARE NOT PERSONALLY PRESENT, PLEASE DATE, SIGN AND RETURN PROMPTLY THE
ENCLOSED PROXY IN THE ENVELOPE PROVIDED. EXECUTION OF THE PROXY WILL NOT AFFECT
YOUR RIGHT TO VOTE IN PERSON IF YOU ARE PRESENT AT THE MEETING.
<PAGE> 3
ON ASSIGNMENT, INC.
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
JUNE 18, 1998
TO THE STOCKHOLDERS OF ON ASSIGNMENT, INC.:
NOTICE IS HEREBY GIVEN that the Annual Meeting of Stockholders of On
Assignment, Inc., a Delaware corporation (the "Company"), will be held on
Thursday, June 18, 1998, at 10:00 a.m. local time, at the Company's corporate
headquarters, 26651 West Agoura Road, Calabasas, California 91302, for the
following purposes:
1. To elect two directors to serve for the ensuing three year term or until
his or her respective successor is elected and qualified.
2. To ratify the appointment of Deloitte & Touche LLP as independent
accountants of the Company for the fiscal year ending December 31, 1998.
3. To transact such other business as may properly come before the meeting
or any adjournment or adjournments thereof.
The foregoing items of business are more fully described in the Proxy
Statement accompanying this Notice.
Only stockholders of record at the close of business on April 21, 1998 are
entitled to notice of and to vote at the meeting. A list of such stockholders
will be available for inspection at the Company's corporate headquarters during
ordinary business hours for the ten day period prior to the Annual Meeting.
All stockholders are cordially invited to attend the meeting in person.
However, to ensure your representation at the meeting, you are urged to sign and
return the enclosed Proxy as promptly as possible in the envelope enclosed for
that purpose. Any stockholder attending the meeting may vote in person even if
he or she has returned a Proxy.
Sincerely,
H. Tom Buelter
Chairman of the Board and
Chief Executive Officer
Calabasas, California
April 28, 1998
<PAGE> 4
PROXY STATEMENT
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
GENERAL INFORMATION FOR STOCKHOLDERS........................ 1
MATTERS TO BE CONSIDERED AT ANNUAL MEETING.................. 3
PROPOSAL ONE -- ELECTION OF DIRECTORS..................... 3
PROPOSAL TWO -- RATIFICATION OF INDEPENDENT ACCOUNTANTS... 5
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT
OF 1934................................................... 6
EXECUTIVE COMPENSATION AND RELATED INFORMATION.............. 6
Board of Directors and Compensation Committee Report...... 6
Stock Performance Graph................................... 8
Summary of Cash and Certain Other Compensation............ 9
Stock Options............................................. 9
Option Exercises and Holdings............................. 10
Certain Relationships and Related Transactions............ 11
ANNUAL REPORT AND FORM 10-K................................. 11
OTHER MATTERS............................................... 11
</TABLE>
<PAGE> 5
ON ASSIGNMENT, INC.
26651 WEST AGOURA ROAD
CALABASAS, CA 91302
PROXY STATEMENT
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 18, 1998
GENERAL INFORMATION FOR STOCKHOLDERS
The enclosed proxy ("Proxy") is solicited on behalf of the Board of
Directors of On Assignment, Inc., a Delaware corporation (the "Company"), for
use at the Annual Meeting of Stockholders to be held on Thursday, June 18, 1998
(the "Annual Meeting"), and at any adjournment or postponement of the Annual
Meeting. The Annual Meeting will be held at 10:00 a.m. at the Company's
corporate headquarters, 26651 West Agoura Road, Calabasas, California 91302.
These proxy solicitation materials were mailed on or about April 30, 1998 to all
stockholders entitled to vote at the Annual Meeting.
REVOCABILITY OF PROXIES
Any person giving a Proxy has the power to revoke it at any time before its
exercise. It may be revoked by filing with the Senior Vice President, Finance
and Operations Support, and Chief Financial Officer of the Company at the
Company's principal executive offices, On Assignment, Inc., 26651 West Agoura
Road, Calabasas, CA 91302, a notice of revocation or another signed Proxy with a
later date. You may also revoke your Proxy by attending the Annual Meeting and
voting in person.
SOLICITATION
The Company will bear the entire cost of solicitation, including the
preparation, assembly, printing and mailing of this Proxy Statement, the Proxy
and any additional soliciting materials furnished to stockholders. Copies of
solicitation materials will be furnished to brokerage houses, fiduciaries, and
custodians holding shares in their names that are beneficially owned by others
so that they may forward this solicitation material to such beneficial owners.
In addition, the Company may reimburse such persons for their costs in
forwarding the solicitation materials to such beneficial owners. The original
solicitation of proxies by mail may be supplemented by solicitation by
telephone, telegram, or other means by directors, officers, employees or agents
of the Company. No compensation will be paid to these individuals for any such
services. Except as described above, the Company does not presently intend to
solicit proxies other than by mail.
RECORD DATE, VOTING AND SHARE OWNERSHIP
Stockholders of record on April 21, 1998 are entitled to notice of and to
vote at the Annual Meeting. At February 27, 1998, 10,790,407 shares of the
Company's Common Stock, $.01 par value, were issued and outstanding. No shares
of the Company's preferred stock are outstanding. Each stockholder is entitled
to one vote for each share of Common Stock held by such stockholder. All votes
will be tabulated by the inspector of election appointed for the Annual Meeting,
who will separately tabulate affirmative and negative votes, abstentions and
broker non-votes. Abstentions and broker non-votes are counted as present for
purposes of determining the presence or absence of a quorum for the transaction
of business. Abstentions will be counted toward the tabulations of votes cast on
proposals presented to the stockholders and will have the same effect as
negative votes, whereas broker non-votes will not be counted for purposes of
determining whether a proposal has been approved or not.
The following table sets forth certain information known to the Company
with respect to the beneficial ownership of the Company's Common Stock as of
February 27, 1998 by (i) all persons who are known to the Company to be
beneficial owners of five percent or more of the Company's Common Stock, (ii)
each director
<PAGE> 6
and nominee, (iii) the Named Officers (as defined below in the section titled
"Executive Compensation and Related Information"), and (iv) all current
directors and executive officers as a group. Unless otherwise indicated, each of
the stockholders has sole voting and investment power with respect to the shares
beneficially owned, subject to community property laws, where applicable.
Beneficial ownership has been determined in accordance with Rule 13d-3 under the
Exchange Act. Under this rule, shares are deemed to be beneficially owned by a
person if the person has the right to acquire shares (for example, upon exercise
of an option or warrant) within sixty (60) days of the date as of which the
information is provided; in computing the percentage ownership of any person,
the amount of shares is deemed to include the amount of shares beneficially
owned by such person (and only such person) by reason of such acquisition
rights. As a result, the percentage of outstanding shares of any person as shown
in the following table does not necessarily reflect the person's actual voting
power at a particular date.
<TABLE>
<CAPTION>
PERCENT OF TOTAL
NUMBER OF SHARES
NAME AND ADDRESS SHARES OUTSTANDING(1)
---------------- --------- ----------------
<S> <C> <C>
Warburg, Pincus Asset Management, Inc.(2)................. 1,196,600 11.1%
466 Lexington Avenue
New York, NY 10017
Putnam Investments, Inc.(3)............................... 984,484 9.1%
One Post Office Square
Boston, MA 02109
Fiduciary Trust Company International(4).................. 964,750 8.9%
Two World Trade Center
New York, NY 10048
H. Tom Buelter(5)......................................... 292,880 2.7%
Karen Brenner(6).......................................... 36,000 *
William E. Brock(7)....................................... 24,000 *
Jonathan S. Holman(8)..................................... 28,022 *
Jeremy M. Jones(9)........................................ 33,500 *
Kathy J. West(10)......................................... 100,158 *
Ronald W. Rudolph(11)..................................... 6,899 *
Carrie S. Nebens(12)...................................... 14,438 *
Jeffrey A. Evans(13)...................................... 12,184 *
All directors and officers as a group (9 persons)(14)..... 548,081 4.9%
</TABLE>
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* Less than one percent.
(1) Percentage of beneficial ownership is calculated assuming 10,790,407 shares
of Common Stock were outstanding on February 27, 1998. This percentage also
includes Common Stock of which such individual or entity has the right to
acquire beneficial ownership within sixty days of February 27, 1998,
including but not limited to the exercise of an option; however, such
Common Stock is not deemed outstanding for the purpose of computing the
percentage owned by any other individual or entity. Such calculation is
required by General Rule 13d-3(1)(i) under the Securities Exchange Act of
1934.
(2) Pursuant to a Schedule 13G dated January 13, 1998 and filed with the
Securities and Exchange Commission, Warburg, Pincus Asset Management, Inc.
has reported that: it had sole power to dispose of 1,196,600 shares; and
had sole voting power with respect to 961,000 shares; and shared voting
power with respect to 210,600 shares; its beneficial ownership of such
shares arose from its services as investment adviser to investments
accounts which own such shares; and none of such investment accounts
individually owns more than five percent of the Company's securities.
(3) Pursuant to a Schedule 13G dated January 16, 1998 and filed with the
Securities and Exchange Commission, Putnam Investments, Inc. has reported
that: it had sole power to dispose of 984,484 shares and it shared voting
power with respect to 343,334 shares.
(4) Pursuant to a Schedule 13G dated January 16, 1998 and filed with the
Securities and Exchange Commission, Fiduciary Trust Company International,
a Bank as defined in Section 3(a)(6) of the
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Securities Exchange Act of 1934, has reported that: it had sole power to
dispose of 951,450 shares and shared power to dispose of 13,300 shares; and
had sole voting power with respect to 865,350 shares and shared voting
power with respect to 99,400 shares.
(5) Includes 192,501 shares underlying stock options exercisable within 60 days
of February 27, 1998.
(6) Includes 36,000 shares underlying stock options exercisable within 60 days
of February 27, 1998.
(7) Includes 24,000 shares underlying stock options exercisable within 60 days
of February 27, 1998.
(8) Includes 21,000 shares underlying stock options exercisable within 60 days
of February 27, 1998 and 7,022 shares held by The Holman Group, Inc. Profit
Sharing Trust.
(9) Includes 29,500 shares underlying stock options exercisable within 60 days
of February 27, 1998.
(10) Includes 20,832 shares underlying stock options exercisable within 60 days
of February 27, 1998.
(11) Includes 6,667 shares underlying stock options exercisable within 60 days
of February 27, 1998.
(12) Includes 7,523 shares underlying stock options exercisable within 60 days
of February 27, 1998.
(13) Includes 9,461 shares underlying stock options exercisable within 60 days
of February 27, 1998.
(14) Includes 347,484 shares underlying stock options exercisable within 60 days
of February 27, 1998.
To the Company's knowledge, each beneficial owner of more than ten percent
of the Company's capital stock filed all reports and reported all transactions
on a timely basis with the Securities and Exchange Commission (the
"Commission"), the Nasdaq Stock Market, Inc. and the Company.
MATTERS TO BE CONSIDERED AT ANNUAL MEETING
PROPOSAL ONE -- ELECTION OF DIRECTORS
The Bylaws of the Company provide that the Board of Directors shall be
comprised of not less than four nor more than seven Directors, with the exact
number to be fixed by the Board. The currently authorized number of Directors is
five. The Company's Certificate of Incorporation provides for a classified Board
of Directors, with the terms of office of each class of Directors ending in
successive years. At the 1998 Annual Meeting, two Directors will be elected to
serve until the 2001 annual meeting or until his or her respective successor is
elected and qualified. The Board of Directors has selected two nominees, both of
whom are current Directors of the Company. Unless otherwise instructed, the
proxy holders will vote the Proxies received by them FOR the nominees named
below. If, however, either of the nominees named in the Proxy is unable or
unwilling to serve (which is not expected) at the time of the Annual Meeting,
the proxies (except those marked to the contrary) will be voted for such other
person(s) as the persons named in the enclosed Proxy may recommend. The two
candidates receiving the highest number of affirmative votes of the shares
entitled to vote at the Annual Meeting will be elected Directors of the Company.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
ELECTION OF THE FOLLOWING NOMINEES TO SERVE AS DIRECTORS OF THE COMPANY UNTIL
THE THIRD ANNUAL MEETING FOLLOWING THE 1998 ANNUAL MEETING OR UNTIL THEIR
RESPECTIVE SUCCESSORS HAVE BEEN ELECTED AND QUALIFIED.
NOMINEES FOR TERM ENDING IN 2001
Set forth below is information regarding the nominees, including their
ages, the period during which they have served as Directors, and information
furnished by them as to principal occupations and directorships held by them in
corporations whose shares are publicly registered.
H. TOM BUELTER, 57, has served as Chief Executive Officer and a
Director of the Company since March 1989, and he has served as Chairman of
the Company's Board of Directors since December 1992. Mr. Buelter also held
the title of President of the Company from March 1989 through September
1997. From 1983 to 1989, Mr. Buelter was Senior Vice President of Kelly
Services, Inc., a temporary personnel firm, and Chief Operating Officer of
Kelly Assisted Living, a division of Kelly Services, Inc. which provides
temporary home-care personnel.
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<PAGE> 8
THE HONORABLE WILLIAM E. BROCK, 67, was elected to the Board of
Directors of the Company in April 1996. Since October 1996, Senator Brock
has been the Founder and Chairman of Intellectual Development Systems,
Inc., a firm specializing in the servicing and delivery of
assessment/developmental materials to public schools. From 1994 to 1996, he
was the Founder and Chief Executive Officer of The Brock Offices, a
consulting office on education and trade issues. From 1988 to 1994, Senator
Brock was the Chairman of The Brock Group, a firm specializing in
international trade, investment and human resources. From 1988 to 1991 he
served as Chairman of the National Endowment for Democracy, an organization
he helped found. Senator Brock served in President Reagan's cabinet as the
United States Trade Representative from 1981 to 1985 and as Secretary of
Labor from 1985 to 1987. From 1970 to 1976, he was a member of the U.S.
Senate and from 1962 to 1970 a member of the U.S. House of Representatives.
Senator Brock has served as a Director of United Payors & United Providers,
Inc., an intermediary between insurance companies and healthcare providers
and a network management company, since 1996.
CONTINUING DIRECTORS
Set forth below is information regarding the continuing Directors of the
Company, including their ages, the period during which they have served as
Directors, and information furnished by them as to principal occupations and
directorships held by them in corporations whose shares are publicly registered.
TERM ENDING IN 1999
JONATHAN S. HOLMAN, 52, has served as a Director of the Company since
March 1995. Since 1981, Mr. Holman has been the President and Founder of
The Holman Group, Inc., an executive search firm.
TERM ENDING IN 2000
KAREN BRENNER, 42, has served as a Director of the Company since
October 1993. Ms. Brenner has been Director of Financial Planning and has
served as a Director of Motorcar Parts & Accessories, Inc., an automotive
remanufacturer of alternators and starters, since September 1997. From
November 1991 through February 1998, Ms. Brenner was Managing Director of
Noel Group, Inc., a holding company for controlling or significant equity
interests in small and medium-sized operating companies. Since June 1994,
Ms. Brenner has been Chairman and Chief Executive Officer of Lincoln
Snacks, a snack food company. Ms. Brenner also serves as Chairman,
President and Chief Executive Officer of Carlyle Industries, Inc.
("Carlyle"), formerly Belding Heminway Co., Inc., a distributor of buttons
and home sewing and craft products. She was elected Chairman of the Board
of Carlyle in May 1996, and elected its President and Chief Executive
Officer in October 1996. Previously, she had been Vice Chairman and a
director of and consultant to Carlyle since February 1996.
JEREMY M. JONES, 56, has served as a Director of the Company since May
1995. Mr. Jones has been an Investor and Business Development Consultant
since February 1998. From 1995 through January 1998, Mr. Jones was Chief
Executive Officer and Chairman of the Board of Apria Healthcare Group, Inc.
("Apria"), a home healthcare services provider. From 1991 to 1995, Mr.
Jones was Chief Executive Officer and Chairman of the Board of Homedco
Group, Inc., a home healthcare services company which was merged into Apria
Healthcare Group, Inc. in 1995.
There are no family relationships among executive officers or Directors of
the Company.
BOARD COMMITTEES AND MEETINGS
During the fiscal year ended December 31, 1997, the Board of Directors held
four meetings and acted by unanimous written consent on two occasions. The Board
of Directors has an Audit Committee, a Compensation Committee and a Stock Option
Committee, and does not have a Nominating Committee.
The Audit Committee currently consists of two directors, Ms. Brenner and
Mr. Jones. The Audit Committee is primarily responsible for approving the
services performed by the Company's independent
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<PAGE> 9
accountants and reviewing their reports regarding the Company's accounting
practices and systems of internal accounting controls. The Audit Committee met
two times during 1997.
The Compensation Committee consists of two directors, Mr. Brock and Mr.
Holman. The Compensation Committee held two meetings during 1997 and acted by
written consent on two occasions. It reviews the Company's general compensation
policies, recommends to the full Board of Directors the compensation levels for
the Company's executive officers, and administers the Company's Restated 1987
Stock Option Plan and Employee Stock Purchase Plan.
The Stock Option Committee consists of one director, Mr. Buelter. The Stock
Option Committee acted by written consent on 20 occasions during 1997. It has
limited authority to grant stock options to eligible individuals who are not
officers or Directors of the Company subject to the short-swing profit
restrictions of the Federal securities laws.
No currently serving Director attended fewer than 75% of the aggregate
number of meetings of the Board of Directors and meetings of the Committees of
the Board on which he or she served during 1997.
DIRECTOR COMPENSATION
Non-employee Directors receive the following fees for services as
Directors: $8,000 per year (payable quarterly in arrears) during the period of
their service as a Director; $1,500 per Board meeting or Committee meeting (if
held separately) attended in person; and $250 per telephonic Board meeting or
Committee meeting (if held separately). In addition, the Company reimburses all
non-employee Directors for their reasonable expenses incurred in attending Board
or Committee meetings. Also, non-employee Directors are paid $1,500 per day for
substantial services requested by the Company in addition to regular Board or
Committee oversight and review duties. Accordingly, the Company paid Ms. Brenner
and Mr. Holman $1,500 and $750, respectively, for such additional services
during 1997.
Directors also receive stock option grants under the Company's Restated
1987 Stock Option Plan. Under the automatic option grant program in effect under
the Company's Restated 1987 Stock Option Plan, each non-employee Board member
who has been or is first elected to the Board after October 13, 1993 has been or
will be automatically granted options to purchase 18,000 shares of Common Stock,
provided such individual has not previously been in the Company's employ. At
each Annual Meeting of Stockholders beginning with the 1993 Annual Meeting and
ending with the 1995 Annual Meeting, each individual who was at the time serving
as a non-employee Board member was automatically granted an option to purchase
3,000 shares of Common Stock on the date of the Annual Meeting, provided he or
she had served as a Board member for at least six months prior to the date of
such meeting. At each Annual Meeting of Stockholders beginning with the 1996
Annual Meeting, each individual who is at the time serving as a non-employee
Board member automatically was or will be granted an option to purchase 6,000
shares of Common Stock on the date of the Annual Meeting, without regard to
prior Board service. Accordingly, all four non-employee Directors were each
granted options for 6,000 shares of the Company's Common Stock at an exercise
price of $19.25 per share on June 9, 1997, the date of the 1997 Annual Meeting,
and will each be granted options for an additional 6,000 shares on the date of
the 1998 Annual Meeting.
PROPOSAL TWO -- RATIFICATION OF INDEPENDENT ACCOUNTANTS
The Board of Directors has appointed the firm of Deloitte & Touche LLP,
independent accountants, to audit the consolidated financial statements of the
Company for the fiscal year ending December 31, 1998, and is asking the
stockholders to ratify this appointment.
In the event the stockholders fail to ratify the appointment, the Board of
Directors will reconsider its selection. Even if the selection is ratified, the
Board of Directors in its discretion may direct the appointment of a different
independent accounting firm at any time during the year if the Board of
Directors feels that such a change would be in the best interests of the Company
and its stockholders. The affirmative vote of the holders of a majority of the
Company's voting shares represented and voting at the Annual Meeting is required
to ratify the selection of Deloitte & Touche LLP.
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<PAGE> 10
Deloitte & Touche LLP has audited the Company's consolidated financial
statements annually since 1986. A representative of Deloitte & Touche LLP is
expected to be present at the Annual Meeting, will have the opportunity to make
a statement if he or she desires to do so, and will be available to respond to
appropriate questions.
THE BOARD OF DIRECTORS RECOMMENDS THAT THE STOCKHOLDERS VOTE FOR THE
RATIFICATION OF THE SELECTION OF DELOITTE & TOUCHE LLP TO SERVE AS THE COMPANY'S
INDEPENDENT ACCOUNTANTS FOR THE FISCAL YEAR ENDING DECEMBER 31, 1998.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES EXCHANGE ACT OF 1934
The members of the Board of Directors, the executive officers of the
Company and persons who hold more than 10% of the Company's outstanding Common
Stock are subject to the reporting requirements of Section 16(a) of the
Securities Exchange Act of 1934 which require them to file reports with respect
to their ownership of the Common Stock and their transactions in such Common
Stock. Based upon (i) the copies of Section 16(a) reports which the Company
received from such persons for their 1997 fiscal year transactions in the Common
Stock and their Common Stock holdings and (ii) the written representations
received from one or more of such persons that no annual Form 5 reports were
required to be filed by them for the 1997 fiscal year, the Company believes that
all reporting requirements under Section 16(a) for such fiscal year were met in
a timely manner by its executive officers, Board members and greater than 10%
stockholders, except that a Form 4 filed by Kathy J. West was amended after its
due date, reporting an additional two transactions.
EXECUTIVE COMPENSATION AND RELATED INFORMATION
BOARD OF DIRECTORS AND COMPENSATION COMMITTEE REPORT
The Compensation Committee (the "Committee") of the On Assignment, Inc.
Board of Directors (the "Board"), recommends to the Board the compensation of
the Company's executive officers and administers the Company's Restated 1987
Stock Option Plan (the "Option Plan") under which grants may be made to such
officers and other employees and the Company's Employee Stock Purchase Plan. In
addition, the Committee recommends to the Board the individual bonus programs to
be in effect for executive officers each fiscal year. The full Board sets the
base salaries and approves individual bonus programs of the Company's executive
officers, with Mr. Buelter abstaining as to his own salary and bonus program.
For the 1997 fiscal year, the Board accepted the recommendations of the
Committee in establishing the compensation payable to Mr. H. Tom Buelter, the
Company's Chief Executive Officer and Chairman of the Board, and the Company's
other executive officers.
GENERAL COMPENSATION POLICY. Our fundamental policy is to offer the
Company's executive officers competitive compensation opportunities based upon
their personal performance, the financial performance of the Company and their
contribution to that performance. It is our objective to make a substantial
portion of each officer's compensation contingent upon the Company's performance
as well as upon his or her own level of performance. Accordingly, each executive
officer's compensation package is comprised of three elements: (i) base salary
which reflects individual performance and is designed primarily to be
competitive with salary levels of similarly sized companies, (ii) annual
variable performance awards payable in cash and tied to the Company's
achievement of performance goals, and (iii) long-term stock-based incentive
awards which strengthen the mutuality of interests between the executive
officers and the Company's stockholders. Generally, as an officer's level of
responsibility increases, a greater portion of his or her total compensation
will be dependent upon Company performance and stock price appreciation rather
than base salary.
FACTORS. Several of the more important factors which were considered in
establishing the components of each executive officer's compensation package for
the 1997 fiscal year are summarized below. Additional factors were also taken
into account to a lesser degree. The Committee and/or the Board may in their
discretion apply entirely different factors, particularly different measures of
financial performance, in recommending and/or setting executive compensation for
future fiscal years, but all compensation decisions will be designed to further
the general compensation policy indicated above.
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* BASE SALARY. The base salary for each executive officer is set on the
basis of personal performance, the average salary levels in effect for
comparable positions with companies with total revenues similar to the Company's
and internal comparability standards.
* ANNUAL INCENTIVE COMPENSATION. Annual bonuses, set as a percentage of
salary based on position, are earned by each executive officer on the basis of
the Company's achievement of corporate performance targets established by the
Board at the start of the fiscal year. For fiscal year 1997, the performance
targets were based on the Company's 1997 Budget as approved by the Board at its
December 1996 meeting. The Committee recommended and the Board granted bonuses
above targeted levels, as the Company achieved record revenues and net income.
* LONG-TERM INCENTIVE COMPENSATION. The Committee periodically approves
grants of stock options to each of the Company's executive officers under the
Option Plan. The grants are designed to align the interests of each executive
officer with those of the stockholders and provide each individual with a
significant incentive to manage the Company from the perspective of an owner
with an equity stake in the business. Each grant generally allows the officer to
acquire shares of the Company's common stock at a fixed price per share (the
market price on the grant date) over a specified period of time (up to 10
years), thus providing a return to the executive officer only if the market
price of the shares appreciates over the option term. The size of the option
grant to each executive officer generally is set to achieve a potential
percentage ownership stake in the Company that the Committee deems appropriate
in order to create a meaningful opportunity for stock ownership based upon the
individual's current position with the Company, but it also takes into account
the individual's potential for future responsibility over the option term, the
individual's personal performance in recent periods and the individual's current
holdings of the Company's stock and options. New options were granted to all
five of the Company's executive officers in fiscal 1997 and such grants were
consistent with these policies.
CEO COMPENSATION. The base salary for the Company's Chief Executive
Officer, Mr. H. Tom Buelter, for the first six months of 1997 remained the same
as his salary rate in 1996 and 1995 by virtue of the Compensation Committee and
Board's decisions at their December 1996 meetings to not increase Mr. Buelter's
salary at that time. The base salary for Mr. Buelter for the last six months of
1997 was established by resolution of the Board, acting upon the recommendation
of the Compensation Committee, at the Board's June 4, 1997 meeting. Commencing
June 1, 1997, Mr. Buelter's base salary was increased on the basis of his
personal performance, internal comparability standards, and the rate of base
salary paid to the chief executive officers of the companies with total revenues
similar to the Company's revenues. The remaining components of Mr. Buelter's
1997 fiscal year compensation were entirely dependent upon the Company's
financial performance and provided no dollar guarantees. The bonus paid to Mr.
Buelter for the 1997 fiscal year was based on the Company's performance in 1997,
including the achievement of record profits and revenues, and the growth of the
Company's annual operating income and revenues by 33.8% and 22.3%, respectively.
We conclude our report with the acknowledgment that no member of the
Compensation Committee is a former or current officer or employee of the Company
or any of its subsidiaries and that except for Mr. Buelter, no member of the
Board of Directors is a former or current officer or employee of the Company or
any of its subsidiaries.
The Board of Directors
Karen Brenner
William E. Brock*
H. Tom Buelter
Jonathan S. Holman*
Jeremy M. Jones
- ---------------
* Compensation Committee Member
7
<PAGE> 12
STOCK PERFORMANCE GRAPH
The graph depicted below shows the Company's stock price as an index
assuming $100 invested on January 1, 1993. Also depicted are the composite
prices of companies listed on the Nasdaq Stock Market and of companies listed in
the SIC Code No. 736 -- Personnel Supply Services Companies Index. The
comparisons shown in the graph below are based upon historical data and the
Company cautions that the stock price performance shown in the graph below is
not indicative of, nor intended to forecast, the potential future performance of
the Company's Common Stock. Information used in the graph was obtained from
Media General Financial Services, a source believed to be reliable, but the
Company is not responsible for any errors or omissions in such information.
COMPARISON OF CUMULATIVE TOTAL RETURN AMONG ON ASSIGNMENT, INC., NASDAQ
COMPOSITE INDEX AND PEER GROUP INDEX
COMPARE 5-YEAR CUMULATIVE TOTAL RETURN AMONG ON ASSIGNMENT, INC.
NASDAQ MARKET INDEX AND SIC CODE INDEX
<TABLE>
<CAPTION>
MEASUREMENT PERIOD ON
(FISCAL YEAR COVERED) ASSIGNMENT PEER GROUP NASDAQ INDEX
<S> <C> <C> <C>
1992 100.00 100.00 100.00
1993 95.45 108.22 119.95
1994 145.45 125.61 125.94
1995 297.73 167.48 163.35
1996 268.18 202.17 202.99
1997 481.82 253.95 248.30
</TABLE>
Assumes $100 invested on January 1, 1993 and dividends reinvested.
8
<PAGE> 13
SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table sets forth the compensation earned by the Company's
Chief Executive Officer (the "CEO") and the Company's four most highly
compensated executive officers other than the CEO (collectively, the "Named
Officers"), for services rendered in all capacities to the Company for each of
the last three fiscal years.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
---------------------
ANNUAL COMPENSATION AWARDS
----------------------------- SECURITIES UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) OPTIONS(#)
--------------------------- ---- --------- -------- ---------------------
<S> <C> <C> <C> <C>
H. Tom Buelter............................... 1997 $253,820 $96,250 80,000
Chairman of the Board 1996 225,000 45,000 0
and Chief Executive Officer 1995 225,000 56,250 100,000
Kathy J. West................................ 1997 185,000 55,500 40,000
President and 1996 165,000 33,000 0
Chief Operating Officer 1995 152,000 38,750 30,000
Ronald W. Rudolph............................ 1997 162,000 46,200 25,000
Senior Vice President, Finance and 1996 150,000 30,000 30,000
Operations Support, and 1995 105,000 35,000 80,000
Chief Financial Officer
Carrie S. Nebens............................. 1997 130,000 39,000 25,000
Senior Vice President and General 1996 94,904 16,000 0
Manager, Lab Support division
Jeffrey A. Evans............................. 1997 101,538 35,910 15,000
Vice President and General Manager
Healthcare Financial Staffing division
</TABLE>
STOCK OPTIONS
The following table provides information with respect to the stock option
grants made during the 1997 fiscal year under the Company's Restated 1987 Stock
Option Plan to the Named Officers for such fiscal year:
OPTION/SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
------------------------------------- VALUE AT ASSUMED ANNUAL
NUMBER OF % OF TOTAL RATES OF STOCK
SECURITIES OPTIONS/SARS EXERCISE PRICE APPRECIATION
UNDERLYING GRANTED TO OR BASE FOR OPTION TERM
OPTIONS/SARS EMPLOYEES IN PRICE EXPIRATION -----------------------
NAME GRANTED(#)1/ FISCAL YEAR ($/SH)(2) DATE 5%($)(3) 10%($)(3)
---- ------------ ------------ --------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
H. Tom Buelter............ 80,000 14.0% $22.75 12/16/2007 $1,144,588 $2,900,611
Kathy J. West............. 40,000 7.0 22.75 12/16/2007 572,294 1,450,306
Ronald W. Rudolph......... 25,000 4.4 22.75 12/16/2007 357,684 906,441
Carrie S. Nebens.......... 25,000 4.4 22.75 12/16/2007 357,684 906,441
Jeffrey A. Evans.......... 15,000 2.6 22.75 12/16/2007 214,610 543,865
</TABLE>
- ---------------
(1) Options become exercisable in equal monthly installments over 48 months from
the date of their grants, which was December 16, 1997, so long as employment
with the Company or one of its subsidiaries continues. To the extent not
already exercisable, the options generally become exercisable upon a
Corporate Transaction unless the option is assumed or replaced with a
comparable option by the surviving entity. The options are also subject to
"limited stock appreciation rights" pursuant to which the options, to the
extent exercisable and outstanding for at least six months at the time of a
"Hostile Takeover", will
9
<PAGE> 14
automatically be cancelled in return for a cash payment to the optionee
based upon the tender-offer price of the Common Stock subject to that
option. Each option has a maximum term of 10 years, subject to earlier
termination in the event of the optionee's cessation of service to the
Company.
(2) Each option was granted at an exercise price equal to the fair market value
of the Company's Common Stock on the date of grant. The exercise price may
be paid in cash, in shares of the Company's Common Stock valued at fair
market value on the exercise date or through a cashless exercise procedure
involving a same-day sale of the purchased shares. The Company may also
finance the option exercise by loaning the optionee sufficient funds to pay
the exercise price for the purchased shares and the federal and state income
tax liability incurred by the optionee in connection with such exercise. The
Compensation Committee has the discretionary authority to reprice
outstanding options under the Option Plan through the cancellation of those
options and the grant of replacement options with an exercise price equal to
the lower fair market value of the option shares on the regrant date.
(3) The 5% and 10% assumed rates of appreciation are mandated by rules of the
Securities and Exchange Commission. The potential realizable value is
calculated based on the 10-year option term and is calculated by assuming
that the stock price on the date of grant appreciates at the indicated
annual rate compounded annually for the entire term of the option and that
the option is sold on the last day of its term for the appreciated price.
There is no assurance provided to any executive officer or any other holder
of the Company's securities that the actual stock price appreciation over
the 10-year option term will be at the assumed 5% and 10% levels or at any
other defined level. Unless the market price of the Common Stock appreciates
over the option term, no value will be realized from the option grants made
to the Named Officers or any other optionee.
OPTION EXERCISES AND HOLDINGS
The table below sets forth information concerning the exercise of options
during the 1997 fiscal year and unexercised options held as of the end of such
year by the Named Officers for such fiscal year.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
AGGREGATE
VALUE REALIZED NUMBER OF SECURITIES VALUE OF UNEXERCISED
(MARKET PRICE AT UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS/SARS AT
SHARES EXERCISE LESS OPTIONS/SARS AT FY-END(#) FY-END(1)
ACQUIRED ON EXERCISE PRICE) ---------------------------- ----------------------------
NAME EXERCISE(#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ---------------- ----------- ------------- ----------- -------------
<S> <C> <C> <C> <C> <C> <C>
H. Tom Buelter....... 138,600 $1,896,544 178,200 130,000 $3,591,176 $812,500
Kathy J. West........ 71,600 845,450 15,000 55,000 153,750 303,750
Ronald W. Rudolph.... 31,875 302,864 2,917 73,542 43,756 816,256
Carrie S. Nebens..... 225 1,406 9,775 35,000 100,194 196,250
Jeffrey A. Evans..... 2,000 19,000 6,546 23,334 114,054 165,897
</TABLE>
- ---------------
(1) Based on the closing price per share of the Company's Common Stock as listed
on the Nasdaq Stock Market as of December 31, 1997 of $26.50, less the per
share exercise price.
SEVERANCE PLAN
On February 12 1998, the Board adopted the On Assignment, Inc. Change in
Control Severance Plan ("Severance Plan") to provide severance benefits for
officers and other eligible employees who lose their jobs following an
acquisition of the Company. Under the Severance Plan, if an eligible employee is
involuntarily terminated within 18 months of a Change in Control (as defined in
the Severance Plan), then the employee will be entitled to salary plus target
bonus payable in a lump sum. Involuntary termination is defined in the Severance
Plan to include a termination by the Company without cause or a voluntary
termination by the employee following (I) a reduction in compensation, (II) a
relocation in the employee's place of employment which is more than 35 miles or
(III) in the case of an officer, a change in the employee's position with the
10
<PAGE> 15
Company that materially reduces his or her level of responsibility or authority.
Upon a termination of employment following a change in control, the Company's
Chief Executive Officer would receive 18 months of salary and target bonus, a
president or senior vice president would receive 12 months of salary and target
bonus, all other officers would receive nine months of salary and target bonus,
and other employees would receive lesser amounts. The Severance Plan provides
for a reduction in the cash severance benefit payable under the Severance Plan
if the employee would be subject to the golden parachute excise tax imposed
under Section 280G of the Internal Revenue Code, but only to the extent that
such reduction results in the receipt of a greater after-tax benefit by the
employee.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
None of the Company's Named Officers have employment agreements with the
Company, and their employment may be terminated at any time at the discretion of
the Board of Directors.
ANNUAL REPORT AND FORM 10-K
A copy of the Annual Report of the Company for the fiscal year ended
December 31, 1997 has been mailed concurrently with this Proxy Statement to all
stockholders entitled to notice of and to vote at the Annual Meeting. The Annual
Report is not incorporated into this Proxy Statement and is not considered proxy
soliciting material.
The Company files an Annual Report on Form 10-K with the Securities and
Exchange Commission. Stockholders may obtain a copy of this report, without
charge, by writing to "Investor Relations Department" at the Company's principal
executive offices, 26651 West Agoura Road, Calabasas, CA 91302.
OTHER MATTERS
Proposals of stockholders of the Company which are intended to be presented
by such stockholders at the Company's annual meeting of stockholders in 1999
must be received by the Company no later than January 1, 1999 in order that they
may be included in the proxy statement and form of proxy relating to that
meeting.
The Company knows of no other matters that will be presented for
consideration at the Annual Meeting. If any other matters properly come before
the Annual Meeting, it is the intention of the persons named in the enclosed
form of Proxy to vote the shares they represent as the Board of Directors may
recommend. Discretionary authority with respect to such other matters is granted
by the execution of the enclosed Proxy.
THE BOARD OF DIRECTORS
Dated: April 28, 1998
11
<PAGE> 16
PROXY ON ASSIGNMENT, INC. PROXY
26651 West Agoura Road, Calabasas, CA 91302
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned revokes all previous proxies, acknowledges receipt of the
Notice of the Annual Meeting of Stockholders and the Proxy Statement and
appoints H. Tom Buelter and Ronald W. Rudolph and each of them, the Proxy of the
undersigned, with full power of substitution, to vote all shares of Common Stock
of On Assignment, Inc. (the "Company") held of record by the undersigned on
April 21, 1998, either on his or her own behalf or on behalf of any entity or
entities, at the Annual Meeting of Stockholders of the Company to be held June
18, 1998, and at any adjournment or postponement thereof, with the same force
and effect as the undersigned might or could do if personally present thereat.
The shares represented by this Proxy shall be voted in the manner set forth
below.
1. To elect the following directors to serve until the 2001 annual meeting of
stockholders or until his or her respective successor is elected and
qualified:
<TABLE>
<CAPTION>
FOR WITHHOLD AUTHORITY TO VOTE
--- ----------------------------
<S> <C> <C>
H. Tom Buelter [ ] [ ]
William E. Brock [ ] [ ]
</TABLE>
2. To ratify the Board of Director's selection of Deloitte & Touche LLP to
serve as the Company's independent accountants for the fiscal year ending
December 31, 1998.
FOR [ ] AGAINST [ ] ABSTAIN [ ]
3. To transact such other business as may properly come before the meeting or
any adjournment or postponement thereof.
(PLEASE DATE AND SIGN ON REVERSE SIDE)
<PAGE> 17
This Proxy, when properly executed, will be voted in the manner directed herein.
THIS PROXY WILL BE VOTED FOR THE ELECTION OF THE DIRECTORS LISTED AND FOR THE
OTHER PROPOSAL IF NO SPECIFICATION IS MADE.
Please sign exactly as your name(s) is (are) shown on the stock certificate to
which the Proxy applies. When shares are held by joint tenants, both should
sign. When signing as an attorney, executor, administrator, trustee or guardian,
please give full title, as such. If a corporation, please sign in full corporate
name by the President or other authorized officer. If a partnership, please sign
in the partnership's name by an authorized person.
Dated:____________, 1998
-------------------------
Signature
-------------------------
Signature if held jointly
Please mark, sign, date
and return the proxy card
promptly using the
enclosed envelope.
