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On Assignment Logo
April 25, 2001
Dear Stockholder:
You are cordially invited to attend the 2001 Annual Meeting of Stockholders
of On Assignment, Inc. (the "Company") on Thursday, June 7, 2001, 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,
/s/ H. TOM BUELTER
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.
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ON ASSIGNMENT, INC.
------------------------
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
JUNE 7, 2001
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 7, 2001, 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 respective successor is elected and qualified.
2. To ratify the appointment of Deloitte & Touche LLP as the Company's
independent accountants for the fiscal year ending December 31, 2001.
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 9, 2001 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,
/s/ H. TOM BUELTER
H. Tom Buelter
Chairman of the Board and
Chief Executive Officer
Calabasas, California
April 25, 2001
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PROXY STATEMENT
TABLE OF CONTENTS
PAGE
----
GENERAL INFORMATION FOR STOCKHOLDERS........................ 1
Revocability of Proxies................................... 1
Solicitation.............................................. 1
Record Date, Voting and Share Ownership................... 1
MATTERS TO BE CONSIDERED AT ANNUAL MEETING.................. 3
PROPOSAL ONE -- ELECTION OF DIRECTORS..................... 3
Nominees for Term Ending in 2004....................... 3
Continuing Directors................................... 4
PROPOSAL TWO -- RATIFICATION OF INDEPENDENT ACCOUNTANTS... 5
CORPORATE GOVERNANCE........................................ 5
Board Committees and Meetings............................. 5
Director Compensation..................................... 6
Board Audit Committee Report.............................. 6
EXECUTIVE COMPENSATION AND RELATED INFORMATION.............. 7
Board of Directors and Compensation Committee Report...... 7
Summary of Cash and Certain Other Compensation............ 9
Stock Options............................................. 9
Option Exercises and Holdings............................. 10
Severance Plan and Change in Control...................... 10
Certain Relationships and Related Transactions............ 11
STOCK PERFORMANCE GRAPH..................................... 12
COMPLIANCE WITH SECTION 16(a) OF THE SECURITIES EXCHANGE ACT
OF 1934................................................... 12
ANNUAL REPORT AND FORM 10-K................................. 13
SHAREHOLDER PROPOSALS....................................... 13
OTHER MATTERS............................................... 13
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ON ASSIGNMENT, INC.
26651 WEST AGOURA ROAD
CALABASAS, CA 91302
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PROXY STATEMENT
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FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 7, 2001
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 7, 2001
(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 25, 2001 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 Executive Vice President, Finance
and Chief Financial Officer of the Company at the Company's principal executive
offices, On Assignment, Inc., 26651 West Agoura Road, Calabasas, California
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 9, 2001 are entitled to notice of and to
vote at the Annual Meeting. At January 31, 2001, 22,486,162 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
January 31, 2001 by (i) all persons who are known to the
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Company to be beneficial owners of five percent or more of the Company's Common
Stock, (ii) each director 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 Securities Exchange Act of 1934. 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) 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.
BENEFICIAL OWNERSHIP OF COMMON STOCK
(AS OF JANUARY 31, 2001)
PERCENT OF
NUMBER OF TOTAL SHARES
NAME AND ADDRESS SHARES OUTSTANDING(1)
---------------- --------- ----------------
Credit Suisse Asset Management, LLC(2)...................... 2,348,600 10.5%
153 East 53rd Street
New York, NY 10022
J.P. Morgan Chase & Co.(3).................................. 1,465,008 6.5%
270 Park Avenue
New York, New York 10017
Wasatch Advisors(4)......................................... 1,127,855 5.0%
150 Social Hall Avenue
Salt Lake City, UT 84111
H. Tom Buelter(5)........................................... 219,715 1.0%
Karen Brenner(6)............................................ 54,000 *
William E. Brock(7)......................................... 55,800 *
Jonathan S. Holman(8)....................................... 16,000 *
Jeremy M. Jones(9).......................................... 72,000 *
Kathy J. West(10)........................................... 72,160 *
Ronald W. Rudolph(11)....................................... 6,354 *
Carrie S. Nebens(12)........................................ 24,605 *
All directors and officers as a group (8 persons)(13)....... 520,634 2.3%
- ---------------
* Less than one percent.
(1) Percentage of beneficial ownership is calculated assuming 22,486,162 shares
of Common Stock were outstanding on January 31, 2001. This percentage also
includes Common Stock of which such individual or entity has the right to
acquire beneficial ownership within sixty days of January 31, 2001,
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 February 8, 2001, and filed with the
Securities and Exchange Commission, Credit Suisse Asset Management, LLC has
reported that: it had sole power to dispose of 2,348,600 shares; it had
sole voting power with respect to 2,348,600 its beneficial ownership of
such shares arose from its services as investment adviser to investment
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 February 12, 2001, and filed with the
Securities and Exchange Commission, J.P. Morgan Chase & Co. has reported
that: it had sole power to dispose of 1,465,008 shares; it had sole voting
power with respect to 1,380,450 shares; its beneficial ownership of such
shares
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arose from its services as investment adviser to investment accounts which
own such shares; and none of such investment accounts individually owns
more than five percent of the Company's securities.
(4) Pursuant to a Schedule 13G dated February 14, 2001, and filed with the
Securities and Exchange Commission, Wasatch Advisors has reported that: it
had sole power to dispose of 1,127,855 shares; it had sole voting power
with respect to 1,127,855 shares; its beneficial ownership of such shares
arose from its services as investment adviser to investment accounts which
own such shares; and none of such investment accounts individually owns
more than five percent of the Company's securities.
(5) Includes 219,715 shares underlying stock options exercisable within 60 days
of January 31, 2001.
(6) Includes 54,000 shares underlying stock options exercisable within 60 days
of January 31, 2001.
(7) Includes 55,800 shares underlying stock options exercisable within 60 days
of January 31, 2001.
(8) Includes 12,000 shares underlying stock options exercisable within 60 days
of January 31, 2001 and 4,000 shares held by The Holman Group, Inc. Profit
Sharing Trust.
(9) Includes 60,000 shares underlying stock options exercisable within 60 days
of January 31, 2001 and 12,000 shares held by the Jones Family Trust.
(10) Includes 72,160 shares underlying stock options exercisable within 60 days
of January 31, 2001.
(11) Includes 6,354 shares underlying stock options exercisable within 60 days
of January 31, 2001.
(12) Includes 18,073 shares underlying stock options exercisable within 60 days
of January 31, 2001 and 6,532 shares held by the Carrie S. and Bruce M.
Nebens Living Trust.
(13) Includes 498,102 shares underlying stock options exercisable within 60 days
of January 31, 2001.
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 Restated 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 2001 Annual Meeting, two Directors
will be elected to serve until the 2004 annual meeting or until his 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 2001 ANNUAL MEETING OR UNTIL THEIR
RESPECTIVE SUCCESSORS HAVE BEEN ELECTED AND QUALIFIED.
NOMINEES FOR TERM ENDING IN 2004
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, 60, has served as Chief Executive Officer and a Director of
the Company since he joined the Company in March 1989. Mr. Buelter was elected
Chairman of the Company's Board of Directors in 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. ("Kelly
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Services"), a temporary personnel firm, and Chief Operating Officer of Kelly
Assisted Living, a division of Kelly Services, Inc. which provides temporary
home-care personnel.
THE HONORABLE WILLIAM E. BROCK, 70, was elected to the Board of Directors
of the Company in April 1996. He is the Founder and Chairman of Intellectual
Development Systems, Inc., a firm specializing in the servicing and delivery of
learning development systems to public schools. 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 1977 to 1981, Senator Brock served as National Chairman of the
Republican Party. 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.
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 2002
JONATHAN S. HOLMAN, 55, has served as a Director of the Company since March
1994. Since 1981, Mr. Holman has been the President and Founder of The Holman
Group, Inc., an executive search firm.
TERM ENDING IN 2003
KAREN BRENNER, 45, has served as a Director of the Company since October
1993. Ms. Brenner has been a principal of Brenner & Company, LLC, a financial
and management advisory firm since February 1999. From October 1996 through June
1998, Ms. Brenner served 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 previously had been Vice
Chairman and a Director of and consultant to Carlyle since February 1996. From
June 1994 through June 1998, Ms. Brenner served as Chairman and Chief Executive
Officer of Lincoln Snacks, a snack food company. Ms. Brenner was formerly the
Chairman of Swiss Army Brands, formerly The Forschner Group, a consumer goods
company, from February 1992 through February 1994 and a consultant to The
Forschner Group, Inc. from July 1990 through December 1994. From November 1991
through February 1998, Ms. Brenner was Managing Director of Noel Group, Inc.
("Noel"), a holding company for controlling or significant equity interests in
small and medium-sized operating companies. From October 1989 to November 1991,
Ms. Brenner was a Director and a Vice President of Noel. Ms. Brenner served as
Director of Simons Outdoor Group, a consumer good company, from 1991 to 1995, as
a Director of VISX, Inc., an ophthalmic laser company, from 1989 to 1995, and as
a Director of Motorcar Parts and Accessories, an automotive remanufacturer of
alternators and starters from 1997 to 1999.
JEREMY M. JONES, 59, has served as a Director of the Company since May
1995. Mr. Jones has served as Managing Director of Mobil Laser Services, LLC, a
provider of mobil excimer lasers, since July 1999, and 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., 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.
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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, 2001, 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.
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.
Audit Fees. The aggregate fees billed by Deloitte & Touche LLP for
professional services rendered for the audit of the Company's annual financial
statements for the fiscal year ended December 31, 2000 and for the reviews of
the financial statements included in the Company's Form 10-Q for fiscal year
ended December 31, 2000 were $76,956.
Financial Information Systems Design and Implementation Fees. There were no
fees billed by Deloitte & Touche LLP for professional services rendered for (i)
directly or indirectly operating, or supervising the operation of, the Company's
information system or managing the Company's local area network or (ii)
designing or implementing a hardware or software system that aggregates source
data underlying the financial statements or generates information that is
significant to the Company's financial statements taken as a whole for the
fiscal year ended December 31, 2000.
All Other Fees. There were no fees billed by Deloitte & Touche LLP for
services rendered other than those described under the caption Audit Fees for
the fiscal year ended December 31, 2000.
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, 2001 AND PROXIES
SOLICITED BY THE BOARD WILL BE VOTED IN FAVOR THEREOF UNLESS A STOCKHOLDER HAS
INDICATED OTHERWISE ON THE PROXY.
CORPORATE GOVERNANCE
BOARD COMMITTEES AND MEETINGS
During the fiscal year ended December 31, 2000, the Board of Directors held
four meetings. The Board of Directors has an Audit Committee, a Compensation
Committee and a Stock Option Committee. It does not have a Nominating Committee.
The Board also acted by written consent on April 7, 2000 to adopt the following
resolutions: 1) Amendment to Restated Certificate of Incorporation; 2) Amendment
to Restated 1987 Stock Option Plan; and 3) Omnibus Authority to Carry out the
Foregoing Resolutions.
The Audit Committee currently consists of three directors, Ms. Brenner, Mr.
Holman and Mr. Jones. The Audit Committee is primarily responsible for approving
the services performed by the Company's independent accountants and reviewing
their reports regarding the Company's accounting practices and systems of
internal accounting controls. The Audit Committee held five meetings during
2000.
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The Compensation Committee consists of two directors, Mr. Brock and Mr.
Holman. The Compensation Committee held one meeting during 2000 and acted by
written consent on five 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 twelve occasions during 2000. It
has limited authority to grant stock options to eligible individuals who are not
officers or Directors of the Company who are 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 2000.
DIRECTOR COMPENSATION
Non-employee Directors currently receive the following fees for services as
Directors: $10,000 per year (payable quarterly in arrears) during the period of
their service as a Director; $2,000 per Board meeting attended in person or by
telephone; $300 per special telephonic Board meeting; $300 per Committee meeting
(if held separately) attended in person or by telephone. 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 Karen Brenner $2,250, Jonathan Holman $3,750 and Jeremy Jones
$1,500, respectively, for such additional services during 2000.
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
6,000 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 and ending with the 2000 Annual Meeting, each individual who was
at the time serving as a non-employee Board member was automatically granted an
option to purchase 12,000 shares of Common Stock on the date of the Annual
Meeting, without regard to prior Board service. At each Annual Meeting of
Stockholders beginning with the 2001 Annual Meeting, each individual who was at
the time serving as a non-employee Board member was or will automatically be
granted an option to purchase 9,000 shares of Common Stock on the date of the
Annual Meeting. There were no stock options granted to the non-employee
Directors for the fiscal year ended December 31, 2000.
BOARD AUDIT COMMITTEE REPORT
The Audit Committee of the Board of Directors, currently consists of Ms.
Brenner, Mr. Holman and Mr. Jones, all of whom are independent as that term is
defined in Rule 4200(a)(14) of the National Association of Securities Dealers'
listing standards. The Audit Committee assists the Board of Directors in
fulfilling its responsibility for oversight of the quality and integrity of the
accounting, auditing and reports practices of the Company and such other duties
as directed by the Board of Directors. The Audit Committee reviewed and
discussed the Company's audited Consolidated Financial Statements for the fiscal
year ended December 31, 2000 with the Company's management. The Audit Committee
also discussed with Deloitte & Touche LLP, the Company's independent
accountants, the auditor's responsibilities, any significant issues arising
during the audit, and other matters required to be discussed by SAS 61. The
Audit Committee received the written disclosures and letter from the independent
accountants required by Independence
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Standards Board Standard No. 1 and has discussed with the independent
accountants the independent accountants' independence. Based on its review and
the discussions noted above, the Audit Committee recommended to the Board of
Directors that the Company's Consolidated Financial Statements for the fiscal
year ended December 31, 2000 be included in the Company's Annual Report on Form
10-K for the fiscal year ended December 31, 2000 for filing with the Securities
and Exchange Commission.
RESPECTFULLY SUBMITTED BY
THE AUDIT COMMITTEE:
Karen Brenner
Jonathan S. Holman
Jeremy M. Jones
EXECUTIVE COMPENSATION AND RELATED INFORMATION
BOARD OF DIRECTORS AND COMPENSATION COMMITTEE REPORT
The Compensation Committee (the "Committee") of the Board of Directors
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 2000 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 depend 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 2000 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.
- 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
2000, the performance targets were based on the Company's 2000 Budget as
approved by the Board at its December 7, 1999
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meeting. The Committee recommended and the Board granted bonuses at
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 of the Company's executive officers in fiscal
2000, with the exception of Carrie S. Nebens, former Executive Vice
President, U.S. Operations who retired effective December 31, 2000, and
such grants were consistent with these policies.
CEO COMPENSATION. The 2000 base salary for the Company's Chief Executive
Officer, Mr. H. Tom Buelter, was increased to $290,000 by virtue of the
Compensation Committee's and Board's decision at their December 7, 1999 meeting.
Mr. Buelter's 2000 base salary was set on the basis of his personal performance,
internal comparability standards, the rate of base salary paid to the chief
executive officers of the companies with total revenues similar to the Company's
revenues and the desire to increase the percentage of his compensation which
varies with the Company's performance. The remaining components of Mr. Buelter's
2000 fiscal year compensation depended entirely upon the Company's financial
performance and provided no dollar guarantees. The bonus paid to Mr. Buelter for
the 2000 fiscal year was based on the Company's performance in 2000, including
the achievement of record profits and revenues, and the growth of the Company's
annual operating income and revenues by 32% and 22%, respectively.
We conclude our report with the acknowledgment that no member of the
Compensation Committee is a former or current officer or employee of the Company
or any of its subsidiaries and that except for Mr. Buelter, no member of the
Board of Directors is a former or current officer or employee of the Company or
any of its subsidiaries.
The Board of Directors
Karen Brenner
William E. Brock*
H. Tom Buelter
Jonathan S. Holman*
Jeremy M. Jones
* Compensation Committee Member
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SUMMARY OF CASH AND CERTAIN OTHER COMPENSATION
The following table sets forth the compensation earned by the Company's
Chief Executive Officer (the "CEO") and the Company's four most highly
compensated executive officers other than the CEO (collectively, the "Named
Officers"), for services rendered in all capacities to the Company for each of
the last three fiscal years.
SUMMARY COMPENSATION TABLE
LONG TERM
COMPENSATION
------------
AWARDS
ANNUAL COMPENSATION SECURITIES
----------------------------- UNDERLYING
NAME AND PRINCIPAL POSITION YEAR SALARY($) BONUS($) OPTIONS(#)
--------------------------- ---- --------- -------- ------------
H. Tom Buelter................................... 2000 $290,000 $160,000 50,000
Chairman of the Board 1999 275,000 150,000 60,000
and Chief Executive Officer 1998 275,000 162,745 90,000
Kathy J. West.................................... 2000 235,000 100,000 50,000
President and 1999 225,000 100,000 50,000
Chief Operating Officer 1998 205,000 82,146 50,000
Ronald W. Rudolph................................ 2000 190,000 80,000 35,000
Executive Vice President, Finance 1999 183,000 75,000 30,000
and Chief Financial Officer 1998 175,000 50,000 20,000
Carrie S. Nebens*................................ 2000 190,000 60,000 --
Executive Vice President, U.S. Operations 1999 162,000 65,000 30,000
1998 120,048 40,000 80,000
- ---------------
* Retired effective as of December 31, 2000.
STOCK OPTIONS
The following table provides information with respect to the stock option
grants made during the 2000 fiscal year under the Company's Restated 1987 Stock
Option Plan to the Named Officers for such fiscal year:
OPTION/SAR GRANTS IN LAST FISCAL YEAR
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
--------------------------------------- VALUE AT ASSUMED ANNUAL
NUMBER OF % OF TOTAL RATES OF STOCK
SECURITIES OPTIONS/SARS EXERCISE PRICE APPRECIATION
UNDERLYING GRANTED TO OR BASE FOR OPTION TERM
OPTIONS/SARS EMPLOYEES IN PRICE EXPIRATION -----------------------
NAME GRANTED(#)(1) FISCAL YEAR(2) ($/SH)(3) DATE 5%($)(4) 10%($)(4)
---- ------------- -------------- --------- ---------- ---------- ----------
H. Tom Buelter........... 50,000 6.8% $23.750 12/4/2010 $1,934,313 $3,080,069
Kathy J. West............ 50,000 6.8% 23.750 12/4/2010 $1,934,313 3,080,069
Ronald W. Rudolph........ 35,000 4.8% 23.750 12/4/2010 $1,354,019 2,156,048
Carrie S. Nebens*........ -- -- -- -- -- --
- ---------------
* Retired effective as of December 31, 2000.
(1) Options become exercisable in equal monthly installments over 48 months from
the date of their grants, which was December 4, 2000 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 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.
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(2) Based on options for 736,200 shares of Common Stock granted to the Company's
employees during the 2000 fiscal year.
(3) 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.
(4) 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 2000 fiscal year and unexercised options held as of the end of such
year by the Named Officers for such fiscal year. No stock appreciation rights
were exercised during the 2000 fiscal year.
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
VALUE OF
AGGREGATE NUMBER OF UNEXERCISED
VALUE REALIZED SECURITIES UNDERLYING IN-THE-MONEY
(MARKET PRICE AT UNEXERCISED OPTIONS/SARS OPTIONS/SARS AT
SHARES EXERCISE LESS AT FY-END(#) FY-END($)(1)
ACQUIRED ON EXERCISE PRICE) --------------------------- ---------------------------
NAME EXERCISE(#) ($) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- ----------- ---------------- ----------- ------------- ----------- -------------
H. Tom Buelter......... 129,724 $2,208,564 240,280 180,000 $4,237,823 $2,141,708
Kathy J. West.......... 13,696 293,638 97,656 132,500 1,546,305 1,442,494
Ronald W. Rudolph...... 69,165 759,883 3,335 80,000 58,803 836,404
Carrie S. Nebens*...... 81,320 832,825 14,074 75,000 199,086 1,038,584
- ---------------
* Retired effective as of December 31, 2000.
(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, 2000 of $28.500, less the per
share exercise price.
SEVERANCE PLAN AND CHANGE IN CONTROL
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
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
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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.
Upon a Corporate Transaction, options granted to persons other than
non-employee directors under the Option Plan, will become fully vested and
exercisable unless the options are assumed or replaced with comparable options
by the surviving entity. Upon a Corporate Transaction or Change in Control,
options granted to non-employee directors under the Option Plan will become
fully vested and exercisable. Upon a Hostile Takeover, options granted to
non-employee directors and executive officers subject to Section 16(a) of the
Securities Exchange Act of 1934 under the Option Plan will be canceled in
exchange for a cash distribution from the Company in an amount equal to the
take-over price per share less the exercise price per share subject to the
options.
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.
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STOCK PERFORMANCE GRAPH
The graph depicted below shows the Company's stock price as an index
assuming $100 invested on January 1, 1996. 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
COMPARATIVE 5-YEAR CUMULATIVE TOTAL RETURN AMONG ON ASSIGNMENT, INC., NASDAQ
MARKET INDEX AND SIC CODE INDEX
[PERFORMANCE GRAPH]
- -------------------------------------------------------------------------------------
1/1/96 12/31/96 12/31/97 12/31/98 12/31/99 12/31/00
- -------------------------------------------------------------------------------------
ON ASSIGNMENT 100.00 90.08 161.83 210.69 182.44 348.09
PEER GROUP 100.00 120.71 151.63 151.62 168.48 143.96
NASDAQ INDEX 100.00 124.27 152.00 214.39 378.12 237.66
- -------------------------------------------------------------------------------------
Assumes $100 invested on January 1, 1996 and dividends reinvested.
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 2000 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 annual Form 5 reports were
required to be filed by them for the 2000 fiscal year,
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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.
ANNUAL REPORT AND FORM 10-K
A copy of the Annual Report of the Company for the fiscal year ended
December 31, 2000 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. A copy of this report for the year ended December 31, 2000
is included in the Company's 2000 Annual Report which has been mailed with this
Proxy Statement. Stockholders may obtain an additional copy of this report,
without charge, by writing to "Investor Relations Department" at the Company's
principal executive offices, 26651 West Agoura Road, Calabasas, California
91302.
SHAREHOLDER PROPOSALS
Proposals which stockholders intend to present at the 2002 Annual Meeting
of Stockholders pursuant to Rule 14a-8 of the Securities Exchange Act of 1934,
as amended, must be received at the Company's principal offices in Calabasas,
California no later than December 29, 2001 for inclusion in the proxy material
for that meeting. Proposals submitted other than pursuant to Rule 14a-8 will be
considered untimely if received after March 14, 2002 and the Company will not be
required to present any such proposal at the 2002 Annual Meeting of
Stockholders. If the Board of Directors decides to present a proposal despite
its untimeliness, the persons named in the proxies solicited by the Board of
Directors for the 2002 Annual Meeting of Stockholders will have the right to
exercise discretionary voting power with respect to such proposal.
OTHER MATTERS
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 25, 2001
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APPENDIX A
CHARTER OF THE AUDIT COMMITTEE OF THE BOARD OF DIRECTORS
OF ON ASSIGNMENT, INC.
The Audit Committee is a Committee of the Board of Directors. Its primary
function is to assist the Board in fulfilling its oversight responsibilities by
reviewing the financial information which will be provided to the stockholders
and others, the systems of internal controls which management and the Board of
Directors have established, and the audit process.
MEMBERSHIP
The Audit Committee shall be comprised of at least two members of the Board
of Directors who are generally knowledgeable in financial and auditing matters.
Each member shall be free of any relationship that, in the opinion of the Board,
would interfere with their individual exercise of independent judgment. Audit
Committee members and the chairman of the Committee, if any, shall be designated
by the full Board of Directors and serve at the pleasure of the Board.
ROLES
The primary roles in the Committee are to:
- Assist the Board of Directors in fulfilling its fiduciary
responsibilities for the integrity of financial reporting and the
adequacy of internal controls.
- Recommend to the Board the selection, retention and/or discharge of the
independent accountants who audit the Company's financial statements.
- Maintain free and open communications with the independent accountants
(including private executive sessions at least annually).
- Function as an agent for the Board of Directors to help ensure the
independence of the Company's independent accountants, the integrity of
management and the adequacy of disclosure to stockholders.
- Conduct or authorize investigations into any matters within the
Committee's scope of responsibilities. The Committee is empowered to
retain independent counsel, accountants, or others to assist it in the
conduct of any investigation.
- Review this charter at least annually and recommend any necessary updates
of this charter to the full Board of Directors.
- Perform such other functions as assigned by law, the Company's charter or
bylaws, or the Board of Directors.
RESPONSIBILITIES
1. OVERSIGHT OF FINANCIAL REPORTING PROCESS:
a. Recommend to the Board of Directors the appointment of the independent
accountants.
b. Consider, in consultation with the independent accountants, the audit
scope and audit plan of the independent accountant.
c. Review with management and the independent accountants at the completion
of annual examination:
i. The Company's annual financial statements and related footnotes.
ii. The independent accountants' audit of the financial statements and
their report thereon.
iii. Any significant changes required in the independent accountants'
audit plan.
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iv. Any serious difficulties or disagreements that arose between the
auditors and management during the course of the audit, any
significant audit adjustments, and the suitability of the
accounting principles being used.
v. Other matters related to the conduct of the audit which are to be
communicated to the Committee under generally accepted auditing
standards.
d. Review the Company's quarterly financial information to stockholders and
regulatory agencies, paying particular attention to reserves and
accruals and other highly judgmental areas in the financial statements.
Also, consider whether the information contained in these documents is
consistent with the information contained in the financial statements.
e. Review and discuss with management any threatened, pending or ongoing
litigation matters or any taxation, regulatory or other matters which
may result in a material financial impact to the Company.
f. Review, in consultation with the independent accountants, the adequacy
of the Company's accounting principles, policies and practices.
g. Review the impact of new accounting pronouncements or reporting
practices relevant to the Company and other matters of interest.
h. Review and approve the scope and fees of audits by the independent
accountants.
i. Review the scope and fees of non-audit services performed by the
independent accountants to consider what effect, if any, said activities
could have on their independence.
2. OVERSIGHT OF THE INTERNAL CONTROLS:
a. Evaluate the general procedures and practices of the Company to ensure
the adequacy of internal controls, including the security surrounding
assets and computerized information systems.
b. Consider the findings and comments from the independent accountants on
the quality and adequacy of the Company's internal controls, together
with management's responses thereto. Also, review the status of prior
period audit recommendations made by the independent accountants.
c. Review the adequacy of the policies and practices related to conflicts
of interest, ethical conduct and compliance with key regulatory issues.
3. COMMITTEE MEETINGS AND REPORTING:
a. The audit Committee shall hold such meetings periodically as the
Committee deems necessary, but no less than two times annually. The
Committee Chairman, if applicable, or Committee members may request that
members of management and representatives of the independent accountants
be present at the meetings of the Committee. At least once per year, the
Committee shall hold a private executive session with the independent
accountants.
b. Semi-annually, the Committee shall report to the Board of Directors
outlining its activities, future plans and any significant matters
brought forth by the independent accountants.
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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 19, 2001, 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
7, 2001, 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 2004 annual meeting of
stockholders or until his successor is elected and qualified:
FOR WITHHOLD AUTHORITY TO VOTE
William E. Brock [ ] [ ]
H. Tom Buelter [ ] [ ]
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, 2001.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. To transact such other business as may properly come before the meeting or
any adjournments or postponements thereof.
(Please Date and Sign on Reverse Side)
20
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 PROPOSALS IF NO SPECIFICATION IS MADE.
Dated: , 2001
-------------------------
Signature
-------------------------
Signature if held jointly
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.
Please mark, sign, date and return the proxy card promptly using the enclosed
envelope.