ON ASSIGNMENT INC (Form: 10-K, Received: 03/18/2013 15:38:23)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-K



	x ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2012



	o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

Commission File Number 0-20540

ON ASSIGNMENT, INC.

(Exact name of registrant as specified in its charter)



Delaware		95-4023433
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

26745 Malibu Hills Road

Calabasas, California 91301

(Address of Principal Executive Offices)

Registrant’s telephone number, including area code: (818) 878-7900

Securities registered pursuant to Section 12(b) of the Act:



Title of each class		Name of each exchange on which registered
Common Stock, $0.01 par value		New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:

None

(Title of Class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes o No ý

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes o No ý

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements of the past 90 days. Yes ý No o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ý No o

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.



Large accelerated filer o	Accelerated filer x	Non-accelerated filer o	Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No ý

As of June 30, 2012 , the aggregate market value of our common stock held by non-affiliates of the registrant was approximately $616,647,781 .

As of March 8, 2013 , the registrant had 53,084,637 outstanding shares of Common Stock, $0.01 par value.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the registrant’s proxy statement for the 2013 Annual Meeting of Stockholders, to be filed within 120 days of the close of the registrant’s fiscal year 2012 , are incorporated by reference into Part III of this Annual Report on Form 10-K.

ON ASSIGNMENT, INC.

ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 2012

TABLE OF CONTENTS



PART I
Item 1.	Business	5
Item 1A.	Risk Factors	13
Item 1B.	Unresolved Staff Comments	19
Item 2.	Properties	19
Item 3.	Legal Proceedings	19
Item 4.	Mine Safety Disclosures	19

PART II
Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	19
Item 6.	Selected Financial Data	22
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	31
Item 8.	Financial Statements and Supplementary Data	32
Item 9.	Changes in and Disagreements With Accountants on Accounting and Financial Disclosure	60
Item 9A.	Controls and Procedures	60
Item 9B.	Other Information	60

PART III
Item 10.	Directors, Executive Officers and Corporate Governance	61
Item 11.	Executive Compensation	61
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	61
Item 13.	Certain Relationships and Related Transactions and Director Independence	61
Item 14.	Principal Accounting Fees and Services	61

PART IV
Item 15.	Exhibits and Financial Statement Schedule	61

SIGNATURES		62

SPECIAL NOTE ON FORWARD-LOOKING STATEMENTS

This Annual Report on Form 10-K contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Such statements are based upon current expectations, as well as management’s beliefs and assumptions, and involve a high degree of risk and uncertainty. Any statements contained herein that are not statements of historical fact may be deemed to be forward-looking statements. Statements that include the words “believes,” “anticipates,” “plans,” “expects,” “intends,” and similar expressions that convey uncertainty of future events or outcomes are forward-looking statements. Forward-looking statements include statements regarding our anticipated financial and operating performance for future periods. Our actual results could differ materially from those discussed or suggested in the forward-looking statements herein. Factors that could cause or contribute to these differences or prove our forward-looking statements, by hindsight, to be overly optimistic or unachievable include, but are not limited to actual demand for our services, our ability to attract, train, and retain qualified staffing consultants (which includes our sales and recruiting staff), our ability to remain competitive in obtaining and retaining temporary staffing clients, the availability of qualified temporary nurses and other qualified contract professionals, our ability to manage our growth efficiently and effectively, continued performance of our information systems and the factors described in Item 1A of this Annual Report on Form 10-K under the Section titled ”Risk Factors.” Other factors also may contribute to the differences between our forward-looking statements and our actual results. In addition, as a result of these and other factors, our past financial performance should not be relied on as an indication of future performance. All forward-looking statements in this document are based on information available to us as of the date we file this Annual Report on Form 10-K, and we assume no obligation to update any forward-looking statement or the reasons why our actual results may differ.

PART I

Item 1. Business

Overview and History

On Assignment, Inc. (NYSE: ASGN), is a leading global provider of highly skilled, hard-to-find professionals in the growing life sciences, healthcare, and technology sectors, where quality people are the key to success. The Company goes beyond matching résumés with job descriptions to match people they know into positions they understand, for contract, contract-to-hire, and direct hire assignments. Our business currently consists of five operating segments: Apex, Oxford (formerly IT and Engineering), Life Sciences, Healthcare and Physician.

We were incorporated on December 30, 1985, and thereafter commenced operation of our Lab Support line of business (now included in our Life Sciences operating segment), our first contract staffing line of business. Expansion within the Life Sciences segment and into other industries has primarily been achieved through acquisitions, and utilizing our experience and unique approach in servicing our clients and contract professionals. Since 1985, we have acquired more than 10 companies.

On May 15, 2012, we acquired Apex Systems, Inc. (Apex), a privately-owned provider of information technology staffing and services headquartered in Richmond, Virginia. Apex is in its own operating segment, within the Technology sector.

On February 28, 2011, we acquired Warphi N.V. (Valesta), a privately-owned provider of specialized clinical research staffing headquartered in Belgium. Valesta is included in the Life Sciences operating segment. On July 31, 2011, we acquired HealthCare Partners, Inc. (HCP), a privately-owned provider of physician staffing headquartered in Atlanta, Georgia. HCP is included in our Physician operating segment.

On April 16, 2010, we acquired The Cambridge Group Ltd., a Connecticut−based privately−owned firm specializing in clinical research, IT, and physician staffing services and accordingly, is included in each of our Life Sciences, Oxford and Physician operating segments. On July 19, 2010, the Company acquired Sharpstream Holdings Limited, a London-based privately−owned provider of executive search services in the life sciences sector and is included in our Life Sciences operating segment . Sharpstream provides search services across Europe, Asia, and the United States.

Financial information regarding our operating segments and our domestic and international revenues is included under “Financial Statements and Supplementary Data” in Part II, Item 8 of this Annual Report on Form 10-K.

Our principal executive office is located at 26745 Malibu Hills Road, Calabasas, California 91301 and our telephone number is (818) 878-7900. We have approximately 130 branch offices in 34 states within the United States and in seven foreign countries.

Industry and Market Dynamics

The U.S. employment projections published by the U.S. Bureau of Labor Statistics as of February 2012 estimates that total employment for the next decade will grow by 20.5 million jobs, or 14 percent, between 2010 and 2020. By comparison, under the previous estimate for the 2008 to 2018 period, total employment was projected to grow by 10 percent. The increase in projected growth from the prior period is largely due to the relatively lower starting base in 2010, compared to employment levels in 2008. Within the employment industries, the U.S. Bureau of Labor Statistics, according to such projections, estimates that employment growth in the healthcare and social assistance sector will add the most jobs, followed by the professional and business services sector.

The Staffing Industry Analysts: Staffing Industry Insight (dated September 2012), an independent staffing industry publication, estimates that total staffing industry revenues were $127 billion in 2012 and are forecasted to be $134 billion in 2013, in each case, up from $117 billion in 2011. The biggest industry segment, contract labor, is forecasted to grow at an annual rate of 6 percent in 2013 with revenues of $105 billion, while permanent placement is forecasted to grow by 6 percent in 2013 with revenues of $16 billion. Within the contract help segment, professional staffing is expected to grow at an annual rate of 7 percent in 2013 to revenues of $56 billion. The temporary staffing (or contract labor) industry is historically cyclical and typically has a strong correlation to employment and GDP growth. We anticipate that our healthcare, life sciences and technology clients will increase their use of outsourced labor through professional staffing firms to meet the need for increases in capacity of their workforce. By using outsourced labor, these end users will benefit from cost structure advantages, improved flexibility to fluctuating demand in business and access to greater expertise.

Sales and Fulfillment

Our strategy is to serve the needs of our targeted industries by effectively understanding and matching client staffing needs with qualified contract professionals. In contrast to the mass market approach generally used for contract office/clerical and light industrial personnel, we believe effective assignments of contract healthcare, life science, physician and technology professionals require the people involved in making assignments to have significant knowledge of the client’s industry and the ability to assess the specific needs of the client as well as the contract professionals’ qualifications. We believe that face-to-face selling in many circumstances is significantly more effective than the telephonic solicitation of clients, a tactic favored by many of our competitors. We believe our strategy of using industry professionals to develop professional relationships provides us with a competitive advantage in our industry which is recognized by our clients.

Our corporate offices are organized to perform many functions that allow staffing consultants and recruiters to focus more effectively on business development and the assignment of contract professionals. These functions include the recruiting and hiring of staffing consultants, recruiters and support staff, as well as ongoing training, coaching and administrative support. Our corporate offices also select, open and maintain branch offices.

Clients

During the year ended December 31, 2012 , we provided contract professionals to approximately 6,511 clients. In 2012 , we had no single customer that represented five percent or more of our revenues.

All contract assignments, regardless of their planned length, may be terminated with limited notice by the client or the contract professional. The duration of agreements with clients are generally dictated by the contract. Usually, contracts with clients may be terminated with 30 days notice by us or by the clients and, oftentimes, assignments may be terminated with less than one week’s notice.

The Contract Professional

Contract professionals often work with a number of staffing companies and develop relationships or loyalty based on a variety of factors, including competitive salaries and benefits, availability and diversity of assignments, quality and duration of assignments and responsiveness to requests for placement. Contract professionals seeking traveling positions are also interested in the quality of travel and housing accommodations as well as the quality of the clinical experience while on assignment.

Each contract professional’s employment or independent contractor’s relationship with us is terminable at will. A locum tenens physician may generally terminate his or her contract for non-emergency reasons upon 30 or 60 days notice.

Hourly wage or contract rates for our contract professionals are established based on their specific skills and whether or not the assignment involves travel away from the professional’s primary residence. Our staffing consultants are our employees or are subcontracted from other corporate entities. For our consultant employees, we pay the related costs of employment including social security taxes, federal and state unemployment taxes, workers’ compensation insurance and other similar costs. After achieving minimum service periods and hours worked, we also provide our contract professional employees with paid holidays and allow participation in our 401(k) Retirement Savings Plan.

Strategy

We remain committed to growing our operations in the technology, healthcare and life sciences sectors that we currently serve, primarily through supporting our core service offerings and growing our newer service lines of business. In February of 2013, we sold our Nurse Travel business. This decision was based on the relatively small size of the travel nursing market which had contracted significantly more than other healthcare staffing markets during the recession, the fact that its gross margins were significantly lower than the gross margins in our other businesses and the difficulty we believed we would have achieving a reasonable scale. We will continue to look at acquisition opportunities which supplement our internal growth. In 2012, we acquired all of the outstanding shares of Apex Systems, Inc., a privately-owned provider of information technology staffing and services headquartered in Richmond, Virginia.

In 2012 , we continued to focus on increasing market share in each of our segments, maintaining or increasing our gross margins, expanding our service offerings and controlling our operating costs. We have increased interaction between our segments so that they can share best practices.

As part of our initiative to improve our sales capabilities, field operations, and back office processing efficiency, we continue to make strategic investments enhancing our primary business systems. Our front office system (RecruitMax) supports all domestic and foreign Lab Support locations along with our Allied Healthcare operations. Deployment for these platforms began in 2004 and was principally completed in 2008. The RecruitMax application interfaces with the existing enterprise-wide information system, PeopleSoft, used in all of our domestic lines of business and provides additional functionality, including applicant tracking and search tools, customer and candidate contact management and sales management tools. Our next major front office development initiative supporting the Oxford segment is currently underway. Apex uses Bullhorn for its front office system.

We continue to extend the use and capabilities of PeopleSoft in domestic and European operations. The Physician staffing segment was migrated to the PeopleSoft platform in 2011. Our ongoing plan is to deploy a common front-office system integrated with the PeopleSoft platform wherever efficiencies can be realized.

We improved our pay-bill processing efficiencies by deploying an on-line time collection system. This secure web-based application is a self-service tool that captures time by assignment and allows our customers to provide an electronic approval. This particular extension of PeopleSoft has been fully operational at the Oxford unit for over three years and the roll-out continues for other business segments. Life Sciences and Allied Healthcare largely completed this deployment in 2012. Customer adoption has been very good and we are planning a number of enhancements for meeting unique customer needs throughout 2013.

Moderate investments are planned to keep our wide area network and computing platform running with high availability hardware. All primary business operates from a secure data center.

We will continue to invest in leasehold improvements as we expand, relocate, and rationalize our branch facilities and leverage favorable commercial real estate terms for cost savings.

We believe these improvements should continue to increase the productivity of our staffing consultants and streamline corporate operations.

During 2012 , we substantially added to the number of recruiters and sales personnel employed by the company. Over the course of the year, the average number of recruiters and sales personnel employed by the company increased 94.0 percent , primarily related to the acquisition of Apex. In 2013 , we anticipate that the markets we serve will improve with the economy. We have made small investments in enhancing our permanent placement capabilities and we will continue to invest in our existing businesses to support growth. In addition, we will continue to review acquisition opportunities that may enable us to leverage our current infrastructure and capabilities, increase our service offerings and expand our geographic reach.

In late 2012, we engaged a third party to assist and facilitate the development of a new strategic plan. This is similar to the process we completed in 2010. The objectives of that plan were met with the acquisition of Apex. We anticipate that the process will be completed in the middle of 2013.

Competition

Some of our competitors are larger than us and have substantially greater financial and marketing resources than we do. We also compete with privately-owned temporary staffing companies on a regional and local basis. Frequently, the strongest competition in a particular market is a privately-held local company with established relationships. These companies oftentimes are extremely competitive on pricing. While their pricing strategies are not necessarily sustainable, they can be problematic for us in the short-term.

The principal competitive factors in attracting qualified candidates for temporary employment or engagements are salaries, contract rates and benefits, availability and variety of assignments, quality and duration of assignments and responsiveness to requests for placement. We believe that many people seeking temporary employment or engagements through us are also pursuing employment through other means, including other temporary staffing. Therefore, the speed at which we place prospective contract professionals and the availability of appropriate assignments are important factors in our ability to complete assignments of qualified candidates. In addition to having high quality contract professionals to assign in a timely manner, the principal competitive factors in obtaining and retaining clients in the temporary staffing industry are properly assessing the clients’ specific job requirements, the appropriateness of the contract professional assigned to the client, the price of services and the monitoring of client satisfaction. Although we believe we compete favorably with respect to these factors, we expect competition to continue to increase.

Operating Segments

Apex

Our Apex segment, a leading provider of information technology staffing and services, has back-office activities based in Richmond, Virginia with 53 branch offices nationwide supporting our sales, recruiting and field activities. Apex segment revenues for 2012 were $508.7 million and represented 41.0 percent of our total revenues. Apex segment revenues were $791.0 million on a pro forma basis, as if the acquisition had occurred at the beginning of the year. The Staffing Industry Analysts: Staffing Industry Insight (dated September 2012), estimates that the IT staffing market will increase eight percent in 2013. Demand is driven by a shortage of IT professionals with specialized skills. Additionally, the demand for project-based work has created an ideal climate to boost the segment.

Our Apex segment provides mission-critical IT operations professionals for contract, contract-to-hire and permanent placement positions to Fortune 1000 and mid-market clients across the United States, and offers consulting services for other select project-based needs. Apex provides staffing and services support for companies from all major industries, including financial services, business services, consumer and industrials, technology, healthcare, government services, and communications. Apex's Consulting Services group is growing to meet the increasing demands of the marketplace. The Consulting Services group supplements Apex's technical staffing solutions by providing deliverable-based services to also help organizations drive better business performance. Apex's consulting services offerings include managed processes, such as support service centers and centers of excellence; managed projects, such as software development, mobile applications, migration services, and consulting; and managed implementations, such as Enterprise Resource Planning and Electronic Health Records.

Candidate quality is Apex's priority. Apex's proactive approach and thorough screening process is central to the business. Based upon the customer's requirements, Apex's skill-based recruiters will source candidates utilizing several tools, such as a pipeline of pre-screened candidates, Apex's applicant tracking system with over 1.7 million candidates nationwide, referrals, open houses/networking, social networking, and diversity-based technical communities.

Apex segment's professionals include mission-critical daily IT operations professionals across 13 primary skill disciplines that cover the entire IT project life-cycle. This includes skill disciplines within infrastructure, application development, project management, and healthcare IT. These contract professionals encompass a wide variety of backgrounds and levels of experience within information technology. Specialized skills and training are typically dictated by recent technological advancements and trends impacting demand across the enterprise. Such specialization includes healthcare IT, Java, Microsoft, cloud computing, mobile development, and enterprise resource planning.

Contract professionals assigned to clients are generally our employees, although clients provide on-the-job supervisors to control and direct professionals and approve hours worked. Apex is responsible for many of the activities typically handled by the client's human resources department.

Apex's clients range from the large financial services companies and government contractors to local hospitals seeking support for Internal Classification of Diseases conversions. Assignments in our Apex segment typically vary from four to 12 months, although they can be longer.

Apex's competition include TEKsystems, Robert Half International (RHI), Kforce, and Insight Global.

Oxford (formerly IT and Engineering)

Our Oxford segment (formerly the IT and Engineering segment) is based in Beverly, Massachusetts where all of the segment’s back-office activities are located. Oxford combines international reach with local depth, serving clients through a network of recruiting centers in North America and Europe, and branch offices in major metropolitan markets across the United States. Oxford segment revenues for 2012 were $345.4 million and represented 27.9 percent of our total revenues. The Staffing Industry Analysts: Staffing Industry Insight (dated September 2012) estimates that the IT staffing market will increase eight percent in 2013. Demand in our Oxford business segment is driven by a shortage of IT and engineering professionals with specialized skills that organizations need quickly but cannot find on their own. Additionally, the push for adoption of health information technology and compliance with FDA regulations is accelerating demand for Oxford's services.

Oxford assigns highly qualified professionals in select IT and engineering technical disciplines which include enterprise resource planning, business intelligence, customer relationship management, supply chain management, database administration, application development, IT infrastructure, and healthcare applications. Oxford's engineering specialties include hardware, software, mechanical and electrical, as well as validation, regulatory compliance, and quality assurance. Assignments are highly diversified across the client base, averaging fewer than two contract assignments per client.

The segment serves the market in two separate operating formats. The first operating format, Oxford International, consists of nine sales and recruiting centers in the U.S. and one in Cork, Ireland that pro-actively recruit skilled IT and engineering professionals and fulfill client needs for temporary consultants and permanent employees across North America and Europe. The right candidates for these assignments often reside in locations that are remote from the client work-site and will travel away from their homes to perform the assignments. The second operating format, Oxford and Associates, consists of 14 branch offices across the United States that recruit technology professionals local to their metropolitan market to fulfill needs for local clients. In each of these formats, we employ both client-oriented sales people and recruiters. Because our Oxford segment concentrates in select disciplines within the IT and engineering markets, our sales people and recruiters specialize in a given discipline. Our competitive advantage comes from our ability to respond very quickly with high quality candidates to a client's request, thus Oxford's tagline “The Right Talent. Right Now. ^® ”

Oxford’s professionals are experts in specific information technology and engineering disciplines. Typically, they have a great deal of knowledge and experience in a fairly narrow field which makes them uniquely qualified to fill a given assignment. Contract professionals assigned to clients are generally our employees. Clients provide on-the-job supervisors for these professionals, control and direct their work, and approve all hours worked. Oxford is responsible for many of the activities typically handled by the client’s human resources department, as well as billing, payroll, and related financial activities.

In our Oxford segment, we supply services to clients in a wide range of industries. Our clients range from large companies that may, for example, be installing new enterprise-wide computer systems and have a need for a subject matter expert with a specific technical and industry-specific experience, to mid-sized medical device manufacturers who needs specialized mechanical engineers. Assignments in our Oxford segment typically have a term of approximately five months.

Oxford’s competition includes local and regional specialty staffing companies as well as large IT consulting firms like Accenture, Inc. and International Business Machines Corporation (IBM), and international staffing firms such as Aerotek and Robert Half International, Inc.

Life Sciences

Our Life Sciences segment includes our domestic and international life science staffing businesses, which operate from local branch offices in the United States, United Kingdom, Netherlands, Belgium, Canada, Spain and China. At December 31, 2012 , we had 48 Life Sciences segment branch offices, of which 13 share office space with our Healthcare segment. Life Sciences segment revenues for 2012 were $162.8 million and represented 13.1 percent of our total revenues. The Staffing Industry Analysts: Staffing Industry Insight (dated September 2012), states that the life sciences professional staffing market will grow by seven percent in 2013. Demand for staffing in our Life Sciences segment is driven primarily by clients with research and development projects across a wide array of industries.

We provide locally-based, contract and permanent life science professionals to clients in the biotechnology, pharmaceutical, food and beverage, personal care, chemical, medical device, automotive, municipal, education and environmental industries.

We have developed a tailored approach to the assignment-making process that utilizes staffing consultants. Unlike traditional approaches that tend to be focused on telephonic solicitation, our Life Sciences staffing consultants are experienced professionals who work

in our branch office network to enable face-to-face meetings with clients and contract professionals. Most of our staffing consultants are either focused on sales and business development or on fulfillment. Sales and business development staffing consultants meet with clients’ managers to understand client needs, formulate position descriptions and assess workplace environments. Fulfillment staffing consultants meet with candidates to assess their qualifications and interests and place these contract professionals on quality assignments with clients.

Our Life Sciences segment’s professionals include chemists, clinical research associates, clinical lab assistants, engineers, biologists, biochemists, microbiologists, molecular biologists, biostatisticians, drug safety specialists, SAS programmers, medical writers, food scientists, regulatory affairs specialists, lab assistants and other skilled scientific professionals. These contract professionals range from individuals with bachelor’s and/or master’s degrees and considerable experience to technicians with limited chemistry or biology backgrounds and lab experience. Contract professionals assigned to clients are generally our employees, although clients provide on-the-job supervisors for these professionals. Therefore, clients control and direct the work of contract professionals and approve hours worked, while we are responsible for many of the activities typically handled by the client’s human resources department.

Our primary contacts with our clients are a mix of end users and process facilitators. End users consist of lab directors, managers and department heads. Facilitators consist of human resource managers, procurement departments and administrators. Facilitators are more price sensitive than end users who typically are more focused on technical capabilities. Assignments in our Life Sciences segment vary from three to 12 months.

We believe our Life Sciences segment is one of the few nationwide temporary staffing providers specializing exclusively in the placement of life science professionals. Although other nationwide temporary staffing companies compete with us with respect to scientific, clinical laboratory, medical billing and collection personnel, many of these companies focus on office/clerical and light and heavy industrial personnel, which account for a significant portion of the overall contract staffing market. These competitors include Manpower, Inc., Kelly Services, Inc., Adecco SA, Yoh Company and the Allegis Group.

Healthcare

Our Healthcare segment includes our Allied Healthcare and Nurse Travel lines of business. Allied Healthcare operates from various locations throughout the United States. At December 31, 2012 , we had 22 Allied Healthcare branch offices in the United States, of which 13 share office space with the Life Sciences segment. Nurse Travel operates from our locations in Cincinnati, Ohio, Tupelo, Mississippi and San Diego, California. Healthcare segment revenues for 2012 were $120.1 million and represented 9.7 percent of our total revenues. We sold Nurse Travel, which was not deemed core to our operations, in February 2013 for $31.0 million in cash. Nurse Travel revenues were $62.2 million or approximately 5 percent of our total revenues. The Staffing Industry Analysts: Staffing Industry Insight (dated September 2012), estimates that the healthcare staffing market will grow by 8 percent in 2013.

The combination of healthcare clients facing shortages of operations-critical staff that limit their ability to generate revenues and increased demand for health services and advances in life science and medical technology is expected to create significant demand for workers with specialized science and medical skills. Also influencing the demand for these workers is the departure of mature professionals from the ranks of full-time employment as they retire, reduced hours worked and the pursuit of other career opportunities.

Our Healthcare segment provides locally-based and traveling contract professionals to healthcare clients, including hospitals, integrated delivery systems, imaging centers, clinics, physician offices, reference laboratories, universities, managed care organizations, rehabilitation facilities, long-term care facilities and third-party administrators. In doing so, we address healthcare occupations that require “high demand and highly-skilled” staff, such as operating room nurses and health information professionals who are essential to hospitals' ability to care for patients and maintain business and revenues.

Our Allied Healthcare line of business has developed a tailored approach to the assignment-making process that utilizes staffing consultants. Staffing consultants are experienced professionals who work in our branch offices and personally meet with clients and contract professionals. Our staffing consultants are typically either focused primarily on sales and business development or on fulfillment. Sales and business development staffing consultants meet with clients to understand their staffing needs, formulate position descriptions and assess workplace environments. Fulfillment staffing consultants meet with candidates to assess their qualifications and interests and place these contract professionals on quality assignments with clients.

Our Healthcare segment’s contract professionals include nurses, specialty nurses, health information management professionals, dialysis technicians, surgical technicians, imaging technicians, x-ray technicians, medical technologists, medical assistants, pharmacists, pharmacy technicians, respiratory therapists, phlebotomists, coders, billers, claims processors and collections staff, and dental professionals - including dental assistants, hygienists and dentists and rehabilitation therapists. The nurses and contract professionals we assign to our clients are usually our employees, although clients provide on-the-job supervisors for these nurses and professionals. Therefore, clients control and direct the work of nurses and approve hours worked, while we are responsible for many of the activities typically handled by the client’s human resources department.

In our Healthcare segment, we serve a diverse collection of healthcare clients, as mentioned above. Assignments in our Healthcare segment typically have a term of two to 13 weeks.

Our Nurse Travel sales, account management, and recruiting functions align with traditional nurse travel companies with an added emphasis on rapid response fulfillment. We employ regional sales directors and account managers to identify and sell a variety of nurse

staffing solutions to healthcare clients nationally. Our recruiters seek the most experienced, highly skilled nurses and place them on assignments as contract professionals with healthcare providers. The critical nature of these occupations to drive revenue motivates clients to respond to our ability to rapidly fill open positions with experienced nurses.

In the Nurse Travel line of business, our competitors include AMN Healthcare Services, Inc., Cross Country, Inc. and several privately-held companies. In the Allied Healthcare line of business, our competitors include Cross Country, Inc., AMN Healthcare Services, Inc., Kforce Inc. and the Allegis Group.

Physician

Our Physician segment is the leading provider of physician staffing, known as locum tenens coverage, and permanent physician search services. The majority of our recruiters are located in Salt Lake City, Utah and Atlanta, Georgia. The Physician segment revenues for 2012 were $102.7 million and represented 8.3 percent of our total revenues. The Staffing Industry Analysts: Staffing Industry Insight (dated September 2012), states that the physician staffing market will increase nine percent in 2013. An ongoing shortage of physicians and potential impacts of healthcare reform could fuel future growth.

Our Physician staffing business places physicians in a wide range of specialties throughout the United States, as well as Australia and New Zealand, under the brand VISTA, placing them in hospitals, community-based practices and federal, state and local facilities. We provide short and long-term locum tenens services and full-service physician search and consulting services. The physician staffing market requires a high degree of specialized knowledge about credentialing and qualifications, as well as unique insurance requirements that make it more difficult to replicate than certain other types of staffing markets. Our Physician segment operates out of two primary recruitment centers with several branch offices.

The sales and fulfillment functions at our Physician segment are similar to those of our competitors. Vista's client sales specialists are organized by geographic territories so that a single individual can handle a client’s physician staffing needs for all disciplines. Vista's recruiters and schedulers are organized by physician specialty and identify physician candidates with the skills, experience and availability to meet our clients’ needs. In addition, we have four branch locations that also carry out recruiting functions.

The physicians in our Physician segment come from 33 different specialties including emergency medicine, psychiatry, anesthesiology, radiology, family practice, surgical specialties, internal medicine, pediatrics, obstetrics and gynecology. The physicians we place at clients are independent contractors. Clients assign shifts and approve hours worked, while we are responsible for issuing payments to the physicians for services rendered to our clients.

Clients in our Physician segment include hospitals, doctors’ practice groups, large healthcare systems and government agencies. We are called on to supply temporary and permanent doctors because of the difficulty that healthcare providers have finding qualified practitioners. Assignments in our Physician segment typically have a term of two to six weeks.

Like our Healthcare segment, our Physician segment competes in the healthcare market, serving hospitals, doctors’ practice groups and private healthcare systems and government administrated healthcare agencies. Our competitors include CHG Healthcare Services, TeamHealth, Inc., Cross Country, Inc. and AMN Healthcare Services, Inc., along with several other privately-held companies providing locum tenens services.

Seasonality

Demand for our staffing services historically has been lower during the first and fourth quarters due to fewer business days resulting from client shutdowns, adverse weather conditions and a decline in the number of contract professionals willing to work during the holidays. As is common in the staffing industry, we run special incentive programs to keep our contract professionals, particularly nurses, working through the holidays. Demand for our staffing services usually increases in the second and third quarters of the year. In addition, our cost of services typically increases in the first quarter primarily due to the reset of payroll taxes.

Employees

At December 31, 2012 , we employed approximately 2,500 full-time regular employees, including staffing consultants, regional sales directors, account managers, recruiters and corporate office employees. During 2012 , we employed approximately 30,850 contract professionals and 1,180 locum tenens physicians.

Government Regulation

The healthcare industry is subject to extensive and complex federal and state laws and regulations related to professional licensure, certification, conduct of operations, payment for services, payment for referrals and insurance. Our operations are subject to additional state and local regulations that require temporary staffing companies placing healthcare personnel to be licensed or separately registered to an extent beyond that required by temporary staffing companies that only place non-healthcare personnel. To date, we have not experienced any material difficulties in complying with such regulations and obtaining required licensure.

Some states require state licensure with associated fees for businesses that employ and/or assign certain healthcare personnel at hospitals and other healthcare facilities. We are currently licensed in all the states that require such licenses. In addition, many of the contract healthcare professionals that we employ are required to be individually licensed and/or certified under applicable state laws. We take reasonable steps to ensure that our contract professionals possess all current licenses and certifications required for each placement. We provide state mandated workers’ compensation insurance, unemployment insurance and professional liability insurance for our contract professionals who are employees and our regular employees. We provide medical malpractice insurance for the non-physician placements through On Assignment Healthcare Staffing. We provide separate medical malpractice insurance coverage for our locum tenens physicians placed through VISTA. These expenses have a direct effect on our cost of services, margins and likelihood of achieving or maintaining profitability.

For a further discussion of government regulation associated with our business, see “Risk Factors” within Item 1A of Part I of this Form 10-K.

Executive Officers of the Company

The executive officers of On Assignment, Inc. are as follows:



Name	Age	Position
Peter T. Dameris	53	Chief Executive Officer and President
Edward L. Pierce	56	Executive Vice President and Chief Financial Officer
James L. Brill	61	Senior Vice President and Chief Administrative Officer
Michael J. McGowan	59	Chief Operating Officer of On Assignment and President, Oxford
Rand Blazer	62	President, Apex
Ted Hanson	43	Chief Financial Officer, Apex
Emmett B. McGrath	51	President, Life Sciences and Allied Healthcare
Christian Rutherford	39	President VISTA
Christina Gibson	42	Vice President of Finance and Corporate Controller

Peter T. Dameris joined the Company in November 2003 as Executive Vice President, Chief Operating Officer and was promoted to President and Chief Executive Officer in September 2004. He was appointed to the Board of Directors of the Company in February 2005. From February 2001 through October 2002, Mr. Dameris served as Executive Vice President and Chief Operating Officer of Quanta Services, Inc. (NYSE: PWR), a leading provider of specialized contracting services for the electric and gas utility, cable and telecommunications industries. From December 1994 through September 2000, Mr. Dameris served in a number of different positions at Metamor Worldwide, Inc., an international, publicly-traded IT consulting/staffing company, including Chairman of the Board, President and Chief Executive Officer, Executive Vice President, General Counsel, Senior Vice President and Secretary. In June 2000, Mr. Dameris successfully negotiated the sale of Metamor for $1.9 billion. From November 2002 to January 2006, Mr. Dameris was a member of the Board of Directors of BindView Corporation (acquired by Symatec Corporation in January 2006). Mr. Dameris holds a Juris Doctorate from the University of Texas Law School and a Bachelor’s in Business Administration from Southern Methodist University.

Edward L. Pierce joined the Company in September 2012 as Executive Vice President and Chief Financial Officer. Prior to this appointment, Mr. Pierce served on the Board of Directors for the Company from December 2007 to August 2012. From March 2011 through August 2012, Mr. Pierce was an executive in residence at Flexpoint Ford, a private equity firm. From February 2008 to March 2011, Mr. Pierce served as the President of First Acceptance Corporation, a publicly-traded retailer, servicer and underwriter of non-standard private passenger automobile insurance. Mr. Pierce served as Executive Vice President and Chief Financial Officer of First Acceptance Corporation from October 2006 through February 2008. From May 2001 through February 2006, Mr. Pierce served as Executive Vice President and Chief Financial Officer and as a director of BindView Development Corporation, a publicly-traded network security software development company. From November 1994 through January 2001, Mr. Pierce held various financial management positions, including Executive Vice President and Chief Financial Officer of Metamor Worldwide, Inc., a publicly-traded information technology consulting/staffing company. Mr. Pierce received his Bachelor of Science degree in Accounting from Harding University and began his career with Arthur Andersen & Co. in Houston, Texas.

James L. Brill joined the Company in January 2007 as Senior Vice President, Finance and Chief Financial Officer and was appointed to Senior Vice President and Chief Administrative Officer in September 2012. Mr. Brill was Vice President, Finance and Chief Financial Officer of Diagnostic Products Corporation, a manufacturer of immuno-diagnostic kits, from July 1999 until it was acquired by Siemens in July 2006. From August 1998 to June 1999, Mr. Brill served as Chief Financial Officer of Jafra Cosmetics International, a marketing and direct-selling company in the skin care and beauty industry, and as Vice President of Finance and Administration and Chief Financial Officer of Vertel Corporation, a provider of middleware for the telecommunications industry, from 1996 to 1998. Mr. Brill also served as Senior Vice President, Finance and Chief Financial Officer of Merisel, Inc., a computer hardware and software distributor, from 1988 to 1996. Mr. Brill has been a member of the Board of Directors of Onvia Inc. since March 2004. He holds a Bachelor’s of Science degree from the United States Naval Academy and a Master’s of Business Administration degree from the University of California Los Angeles.

Michael J. McGowan is Chief Operating Officer of the Company and President of Oxford. He was promoted to Chief Operating Officer in May 2012 and has held the position of President of Oxford since 1998. He joined Oxford in May of 1997 as Chief Operating Officer. Formerly, Mr. McGowan was Senior Vice President and General Manager for Kelly Services’ Middle Markets Division, a provider of staffing solutions. Prior to that time he was Vice President & General Manager for The MEDSTAT Group, a healthcare information firm, and held increasingly senior positions for Automatic Data Processing (ADP), a provider of human resources, payroll and tax and benefits administration solutions, during a sixteen year tenure. Mr. McGowan holds a Bachelor’s of Science degree in Electrical Engineering from Michigan State University and a Master’s of Business Administration degree from the Eli Broad Graduate School of Management, also at Michigan State University. Mr. McGowan joined On Assignment as a result of the Company’s acquisition of Oxford in January 2007.

Rand Blazer joined On Assignment as President of Apex as a result of the Company's acquisition of Apex in May 2012. Prior to the acquisition, Mr. Blazer served as Apex's Chief Operating Officer. Formerly, Mr. Blazer served as President of Public Sector for SAP America. From 2000 through 2004, Mr. Blazer was Chairman and Chief Executive Officer of BearingPoint, one of the world's largest consulting and systems integration firms, based in McLean, VA. Under his leadership, the firm, then known as KPMG Consulting, launched the second-largest IPO of NASDAQ's history, becoming the first of the Big Five consulting firms to separate from its audit and tax parent and become an independent, publicly-traded company. From 1977 through 2000, Mr. Blazer held increasing senior positions with KPMG. Mr. Blazer has been a member of the Board of Directors of AtSite since September 2012. Mr. Blazer holds a Bachelor's degree in Economics from McDaniel College and a Master's of Business Administration from the University of Kentucky.

Ted Hanson joined On Assignment as Chief Financial Officer of Apex as a result of the Company's acquisition of Apex in May 2012. Mr. Hanson joined Apex in November 1998 as Corporate Controller and became Chief Financial Officer in January 2001. From 1991 to 1998, he worked at Keiter, Stephens, Hurst, Gary and Shreaves, an independent CPA firm in Virginia. He currently serves as Vice Chairman of the Massey Cancer Advisory Board and as a past Treasurer and President of the Board of Directors of the Metropolitan Richmond Sportsbackers. Mr. Hanson holds Bachelors of Science degree from Virginia Tech and a Master's of Business Administration from Virginia Commonwealth University. Mr. Hanson is a Certified Public Accountant.

Emmett B. McGrath joined the Company in September 2004 as President, Life Sciences U.S., and in August 2005, Mr. McGrath was appointed as President of Life Sciences Europe. Mr. McGrath was appointed as President of Allied Healthcare in November 2007. From February 1985 through August 2004, Mr. McGrath worked at Yoh Company, a privately-held IT staffing firm. During his tenure at Yoh, Mr. McGrath held various staffing positions, including Technical Recruiter, Account Manager, Branch and District Management, Vice President and Regional President. As Regional President, Mr. McGrath was responsible for core lines of businesses, including Scientific, Information Technology, Engineering, Healthcare, Telecommunications and Vendor on Premise (VOP) programs. In addition, Mr. McGrath served on Yoh’s Executive Committee and the Chairman’s Board of the Day & Zimmermann Group, Yoh’s parent company. Mr. McGrath received a Bachelor’s of Science degree in Business Administration, with an emphasis in Human Resources, from California State University, Northridge in 1991.

Christian Rutherford is President of Vista, On Assignment’s physician staffing division. Mr. Rutherford is an 18-year veteran of the U.S. staffing industry. From January 2004 through December 2008, Mr. Rutherford held senior leadership roles at CompHealth, the largest locum tenens company in the nation, including President of Weatherby Locums and President of RN Network. In February 2009, Mr. Rutherford began working for Medfinders, a large, national healthcare staffing company. There, he served as President of Linde Healthcare, Kendall and Davis. In November 2009, Mr. Rutherford was promoted to Chief Operating Officer and Board member of Medfinders and served in that capacity until the fourth quarter of 2010 when Medfinders was sold to AMN Healthcare. Prior to joining as President of VISTA, Mr. Rutherford served as a consultant to On Assignment. Mr. Rutherford holds a Bachelor’s of Science degree in Business from the University of Utah.

Christina Gibson joined the Company in May 2007 as Vice President of Finance and Corporate Controller. Ms. Gibson is responsible for the day-to-day accounting operations of the Company and its subsidiaries, managing Sarbanes-Oxley compliance, and external and internal financial reporting for the Company. Prior to joining the Company, Ms. Gibson was the Vice President and Controller for Digital Insight, an internet banking software company from April 2005 to May 2007. From May 2000 through April 2005, Ms. Gibson worked at Tekelec, a telecommunications equipment provider. During her tenure at Tekelec, Ms. Gibson served as the Director of Finance as well as the Assistant Vice President and Corporate Controller. She holds a Bachelors of Science degree in accounting from the University of Southern California and is a Certified Public Accountant.

Available Information and Access to Reports

We electronically file our Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, and all amendments to those reports with the Securities and Exchange Commission (SEC). You may read and copy any of our reports that are filed with the SEC in the following manner:


•	At the SEC’s Public Reference Room at 100 F Street NE, Washington, DC 20549. You may obtain information on the operation of the Public Reference Room by calling the SEC at (800) SEC-0330;


•	At the SEC’s website, http://www.sec.gov ;


•	At our website, http://www.onassignment.com ; or


•	By contacting our Investor Relations Department at (818) 878-7900.

Our reports are available through any of the foregoing means and are available free of charge on our website as soon as practicable after such material is electronically filed with or furnished to the SEC. Also available on our website ( http://www.onassignment.com) , free of charge, are copies of our Code of Ethics for the Principal Executive Officer and Senior Financial Officers, Code of Business Conduct and Ethics and the charters for the committees of our Board of Directors. We intend to disclose any amendment to, or waiver from, a provision of our Code of Ethics for Principal Executive Officer and Senior Financial Officers on our website within five business days following the date of the amendment or waiver.

Item 1A. Risk Factors

Our business is subject to a number of risks including, but not limited to, the following:

Global market and economic developments could adversely affect our business, financial condition and results of operations.

Demand for the contract staffing services that we provide is significantly affected by global market and economic conditions. As economic activity slows, particularly any negative effect on healthcare, research and development and quality control and capital spending, many clients or potential clients reduce their use of and reliance upon contract professionals. During periods of reduced economic activity, we may also be subject to increased competition for market share and pricing pressure. As a result, a recession or periods of reduced economic activity could harm our business and results of operations.

Economic conditions remain uncertain. Concerns continue about the systemic impact of energy costs, geopolitical issues, low consumer confidence, high unemployment and underemployment, and the global housing and mortgage markets. As a result of these market conditions, the cost and availability of credit has been and may continue to be adversely affected by illiquid credit markets and wider credit spreads. Continued turbulence in the U.S. and international markets and economies may adversely affect our liquidity and financial condition, as well as the liquidity and financial condition of our lenders and clients. This could impact our ability to draw on all, or a substantial portion, of our credit facilities, refinance maturing liabilities and access the capital markets to meet liquidity needs, as well as expose us to risks in collecting our accounts receivable.

If we are not able to remain competitive in obtaining and retaining temporary staffing clients, our future growth will suffer. Agreements may be terminated by clients and contract professionals at will and the termination of a significant number of such agreements would adversely affect our revenues and results of operations.

The contract staffing industry is highly competitive and fragmented with limited barriers to entry. We compete in national, regional and local markets with full-service agencies, and in regional and local markets with specialized contract staffing agencies. Many of these companies have significantly greater marketing and financial resources than we do. The success of our business depends upon our ability to continually secure new orders from clients and to fill those orders with our contract professionals.

Our agreements do not provide for exclusive use of our services, and clients are free to place orders with our competitors. Each contract professional’s employment or independent contractor’s relationship with us is terminable at will. If clients terminate a significant number of our staffing agreements or assignments and we are unable to generate new contract staffing orders to replace lost revenues or a significant number of our contract professionals terminate their employment with us and we are unable to find suitable replacements, the growth of our business could be adversely affected and our revenues and results of operations could be harmed. As a result, it is imperative to our business that we maintain positive relationships with our clients and contract professionals.

To the extent that competitors seek to gain or retain market share by reducing prices or increasing marketing expenditures, we could lose revenues and our margins could decline, which could seriously harm our operating results and cause the trading price of our stock to decline. As we expand into new geographic markets, our success will depend in part on our ability to gain market share from competitors. We expect competition for clients to increase in the future, and the success and growth of our business depends on our ability to remain competitive.

In addition, we continue to participate in an increasing number of third party contracts as a subcontractor and that requires us to participate in vendor management contracts, which may subject us to greater risks or lower margins.

If Apex is unable to sustain its rate of growth, the growth prospects and future results of On Assignment are likely to be adversely affected.

Over the past eight years, Apex has undergone revenue and earnings growth. This growth has come from Apex's focus on information technology staffing, increased market share with existing clients, addition of new clients, national presence and infrastructure that promotes high operating leverage. There is no assurance that Apex will be able to continue this pace of growth in the future. Such growth also could be negatively affected by many factors, including future technology industry conditions, the effects of integration with the Company's business or macroeconomic events. If Apex's growth rate slows, or if it fails to grow at the pace anticipated by the Company, the growth prospects and future results of the Company are likely to be adversely affected.

Fluctuation in patient occupancy rates at client facilities could adversely affect demand for services of our Healthcare and Physician segments and our results of operations.

Client demand for our Healthcare and Physician segment services is significantly impacted by changes in patient occupancy rates at our hospital and healthcare clients’ facilities. Increases in occupancy often result in increased client need for contract professionals before full-time employees can be hired. During periods of decreased occupancy, however, hospitals and other healthcare facilities typically reduce their use of contract professionals before laying off their regular, full-time employees. During periods of decreased occupancy, we may experience increased competition to service clients, including pricing pressure. Occupancy at certain healthcare clients’ facilities also fluctuates due to the seasonality of some elective procedures and patients declining elective procedures. Periods of decreased occupancy at client healthcare facilities could materially adversely affect our results of operations.

If we cannot attract, develop and retain qualified and skilled sales and recruiting staff, our business growth will suffer.

A key component of our ability to grow our business is our ability to attract, develop and retain qualified and skilled sales and recruiting staff, particularly persons with industry experience. The available pool of qualified staffing consultant candidates is limited, and further constrained by the industry practice of entering into non-compete agreements with these employees, which may restrict their ability to accept employment with other staffing firms, including us. We cannot assure that we will be able to recruit, develop and retain qualified sales and recruiting staff in sufficient numbers, or that our staffing consultants will achieve productivity levels sufficient to enable growth of our business. Failure to attract and retain productive sales and recruiting staff could adversely affect our business, financial condition and results of operations.

If we are unable to attract and retain qualified contract professionals, our business could be negatively impacted.

Our business is substantially dependent upon our ability to attract and retain contract professionals who possess the skills, experience, and licenses, as required, to meet the specified requirements of our clients. We compete for such contract professionals with other temporary staffing companies and with our clients and potential clients. There can be no assurance that qualified healthcare, nursing, life sciences, physician, IT and engineering professionals will be available to us in adequate numbers to staff our operating segments. Moreover, our contract professionals are often hired to become regular employees of our clients. Attracting and retaining contract professionals depends on several factors, including our ability to provide contract professionals with desirable assignments and competitive benefits and wages. The cost of attracting and retaining contract professionals may be higher than we anticipate and, as a result, if we are unable to pass these costs on to our clients, our likelihood of achieving or maintaining profitability could decline. In periods of high unemployment, contract professionals frequently opt for full-time employment directly with clients and, due to a large pool of available candidates, clients are able to directly hire and recruit qualified candidates without the involvement of staffing agencies. If we are unable to attract and retain a sufficient number of contract professionals to meet client demand, we may be required to forgo staffing and revenue opportunities, which may hurt the growth of our business.

Reclassification of our independent contractors by tax authorities could materially and adversely affect our business model and could require us to pay significant retroactive wages, taxes and penalties.

We consider our locum tenens physicians to be independent contractors rather than employees. As such, we do not withhold or pay income or other employment related taxes, or provide workers’ compensation insurance for them. Our classification of locum tenens physicians as independent contractors is consistent with general industry standard, but can nonetheless be challenged by the contractors themselves or by relevant taxing authorities. If federal or state taxing authorities determine that locums tenens physicians engaged as independent contractors are employees, our business model for that segment would be materially and adversely affected. Although we believe we qualify for safe harbor under the provisions of Section 530 of the Revenue Act of 1978, Pub. L. No. 95−600, and any similar applicable state laws, we could incur significant liability for past wages, taxes, penalties and other employment benefits if we could not so qualify. In addition, many states have laws that prohibit non−physician owned companies from employing physicians. If our independent contractor physicians are classified as employees, we could be found in violation of such state laws, which could subject us to liability in those states and thereby negatively impact our profitability.

Our costs of providing travel and housing for traveling contract professionals may be higher than we anticipate and, as a result, our margins could decline.

If our travel and housing costs, including the costs of airline tickets, rental cars, apartments and rental furniture for our traveling contract professionals exceed the levels we anticipate, and we are unable to pass such increases on to our clients, our margins may decline. To the extent the length of our apartment leases exceed the terms of our staffing contracts, we bear the risk that we will be obligated to pay rent for housing we do not use. If we cannot source a sufficient number of appropriate short-term leases in regional markets, or if, for any reason, we are unable to efficiently utilize the apartments we do lease, we may be required to pay rent for unutilized or underutilized housing. Effective management of travel costs will be necessary to prevent a decrease in gross profit and gross and operating margins.

Future changes in reimbursement trends could hamper our Healthcare and Physician segments clients’ ability to pay us, which would harm our financial results.

Many of our Healthcare and Physician segments’ clients are reimbursed under the federal Medicare program and state Medicaid programs for the services they provide. In recent years, federal and state governments have made significant changes in these programs that

have reduced reimbursement rates. In addition, insurance companies and managed care organizations seek to control costs by requiring that healthcare providers, such as hospitals, discount their services in exchange for exclusive or preferred participation in their benefit plans. Future federal and state legislation or evolving commercial reimbursement trends may further reduce, or change conditions for, our clients’ reimbursement. Limitations on reimbursement could reduce our clients’ cash flows, thereby hampering their ability to pay us.

If our insurance costs increase significantly, these incremental costs could negatively affect our financial results.

The costs related to obtaining and maintaining workers’ compensation insurance, medical malpractice insurance, professional and general liability insurance and health insurance for our contract professionals have been increasing. If the cost of carrying this insurance continues to increase significantly, this may reduce our gross and operating margins and affect our financial results.

We may be subject to increases in payroll-related costs and unemployment insurance taxes, resulting in lower margins.

We currently pay federal, state and local payroll costs and taxes for our corporate employees and contract professional employees. If we are subject to significant increases in costs associated with payroll and unemployment taxes, we may not be able to increase client bill rates to cover the additional expense and this may reduce our gross and operating margins and affect our financial results.

Significant legal actions and claims could subject us to substantial uninsured liabilities, result in damage to our business reputation, discontinuation of our client relationships and adversely affect our recruitment and retention efforts.

In recent years, we have been subject to an increasing number of legal actions alleging malpractice, vicarious liability, intentional torts, negligent hiring, discrimination, sexual harassment, retroactive entitlement to employee benefits, violation of wage and hour requirements, or related legal theories. We may be subject to liability in such cases even if the contribution to the alleged injury was minimal. Many of these actions involve large claims and significant defense costs. In addition, we may be subject to claims related to torts or crimes committed by our corporate employees or contract professionals. In most instances, we are required to indemnify clients against some or all of these risks. A failure of any of our corporate employees or contract professionals to observe our policies and guidelines intended to reduce these risks; relevant client policies and guidelines or applicable federal, state or local laws, rules and regulations could result in negative publicity, payment of fines or other damages. We may be subject to possible claims by our clients related to errors and omissions, misuse of proprietary information, breach of confidentiality, discrimination and harassment, theft and other criminal activity, malpractice and other claims stemming from the improper activities or alleged activities of our contract professionals.

To protect ourselves from the cost of these types of claims, we maintain workers’ compensation, medical malpractice, errors and omissions, employment practices and general liability insurance coverage in amounts and with deductibles that we believe are appropriate for our operations. Our coverage includes a large retention amount, and our insurance coverage may not cover all claims against us or continue to be available to us at a reasonable cost. If we are unable to maintain adequate insurance coverage, we may be exposed to substantial liabilities. Claims raised by clients stemming from the improper actions of our contract professionals, even if without merit, could cause us to incur significant expense associated with the costs or damages related to such claims. Further, such claims by clients could damage our business reputation and result in the discontinuation of client relationships. Any associated negative publicity could adversely affect our ability to attract and retain qualified contract professionals in the future.

We operate in a regulated industry and changes in regulations or violations of regulations may result in increased costs or sanctions that could reduce our revenues and profitability.

Our organization is subject to extensive and complex federal and state laws and regulations including but not limited to laws and regulations related to professional licensure, payroll tax, conduct of operations, payment for services and payment for referrals. If we fail to comply with the laws and regulations that are directly applicable to our business, we could suffer civil and/or criminal penalties or be subject to injunctions or cease and desist orders.

Extensive and complex laws that apply to our hospital and healthcare facility clients, including laws related to Medicare, Medicaid and other federal and state healthcare programs, could indirectly affect the demand or the prices paid for our services. For example, our hospital and healthcare facility clients could suffer civil and/or criminal penalties and/or be excluded from participating in Medicare, Medicaid and other healthcare programs if they fail to comply with the laws and regulations applicable to their businesses. In addition, our hospital and healthcare facility clients could receive reduced reimbursements or be excluded from coverage because of a change in the rates or conditions set by federal or state governments. In turn, violations of or changes to these laws and regulations that adversely affect our hospital and healthcare facility clients could also adversely affect the prices that these clients are willing or able to pay for our services.

U.S. healthcare legislation could negatively impact our results of operations.

In March 2010, the Patient Protection and Affordable Care Act and the Health Care and Education Reconciliation Act of 2010 (collectively, the Acts) were signed into U.S. law. The Acts represent comprehensive healthcare reform legislation that, in addition to other provisions, will require that we provide healthcare coverage to our temporary employees in the United States or incur penalties. Although our intent is to bill these costs to our customers, there can be no assurance that we will be able to increase client bill rates in a sufficient amount to cover the increased costs. This may reduce our gross and operating margins and negatively impact our financial results. Additionally, since significant provisions of the Acts will not become effective until 2014, possible future changes to the Acts could significantly impact any

estimates we develop during that period. While we are unable at this time to estimate the net impact of the Acts, we believe the net financial impact on our results of operations could be significant.

We may not successfully make or integrate acquisitions, which could harm our business and growth.

As part of our growth strategy, we intend to opportunistically pursue selected acquisitions. We compete with other companies in the professional staffing and consulting industries for acquisition opportunities, and we cannot assure that we will be able to affect future acquisitions on commercially reasonable terms or at all. To the extent we enter into acquisition transactions in the future, we may experience:


•	delays in realizing or a failure to realize the benefits, cost savings and synergies that we anticipate;


•	difficulties or higher-than-anticipated costs associated with integrating any acquired companies into our businesses;


•	attrition of key personnel from acquired businesses;


•	diversion of management’s attention from other business concerns;


•	inability to maintain the business relationships and reputation of the acquired companies;


•	difficulties in integrating the acquired companies into our information systems, controls, policies and procedures;


•	additional risks relating to the businesses or industry of the acquired companies that are different from ours;


•	unexpected liabilities, costs or charges;


•	unforeseen operating difficulties that require significant financial and managerial resources that would otherwise be available for the ongoing development or expansion of our existing operations; and


•	impairment related to goodwill and other identifiable intangible assets acquired

To undertake more transactions, additional financing may be necessary and, if used, would result in additional debt, dilution of outstanding equity, or both. We may face unexpected contingent liabilities arising from these or future acquisitions that could harm our business.

Impairment of goodwill or identifiable intangible assets could materially impact future results of operations.

We have approximately $498.4 million in goodwill and $263.8 million in identifiable intangible assets at December 31, 2012 . As part of the testing of goodwill impairment, Accounting Standards Codification Topic 350, Intangibles - Goodwill and Other , requires the Company to estimate the fair value of its reporting units on at least an annual basis and more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount. The impairment tests consist of comparing the fair value of a reporting unit with its carrying amount including goodwill. We determine the fair value of each reporting unit based upon a weighted average calculation using the fair value derived from a discounted cash flow analysis and a market approach analysis. Discounted cash flows are developed for each reporting unit based on assumptions including revenue growth expectations, gross margins, operating expense projections, working capital, capital expense requirements and tax rates. The multi-year financial forecasts for each reporting unit used in the cash flow models considered several key business drivers such as new product lines, historical performance and industry and economic trends, among other considerations. The market approach considers multiples of financial metrics, primarily EBITDA, based on trading multiples of a group of guideline public companies in the staffing industry, which multiples are then applied to the corresponding financial metrics of our reporting units to derive an indication of fair value. There are inherent uncertainties related to the factors, and management's judgment in applying these factors. At October 31, 2012, we performed our annual goodwill impairment test and concluded that there was no impairment. Future declines in our market capitalization or any other impairment indicators subsequent to the balance sheet date could be an early indication that remaining goodwill may become impaired in the future. Although a future impairment of goodwill and indefinite lived identifiable intangible assets would not affect our cash flow, it would negatively impact our operating results.

Intangible assets with indefinite lives consist of trademarks. We test trademarks for impairment on an annual basis, on October 31. In order to test the trademarks for impairment, we determine the fair value of the trademarks and compare such amount to its carrying value. We determine the fair value of the trademarks using a projected discounted cash flow analysis based on the relief-from-royalty approach. The principal factors used in the discounted cash flow analysis requiring judgment are projected net sales, discount rate, royalty rate and terminal value assumption. The royalty rate used in the analysis is based on transactions that have occurred in our industry. Intangible assets having finite lives are amortized over their useful lives and are tested for recoverability whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Customer relations are amortized using an accelerated method. Contractor relations and non-compete agreements are amortized using the straight-line method. We did not have any impairment of indefinite lived or finite lived intangibles in 2012.

We are subject to business risks associated with international operations, which could make our international operations significantly more costly.

During 2012 , we had international sales in all countries in the European Union, in Canada, New Zealand and Australia. In 2012 , our international operations comprised approximately 6.3 percent of total sales compared with 11.4 percent and 7.0 percent in 2011 and 2010 , respectively. We have limited experience in marketing, selling and supporting our services outside of North America.

Operations in certain markets are subject to risks inherent in international business activities, including:


•	fluctuations in currency exchange rates;


•	complicated work permit requirements;


•	varying economic and political conditions;


•	seasonal reductions in business activity during the summer months in Europe and Asia;


•	overlapping or differing tax structures;


•	difficulties collecting accounts receivable; and


•	regulations concerning pay rates, benefits, vacation, union membership, redundancy payments and the termination of employment.

Our inability to effectively manage our international operations could result in increased costs and adversely affect our results of operations.

Adverse results in tax examinations could subject us to unforeseen liabilities and impact our financial results.

We are subject to periodic tax audits. Adverse findings or assessments made by taxing authorities as the result of an audit could have an adverse effect on our financial results, if we are unable to sustain our position with the relevant jurisdiction.

If our information systems do not function in a cost effective manner, our business will be harmed.

The operation of our business is dependent on the proper functioning of our information systems. In 2012 , we continued to upgrade our information technology systems, including our PeopleSoft and Recruitmax Technology enterprise-wide information systems used in daily operations to identify and match staffing resources and client assignments, track regulatory credentialing, manage scheduling, and perform billing and accounts receivable functions. If the systems fail to perform reliably or otherwise do not meet our expectations, or if we fail to successfully complete the implementation of other modules of the systems, we could experience business interruptions that could result in deferred or lost sales. Our information systems are vulnerable to fire, storm, flood, power loss, telecommunications failures, physical or software break-ins, viruses, security breaches and similar events. Our network infrastructure is currently located at our facility in Salt Lake City, Utah. As a result, any system failure or service outage at this primary facility could result in a loss of service for the duration of the failure of the outage. Our location in Southern California is susceptible to earthquakes and has experienced power shortages and outages in the past, which could result in system failures or outages. If our information systems fail or are otherwise unavailable, these functions would have to be accomplished manually, which could impact our ability to respond to business opportunities quickly, to pay our staff in a timely fashion and to bill for services efficiently.

The loss of key members of our senior management team could adversely affect the execution of our business strategy and our financial results.

We believe that the successful execution of our business strategy and our ability to build upon the significant recent investments in our business and acquisitions of new businesses depends on the continued employment of key members of our senior management team. If any members of our senior management team become unable or unwilling to continue in their present positions, our financial results and our business could be materially adversely affected.

Failure of internal controls may leave us susceptible to errors and fraud.

Our management, including our CEO and CFO, does not expect that our disclosure controls and internal controls will prevent all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable assurance that the objectives of the control system are met. Furthermore, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, would be detected.

Failure to comply with restrictive covenants under our debt instruments could trigger prepayment obligations or additional costs.

Our failure to comply with restrictive covenants under our credit facilities and other debt instruments could result in an event of default, which, if not cured or waived, could result in the requirement to repay such borrowings before their due date. Some covenants are tied to our operating results and thus may be breached if we do not perform as expected. The lenders may require fees and expenses to be paid or other changes to terms in connection with waivers or amendments. If we are forced to refinance these borrowings on less favorable terms, our results of operations and financial condition could be adversely affected by increased costs and/or rates.

The trading price of our common stock has experienced significant fluctuations, which could make it difficult for us to access the public markets for financing or use our common stock as consideration in a strategic transaction.

In 2012 , the trading price of our common stock experienced significant fluctuations, ranging from a high of $20.93 to a low of $10.65 . The closing price of our common stock on the NYSE was $24.85 on March 8, 2013 . Our common stock may continue to fluctuate widely as a result of a large number of factors, many of which are beyond our control, including:


•	period to period fluctuations in our financial results or those of our competitors;


•	failure to meet previously announced guidance or analysts’ expectations of our quarterly results;


•	announcements by us or our competitors of acquisitions, significant contracts, commercial relationships or capital commitments;


•	commencement of, or involvement in, litigation;


•	any major change in our board or management;


•	changes in government regulations, including those related to Medicare and Medicaid reimbursement policies;


•	recommendations by securities analysts or changes in earnings estimates;


•	announcements about our earnings that are not in line with analyst expectations;


•	the volume of shares of common stock available for public sale;


•	announcements by our competitors of their earnings that are not in line with analyst expectations;


•	sales of stock by us or by our shareholders;


•	short sales, hedging and other derivative transactions in shares of our common stock; and


•	general economic conditions, slow or negative growth of unrelated markets and other external factors.

The stock market has experienced extreme price and volume fluctuations that have affected the trading prices of the common stock of many companies involved in the temporary staffing industry. As a result of these fluctuations, we may encounter difficulty should we determine to access the public markets for financing or use our common stock as consideration in a strategic transaction.

Our results of operations may vary from quarter to quarter as a result of a number of factors, which may make it difficult to evaluate our business and could cause instability in the trading price of our common stock.

Factors that may cause our quarterly results to fluctuate include:


•	the level of demand for our temporary staffing services and the efficiency with which we source and assign our contract professionals and support our staffing consultants in the execution of their duties;


•	changes in our pricing policies or those of our competitors; and


•	our ability to control costs and manage our accounts receivable balances.

Most temporary staffing companies experience seasonal declines in demand during the first and fourth quarters, as a result of fewer business days and the reduced number of contract professionals willing to work during the holidays. Historically, we have experienced variability in the duration and depth of these seasonal declines, which in turn have materially affected our quarterly results of operations and made period-to-period comparisons of our financial and operating performance difficult.

If our operating results are below the expectations of public market analysts or investors in a given quarter, the trading price of our common stock could decline.

Future sales of our common stock and the future exercise of options may cause the market price of our common stock to decline and may result in substantial dilution.

We cannot predict what effect, if any, future sales of our common stock, or the availability of our common stock for sale will have on the market price of our common stock. Sales of substantial amounts of our common stock in the public market by management or us, or the perception that such sales could occur, could adversely affect the market price of our common stock and may make it more difficult for you to sell your common stock at a time and price which you may deem appropriate.

We have adopted anti-takeover measures that could prevent a change in our control.

We adopted a shareholder rights plan that has certain anti-takeover effects and will cause substantial dilution to a person or group that attempts to acquire us in a manner or on terms that have not been approved by our board of directors. This plan could delay or impede the removal of incumbent directors and could make more difficult a merger, tender offer or proxy contest involving us, even if such events could be beneficial, in the short-term, to the interests of our shareholders. In addition, such provisions could limit the price that some investors might be willing to pay in the future for shares of our common stock. Our certificate of incorporation and bylaws contain provisions that limit liability and provide for indemnification of our directors and officers, and provide that our stockholders can take action only at a duly called meeting of stockholders. These provisions and others also may have the effect of deterring hostile takeovers or delaying changes in control or management.

Provisions in our corporate documents and Delaware law may delay or prevent a change in control that our stockholders consider favorable.

Provisions in our certificate of incorporation and bylaws could have the effect of delaying or preventing a change of control or changes in our management. These provisions include the following:


•	Our board of directors has the right to elect directors to fill a vacancy created by the expansion of the board of directors or the resignation, death or removal of a director, which prevents stockholders from being able to fill vacancies on our board of directors.

•

Our stockholders may not act by written consent. In addition, a holder or holders controlling a majority of our capital stock would not be able to take certain actions without holding a stockholder’s meeting, and only stockholders owning at least 50 percent of our entire voting stock must request in writing in order to call a special meeting of stockholders (which is in addition to the authority held by our board of directors to call a special stockholder meeting).


•	Stockholders must provide advance notice to nominate individuals for election to the board of directors or to propose matters that can be acted upon at a stockholders’ meeting. These provisions may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise attempting to obtain control of our company.


•	Our board of directors may issue, without stockholder approval, up to one million shares of undesignated or “blank check” preferred stock. The ability to issue undesignated or “blank check” preferred stock makes it possible for our board of directors to issue preferred

stock with voting or other rights or preferences that could impede the success of any attempt or make it more difficult for a third party to acquire us.

As a Delaware corporation, we are also subject to certain Delaware anti-takeover provisions, including Section 203 of the Delaware General Corporation Law. Under these provisions, a corporation may not engage in a business combination with any large stockholders who hold 15 percent or more of our outstanding voting capital stock in a merger or business combination unless the holder has held the stock for 3 years, the board of directors has expressly approved the merger or business transaction or at least two-thirds of the outstanding voting capital stock not owned by such large stockholder approve the merger or the transaction. These provisions of Delaware law may have the effect of delaying, deferring or preventing a change of control, and may discourage bids for our common stock at a premium over its market price. In addition, our board of directors could rely on these provisions of Delaware law to discourage, prevent or delay an acquisition of us.

Item 1B. Unresolved Staff Comments

Not applicable.

Item 2. Properties

As of December 31, 2012 , we leased approximately 37,200 square feet of office space through November 2021 for our field support and corporate headquarters in Calabasas, California. Additionally, we leased 16,600 square feet of office space through February 2016 for our field support offices in Blue Ash, Ohio. As of December 31, 2012 , we leased approximately 56,000 square feet of office space through December 2016 at our VISTA headquarters in Salt Lake City, Utah; 48,300 square feet of office space through December 2015 at our Oxford headquarters in Beverly, Massachusetts; and 21,700 square feet of office space through March 2017 at our Apex headquarters in Richmond, Virginia.

In addition, as of December 31, 2012 , we lease approximately 670,000 square feet of total office space in approximately 130 branch office locations in the United States, United Kingdom, Netherlands, Belgium, Ireland, Spain, China and Canada. A branch office typically occupies space ranging from approximately 1,000 to 5,000 square feet with lease terms that typically range from six months to five years.

Item 3. Legal Proceedings

We are involved in various legal proceedings, claims and litigation arising in the ordinary course of business. However, based on the facts currently available, we do not believe that the disposition of matters that are pending or asserted will have a material effect on our financial position, results of operations or cash flows.

Item 4. Mine Safety Disclosures

Not applicable.

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Price Range of Common Stock

Our common stock is listed on the New York Stock Exchange, or NYSE, under the symbol ASGN. Prior to August 31, 2012, our common stock was listed on the NASDAQ Global Select Market, or Nasdaq. The following table sets forth the range of high and low sales prices as reported on the Nasdaq and the NYSE, as applicable for each quarterly period within the two most recent fiscal y ears. A t March 8, 2013 , we had approximately 70 holders of record, approximately 8,700 beneficial owners of our common stock and 53,084,637 shares outstanding.



	Price Range of Common Stock
	High		Low
Year Ended December 31, 2012
First Quarter	$	18.25	$	10.65
Second Quarter	$	19.37	$	14.48
Third Quarter	$	20.93	$	14.50
Fourth Quarter	$	20.74	$	18.00
Year Ended December 31, 2011
First Quarter	$	10.87	$	7.77
Second Quarter	$	11.67	$	8.06
Third Quarter	$	11.25	$	6.27
Fourth Quarter	$	11.94	$	6.68

Since inception, we have not declared or paid any cash dividends on our common stock, and we currently plan to retain all earnings to support the development and expansion of our business and we have no present intention of paying any dividends on our common stock in the foreseeable future. However, the board of directors periodically reviews our dividend policy to determine whether the declaration of dividends is appropriate. Terms of our senior credit facility restrict our ability to pay dividends of more than $2.5 million in total over the term of the agreement.

Stock Performance Graph

The following graph compares the performance of On Assignment’s common stock price during the period from December 31, 2007 to December 31, 2012 with the composite prices of companies listed on the NYSE, the NASDAQ and of companies included in the SIC Code No. 736—Personnel Supply Services Companies Index. The companies listed in the SIC Code No. 736 include peer companies in the same industry or line of business as On Assignment.

The graph depicts the results of investing $100 in On Assignment’s common stock, the NYSE market index, the NASDAQ market index and an index of the companies listed in the SIC Code No. 736 on December 31, 2007 and assumes that dividends were reinvested during the period.

The comparisons shown in the graph below are based upon historical data, and we caution stockholders that the stock price performance shown in the graph below is not indicative of, nor intended to forecast, potential future performance.

ASSUMES $100 INVESTED ON JANUARY 1, 2007

ASSUMES DIVIDEND REINVESTED

FISCAL YEAR ENDING DECEMBER 31, 2012



	Year Ended December 31,
	2012		2011		2010		2009		2008		2007
On Assignment, Inc. (ASGN)	$	289.25	$	159.46	$	116.25	$	102.00	$	80.88	$	100.00
SIC Code No. 736 Index—Personnel Supply Services Company Index	$	89.03	$	77.60	$	108.06	$	85.80	$	58.83	$	100.00
NASDAQ Market Index	$	120.41	$	102.26	$	103.08	$	87.24	$	60.02	$	100.00
NYSE Stock Market Index	$	99.46	$	85.62	$	88.89	$	78.24	$	60.85	$	100.00

Common Stock Repurchases

There were no purchases of equity securities during the year ended December 31, 2012 .

On October 25, 2010, the Board of Directors authorized additional corporate stock repurchases subject to an overall repurchase cost limitation of $20.0 million. Under this program, the Company, through a third party, may repurchase shares in open market purchases or in privately negotiated transactions over a four year period. In 2010, the Company repurchased and retired 291,212 shares of its common stock at a total cost of $2.0 million. In 2011, the Company repurchased and retired 323,361 shares of its common stock at a total cost of $2.2 million. The Company’s remaining authorized cost limitation to repurchase its common stock was $15.8 million as of December 31, 2012 .

Item 6. Selected Financial Data

The following table presents selected financial data of On Assignment. This selected financial data should be read in conjunction with the consolidated financial statements and notes thereto included under “Financial Statements and Supplementary Data” in Part II, Item 8 of this report.



	Year Ended December 31,
	2012			2011			2010			2009			2008
	(in thousands, except per share data)
Summary Results of Operations:
Revenues	$	1,239,705		$	597,281		$	438,065		$	416,613		$	618,058
Cost of services	855,382			397,176			288,609			280,245			418,602
Gross profit	384,323			200,105			149,456			136,368			199,456
Selling, general and administrative expenses	273,528			153,360			128,715			115,066			146,506
Amortization of intangible assets	18,016			2,346			2,115			6,075			9,436
Impairment of goodwill	—			—			15,399			—			—
Operating income	92,779			44,399			3,227			15,227			43,514
Interest expense, net	(17,823		)	(2,936		)	(8,168		)	(6,442		)	(9,283		)
Income (loss) before income taxes	74,956			41,463			(4,941		)	8,785			34,231
Provision for income taxes	32,303			17,166			4,956			4,078			15,261
Net income (loss)	$	42,653		$	24,297		$	(9,897	)	$	4,707		$	18,970
Earnings (loss) per share:
Basic	$	0.91		$	0.66		$	(0.27	)	$	0.13		$	0.53
Diluted	$	0.89		$	0.64		$	(0.27	)	$	0.13		$	0.53
Number of shares and share equivalents used to calculate earnings (loss) per share:
Basic	46,739			36,876			36,429			36,011			35,487
Diluted	47,826			37,758			36,429			36,335			35,858

Balance Sheet Data (at end of period):
Cash and cash equivalents	$	27,479		$	17,739		$	18,409		$	25,974		$	46,271
Working capital	175,030			74,705			50,596			62,238			91,192
Total assets	1,098,021			410,665			341,116			343,462			401,850
Long-term liabilities	446,571			107,513			76,579			84,847			129,805
Stockholders' equity	532,723			246,743			219,487			226,661			218,514

Our working capital at December 31, 2012 was $175.0 million , including $27.5 million in cash and cash equivalents. On May 15, 2012, we acquired Apex. The acquisition was completed by utilizing existing cash and the proceeds from a new senior secured credit facility and the issuance of 14.3 million shares of common stock. For further discussion regarding the new credit facility, see Note 5 to our Consolidated Financial Statements appearing in Part II, Item 8 of this report.

Item 7 - Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion should be read in conjunction with the other sections of this Annual Report on Form 10-K, including Special Note on Forward-looking Statements and Part I, "Item 1A — Risk Factors".

OVERVIEW

On Assignment, Inc. is a leading global provider of in-demand, skilled professionals in the growing technology, healthcare, and life sciences sectors. We provide clients with short- and long-term placement of contract, contract-to-hire, and direct hire professionals.

Our Technology service offering consists of two complementary segments uniquely positioned in the marketplace to offer our clients a broad spectrum of information technology, or IT, staffing solutions: Apex and Oxford, which was formerly known as the IT and Engineering segment. Our Apex segment provides mission-critical daily IT operation professionals for contract and contract-to-hire positions to Fortune 1000 and mid-market clients across the United States. Our Oxford segment proactively recruits and delivers high-end information technology,

engineering, regulatory, and compliance professionals for consulting assignments and permanent placements across the United States, Canada, and Europe.

Our Healthcare service offering consists of two segments: Healthcare, which includes our Nurse Travel and Allied Healthcare lines of business, and Physician. Our Healthcare segment offers our healthcare clients locally-based and traveling contract professionals, from a number of healthcare, medical, financial and allied occupations. Our Healthcare segment contract professionals include nurses, specialty nurses, health information management professionals, dialysis technicians, surgical technicians, imaging technicians, x-ray technicians, medical technologists, medical assistants, pharmacists, pharmacy technicians, respiratory therapists, phlebotomists, coders, billers, claims processors and collections staff, and dental professionals - including dental assistants, hygienists and dentists and rehabilitation therapists. Our Physician segment is a leading provider of physician staffing, known as locum tenens, and permanent physician search services. Our Physician segment provides short- and long-term locum tenens services and full-service physician search and consulting services, primarily in the United States, with some locum tenens placements in Australia and New Zealand. We work with physicians in a wide range of specialties, placing them in hospitals, community-based practices and federal, state and local facilities.

Our Life Sciences service offering segment provides locally-based contract life science professionals to clients in the biotechnology, pharmaceutical, food and beverage, medical device, personal care, chemical, automotive, educational and environmental industries. Our contract professionals include chemists, clinical research associates, clinical lab assistants, engineers, biologists, biochemists, microbiologists, molecular biologists, food scientists, regulatory affairs specialists, lab assistants, biostatisticians, drug safety specialists, SAS programmers, medical writers, and other skilled scientific professionals.

Results of Operations

The following table summarizes selected statement of operations data expressed as a percentage of revenues:



	Year Ended December 31,
	2012		2011		2010
Revenues	100.0	%	100.0	%	100.0	%
Cost of services	69.0		66.5		65.9
Gross profit	31.0		33.5		34.1
Selling, general and administrative expenses	22.1		25.7		29.4
Amortization of intangible assets	1.5		0.4		0.5
Impairment of goodwill	—		—		3.5
Operating income	7.5		7.4		0.7
Interest expense, net	(1.4	)	(0.5	)	(1.9	)
Income (loss) before income taxes	6.0		6.9		(1.2	)
Provision for income taxes	2.6		2.9		1.1
Net income (loss)	3.4	%	4.1	%	(2.3	)%

* Columns may not foot due to rounding.

RESULTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2012 COMPARED WITH THE YEAR ENDED

DECEMBER 31, 2011



	Year Ended December 31,				Change
	2012		2011		$		%
Revenues by segment (in thousands):
Apex	$	508,743	$	—	$	508,743	—	%
Oxford (formerly IT and Engineering)	345,380		266,742		78,638		29.5	%
Life Sciences	162,799		155,324		7,475		4.8	%
Healthcare	120,104		94,598		25,506		27.0	%
Physician	102,679		80,617		22,062		27.4	%
	$	1,239,705	$	597,281	$	642,424	107.6	%

Revenues increased $642.4 million , or 107.6 percent , mainly due to the acquisition of Apex and 22.4 percent year-over-year growth of our other business segments. Apex revenues for the year ended December 31, 2012 were $508.7 million or 41.0 percent of total revenues. Apex was acquired on May 15, 2012 and is reported in the Apex segment.

Oxford segment revenues increased $78.6 million , or 29.5 percent , comprised of a 23.5 percent increase in the average number of contract professionals on assignment, a 4.7 percent increase in average bill rate and a $1.1 million increase in conversion and permanent

placement revenue. Revenues for Oxford's Healthcare IT line of business increased by approximately 119 percent, the Engineering - Regulatory and Compliance line of business increased by approximately 39 percent, while the remaining lines of business grew by approximately 17 percent. Due to the limited availability of senior IT and engineering consultants, the demand for our services have increased. We have continued to focus on diversifying this segment across clients and industries and have selectively added staffing consultants necessary for current and future growth. In their September report Staffing Industry Analysts say the US IT Staffing market “will attain an all-time high of $24.9 billion in 2013”.

Life Sciences segment revenues increased $7.5 million , or 4.8 percent , comprised of a 5.0 percent increase in the average number of contract professionals on assignment and a 0.5 percent increase in the average bill rate, which was slightly offset by a $0.8 million decrease in conversion and permanent placement revenue. The increase was achieved despite the termination in early 2012 of a low-margin account that generated approximately $3.1 million in revenue in 2011. The year-over-year increase in revenues was attributable to inclusion of a full year's operating results from Valesta, which was acquired on February 28, 2011 and increased demand from our other service offerings as our clients end markets improved. In 2012, Valesta accounted for $24.5 million in revenues up from $20.4 million in 2011.

Healthcare segment (comprised of our Nurse Travel and Allied Healthcare lines of business) revenues increased $25.5 million , or 27.0 percent . Nurse Travel revenues were $62.2 million , up $12.5 million year-over-year primarily due to higher revenues from staffing services supporting customers experiencing labor disruptions ($13.5 million in revenues during the year ended December 31, 2012 and $7.1 million in 2011). The average number of nurses on assignment increased 14.1 percent , which was slightly offset by a 1.3 percent decrease in the average bill rate. Allied Healthcare revenues were $57.9 million , up $13.0 million , or 28.8 percent . The average number of contract professionals on assignment increased 23.4 percent , the average bill rate increased 2.0 percent , and conversion and permanent placement revenue increased $0.3 million. The increase in revenues was attributable to improved economic trends in the healthcare sector, which resulted in a higher number of contract professionals on assignment, open orders and average bill rates. The Allied Healthcare operating environment continued to demonstrate signs of improvement as economic trends in our end markets showed signs of stabilization and growth as evidenced by year-over-year growth in the number of clients and contractors on billing, average bill rate and billable hours. Although the Healthcare segment remains soft, we continue to see signs of improvement in demand for contract professionals.

Physician segment revenues increased $22.1 million , or 27.4 percent . The increase in Physician segment revenues was attributable to inclusion of a full year's operating results from HCP, which was acquired on July 31, 2011 and a $7.8 million increase in our legacy physician business. HCP accounted for $25.5 million in revenues in 2012 up from $11.2 million in 2011. The increase in legacy physician revenues was due to a 4.3 percent increase in the average number of physicians placed and working, a 4.8 percent increase in average bill rate and a $0.6 million increase in direct hire and conversation fee revenues.

Gross Profit and Gross Margins



	Year Ended December 31,
	2012				2011
	Gross Profit		Gross Margin		Gross Profit		Gross Margin
Gross Profit by segment (in thousands):
Apex	$	140,669	27.7	%	$	—	—	%
Oxford (formerly IT and Engineering)	122,043		35.3	%	94,967		35.6	%
Life Sciences	55,874		34.3	%	52,643		33.9	%
Healthcare	34,282		28.5	%	26,637		28.2	%
Physician	31,455		30.6	%	25,858		32.1	%
	$	384,323	31.0	%	$	200,105	33.5	%

The year-over-year gross profit increase was primarily due to higher revenues, which was partially offset by a 250 basis point contraction in consolidated gross margin. The decrease in gross margin was primarily attributable to the inclusion of Apex, which has a lower gross margin than our other segments.

Oxford segment gross profit increased $27.1 million , or 28.5 percent , primarily due to a $78.6 million , or 29.5 percent increase in revenues, which was partially offset by a 26 basis point contraction in gross margin. The contraction in gross margin was primarily due to increases in consultant payroll taxes and benefits offset by a $1.1 million increase in direct hire and conversion fee revenue.

Life Sciences segment gross profit increased $3.2 million , or 6.1 percent . The increase in gross profit was primarily due to a 4.8 percent increase in revenues and a 43 basis point expansion in gross margin. The expansion in gross margin was due to a 1.9 percent increase in bill/pay spread, which was partially offset by an increase in travel related expense, an increase in payroll taxes related to higher European payroll tax rates for Valesta employees, and a $0.8 million decrease in direct hire and conversion fee revenue.

Healthcare segment gross profit increased $7.6 million , or 28.7 percent . The increase in gross profit was due to a 27.0 percent increase in revenues and a 38 basis point expansion in gross margin. Within this segment, Allied Healthcare gross profit increased 28.8 percent , while

gross margin was flat. Nurse Travel gross profit increased 28.6 percent and gross margin increased 66 basis points. The expansion in gross margin was primarily due to a $6.4 million increase in revenues from labor disruption in 2012 which have higher gross margin than other Nurse Travel revenues.

Physician segment gross profit increased $5.6 million , or 21.6 percent . The increase in gross profit was due to a $22.1 million , or 27.4 percent increase in revenues, partially offset by a 145 basis point contraction in gross margin. The contraction in gross margin was primarily due to a 7.7 percent decrease in bill/pay spread in part related to a greater concentration of government work at HCP, which has a lower gross margin than the legacy Physician business. The Physician segment also experienced an increase in non-billable expenses, which was partially offset by a $0.5 million favorable actuarial adjustment to our medical malpractice insurance expense.

Selling, General and Administrative Expenses. Selling, general and administrative (SG&A) expenses include field operating expenses, such as costs associated with our network of staffing consultants and branch offices for each of our five segments, including staffing consultant compensation, rent, other office expenses, marketing and recruiting expenses for our contract professionals. SG&A expenses also include our corporate and branch office support expenses, such as the salaries of corporate operations and support personnel, recruiting and training expenses for field staff, marketing staff expenses, expenses related to being a publicly-traded company and other general and administrative expenses.

For the year ended December 31, 2012, SG&A expenses increased $120.2 million , or 78.4 percent , to $273.5 million from $153.4 million in 2011. The increase in SG&A expenses was primarily due to (i) $88.6 million of SG&A expenses from Apex, which was acquired on May 15, 2012, (ii) $10.6 million in acquisition costs primarily related to the recent acquisition of Apex, and (iii) $20.8 million, or 18.1 percent increase, in compensation and benefits excluding Apex. The increase in compensation and benefits was due to a $9.0 million increase in compensation expenses primarily as a result of headcount additions to support anticipated higher growth in certain segments and increased headcount related to the Valesta and HCP acquisitions, and an $11.8 million increase in bonuses and commissions as a result of increased revenue and the attainment of incentive compensation targets. Total SG&A expenses as a percentage of revenues decreased to 22.1 percent for 2012 compared with 25.7 percent in 2011. Excluding acquisition-related costs of $10.6 million, total SG&A expenses as a percentage of revenues was 21.2 percent for 2012.

Amortization of Intangible Assets. Amortization of intangible assets was $18.0 million compared with $2.3 million in 2011. The $15.7 million increase was due to amortization related to $104.8 million of identifiable intangible assets acquired related to the Apex acquisition in May 2012. Apex's customer relationships were valued at $92.1 million and are being amortized using an accelerated method.

Interest Expense. Interest expense was $17.8 million compared with $2.9 million in the same period in 2011. This increase was primarily due to higher debt outstanding for the new senior secured credit agreement closed in May 2012 to fund the cash portion of the acquisition of Apex.

Provision for Income Taxes. The provision for income taxes was $32.3 million compared with $17.2 million for the same period in the prior year. The annual effective tax rate was 43.1 percent for 2012 and 41.4 percent for 2011. The increase in the annual effective tax rate in 2012 relates to the addition of Apex and their higher non-deductible expenses as well as valuation allowances on deferred tax assets of certain of our foreign subsidiaries.

RESULTS OF OPERATIONS FOR THE YEAR ENDED DECEMBER 31, 2011 COMPARED WITH THE YEAR ENDED

DECEMBER 31, 2010



	Year Ended December 31,				Change
	2011		2010		$		%
Revenues by segment (in thousands):
Oxford (formerly IT and Engineering)	$	266,742	$	178,688	$	88,054	49.3	%
Life Sciences	155,324		109,495		45,829		41.9	%
Healthcare	94,598		76,287		18,311		24.0	%
Physician	80,617		73,595		7,022		9.5	%
	$	597,281	$	438,065	$	159,216	36.3	%

Revenues increased $159.2 million, or 36.3 percent, mainly due to growth in all four segments which was partially due to our acquisitions of Cambridge, Sharpstream, Valesta and HCP. Cambridge and Sharpstream were acquired in 2010, Valesta was acquired during the first quarter of 2011 and HCP was acquired on July 31, 2011. Cambridge is reported under the Life Sciences, Oxford and Physician segments; Sharpstream and Valesta are reported under the Life Sciences segment and HCP is reported under the Physician segment. Consolidated revenues for the year ended December 31, 2011 included $48.1 million related to our Cambridge, Sharpstream, Valesta and HCP acquisitions compared with $9.9 million related to the Cambridge and Sharpstream acquisitions in 2010.

Oxford segment revenues increased $88.1 million, or 49.3 percent, comprised of a 41.0 percent increase in the average number of contract professionals on assignment and a 5.8 percent increase in average bill rate. The increase in revenue was also due to a $0.9 million, or 46.4 percent increase in direct hire and conversion fee revenues. Oxford segment revenues for the year ended December 31, 2011 included

$4.3 million in revenue from our Cambridge acquisition in April 2010, compared with $2.2 million in 2010. Because many of our placements involve capital projects, we believe that one of the reasons the demand for our services has increased with the progressing economic recovery is that more companies have increased their capital spending.

Life Sciences segment revenues increased $45.8 million, or 41.9 percent, comprised of a $42.4 million increase in staffing revenues and a $3.4 million, or 46.7 percent increase in direct hire and conversion fees. The increase in staffing revenues resulted from a 29.1 percent increase in the average number of contract professionals on assignment and a 7.8 percent increase in average bill rate. The year-over-year increase in revenues was primarily attributable to increased demand for our service offerings as our clients’ end markets have improved in 2011 with the progressing economic recovery and an increase in revenues of $24.8 million from the business acquired in 2010 and 2011.

Revenues for our Healthcare segment (comprised of our Nurse Travel and Allied Healthcare lines of business) increased $18.3 million, or 24.0 percent. The increase in revenues in the Healthcare segment was attributable to improved economic trends in the healthcare sector, which contributed to the increase in the number of contract professionals on assignment, open orders and average bill rates and supporting customers who were undergoing system conversions. Although the Healthcare segment was soft, we continued to see signs of improvement in demand. Nurse Travel revenues increased $12.9 million, or 35.1 percent, to $49.6 million, comprised of a 29.5 percent increase in the average number of nurses on assignment and a 2.0 percent increase in the average bill rate. Revenues related to staffing resulting from labor disruptions at customer sites included $7.1 million in 2011 and $5.0 million in 2010. Allied Healthcare revenues increased $5.4 million, or 13.7 percent, to $45.0 million, comprised of a 5.9 percent increase in average number of contract professionals on assignment and a 2.5 percent increase in the average bill rate. The Allied Healthcare operating environment continued to demonstrate signs of improvement as economic trends in our end markets showed signs of stabilization and growth as evidenced by year-over-year growth in the number of contractors and clients on billing, average bill rate, permanent placement activity and billable hours.

Physician segment revenues increased $7.0 million, or 9.5 percent, comprised of a 16.5 percent increase in the average number of physicians on assignment, a 1.9 percent decrease in average bill rate and a $0.3 million, or 8.5 percent decrease in direct hire and conversion fees revenue Physician segment revenues for year ended December 31, 2011 included $11.4 million related to our HCP and Cambridge acquisitions. The legacy physician staffing business decreased year over year. We attribute this to continued uncertainty related to healthcare reform, fewer physicians deciding to retire, current economic conditions and high unemployment which have reduced the number of elective procedures and lowered patient census at client facilities.

Gross Profit and Gross Margins



	Year Ended December 31,
	2011				2010
	Gross Profit		Gross Margin		Gross Profit		Gross Margin
Gross Profit by segment (in thousands):
Oxford (formerly IT and Engineering)	$	94,967	35.6	%	$	64,775	36.3	%
Life Sciences	52,643		33.9	%	37,776		34.5	%
Healthcare	26,637		28.2	%	23,058		30.2	%
Physician	25,858		32.1	%	23,847		32.4	%
	$	200,105	33.5	%	$	149,456	34.1	%

The year-over-year gross profit increase was primarily due to higher revenues, which was partially offset by a 62 basis point contraction in consolidated gross margin. The contraction in gross margin was primarily due to margin contraction in the Healthcare and Oxford segments.

Oxford segment gross profit increased $30.2 million, or 46.6 percent, primarily due to an $88.1 million, or 49.3 percent, increase in revenues, partially offset by a 65 basis point contraction in gross margin. The contraction in gross margin was in part due to a $4.7 million, or 35.2 percent, increase in other employee expenses, and a benefit in 2010 from employment tax credits related to the HIRE Act, which expired on December 31, 2010, partially offset by a $0.9 million increase in direct hire and conversion fee revenues and a 5.0 percent increase in bill/pay spread.

Life Sciences segment gross profit increased $14.9 million, or 39.4 percent. The increase in gross profit was primarily due to a 41.9 percent increase in revenues, offset by a 61 basis point contraction in gross margin. The contraction in gross margin was mainly due to a benefit in 2010 from employment tax credits related to the HIRE Act, which expired on December 31, 2010, higher European payroll tax rates and holiday pay related to Valesta employees and an increase in unemployment insurance expenses. This contraction was partially offset by a $3.4 million increase in direct hire and conversion fee revenues mainly from our Sharpstream acquisition and an 11.4 percent increase in bill/pay spread.

Healthcare segment gross profit increased $3.6 million, or 15.5 percent. The increase in gross profit was due to a 24.0 percent increase in revenues, partially offset by a 207 basis point contraction in gross margin. The contraction in gross margin was mainly due to an abnormally high gross margin in Nurse Travel in 2010, related to supporting a customer with labor disruptions when we did not have to have

nurses travel. and thus the related costs, a $1.8 million increase in travel related expenses, a $1.9 million increase in other employee expenses, and a $0.7 million increase in unemployment insurance expense. The contraction in gross margin was partially offset by an 8.1 percent increase in bill/pay spread. Within this segment, Allied Healthcare gross profit increased 11.0 percent while gross margin decreased 77 basis points and Nurse Travel gross profit increased 21.3 percent while gross margin decreased 283 basis points.

Physician segment gross profit increased $2.0 million, or 8.4 percent. The increase in gross profit was due to a $7.0 million, or 9.5 percent, increase in revenues, partially offset by a 32 basis point contraction in gross margin. The contraction in gross margin was primarily due to a 7.0 percent decrease in bill/pay spread, in part a result of the acquisition of HCP which has a higher concentration of lower gross margin government business, and a $0.3 million, or 8.5 percent, decrease in direct hire revenue and conversion fee revenues, partially offset by a $1.5 million decrease in medical malpractice insurance expense primarily due to favorable claims development.

Selling, General and Administrative Expenses. For the year ended December 31, 2011, SG&A expenses increased $24.9 million, or 19.0 percent, to $155.7 million in 2011. The increase in SG&A expenses was primarily due to a $20.1 million, or 21.1 percent, increase in compensation and benefits. The increase in compensation and benefits was due to (i) an $11.7 million increase in compensation expenses primarily as a result of increased headcount related to the Cambridge, Sharpstream, Valesta and HCP acquisitions and headcount additions to support anticipated high growth in certain segments, (ii) an $8.4 million increase in bonuses and commissions as a result of increased revenue and the anticipated attainment of incentive compensation targets, and (iii) a $0.5 million increase in acquisition costs primarily related to the recent acquisitions. Additionally, non-compensation and benefits related SG&A expenses increased $2.9 million as a result of the Valesta and HCP acquisitions which were both completed in 2011. This increase in SG&A expenses was partially offset by a $1.9 million gain related to the settlements of the Cambridge earn-out and Sharpstream earn-out. Total SG&A expenses as a percentage of revenues decreased to 26.1 percent for the year ended December 31, 2011 compared with 29.9 percent in the same period in 2010.

Impairment of Goodwill. We recognized a goodwill impairment charge of $15.4 million related to Nurse Travel during 2010. The goodwill impairment charge for Nurse Travel was a result of the decreased fair value of the reporting unit due to lowered growth expectations in the later years because of uncertainty regarding the timing of the recovery of the Nurse Travel industry.

Interest Expense. Interest expense was $3.0 million for the year ended December 31, 2011 compared with $8.3 million in 2010. This decrease was related to the $2.8 million write-off of unamortized capitalized loan costs in 2010, related to the old borrowing facility that was paid in full in December 2010, as well as lower interest rates in 2011.

Provision for Income Taxes. The provision for income taxes was $17.2 million for the year ended December 31, 2011 compared with $5.0 million in 2010. The annual effective tax rate was 41.4 percent for the year ended December 31, 2011 and 47.4 percent in 2010 excluding the impact of the goodwill impairment charge. The decrease in the tax rate in 2011 was primarily related to the year-over-year increase in income before income taxes for 2011 while permanent differences increased, but not as much as the increase to the income before income taxes, which lowered the annual effective rate. Refer to Note 9 - Income Taxes for detailed information reconciling the statutory tax rate to the effective tax rate.

Liquidity and Capital Resources

Our working capital at December 31, 2012 was $175.0 million and our cash and cash equivalents were $27.5 million , of which $8.0 million was held in foreign countries. Cash held in foreign countries is not available to fund domestic operations unless repatriated, which would require the accrual and payment of taxes. We do not intend to repatriate cash held in foreign countries. Our operating cash flows have been our primary source of liquidity and historically have been sufficient to fund our working capital and capital expenditure needs. Our working capital requirements consist primarily of the financing of accounts receivable, payroll expenses and the periodic payments of principal and interest on our loans.

Net cash provided by operating activities was $40.7 million for 2012 compared with $23.4 million for 2011 . Cash provided by operating activities in 2012 was primarily driven by income from operations offset by an increase working capital (excluding cash) related to the high growth of the business. Cash provided by operating activities in 2011 was primarily driven by income from operations, an increase in accrued payroll and contract professional pay, offset by an increase in accounts receivable.

Net cash used in investing activities was $363.0 million during 2012 compared with $41.1 million during 2011 . Cash paid for acquisitions was $347.7 million and capital expenditures for information technology projects, leasehold improvements and various property and equipment purchases increased $5.9 million to $14.4 million in 2012 . We estimate that capital expenditures for 2013 will be approximately $16.0 million .

Net cash provided by financing activities was $331.9 million for 2012 , compared with $17.5 million provided by financing activities in 2011 . During 2012 , principal payments of long-term debt were $173.2 million , versus $20.5 million paid down during 2011 . Proceeds from new borrowings on the term loan and line of credit were $513.0 million and $40.5 million in 2012 and 2011 , respectively.

Under terms of the credit facility, the term loan facility is repayable at the minimum rate of $2.5 million per quarter and we are required to reduce the term loan by up to 50 percent of our excess cash flow based on leverage ratios, as defined by the agreement for each year end over the next seven years. We are required to maintain certain financial covenants, including a maximum leverage ratio. Our leverage ratio (consolidated funded debt to trailing 12 months EBITDA) is currently limited to no more than 4.25 to 1.00 and reduces over time to 3.00 to 1.00 . As of December 31, 2012 , the leverage ratio was approximately 2.73 to 1.00 and we were in compliance with all such

covenants. Additionally, the agreement, which is secured by substantially all of our assets, provides for certain limitations on our ability to, among other things, incur additional debt, offer loans, and declare dividends. As of December 31, 2012 , we had $72.2 million of borrowing available under our credit facility.

We continue to make progress on enhancements to our front-office and back-office information systems. These enhancements include the consolidation of back-office systems across all corporate functions, as well as enhancements to and broader application of our front-office software across all lines of business.

We believe that our working capital as of December 31, 2012 , our credit facility and expected operating cash flows will be sufficient to fund future requirements of our debt repayment obligations, accounts payable and related payroll expenses, as well as capital expenditure initiatives for the next twelve months.

Commitments and Contingencies

We lease space for our corporate and branch offices. Rent expense was $14.1 million in 2012 , $8.6 million in 2011 and $8.4 million in 2010 .

The following table sets forth, on an aggregate basis, at December 31, 2012 , the amounts of specified contractual cash obligations required to be paid in the periods shown (in thousands):



Contractual Obligations	2013		2014		2015		2016		2017		Thereafter		Total
Long-term debt obligations	$	10,000	$	10,000	$	10,000	$	10,000	$	52,500	$	334,088	$	426,588
Operating lease obligations	13,545		11,117		9,210		6,386		3,588		6,764		50,610
Related party leases	1,266		1,299		1,168		694		175		—		4,602
Total	$	24,811	$	22,416	$	20,378	$	17,080	$	56,263	$	340,852	$	481,800

For additional information about these contractual cash obligations, see Note 8 - Commitments and Contingencies to our Consolidated Financial Statements appearing in Part II, Item 8 of this report. Interest payments related to our bank debt are not set forth in the table above.

We have large retention policies for our workers' compensation and medical malpractice exposures. In connection with this program, we pay a base premium plus actual losses incurred up to certain levels and are insured for losses greater than certain levels per occurrence and in the aggregate. The workers' compensation and medical malpractice loss reserves liability is determined based on claims filed and claims incurred but not yet reported. We account for claims incurred but not yet reported based on estimates derived from historical claims experience and current trends of industry data. Changes in estimates, differences in estimates and actual payments for claims are recognized in the period that the estimates changed or payments were made. The workers' compensation and medical malpractice loss reserves liability was $10.3 million and $10.4 million at December 31, 2012 and 2011 , respectively. Additionally, we have unused stand-by letters of credit outstanding to secure obligations for workers’ compensation claims with various insurance carriers. The unused stand-by letters of credit at December 31, 2012 and 2011 were $2.8 million and $2.4 million , respectively.

As of December 31, 2012 and 2011 , we have an income tax reserve in other long-term liabilities related to our uncertain tax positions of $0.4 million and $0.3 million , respectively.

We are involved in various other legal proceedings, claims and litigation arising in the ordinary course of business. However, based on the facts currently available, we do not believe that the disposition of matters that are pending or asserted will have a material effect on our consolidated financial statements.

We are subject to earn-out obligations entered into in connection with acquisitions. If the acquired businesses meet predetermined targets, we are obligated to make additional cash payments in accordance with the terms of such earn-out obligations. At December 31, 2012 , the Company has potential future earn-out obligations of approximately $9.1 million through 2013.

Off-Balance Sheet Arrangements

As of December 31, 2012 , the Company had no significant off-balance sheet arrangements other than operating leases and unused stand-by letters of credit outstanding.

Accounting Standards Updates

See Note 1 - Summary of Significant Accounting Policies, to the Consolidated Financial Statements in Part II, Item 8 of this report for a discussion of new accounting pronouncements.

Critical Accounting Policies

Our accounting policies are described in Note 1 of the Notes to Consolidated Financial Statements in Part II, Item 8 of this report. We prepare our financial statements in conformity with accounting principles generally accepted in the United States, which require us to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the year. Actual results could differ from those estimates. We consider the following policies to be most critical in understanding the judgments that are involved in preparing our financial statements and the uncertainties that could impact our results of operations, financial condition and cash flows.

Allowance for Doubtful Accounts and Billing Adjustments. We estimate an allowance for doubtful accounts, as well as an allowance for billing adjustments related to trade receivables based on our analysis of historical collection and adjustment experience. We apply bad debt percentages based on experience to the outstanding accounts receivable balances at the end of the period, as well as analyze specific reserves as needed. Impaired receivables, or portions thereof, are charged off when deemed uncollectible. If we experience a significant change in collections or billing adjustment experience, our estimates of the recoverability of accounts receivable could change by a material amount.

Workers’ Compensation and Medical Malpractice Loss Reserves. We carry retention policies for our workers’ compensation and medical malpractice exposures. In connection with these programs, we pay a base premium plus actual losses incurred, not to exceed certain stop-loss limits. We are insured for losses above these limits, both per occurrence and in the aggregate. The workers' compensation and medical malpractice loss reserves are based upon an actuarial report obtained from a third party and determined based on claims filed and claims incurred but not reported. We account for claims incurred but not yet reported based on estimates derived from historical claims experience and current trends of industry data. Changes in estimates and differences in estimates and actual payments for claims are recognized in the period that the estimates changed or the payments were made.

Contingencies. We record an estimated loss from a loss contingency when information available prior to issuance of our financial statements indicates it is probable that an asset has been impaired or a liability has been incurred at the date of the financial statements, and the amount of the loss can be reasonably estimated. Accounting for contingencies, such as legal settlements, workers’ compensation matters and medical malpractice insurance matters, requires us to use our judgment. While we believe that our accruals for these matters are adequate, if the actual loss from a loss contingency is significantly different than the estimated loss, results of operations may be over or understated.

Income taxes. We account for income taxes using the liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that a portion of the deferred tax asset will not be realized.

We make a comprehensive review of our uncertain tax positions regularly. In this regard, an uncertain tax position represents our expected treatment of a tax position taken in a filed return, or planned to be taken in a future tax return or claim that has not been reflected in measuring income tax expense for financial reporting purposes. In general, until these positions are sustained by the taxing authorities or statutes expire for the year that the position was taken, we do not recognize the tax benefits resulting from such positions and report the tax effects as a liability for uncertain tax positions in our consolidated balance sheets.

Goodwill and Identifiable Intangible Assets. Goodwill and intangible assets with indefinite lives are tested for impairment on an annual basis as of October 31, and for goodwill whenever an event occurs or circumstances change that would more likely than not reduce the fair value of a reporting unit below its carrying amount and for indefinite lived intangibles, if events or changes in circumstances indicate that it is more likely than not that the asset is impaired.

During the quarter ended December 31, 2012, we changed the date of the annual impairment test for goodwill from December 31 to October 31. The change is preferable because it alleviates constraints on accounting resources during the year-end reporting process and better aligns the timing of the assessment with our planning and forecasting process, which occurs primarily in the third quarter. The resulting change in accounting principle related to changing the annual goodwill impairment test date did not delay, accelerate or avoid an impairment charge. Due to significant judgments and estimates that are utilized in the goodwill impairment analysis, we determined it was impracticable to objectively determine, without the use of hindsight, projected cash flows and related valuation estimates as of each October 31 for periods prior to October 31, 2012. As such, we have prospectively applied the change in the annual goodwill impairment test date from October 31, 2012.

compete agreements are amortized using the straight-line method. Other than the goodwill impairment in 2010 discussed below, we did not have any impairment of indefinite lived or finite lived intangibles in 2012, 2011, or 2010.

Goodwill is tested for impairment using a two-step process in which the first step compares the fair value of a reporting unit, which is generally an operating segment or one level below the operating segment level which is a business and for which discrete financial information is available and reviewed by segment management, to the reporting unit's carrying value. We determine the fair value of each reporting unit based upon a weighted average calculation using the fair value derived from a discounted cash flow analysis and a market approach analysis. Discounted cash flows are developed for each reporting unit based on assumptions including revenue growth expectations, gross margins, operating expense projections, working capital, capital expense requirements and tax rates. The multi-year financial forecasts for each reporting unit used in the cash flow models considered several key business drivers such as new product lines, historical performance and industry and economic trends, among other considerations. The market approach considers multiples of financial metrics, primarily EBITDA, based on trading multiples of a group of guideline public companies in the staffing industry, which multiples are then applied to the corresponding financial metrics of our reporting units to derive an indication of fair value.

If after performing the first step of the goodwill impairment test, the fair value of the reporting unit does not exceed its carrying value, we perform a second step of the goodwill impairment test for that reporting unit. The second step measures the amount of goodwill impairment by comparing the implied fair value of the respective reporting unit goodwill with the carrying value of that goodwill. The implied fair value of goodwill is determined under the same approach utilized to estimate the amount of goodwill recognized in a business combination. This approach requires we allocate the fair value of the respective reporting unit as calculated in the first step of the goodwill impairment test to the reporting unit assets, including identifiable intangible assets, which typically includes tradenames, staffing databases and customer relationships, and reporting unit liabilities, based on the estimated fair values of such assets and liabilities, with any excess reporting unit fair value representing the implied fair value of goodwill for that reporting unit. The reporting unit goodwill impairment loss, if any, is measured as the amount by which the carrying value of goodwill exceeds the implied fair value of goodwill calculated in the second step of the goodwill impairment test.

The principal factors used in the discounted cash flow analysis requiring judgment are the projected results of operations, discount rate, and terminal value assumptions. The discount rate is determined using the weighted average cost of capital (WACC). The WACC takes into account the relative weights of each component of an average market participant's capital structure (equity and debt). It also considers our risk-free rate of return, equity market risk premium, beta and size premium adjustment. A range of discount rates are utilized across the reporting units based on the entity size of each reporting unit. The terminal value assumptions are applied subsequent to the tenth year of the discounted cash flow model.

We performed step one goodwill impairment tests for each reporting unit as of October 31, 2012 as this is our new annual impairment test date. No impairment charge was recorded for any of the reporting units as of October 31, 2012. The fair value of all reporting units exceeded their respective carrying values by approximately 21 percent or more. The discount rate used in the cash flow analysis ranged between approximately 13 to 15 percent.

Based upon the annual goodwill impairment test in 2011, there was no goodwill impairment charge. We recognized a goodwill impairment charge of $15.4 million in the fourth quarter of 2010. Goodwill for the Company's impaired reporting unit, Nurse Travel, with a carrying amount of $15.4 million was written down to the implied fair value of $0 resulting in an impairment charge of $15.4 million.

The discounted cash flows and the resulting fair value estimates of our reporting units are sensitive to changes in assumptions. An increase of less than eight percent in the discount rate of a reporting unit could cause the fair value of certain significant reporting units to be below their carrying value. Changes in the timing of the recovery and the impact on our operations and costs may also affect the sensitivity of the projections including achieving future cost savings resulting from initiatives which contemplate further synergies from system and operational improvements in infrastructure and field support which were included in our forecasts. Ultimately, future changes in these assumptions may impact the estimated fair value of a reporting unit and cause the fair value of the reporting unit to be below its carrying value, which would require a step two analysis and may result in impairment of goodwill.

Due to the many variables inherent in the estimation of a reporting unit's fair value and the relative size of recorded goodwill, changes in assumptions may have a material effect on the results of our impairment analysis. Downward revisions of our forecasts, extended delays in the economic recovery, or a sustained decline of our stock price resulting in market capitalization significantly below book value could lead to an impairment of goodwill or intangible assets with indefinite lives in future periods.

Impairment or Disposal of Long-Lived Assets. We evaluate long-lived assets, other than goodwill and identifiable intangible assets with indefinite lives, for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. An impairment loss is recognized when the sum of the undiscounted future cash flows is less than the carrying amount of the asset, in which case a write-down is recorded to reduce the related asset to its estimated fair value. There was no impairment of long-lived assets as of December 31, 2012 , 2011 or 2010 .

Business Combinations. The purchase price of an acquisition is allocated to the underlying assets acquired and liabilities assumed based upon their estimated fair values at the date of acquisition. To the extent the purchase price exceeds the fair value of the net identifiable tangible and intangible assets acquired and liabilities assumed, such excess is allocated to goodwill. We determine the estimated fair values after review and consideration of relevant information including discounted cash flows, quoted market prices and estimates made by management. Accordingly, these can be affected by contract performance and other factors over time, which may cause final amounts to

differ materially from original estimates. We adjust the preliminary purchase price allocation, as necessary, up to one year after the acquisition closing date if we obtain more information regarding asset valuations and liabilities assumed.

Goodwill acquired in business combinations is assigned to the reporting unit(s) expected to benefit from the combination as of the acquisition date. Acquisition related costs are recognized separately from the acquisition and are expensed as incurred.

Stock-Based Compensation. We record compensation expense for restricted stock awards and stock units based on the fair market value of the awards on the date of grant. Market-based awards, which are based on achievement of targets indexed to our share price, are valued using a Monte Carlo simulation model. Compensation expense for performance-based awards is measured based on the amount of shares ultimately expected to vest, estimated at each reporting date based on management’s expectations regarding the relevant performance criteria. We account for stock options granted and ESPP shares based on an estimated fair market value using a Black-Scholes option valuation model. This methodology requires the use of subjective assumptions, including expected stock price volatility and the estimated life of each award. The fair value of equity-based compensation awards less the estimated forfeitures is amortized over the service period of the award.

Item 7A. Quantitative and Qualitative Disclosures about Market Risk

We are exposed to certain market risks arising from transactions in the normal course of business, principally risks associated with foreign currency fluctuations and interest rates. We are exposed to foreign currency risk from the translation of foreign operations into U.S. dollars. Based on the relative size and nature of our foreign operations, we do not believe that a ten percent change in the value of foreign currencies relative to the U.S. dollar would have a material impact on our financial statements. Our primary exposure to market risk is interest rate risk associated with our debt instruments. See “Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations” for further description of our debt instruments.

On February 18, 2011, we entered into an interest rate swap agreement to hedge a portion of our interest rate exposure on our senior secured credit agreement. The swap has a notional amount of $25.0 million and fixes a portion of our base borrowing rate, which is a floating rate based on a LIBOR swap rate that resets periodically.

Effective August 8, 2012 , the Company entered into three interest rate cap agreements to hedge a portion of its interest rate exposure on its senior secured debt (collectively referred to as the Interest Rate Caps). Under the terms of the Interest Rate Caps, the one month LIBOR rate will not exceed 3.0 percent . From a practical standpoint, the interest rate in the hedged portion of the debt is limited to a maximum of 3.0 percent plus the Eurodollar applicable margin. The total initial notional amount was $223.1 million and is scheduled to decline over the term of the Interest Rate Caps. Each of the Interest Rate Caps terminates on August 10, 2015.

As of December 31, 2012 , we had $426.6 million outstanding under the senior secured credit agreement, $401.6 million of which bears interest at variable-rates. We have the option to determine the variable interest rate as the Eurodollar rate or the base rate (which is the highest of the bank’s prime rate, one-half of 1.0 percent in excess of the overnight federal funds rate, and 1.0 percent in excess of the one-month Eurodollar rate), plus in each case, an applicable margin.

Excluding the effect of our interest rate swap agreement and interest rate caps, a hypothetical 1.0 percent change in interest rates on variable rate debt would have resulted in interest expense fluctuating approximately $4.3 million based on $426.6 million of debt outstanding for any twelve month period. Including the effect of our interest rate swap agreement and interest rate cap agreements, a 1.0 percent change in interest rates on variable debt would have resulted in interest expense fluctuating approximately $4.0 million based on $401.6 million of debt outstanding for any twelve month period. We have not entered into any market risk sensitive instruments for trading purposes.

Item 8. Financial Statements and Supplementary Data

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of On Assignment, Inc.

Calabasas, California

We have audited the accompanying consolidated balance sheets of On Assignment, Inc. and subsidiaries (the “Company”) as of December 31, 2012 and 2011, and the related consolidated statements of operations and comprehensive income (loss), stockholders' equity, and cash flows for each of the three years in the period ended December 31, 2012. Our audits also included the financial statement schedule listed in the Index at Item 15. These financial statements and financial statement schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and financial statement schedule based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, such consolidated financial statements present fairly, in all material respects, the financial position of On Assignment, Inc. and subsidiaries as of December 31, 2012 and 2011, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2012, in conformity with accounting principles generally accepted in the United States of America. Also, in our opinion, such financial statement schedule, when considered in relation to the basic consolidated financial statements taken as a whole, presents fairly, in all material respects, the information set forth therein.

As discussed in Note 4 to the consolidated financial statements, on May 15, 2012, the Company acquired all the outstanding shares of Apex Systems, Inc.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the Company's internal control over financial reporting as of December 31, 2012, based on the criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated March 18, 2013 expressed an unqualified opinion on the Company's internal control over financial reporting.

/s/ Deloitte & Touche LLP

Los Angeles, California

March 18, 2013

ON ASSIGNMENT, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(In thousands, except share and per share data)



	December 31,
	2012			2011
ASSETS
Current Assets:
Cash and cash equivalents	$	27,479		$	17,739
Accounts receivable, net of $3,970 and $2,777, respectively	243,003			93,925
Prepaid expenses	8,839			6,645
Deferred income tax assets	10,147			9,271
Other	4,289			3,534
Total current assets	293,757			131,114
Property and equipment, net	26,862			18,057
Goodwill	498,356			229,234
Identifiable intangible assets, net	263,840			30,206
Other	15,206			2,054
Total Assets	$	1,098,021		$	410,665
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Current portion of long-term debt	$	10,000		$	5,000
Accounts payable	6,810			4,112
Accrued payroll and contract professional pay	59,962			24,948
Deferred compensation	10,000			1,896
Workers’ compensation and medical malpractice loss reserves	10,327			10,401
Current portion of accrued earn-outs	6,563			3,488
Other	15,065			6,564
Total current liabilities	118,727			56,409
Deferred income tax liabilities	23,009			14,856
Long-term debt, net of current portion	416,588			81,750
Accrued earn-outs	1,014			6,368
Other long-term liabilities	5,960			4,539
Total liabilities	565,298			163,922
Commitments and Contingencies
Stockholders’ Equity:
Preferred Stock, $0.01 par value, 1,000,000 shares authorized, no shares issued	—			—
Common Stock, $0.01 par value, 75,000,000 shares authorized, 52,960,570 and 37,012,250 issued and outstanding, respectively	530			370
Paid-in capital	471,711			229,377
Retained earnings	61,687			19,034
Accumulated other comprehensive loss	(1,205		)	(2,038		)
Total stockholders’ equity	532,723			246,743
Total Liabilities and Stockholders’ Equity	$	1,098,021		$	410,665

See notes to consolidated financial statements.

ON ASSIGNMENT, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (LOSS)

(In thousands, except per share data)



	Year Ended December 31,
	2012			2011			2010
Revenues	$	1,239,705		$	597,281		$	438,065
Cost of services	855,382			397,176			288,609
Gross profit	384,323			200,105			149,456
Selling, general and administrative expenses	273,528			153,360			128,715
Amortization of intangible assets	18,016			2,346			2,115
Impairment of goodwill	—			—			15,399
Operating income	92,779			44,399			3,227
Interest expense, net	(17,823		)	(2,936		)	(8,168		)
Income (loss) before income taxes	74,956			41,463			(4,941		)
Provision for income taxes	32,303			17,166			4,956
Net income (loss)	$	42,653		$	24,297		$	(9,897	)
Earnings (loss) per share:
Basic	$	0.91		$	0.66		$	(0.27	)
Diluted	$	0.89		$	0.64		$	(0.27	)
Number of shares and share equivalents used to calculate earnings (loss) per share:
Basic	46,739			36,876			36,429
Diluted	47,826			37,758			36,429



Reconciliation of net income (loss) to comprehensive income (loss):
Net income (loss)	$	42,653		$	24,297		$	(9,897	)
Changes in fair value of derivative, net of income tax of $21 and $227, respectively	(21		)	(380		)	—
Foreign currency translation adjustment	854			(1,662		)	(1,122		)
Comprehensive income (loss)	$	43,486		$	22,255		$	(11,019	)

See notes to consolidated financial statements.

ON ASSIGNMENT, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(In thousands, except share data)



	Common Stock					Paid-in Capital			Retained Earnings (Accumulated Deficit)			Accumulated Other Comprehensive Income (Loss)			Total
	Shares		Amount			Paid-in Capital			Retained Earnings (Accumulated Deficit)			Accumulated Other Comprehensive Income (Loss)			Total
Balance at January 1, 2010	36,262,810		$	363		$	220,082		$	5,090		$	1,126		$	226,661
Exercise of common stock options	68,200		1			332			—			—			333
Stock repurchase and retirement of shares	(291,212	)	(3		)	(1,783		)	(214		)	—			(2,000		)
Stock-based compensation expense	—		—			7,151			—			—			7,151
Vesting of restricted stock units and restricted stock awards	359,013		4			(1,309		)	—			—			(1,305		)
Tax deficiency from stock-based compensation	—		—			(334		)	—			—			(334		)
Translation adjustments	—		—			—			—			(1,122		)	(1,122		)
Net loss	—		—			—			(9,897		)	—			(9,897		)
Balance at December 31, 2010	36,398,811		365			224,139			(5,021		)	4			219,487
Exercise of common stock options	293,893		2			1,722			—			—			1,724
Employee stock purchase plan	187,036		2			975			—			—			977
Stock repurchase and retirement of shares	(323,361	)	(3		)	(1,985		)	(242		)	—			(2,230		)
Stock-based compensation expense	—		—			5,868			—			—			5,868
Vesting of restricted stock units and restricted stock awards	455,871		4			(2,223		)	—			—			(2,219		)
Tax benefit from stock-based compensation	—		—			881			—			—			881
Fair value adjustment of derivatives, net of income tax	—		—			—			—			(380		)	(380		)
Translation adjustments	—		—			—			—			(1,662		)	(1,662		)
Net income	—		—			—			24,297			—			24,297
Balance at December 31, 2011	37,012,250		370			229,377			19,034			(2,038		)	246,743
Exercise of common stock options	968,206		10			7,031			—			—			7,041
Employee stock purchase plan	154,934		2			1,342			—			—			1,344
Stock-based compensation expense	—		—			9,558			—			—			9,558
Vesting of restricted stock units and restricted stock awards	520,652		5			(5,540		)	—			—			(5,535		)
Tax benefit from stock-based compensation	—		—			4,528			—			—			4,528
Acquisition of Apex	14,304,528		143			225,415			—			—			225,558
Fair value adjustment of derivatives, net of income tax	—		—			—			—			(21		)	(21		)
Translation adjustments	—		—			—			—			854			854
Net income	—		—			—			42,653			—			42,653
Balance at December 31, 2012	52,960,570		$	530		$	471,711		$	61,687		$	(1,205	)	$	532,723

See notes to consolidated financial statements.

ON ASSIGNMENT, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)



	Year Ended December 31,
	2012			2011			2010
Cash Flows from Operating Activities:
Net income (loss)	$	42,653		$	24,297		$	(9,897	)
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
Depreciation	6,686			6,505			5,881
Amortization of intangible assets	18,016			2,346			2,115
Provision for doubtful accounts and billing adjustments	(166		)	1,127			644
Deferred income tax (benefit) provision	4,970			3,748			2,274
Stock-based compensation	9,706			6,927			7,749
Amortization of deferred loan costs	1,960			460			961
Gross excess tax benefits from stock-based compensation	(4,638		)	(1,113		)	(205		)
Impairment of goodwill	—			—			15,399
Workers’ compensation and medical malpractice provision	3,594			3,196			4,310
Other	(362		)	(1,765		)	1,993
Changes in operating assets and liabilities, net of effects of acquisitions:
Accounts receivable	(18,604		)	(25,079		)	(10,532		)
Prepaid expenses	(1,881		)	(1,633		)	(501		)
Prepaid income taxes	4,047			(1,292		)	4,223
Accounts payable	1,987			(1,812		)	1,032
Accrued payroll and contract professional pay	(28,053		)	6,400			3,880
Workers’ compensation and medical malpractice loss reserves	(2,049		)	(1,467		)	(3,948		)
Other	2,831			2,574			1,483
Net cash provided by operating activities	40,697			23,419			26,861
Cash Flows from Investing Activities:
Cash paid for property and equipment	(14,354		)	(8,411		)	(6,302		)
Cash paid for acquisitions, net of cash acquired	(347,743		)	(32,818		)	(10,458		)
Other	(869		)	109			179
Net cash used in investing activities	(362,966		)	(41,120		)	(16,581		)
Cash Flows from Financing Activities :
Principal payments of long-term debt	(173,163		)	(20,500		)	(79,163		)
Proceeds from term debt	513,000			40,500			68,000
Proceeds from stock transactions	8,384			2,701			333
Payment of employment taxes related to release of restricted stock awards	(2,627		)	(2,214		)	(1,955		)
Gross excess tax benefits from stock-based compensation	4,638			1,113			205
Repurchase of common stock	—			(2,230		)	(2,000		)
Debt issuance or amendment costs	(17,113		)	(87		)	(1,938		)
Payments of other long-term liabilities	(1,198		)	(1,731		)	(52		)
Other	(43		)	(43		)	(44		)
Net cash provided by (used in) financing activities	331,878			17,509			(16,614		)
Effect of exchange rate changes on cash and cash equivalents	131			(478		)	(1,231		)
Net Increase (Decrease) in Cash and Cash Equivalents	9,740			(670		)	(7,565		)
Cash and Cash Equivalents at Beginning of Year	17,739			18,409			25,974
Cash and Cash Equivalents at End of Year	$	27,479		$	17,739		$	18,409



Supplemental Disclosure of Cash Flow Information
Cash paid for:
Income taxes	$	33,915	$	16,163	$	(2,578	)
Interest	$	14,722	$	2,659	$	5,478
Acquisitions --
Goodwill	$	266,788	$	30,504	$	10,458
Identifiable intangible assets acquired	251,555		7,726		1,761
Net tangible assets acquired	54,958		4,934		—
Fair value of assets acquired, net of cash received	$	573,301	$	43,164	$	12,219
Non-Cash Investing and Financing Activities
Equity consideration for acquisition	$	225,558	$	—	$	—
Payable for employment taxes withheld related to release of restricted stock awards	$	2,907	$	—	$	96
Accrued earn-out payments	$	—	$	10,346	$	3,700
Acquisition of property and equipment through accounts payable	$	369	$	324	$	383

See notes to consolidated financial statements.

ON ASSIGNMENT, INC. AND SUBSIDIARIES

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Summary of Significant Accounting Policies.

Principles of Consolidation. The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All intercompany accounts and transactions have been eliminated.

Use of Estimates. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

Revenue Recognition. Revenues from contract assignments, net of sales adjustments and discounts, are recognized when earned, based on hours worked by the Company’s contract professionals on a weekly basis. Conversion and direct hire fees are recognized when employment candidates begin permanent employment. The Company records a sales allowance against consolidated revenues, which is an estimate based on historical billing adjustment experience. The sales allowance is recorded as a reduction to revenues and an increase to the allowance for billing adjustments. The billing adjustment reserve includes an allowance for fallouts. Fallouts are direct hire and conversion fees that do not complete the contingency period, which is typically 90 days or less. The Company includes reimbursed expenses, in revenues and the associated amounts of reimbursable expenses in cost of services.

The Company records revenues on a gross basis as a principal or on a net basis as an agent depending on the arrangement. The key indicators as to whether it acts as a principal or an agent are whether the Company (i) has the direct contractual relationships with its customers, (ii) bears the risks and rewards of the transactions, and (iii) has the discretion to select the contract professionals and establish their price.

Income Taxes. Income taxes are accounted for using the liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. Deferred tax assets are reduced by a valuation allowance if it is more likely than not that a portion of the deferred tax asset will not be realized.

The Company makes a comprehensive review of its uncertain tax positions regularly. An uncertain tax position represents the Company’s expected treatment of a tax position taken in a filed return, or planned to be taken in a future tax return or claim that has not been reflected in measuring income tax expense for financial reporting purposes. In general, until these positions are sustained by the taxing authorities or statutes expire for the year that the position was taken, the Company does not recognize the tax benefits resulting from such positions and reports the tax effects as a liability for uncertain tax positions.

Foreign Currency Translation. The functional currency of the Company’s foreign operations is their local currency, and as such, their assets and liabilities are translated into U.S. dollars at the rate of exchange in effect on the balance sheet date. Revenue and expenses are translated at the average rates of exchange prevailing during each monthly period. The related translation adjustments are recorded as cumulative foreign currency translation adjustments in accumulated other comprehensive income as a separate component of stockholders’ equity. Gains and losses resulting from foreign currency transactions, which are not material, are included in Selling, general and administrative (SG&A) expenses in the Consolidated Statements of Operations and Comprehensive Income (Loss).

Cash and Cash Equivalents. The Company considers all highly liquid investments with a maturity of three months or less on the date of purchase to be cash equivalents.

Allowance for Doubtful Accounts and Billing Adjustments. The Company estimates an allowance for doubtful accounts and an allowance for billing adjustments related to trade receivables based on an analysis of historical collection and billing adjustment experience. The Company applies bad debt percentages based on experience to the outstanding accounts receivable balances at the end of the period, as well as analyzes specific reserves as needed. Impaired receivables, or portions thereof, are written-off when deemed uncollectible.

Property and Equipment. Property and equipment are stated at cost. Depreciation and amortization are provided using the straight-line method over the estimated useful lives of the related assets, generally three to five years. Leasehold improvements are amortized over the shorter of the life of the related asset or the remaining term of the lease. Costs associated with customized internal-use software systems that have reached the application development stage and meet recoverability tests are capitalized. Such capitalized costs include external direct costs utilized in developing or obtaining the applications and payroll and payroll-related expenses for employees who are directly associated with the application development.

During the quarter ended December 31, 2012, the Company changed the date of the annual impairment test for goodwill from December 31 to October 31 . The change is preferable because it alleviates constraints on accounting resources during the year-end financial statement close and reporting process and better aligns the timing of the assessment with our planning and forecasting process, which occurs primarily in the third quarter. The change in accounting principle related to the annual goodwill impairment test date did not delay, accelerate or avoid an impairment charge. Due to significant judgments and estimates that are utilized in the goodwill impairment analysis, the Company determined it was impracticable to objectively determine, without the use of hindsight, projected cash flows and related valuation estimates as of each October 31 for periods prior to October 31, 2012. As such, the Company has prospectively applied the change in the annual goodwill impairment test date from October 31, 2012.

Intangible assets with indefinite lives consist of trademarks. The Company tests trademarks for impairment on an annual basis, on October 31. In order to test the trademarks for impairment, the Company determines the fair value of the trademarks and compares such amount to its carrying value. The fair value of the trademarks is determined using a projected discounted cash flow analysis based on the relief-from-royalty approach. The principal factors used in the discounted cash flow analysis requiring judgment are projected net sales, discount rate, royalty rate and terminal value assumption. The royalty rate used in the analysis is based on transactions that have occurred in our industry. Intangible assets having finite lives are amortized over their useful lives and are tested for recoverability whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. Customer relations are amortized using an accelerated method. Contractor relations and non-compete agreements are amortized using the straight-line method. Other than the goodwill impairment in 2010 discussed below, we did not have any impairment of indefinite lived or finite lived intangibles in 2012, 2011, or 2010.

The Company performed the step one goodwill impairment tests for each reporting unit as of October 31, 2012 as this is the annual impairment test date. No impairment charge was recorded for any of the reporting units as of October 31, 2012. Based upon the annual goodwill impairment test in 2011, there was no goodwill impairment charge. The Company recognized a goodwill impairment charge of $15.4 million in the fourth quarter of 2010. Goodwill for the Company's impaired reporting unit, Nurse Travel, with a carrying amount of $15.4 million was written down to the implied fair value of $0 resulting in an impairment charge of $15.4 million .

Impairment or Disposal of Long-Lived Assets. The Company evaluates long-lived assets, other than goodwill and identifiable intangible assets with indefinite lives, for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. An impairment loss is recognized when the sum of the undiscounted future cash flows is less than the carrying amount of the asset, in which case a write-down is recorded to reduce the related asset to its estimated fair value.

Workers’ Compensation and Medical Malpractice Loss Reserves. The Company carries retention policies for its workers’ compensation liability and medical malpractice liability exposures. In connection with these programs, the Company pays a base premium plus actual losses incurred, not to exceed certain stop-loss limits. The Company is insured for losses above these limits, both per occurrence and in the aggregate. The workers' compensation and medical malpractice loss reserves are based upon an actuarial report obtained from a third party and determined based on claims filed and claims incurred but not reported. The Company accounts for claims incurred but not yet reported based on estimates derived from historical claims experience and current trends of industry data. Changes in estimates and differences in estimates and actual payments for claims are recognized in the period that the estimates changed or the payments were made.

Contingencies. The Company records an estimated loss from a loss contingency when information available prior to issuance of its financial statements indicates it is probable that an asset has been impaired or a liability has been incurred at the date of the financial statements, and the amount of the loss can be reasonably estimated. Accounting for contingencies, such as legal settlements, workers’ compensation matters and medical malpractice insurance matters, requires the Company to use judgment.

Business Combinations. The purchase price of an acquisition is allocated to the underlying assets acquired and liabilities assumed based upon their estimated fair values at the date of acquisition. To the extent the purchase price exceeds the fair value of the net identifiable tangible and intangible assets acquired and liabilities assumed, such excess is allocated to goodwill. The Company determines the estimated fair values after review and consideration of relevant information including discounted cash flows, quoted market prices and estimates made by management. Accordingly, these can be affected by contract performance and other factors over time, which may cause final amounts to differ materially from original estimates. The Company adjusts the preliminary purchase price allocation, as necessary, up to one year after the acquisition closing date if it obtains more information regarding asset valuations and liabilities assumed.

Stock-Based Compensation. The Company records compensation expense for restricted stock awards and stock units based on the fair market value of the awards on the date of grant. Market-based awards, which are based on achievement of targets indexed to the Company’s share price, are valued using a Monte Carlo simulation model. Compensation expense for performance-based awards is measured based on the amount of shares ultimately expected to vest, estimated at each reporting date based on management’s expectations regarding the relevant

performance criteria. The Company accounts for stock options granted and ESPP shares based on an estimated fair market value using a Black-Scholes option valuation model. This methodology requires the use of subjective assumptions including expected stock price volatility and the estimated life of each award. The fair value of equity-based compensation awards less the estimated forfeitures is amortized over the vesting period of the award.

Concentration of Credit Risk. Financial instruments that potentially subject the Company to credit risks consist primarily of cash, cash equivalents and trade receivables. The Company places its cash and cash equivalents in low risk investments with quality credit institutions and limits the amount of credit exposure with any single institution above FDIC insured limits. Concentration of credit risk with respect to accounts receivable is limited because of the large number of geographically dispersed customers, thus spreading the trade credit risk. The Company performs ongoing credit evaluations to identify risks and maintains an allowance to address these risks.

Derivative Instruments. The Company utilizes derivative financial instruments to manage interest rate risk. The Company does not use derivative financial instruments for trading or speculative purposes, nor does it use leveraged financial instruments.

Advertising Costs. Advertising costs, which are expensed as incurred, were $5.3 million in 2012 , $3.2 million in 2011 , and $3.1 million in 2010 .

2. Accounting Standards Updates . In February 2013, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update No. 2013-02, Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income (ASU 2013-02). Under ASU 2013-02, an entity is required to provide information about the amounts reclassified out of Accumulated Other Comprehensive Income (AOCI) by component. In addition, an entity is required to present, either on the face of the financial statements or in the notes, significant amounts reclassified out of AOCI by the respective line items of net income, but only if the amount reclassified is required to be reclassified in its entirety in the same reporting period. For amounts that are not required to be reclassified in their entirety to net income, an entity is required to cross-reference to other disclosures that provide additional details about those amounts. ASU 2013-02 does not change the current requirements for reporting net income or other comprehensive income in the financial statements. ASU 2013-02 is effective for us on January 1, 2013.

In July 2012, the FASB issued Accounting Standards Update No. 2012-02, Intangibles-Goodwill and Other (Topic 350) — Testing Indefinite-Lived Intangible Assets for Impairment (ASU 2012-02), allowing entities the option to first assess qualitative factors to determine whether it is necessary to perform the quantitative impairment test. If the qualitative assessment indicates it is more-likely-than-not that the fair value of an indefinite lived intangible asset is less than its carrying amount, the quantitative impairment test is required. Otherwise, no testing is required. ASU 2012-02 is effective for the Company in the period beginning January 1, 2013. The adoption of this ASU is not expected to have a material impact on the Company's consolidated financial statements.

In December 2011, the FASB issued FASB ASU No. 2011-11, Balance Sheet (Topic 210)—Disclosures about Offsetting Assets and Liabilities . ASU 2011-11 requires an entity to disclose information about offsetting and related arrangements to enable users of its financial statements to understand the effect of those arrangements on its financial position. Entities are required to disclose both gross and net information about these instruments. ASU 2011-11 is effective for annual reporting periods beginning on or after January 1, 2013, and interim periods within those annual periods. The adoption of this ASU is not expected to have a material impact on the Company's consolidated financial statements.

In September 2011, the FASB issued ASU No. 2011-08, Testing Goodwill for Impairment (Topic 350) — Intangibles—Goodwill and Other (ASU 2011-08), to allow entities to use a qualitative approach to test goodwill for impairment. ASU 2011-08 permits an entity to first perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. If so, it is necessary to perform the currently prescribed two-step goodwill impairment test. Otherwise, the two step goodwill impairment test is not required. ASU 2011-08 was effective for the Company in the first quarter of fiscal 2012 and earlier adoption was permitted. The adoption of ASU 2011-08 did not have a material impact on the consolidated financial statements.

In June 2011, the FASB issued ASU No. 2011-05, Presentation of Comprehensive Income (Topic 220) — Comprehensive Income (ASU 2011-05), to require an entity to present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. ASU 2011-05 eliminates the option to present the components of other comprehensive income as part of the statement of equity. ASU 2011-05 was effective for the Company in the first quarter of fiscal 2012 and was applied retrospectively. In December 2011, the FASB issued ASU 2011-12, Deferral of the Effective Date for Amendments to the Presentation of Reclassifications of Items out of Accumulated Other Comprehensive Income in Accounting Standards Update No. 2011-05 , which defers certain aspects of ASU 2011-05 related to the presentation of reclassification adjustments. The adoption of ASU 2011-05 only impacted the presentation of the consolidated financial statements.

In May 2011, the FASB issued ASU No. 2011-04, Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and International Financial Reporting Standards (Topic 820) — Fair Value Measurement (ASU 2011-04), to provide a consistent definition of fair value and ensure that the fair value measurement and disclosure requirements are similar between U.S. Generally Accepted Accounting Principles and International Financial Reporting Standards. ASU 2011-04 changes certain fair value measurement principles and enhances the disclosure requirements particularly for Level 3 fair value measurements. ASU 2011-04 became effective for the Company in the first quarter of fiscal 2012; see Note 14 - Fair Value Measurements for required disclosures.

3. Property and Equipment.

Property and equipment at December 31, 2012 and 2011 consisted of the following (in thousands):



	2012			2011
Furniture, fixtures and equipment	$	6,891		$	5,776
Computers and related equipment	6,918			5,414
Computer software	32,871			27,306
Leasehold improvements	5,417			4,633
Work-in-progress	9,937			4,751
	62,034			47,880
Less -- accumulated depreciation and amortization	(35,172		)	(29,823		)
	$	26,862		$	18,057

Depreciation and amortization expense related to property and equipment was $6.7 million in 2012 , $6.5 million in 2011 and $5.9 million in 2010 .

The Company has capitalized costs related to its various technology initiatives. The net book value of the property and equipment related to software development was $12.1 million as of December 31, 2012 and $8.5 million as of December 31, 2011 , which includes work-in-progress of $7.5 million and $3.9 million , respectively.

4. Acquisitions. On May 15, 2012 , the Company acquired all of the outstanding shares of Apex Systems, Inc. , a privately-owned provider of information technology staffing headquartered in Richmond, Virginia. The primary reason for the acquisition was to expand the Company's information technology staffing services. The purchase price totaled approximately $610.8 million , comprised of $385.0 million paid in cash at closing, $0.3 million paid in the third quarter related to the net working capital adjustments, and 14.3 million shares of common stock of the Company issued to the holders of shares of common stock and options to purchase common stock of Apex immediately prior to the effective time of the merger. Acquisition costs related to this transaction totaled approximately $9.8 million and were expensed in 2012. Goodwill and the identifiable intangible assets are deductible for tax purposes. The results of operations of Apex have been combined with those of the Company since the acquisition date. Apex revenues and net loss included in the Statement of Operations for the year-ended December 31, 2012 were $508.7 million and $(7.3) million , respectively.

On July 31, 2011 , the Company acquired all of the outstanding shares of HealthCare Partners, Inc. (HCP) , a privately-owned provider of physician staffing headquartered in Atlanta, Georgia . The primary reasons for the acquisition were to expand the Physician segment business operations geographic coverage and to leverage the Company’s infrastructure. The purchase price for HCP was approximately $19.1 million comprised of $15.7 million in cash paid at closing and potential future earn-out consideration of $3.4 million (the maximum earn-out opportunity is capped at $3.7 million ) based on estimated financial performance of HCP through 2013. Acquisition costs of approximately $57,000 were expensed in 2011. The Company discontinued the use of the HCP tradename during 2012. Go odwill is deductible for tax purposes. The results of operations for the acquisition have been combined with those of the Company since the acquisition date.

On February 28, 2011 , the Company acquired all of the outstanding shares of Warphi N.V. and its subsidiaries (collectively, Valesta) , a privately-owned provider of specialized clinical research staffing headquartered in Belgium . The primary reasons for the acquisition were to expand the Life Sciences business operations and to leverage the Company’s infrastructure . The purchase price for Valesta totaled $23.7 million , comprised of $16.8 million in cash paid at closing and potential future earn-out consideration of $6.9 million (the maximum earn-out is capped at a Euro value of €5.0 million or approximately $6.6 million at December 31, 2012 exchange rates) based on estimated financial performance of Valesta through 2013. Acquisition costs of approximately $0.4 million were expensed in 2011. Goodwill is not deductible for tax purposes. The results of operations for the acquisition have been combined with those of the Company since the acquisition date.

On July 19, 2010 , the Company acquired all of the outstanding shares of Sharpstream Holdings Limited (Sharpstream) , a privately-owned provider of search services for executives to middle managers in the life sciences sector . The primary reasons for the Sharpstream acquisition were to expand our Life Sciences business operations, further expand our global presence and to leverage the Company’s infrastructure. The purchase price totaled $8.6 million , comprised of $7.2 million in cash paid at closing, plus potential future earn-out consideration of up to $1.4 million . Acquisition costs of $0.1 million related to the purchase were expensed in 2010. Goodwill is not deductible for tax purposes. The results of operations for the acquisition have been combined with those of the Company since the acquisition date.

On April 16, 2010 , the Company acquired all of the outstanding shares of The Cambridge Group Ltd. and Cambridge Contract Staffing Group, Inc. (Cambridge) , a Connecticut-based privately-held provider of specialized staffing services . The primary reasons for the Cambridge acquisition were to expand our Life Sciences, Oxford, and Physician business operations and to leverage the Company’s infrastructure. The purchase price totaled $7.6 million , comprised of $5.3 million in cash paid at closing, plus potential future earn-out consideration of up to $2.3 million . Acquisition costs of $0.1 million related to the purchase were expensed in 2010. Goodwill is not

deductible for tax purposes. The results of operations for the acquisition have been combined with those of the Company since the acquisition date.

Assets and liabilities of the acquired companies were recorded at their estimated fair values at the dates of acquisition. The excess purchase price over the fair value of net tangible assets and identifiable intangible assets acquired has been allocated to goodwill. The fair value assigned to identifiable intangible assets was determined primarily by using a discounted cash flow method. The Company's allocation for the purchase price for Apex, except for the pre-acquisition contingencies and income taxes related to the acquisition, have been finalized. Any material measurement period adjustments will be recorded retrospectively to the acquisition date.

During 2012, the Company adjusted Valesta's purchase price allocation. The adjustment was to correct the tax impact of the amortization of identifiable intangible assets. The adjustment was not material and had no impact on the consolidated statements of operations and comprehensive income (loss); accordingly it was not presented retrospectively.

The fair value of earn-out obligations was based on the present value of the expected future payments to be made to the sellers of the acquired businesses in accordance with the respective purchase agreements. See Note - 14 Fair Value Measurements for further information regarding the fair value of earn-outs and the level 3 rollforward disclosure.

The following tables summarize (in thousands) the purchase price allocations for the acquisitions of Apex, which is subject to finalization during the measurement period and HCP and Valesta:



	2012 Acquisition		2011 Acquisitions
	Apex		HCP		Valesta		Total
Current assets	$	169,844	$	3,950	$	6,332	$	10,282
Property and equipment	902		123		299		422
Goodwill	266,788		14,398		17,911		32,309
Identifiable intangible assets	251,555		1,784		5,679		7,463
Other	494		13		26		39
Total assets acquired	$	689,583	$	20,268	$	30,247	$	50,515

Current liabilities	$	77,905	$	1,070	$	4,774	$	5,844
Other	850		49		1,814		1,863
Total liabilities assumed	78,755		1,119		6,588		7,707
Total purchase price	$	610,828	$	19,149	$	23,659	$	42,808

The following table summarizes (in thousands) the allocation of the purchase price among the identifiable intangible assets for the acquisition of Apex, HCP and Valesta:



		Identifiable Intangible Asset Value
		2012 Acquisition		2011 Acquisitions
	Useful life	Apex		HCP		Valesta		Total
Contractor relations	2 – 5 years	$	10,589	$	814	$	266	$	1,080
Customer relations	2 – 10 years	92,147		950		2,395		3,345
Non-compete agreements	2 – 7 years	2,076		20		440		460
Trademarks	indefinite	146,743		—		2,578		2,578
		$	251,555	$	1,784	$	5,679	$	7,463

The summary below (in thousands, except for per share data) presents pro forma consolidated results of operations for the years ended December 31, 2012 and 2011 as if the acquisitions of HCP and Valesta occurred on January 1, 2010, and the acquisition of Apex occurred on January 1, 2011. The acquisitions in 2010 were not material to the Company, therefore pro forma information related to these acquisitions has not been presented. The pro forma financial information gives effect to certain adjustments, including: the amortization of intangible assets and interest expense on acquisition-related debt, changes in the management fees, and increased number of common shares as a result of the acquisition. Acquisition-related costs are assumed to have occurred at the beginning of the year prior to acquisition. The pro forma financial information is not necessarily indicative of the operating results that would have occurred if the acquisition had been consummated as of the date indicated, nor are they necessarily indicative of future operating results.



	2012		2011
	(unaudited)
Revenues	$	1,521,982	$	1,316,165
Operating income	$	121,565	$	68,608
Net income	$	55,615	$	26,109

Basic earnings per share	$	1.07	$	0.51
Diluted earnings per share	$	1.05	$	0.50

Weighted average number of shares outstanding	52,103		51,180
Weighted average number of shares and dilutive shares outstanding	53,190		52,062

5. Long-Term Debt.

Long-term debt at December 31, 2012 and 2011 consisted of the following (in thousands):



	2012		2011
New Senior Secured Debt --
$100 million term A loan facility, due May 2017	$	92,500	$	—
$365 million term B loan facility, due May 2019	334,088		—
$75 million revolving credit facility, due May 2017	—		—
Old Senior Secured Debt (repaid May 2012) --
$75 million revolving credit facility	—		43,000
$50 million term loan facility	—		43,750
	$	426,588	$	86,750

On May 15, 2012 , in connection with the Apex acquisition, the Company entered into a new senior secured credit agreement. The new credit agreement consists of (i) a $100.0 million , five -year term loan A facility, (ii) a $365.0 million , seven -year term loan B facility and (iii) a $75.0 million , five -year revolving loan facility with a $15.0 million sublimit for letters of credit. The new credit agreement also provides the ability to increase the loan facilities for up to $75.0 million in additional principal amount of revolving or term B loans, subject to receipt of lender commitments and satisfaction of specified conditions.

Borrowings under the new credit agreement bear interest at a variable rate based upon, at the Company’s option, either the Eurodollar rate or the base rate, plus in each case, an applicable margin . The applicable margin for Eurodollar rate loans for the revolving loans and the term A loans ranges, based on the applicable leverage ratio, from 2.75 percent to 3.25 percent per annum and the applicable margin for base rate loans ranges, based on the applicable leverage ratio, from 1.75 percent to 2.25 percent per annum. The applicable margin for Eurodollar rate loans for the term B loans is 3.75 percent per annum and the applicable margin for base rate loans is 2.75 percent per annum. The Company is required to pay a commitment fee equal to 0.50 percent per annum on the undrawn portion available under the revolving loan facility if its leverage ratio is greater than or equal to 3.00 to 1.00 , a commitment fee equal to 0.40 percent per annum if its leverage ratio is less than 3.00 to 1.00 but greater than or equal to 2.00 to 1.00 and a commitment fee equal to 0.30 percent per annum if its leverage ratio is less than 2.00 to 1.00 . Additionally, the Company is required to pay variable per annum fees equal to the applicable margin for Eurodollar rate loans in respect of outstanding letters of credit. At December 31, 2012 , borrowings on the term A loan bore interest at 3.2 percent , and borrowings on the term B loan bore interest at 5.0 percent . The weighted average interest rate at December 31, 2012 was 4.6 percent .

The Company is required to make quarterly amortization payments on the term loan A facility in the amount of $2.5 million . The Company is also required to make mandatory prepayments of loans under the new credit agreement, subject to specified exceptions, from excess cash flows and with the proceeds of asset sales, debt issuances and specified other events.

The Company’s obligations under the new credit agreement are guaranteed by substantially all of its direct and indirect domestic subsidiaries. The obligations under the new credit agreement and the guarantees are secured by a lien on substantially all of the Company’s tangible and intangible property and by a pledge of all of the equity interests in its direct and indirect domestic subsidiaries.

The new credit agreement also places limits on the Company’s and its subsidiaries’ ability to incur liens, incur additional indebtedness, make loans and investments, engage in mergers and acquisitions, engage in asset sales, declare dividends or redeem or repurchase capital stock, alter the business conducted by the Company and its subsidiaries, transact with affiliates, prepay, redeem or purchase subordinated debt and amend or otherwise alter debt agreements. The Company's leverage ratio (consolidated funded debt to trailing 12 months earnings before interest, taxes, depreciation and amortization (EBITDA)) is currently limited to no more than 4.25 to 1.00 and reduces over time to 3.00 to 1.00 . As of December 31, 2012 , the leverage ratio was approximately 2.73 to 1.00. A failure to comply with these

covenants could permit the lenders under the new credit agreement to declare all amounts borrowed under the new credit agreement, together with accrued interest and fees, to be immediately due and payable.

As of December 31, 2012 and 2011 , the Company was in compliance with all of its debt covenants. As of December 31, 2012 , the Company had $72.2 million of borrowing available under our credit facility.

6. Goodwill and Other Identifiable Intangible Assets.

The changes in the carrying amount of goodwill for the years ended December 31, 2012 and 2011 are as follows (in thousands):



	Apex		Oxford		Life Sciences			Healthcare			Physician			Total
Balance as of December 31, 2010
Gross goodwill	$	—	$	149,483	$	12,561		$	122,230		$	37,163		$	321,437
Accumulated impairment	—		—		—			(121,717		)	—			(121,717		)
	—		149,483		12,561			513			37,163			199,720
Valesta acquisition (see Note 4)	—		—		16,097			—			—			16,097
HCP acquisition (see Note 4)	—		—		—			—			14,407			14,407
Translation adjustment	—		—		(990		)	—			—			(990		)
Balance as of December 31, 2011
Gross goodwill	—		149,483		27,668			122,230			51,570			350,951
Accumulated impairment	—		—		—			(121,717		)	—			(121,717		)
	—		149,483		27,668			513			51,570			229,234
Apex acquisition (see Note 4)	266,788		—		—			—			—			266,788
Acquisition accounting	—		—		1,814			—			(9		)	1,805
Translation adjustment	—		—		529			—			—			529
Balance as of December 31, 2012
Gross goodwill	266,788		149,483		30,011			122,230			51,561			620,073
Accumulated impairment	—		—		—			(121,717		)	—			(121,717		)
	$	266,788	$	149,483	$	30,011		$	513		$	51,561		$	498,356

Subsequent to the issuance of the Company's annual report on Form 10-K for the year ended December 31, 2011, the Company identified an error of $1.8 million to record deferred tax liabilities and a corresponding increase in goodwill related to Valesta's intangible assets. The Company considers this an immaterial adjustment and has corrected the goodwill and deferred tax liabilities as of December 31, 2012 reflecting the adjustment in the accompanying consolidated balance sheets, the adjustments in the non-cash supplemental disclosures in the consolidated statements of cash flows and related footnote disclosures. This adjustment has no effect on the Company's consolidated statements of operations and comprehensive income (loss).

As of December 31, 2012 and December 31, 2011 , the Company had the following acquired intangible assets (in thousands):



		December 31, 2012						December 31, 2011
	Estimated Useful Life	Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Subject to amortization:
Customer relations	3 months – 10 years	$	103,285	$	23,338	$	79,947	$	11,077	$	7,891	$	3,186
Contractor relations	2 - 7 years	37,871		27,754		10,117		27,276		25,599		1,677
Non-compete agreements	2 - 7 years	2,986		1,062		1,924		899		604		295
		144,142		52,154		91,988		39,252		34,094		5,158
Not subject to amortization:
Trademarks		171,852		—		171,852		25,048		—		25,048
Goodwill		498,356		—		498,356		229,234		—		229,234
Total		$	814,350	$	52,154	$	762,196	$	293,534	$	34,094	$	259,440

Amortization expense for intangible assets with finite lives was $18.0 million in 2012 , $2.3 million in 2011 and $2.1 million in 2010 . Estimated amortization for the each of the next five fiscal years and thereafter follows (in thousands):



2013	$	20,973
2014	16,823
2015	14,305
2016	12,369
2017	8,996
Thereafter	18,522
	$	91,988

Goodwill and other intangible assets having an indefinite useful life are not amortized for financial statement purposes. Goodwill and intangible assets with indefinite lives are reviewed for impairment on an annual basis as of October 31 and whenever certain events or changes in circumstances occur. No impairment charge was recorded for any of the reporting units as of October 31, 2012. Based upon the annual goodwill impairment test in 2011, there was no goodwill impairment charge. The Company recognized a goodwill impairment charge of $15.4 million in the fourth quarter of 2010. Goodwill for the Company's impaired reporting unit, Nurse Travel, with a carrying amount of $15.4 million was written down to the implied fair value of $0 resulting in an impairment charge of $15.4 million .

7. 401(k) Retirement Savings Plan, Deferred Compensation Plan and Change in Control Severance Plan.

Under the Company’s 401(k) Retirement Savings Plan, which covers eligible employees of On Assignment and its wholly-owned subsidiaries, Assignment Ready Inc., On Assignment Staffing Services, Inc., VISTA, and Oxford, eligible employees may elect to have a portion of their salary deferred and contributed to the plans. The amount of salary deferred, up to certain limits set by the IRS, is not subject to federal and state income tax at the time of deferral, but together with any earnings on deferred amounts, is subject to taxation upon distribution. The plan covers all eligible employees and permits matching or other discretionary contributions at the Company’s discretion. Eligible employees may enroll once they complete three months of service prior to the next quarterly offering. Apex sponsors a 401(k) plan for the benefit of all eligible Apex employees. Employees are eligible to participate after 12 months of service, 1000 hours of work, and attaining the age of 18 . Under the terms of the plan, employees are entitled to contribute a portion of their total compensation, within limitations established by the Internal Revenue Code. The Company pledged to make contributions to the 401(k) plans of $3.7 million in 2012 and made contributions of $1.1 million and $0.4 million in 2011 and 2010 , respectively.

Effective January 1, 1998, the Company implemented the On Assignment, Inc. Deferred Compensation Plan. On September 4, 2008, effective as of January 1, 2008, the Company amended the On Assignment Deferred Compensation Plan and adopted a new plan, called the On Assignment Deferred Compensation Plan – Effective January 1, 2008, applicable to deferrals made on or after January 1, 2005 (referred to herein as the 2008 Deferred Compensation Plan). On April 20, 2011, the Company’s Board of Directors authorized and directed the termination of the 1998 Deferred Compensation Plan and the 2008 Deferred Compensation Plan (collectively referred to as the Plans), effective May 2, 2011.

The deferred compensation liability under the deferred compensation plans was approximately $1.9 million at December 31, 2011 . Life insurance policies were maintained as a funding source to the plans, under which the Company is the sole owner and beneficiary of such insurance. At December 31, 2011, the cash surrender value of these life insurance policies was $2.1 million , reflected in other current assets in the accompanying Consolidated Balance Sheets. As a result of the termination, the Company received $1.5 million related to the cash surrender value of the life insurance proceeds, which were maintained as a funding source to the deferred compensation plans, and in June 2012, distributed $1.2 million to plan participants according to the terms of the Plans.

As a result of the merger with Apex, the Company assumed a long-term incentive program, which began in 2010, that provides for a total award of up to $10.0 million to eligible employees, based on the attainment by Apex of stipulated revenues and EBITDA goals during a three year performance period. The Company determined that it was probable that the revenue and EBITDA goals for Apex would be reached in 2012 and the Company accrued approximately $7.9 million at May 15, 2012 (the effective date of the acquisition), and $10.0 million at December 31, 2012 , which are included in deferred compensation in the Consolidated Balance Sheet.

The Company adopted the On Assignment, Inc. Change in Control Severance Plan (the CIC Plan) to provide severance benefits for officers and certain other employees who are terminated following an acquisition of the Company. This CIC Plan was adopted as of February 12, 2004 and amended and restated on December 11, 2008. Under the CIC Plan, eligible employees with titles of vice president or higher who are involuntarily terminated within eighteen months after a change in control, as defined in the CIC Plan will be entitled to (i) a payment equal to the employee's annual salary plus the employee's target bonus, payable in a lump sum, and (ii) a lump sum payment representing the cost of continuation of health and welfare benefits, under the Consolidated Omnibus Budget Reconciliation Act of 1985 (COBRA). Severance pay under the CIC Plan varies depending on the eligible employee's length of service and position with the Company.

The Company entered into an Amended and Restated Executive Change of Control Agreement with the Chief Executive Officer on December 11, 2008, primarily for the purpose of causing his previous agreement to meet the requirements of Code Section 409A. This agreement supersedes the CIC Plan and provides, in the event of an involuntary termination occurring within six months and ten days following a change of control of the Company, that the Chief Executive Officer is entitled to the benefits including salary and bonus payments, continuation of

health and welfare benefits and car allowance, cash payments equal to insurance premiums and retirement and deferred compensation contributions, and payment for outplacement services. Additionally, under the arrangements, immediately prior to a change of control, all outstanding Company stock options, restricted stock and stock units held by the Chief Executive Officer will become fully vested (and, in the case of options, remain exercisable for an extended period), subject to any express limitations contained in the Chief Executive Officer's employment agreement. In addition, the agreement entitles the Chief Executive Officer to tax gross-up payments in the event that any payments are subject to “golden parachute” excise taxes under IRS Code Section 280G.

The Company entered into an Executive Change of Control Agreement with the Chief Financial Officer on September 1, 2012. This agreement supersedes the CIC Plan and provides, in the event of an involuntary termination occurring within six months and ten days following a change of control of the Company, for benefits including salary and bonus payments, car allowance, healthcare coverage, cash payment equal to premiums for life insurance and disability insurance, and payment for outplacement services. Immediately prior to a change of control, all outstanding Company stock options, restricted stock and stock units held by the officer will become fully vested (and, in the case of options, remain exercisable for an extended period). The agreement provides that the Chief Financial Officer with a best pay cap reduction for any excess parachute payments under Code Section 280G unless he would receive a greater after-tax benefit without the reduction and after paying the related excise tax.

8. Commitments and Contingencies.

The Company leases its facilities and certain office equipment under operating leases, which expire at various dates through 2022. Certain leases contain rent escalations and/or renewal options. Rent expense for all significant leases is recognized on a straight-line basis. The balance of the deferred rent liability reflected in other current liabilities in the accompanying Consolidated Balance Sheets was $0.3 million at December 31, 2012 and 2011 and the balance reflected in other long-term liabilities was $3.8 million and $2.1 million , at December 31, 2012 and 2011 respectively.

The following is a summary of specified contractual cash obligation payments by the Company as of December 31, 2012 (in thousands):



	Long-Term Debt		Operating Leases		Related Party Leases		Total
2013	$	10,000	$	13,545	$	1,266	$	24,811
2014	10,000		11,117		1,299		22,416
2015	10,000		9,210		1,168		20,378
2016	10,000		6,386		694		17,080
2017	52,500		3,588		175		56,263
Thereafter	334,088		6,764		—		340,852
Total	$	426,588	$	50,610	$	4,602	$	481,800

Rent expense, which is included in SG&A expenses, was $14.1 million for 2012 , $8.6 million for 2011 , and $8.4 million for 2010 .

As discussed in Note 1, the Company carries large retention policies for its workers’ compensation liability and its medical malpractice exposures. The workers' compensation and medical malpractice loss reserves are based upon an actuarial report obtained from a third party and determined based on claims filed and claims incurred but not reported. The Company accounts for claims incurred but not yet reported based on estimates derived from historical claims experience and current trends of industry data. Changes in estimates, differences in estimates and actual payments for claims are recognized in the period that the estimates changed or the payments were made. The workers' compensation and medical malpractice loss reserves were approximately $10.3 million and $10.4 million at December 31, 2012 and 2011 , respectively. Additionally, the Company has unused stand-by letters of credit outstanding to secure obligations for workers’ compensation claims with various insurance carriers. The unused stand-by letters of credit at December 31, 2012 and December 31, 2011 were $2.8 million and $2.4 million , respectively.

The Company is subject to earn-out obligations entered into in connection with certain of its acquisitions. If the acquired businesses meet predetermined financial targets, the Company is obligated to make additional cash payments in accordance with the terms of such earn-out obligations. As of December 31, 2012 , the Company has potential future earn-out obligations of approximately $9.1 million through 2013.

The Company has entered into various non-cancelable operating leases, primarily related to its facilities and certain office equipment used in the ordinary course of business. As a result of the Apex acquisition, the Company leases two properties owned by related parties.

At December 31, 2012 and 2011 , the Company has an income tax reserve in other long-term liabilities related to uncertain tax positions of $0.4 million and $0.3 million , respectively.

Legal Proceedings

The Company is involved in various legal proceedings, claims and litigation arising in the ordinary course of business. However, based on the facts currently available, the Company does not believe that the disposition of matters that are pending or asserted will have a material effect on its consolidated financial statements.

9. Income Taxes.

The provision (benefit) for income taxes consists of the following (in thousands):



	Year Ended December 31,
	2012			2011			2010
Current:
Federal	$	20,849		$	9,814		$	1,748
State	3,353			1,447			522
Foreign	2,645			1,465			412
	26,847			12,726			2,682
Deferred:
Federal	5,467			3,759			2,271
State	565			488			—
Foreign	(822		)	(261		)	(212		)
	5,210			3,986			2,059
Change in valuation allowance	246			454			215
	$	32,303		$	17,166		$	4,956

Income (loss) before income taxes consists of the following (in thousands):



	Year Ended December 31,
	2012		2011		2010
United States	$	72,184	$	37,405	$	(6,071	)
Foreign	2,772		4,058		1,130
	$	74,956	$	41,463	$	(4,941	)

The components of deferred tax assets (liabilities) are as follows (in thousands):



	December 31, 2012			December 31, 2011
Deferred income tax assets (liabilities):
Current:
Allowance for doubtful accounts	$	1,150		$	1,007
Employee related accruals	3,419			2,923
State taxes	1,064			534
Workers’ compensation and medical malpractice loss reserves	4,683			4,277
Prepaid insurance	(631		)	(319		)
Other	462			849
	10,147			9,271
Non-current:
Intangibles	(23,662		)	(15,559		)
Depreciation expense	(4,449		)	(3,867		)
Stock-based compensation	2,852			3,428
Net operating loss carryforwards	1,191			1,054
Other	1,975			758
	(22,093		)	(14,186		)
Valuation allowance	(916		)	(670		)
Total net deferred income tax liability	$	(12,862	)	$	(5,585	)

The reconciliation between the amount computed by applying the U.S. federal statutory tax rate of 35.0 percent for 2012 , 35.0 percent for 2011 , and 34.0 percent for 2010 to income before income taxes and the income tax provision is as follows (in thousands):



	Year Ended December 31,
	2012		2011			2010
Income tax provision at the statutory rate	$	26,235	$	14,512		$	(1,680	)
State income taxes, net of federal benefit	2,952		1,527			460
Impairment of goodwill	—		—			5,236
Permanent difference – disallowed meals and entertainment expenses	1,822		1,093			614
Permanent difference – settlement of earn-out	—		(445		)	—
Valuation allowance related to foreign jurisdictions	246		454			215
Income tax contingency	276		(91		)	(16		)
Foreign tax rate differential	14		(222		)	(181		)
Other	758		338			308
	$	32,303	$	17,166		$	4,956

As of December 31, 2012 , the Company had no federal net operating losses, state net operating losses of approximately $9.5 million and foreign net operating losses of approximately $3.1 million . The state net operating losses can be carried forward up to 20 years and begin expiring in 2013. The foreign net operating losses in the United Kingdom can be carried forward indefinitely and the net operating losses in Spain can be carried forward up to 18 years beginning from the first period of profits. The Company has recorded a valuation allowance of approximately $0.9 million and $0.7 million at December 31, 2012 and December 31, 2011 , respectively, related to net operating loss carryforwards.

At December 31, 2012 , the Company had accumulated net foreign earnings of $13.0 million . The Company did not provide deferred taxes on the excess of the financial reporting over the tax basis in its investment in foreign subsidiaries since the Company intends to permanently reinvest the undistributed earnings of its foreign subsidiaries. The determination of additional deferred taxes that have not been provided is not practicable.

The Company had gross deferred tax assets of $17.7 million and $14.4 million and gross deferred tax liabilities of $30.5 million and $19.9 million at December 31, 2012 and 2011 , respectively.

The Company receives a tax deduction for stock-based awards upon exercise of a non-qualified stock options or as the result of disqualifying dispositions made by directors, officers and employees. A disqualifying disposition occurs when stock acquired through the exercise of incentive stock options or the Employee Stock Purchase Plan is disposed of prior to the required holding period. The Company also receives a tax deduction upon the vesting of restricted stock units or restricted stock awards. The Company received tax deductions of $22.8 million and $7.5 million , respectively, from stock-based awards in 2012 and 2011 .

As of December 31, 2012 , the Company had $0.4 million of gross unrecognized tax benefits, which includes penalties and interest, all of which was carried in other long-term liabilities. If the Company’s positions are sustained by the taxing authority in favor of the Company, the entire $0.4 million would reduce the Company’s effective tax rate. The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. The amount of interest and penalties recognized in the financial statements is not significant.

The following is a reconciliation of the total amounts of unrecognized tax benefits (in thousands):



	Year Ended December 31,
	2012			2011			2010
Unrecognized Tax Benefit beginning of year	$	251		$	358		$	397
Gross decreases - tax positions in prior year	(34		)	—			(39		)
Reductions for tax positions as a result of a lapse of the applicable statute of limitations	—			(107		)	—
Gross increases - tax positions in prior year	159			—			—
Unrecognized Tax Benefit end of year	$	376		$	251		$	358

The Company believes that there will be no significant increases or decreases to unrecognized tax benefits within the next twelve months.

The Company is subject to taxation in the United States and various states and foreign jurisdictions. The IRS has examined and concluded all tax matters for years through 2009.

10. Earnings per Share .

Basic earnings per share are computed based upon the weighted average number of shares outstanding and diluted earnings per share are computed based upon the weighted average number of shares and dilutive share equivalents (consisting of incentive stock options, non-qualified stock options, restricted stock units, restricted stock awards and employee stock purchase plan contributions) outstanding during the periods using the treasury stock method.

The following is a reconciliation of the shares used to compute basic and diluted earnings per share (in thousands):



	Year Ended December 31,
	2012	2011	2010
Weighted average number of common shares	46,739	36,876	36,429
Dilutive effect of stock-based awards	1,087	882	—
Number of shares used to compute diluted earnings per share	47,826	37,758	36,429

The following table presents the weighted average share equivalents outstanding during each period that were excluded from the computation of diluted earnings per share because the exercise price for these options was greater than the average market price of the Company’s shares of common stock during the respective periods. Also excluded from the computation of diluted earnings per share were other share equivalents that became anti-dilutive when applying the treasury stock method.



	Year Ended December 31,
	2012	2011	2010
Anti-dilutive common share equivalents outstanding	83	1,039	1,339

11. Stock-based Compensation: Incentive Award Plan and Employee Stock Purchase Plan.

The Company believes that stock-based compensation better aligns the interests of its employees and directors with those of its shareholders versus exclusively providing cash-based compensation. Stock-based compensation provides incentives to retain and motivate executive officers and key employees responsible for driving Company performance and maintaining important relationships that contribute to the growth of the Company.

Compensation expense charged to operations related to stock-based compensation was $9.7 million , $6.9 million , and $7.7 million for each of the years ended December 31, 2012 , 2011 and 2010 , respectively, and is included in the Consolidated Statements of Operations and Comprehensive Income (Loss) in SG&A expenses. The Company has recognized an income tax benefit of $3.5 million , $2.5 million , and $2.9 million for the years ended December 31, 2012 , 2011 and 2010 , respectively in the consolidated statements of operations for stock-based compensation arrangements.

Effective June 3, 2010 , shareholders of the Company approved the adoption of the On Assignment, Inc. 2010 Incentive Award Plan (the 2010 Plan), which replaced the Company’s Restated 1987 Stock Option Plan (the 1987 Plan). The 2010 Plan permits the grant of stock options, including incentive stock options, nonqualified stock options, restricted stock awards (RSAs), dividend equivalent rights, stock payments, deferred stock, restricted stock units (RSUs), performance shares and other incentive awards, stock appreciation rights and cash awards to its employees, directors and consultants for up to 2,184,983 shares of common stock, which included 884,983 shares that remained available for issuance under the 1987 Plan as of June 3, 2010 . The 2010 Plan allows for stock option awards to be granted with an exercise price equal to the closing market price of the Company’s stock at the date of grant. Stock option awards generally vest over four years of continuous service with the Company and generally have ten -year contractual terms. RSUs and RSAs generally vest over a three year continuous service period, though individual award vesting terms vary within these parameters. Certain stock option awards and RSUs and RSAs provide for accelerated vesting in the event of a change in control (see Note 7). Options or awards that are canceled or forfeited are added back to the pool of shares available for issuance under the 2010 Plan. As of December 31, 2012 , there were 1,502,481 shares available for issuance under the 2010 Plan.

The fair value of each option award is estimated on the date of grant using a Black-Scholes option valuation model that incorporates assumptions disclosed in the table below. Expected volatility is based on historical volatility of the underlying stock for a period consistent with the expected lives of the stock options as the Company believes this is a reasonable representation of future volatility. Additionally, the Company analyzes historical stock option exercise behavior and vesting patterns for RSUs and RSAs in order to estimate employee turnover rates (i.e. forfeiture rates). The forfeiture rate, set by management, is used to estimate the number of options and awards that will eventually vest and the associated impact on stock-based compensation expense. The expected life, or term, of options granted is derived from historical exercise behavior and represents the period of time that stock option awards are expected to be outstanding. The Company has selected a risk-free rate based on the implied yield available on U.S. Treasury Securities with a maturity equivalent to the options’ expected term. For RSUs and RSAs, the Company records compensation expense based on the fair market value of the awards on the grant date.

The preceding paragraphs describe the general terms of most stock-based incentive awards granted by the Company. However, the Company has granted a discrete set of stock-based awards to its Chief Executive Officer (CEO) and other corporate officers that differ from those generally stated terms. The grant-date fair-value of these awards, which was determined by applying certain provisions of the stock compensation guidance relative to performance-based and market-based awards, is generally being expensed over the vesting term. The impact of these awards is reflected in the detailed RSU and RSA disclosures below. All awards are subject to the officer’s continued employment through such vesting dates, however, the vesting of certain awards will accelerate upon the occurrence of a change in control of the Company and/or upon certain qualifying terminations of employment.

2012 Employment Inducement Incentive Award Plan

Effective May 15, 2012 (amended and restated as of December 13, 2012), the Board of Directors adopted the 2012 Employment Inducement Incentive Award Plan (2012 Inducement Award Plan). The 2012 Inducement Award Plan includes terms similar to the 2010 Plan and allows for grants of stock to employees as employment inducement awards pursuant to NYSE rules.

CEO Awards

The Company granted discrete stock-based awards to its CEO as follows: (i) a market based award in 2010 with a grant date fair market value of $0.5 million . The award was expensed over a service perio d of 2.6 years and the number of shares were determined by dividing $0.5 million by the closing price of the Company stock on February 1, 2013, contingent upon the achievement of defined market targets, which were met, (ii) a performance based award on March 8, 2011, which had a grant date fair market value of $1.0 million and was expensed over a service period of 9.9 months , the financial performance objectives were met by the Company during the twelve month period ending December 31, 2011 and 24,654 shares vested on December 31, 2012 and the remaining number of shares will be determined by dividing $0.5 million by the closing price of the Company’s stock on February 1, 2014, and (iii) a performance based award on March 23, 2012 , which had a grant date fair market value of $1.5 million and was expensed over a service period of 9.3 months , the financial performance objectives were met by the Company during the twelve month period ending December 31, 2012 and 24,654 shares vested on December 31, 2012 and the remaining number of shares will be determined by dividing $0.5 million by the closing price of the Company’s stock on each of February 1, 2014 and February 1, 2015. The Company classifies these awards as liability awards until the number of shares is determined. The liability of $2.0 million related to these awards is included in other accrued expenses and other long-term liabilities in the accompanying Consolidated Balance Sheets as of December 31, 2012.

On December 31, 2012, the CEO was awarded 39,448 RSUs with a grant date fair market value of $0.8 million , contingent upon the Company meeting certain financial performance objectives based on adjusted EBITDA approved by the Compensation Committee over the twelve-month period ending December 31, 2013 and continued employment through January 1, 2014.

On March 5, 2012, the CEO was awarded 45,372 RSUs with a grant date fair market value of $0.6 million , of which 22,686 shares vested on December 31, 2012 and the remaining 22,686 shares will vest on January 4, 2014. As of December 31, 2012, the performance targets had been fully achieved and certified by the Compensation Committee of the Board of Directors.

On March 8, 2011, the CEO was awarded 58,754 RSUs with a grant date fair market value of $0.6 million , which vested in two equal components of $0.3 million on January 1, 2012 and December 31, 2012. As of December 31, 2011, the performance targets had been fully achieved and certified by the Compensation Committee.

On March 17, 2010, the CEO was granted 67,568 RSUs, with a grant-date fair value of $0.5 million , of which 33,784 RSUs vested on February 1, 2011 and 33,784 RSUs vested on February 1, 2012. As of December 31, 2011, the performance targets had been fully achieved and certified by the Compensation Committee and the grant-date fair value was expensed over the respective vesting periods for each of the two components.

On November 4, 2009, the Company entered into an employment agreement with the CEO that provided for three annual stock award grants with grant-date values of $0.8 million each, based on performance objectives for 2010 through 2012 that vested on February 1, 2011, January 1, 2012, and December 31, 2012, respectively, contingent upon achieving positive adjusted EBITDA, which were met for each of the respective periods.

The grant-date fair value of the RSUs are expensed over the vesting term, based on an estimate of the percentage achievement of the applicable performance targets. All awards were subject to the CEO’s continued employment through applicable vesting dates. All awards may vest on an accelerated basis in part or in full upon the occurrence of certain events.

Other Executive Officer Awards

The Company records stock-based compensation expense over the vesting period of the awards based on the probability that the performance objectives will be met and that the executives will maintain their employment through the respective vesting dates.

In the first quarter of 2012, the Company granted RSUs to certain executive officers with an aggregate grant-date fair value of $1.7 million . Of the $1.7 million , $0.9 million will vest in three equal annual increments subject to continued employment on each succeeding grant-date anniversary. The remaining $0.8 million vested on December 31, 2012, as certain performance objectives approved by the Compensation Committee were attained and certified by the Compensation Committee.

On May 15, 2012, the Company granted RSUs to certain executive officers in conjunction with the acquisition of Apex. The aggregate grant-date fair value of these grants was $0.8 million . Of the $0.8 million , $0.6 million will vest in three equal annual increments subject to continued employment on each succeeding grant-date anniversary. The remaining $0.2 million will vest on May 31, 2013, subject to continued employment, Apex attaining certain performance objectives and certification by the Compensation Committee.

In the first quarter of 2011, the Company granted RSUs to certain executive officers with an aggregate grant-date fair value of $1.6 million Of the $1.6 million , $0.9 million will vest in three annual increments subject to continued employment on each succeeding grant-date anniversary. The remaining $0.7 million vested on January 3, 2012, as certain performance objectives approved by the Compensation Committee were attained and certified by the Compensation Committee.

In the first quarter of 2010, the Company granted RSUs to certain executive officers with an aggregate grant-date fair value of $1.2 million . Sixty percent of the total RSU awards will vest in three annual increments subject to continued employment on each succeeding grant-date anniversary. Forty percent of the awards will vest in three consecutive annual installments contingent upon the officer attaining certain performance objectives certified by the Compensation Committee. Accordingly, the Company records stock-based compensation expense over the vesting period of these awards based on the probability that the performance objectives will be met and that the executives will maintain their employment through the respective vesting dates.

Stock Options

The following table displays the weighted average assumptions that have been applied to estimate the fair value of stock option awards on the date of grant:



	Year Ended December 31,
	2012		2011		2010
Dividend yield	—		—		—
Risk-free interest rate	1.19	%	0.92	%	1.47	%
Expected volatility	64.15	%	75.67	%	73.26	%
Expected lives	7.3 years		3.6 years		3.6 years

The following summarizes pricing and term information for options outstanding as of December 31, 2012 :



					Options Outstanding				Options Exercisable
					Number Outstanding at	Weighted Average Remaining Contractual Life (years)	Weighted Average Exercise Price		Number Exercisable at	Weighted Average Exercise Price
Range of Exercise Prices					December 31, 2012	Weighted Average Remaining Contractual Life (years)	Weighted Average Exercise Price		December 31, 2012	Weighted Average Exercise Price
$	2.82	─	$	6.68	275,164	3.4	$	5.33	270,436	$	5.33
6.86		─	10.20		280,731	7.5	8.03		130,360	7.86
10.46		─	11.39		308,390	6.5	10.88		182,132	11.18
11.56		─	12.90		275,950	4.1	12.25		275,950	12.25
12.91		─	16.51		146,125	7.0	14.98		67,625	13.30
$	2.82	─	$	16.51	1,286,360	5.6	$	9.83	926,503	$	9.48

The following table is a summary of stock option activity under the Plan as of December 31, 2012 and changes for the year then ended:



	Incentive Stock Options	Non- Qualified Stock Options	Weighted Average Exercise Price Per Share		Weighted Average Remaining Contractual Term (Years)	Aggregate Intrinsic Value
Outstanding at January 1, 2012	221,466	2,041,738	$	8.62	5.3	$	6,928,000
Granted	—	78,500	$	16.43
Exercised	(87,973)	(880,233)	$	7.27
Canceled	(4,070)	(83,068)	$	12.78
Outstanding at December 31, 2012	129,423	1,156,937	$	9.83	5.6	$	13,442,000
Vested and Expected to Vest at December 31, 2012	129,324	1,091,043	$	9.70	5.4	$	12,910,000
Exercisable at December 31, 2012	129,192	797,311	$	9.48	4.5	$	10,007,000

The table above includes 54,000 non-employee director stock options outstanding as of January 1, 2012 . There were no non-employee director stock options outstanding as of December 31, 2012 .

The weighted-average grant-date fair value of options granted during the years ended December 31, 2012 , 2011 and 2010 was $10.34 , $5.04 , and $3.80 per option, respectively. The total intrinsic value of options exercised during the years ended December 31, 2012 , 2011 and 2010 was $9.7 million , $1.3 million , and $0.2 million .

As of December 31, 2012 there was unrecognized compensation expense of $1.5 million related to unvested stock options based on options that are expected to vest. The unrecognized compensation expense is expected to be recognized over a weighted-average period of 2.65 years.

Restricted Stock Units and Restricted Stock Awards

A summary of the status of the Company’s unvested RSUs and RSAs as of December 31, 2012 and changes during the year then ended are presented below:



	Restricted Stock Units / Awards		Weighted Average Grant-Date Fair Value Per Unit / Award
Unvested RSUs and RSAs outstanding at January 1, 2012	1,208,166		$	8.99
Granted	1,168,172		16.94
Market value share count adjustment for liability awards	(84,858	)	20.28
Vested	(865,833	)	10.04
Forfeited	(34,813	)	9.67
Unvested RSUs and RSAs outstanding at December 31, 2012	1,390,834		$	14.31
Unvested and expected to vest RSUs and RSAs outstanding at December 31, 2012	1,149,735		$	14.50

The number of shares vested in the table above includes 345,181 shares surrendered by the employees to the Company for payment of minimum tax withholding obligations. Shares of stock withheld for purposes of satisfying minimum tax withholding obligations are again available for issuance under the Plan.

The table above includes 760,788 RSUs with an aggregate grant-date fair value of $12.3 million granted on May 15, 2012 to certain Apex employees. The grants generally vest 25 percent on the first anniversary of the grant date and in 12 quarterly installments thereafter, subject to continued employment.

Additionally, the table above includes 42,392 RSUs that were awarded to non-employee directors on September 1, 2012 , of which 21,196 shares vested immediately upon issuance and the remaining shares will vest on September 1, 2013. The weighted average grant-date fair value of these awards was $16.51 . There was unrecognized compensation expense of $210,000 as of December 31, 2012 related to these RSUs that will be recorded over the remaining term of eight months.

In December 2012, the Company converted certain RSUs for six executive officers to RSAs and accelerated the vesting of those awards. The original vesting dates for these awards were in January 2013. The awards were accelerated in order to provide an opportunity to accelerate the application of taxes applicable to all or a portion of the equity awards and thereby provide each executive with the certainty of known 2012 tax consequences. There was no incremental compensation cost as a result of this acceleration.

The weighted-average grant-date fair value of RSUs and RSAs granted during the years ended December 31, 2012 , 2011 and 2010 was $16.01 , $9.18 and $7.26 per award, respectively. The total intrinsic value of RSUs and RSAs vested during the years ended December 31, 2012 , 2011 and 2010 was $13.7 million , $6.4 million and $3.7 million , respectively.

As of December 31, 2012 , there was unrecognized compensation expense of $12.8 million related to unvested RSUs and RSAs based on awards that are expected to vest. The unrecognized compensation expense is expected to be recognized over a weighted-average period of 2.6 years.

Employee Stock Purchase Plan

Effective June 3, 2010 , the date of shareholder approval of the On Assignment 2010 Employee Stock Purchase Plan (the ESPP), the Company reinstated the employee stock purchase program for issuance of up to 3,500,000 shares of common stock with the first offering periods. The ESPP allows eligible employees to purchase common stock of the Company, through payroll deductions, at 85 percent of the lower of the market price on the first day or the last day of semi-annual purchase periods. The ESPP is intended to qualify as an “employee stock purchase plan” under IRS Code Section 423. Eligible employees may contribute up to a certain percentage set by the plan administrator of their eligible earnings toward the purchase of the stock (subject to certain IRS limitations).

In accordance with the ESPP, shares of common stock are transferred to participating employees at the conclusion of each six month enrollment period, which now end on the last business day of the month in March and September each year. The Company issued 154,934 and 187,036 shares of common stock in 2012 and 2011 , respectively, under the ESPP. In 2010, no shares were issued under the ESPP.

Compensation expense of shares purchased under the ESPP is measured based on a Black-Scholes option-pricing model. The model accounts for the discount from market value and applies an expected life in line with each six month purchase period. The weighted average fair value of stock purchased under the ESPP was $3.53 and $2.10 for the years ended December 31, 2012 and 2011 , respectively. The stock-based compensation expense related to the ESPP was $0.8 million in 2012 , $0.4 million in 2011 and $0.1 million in 2010 .

12. Business Segments.

The Company has five reportable segments: Apex, Oxford (formerly IT and Engineering), Life Sciences, Healthcare and Physician.

The Apex segment provides mission-critical IT operations professionals for contract, contract-to-hire and permanent placement positions to Fortune 1000 and mid-market clients across the United States, and offers consulting services for other select project-based needs. Apex provides staffing and services support for companies from all major industries, including financial services, business services, consumer and industrials, technology, healthcare, government services, and communications.

The Oxford segment provides high-end contract and direct placement services of information technology and engineering professionals with expertise in specialized information technology; software and hardware engineering; and mechanical, electrical, validation and telecommunications engineering fields.

The Life Sciences segment provides contract, contract-to-permanent and direct placement services of laboratory and scientific professionals to the biotechnology, pharmaceutical, food and beverage, medical device, personal care, chemical and environmental industries. These contract staffing specialties include chemists, clinical research associates, clinical lab assistants, engineers, biologists, biochemists, microbiologists, molecular biologists, food scientists, regulatory affairs specialists, lab assistants and other skilled scientific professionals.

The Healthcare segment includes the combined results of the Nurse Travel and Allied Healthcare lines of business. The lines of business have been aggregated into the Healthcare segment based on similar economic characteristics, end-market customers and

management personnel. The Healthcare segment provides contract, contract-to-permanent and direct placement of professionals from a number of healthcare, medical financial and allied occupations. These contract staffing specialties include nurses, specialty nurses, respiratory therapists, surgical technicians, imaging technicians, x-ray technicians, medical technologists, phlebotomists, coders, billers, claims processors and collections staff.

The Physician segment provides contract and direct placement physicians to healthcare organizations. The Physician segment works with nearly all medical specialties, placing locum tenens physicians in hospitals, community-based practices, and federal, state and local facilities.

The Company’s management evaluates the performance of each segment primarily based on revenues, gross profit and operating income. The information in the following table is derived directly from the segments’ internal financial reporting used for corporate management purposes.

The following table represents revenues, gross profit and operating income by reportable segment (in thousands):



	Year Ended December 31,
	2012		2011			2010
Revenues:
Apex	$	508,743	$	—		$	—
Oxford (formerly IT and Engineering)	345,380		266,742			178,688
Life Sciences	162,799		155,324			109,495
Healthcare	120,104		94,598			76,287
Physician	102,679		80,617			73,595
	$	1,239,705	$	597,281		$	438,065
Gross Profit:
Apex	$	140,669	$	—		$	—
Oxford (formerly IT and Engineering)	122,043		94,967			64,775
Life Sciences	55,874		52,643			37,776
Healthcare	34,282		26,637			23,058
Physician	31,455		25,858			23,847
	$	384,323	$	200,105		$	149,456
Operating Income (Loss):
Apex (1)	$	21,593	$	—		$	—
Oxford (formerly IT and Engineering)	48,802		31,816			13,910
Life Sciences	11,626		10,727			5,305
Healthcare	2,375		(3,491		)	(20,998		)
Physician	8,383		5,347			5,010
	$	92,779	$	44,399		$	3,227
____

(1) Apex operating income includes acquisition related costs of $ 9.8 million for the twelve months ended December 31, 2012.

The Company does not report Life Sciences and Healthcare segments’ total assets separately as the operations are largely centralized. The following table represents total assets as allocated by reportable segment (in thousands):



	December 31,
	2012		2011		2010
Total Assets:
Apex	$	642,594	$	—	$	—
Oxford (formerly IT and Engineering)	231,211		218,810		202,229
Life Sciences and Healthcare	139,601		107,915		74,979
Physician	84,615		83,940		63,908
	$	1,098,021	$	410,665	$	341,116

The Company does not report all assets by segment for all reportable segments. The following table represents identifiable assets by reportable segment (in thousands):



	December 31,
	2012		2011		2010
Gross Accounts Receivable:
Apex	$	132,575	$	—	$	—
Oxford (formerly IT and Engineering)	56,336		47,658		30,725
Life Sciences	21,041		21,727		14,107
Healthcare	18,116		11,568		9,628
Physician	18,905		15,749		10,233
	$	246,973	$	96,702	$	64,693

The Company operates internationally, with operations in the United States, Europe, Canada, China, Australia, and New Zealand. The following table represents revenues by geographic location (in thousands):



	Year Ended December 31,
	2012		2011		2010
Revenues:
Domestic	$	1,161,936	$	529,150	$	407,317
Foreign	77,769		68,131		30,748
	$	1,239,705	$	597,281	$	438,065

The following table represents long-lived assets by geographic location (in thousands):



	December 31,
	2012		2011		2010
Long-lived Assets:
Domestic	$	40,062	$	19,078	$	19,826
Foreign	2,006		1,033		754
	$	42,068	$	20,111	$	20,580

13. Derivative Instruments.

The Company utilizes derivative financial instruments to manage interest rate risk. The Company does not use derivative financial instruments for trading or speculative purposes, nor does it use leveraged financial instruments. The Company reports its derivative instruments separately as assets and liabilities unless a legal right of set-off exists under a master netting agreement enforceable by law. The Company’s derivative instruments are recorded at their fair value, and are included in other long-term assets, other long-term liabilities and other liabilities in the Consolidated Balance Sheets.

On February 18, 2011 , the Company entered into an interest rate swap agreement to hedge a portion of its interest rate exposure on its senior secured debt (the Interest Rate Swap). The Interest Rate Swap has a notional amount of $25.0 million and fixes a portion of the Company’s base borrowing rate, which is a floating rate based on a LIBOR swap rate that resets periodically.

The Interest Rate Caps and the Interest Rate Swap were designated as hedging instruments for accounting purposes and are accounted for as a cash flow hedges. The effective portion of unrealized losses on cash flow hedges are included in accumulated other comprehensive income until the periodic interest settlements occur, at which time they will be recorded as interest expense in the Consolidated Statements of Operations and Comprehensive Income. The Company expects to reclassify losses of $0.4 million (pretax) from accumulated other comprehensive income to interest expense in the Consolidated Statements of Operation within the next twelve months.

As a result of the use of derivative instruments, the Company is exposed to risk that the counterparties will fail to meet their contractual obligations. To mitigate the counterparty credit risk, the Company only enters into contracts with carefully selected major financial institutions based upon their credit ratings and other factors, and continually assess the creditworthiness of counterparties. As of December 31, 2012 , the counterparty to the interest rate contracts had investment grade ratings and has performed in accordance with their contractual obligations.

The fair values of derivative instruments in the Consolidated Balance Sheets as of December 31, 2012 and 2011 are as follows (in thousands):



Derivative designated as hedging instrument under ASC 815	Balance Sheet Classification	2012			2011
Interest rate contracts	Other long-term assets	$	69		$	—
Interest rate contracts	Other liabilities	(362		)	(310		)
Interest rate contracts	Other long-term liabilities	(55		)	(298		)
		$	(348	)	$	(608	)

The following tables reflect the effect of derivative instruments on the Consolidated Statements of Operations and Comprehensive Income (Loss) for the years ended December 31, 2012 , 2011 and 2010 (in thousands):



Derivatives in Cash Flow Hedging Relationships	Amount of Gain/Loss Recognized in Accumulated Other Comprehensive Income on Derivative
	2012			2011			2010
Interest rate contracts	$	(21	)	$	(380	)	$	—



	Location of Gain/Loss Reclassified from Accumulated Other Comprehensive Income into Income	Amount of Gain/Loss Reclassified from Accumulated Other Comprehensive Income into Income
		2012		2011		2010
Interest rate contracts	Interest expense	$	369	$	310	$	—

14. Fair Value Measurements.

The valuation techniques utilized are based upon observable and unobservable inputs. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect internal market assumptions. These two types of inputs create the following fair value hierarchy:

Level 1: Quoted market prices in active markets for identical assets or liabilities.

Level 2: Observable market based inputs or unobservable inputs that are corroborated by market data.

Level 3: Unobservable inputs that are not corroborated by market data.

The recorded values of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximate their fair value based on their short-term nature. Long-term debt recorded in the Company’s Consolidated Balance Sheets at December 31, 2012 was $426.6 million . The fair value of the long-term debt was determined using the quoted price technique, based on Level 2 inputs including the yields of comparable companies with similar credit characteristics, was $430.0 million .

The interest rate swap and interest rate caps are measured using the income approach. The fair value reflects the estimated amounts that the Company would pay or receive based on the present value of the expected cash flows derived from market rates and prices. As such, these derivative instruments are classified within Level 2.

The Company has obligations, to be paid in cash, to the former owners of Valesta and HCP, if certain future financial goals are met. The fair value of this contingent consideration is determined using an expected present value technique. Expected cash flows are determined using the probability - weighted average of possible outcomes that would occur should certain financial metrics be reached. There is no market data available to use in valuing the contingent consideration, therefore, the Company developed its own assumptions related to the future financial performance of the businesses to evaluate the fair value of these liabilities. As such, the contingent consideration is classified within Level 3.

In connection with estimating the fair value of the contingent consideration, the Company develops various scenarios (base case, downside case, and upside case) and weights each according to the probability of occurrence. The probabilities range from 10 percent to 80 percent , with the most significant weighting given to the base case at 80 percent . These scenarios are developed based on the expected financial performance of the acquired companies, with revenue growth rates being a primary input to the calculation. These revenue growth

rates range from (4.0) percent to 16.1 percent . An increase or decrease in the probability of achievement of any of these scenarios could result in a significant increase or decrease to the estimated fair value.

The fair value is reviewed on a quarterly basis based on most recent financial performance of the most recent fiscal quarter. An analysis is performed at the end of each fiscal quarter to compare actual results to forecasted financial performance. If performance has deviated from projected levels, the valuation is updated for the latest information available.

The significant assumptions that may materially affect the fair value are developed in conjunction with the guidance of the division presidents, division vice presidents, and chief financial officer to ensure that the most accurate and latest financial projections are used and compared with the most recent financial results in the fair value measurement.

The liabilities for the contingent consideration were established at the time of the acquisition and are evaluated at each reporting period. The current liability is included in the Consolidated Balance Sheets in the current portion of accrued earn-outs and the non-current portion is included in accrued earn-outs. Fair value adjustments are included in the Consolidated Statements of Operations and Comprehensive Income in S&GA expenses.

The assets and liabilities measured at fair value on a recurring basis are as follows (in thousands):



	As of December 31, 2012
	Fair Value Measurements Using								Total
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Interest rate contracts	$	—	$	(348	)	$	—		$	(348	)
Contingent consideration to be paid in cash for the acquisitions	$	—	$	—		$	(7,577	)	$	(7,577	)



	As of December 31, 2011
	Fair Value Measurements Using								Total
	Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)			Significant Unobservable Inputs (Level 3)
Interest rate contracts	$	—	$	(608	)	$	—		$	(608	)
Contingent consideration to be paid in cash for the acquisitions	$	—	$	—		$	(9,856	)	$	(9,856	)

Reconciliations of liabilities measured and carried at fair value on a recurring basis with the use of significant unobservable inputs (Level 3) are as follows (in thousands):



	Year Ended December 31,
	2012			2011
Contingent consideration for acquisitions --
Balance at beginning of year	$	(9,856	)	$	(3,700	)
Additions for acquisitions	—			(10,346		)
Payments on contingent consideration	1,198			1,731
Settlements of contingent consideration	—			1,369
Fair value adjustments	1,215			640
Foreign currency translation adjustment	(134		)	450
Balance at end of year	$	(7,577	)	$	(9,856	)

Certain assets and liabilities, such as goodwill, are not measured at fair value on an ongoing basis but are subject to fair value adjustments in certain circumstances (e.g., when there is evidence of impairment). For 2012 , no fair value adjustments were required for non-financial assets or liabilities.

15. Subsequent Event.

On February 12, 2013, the Company sold its Nurse Travel Division, included in the Healthcare segment, for $31.0 million in cash. The Nurse Travel Division was not deemed to be a core offering and represented approximately five percent of revenues in 2012. The Company has agreed to provide certain back office services during a transitional period.

16. Unaudited Quarterly Results.

The following tables present unaudited quarterly financial information during the years ended December 31, 2012 and 2011 . In the opinion of the Company’s management, the quarterly information contains all adjustments, consisting only of normal recurring accruals, necessary for a fair presentation thereof. The operating results for any quarter are not necessarily indicative of the results for any future periods.

Subsequent to the issuance of the Company's quarterly report on Form 10-Q for the second quarter of 2012, the Company identified an immaterial classification error of $0.5 million related to certain vendor fees paid by Apex Systems, Inc., which we acquired in May 2012 (see Note 4 - Acquisitions). Such fees should have been recorded as revenues, rather than in costs of services. The Company considers this an immaterial reclassification and has presented the revenues and cost of services for the year ended December 31, 2012 reflecting the reclassification in the pro forma revenues in Note 4 - Acquisitions, and revenues in the table below. The Company will present the corrected results for the three and six months ended June 30, 2012 in future filings. This reclassification has no effect on the Company's consolidated balance sheets or consolidated statement of cash flows.



	2012
	Dec. 31,		Sep. 30,		Jun. 30,		Mar. 31,
	(in thousands, except per share data)
Revenues	$	401,659	$	388,283	$	282,685	$	167,078
Gross profit	$	121,282	$	119,039	$	88,954	$	55,048
Net income	$	11,322	$	17,433	$	8,515	$	5,383
Earnings per share:
Basic	$	0.22	$	0.33	$	0.19	$	0.14
Diluted	$	0.21	$	0.33	$	0.19	$	0.14



	2011
	Dec. 31,		Sep. 30,		Jun. 30,		Mar. 31,
	(in thousands, except per share data)
Revenues	$	161,790	$	162,370	$	143,683	$	129,438
Gross profit	$	53,629	$	54,528	$	48,794	$	43,154
Net income	$	7,501	$	7,767	$	5,865	$	3,164
Earnings per share:
Basic	$	0.20	$	0.21	$	0.16	$	0.09
Diluted	$	0.20	$	0.21	$	0.16	$	0.08

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of On Assignment, Inc.

Calabasas, California

We have audited the internal control over financial reporting of On Assignment, Inc. and subsidiaries (the “Company”) as of December 31, 2012, based on criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission. As described in Management's Report on Internal Control Over Financial Reporting, management excluded from its assessment the internal control over financial reporting at Apex Systems, Inc., which was acquired on May 15, 2012 and whose financial statements constitute 47% and 59% of net and total assets, respectively, 41% of revenues, and -17% of net income of the consolidated financial statement amounts as of and for the year ended December 31, 2012. Accordingly, our audit did not include the internal control over financial reporting at Apex Systems, Inc. The Company's management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Report on Internal Control Over Financial Reporting. Our responsibility is to express an opinion on the Company's internal control over financial reporting based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion.

A company's internal control over financial reporting is a process designed by, or under the supervision of, the company's principal executive and principal financial officers, or persons performing similar functions, and effected by the company's board of directors, management, and other personnel to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Because of the inherent limitations of internal control over financial reporting, including the possibility of collusion or improper management override of controls, material misstatements due to error or fraud may not be prevented or detected on a timely basis. Also, projections of any evaluation of the effectiveness of the internal control over financial reporting to future periods are subject to the risk that the controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2012, based on the criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated financial statements and financial statement schedule as of and for the year ended December 31, 2012 of the Company and our report dated March 18, 2013 expressed an unqualified opinion on those financial statements and financial statement schedule and included an explanatory paragraph regarding the acquisition of Apex Systems, Inc.

/s/ Deloitte & Touche LLP

Los Angeles, California

March 18, 2013

Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

Not applicable.

Item 9A. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

As of the end of the period covered by this report, the Company’s management carried out an evaluation, under the supervision and with the participation of our Principal Executive Officer and Principal Financial Officer, of the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Securities Exchange Act of 1934). Based on this evaluation, our Principal Executive Officer and Principal Financial Officer have concluded that our disclosure controls and procedures are effective as of the end of the period covered by this report. The term “disclosure controls and procedures” means controls and other procedures of the Company that are designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. “Disclosure controls and procedures” include, without limitation, controls and procedures designed to ensure that information required to be disclosed by the Company in the reports that it files or submits under the Securities Exchange Act of 1934 is accumulated and communicated to the Company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Management’s Report on Internal Control Over Financial Reporting

Management is responsible for establishing and maintaining adequate internal control over financial reporting (as defined in Rule 13a-15(f) of the Securities Exchange Act of 1934) for the Company. The term “internal control over financial reporting” is defined as a process designed by, or under the supervision of, the Company’s principal executive and principal financial officers, or persons performing similar functions, and effected by the Company’s board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that:


•	Pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;


•	Provide reasonable assurance that the transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and


•	Provide reasonable assurance regarding prevention of timely detection of unauthorized acquisition, use, or disposition of the Company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with policies or procedures may deteriorate.

Management, under the supervision and with the participation of our Principal Executive Officer and Principal Financial Officer, assessed the effectiveness of the Company’s internal control over financial reporting as of December 31, 2012 . In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control-Integrated Framework . Based on our assessment and those criteria, management believes that the Company maintained effective internal control over financial reporting as of December 31, 2012 . Our independent registered public accounting firm, Deloitte & Touche LLP, has included an attestation report on our internal control over financial reporting, which is included above.

For purposes of conducting its 2012 evaluation of the effectiveness of the Company's internal control over financial reporting,

management has excluded the acquisition of Apex, completed on May 15, 2012, whose financial statements constitute 47 percent and 59 percent of net and total assets, respectively, 41.0 percent of revenues, and -17.0 percent of net income, of the consolidated financial statement amounts as of and for the year ended December 31, 2012. Refer to Note 4 in Part II, Item 8 of this report for further discussion of the acquisitions and their impact on the Company's Consolidated Financial Statements.

Changes in Internal Controls

There were no changes in the Company’s internal control over financial reporting that occurred during the Company’s fourth quarter that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.

Item 9B. Other Information

None.

PART III

Item 10. Directors, Executive Officers and Corporate Governance

Information responsive to this item will be set forth in the Company’s proxy statement for use in connection with its 2013 Annual Meeting of Stockholders (the 2013 Proxy Statement) and is incorporated herein by reference. The 2013 Proxy Statement will be filed with the SEC within 120 days after the end of the Company’s fiscal year. The information under the heading “Executive Officers of the Registrant” in Part I, Item 1 of this Form 10-K is also incorporated by reference in this section.

Item 11. Executive Compensation

Information responsive to this item will be set forth in the 2013 Proxy Statement to be filed with the SEC within 120 days after the end of the Company’s fiscal year and is incorporated herein by reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

Item 13. Certain Relationships and Related Transactions and Director Independence

Information responsive to this Item will be set forth in the 2013 Proxy Statement to be filed with the SEC within 120 days after the end of the Company’s fiscal year and is incorporated herein by reference.

Item 14. Principal Accounting Fees and Services

Information responsive to this Item will be set forth in the 2013 Proxy Statement, to be filed with the SEC within 120 days after the end of the Company’s fiscal year and is incorporated herein by reference.

PART IV

Item 15. Exhibits and Financial Statement Schedule

(a) List of documents filed as part of this report

1. Financial Statements:

Report of Independent Registered Public Accounting Firm

Consolidated Balance Sheets at December 31, 2012 and 2011

Consolidated Statements of Operations and Comprehensive Income (Loss) for the Years Ended December 31, 2012 , 2011 and 2010

Consolidated Statements of Stockholders’ Equity for the Years Ended December 31, 2012 , 2011 and 2010

Consolidated Statements of Cash Flows for the Years Ended December 31, 2012 , 2011 and 2010

Notes to Consolidated Financial Statements

2. Financial Statement Schedule:

Schedule II—Valuation and Qualifying Accounts

Schedules other than those referred to above have been omitted because they are not applicable or not required under the instructions contained in Regulation S-X or because the information is included elsewhere in the financial statements or notes thereto.

(b) Exhibits

See Index to Exhibits.

SIGNATURES

Pursuant to the requirements of the Section 13 or 15(d) of the Securities and Exchange Act of 1934, the registrant has duly caused this to report to be signed on its behalf by the undersigned, thereunto duly authorized, on this 18th day of March 2013.



	ON ASSIGNMENT, INC.
	/s/ Peter T. Dameris
	Peter T. Dameris
	Chief Executive Officer and President

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated and on the dates indicated.



Signature	Title	Date
/s/ Peter T. Dameris	Chief Executive Officer, President and Director	March 18, 2013
Peter T. Dameris	(Principal Executive Officer)
/s/ Edward L. Pierce	Executive Vice President, Finance and Chief Financial Officer	March 18, 2013
Edward L. Pierce	(Principal Financial and Accounting Officer)
/s/ William E. Brock	Director	March 18, 2013
William E. Brock
/s/ Jonathan S. Holman	Director	March 18, 2013
Jonathan S. Holman
/s/ Marty R. Kittrell	Director	March 18, 2013
Marty R. Kittrell
/s/ Jeremy M. Jones	Director	March 18, 2013
Jeremy M. Jones
/s/ Brian J. Callaghan	Director	March 18, 2013
Brian J. Callaghan
/s/ Edwin A. Sheridan IV	Director	March 18, 2013
Edwin A. Sheridan IV

ON ASSIGNMENT, INC. AND SUBSIDIARIES

SCHEDULE II—VALUATION AND QUALIFYING ACCOUNTS

Year Ended December 31, 2012 , 2011 and 2010

(In thousands)



Description	Balance at beginning of year		Provisions		Deductions from reserves		Balance at end of year
Year ended December 31, 2012
Allowance for doubtful accounts and billing adjustments	$	2,777	(166	)	1,359		$	3,970
Workers’ compensation and medical malpractice loss reserves	$	10,401	3,594		(3,668	)	$	10,327

Year ended December 31, 2011
Allowance for doubtful accounts and billing adjustments	$	2,175	1,127		(525	)	$	2,777
Workers’ compensation and medical malpractice loss reserves	$	10,244	2,339		(2,182	)	$	10,401

Year ended December 31, 2010
Allowance for doubtful accounts and billing adjustments	$	1,949	644		(418	)	$	2,175
Workers’ compensation and medical malpractice loss reserves	$	10,349	4,310		(4,415	)	$	10,244

INDEX TO EXHIBITS



Number	Footnote	Description
2.1	(19)	Agreement of Merger, dated as of March 20, 2012, by and among On Assignment, Inc., Apex Systems, Inc., OA Acquisition Corp. and Jeffrey E. Veatch, as the Shareholder Representative.
3.1	(1)	Certificate of Amendment of Restated Certificate of Incorporation of On Assignment, Inc., as filed with the Secretary of State of the State of Delaware on August 24, 2000.
3.2	(2)	Restated Certificate of Incorporation of On Assignment, Inc., as amended.
3.3	(3)	Amended and Restated Bylaws of On Assignment, Inc.
4.1	(4)	Specimen Common Stock Certificate.
4.2	(6)	Rights Agreement, dated as of June 4, 2003, between On Assignment, Inc. and U.S. Stock Transfer Corporation, as Rights Agent, which includes the form of Certificate of Designation of the Series A Junior Participating Preferred Stock as Exhibit A, the Summary of Rights to Purchase Series A Junior Participating Preferred Shares as Exhibit B and the form of Rights Certificate as Exhibit C.
4.3	(21)	Investor Rights Agreement, dated as of May 15, 2012, by and among On Assignment, Inc., Jeffrey E. Veatch as the shareholder representative, and the former shareholders and certain former option holders of Apex Systems, Inc.
10.1	(20)	Amendment No. 2 to Security Agreement, dated as of March 6, 2012, by and among On Assignment, Inc., its subsidiaries named therein, Bank of America, N.A., as administrative agent and the other secured parties thereto.
10.2	(21)	Credit Agreement, dated as of May 15, 2012, among On Assignment, Inc., Wells Fargo Bank, National Association, as administrative agent, Bank of America, N.A. and Deutsche Bank Securities Inc., as co-syndication agents, Fifth Third Bank, as documentation agent and the lenders party thereto.
10.3	(16)	Office Lease, dated August 18, 2010, by and between On Assignment, Inc. and Calabasas BDC, Inc.
10.4	(8)	On Assignment, Inc. Restated 1987 Stock Option Plan, as amended and restated April 7, 2006. †
10.5	(10)	First Amendment to the On Assignment, Inc. Restated 1987 Stock Option Plan, dated January 23, 2007. †
10.6	(8)	Second Amendment to the On Assignment, Inc. Restated 1987 Stock Option Plan, dated April 17, 2007. †
10.7	(12)	Third Amendment to the On Assignment, Inc. Restated 1987 Stock Option Plan, dated December 11, 2008. †
10.80	(5)	On Assignment, Inc. Restated 1987 Stock Option Plan Form of Option Agreement. †
10.90	(7)	On Assignment, Inc. Restated 1987 Stock Option Plan Form of Stock Unit Agreement. †
10.10	(9)	On Assignment, Inc. 2010 Employee Stock Purchase Plan, dated March 18, 2010. †
10.11	(9)	On Assignment, Inc. 2010 Incentive Award Plan, dated March 18, 2010. †
10.12	(11)	On Assignment, Inc. 2010 Incentive Award Plan Form of Stock Option Agreement †
10.13	(11)	On Assignment, Inc. 2010 Incentive Award Plan Form of Restricted Stock Unit Award Agreement †
10.14	(24)	On Assignment, Inc. 2010 Incentive Award Plan Form of Restricted Stock Award Agreement. †
10.15*		On Assignment, Inc. Amended and Restated 2012 Employment Inducement Incentive Award Plan. †
10.16	(25)	On Assignment, Inc. Amended and Restated 2012 Employment Inducement Incentive Award Plan Form of Restricted Stock Unit Award Agreement. †
10.17	(25)	On Assignment, Inc. Amended and Restated 2012 Employment Inducement Incentive Award Plan Form of Stock Option Grant Agreement. †
10.18	(15)	On Assignment, Inc. Nonqualified Inducement Stock Option Grant Agreement between On Assignment, Inc. and James Brill.†
10.19	(15)	On Assignment, Inc. Nonqualified Inducement Stock Option Grant Agreement between On Assignment, Inc. and Michael McGowan.†
10.20	(17)	On Assignment, Inc. Amended and Restated Change in Control Severance Plan and Summary Plan Description. †
10.21	(22)	Employment Agreement, by and between On Assignment, Inc. and Edward Pierce, dated September 1, 2012. †
10.22	(22)	Executive Change of Control Agreement, by and between On Assignment, Inc. and Edward Pierce, dated September 1, 2012. †
10.23	(14)	Amended and Restated Executive Change in Control Agreement between On Assignment, Inc. and Peter T. Dameris, dated December 11, 2008. †
10.24	(24)	Amended and Restated Senior Executive Agreement between On Assignment, Inc. and Peter Dameris, dated December 13, 2012. †
10.25	(14)	Amended and Restated Employment Agreement between Oxford Global Resources, Inc., On Assignment, Inc. and Michael J. McGowan, dated December 30, 2008. †



10.26	(18)	Second Amended and Restated Employment Agreement between On Assignment, Inc., VISTA Staffing Solutions, Inc. and Mark S. Brouse, dated August 1, 2011. †
10.27	(18)	Employment Agreement between On Assignment, Inc., VISTA Staffing Solutions, Inc. and Christian Rutherford, dated August 1, 2011. †
10.28	(14)	Amended and Restated Senior Executive Agreement between On Assignment, Inc. and Emmett McGrath, dated December 11, 2008. †
10.29*		Employment Agreement between Theodore S. Hanson and Apex Systems, Inc., dated January 15, 2008. †
10.30*		Amendment No. 1 to the Employment Agreement between Theodore S. Hanson and Apex Systems, Inc., dated December 31, 2008. †
10.31*		Amendment No. 2 to the Employment Agreement between Theodore S. Hanson and Apex Systems, Inc., dated February 12, 2011.†
10.32*		Amendment No. 3 to the Employment Agreement between On Assignment, Inc., Theodore S. Hanson, and Apex Systems, Inc., dated May 15, 2012. †
10.33*		Amendment No. 4 to the Employment Agreement between On Assignment, Inc., Theodore S. Hanson and Apex Systems, Inc., dated May 15, 2012. †
10.34	(22)	Amended and Restated Employment Agreement, by and between On Assignment, Inc. and James Brill, dated September 1, 2012. †
10.35*		Employment Agreement between Rand Blazer and Apex Systems, Inc., dated January 8, 2007. †
10.36*		Amendment No. 1 to the Employment Agreement between Rand Blazer and Apex Systems, Inc., dated December 31, 2008. †
10.37*		Amendment No. 2 to the Employment Agreement between Rand Blazer and Apex Systems, Inc. dated August 3, 2008.†
10.38*		Amendment No. 3 to the Employment Agreement by and between Rand Blazer, On Assignment, Inc. and Apex Systems, Inc., dated May 15, 2012. †
10.39*		Amendment No. 4 to the Employment Agreement by and between Rand Blazer, On Assignment, Inc. and Apex Systems, Inc., dated May 15, 2012. †
10.40	(10)	Form of Indemnification Agreement.†
10.41*		Indemnification Agreement by and between On Assignment, Inc. and Rand Blazer, dated May 15, 2012. †
10.42	(13)	Indemnification Agreement by and between On Assignment, Inc. and Christian Rutherford, dated November 1, 2011. †
10.43	(23)	Indemnification Agreement by and between On Assignment, Inc. and Marty Kittrell, dated September 1, 2012. †
10.44*		Indemnification Agreement by and between On Assignment, Inc. and Theodore S. Hanson, dated May 15, 2012. †
10.45*		Indemnification Agreement by and between On Assignment, Inc. and Edwin A. Sheridan, IV, dated May 15, 2012. †
10.46*		Indemnification Agreement by and between On Assignment, Inc. and Brian J. Callaghan, dated May 15, 2012.†
10.47*		Indemnification Agreement by and between On Assignment, Inc. and Jeffrey E. Veatch, dated May 15, 2012. †
18*		Preferability Letter of Independent Registered Public Accounting Firm.
21.1*		Subsidiaries of the Registrant.
23.1*		Consent of Independent Registered Public Accounting Firm.
31.1*		Certification of Peter T. Dameris, Chief Executive Officer and President pursuant to Rule 13a-14(a) or 15d-14(a).
31.2*		Certification of Edward L. Pierce, Executive Vice President and Chief Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a).
32.1*		Certification of Peter T. Dameris, Chief Executive Officer and President, and Edward L. Pierce, Executive Vice President and Chief Financial Officer pursuant to 18 U.S.C. Section 1350.
101.INS*		XBRL Instance Document
101.SCH*		XBRL Taxonomy Extension Schema Document
101.CAL*		XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*		XBRL Taxonomy Extension Definition Linkbase Document
101.LAB*		XBRL Taxonomy Extension Label Linkbase Document
101.PRE*		XBRL Taxonomy Extension Presentation Linkbase Document
____
*		Filed herewith.
†		These exhibits relate to management contracts or compensatory plans, contracts or arrangements in which directors and/or executive officers of the Registrant may participate.



(1)				Incorporated by reference from an exhibit filed with our Current Report on Form 8-K (File No. 0-20540) filed with the Securities and Exchange Commission on October 5, 2000.
(2)				Incorporated by reference from an exhibit filed with our Annual Report on Form 10-K (File No. 0-20540) filed with the Securities and Exchange Commission on March 30, 1993.
(3)				Incorporated by reference from an exhibit filed with our Current Report on Form 8-K (File No. 0-20540) filed with the Securities and Exchange Commission on May 3, 2002.
(4)				Incorporated by reference from an exhibit filed with our Registration Statement on Form S-1 (File No. 33-50646) declared effective by the Securities and Exchange Commission on September 21, 1992.
(5)				Incorporated by reference from an exhibit filed with our Annual Report on Form 10-K (File No. 0-20540) filed with the Securities and Exchange Commission on March 16, 2005.
(6)				Incorporated by reference from an exhibit filed with our Current Report on Form 8-K (File No. 0-20540) filed with the Securities and Exchange Commission on June 5, 2003.
(7)				Incorporated by reference from an exhibit filed with our Current Report on Form 8-K (File No. 000-20540) filed with the Securities and Exchange Commission on August 8, 2005.
(8)				Incorporated by reference from an exhibit filed with our Registration Statement on Form S-8 (File No. 333-143907) filed with the Securities and Exchange Commission on June 20, 2007.
(9)				Incorporated by reference from our Proxy Statement on Schedule 14A (File No. 000-20540) filed with the Securities and Exchange Commission on April 27, 2010.
(10)				Incorporated by reference from an exhibit filed with our Annual Report on Form 10-K (File No. 0-20540) filed with the Securities and Exchange Commission on March 16, 2007.
(11)				Incorporated by reference from an exhibit filed with our Quarterly Report on Form 10-Q (File No. 000-20540) filed with the Securities and Exchange Commission on August 9, 2010.
(12)				Incorporated by reference from an exhibit filed with our Current Report on Form 8-K (File No. 000-20540) filed with the Securities and Exchange Commission on December 16, 2008.
(13)				Incorporated by reference from an exhibit filed with our Annual Report on Form 10-K (File No. 0-20540) filed with the Securities and Exchange Commission on March 14, 2012.
(14)				Incorporated by reference from an exhibit filed with our Annual Report on Form 10-K (File No. 0-20540) filed with the Securities and Exchange Commission on March 16, 2009.
(15)				Incorporated by reference from an exhibit filed with our Registration Statement on Form S-8 (File No. 333-148000) filed with the Securities and Exchange Commission on December 12, 2007.
(16)				Incorporated by reference from an exhibit filed with our Quarterly Report on Form 10-Q (File No. 000-20540) filed with the Securities and Exchange Commission on November 8, 2010.
(17)				Incorporated by reference from an exhibit filed with our Annual Report on Form 10-K (File No. 0-20540) filed with the Securities and Exchange Commission on March 16, 2010.
(18)				Incorporated by reference from an exhibit filed with our Current Report on Form 8-K (File No. 000-20540) filed with the Securities and Exchange Commission on August 5, 2011.
(19)				Incorporated by reference from an exhibit filed with our Current Report on Form 8-K (File No. 000-20540) filed with the Securities and Exchange Commission on March 26, 2012.
(20)				Incorporated by reference from an exhibit filed with our Quarterly Report on Form 10-Q (File No. 000-20540) filed with the Securities and Exchange Commission on May 9, 2012.
(21)				Incorporated by reference from an exhibit filed with our Current Report on Form 8-K (File No. 000-20540) filed with the Securities and Exchange Commission on May 15, 2012.
(22)				Incorporated by reference from an exhibit filed with our Current Report on Form 8-K (File No. 000-20540) filed with the Securities and Exchange Commission on September 7, 2012.
(23)				Incorporated by reference from an exhibit filed with our Quarterly Report on Form 10-Q (File No. 000-20540) filed with the Securities and Exchange Commission on November 8, 2012.
(24)				Incorporated by reference from an exhibit filed with our Current Report on Form 8-K (File No. 000-20540) filed with the Securities and Exchange Commission on December 18, 2012.
(25)				Incorporated by reference from an exhibit filed with our Registration Statement on Form S-8 (File No. 333-183863) filed with the Securities and Exchange Commission on September 12, 2012.

Exhibit 10.15

AMENDED AND RESTATED ON ASSIGNMENT, INC.
2012 EMPLOYMENT INDUCEMENT INCENTIVE AWARD PLAN

ARTICLE 1.

PURPOSE

The purpose of the Amended and Restated On Assignment, Inc. 2012 Employment Inducement Incentive Award Plan (the “ Plan ”) is to promote the success and enhance the value of On Assignment, Inc. (the “ Company ”) by linking the individual interests of Eligible Individuals to those of the Company’s stockholders and by providing such individuals with an incentive for outstanding performance to generate superior returns to the Company’s stockholders. The Plan is further intended to provide flexibility to the Company in its ability to attract, and retain the services of Eligible Individuals upon whose judgment, interest, and special effort the successful conduct of the Company’s operation is largely dependent. Only Eligible Individuals may receive Awards under the Plan. The Plan amends and restates in its entirety, as of August 31, 2012, the On Assignment, Inc. 2012 Employment Inducement Incentive Award Plan (the “ Original Plan ”).

ARTICLE 2.

DEFINITIONS AND CONSTRUCTION

Wherever the following terms are used in the Plan they shall have the meanings specified below, unless the context clearly indicates otherwise. The singular pronoun shall include the plural where the context so indicates.

2.1 “ Administrator ” shall mean the entity that conducts the general administration of the Plan as provided in Article 11 hereof.

2.2 “ Affiliate ” shall mean any Parent or Subsidiary.

2.3 “ Applicable Accounting Standards ” shall mean Generally Accepted Accounting Principles in the United States, International Financial Reporting Standards or such other accounting principles or standards as may apply to the Company’s financial statements under United States federal securities laws from time to time.

2.4 “ Award ” shall mean an Option, a Restricted Stock Award, a Restricted Stock Unit Award, a Performance Award, a Dividend Equivalent Award, a Deferred Stock Award, a Stock Payment Award, a Stock Appreciation Right, an Other Incentive Award or a Performance Share Award, which may be awarded or granted under the Plan.

2.5 “ Award Agreement ” shall mean any written notice, agreement, contract or other instrument or document evidencing an Award, including through electronic medium, which shall contain such terms and conditions with respect to an Award as the Administrator shall determine, consistent with the Plan.

2.6 “ Board ” shall mean the Board of Directors of the Company.

2.7 “ Change in Control ” shall mean the occurrence of any of the following events:

(a) A transaction or series of transactions (other than an offering of Shares to the general public through a registration statement filed with the Securities and Exchange Commission) whereby any “person” or related “group” of “persons” (as such terms are used in Sections 13(d) and 14(d)(2) of the Exchange Act) (other than the Company, any of its Parents or Subsidiaries, an employee benefit plan maintained by the Company or any of its Parents or Subsidiaries or a “person” that, prior to such transaction, directly or indirectly controls, is controlled by, or is under common control with, the Company) directly or indirectly acquires beneficial ownership (within the meaning of Rule 13d-3 under the Exchange Act) of securities of the Company possessing more than fifty percent (50%) of the total combined voting power of the Company’s securities outstanding immediately after such acquisition; or

(b) The consummation by the Company (whether directly involving the Company or indirectly involving the Company through one or more intermediaries) of (x) a merger, consolidation, reorganization, or business combination or (y) a sale or other disposition of all or substantially all of the Company’s assets or (z) the acquisition of assets or stock of another entity, in each case, other than a transaction:

(i) Which results in the Company’s voting securities outstanding immediately before the transaction continuing to represent (either by remaining outstanding or by being converted into voting securities of the Company or the person that, as a result of the transaction, controls, directly or indirectly, the Company or owns, directly or indirectly, all or substantially all of the Company’s assets or otherwise succeeds to the business of the Company (the Company or such person, the “ Successor Entity ”)) directly or indirectly, at least a majority of the combined voting power of the Successor Entity’s outstanding voting securities immediately after the transaction, and

(ii) After which no person or group beneficially owns voting securities representing 50% or more of the combined voting power of the Successor Entity; provided , however , that no person or group shall be treated for purposes of this Section 2.7(b)(ii) as beneficially owning 50% or more of combined voting power of the Successor Entity solely as a result of the voting power held in the Company prior to the consummation of the transaction.

Notwithstanding the foregoing, if a Change in Control constitutes a payment event with respect to any Award which provides for the deferral of compensation that is subject to Section 409A of the Code, to the extent required to avoid the imposition of additional taxes under Section 409A of the Code, the transaction or event described in subsection (a) or (b), with respect to such Award shall only constitute a Change in Control for purposes of the payment timing of such Award if such transaction also constitutes a “change in control event,” as defined in Treasury Regulation §1.409A-3(i)(5).

Consistent with the terms of this Section 2.7, the Administrator shall have full and final authority to determine conclusively whether a Change in Control of the Company has occurred

pursuant to the above definition, the date of the occurrence of such Change in Control and any incidental matters relating thereto.

2.8 “ Code ” shall mean the Internal Revenue Code of 1986, as amended from time to time, together with the regulations and official guidance promulgated thereunder, whether issued prior or subsequent to the grant of any Award.

2.9 “ Committee ” shall mean the Compensation Committee of the Board, or another committee or subcommittee of the Board described in Article 11 hereof.

2.10 “ Common Stock ” shall mean the common stock of the Company, par value $.01 per share.

2.11 “ Company ” shall mean On Assignment, Inc., a Delaware corporation.

2.12 “ Consultant ” shall mean any consultant or adviser engaged to provide services to the Company or any Affiliate that qualifies as a consultant under the applicable rules of the Securities and Exchange Commission for registration of shares on a Form S-8 Registration Statement or any successor Form thereto.

2.13 “ Deferred Stock ” shall mean a right to receive Shares awarded under Section 8.4 hereof.

2.14 “ Director ” shall mean a member of the Board, as constituted from time to time.

2.15 “ Dividend Equivalent ” shall mean a right to receive the equivalent value (in cash or Shares) of dividends paid on Shares, awarded under Section 8.2 hereof.

2.16 “ DRO ” shall mean a “domestic relations order” as defined by the Code or Title I of the Employee Retirement Income Security Act of 1974, as amended from time to time, or the rules thereunder.

2.17 “ Effective Date ” shall mean the date the Original Plan was approved by the Board.

2.18 “ Eligible Individual ” shall mean any prospective Employee who is commencing employment with the Company or a Subsidiary, or is being rehired following a bona fide period interruption of employment by the Company or a Subsidiary, if he or she is granted an Award in connection with his or her commencement of employment with the Company or a Subsidiary and such grant is an inducement material to his or her entering into employment with the Company or a Subsidiary (within the meaning of New York Stock Exchange Rule 303A.08 or any successor rule, if the Company’s securities are traded on the New York Stock Exchange, and/or the applicable requirements of any other established stock exchange on which the Company’s securities are traded, as applicable, as such rules and requirements may be amended from time to time). Notwithstanding the foregoing, if the Company’s securities are traded on the Nasdaq Stock Market, an “Eligible Individual” shall not include any prospective Employee who has previously been an Employee or Director of the Company unless following a bona fide period of non-employment by the Company or a Subsidiary. The Administrator may in its discretion adopt procedures from time to time to

ensure that a prospective Employee is eligible to participate in the Plan prior to the granting of any Awards to such individual under the Plan (including without limitation a requirement that each such prospective Employee certify to the Company prior to the receipt of an Award under the Plan that he or she has had a bona fide period of interruption of employment, and that the grant of Awards under the Plan is an inducement material to his or her agreement to enter into employment with the Company or a Subsidiary).

2.19 “ Employee ” shall mean any officer or other employee (as determined in accordance with Section 3401(c) of the Code) of the Company or of any Affiliate.

2.20 “ Equity Restructuring ” shall mean a nonreciprocal transaction between the Company and its stockholders, such as a stock dividend, stock split, spin-off, rights offering or recapitalization through a large, nonrecurring cash dividend, that affects the number or kind of shares of Common Stock (or other securities of the Company) or the share price of Common Stock (or other securities) and causes a change in the per share value of the Common Stock underlying outstanding Awards.

2.21 “ Exchange Act ” shall mean the Securities Exchange Act of 1934, as amended from time to time.

2.22 “ Fair Market Value ” shall mean, as of any given date, the value of a Share determined as follows:

(a) If the Common Stock is (i) listed on any established securities exchange (such as the New York Stock Exchange, the NASDAQ Global Market and the NASDAQ Global Select Market), (ii) listed on any national market system or (iii) listed, quoted or traded on any automated quotation system, its Fair Market Value shall be the closing sales price for a share of Common Stock as quoted on such exchange or system for such date or, if there is no closing sales price for a share of Common Stock on the date in question, the closing sales price for a share of Common Stock on the last preceding date for which such quotation exists, as reported in The Wall Street Journal or such other source as the Administrator deems reliable;

(b) If the Common Stock is not listed on an established securities exchange, national market system or automated quotation system, but the Common Stock is regularly quoted by a recognized securities dealer, its Fair Market Value shall be the mean of the high bid and low asked prices for such date or, if there are no high bid and low asked prices for a share of Common Stock on such date, the high bid and low asked prices for a share of Common Stock on the last preceding date for which such information exists, as reported in The Wall Street Journal or such other source as the Administrator deems reliable; or

(c) If the Common Stock is neither listed on an established securities exchange, national market system or automated quotation system nor regularly quoted by a recognized securities dealer, its Fair Market Value shall be established by the Administrator in good faith.

2.23 “ Incentive Stock Option ” shall mean an Option that is intended to qualify as an incentive stock option and conforms to the applicable provisions of Section 422 of the Code.

2.24 “ Independent Director ” shall mean a Director of the Company who is not an Employee of the Company and who qualifies as “independent” within the meaning of New York Stock Exchange Rule 303A.02, or any successor rule, if the Company’s securities are traded on the New York Stock Exchange, and/or the applicable requirements of any other established stock exchange on which the Company’s securities are traded, as applicable, as such rules and requirements may be amended from time to time.

2.25 “ Non-Employee Director ” shall mean a Director of the Company who is not an Employee.

2.26 “ Non-Qualified Stock Option ” shall mean an Option that is not an Incentive Stock Option.

2.27 “ Option ” shall mean a right to purchase Shares at a specified exercise price, granted under Article 5 hereof. Any Option granted under the Plan shall be a Non-Qualified Stock Option.

2.28 “ Original Plan ” shall mean the On Assignment, Inc. 2012 Employment Inducement Incentive Award Plan.

2.29 “ Other Incentive Award ” shall mean an Award denominated in, linked to or derived from Shares or value metrics related to Shares, granted pursuant to Section 8.7 hereof.

2.30 “ Parent ” shall mean any entity (other than the Company), whether domestic or foreign, in an unbroken chain of entities ending with the Company if each of the entities other than the Company beneficially owns, at the time of the determination, securities or interests representing more than fifty percent (50%) of the total combined voting power of all classes of securities or interests in one of the other entities in such chain.

2.31 “ Participant ” shall mean a person who has been granted an Award.

2.32 “ Performance Award ” shall mean an Award that is granted under Section 8.1 hereof.

2.33 “ Performance Share Award ” shall mean a contractual right awarded under Section 8.6 hereof to receive a number of Shares or the cash value of such number of Shares based on the attainment of specified Performance Goals or other criteria determined by the Administrator.

2.34 “ Permitted Transferee ” shall mean, with respect to a Participant, any “family member” of the Participant, as defined under the instructions to use of the Form S-8 Registration Statement under the Securities Act, after taking into account any state, federal, local or foreign tax and securities laws applicable to transferable Awards.

2.35 “ Plan ” shall mean this Amended and Restated On Assignment, Inc. 2012 Employment Inducement Incentive Award Plan, as it may be amended from time to time.

2.36 “ Program ” shall mean any program adopted by the Administrator pursuant to the Plan containing the terms and conditions intended to govern a specified type of Award granted under the Plan and pursuant to which such type of Award may be granted under the Plan.

2.37 “ Restricted Stock ” shall mean Common Stock awarded under Article 7 hereof that is subject to certain restrictions and may be subject to risk of forfeiture.

2.38 “ Restricted Stock Unit ” shall mean a contractual right awarded under Section 8.5 hereof to receive in the future a Share or the cash value of a Share.

2.39 “ Securities Act ” shall mean the Securities Act of 1933, as amended.

2.40 “ Share Limit ” shall have the meaning provided in Section 3.1(a) hereof.

2.41 “ Shares ” shall mean shares of Common Stock.

2.42 “ Stock Appreciation Right ” shall mean a stock appreciation right granted under Article 9 hereof.

2.43 “ Stock Payment ” shall mean a payment in the form of Shares awarded under Section 8.3 hereof.

2.44 “ Subsidiary ” shall mean any entity (other than the Company), whether domestic or foreign, in an unbroken chain of entities beginning with the Company if each of the entities other than the last entity in the unbroken chain beneficially owns, at the time of the determination, securities or interests representing more than fifty percent (50%) of the total combined voting power of all classes of securities or interests in one of the other entities in such chain.

2.45 “ Substitute Award ” shall mean an Award granted under the Plan in connection with a corporate transaction, such as a merger, combination, consolidation or acquisition of property or stock, in any case, upon the assumption of, or in substitution for, an outstanding equity award previously granted by a company or other entity that is a party to such transaction; provided , however , that in no event shall the term “Substitute Award” be construed to refer to an award made in connection with the cancellation and repricing of an Option or Stock Appreciation Right.

2.46 “ Termination of Service ” means:

(a) As to a Consultant, the time when the engagement of a Participant as a Consultant to the Company and its Affiliates is terminated for any reason, with or without cause, including, without limitation, by resignation, discharge, death or retirement, but excluding terminations where the Consultant simultaneously commences or remains in employment or service with the Company or any Affiliate.

(b) As to a Non-Employee Director, the time when a Participant who is a Non-Employee Director ceases to be a Director for any reason, including, without limitation, a termination by resignation, failure to be elected, death or retirement, but excluding terminations where the

Participant simultaneously commences or remains in employment or service with the Company or any Affiliate.

(c) As to an Employee, the time when the employee-employer relationship between a Participant and the Company and its Affiliates is terminated for any reason, including, without limitation, a termination by resignation, discharge, death, disability or retirement; but excluding terminations where the Participant simultaneously commences or remains in employment or service with the Company or any Affiliate.

The Administrator, in its sole discretion, shall determine the effect of all matters and questions relating to Terminations of Service, including, without limitation, the question of whether a Termination of Service has occurred, whether any Termination of Service resulted from a discharge for cause and all questions of whether particular leaves of absence constitute a Termination of Service. For purposes of the Plan, a Participant’s employee-employer relationship or consultancy relationship shall be deemed to be terminated in the event that the Affiliate employing or contracting with such Participant ceases to remain an Affiliate following any merger, sale of stock or other corporate transaction or event (including, without limitation, a spin-off).

ARTICLE 3.

SHARES SUBJECT TO THE PLAN

3.1 Number of Shares .

(a) Subject to Section 3.1(b) and Section 12.2 hereof, the aggregate number of Shares which may be issued or transferred pursuant to Awards under the Plan shall be nine hundred thirty-five thousand eight hundred sixty-one (935,861) (the “ Share Limit ”). Notwithstanding the foregoing, to the extent permitted under applicable law and applicable stock exchange rules, Awards that provide for the delivery of Shares subsequent to the applicable grant date may be granted in excess of the Share Limit if such Awards provide for the forfeiture or cash settlement of such Awards to the extent that insufficient Shares remain under the Share Limit at the time that Shares would otherwise be issued in respect of such Award.

(b) If any Shares subject to an Award are forfeited or expire or such Award is settled for cash (in whole or in part), the Shares subject to such Award shall, to the extent of such forfeiture, expiration or cash settlement, again be available for future grants of Awards under the Plan and shall be added back to the Share Limit in the same number of Shares as were debited from the Share Limit in respect of the grant of such Award (as may be adjusted in accordance with Section 13.2 hereof). Notwithstanding anything to the contrary contained herein, the following Shares shall not be added back to the Share Limit and will not be available for future grants of Awards: (i) Shares tendered by a Participant or withheld by the Company in payment of the exercise price of an Option; (ii) Shares tendered by the Participant or withheld by the Company to satisfy any tax withholding obligation with respect to an Award; (iii) Shares subject to a Stock Appreciation Right that are not issued in connection with the stock settlement of the Stock Appreciation Right on exercise thereof; and (iv) Shares purchased on the open market with the cash proceeds from the exercise of Options. Any Shares repurchased by the Company under Section 7.4 hereof at the same price paid by the

Participant so that such shares are returned to the Company will again be available for Awards. The payment of Dividend Equivalents in cash in conjunction with any outstanding Awards shall not be counted against the shares available for issuance under the Plan.

(c) Substitute Awards shall not reduce the Shares authorized for grant under the Plan. Additionally, in the event that a company acquired by the Company or any Affiliate or with which the Company or any Affiliate combines has shares available under a pre-existing plan approved by stockholders and not adopted in contemplation of such acquisition or combination, the shares available for grant pursuant to the terms of such pre-existing plan (as adjusted, to the extent appropriate, using the exchange ratio or other adjustment or valuation ratio or formula used in such acquisition or combination to determine the consideration payable to the holders of common stock of the entities party to such acquisition or combination) may be used for Awards under the Plan and shall not reduce the Shares authorized for grant under the Plan; provided , that Awards using such available shares shall not be made after the date awards or grants could have been made under the terms of the pre-existing plan, absent the acquisition or combination, and shall only be made to individuals who were not employed by or providing services to the Company or its Affiliates immediately prior to such acquisition or combination.

3.2 Stock Distributed . Any Shares distributed pursuant to an Award may consist, in whole or in part, of authorized and unissued Common Stock or treasury Common Stock.

ARTICLE 4.

GRANTING OF AWARDS

4.1 Participation. The Administrator may, from time to time, select from among all Eligible Individuals, those to whom one or more Awards shall be granted and shall determine the nature and amount of each Award, which shall not be inconsistent with the requirements of the Plan. No Eligible Individual shall have any right to be granted an Award pursuant to the Plan.

4.2 Award Agreement . Each Award shall be evidenced by an Award Agreement stating the terms and conditions applicable to such Award, consistent with the requirements of the Plan and any applicable Program.

4.3 Limitations Applicable to Section 16 Persons . Notwithstanding anything contained herein to the contrary, with respect to any Award granted or awarded to any individual who is then subject to Section 16 of the Exchange Act, the Plan, any applicable Program and the applicable Award Agreement shall be subject to any additional limitations set forth in any applicable exemptive rule under Section 16 of the Exchange Act (including Rule 16b‑3 of the Exchange Act and any amendments thereto) that are requirements for the application of such exemptive rule, and such additional limitations shall be deemed to be incorporated by reference into such Award to the extent permitted by applicable law.

4.4 At-Will Service . Nothing in the Plan or in any Program or Award Agreement hereunder shall confer upon any Participant any right to continue as an Employee, Director or Consultant of the Company or any Affiliate, or shall interfere with or restrict in any way the rights

of the Company and any Affiliate, which rights are hereby expressly reserved, to discharge any Participant at any time for any reason whatsoever, with or without cause, and with or without notice, or to terminate or change all other terms and conditions of employment or engagement, except to the extent expressly provided otherwise in a written agreement between the Participant and the Company or any Affiliate.

4.5 Foreign Participants . Notwithstanding any provision of the Plan to the contrary, in order to comply with the laws in other countries in which the Company and its Affiliates operate, or in order to comply with the requirements of any foreign securities exchange, the Administrator, in its sole discretion, shall have the power and authority to: (a) determine which Affiliates shall be covered by the Plan; (b) determine which Eligible Individuals outside the United States are eligible to participate in the Plan; (c) modify the terms and conditions of any Award granted to Eligible Individuals outside the United States to comply with applicable foreign laws or listing requirements of any such foreign securities exchange; (d) establish subplans and modify exercise procedures and other terms and procedures, to the extent such actions may be necessary or advisable (any such subplans and/or modifications shall be attached to the Plan as appendices); provided , however , that no such subplans and/or modifications shall increase the Share Limit contained in Section 3.1 hereof; and (e) take any action, before or after an Award is made, that it deems advisable to obtain approval or comply with any necessary local governmental regulatory exemptions or approvals or listing requirements of any such foreign securities exchange. Notwithstanding the foregoing, the Administrator may not take any actions hereunder, and no Awards shall be granted, that would violate the Code, the Exchange Act, the Securities Act, any other securities law or governing statute, the rules of the securities exchange or automated quotation system on which the Shares are listed, quoted or traded or any other applicable law.

4.6 Stand-Alone and Tandem Awards . Awards granted pursuant to the Plan may, in the sole discretion of the Administrator, be granted either alone, in addition to, or in tandem with, any other Award granted pursuant to the Plan. Awards granted in addition to or in tandem with other Awards may be granted either at the same time as or at a different time from the grant of such other Awards.

ARTICLE 5.

GRANTING OF OPTIONS

5.1 Granting of Options to Eligible Individuals . The Administrator is authorized to grant Options to Eligible Individuals from time to time, in its sole discretion, on such terms and conditions as it may determine which shall not be inconsistent with the Plan.

5.2 Option Exercise Price . The exercise price per Share subject to each Option shall be set by the Administrator, but shall not be less than 100% of the Fair Market Value of a Share on the date the Option is granted.

5.3 Option Term . The term of each Option shall be set by the Administrator in its sole discretion; provided , however , that the term shall not be more than ten (10) years from the date the Option is granted. The Administrator shall determine the time period, including the time period

following a Termination of Service, during which the Participant has the right to exercise the vested Options, which time period may not extend beyond the term of the Option term. Except as limited by the requirements of Section 409A of the Code, the Administrator may extend the term of any outstanding Option, and may extend the time period during which vested Options may be exercised, in connection with any Termination of Service of the Participant, and may amend any other term or condition of such Option relating to such a Termination of Service.

5.4 Option Vesting .

(c) The terms and conditions pursuant to which an Option vests in the Participant and becomes exercisable shall be determined by the Administrator and set forth in the applicable Award Agreement. Such vesting may be based on service with the Company or any Affiliate, the attainment of one or more performance criteria established by the Administrator, and/or any other criteria selected by the Administrator. At any time after grant of an Option, the Administrator may, in its sole discretion and subject to whatever terms and conditions it selects, accelerate the period during which an Option vests.

(d) No portion of an Option which is unexercisable at a Participant’s Termination of Service shall thereafter become exercisable, except as may be otherwise provided by the Administrator either in a Program, the applicable Award Agreement or by action of the Administrator following the grant of the Option.

5.5 Substitute Awards . Notwithstanding the foregoing provisions of this Article 5 to the contrary, in the case of an Option that is a Substitute Award, the price per share of the shares subject to such Option may be less than the Fair Market Value per share on the date of grant, provided , however , that the excess of: (a) the aggregate Fair Market Value (as of the date such Substitute Award is granted) of the shares subject to the Substitute Award, over (b) the aggregate exercise price thereof does not exceed the excess of (x) the aggregate fair market value (as of the time immediately preceding the transaction giving rise to the Substitute Award, such fair market value to be determined by the Administrator) of the shares of the predecessor entity that were subject to the grant assumed or substituted for by the Company, over (y) the aggregate exercise price of such shares.

5.6 Substitution of Stock Appreciation Rights . The Administrator may provide in an applicable Program or the applicable Award Agreement evidencing the grant of an Option that the Administrator, in its sole discretion, shall have the right to substitute a Stock Appreciation Right for such Option at any time prior to or upon exercise of such Option; provided , however , that such Stock Appreciation Right shall be exercisable with respect to the same number of Shares for which such substituted Option would have been exercisable, and shall also have the same exercise price and remaining term as the substituted Option.

ARTICLE 6.

EXERCISE OF OPTIONS

6.1 Partial Exercise . An exercisable Option may be exercised in whole or in part. However, an Option shall not be exercisable with respect to fractional shares and the Administrator may require that, by the terms of the Option, a partial exercise must be with respect to a minimum number of shares.

6.2 Manner of Exercise . All or a portion of an exercisable Option shall be deemed exercised upon delivery of all of the following to the Secretary of the Company, or such other person or entity designated by the Administrator, or his, her or its office, as applicable:

(a) A written or electronic notice complying with the applicable rules established by the Administrator stating that the Option, or a portion thereof, is exercised. The notice shall be signed by the Participant or other person then entitled to exercise the Option or such portion of the Option;

(b) Such representations and documents as the Administrator, in its sole discretion, deems necessary or advisable to effect compliance with all applicable provisions of the Securities Act and any other federal, state or foreign securities laws or regulations, the rules of any securities exchange or automated quotation system on which the Shares are listed, quoted or traded or any other applicable law. The Administrator may, in its sole discretion, also take whatever additional actions it deems appropriate to effect such compliance including, without limitation, placing legends on share certificates and issuing stop-transfer notices to agents and registrars;

(c) In the event that the Option shall be exercised pursuant to Section 10.3 hereof by any person or persons other than the Participant, appropriate proof of the right of such person or persons to exercise the Option, as determined in the sole discretion of the Administrator; and

(d) Full payment of the exercise price and applicable withholding taxes to the stock administrator of the Company for the shares with respect to which the Option, or portion thereof, is exercised, in a manner permitted by Sections 10.1 and 10.2 hereof.

ARTICLE 7.

RESTRICTED STOCK

7.1 Award of Restricted Stock .

(e) The Administrator is authorized to grant Restricted Stock to Eligible Individuals, and shall determine the terms and conditions, including the restrictions applicable to each award of Restricted Stock, which terms and conditions shall not be inconsistent with the Plan, and may impose such conditions on the issuance of such Restricted Stock as it deems appropriate.

(f) The Administrator shall establish the purchase price, if any, and form of payment for Restricted Stock; provided , however , that if a purchase price is charged, such purchase price shall be no less than the par value of the Shares to be purchased, unless otherwise permitted by applicable law. In all cases, legal consideration shall be required for each issuance of Restricted Stock to the extent required by applicable law.

7.2 Rights as Stockholders . Subject to Section 7.4 hereof, upon issuance of Restricted Stock, the Participant shall have, unless otherwise provided by the Administrator, all the rights of a stockholder with respect to said shares, subject to the restrictions in an applicable Program or in the applicable Award Agreement; provided , however , that, in the sole discretion of the Administrator, any extraordinary distributions with respect to the Shares shall be subject to the restrictions set forth in Section 7.3 hereof; provided , further , that with respect to a share of Restricted Stock with vesting conditions, dividends which are paid by the Company with respect to Shares prior to vesting shall only be paid out to the extent that, and at such time or times as, the vesting conditions are subsequently satisfied and the underlying shares of Restricted Stock vest.

7.3 Restrictions . All shares of Restricted Stock (including any shares received by Participants thereof with respect to shares of Restricted Stock as a result of stock dividends, stock splits or any other form of recapitalization) shall, in the terms of an applicable Program or in the applicable Award Agreement, be subject to such restrictions and vesting requirements as the Administrator shall provide. Such restrictions may include, without limitation, restrictions concerning voting rights and transferability and such restrictions may lapse separately or in combination at such times and pursuant to such circumstances or based on such criteria as selected by the Administrator, including, without limitation, criteria based on the Participant’s duration of employment, Company or Affiliate performance, individual performance or other criteria selected by the Administrator. By action taken after the Restricted Stock is issued, the Administrator may, on such terms and conditions as it may determine to be appropriate, accelerate the vesting of such Restricted Stock by removing any or all of the restrictions imposed by the terms of any Program or by the applicable Award Agreement. Restricted Stock may not be sold or encumbered until all restrictions are terminated or expire.

7.4 Repurchase or Forfeiture of Restricted Stock . If no price was paid by the Participant for the Restricted Stock, upon a Termination of Service, the Participant’s rights in unvested Restricted Stock then subject to restrictions shall lapse, and such Restricted Stock shall be surrendered to the Company and cancelled without consideration. If a price was paid by the Participant for the Restricted Stock, upon a Termination of Service the Company shall have the right to repurchase from the Participant the unvested Restricted Stock then-subject to restrictions at a cash price per share equal to the price paid by the Participant for such Restricted Stock or such other amount as may be specified in an applicable Program or the applicable Award Agreement. The Administrator in its sole discretion may provide that, upon certain events, including without limitation a Change in Control, the Participant’s death, retirement or disability, any other specified Termination of Service or any other event, the Participant’s rights in unvested Restricted Stock shall not lapse, such Restricted Stock shall vest and cease to be forfeitable and, if applicable, the Company cease to have a right of repurchase.

7.5 Certificates for Restricted Stock . Restricted Stock granted pursuant to the Plan may be evidenced in such manner as the Administrator shall determine. Certificates or book entries evidencing shares of Restricted Stock must include an appropriate legend referring to the terms, conditions, and restrictions applicable to such Restricted Stock, and the Company may, in its sole discretion, retain physical possession of any stock certificate until such time as all applicable restrictions lapse.

7.6 Section 83(b) Election . If a Participant makes an election under Section 83(b) of the Code to be taxed with respect to the Restricted Stock as of the date of transfer of the Restricted Stock rather than as of the date or dates upon which the Participant would otherwise be taxable under Section 83(a) of the Code, the Participant shall be required to deliver a copy of such election to the Company promptly after filing such election with the Internal Revenue Service.

ARTICLE 8.

PERFORMANCE AWARDS, DIVIDEND EQUIVALENTS, DEFERRED STOCK, STOCK PAYMENTS, RESTRICTED STOCK UNITS; OTHER INCENTIVE AWARDS

8.1 Performance Awards . The Administrator is authorized to grant Performance Awards to any Eligible Individual. The value of Performance Awards may be linked to any specific criteria determined by the Administrator, in each case on a specified date or dates or over any period or periods determined by the Administrator.

8.2 Dividend Equivalents .

(a) Subject to Section 8.2(b) hereof, Dividend Equivalents may be granted by the Administrator, either alone or in tandem with another Award, based on dividends declared on the Common Stock, to be credited as of dividend payment dates during the period between the date the Dividend Equivalents are granted to a Participant and the date such Dividend Equivalents terminate or expire, as determined by the Administrator. Such Dividend Equivalents shall be converted to cash or additional shares of Common Stock by such formula and at such time and subject to such limitations as may be determined by the Administrator.

(b) Notwithstanding the foregoing, no Dividend Equivalents shall be payable with respect to Options or Stock Appreciation Rights.

8.3 Stock Payments . The Administrator is authorized to make one or more Stock Payments to any Eligible Individual. The number or value of shares of any Stock Payment shall be determined by the Administrator and may be based upon any specific criteria, including service to the Company or any Affiliate and/or the attainment of any performance goals, determined by the Administrator. Stock Payments may, but are not required to be made in lieu of base salary, bonus, fees or other cash compensation otherwise payable to such Eligible Individual.

8.4 Deferred Stock . The Administrator is authorized to grant Deferred Stock to any Eligible Individual. The number of shares of Deferred Stock shall be determined by the Administrator and may be based on any specific criteria, including service to the Company or any Affiliate and/or the attainment of any performance goals, as the Administrator determines, in each case on a specified date or dates or over any period or periods determined by the Administrator. Shares underlying a Deferred Stock award which is subject to a vesting schedule or other conditions or criteria set by the Administrator will not be issued until those conditions have been satisfied. Unless otherwise provided by the Administrator, a holder of Deferred Stock shall have no rights as a Company stockholder with respect to such Deferred Stock until such time as the Award has vested and the Shares underlying the Award have been issued to the Participant.

8.5 Restricted Stock Units . The Administrator is authorized to grant Restricted Stock Units to any Eligible Individual. The number and terms and conditions of Restricted Stock Units shall be determined by the Administrator. The Administrator shall specify the date or dates on which the Restricted Stock Units shall become fully vested and nonforfeitable, and may specify such conditions to vesting as it deems appropriate, including conditions based on service to the Company or any Affiliate and/or the attainment of performance goals, in each case on a specified date or dates or over any period or periods, as determined by the Administrator. The Administrator shall specify, or may permit the Participant to elect, the conditions and dates upon which the Shares underlying the Restricted Stock Units which shall be issued, which dates shall not be earlier than the date as of which the Restricted Stock Units vest and become nonforfeitable and which conditions and dates shall be subject to compliance with Section 409A of the Code or an exemption therefrom. On the distribution dates, the Company shall issue to the Participant one unrestricted, fully transferable Share (or the Fair Market Value of one such Share in cash) for each vested and nonforfeitable Restricted Stock Unit.

8.6 Performance Share Awards . Any Eligible Individual selected by the Administrator may be granted one or more Performance Share Awards which shall be denominated in a number of Shares and the vesting of which may be linked to any specific performance criteria (in each case on a specified date or dates or over any period or periods determined by the Administrator) and/or time-vesting or other criteria, as determined by the Administrator.

8.7 Other Incentive Awards . The Administrator is authorized to grant Other Incentive Awards to any Eligible Individual, which Awards may cover Shares or the right to purchase Shares or have a value derived from the value of, or an exercise or conversion privilege at a price related to, or that are otherwise payable in or based on, Shares, shareholder value or shareholder return, in each case on a specified date or dates or over any period or periods determined by the Administrator. Other Incentive Awards may be linked to any specific performance criteria and/or time-vesting or other criteria, as determined appropriate by the Administrator.

8.8 Cash Settlement . Without limiting the generality of any other provision of the Plan, the Administrator may provide, in an Award Agreement or subsequent to the grant of an Award, in its discretion, that any Award may be settled in cash, Shares or a combination thereof.

8.9 Other Terms and Conditions . All applicable terms and conditions of each Award described in this Article 8, including without limitation, as applicable, the term, vesting and exercise/purchase price applicable to the Award, shall be set by the Administrator in its sole discretion, provided , however , that the value of the consideration shall not be less than the par value of a Share, unless otherwise permitted by applicable law.

8.10 Exercise upon Termination of Service . Awards described in this Article 8 are exercisable or distributable, as applicable, only while the Participant is an Employee, Director or Consultant, as applicable. The Administrator, however, in its sole discretion may provide that such Award may be exercised or distributed subsequent to a Termination of Service as provided under an applicable Program, Award Agreement, payment deferral election and/or in certain events, including a Change in Control, the Participant’s death, retirement or disability or any other specified Termination of Service.

ARTICLE 9.

STOCK APPRECIATION RIGHTS

9.1 Grant of Stock Appreciation Rights .

(c) The Administrator is authorized to grant Stock Appreciation Rights to Eligible Individuals from time to time, in its sole discretion, on such terms and conditions as it may determine consistent with the Plan.

(d) A Stock Appreciation Right shall entitle the Participant (or other person entitled to exercise the Stock Appreciation Right pursuant to the Plan) to exercise all or a specified portion of the Stock Appreciation Right (to the extent then-exercisable pursuant to its terms) and to receive from the Company an amount determined by multiplying the difference obtained by subtracting the exercise price per share of the Stock Appreciation Right from the Fair Market Value on the date of exercise of the Stock Appreciation Right by the number of Shares with respect to which the Stock Appreciation Right shall have been exercised, subject to any limitations the Administrator may impose. Except as described in Section 9.1(c) hereof, the exercise price per Share subject to each Stock Appreciation Right shall be set by the Administrator, but shall not be less than 100% of the Fair Market Value on the date the Stock Appreciation Right is granted.

(e) Notwithstanding the foregoing provisions of Section 9.1(b) hereof to the contrary, in the case of a Stock Appreciation Right that is a Substitute Award, the price per share of the shares subject to such Stock Appreciation Right may be less than 100% of the Fair Market Value per share on the date of grant; provided , however , that the excess of: (a) the aggregate Fair Market Value (as of the date such Substitute Award is granted) of the shares subject to the Substitute Award, over (b) the aggregate exercise price thereof does not exceed the excess of (x) the aggregate fair market value (as of the time immediately preceding the transaction giving rise to the Substitute Award, such fair market value to be determined by the Administrator) of the shares of the predecessor entity that were subject to the grant assumed or substituted for by the Company, over (y) the aggregate exercise price of such shares.

9.2 Stock Appreciation Right Vesting .

(a) The period during which the right to exercise, in whole or in part, a Stock Appreciation Right vests in the Participant shall be set by the Administrator and the Administrator may determine that a Stock Appreciation Right may not be exercised in whole or in part for a specified period after it is granted. Such vesting may be based on service with the Company or any Affiliate, the attainment of performance goals or any other criteria selected by the Administrator. At any time after grant of a Stock Appreciation Right, the Administrator may, in its sole discretion and subject to whatever terms and conditions it selects, accelerate the period during which a Stock Appreciation Right vests.

(b) No portion of a Stock Appreciation Right which is unexercisable at Termination of Service shall thereafter become exercisable, except as may be otherwise provided

by the Administrator either in an applicable Program or Award Agreement or by action of the Administrator following the grant of the Stock Appreciation Right.

9.3 Manner of Exercise . All or a portion of an exercisable Stock Appreciation Right shall be deemed exercised upon delivery of all of the following to the stock administrator of the Company, or such other person or entity designated by the Administrator, or his, her or its office, as applicable:

(a) A written or electronic notice complying with the applicable rules established by the Administrator stating that the Stock Appreciation Right, or a portion thereof, is exercised. The notice shall be signed by the Participant or other person then-entitled to exercise the Stock Appreciation Right or such portion of the Stock Appreciation Right;

(c) In the event that the Stock Appreciation Right shall be exercised pursuant to this Section 9.3 by any person or persons other than the Participant, appropriate proof of the right of such person or persons to exercise the Stock Appreciation Right.

9.4 Stock Appreciation Right Term . The term of each Stock Appreciation Right shall be set by the Administrator in its sole discretion; provided , however , that the term shall not be more than ten (10) years from the date the Stock Appreciation Right is granted. The Administrator shall determine the time period, including the time period following a Termination of Service, during which the Participant has the right to exercise the vested Stock Appreciation Rights, which time period may not extend beyond the expiration date of the Stock Appreciation Right term. Except as limited by the requirements of Section 409A of the Code, the Administrator may extend the term of any outstanding Stock Appreciation Right, and may extend the time period during which vested Stock Appreciation Rights may be exercised, in connection with any Termination of Service of the Participant, and may amend any other term or condition of such Stock Appreciation Right relating to such a Termination of Service.

9.5 Payment . Payment of the amounts payable with respect to Stock Appreciation Rights pursuant to this Article 9 shall be in cash, Shares (based on its Fair Market Value as of the date the Stock Appreciation Right is exercised), or a combination of both, as determined by the Administrator.

ARTICLE 10.

ADDITIONAL TERMS OF AWARDS

10.1 Payment . The Administrator shall determine the methods by which payments by any Participant with respect to any Awards granted under the Plan shall be made, including, without

limitation: (a) cash or check, (b) Shares (including, in the case of payment of the exercise price of an Award, Shares issuable pursuant to the exercise of the Award) held for such period of time as may be required by the Administrator in order to avoid adverse accounting consequences, in each case, having a Fair Market Value on the date of delivery equal to the aggregate payments required, (c) delivery of a written or electronic notice that the Participant has placed a market sell order with a broker with respect to Shares then-issuable upon exercise or vesting of an Award, and that the broker has been directed to pay a sufficient portion of the net proceeds of the sale to the Company in satisfaction of the aggregate payments required; provided , however , that payment of such proceeds is then made to the Company upon settlement of such sale, or (d) other form of legal consideration acceptable to the Administrator. The Administrator shall also determine the methods by which Shares shall be delivered or deemed to be delivered to Participants. Notwithstanding any other provision of the Plan to the contrary, no Participant who is a Director or an “executive officer” of the Company within the meaning of Section 13(k) of the Exchange Act shall be permitted to make payment with respect to any Awards granted under the Plan, or continue any extension of credit with respect to such payment with a loan from the Company or a loan arranged by the Company in violation of Section 13(k) of the Exchange Act.

10.2 Tax Withholding . The Company and its Affiliates shall have the authority and the right to deduct or withhold, or require a Participant to remit to the Company or an Affiliate, an amount sufficient to satisfy federal, state, local and foreign taxes (including the Participant’s social security, Medicare and any other employment tax obligation) required by law to be withheld with respect to any taxable event concerning a Participant arising as a result of the Plan. The Administrator may in its sole discretion and in satisfaction of the foregoing requirement allow a Participant to elect to have the Company or an Affiliate withhold Shares otherwise issuable under an Award (or allow the surrender of Shares). The Administrator shall determine the fair market value of the Shares, consistent with applicable provisions of the Code, for tax withholding obligations due in connection with a broker-assisted cashless Option or Stock Appreciation Right exercise involving the sale of shares to pay the Option or Stock Appreciation Right exercise price or any tax withholding obligation.

10.3 Transferability of Awards .

(a) Except as otherwise provided in Section 10.3(b) or (c) hereof:

(i) No Award under the Plan may be sold, pledged, assigned or transferred in any manner other than by will or the laws of descent and distribution or, subject to the consent of the Administrator, pursuant to a DRO, unless and until such Award has been exercised, or the shares underlying such Award have been issued, and all restrictions applicable to such shares have lapsed;

(ii) No Award or interest or right therein shall be liable for the debts, contracts or engagements of the Participant or his successors in interest or shall be subject to disposition by transfer, alienation, anticipation, pledge, hypothecation, encumbrance, assignment or any other means whether such disposition be voluntary or involuntary or by operation of law by judgment, levy, attachment, garnishment or any other legal or equitable proceedings (including bankruptcy) unless and until such Award has been exercised, or the Shares underlying such Award

have been issued, and all restrictions applicable to such Shares have lapsed, and any attempted disposition of an Award prior to the satisfaction of these conditions shall be null and void and of no effect, except to the extent that such disposition is permitted by clause (i) of this provision; and

(iii) During the lifetime of the Participant, only the Participant may exercise an Award (or any portion thereof) granted to him under the Plan, unless it has been disposed of pursuant to a DRO; after the death of the Participant, any exercisable portion of an Award may, prior to the time when such portion becomes unexercisable under the Plan or the applicable Program or Award Agreement, be exercised by his personal representative or by any person empowered to do so under the deceased Participant’s will or under the then applicable laws of descent and distribution.

(b) Notwithstanding Section 10.3(a) hereof, the Administrator, in its sole discretion, may determine to permit a Participant to transfer an Award to any one or more Permitted Transferees, subject to the following terms and conditions: (i) an Award transferred to a Permitted Transferee shall not be assignable or transferable by the Permitted Transferee other than by will or the laws of descent and distribution; (ii) an Award transferred to a Permitted Transferee shall continue to be subject to all the terms and conditions of the Award as applicable to the original Participant (other than the ability to further transfer the Award); and (iii) the Participant and the Permitted Transferee shall execute any and all documents requested by the Administrator, including without limitation, documents to (A) confirm the status of the transferee as a Permitted Transferee, (B) satisfy any requirements for an exemption for the transfer under applicable federal, state and foreign securities laws and (C) evidence the transfer.

(c) Notwithstanding Section 10.3(a) hereof, a Participant may, in the manner determined by the Administrator, designate a beneficiary to exercise the rights of the Participant and to receive any distribution with respect to any Award upon the Participant’s death. A beneficiary, legal guardian, legal representative, or other person claiming any rights pursuant to the Plan is subject to all terms and conditions of the Plan and any Program or Award Agreement applicable to the Participant, except to the extent the Plan, the Program and the Award Agreement otherwise provide, and to any additional restrictions deemed necessary or appropriate by the Administrator. If the Participant is married and resides in a “community property” state, a designation of a person other than the Participant’s spouse as his or her beneficiary with respect to more than 50% of the Participant’s interest in the Award shall not be effective without the prior written or electronic consent of the Participant’s spouse. If no beneficiary has been designated or survives the Participant, payment shall be made to the person entitled thereto pursuant to the Participant’s will or the laws of descent and distribution. Subject to the foregoing, a beneficiary designation may be changed or revoked by a Participant at any time provided the change or revocation is filed with the Administrator prior to the Participant’s death.

10.4 Conditions to Issuance of Shares .

(a) Notwithstanding anything herein to the contrary, neither the Company nor its Affiliates shall be required to issue or deliver any certificates or make any book entries evidencing Shares pursuant to the exercise of any Award, unless and until the Administrator has determined, with advice of counsel, that the issuance of such Shares is in compliance with all applicable laws,

regulations of governmental authorities and, if applicable, the requirements of any exchange on which the Shares are listed or traded, and the Shares are covered by an effective registration statement or applicable exemption from registration. In addition to the terms and conditions provided herein, the Administrator may require that a Participant make such reasonable covenants, agreements, and representations as the Administrator, in its discretion, deems advisable in order to comply with any such laws, regulations, or requirements.

(b) All Share certificates delivered pursuant to the Plan and all shares issued pursuant to book entry procedures are subject to any stop-transfer orders and other restrictions as the Administrator deems necessary or advisable to comply with federal, state, or foreign securities or other laws, rules and regulations and the rules of any securities exchange or automated quotation system on which the Shares are listed, quoted, or traded. The Administrator may place legends on any Share certificate or book entry to reference restrictions applicable to the Shares.

(c) The Administrator shall have the right to require any Participant to comply with any timing or other restrictions with respect to the settlement, distribution or exercise of any Award, including a window-period limitation, as may be imposed in the sole discretion of the Administrator.

(d) No fractional Shares shall be issued and the Administrator shall determine, in its sole discretion, whether cash shall be given in lieu of fractional shares or whether such fractional shares shall be eliminated by rounding down.

(e) Notwithstanding any other provision of the Plan, unless otherwise determined by the Administrator or required by any applicable law, rule or regulation, the Company and/or its Affiliates may, in lieu of delivering to any Participant certificates evidencing Shares issued in connection with any Award, record the issuance of Shares in the books of the Company (or, as applicable, its transfer agent or stock plan administrator).

10.5 Forfeiture Provisions . Pursuant to its general authority to determine the terms and conditions applicable to Awards under the Plan, the Administrator shall have the right to provide, in the terms of Awards made under the Plan, or to require a Participant to agree by separate written or electronic instrument, that: (a) any proceeds, gains or other economic benefit actually or constructively received by the Participant upon any receipt or exercise of the Award, or upon the receipt or resale of any Shares underlying the Award, must be paid to the Company, and (b) the Award shall terminate and any unexercised portion of the Award (whether or not vested) shall be forfeited, if (i) a Termination of Service occurs prior to a specified date, or within a specified time period following receipt or exercise of the Award, or (ii) the Participant at any time, or during a specified time period, engages in any activity in competition with the Company, or which is inimical, contrary or harmful to the interests of the Company, as further defined by the Administrator or (iii) the Participant incurs a Termination of Service for “cause” (as such term is defined in the sole discretion of the Administrator).

10.6 Prohibition on Repricing . Subject to Section 12.2 hereof, the Administrator shall not, without the approval of the stockholders of the Company, (i) authorize the amendment of any outstanding Option or Stock Appreciation Right to reduce its price per share, or (ii) cancel any

Option or Stock Appreciation Right in exchange for cash or another Award when the Option or Stock Appreciation Right price per share exceeds the Fair Market Value of the underlying Shares. Subject to Section 12.2 hereof, the Administrator shall have the authority, without the approval of the stockholders of the Company, to amend any outstanding award to increase the price per share or to cancel and replace an Award with the grant of an Award having a price per share that is greater than or equal to the price per share of the original Award.

ARTICLE 11.

ADMINISTRATION

11.1 Administrator . The Committee (or another committee or a subcommittee of the Board assuming the functions of the Committee under the Plan) shall administer the Plan (except as otherwise permitted herein) and, unless otherwise determined by the Board, shall consist solely of two or more Independent Directors appointed by and holding office at the pleasure of the Board, each of whom is intended to qualify as a “non-employee director” as defined by Rule 16b-3 of the Exchange Act and an “independent director” under the rules of any securities exchange or automated quotation system on which the Shares are listed, quoted or traded, in each case, to the extent required under such provision; provided , however , that any action taken by the Committee shall be valid and effective, whether or not members of the Committee at the time of such action are later determined not to have satisfied the requirements for membership set forth in this Section 11.l or otherwise provided in any charter of the Committee. Except as may otherwise be provided in any charter of the Committee, appointment of Committee members shall be effective upon acceptance of appointment. Committee members may resign at any time by delivering written or electronic notice to the Board. Vacancies in the Committee may only be filled by the Board.

11.2 Duties and Powers of Administrator . It shall be the duty of the Administrator to conduct the general administration of the Plan in accordance with its provisions. The Administrator shall have the power to interpret the Plan and all Programs and Award Agreements, and to adopt such rules for the administration, interpretation and application of the Plan and any Program as are not inconsistent with the Plan, to interpret, amend or revoke any such rules and to amend any Program or Award Agreement provided that the rights or obligations of the holder of the Award that is the subject of any such Program or Award Agreement are not affected adversely by such amendment, unless the consent of the Participant is obtained or such amendment is otherwise permitted under Section 12.10 hereof. Any such grant or award under the Plan need not be the same with respect to each Participant. In its sole discretion, the Board may at any time and from time to time exercise any and all rights and duties of the Committee under the Plan except with respect to matters which under Rule 16b‑3 under the Exchange Act, or the rules of any securities exchange or automated quotation system on which the Shares are listed, quoted or traded are required to be determined in the sole discretion of the Committee.

11.3 Action by the Committee . Unless otherwise established by the Board or in any charter of the Committee, a majority of the Committee shall constitute a quorum and the acts of a majority of the members present at any meeting at which a quorum is present, and acts approved in writing by all members of the Committee in lieu of a meeting, shall be deemed the acts of the Committee. Each member of the Committee is entitled to, in good faith, rely or act upon any report

or other information furnished to that member by any officer or other employee of the Company or any Affiliate, the Company’s independent certified public accountants, or any executive compensation consultant or other professional retained by the Company to assist in the administration of the Plan.

11.4 Authority of Administrator . Subject to any specific designation in the Plan, the Administrator has the exclusive power, authority and sole discretion to:

(a) Adopt procedures from time to time intended to ensure that an individual is an Eligible Individual prior to the granting of any Awards to such individual under the Plan (including without limitation a requirement, if any, that each such individual certify to the Company prior to the receipt of an Award under the Plan that he or she has not been previously employed by the Company or a Subsidiary, or if previously employed, has had a bona fide period of non-employment, and that the grant of Awards under the Plan is an inducement material to his or her agreement to enter into employment with the Company or a Subsidiary);

(b) Designate Eligible Individuals to receive Awards;

(d) Determine the number of Awards to be granted and the number of Shares to which an Award will relate;

(e) Determine the terms and conditions of any Award granted pursuant to the Plan, including, but not limited to, the exercise price, grant price, or purchase price, any performance criteria, any restrictions or limitations on the Award, any schedule for vesting, lapse of forfeiture restrictions or restrictions on the exercisability of an Award, and accelerations or waivers thereof, and any provisions related to non-competition and recapture of gain on an Award, based in each case on such considerations as the Administrator in its sole discretion determines;

(f) Determine whether, to what extent, and pursuant to what circumstances an Award may be settled in, or the exercise price of an Award may be paid in cash, Shares, other Awards, or other property, or an Award may be canceled, forfeited, or surrendered;

(g) Prescribe the form of each Award Agreement, which need not be identical for each Participant;

(h) Decide all other matters that must be determined in connection with an Award;

(i) Establish, adopt, or revise any rules and regulations as it may deem necessary or advisable to administer the Plan;

(j) Interpret the terms of, and any matter arising pursuant to, the Plan, any Program or any Award Agreement; and

(k) Make all other decisions and determinations that may be required pursuant to the Plan or as the Administrator deems necessary or advisable to administer the Plan.

11.5 Actions Required Upon Grant of Award . Following the issuance of any Award under the Plan, the Company shall, in accordance with the listing requirements of the applicable securities exchange, (a) promptly issue a press release disclosing the material terms of the grant, including the recipient(s) of the grant and the number of shares involved and (b) notify the applicable securities exchange of such grant no later than the earlier to occur of (i) five (5) calendar days after entering into the agreement to issue the Award or (ii) the date of the public announcement of the Award.

11.6 Decisions Binding . The Administrator’s interpretation of the Plan, any Awards granted pursuant to the Plan, any Program, any Award Agreement and all decisions and determinations by the Administrator with respect to the Plan are final, binding, and conclusive on all parties.

11.7 Delegation of Authority . To the extent permitted by applicable law or the rules of any securities exchange or automated quotation system on which the Shares are listed, quoted or traded, the Board or Committee may from time to time delegate to a committee of one or more members of the Board or one or more officers of the Company the authority to amend Awards or to take other administrative actions pursuant to this Article 11; provided , however , that in no event shall an officer of the Company be delegated the authority to (a) grant awards or (b) amend awards held by the following individuals: (i) individuals who are subject to Section 16 of the Exchange Act or (ii) officers of the Company (or Directors) to whom authority to amend Awards has been delegated hereunder; provided further , that any delegation of administrative authority shall only be permitted to the extent it is permissible under applicable securities laws or the rules of any securities exchange or automated quotation system on which the Shares are listed, quoted or traded. Any delegation hereunder shall be subject to the restrictions and limits that the Board or Committee specifies at the time of such delegation, and the Board may at any time rescind the authority so delegated or appoint a new delegatee. At all times, the delegatee appointed under this Section 11.7 shall serve in such capacity at the pleasure of the Board and the Committee. Notwithstanding anything to the contrary provided herein (x) Awards shall be approved by (i) the Company’s Compensation Committee comprised of a majority of the Company’s Independent Directors or (ii) a majority of the Company’s Independent Directors and (y) the authority to grant Awards shall not be delegated under any circumstances.

ARTICLE 12.

MISCELLANEOUS PROVISIONS

12.1 Amendment, Suspension or Termination of the Plan . Except as otherwise provided in this Section 12.1, the Plan may be wholly or partially amended or otherwise modified, suspended or terminated at any time or from time to time by the Board. However, without approval of the Company’s stockholders given within twelve (12) months before or after the action by the Administrator, no action of the Administrator may, except as provided in Section 12.2 hereof, (i) reduce the price per share of any outstanding Option or Stock Appreciation Right granted under the

Plan or (ii) cancel any Option or Stock Appreciation Right in exchange for cash or another Award in violation of Section 10.6 hereof. Except as provided in Section 12.10 hereof, no amendment, suspension or termination of the Plan shall, without the consent of the Participant, impair any rights or obligations under any Award theretofore granted or awarded, unless the Award itself otherwise expressly so provides. No Awards may be granted or awarded during any period of suspension or after termination of the Plan.

12.2 Changes in Common Stock or Assets of the Company, Acquisition or Liquidation of the Company and Other Corporate Events .

(f) In the event of any stock dividend, stock split, combination or exchange of shares, merger, consolidation or other distribution (other than normal cash dividends) of Company assets to stockholders, or any other change affecting the shares of the Company’s stock or the share price of the Company’s stock other than an Equity Restructuring, the Administrator shall make equitable adjustments, if any, to reflect such change with respect to (i) the aggregate number and kind of shares that may be issued under the Plan (including, but not limited to, adjustments of the Share Limit); (ii) the number and kind of shares of Common Stock (or other securities or property) subject to outstanding Awards; (iii) the terms and conditions of any outstanding Awards (including, without limitation, any applicable performance targets or criteria with respect thereto); and/or (iv) the grant or exercise price per share for any outstanding Awards under the Plan.

(g) In the event of any transaction or event described in Section 12.2(a) hereof or any unusual or nonrecurring transactions or events affecting the Company, any Affiliate of the Company, or the financial statements of the Company or any Affiliate, or of changes in applicable laws, regulations or accounting principles, the Administrator, in its sole discretion, and on such terms and conditions as it deems appropriate, either by the terms of the Award or by action taken prior to the occurrence of such transaction or event and either automatically or upon the Participant’s request, is hereby authorized to take any one or more of the following actions whenever the Administrator determines that such action is appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Plan or with respect to any Award under the Plan, to facilitate such transactions or events or to give effect to such changes in laws, regulations or principles:

(i) To provide for either (A) termination of any such Award in exchange for an amount of cash, if any, equal to the amount that would have been attained upon the exercise of such Award or realization of the Participant’s rights (and, for the avoidance of doubt, if as of the date of the occurrence of the transaction or event described in this Section 12.2, the Administrator determines in good faith that no amount would have been attained upon the exercise of such Award or realization of the Participant’s rights, then such Award may be terminated by the Company without payment) or (B) the replacement of such Award with other rights or property selected by the Administrator in its sole discretion having an aggregate value not exceeding the amount that could have been attained upon the exercise of such Award or realization of the Participant’s rights had such Award been currently exercisable or payable or fully vested;

(ii) To provide that such Award be assumed by the successor or survivor corporation, or a parent or subsidiary thereof, or shall be substituted for by similar options, rights

or awards covering the stock of the successor or survivor corporation, or a parent or subsidiary thereof, with appropriate adjustments as to the number and kind of shares and prices;

(iii) To make adjustments in the number and type of securities subject to outstanding Awards and Awards which may be granted in the future and/or in the terms, conditions and criteria included in such Awards (including the grant or exercise price, as applicable);

(iv) To provide that such Award shall be exercisable or payable or fully vested with respect to all securities covered thereby, notwithstanding anything to the contrary in the Plan or an applicable Program or Award Agreement; and

(v) To provide that the Award cannot vest, be exercised or become payable after such event.

(h) In connection with the occurrence of any Equity Restructuring, and notwithstanding anything to the contrary in Sections 12.2(a) and 12.2(b) hereof:

(i) The number and type of securities subject to each outstanding Award and the exercise price or grant price thereof, if applicable, shall be equitably adjusted; and/or

(ii) The Administrator shall make such equitable adjustments, if any, as the Administrator in its discretion may deem appropriate to reflect such Equity Restructuring with respect to the aggregate number and kind of shares that may be issued under the Plan (including, but not limited to, adjustments to the Share Limit and the Individual Award Limits). The adjustments provided under this Section 12.2(c) shall be nondiscretionary and shall be final and binding on the affected Participant and the Company.

(i) Notwithstanding any other provision of the Plan, in the event of a Change in Control, each outstanding Award shall be assumed or an equivalent Award substituted by the successor corporation or a parent or subsidiary of the successor corporation. For the purposes of this Section 12.2(d), an Award shall be considered assumed or substituted if, following the Change in Control, the assumed or substituted Award confers the right to purchase or receive, for each share of Common Stock subject to the Award immediately prior to the Change in Control, the consideration (whether stock, cash, or other securities or property) received in the Change in Control by holders of Common Stock for each Share held on the effective date of the transaction (and if holders were offered a choice of consideration, the type of consideration chosen by the holders of a majority of the outstanding shares); provided , however , that if such consideration received in the Change in Control was not solely common stock of the successor corporation or its parent, the Administrator may, with the consent of the successor corporation, provide for the consideration to be received upon the exercise of the assumed or substituted Award, for each share of Common Stock subject to such Award, to be solely common stock of the successor corporation or its parent equal in fair market value to the per share consideration received by holders of Common Stock in the Change in Control.

(j) In the event that the successor corporation in a Change in Control and its parents and subsidiaries refuse to assume or substitute for any Award in accordance with Section

12.2(d) hereof, each such non-assumed/substituted Award shall become fully vested and, as applicable, exercisable and shall be deemed exercised, immediately prior to the consummation of such transaction, and all forfeiture restrictions on any or all such Awards shall lapse at such time. If an Award vests and, as applicable, is exercised in lieu of assumption or substitution in connection with a Change in Control, the Administrator shall notify the Participant of such vesting and any applicable exercise , and the Award shall terminate upon the Change in Control. For the avoidance of doubt, if the value of an Award that is terminated in connection with this Section 12.2(e) is zero or negative at the time of such Change in Control, such Award shall be terminated upon the Change in Control without payment of consideration therefor.

(k) The Administrator may, in its sole discretion, include such further provisions and limitations in any Award, agreement or certificate, as it may deem equitable and in the best interests of the Company that are not inconsistent with the provisions of the Plan.

(l) No adjustment or action described in this Section 12.2 or in any other provision of the Plan shall be authorized with respect to any Award to the extent such adjustment or action would result in short-swing profits liability under Section 16 or violate the exemptive conditions of Rule 16b-3 unless the Administrator determines that the Award is not to comply with such exemptive conditions.

(m) The existence of the Plan, the Program, the Award Agreement and the Awards granted hereunder shall not affect or restrict in any way the right or power of the Company or the stockholders of the Company to make or authorize any adjustment, recapitalization, reorganization or other change in the Company’s capital structure or its business, any merger or consolidation of the Company, any issue of stock or of options, warrants or rights to purchase stock or of bonds, debentures, preferred or prior preference stocks whose rights are superior to or affect the Common Stock or the rights thereof or which are convertible into or exchangeable for Common Stock, or the dissolution or liquidation of the Company, or any sale or transfer of all or any part of its assets or business, or any other corporate act or proceeding, whether of a similar character or otherwise.

(n) No action shall be taken under this Section 12.2 which shall cause an Award to fail to comply with Section 409A of the Code to the extent applicable to such Award, unless the Administrator determines any such adjustments to be appropriate.

(o) In the event of any pending stock dividend, stock split, combination or exchange of shares, merger, consolidation or other distribution (other than normal cash dividends) of Company assets to stockholders, or any other change affecting the shares of Common Stock or the share price of the Common Stock including any Equity Restructuring, for reasons of administrative convenience, the Company in its sole discretion may refuse to permit the exercise of any Award during a period of thirty (30) days prior to the consummation of any such transaction.

12.3 No Stockholders Rights . Except as otherwise provided herein or in an Award Agreement, a Participant shall have none of the rights of a stockholder with respect to shares of Common Stock covered by any Award until the Participant becomes the record owner of such shares of Common Stock.

12.4 Paperless Administration . In the event that the Company establishes, for itself or using the services of a third party, an automated system for the documentation, granting or exercise of Awards, such as a system using an internet website or interactive voice response, then the paperless documentation, granting or exercise of Awards by a Participant may be permitted through the use of such an automated system.

12.5 Effect of Plan upon Other Compensation Plans . The adoption of the Plan shall not affect any other compensation or incentive plans in effect for the Company or any Affiliate. Nothing in the Plan shall be construed to limit the right of the Company or any Affiliate: (a) to establish any other forms of incentives or compensation for Employees of the Company or any Affiliate, or (b) to grant or assume options or other rights or awards otherwise than under the Plan in connection with any proper corporate purpose including without limitation, the grant or assumption of options in connection with the acquisition by purchase, lease, merger, consolidation or otherwise, of the business, stock or assets of any corporation, partnership, limited liability company, firm or association.

12.6 Compliance with Laws . The Plan, the granting and vesting of Awards under the Plan and the issuance and delivery of Shares and the payment of money under the Plan or under Awards granted or awarded hereunder are subject to compliance with all applicable federal, state, local and foreign laws, rules and regulations (including but not limited to state, federal and foreign securities law and margin requirements), the rules of any securities exchange or automated quotation system on which the Shares are listed, quoted or traded, and to such approvals by any listing, regulatory or governmental authority as may, in the opinion of counsel for the Company, be necessary or advisable in connection therewith. Any securities delivered under the Plan shall be subject to such restrictions, and the person acquiring such securities shall, if requested by the Company, provide such assurances and representations to the Company as the Company may deem necessary or desirable to assure compliance with all applicable legal requirements. To the extent permitted by applicable law, the Plan and Awards granted or awarded hereunder shall be deemed amended to the extent necessary to conform to such laws, rules and regulations.

12.7 Titles and Headings, References to Sections of the Code or Exchange Act . The titles and headings of the sections in the Plan are for convenience of reference only and, in the event of any conflict, the text of the Plan, rather than such titles or headings, shall control. References to sections of the Code or the Exchange Act shall include any amendment or successor thereto.

12.8 Governing Law . The Plan and any agreements hereunder shall be administered, interpreted and enforced under the internal laws of the State of California without regard to conflicts of laws thereof.

12.9 Section 409A . To the extent that the Administrator determines that any Award granted under the Plan is subject to Section 409A of the Code, the Plan, any applicable Program and the Award Agreement covering such Award shall be interpreted in accordance with Section 409A of the Code. Notwithstanding any provision of the Plan to the contrary, in the event that, following the Effective Date, the Administrator determines that any Award may be subject to Section 409A of the Code, the Administrator may adopt such amendments to the Plan, any applicable Program and the Award Agreement or adopt other policies and procedures (including amendments,

policies and procedures with retroactive effect), or take any other actions, that the Administrator determines are necessary or appropriate to avoid the imposition of taxes on the Award under Section 409A of the Code, either through compliance with the requirements of Section 409A of the Code or with an available exemption therefrom. Notwithstanding the foregoing, nothing herein shall create any obligation on the part of the Administrator or the Company or its Affiliates to take any action described in this Section 12.9 or give rise to any liability on the part of the Administrator or the Company or its Affiliates for failing to take any such action.

12.10 No Rights to Awards . No Eligible Individual or other person shall have any claim to be granted any Award pursuant to the Plan, and neither the Company nor the Administrator is obligated to treat Eligible Individuals or any other persons uniformly.

12.11 Unfunded Status of Awards . The Plan is intended to be an “unfunded” plan for incentive compensation. With respect to any payments not yet made to a Participant pursuant to an Award, nothing contained in the Plan or any Program or Award Agreement shall give the Participant any rights that are greater than those of a general creditor of the Company or any Affiliate.

12.12 Indemnification . To the extent allowable pursuant to applicable law, each member of the Board and any officer or other employee to whom authority to administer any component of the Plan is delegated shall be indemnified and held harmless by the Company from any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by such member in connection with or resulting from any claim, action, suit, or proceeding to which he or she may be a party or in which he or she may be involved by reason of any action or failure to act pursuant to the Plan and against and from any and all amounts paid by him or her in satisfaction of judgment in such action, suit, or proceeding against him or her; provided , however , that he or she gives the Company an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his or her own behalf. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled pursuant to the Company’s Certificate of Incorporation or Bylaws, as a matter of law, or otherwise, or any power that the Company may have to indemnify them or hold them harmless.

12.13 Relationship to other Benefits . No payment pursuant to the Plan shall be taken into account in determining any benefits under any pension, retirement, savings, profit sharing, group insurance, welfare or other benefit plan of the Company or any Affiliate except to the extent otherwise expressly provided in writing in such other plan or an agreement thereunder.

12.14 Expenses . The expenses of administering the Plan shall be borne by the Company and its Affiliates.

ARTICLE 13.

STOCKHOLDER APPROVAL

13.1 Stockholder Approval Not Required . It is expressly intended that approval of the Company’s stockholders not be required as a condition of the effectiveness of the Plan or the Original Plan, and the Plan’s provisions shall be interpreted in a manner consistent with such intent for all

purposes. Specifically, (a) New York Stock Exchange Rule 303A.08 generally requires stockholder approval for equity-compensation plans adopted by companies whose securities are listed on the New York Stock Exchange, and (b) Nasdaq Stock Market Rule 5635(c) generally requires stockholder approval for stock option plans or other equity compensation arrangements adopted by companies whose securities are listed on the Nasdaq Stock Market pursuant to which stock awards or stock may be acquired by officers, directors, employees or consultants of such companies. New York Stock Exchange Rule 303A.08 and Nasdaq Stock Market Rule 5635(c)(4) each provides an exemption in certain circumstances for “employment inducement” awards (within the meaning of New York Stock Exchange Rule 303A.08 and Nasdaq Stock Market Rule 5635(c)(4)). Notwithstanding anything to the contrary herein, (w) if the Company’s securities are traded on the New York Stock Exchange, then Awards under the Plan may only be made to Employees who are being hired by the Company or a Subsidiary, or being rehired following a bona fide period of interruption of employment by the Company or a Subsidiary and (x) if the Company’s securities are traded on the Nasdaq Stock Market, then Awards under the Plan may only be made to Employees who have not previously been an Employee or director of the Company or a Subsidiary, or following a bona fide period of non-employment by the Company or a Subsidiary, in each case as an inducement material to the Employee’s entering into employment with the Company or a Subsidiary. Awards under the Plan will be approved by (y) the Company’s Compensation Committee comprised of a majority of the Company’s Independent Directors or (z) a majority of the Company’s Independent Directors. Accordingly, pursuant to New York Stock Exchange Rule 303A.08 and Nasdaq Stock Market Rule 5635(c)(4), the issuance of Awards and the shares of Stock issuable upon exercise or vesting of such Awards pursuant to the Plan are not subject to the approval of the Company’s stockholders.

[ signature page follows ]

* * * * *

I hereby certify that the Original Plan was duly adopted by the Board of Directors of On Assignment, Inc. on May 14, 2012.

* * * * *

I hereby certify that the Plan was duly adopted by the Board of Directors of On Assignment, Inc. as of December 13, 2012.

Tarini Ramaprakash, Corporate Secretary

Exhibit 10.29

APEX SYSTEMS, INC.

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this “Agreement”), made as of January 15, 2008, by and between THEODORE S. HANSON (the "Employee") and APEX SYSTEMS, INC. , a Virginia corporation (the "Company"), provides:

In consideration of the mutual covenants herein contained, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Employee and the Company agree as follows:

1. Employment . The Company hereby employs the Employee, and the Employee hereby accepts employment with the Company to serve as Treasurer and Chief Financial Officer of the Company, upon and subject to the terms and conditions hereafter set forth.

2. Term of Employment . The term of this Agreement and of the Employee's employment with the Company shall be for the period beginning on the date hereof and ending on December 31, 2008, unless sooner terminated in the manner herein provided. This Agreement shall automatically renew from year-to-year unless terminated as provided herein.

3. Duties . The Employee shall perform to the very best of his ability and in the best interests of the Company all executive, managerial and other duties both (i) mandated for the offices of Treasurer and Chief Financial Officer pursuant to the By-laws of the Company as in force and effect from time to time and (ii) reasonably assigned to him by the Board of Directors of the Company. The Employee shall perform his duties hereunder on a full time and exclusive basis to the Company and such duties shall be performed at the offices of the Company or other reasonable location as determined by the Board of Directors.

4. Compensation .

4.1 Salary and Bonus . The Company shall pay to the Employee an annual salary at a rate not less than $250,000 per year and such additional salary and bonus as determined by the Board of Directors of the Company. The Company, during the term of the Employee's employment, shall pay to the Employee his salary in equal weekly installments.

4.2 Severance Pay . (a) In the event that the Employee's employment hereunder is terminated for any reason other than as described under Section 7.4(b) below, including the Employee’s resignation or the non-renewal of this Agreement, the Company shall have no further obligation to the Employee except to pay any unpaid

and annual accrued salary up to the effective date of such termination. Such accrued salary shall be paid within fifteen (15) days of Employee’s termination of employment.

(b) If the Employee’s employment hereunder is terminated pursuant to Section 7.4(b) below, then the Employee shall receive severance pay on a monthly basis for a period of twelve (12) months after the effective date of the Employee’s termination hereunder in any amount equal to the difference between one-twelfth (1/12) of his then current annual salary for each given month less any disability insurance payments which the Employee receives in such give month pursuant to any disability insurance policies insuring the Employee which are owned or purchased by the Company.

4.3 Withholdings . The Company shall withhold any applicable federal or state income tax, social security taxes or other taxes from the Employee’s compensation paid hereunder.

5. Paid Time Off . During the term of this Agreement, the Employee shall be entitled to thirty (30) business days of paid time off per year for vacation, sick, education and other purposes for each calendar year, without loss of pay and such other additional business days authorized by the Board of Directors of the Company. Such paid time off leave shall (a) be non-cumulative in that any unused leave may not be carried over to a subsequent year and (b) be forfeited to the extent unused as of the effective date of termination or non-renewal of this Agreement.

6. Benefits . During the term of the Employee's employment, the Employee shall receive and be entitled to participate in all benefits (in amounts as determined by the Board of Directors) offered or provided to Brian J. Callaghan, Edwin A. Sheridan, IV and Jeffrey E. Veatch (the “Executive Officers”). The Company shall reimburse the Employee for all reasonable travel, entertainment and similar expenses incurred in the promotion of the Company's business according to the same standards that are applicable to the Executive Officers. ANY REIMBURSEMENT OF REASONABLE BUSINESS EXPENSES SHALL BE MADE BY THE EARLIER OF: (A) THE TIME PERIOD REQUIRED BY THE COMPANY’S REGULAR POLICY IN EFFECT AT THE TIME THE EMPLOYEE INCURS THE REIMBURSABLE EXPENSE; OR (B) THE LAST DAY OF THE CALENDAR YEAR FOLLOWING THE CALENDAR YEAR IN WHICH THE EMPLOYEE INCURS THE EXPENSE.

7. Termination of Employment .

7.1 Termination Without Cause . This Agreement may be terminated without cause by either party delivering to the other one hundred twenty (120) days written notice of termination prior to the date of termination specified in the notice. For purposes hereof, any termination pursuant to this Section 7.1 shall be deemed a termination “Without Cause”.

7.2 Termination for Cause by the Company . This Agreement may be terminated by the Company immediately upon and without an opportunity to cure upon the occurrence of any of the following:

(a) The conviction of the Employee for any felony or crime of moral turpitude;

(b) The breach of any of the material terms of this Agreement by the Employee as reasonably determined by the majority vote of the Board of Directors of the Company provided such breach continues for more than thirty (30) days after the Company has delivered written notice thereof to the Employee; or

(c) The commission of an act of fraud or dishonesty against the Company as reasonably determined by the majority vote of the Board of Directors of the Company.

For purposes hereof, any termination pursuant to this Section 7.2 shall be deemed a termination “With Cause”.

7.3 Termination for Cause by the Employee . If the Company breaches any of the material terms of this Agreement and such breach continues for more than thirty (30) days the Employee has delivered written notice thereof to the Company, this Agreement may be terminated by the Employee immediately upon delivery of notice to the Company.

For purposes hereof, any termination pursuant to this Section 7.2 shall be deemed a termination “With Cause”.

7.4 Automatic Termination . This Agreement shall automatically terminate upon the occurrence of any of the following:

(a) The death of the Employee; or

(b) The disability of the Employee. For purposes of this Agreement, the Employee shall be deemed to have suffered a disability if a physician licensed to practice medicine in Virginia, as chosen by the Co-Chief Executive Officer and Secretary of the Company (unless the employee is then the Co-Chief Executive Officer and Secretary, in which case the next highest ranking officer, which shall be the Co-Chief Executive Officer and Chairman of the Board, Co-Chief Executive Officer and President, in that order who shall choose the physician), opines in writing to the Board of Directors of the Company will cause the employee to be for a period more than 12 months unable to fulfill his normal duties and responsibilities as an officer and/or employee of the Company by reason of accident, physical illness or mental illness. If the Employee disputes such physician's opinion, he shall choose another physician licensed to practice medicine in Virginia who shall render a separate written opinion to the Board of Directors of the Company with reasonable speed. In the event the two opinions are at variance, such two physicians shall be asked to agree on a third physician licensed to practice medicine in Virginia to render a third or final opinion with

reasonable speed. The written opinion of such third physician shall be controlling on the issue in question upon its receipt by the Board of Directors of the Company. The fees of any or all of such physicians shall be paid by the Company. Notwithstanding anything to the contrary above, in the event that the Company is beneficiary of a permanent disability insurance policy covering the Employee which provides for a lump sum benefit, and if the Employee has not yet been designated as disabled as provided hereunder, the Employee shall be deemed disabled on the date that he is so deemed under the aforementioned insurance policy. The effective date of the Employee’s termination hereunder due to disability shall be the earlier of (i) the date on which the first opinion or, in the event that the Employee disputes such, the third and final opinion of a physician is delivered to the Board of Directors of the Company or (ii) the date the Employee is deemed disabled under an insurance policy described above.

8. Confidential Information . As consideration for and to induce the employment of the Employee by the Company, the Employee hereby covenants and agrees that:

(a) All information relating to or used in the business and operation of the Company (including but not limited to proprietary business methods, billing methods, identities of accounts and customers, product and service development information, computer and computer software design information and manufacturing information, if any), whether prepared, compiled, developed, or obtained by the Employee or by other employees or members of the Company, prior to or during the term of the employment of the Employee, are and shall be confidential information and/or the trade secrets and the exclusive property of the Company.

(b) All data and information relating to the businesses and operations of customers of the Company, whether prepared, compiled, developed or obtained by the Employee or by other employees or the Company or its customers prior to or during the term of the employment of the Employee, are and shall be confidential information and the exclusive property of the Company or its customers, or both.

(c) All records of and materials relating to trade secrets of the Company and to confidential information which are the property of the Company or its customers, or both, whether in written form or in a form produced or stored by any electrical or mechanical means or process (including, but not limited to, drawings, diagrams, work notes, cards, tapes, diskettes, studies, reports and correspondence), whether prepared, compiled or obtained by the Employee or by other employees or the Company or its customers prior to or during the term of the employment of the Employee, shall be the exclusive property of the Company or its customers, or both.

(d) Except in the regular course of his employment by the Company or as the Company may expressly authorize or direct in writing, the Employee shall not, during or after the term of his employment, copy, reproduce, disclose or divulge to others, use or permit others to use any trade secrets of the Company or any confidential information which is the property of the Company or its customers, or any records of or materials relating to any such trade secrets or confidential information. The Employee further covenants and agrees that during the term of his employment he

shall not remove from the custody and control of the Company any records or any materials relating to such trade secrets and confidential information and that upon the termination of his employment he shall deliver all such material to the Company. Notwithstanding anything to the contrary, the Employee shall not be deemed in violation of this Section if he is required to testify or produce documents pursuant to any court order, notice of deposition or subpoena related to any litigation or governmental proceeding or investigation provided that the Employee has given the Company reasonable prior written notice of such testimony or document production so that the Company may take such action as it desires to protect its trade secrets and confidential information.

9. Covenant Not To Compete . As consideration for and to induce the employment of the Employee by the Company, the Employee hereby covenants and agrees that:

(a) Beginning on the date of the termination of this Agreement for any reason, including resignation by the Employee or the non-renewal hereof, and continuing for the period of one (1) year thereafter, he will not (i) offer or provide any technical personnel staffing services to any “Customers” of the Company or (ii) directly or indirectly, own, manage, operate, join, control, or participate in the ownership, management, operation, or control of, or serve as an employee, agent, or representative of, any corporation, association, partnership, proprietorship or other business entity that (A) provides technical personnel staffing services within a twenty-five (25) mile radius of (i) any office of the Company which is in operation as of such termination (the “Restricted Territory”) and (B) employs or uses the Employee in any capacity related to the providing of technical personnel staffing services within the Restricted Territory. For purposes hereof, “Customer” shall mean any person to which the Company has provided of technical personnel staffing services within the Restricted Territory within the twelve (12) month period immediately preceding the termination of this Agreement.

(b) All the business relationships which the Company has with its customers are valuable assets and, accordingly, the Employee will take no action which would reasonably be expected to either undermine the ownership of such assets or interfere with the full enjoyment of such assets by the Company.

10. Non-Hiring of Employer’s Employees . As consideration for and to induce the employment of the Employee by the Company, the Employee hereby covenants and agrees that beginning on the date of the termination of this Agreement, for any reason, including the resignation of the Employee or the non-renewal hereof, and continuing for a period of one (1) year thereafter, the Employee shall not directly solicit to hire or hire any employee of the Company for the Employee’s own account or for the account of any other person or entity, besides the Company, for any reason whatsoever. For purposes hereof, “employee of the Company” shall mean any person who is or was employed by the Company at the time during the one (1) year period immediately preceding the date on which the Employee solicits to hire such person.

11. Special Remedies . The Employee hereby covenants and agrees that:

(a) Any breach or threatened breach by him of Sections 8, 9, and 10 above will result in irreparable injury and damage to the Company for which the Company would have no adequate remedy at law because the duties which he rendered to the Company were of a special, unique and extraordinary character. The Employee further agrees that in the event of such a breach, that the Company shall be entitled to an immediate injunction to prevent such violations and to all costs and expenses incurred as a result, including reasonable attorney’s fees, in addition to any other remedies, including damages.

(b) The geographical area, activity and time period restrictions imposed upon him in Sections 8, 9 and 10 above, as the case may be, are fair and reasonably required for the protection of the Company. Each of Sections 8, 9 and 10, and the separate sections, paragraphs and items within such sections, are separate covenants. However, if a court of competent jurisdiction shall refuse to enforce all of the separate covenants of the aforementioned Sections, then such unenforceable covenants shall be separated from the provisions hereof to the extent necessary to permit the remaining covenants to be enforced. In the event that a court of competent jurisdiction determines that the geographical area, activity or time period restrictions exceed whatever standards which the court deems enforceable, then such restrictions shall be reformed by such court and be applicable for such lesser geographical area, activity or time period. The parties agree to be bound by such judicial modification with the same force and effect as if such modification were contained in the covenants in the first instance.

(c) In the event that a legal action is commenced with respect to any of the provisions of this Section to enforce Section 9 above, the one (1) year period described in Section 9 shall run from the date of any Final Judicial Determination of such legal action. "Final Judicial Determination" shall mean the day on which the time to appeal from a final judgment in such legal action expires or, if an appeal be taken, the day on which a final determination of the appellate proceeding occurs.

12. Survival . The agreements and covenants made by the Employee in and the obligations of the Employee under Sections 8, 9, 10 and 11 above shall survive the expiration of this Agreement and the termination of the employment of the Employee hereunder. Each such agreement and covenant by the Employee shall be construed as a covenant and agreement independent of any other provisions herein, and the existence of any claim or cause of action by the Employee against the Company shall not constitute a defense to the enforcement of provisions of any such covenant or agreement.

13. Consent to Jurisdiction and Venue . The Employee hereby irrevocably submits to the non-exclusive jurisdictions of any Circuit Court of the Commonwealth of Virginia or United States District Court located in the City of Richmond or the County of Henrico, Virginia , in any action or proceeding arising out of, or relating to, this Agreement, and the Employee hereby irrevocably agrees that all claims in respect of

any such action or proceeding may be heard and determined in such court. The Employee agrees that a final judgment in any action or proceeding shall, to the extent permitted by applicable law, be conclusive and may be enforced in other jurisdictions by suit on the judgment, or in any other manner provided by applicable law related to the enforcement of judgments. Nothing contained herein shall affect the Employee’s right to appeal.

14. Attorneys’ Fees . If any action or proceeding is brought to enforce any rights or obligations hereunder, the party that substantially prevails in such action or proceeding shall be reimbursed by the other party for all costs and expenses (including any reasonable attorneys’ fees) incurred by such party with respect to such action or proceeding. Such reimbursement shall be payable upon demand.

15. Assignment . The Employee acknowledges that this Agreement is a personal services contract. Accordingly, this Agreement may not be assigned by the Employee without the prior written consent of the Company. Notwithstanding the foregoing, in the event that all or substantially all the assets of the Company are sold to any person or entity, the Company in its sole discretion shall have the right to assign this Agreement in connection with such sale to the pertinent purchaser and this Agreement shall continue in full force and effect. Similarly, if there is a merger, consolidation, share exchange of the Company with another entity and such other entity is the survivor of such transaction (that is, the Company does not survive), this Agreement shall be deemed automatically assigned to such other entity and continue in full and force and effect.

16. Notices . All notices, consents, and other communications to, upon, and between the respective parties hereto shall be in writing and shall be deemed to have been given, delivered, or made when sent or mailed by registered or certified mail, postage prepaid, and return receipt requested addressed to the Company at 2235 Staples Mill Road, Suite 200, Richmond, Virginia 23230 and to the Employee at his address shown upon the employment records of the Company.

17. Modification . No provision of this Agreement, including any provision of this Section, may be modified, deleted or amended in any manner except by an agreement in writing executed by the parties hereto.

18. Benefit . All of the terms of this Agreement shall be binding upon, inure to the benefit of and be enforceable by the Company and its successors and assigns and by the Employee and his personal representatives.

19. Severability . In the event that any part of this Agreement shall be held to be unenforceable or invalid, the remaining parts shall nevertheless continue to be valid and enforceable as though the invalid portions were not a part hereof.

20. Construction . This Agreement is executed and delivered in the Commonwealth of Virginia and shall be construed and enforced in accordance with the laws of such state.

21. Headings . The underlined headings provided herein are for convenience only and shall not affect the interpretation of this Agreement.

22. Counterparts . This Agreement may be executed in one or more counterparts, each of which shall be deemed as original.

23. Employee Stock Ownership .

23.1 Issuance of Additional Shares . (a) The Company acknowledges, as of the date hereof, the Employee owns, and has been issued certificates representing, five percent (5%) of the outstanding common stock of the Company. The Company agrees that, in the event there is an Extraordinary Event (as defined below), the Company shall issue immediately prior to such Extraordinary Event 43,263 additional shares of common stock of the Company (the “Additional Shares”). For purposes hereof, an Extraordinary Event shall mean the first to occur of any of the following events; (i) a dissolution or liquidation of the Company, or (ii) a sale of all or substantially all of the assets of the Company, or (iii) a merger or share exchange in which the Company is not the surviving Company, or (iv) other capital reorganization in which more than thirty-three and one-third percent (33-1/3%) of the shares of the Company entitled to vote are exchanged in a single transaction or related series of transactions for an ownership interest in another entity which is not affiliated with the Company, or (v) the Company has an initial public offering, or (vi) the Employee’s employment with the Company is terminated for any reason at any time within one hundred twenty (120) days prior to the occurrence of any of the events described in the preceding items (i) through (v).

(b) In the event of any stock dividend or stock split, split-up, spin-off, recapitalization or partial liquidation of the Company, or if for any other reason, the shares of any class of stock of the Company shall be changed into the same or a different number of shares of the same or another class or classes of stock, then the number of Additional Shares shall be appropriately increased or decreased so that the Employee owns, and has been issued certificates representing, five percent (5%) of the Adjusted Outstanding Shares (as defined below) of the Company taking into account the amount of shares which he owns immediately before such issuance immediately prior to an Extraordinary Event. For purposes hereof, Adjusted Outstanding Shares shall be the sum of (i) the number of all outstanding shares of common stock of the Company, (ii) the number of fully vested option shares that any employee of the Company has an option to purchase under any outstanding incentive stock option grant pursuant to the 2000 Incentive Stock Option Plan (as amended from time to time) and (iii) the number of fully vested “Performance Units” that any employee or independent contractor of the Company has been awarded under any outstanding “Top

Performers Equity Plan Notice of Grant” pursuant to the Top Performers Equity Plan (as amended from time to time).

23.2 Certain Tax Treatment . The Company’s issuance of additional shares of common stock pursuant to Section 2.3.1 above (the “Additional Shares”) shall be deemed compensation paid to the Employee for federal and state income tax purposes. The fair market value of the Additional Shares shall be determined by the Company’s Board of Directors in its sole discretion. The Employee shall be responsible for and shall promptly pay to the Company, the Employee’s portion of applicable federal and state income tax withholdings incurred in connection with such stock issuance. On the date that the Company issues the Additional Shares, the Company shall pay to the Employee a bonus equal to a grossed up before-tax amount calculated so that the after-tax amount payable to the Employee equals the federal and state income taxes that the Employee must pay in connection with such stock issuance.

24. CODE SECTION 409A COMPLIANCE . TO THE EXTENT THAT ANY PAYMENT OR BENEFIT UNDER THE EMPLOYMENT AGREEMENT CONSTITUTES A “DEFERRAL OF COMPENSATION” SUBJECT TO CODE SECTION 409A, THEN, NOTWITHSTANDING ANYTHING IN THE EMPLOYMENT AGREEMENT TO THE CONTRARY, SUCH PAYMENTS OR BENEFITS THAT ARE TO BE PAID UPON THE EMPLOYEE’S TERMINATION OF EMPLOYMENT SHALL NOT BE PAID TO THE EMPLOYEE UNTIL THE EMPLOYEE HAS EXPERIENCED A “SEPARATION FROM SERVICE” AS DEFINED IN CODE SECTION 409A FROM THE COMPANY OR AN AFFILIATE WHO IS TREATED AS THE EMPLOYER UNDER CODE SECTION 409A (COLLECTIVELY THE “COMPANY”), PROVIDED FURTHER THAT, IF THE EMPLOYEE IS A “SPECIFIED EMPLOYEE” (WITHIN THE MEANING OF CODE SECTION 409A AND AS DETERMINED BY THE COMPANY IN ACCORDANCE WITH CODE SECTION 409A), SUCH PAYMENT OR BENEFIT SHALL BE DELAYED FOR 6 MONTHS AFTER THE DATE OF EMPLOYEE’S SEPARATION FROM SERVICE (OR, IF EARLIER THAN THE END OF SUCH 6-MONTH PERIOD, THE DATE OF EMPLOYEE’S DEATH). TO THE EXTENT ANY PAYMENT OR BENEFIT HEREUNDER IS SUBJECT TO THE 6-MONTH DELAY, SUCH PAYMENT OR BENEFIT SHALL BE PAID IMMEDIATELY AFTER THE END OF SUCH 6-MONTH PERIOD (OR THE DATE OF DEATH, IF EARLIER). THE PROVISIONS OF THE EMPLOYMENT AGREEMENT GOVERNING ANY PAYMENT OR BENEFIT CONSTITUTING A “DEFERRAL OF COMPENSATION” SHALL BE INTERPRETED AND OPERATED CONSISTENTLY WITH THE REQUIREMENTS OF CODE SECTION 409A.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written.

APEX SYSTEMS, INC.

By: /s/ Carl Omohundro

Carl Omohundro

Its: General Counsel

EMPLOYEE

/s/ Theodore S. Hanson

Theodore S. Hanson

Exhibit 10.30

AMENDMENT TO EMPLOYMENT AGREEMENT

The Employment Agreement (the “Employment Agreement”) dated January 15, 2008 between Apex Systems, Inc. (the “Company”) and Theodore S. Hanson (the “Employee”) is hereby amended in the following respects in order to comply with Section 409A of the Internal Revenue Code, as amended, and applicable guidance issued thereunder (collectively, “Code Section 409A”) effective January 1, 2009:

1. Section 4.2(a) of the Employment Agreement shall be amended by adding the following to the end:

Such accrued salary shall be paid within 15 days of the Employee’s termination of employment.

2. Section 4.2(b) of the Employment Agreement shall be amended by adding the following to the end:

If any severance payment is subject to Code Section 409A and the disability insurance payment offset does not meet the disability offset exception under Code Section 409A, then any such offset shall only apply to disability payments paid to you in the same month as the applicable monthly severance payment.

3. Section 23.1(a) shall be replaced in its entirety with the following:

23.1 Issuance of Additional Shares . (a) The Company acknowledges, as of the date hereof, the Employee owns, and has been issued certificates representing, five percent (5%) of the outstanding common stock of the Company. The Company agrees that, in the event there is an Extraordinary Event (as defined below), the Company shall issue at the time of such Extraordinary Event 43,263 additional shares of common stock of the Company (the “Additional Shares”). For purposes hereof, an Extraordinary Event shall mean a change in the ownership or effective control of the Company, or in the ownership of a substantial portion of the assets of the Company (as determined under Code Section 409A). In the event the Employee’s employment with the Company is terminated for any reason at any time within one hundred twenty (120) days prior to the occurrence of a Extraordinary Event, for purposes of determining the Employee’s right to receive the Additional Shares, the Extraordinary Event shall be deemed to have occurred immediately prior to his termination of employment. However, actual payment of the Additional Shares shall not occur until the Extraordinary Event.

4. A revised Section 24 shall be added to the end of the Employment Agreement as follows:

24. Code Section 409A Compliance . To the extent that any payment or benefit under the Employment Agreement constitutes a “deferral of compensation”

subject to Code Section 409A, then, notwithstanding anything in the Employment Agreement to the contrary, such payments or benefits that are to be paid upon the Employee’s termination of employment shall not be paid to the Employee until the Employee has experienced a “separation from service” as defined in Code Section 409A from the Company or an affiliate who is treated as the employer under Code Section 409A (collectively the “Company”). If under this Agreement, an amount is to be paid in two or more installments, for purposes of Code Section 409A, each installment shall be treated as a separate payment. With regard to any provision herein that provides for reimbursement of expenses or in-kind benefits, except as permitted by Code Section 409A, (i) the right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit, and (ii) the amount of expenses eligible for reimbursement, or in- kind benefits, provided during any taxable year shall not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year (except as otherwise allowed under Code Section 409A). All such reimbursements shall be reimbursed in accordance with the Company’s reimbursement policies but in no event later than the calendar year following the calendar year in which the related expense is incurred. The provisions of the Employment Agreement governing any payment or benefit constituting a “deferral of compensation” shall be interpreted and operated consistently with the requirements of Code Section 409A. The Company shall not be liable to the Employee if any payment or benefit which is to be provided pursuant to the Employment Agreement and which is considered deferred compensation subject to Code Section 409A otherwise fails to comply with, or be exempt from, the requirements of Code Section 409A.

IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment to the Employment Agreement on this 31st day of December, 2008 to be effective on January 1, 2009.

/s/ Theodore S. Hanson

Theodore S. Hanson

APEX SYSTEMS, INC.

By:

Name: Carl Omohundro

Title: General Counsel

Exhibit 10.31

SECOND AMENDMENT TO HANSON EMPLOYMENT AGREEMENT

This Second Amendment to Hanson Employment Agreement (the “Amendment”) dated the 12 ^th day of February, 2011 by and between Theodore S. Hanson (the “Employee”) and Apex Systems, Inc. (the “Company”) is amended as follows:

RECITALS:

A. The Employee and the Company entered into that certain Employment Agreement dated January 15, 2008, as amended by that certain Amendment to Employment Agreement dated January 15, 2008 (the “Original Agreement”).

B. The Employee and the Company desire to amend the Original Agreement, as provided herewith.

AGREEMENT:

NOW, THEREFORE, for and in consideration of Ten Dollars ($10.00) cash in hand paid, the above recitals, and the covenants and agreements set forth below, the receipt and sufficiency of which are acknowledged, the parties agree as follows:

1. Section . Section 23.1(b) of the Original Agreement is hereby amended by deleting such paragraph in its entirety and in its stead substituting the following:

(b) In the event the Company shall at any time declare any dividend on common stock payable in, or pay any dividend on common stock in, shares of common stock or effect a subdivision or combination or consolidation of the outstanding shares of common stock (by reclassification or otherwise than by payment of a dividend in shares of common stock) into a greater or lesser number of shares of common stock, then in each such case the amount of the Additional Shares (43,263) shall be adjusted by multiplying such amount by a fraction of which the numerator is the number of shares of common stock outstanding immediately after such event and the denominator is the number of shares of common stock that were outstanding immediately prior to such event.

2. Counterparts . This Amendment may be executed in several counterparts and all so executed shall constitute one agreement, binding on all the parties hereto, notwithstanding that all of the parties are not signatory to the original or the same counterpart.

3. Ratification . Except as expressly modified hereby, the parties ratify and confirm the terms of the Original Agreement.

[SIGNATURE PAGE TO FOLLOW]

IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment as of the date first written above.

/s/ Theodore S. Hanson

Theodore S. Hanson

APEX SYSTEMS, INC.

By: /s/ Brian Callaghan

Name: Brian Callaghan

Title: Secretary

Exhibit 10.32

THIRD AMENDMENT TO EMPLOYMENT AGREEMENT

THIS THIRD AMENDMENT TO EMPLOYMENT AGREEMENT (this “ Third Amendment ”), is made as of May 15, 2012, by and between Apex Systems, Inc. (the “ Company ”), On Assignment, Inc. (“ OA ”) and Theodore S. Hanson (the “ Employee ”). Capitalized terms used and not otherwise defined herein shall have the meanings ascribed to such terms in the Employment Agreement (as defined below).

RECITALS


A.	The Company and the Employee have entered into an employment agreement, dated January 15, 2008, as amended by an Amendment dated December 31, 2008 and as further amended February 12, 2011 (the “ Employment Agreement ”).

The Company has entered into an Agreement of Merger, dated as of March 20, 2012, by and among OA, OA Acquisition Corp., the Company and Jeffrey Veatch, as shareholder representative (the “ Merger Agreement ”), pursuant to which OA Acquisition Corp. will be merged with and into the Company at and as of the Effective Time (as defined in the Merger Agreement) such that the Company shall be the surviving corporation in the merger and shall become a wholly-owned indirect subsidiary of OA.


C.	In connection with the closing of the transactions contemplated by the Merger Agreement, the Company, OA and the Employee wish to amend certain terms of the Employment Agreement.

AMENDMENT

The parties hereto hereby amend the Employment Agreement as follows, effective as of the Closing (as defined in the Merger Agreement). This Third Amendment shall become effective only if the Closing occurs and, in the event the Merger Agreement is terminated or Closing otherwise does not occur, this Third Amendment will have no force or effect.

1. Section 2 . Section 2 of the Employment Agreement is hereby deleted and replaced in its entirety with the following:

“Subject to the provisions for earlier termination hereinafter provided, the Employee’s employment hereunder shall continue until the second anniversary of the Closing Date (as defined in that certain Agreement of Merger, dated as of March 20, 2012, by and among OA, OA Acquisition Corp., the Company and Jeffrey Veatch, as shareholder representative) (such date, the “ Initial Termination Date ”); provided, that commencing on the Initial Termination Date, and on each subsequent anniversary thereof, the term of this Agreement shall automatically be extended for one additional year, unless either the Employee or the Company elects not to so extend the term of this Agreement by

notifying the other party in accordance with the terms of the Agreement (in any case, the “ Employment Period ”).”

2. Section 3 . The phrase “offices of Treasurer and Chief Financial Officer” in Section 3 of the Employment Agreement is hereby deleted and replaced in its entirety with the phrase “office of Chief Financial Officer”.

3. Section 4.1 . The second sentence of Section 4.1 of the Employment Agreement is hereby deleted and replaced in its entirety with the following:

“The Company, during the Employment Period, shall pay to the Employee his salary in installments in accordance with the Company’s applicable payroll practices, as in effect from time to time. Payment of any bonus, to the extent that the Company determines to pay such bonus, will be contingent upon the Employee’s continued employment through the applicable payment date, which shall be no later than the date on which annual bonuses are paid generally to the Company’s similarly situated executives. Notwithstanding the foregoing, the terms of any bonus to which the Employee is eligible to receive pursuant to the Company's 2010 Long Term Incentive Program or any successor long term incentive program, shall be subject to the terms and conditions regarding eligibility for and timing of payment, as set forth therein.”

4. Section 4.2 . Section 4.2 of the Employment Agreement is hereby deleted and replaced in its entirety with the following:

“[INTENTIONALLY OMITTED]”

5. Section 5 . Section 5 of the Employment Agreement is hereby deleted and replaced in its entirety with the following:

“ Vacation . During the Employment Period, the Employee shall be entitled to four (4) weeks of paid vacation per calendar year, pro-rated for any service by the Employee during any partial calendar year, provided, that the Employee shall not accrue any vacation time in excess of four (4) weeks (for the avoidance of doubt, vacation shall stop accruing at four (4) weeks and accrual shall not re-commence until accrued vacation falls below four (4) weeks, but up to four (4) weeks of accrued vacation may be carried forward to any succeeding calendar year.”

6. Section 6 . Section 6 of the Employment Agreement is hereby deleted and replaced in its entirety with the following:

“6.1 Benefit Plans . During the Employment Period, the Employee and the Employee’s legal dependents shall be eligible to participate in the welfare benefit plans, policies and programs (including, if applicable, medical, dental, disability, life and accidental death insurance plans and programs) maintained by the Company for its senior executives. In addition, the Employee shall be eligible to participate in such incentive, savings and

retirement plans, policies and programs as are made available to similarly situated executives of the Company, provided, that the Company shall have no obligation, in any case, to adopt, maintain or continue any such plans, policies or programs.

6.2 Additional Perquisites . In addition, subject to Section 24 below, during the Employment Period, the Company shall pay or reimburse the Employee for actual, properly substantiated expenses incurred by the Employee in connection with (a) the lease or purchase of an automobile, not to exceed five hundred dollars ($500) per month; (b) an annual physical examination, not to exceed one thousand, five hundred dollars ($1,500) per calendar year; and (iii) tax preparation and financial planning, not to exceed two thousand, five hundred dollars ($2,500) per calendar year. On all international and all transcontinental North American airplane flights, the Employee shall be entitled to fly business class or, if any such flight offers only two classes of service, first class.

6.3 Expenses . During the Employment Period, the Employee shall be entitled to receive prompt reimbursement of all reasonable business expenses incurred by the Employee in accordance with the Company expense reimbursement policy applicable to senior executives of the Company, as in effect from time to time, provided that the Employee properly substantiates such expenses in accordance with such policy.”

7. Section 7 . Section 7 of the Employment Agreement (together with its subsections) is hereby deleted and replaced in its entirety with the following:

“7. Termination of Employment . Either the Company or the Employee may terminate the Employee’s employment at any time for any reason or no reason. The following provisions shall control any such termination of the Employee’s employment.

7.1 Termination by the Company Without Cause . The Company may terminate the Employee’s employment without Cause (as defined below) at any time during the Employment Period upon written notice to the Employee provided in accordance with Section 16 below. If the Employee’s employment is terminated as provided in this Section 7.1, the Company shall pay to the Employee (a) the Employee’s earned but unpaid salary accrued through the Date of Termination (as defined below), (b) accrued but unpaid vacation time through the Date of Termination, (c) reimbursement of any properly submitted business expenses incurred by the Employee prior to the Date of Termination that are reimbursable under Sections 6.2 or 6.3 above, and (d) any vested benefits and other amounts due to the Employee under any plan, program or policy of the Company (together, all of these benefits shall be referred to as the “ Accrued Obligations ”). The Accrued Obligations described in clauses (a) – (c) above will be paid to the Employee as soon as practicable on or after the Date of Termination, but in any event within thirty (30) days following the Date of Termination (or such earlier date as may be required by applicable law), provided, in the case of reimbursable expenses, that such expenses have been properly substantiated in accordance with applicable Company policy within fourteen (14) calendar days following the Date of Termination. The Accrued Obligations described in clause (d) above shall be paid to the Employee as such

obligations become due to the Employee in accordance with the applicable plan or program. In addition, subject to Sections 7.8 and 24 below, the Employee’s execution and non-revocation of a binding Release (as defined below) in accordance with Section 7.8 below and the Employee’s continued compliance with the Confidentiality Agreement (as defined below) and Sections 8 – 10 below, the Employee shall be entitled to the following payments and benefits from the Company (referred to collectively as the “ Severance ”):

(x) payment of one hundred percent (100%) of the Employee’s annual salary at the rate in effect as of the Date of Termination, payable in substantially equal installments for a period of twelve (12) months following the Date of Termination, in accordance with the Company’s normal payroll procedures applicable to senior executives of the Company, as in effect from time to time (but no less often than monthly), provided that, consistent with the provisions of Treasury Regulation Section 1.409A-3(d), the Company hereby determines in its sole discretion to make any such payments that are otherwise scheduled to be paid during the period beginning on the Date of Termination and ending on the first regularly scheduled payroll date occurring on or after the thirtieth (30 ^th ) day following the Date of Termination (the “ First Payroll Date ”) on a later date, provided that the Company shall make such payments on or before the earlier of (i) the First Payroll Date or (ii) the 15 ^th day of the third calendar month following the otherwise scheduled payment date, and such payments shall be treated as made upon the otherwise scheduled payment date pursuant to Treasury Regulation Section 1.409A-3(d). If the Date of Termination and the First Payroll Date are in different calendar years, the Company shall make any such payments that are otherwise scheduled to be made in the calendar year that includes the Date of Termination on the First Payroll Date to the extent permitted by Treasury Regulation Section 1.409A-3(d). In all events, the parties intend that any and all amounts delayed until the First Payroll Date (or earlier date described above) shall be treated for purposes of Code (as defined below) Section 409A as payments made upon their originally scheduled dates in accordance with Treasury Regulation Section 1.409A-3(d), and the originally scheduled date(s) of any such payment(s) shall continue to constitute the “designated payment date(s)” for such payment(s) (within the meaning of Code Section 409A) for all purposes of Code Section 409A. If, under applicable law, the Employee is afforded forty-five (45) days to execute a Release rather than twenty-one (21) days, Severance payments described in this Section 7.1(x) will commence on the date or dates determined above whether or not the Employee has executed the Release and the applicable revocation period has expired (subject to the Company’s right to recoup any such payments if the Employee ultimately fails to timely execute or revokes the Release); and

(y) subject to the Employee’s proper election to continue healthcare coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“ COBRA ”), for a period of twelve (12) months from the Date of Termination, the Company will pay the Employee no less frequently than monthly (unless otherwise agreed by the Company and the Employee in a manner that is permissible under Code Section 409A) the difference between the Employee’s COBRA premiums (in respect of

COBRA benefits to be provided through third-party insurance maintained by the Company under the Company’s benefit plans for the Employee and his legal dependents to the extent each such individual received healthcare coverage provided by the Company immediately prior to such termination of employment), and the cost to the Employee of such coverage immediately prior to such termination (subject to premium increases affecting participants in such plan(s) generally). The Company shall provide this premium cost offset in a manner that causes such COBRA benefits to be exempt from the application of Section 409A under Treasury Regulation Section 1.409A-1(a)(5), provided, that if during such twelve (12) month period, (i) any plan pursuant to which such benefits are to be provided is not, or ceases to be, exempt from the application of Section 409A under Treasury Regulation Section 1.409A-1(a)(5), (ii) the Company cannot provide such COBRA benefits without violating applicable law (including, without limitation, Section 2716 of the Public Health Service Act), or (iii) the Company is otherwise unable under applicable law to continue to cover the Employee and/or the Employee’s dependents under its group health plans without violating a prohibition on such coverage or incurring penalties and/or additional taxes as a result of such coverage, then, in any such case, an amount equal to each such remaining premium cost offset shall thereafter be paid to the Employee as currently taxable compensation in substantially equal monthly installments over the remainder of the twelve (12) month period; following such twelve (12)-month continuation period, any further continuation of such coverage under applicable law shall be at the Employee’s sole expense. For the avoidance of doubt, Severance payments described in this Section 7.1(y) will commence on the date or dates determined above whether or not the Employee has executed the Release and the applicable revocation period has expired (subject to the Company’s right to recoup any such payments if the Employee ultimately fails to timely execute or revokes the Release).

7.2 Disability . If the Employee’s employment is terminated due to the Employee’s Disability (as defined below) during the Employment Period, the Employee shall be entitled to receive the Accrued Obligations in the manner described in Section 7.1 above. In addition, subject to Sections 7.8 and 24 below, the Employee’s execution and non-revocation of a binding Release in accordance with Section 7.8 below and the Employee’s continued compliance with the Confidentiality Agreement and Sections 8 – 11 below, the Employee shall be entitled to receive:

(a) a monthly payment during the period commencing on the Date of Termination and ending on the twelve (12)-month anniversary of the Date of Termination in an amount equal to (i) the Employee’s monthly base salary as in effect on the Date of Termination, reduced, on a direct, dollar-for-dollar basis, by (ii) to the extent that the limitation under this clause (ii) qualifies as a nondiscretionary, objective formula or a specified amount that is not under the effective control of the service provider and is not subject to the exercise of discretion by the service recipient (in each case within the meaning of Treasury Regulation Section 1.409A-3(i)(1)(ii)), any bona fide disability insurance payments which the Employee receives for such month under the Company’s applicable disability insurance policies established before the Employee became disabled. Any amounts that become payable to the Employee under this Section 7.2(a) shall be

paid at the time and in the manner described in Section 7.1(x) above. Notwithstanding the foregoing, if any such disability insurance payments become payable during the one (1)-year period following the Date of Termination but are actually paid to the Employee after the twelve (12)-month anniversary of the Date of Termination, the Employee shall promptly pay such amounts to the Company; and


(b)	the benefits described in Section 7.1(y) above.

7.3 Death . If the Employee dies during the Employment Period, the Employee or the Employee’s estate shall be entitled to receive the Accrued Obligations in the manner described in Section 7.1(d) above. In addition, subject to Sections 7.8 and 24 below, the Employee’s estate’s execution and non-revocation of a binding Release in accordance with Section 7.8 below the Employee’s estate shall be entitled to receive the Severance, payable as set forth in Section 7.1 above.

7.4 Voluntary Termination . The Employee may voluntarily terminate the Employee’s employment upon ninety (90) days’ notice to the Company provided in accordance with Section 16 below, subject to the Company’s right to waive any or all of such notice period. If the Employee so terminates the Employee’s employment, the Employee shall be entitled to receive the Accrued Obligations in the manner described in Section 7.1 above. If the Company elects to waive all or any portion of the notice period provided for in this Section 7.4, the Employee shall terminate employment effective immediately prior to the commencement of the waived period and shall, subject to Sections 7.8 and 24 below, the Employee’s execution and non-revocation of a binding Release in accordance with Section 7.8 below and the Employee’s continued compliance with the Confidentiality Agreement and Sections 8 – 10 below, be entitled to payment of an amount equal to the salary that would otherwise become payable in respect of such waived period absent the Company’s waiver, payable over the waived period in substantially equal installments in accordance with the Company’s normal payroll procedures applicable to senior executives of the Company, as in effect from time to time (but no less often than monthly), provided, that such payments shall be paid in the manner described in Section 7.1(x) above.

7.5 Cause . If the Employee’s employment becomes terminable by the Company for Cause (as defined below), then the Company shall provide the Employee with written notice setting forth in reasonable detail the nature of such Cause and, to the extent capable of cure, the Employee shall have a period of fifteen (15) days to cure such Cause (or such longer period as may be permitted under the definition of Cause below). If the Employee has not cured such Cause within the applicable cure period (to the extent capable of cure), then the Company may terminate the Employee’s employment immediately and the Employee shall be entitled to receive the Accrued Obligations in the manner described in Section 7.1 above.

7.6 Non-Renewal of Employment Period . If the Company elects not to renew the Employment Period (or any extension thereof), the Employee shall be entitled to receive

the Accrued Obligations in the manner described in Section 7.1 above. In addition, if, at the time of the Employee’s receipt of the Company’s notice of election not to renew the Employment Period (or any extension thereof), the Employee is willing and able to extend the Agreement and continue providing services on terms and conditions substantially similar to those contained in this Agreement, then subject to Sections 7.8 and 24 below, the Employee’s execution and non-revocation of a binding Release in accordance with Section 7.8 below and the Employee’s continued compliance with the Confidentiality Agreement and Sections 8 – 10 below, the Employee shall be entitled to receive the Severance in the manner describe in Section 7.1 above, except that (a) the cash component of the Severance shall equal fifty percent (50%) of the Employee’s annual salary at the rate in effect as of the Date of Termination (rather than one hundred percent (100%)) and shall be payable in substantially equal installments for a period of six (6) months following the Date of Termination (rather than twelve (12) months), and (b) subsidized COBRA benefits shall continue for a period of six (6) months (rather than twelve (12) months).

7.7 Change in Control Benefits . During the Employment Period, the Employee shall be eligible to participate in the On Assignment, Inc. Amended and Restated Change in Control Severance Plan (the “ CIC Plan ”) at the level of “Division President”, as such plan may be amended from time to time in accordance with its terms; provided, however , that notwithstanding anything to the contrary contained in the CIC Plan (but subject to the provisions therein relating to a “Potential Six-Month Delay”), if the Employee becomes entitled to receive benefits under the CIC Plan, a portion of the “Annual Base Pay” (as defined in the CIC Plan) equal to twelve (12) months’ of the Employee’s annualized base salary at the rate in effect during the last regularly scheduled payroll period immediately preceding the occurrence of the change in control ( i.e., the severance that would have been payable under the Employment Agreement as in effect immediately prior to this Third Amendment upon a “disability” termination) shall be paid in substantially equal installments over a period of twelve (12) months following the Date of Termination ( i.e. , in the manner provided under the Employment Agreement as in effect immediately prior to this Third Amendment) in accordance with the Company’s normal payroll procedures applicable to senior executives of the Company, as in effect from time to time (but no less often than monthly) (and, for the avoidance of doubt, all remaining amounts that become payable under the CIC Plan shall be paid as set forth in the CIC Plan). For the avoidance of doubt, the preceding sentence applies only to the timing of payments under the CIC Plan and shall in no way increase the amount of payments or benefits to which the Employee may become entitled under the CIC Plan. In the event that the Employee actually receives benefits under the CIC Plan, such benefits shall be in lieu and full replacement of any benefits to which the Employee would otherwise become entitled under this Section 7 and the Employee shall not be entitled to receive any of the benefits described in this Section 7.

7.8 Release; Exclusivity of Benefits . Notwithstanding anything in this Agreement to the contrary, it shall be a condition to the Employee’s right to receive or retain, as applicable, the Severance (as defined above) that the Employee (or his estate)

execute and deliver to the Company a general release of claims in a form reasonably prescribed by the Company and (the “ Release ”) within twenty-one (21) days (or, to the extent required by law, forty-five (45) days) following the Date of Termination and that the Employee not revoke such Release during any applicable revocation period. Except as expressly provided in this Agreement and/or required by applicable law, upon the termination of the Employee’s employment, the Company shall have no obligation to the Employee in connection with the Employee’s employment with the Company or the termination thereof.

7.9 Definitions .

(a) “ Cause ” means (i) the Employee’s willful breach of duty unless waived by the Company (which willful breach is limited to the Employee’s deliberate and consistent refusal to perform the Employee’s duties or the Employee’s deliberate and consistent refusal to conform to or follow any reasonable policy adopted by the Company provided the Employee has had prior written notice of such refusal and an opportunity of at least thirty (30) days to cure such refusal); (ii) the Employee’s unauthorized use or disclosure of confidential information or trade secrets of the Company; (iii) the Employee’s breach of an applicable non-competition or non-solicitation agreement; (iv) the Employee’s conviction of a felony under the laws of the United States or any state thereof; or (v) the Employee’s gross negligence.

(b) “ Code ” shall mean the Internal Revenue Code of 1986, as amended.

(d) “ Disability ” shall mean that a physician licensed to practice medicine in Virginia, as chosen by the Company, opines in writing to the Board of Directors of the Company that the Employee has suffered an accident, physical illness or mental illness which will cause the Employee to be, for a period more than twelve (12) months, unable to fulfill his normal duties and responsibilities as an officer and/or employee of the Company by reason of such accident, physical illness or mental illness. If the Employee disputes such physician’s opinion, the Employee shall choose another physician licensed to practice medicine in Virginia who shall render a separate written opinion to the Board of Directors of the Company with reasonable speed, which shall be controlling on the issue in question upon its receipt by the Board of Directors of the Company if the opinion of the second physician is in agreement with the opinion of the first physician. In the event the two opinions are at a variance, such two physicians shall be asked to agree on a third physician licensed to practice medicine in Virginia to render a third or final opinion to the Board of Directors of the Company with reasonable speed. The written opinion of such third physician shall be controlling on the issue in question upon its receipt by the Board of Directors of the Company. The fees of any or all of such physicians shall be paid by the Company. Notwithstanding anything to the contrary

above, in the event that the Company maintains a long-term disability insurance policy covering the Employee, and if the Employee has not yet been designated as having experienced a Disability as provided hereunder, the Employee shall be deemed to have a Disability for purposes of this Agreement on the date that he is deemed disabled under the aforementioned insurance policy. The effective date of the Employee’s termination hereunder due to Disability shall be the earlier of (i) the date on which the applicable controlling physician opinion (determined in accordance with this Section 7.9(d)) is delivered to the Board of Directors of the Company or (ii) the date the Employee is deemed disabled under an insurance policy described above.

(e) “ Separation from Service ” has the meaning assigned pursuant to Section 409A(a)(2)(A)(i) of the Code, and Treasury Regulation Section 1.409A-1(h).”

8. Section 11A . The following Section 11A is hereby added to the Employment Agreement immediately after Section 11 thereof:

“11A. Restrictive Covenants . The parties acknowledge and agree that OA and the Employee have entered into a Confidentiality, Noncompetition, Nonsolicitation and Nondisclosure Agreement (the “ Confidentiality Agreement ”), and that such Confidentiality Agreement shall be additional to, and not in limitation of, the covenants contained in this Agreement, and shall remain in full force and effect in accordance with its terms. The compensation and benefits provided under this Agreement, together with compensation and benefits provided under the Merger Agreement, any Severance obligations arising hereunder and other good and valuable consideration are hereby acknowledged by the parties hereto to constitute adequate consideration for the Employee’s entering into the Confidentiality Agreement.”

9. Section 12 . Reference to the phrase “Sections 8, 9, 10 and 11 above” in Section 12 of the Employment Agreement is hereby deleted and replaced in its entirety with the phrase “Sections 8, 9, 10, 11 and 11A above”.

10. Section 23.3 . The following Section 23.3 is hereby added to the Employment Agreement:

“Notwithstanding the foregoing Section 23.1 and 23.2, the Employee hereby acknowledges and agrees that, as of the Closing, (a) the Company has issued the Additional Shares in accordance with Sections 23.1 and 23.2 above and has satisfied in full its obligations with respect to this Section 23 in connection with such share issuance, (b) the Employee has no further right, claim, entitlement or interest in or to the issuance of any additional shares of capital stock of Apex and (c) the Company has paid to the Employee a bonus (as contemplated in Section 23.2) with respect to the Additional Shares in full satisfaction of its obligations under Section 23.2 based on the per share fair market value of the Additional Shares on the Closing Date (the “ Apex Share Value ”), provided, however, that, notwithstanding the foregoing, the parties acknowledge and agree that, because the Apex Share Value was calculated in part based on an estimate of

the closing trading price of Purchaser Stock (as defined in the Merger Agreement) on the Closing Date (such closing trading price, the “ Closing Purchaser Stock Price ”), the Employee may become entitled to an additional bonus payment in accordance with Section 23.2 if the actual Closing Purchaser Stock Price is subsequently determined to be greater than the estimated Closing Purchaser Stock Price. If such an additional bonus payment becomes payable to the Employee, such payment shall be made no later than thirty (30) days after the Closing Date.”

11. Section 24 . The following language is hereby added to the end of Section 24 of the Employment Agreement:

“Notwithstanding anything to the contrary in this Agreement, no compensation or benefits shall be paid to the Employee during the six (6)-month period following the Employee’s Separation from Service to the extent the Board of Directors of the Company reasonably determines the Employee is a “specified employee” at the time of such Separation from Service (within the meaning of Code Section 409A) and that paying such amounts at the time or times indicated in this Agreement would be a prohibited distribution under Code Section 409A(a)(2)(b)(i) and/or cause the Employee to incur additional taxes under Code Section 409A. If the payment of any such amounts is delayed as a result of the previous sentence, then on the first business day following the end of such six (6)-month period, (or such earlier date upon which such amount can be paid under Code Section 409A without being subject to such additional taxes, including as a result of the Employee’s death), the Company shall pay the Employee a lump-sum amount equal to the cumulative amount that would have otherwise been payable to the Employee during such six (6)-month period, without interest thereon. Notwithstanding any provision of this Agreement to the contrary, in the event that following the effective date hereof, the Company determines that any payments or benefits hereunder (or, with respect to the Employee, under the CIC Plan) are not either exempt from or compliant with the requirements of Section 409A of the Code and related Department of Treasury guidance, the Company may adopt such amendments to this Agreement or adopt such other policies and procedures (including amendments, policies and procedures with retroactive effect), or take any other actions, that the Company determines are necessary or appropriate to preserve the intended tax treatment and economic benefits of the payments and benefits provided hereunder, including any such actions intended (a) to exempt such payments and benefits from Section 409A of the Code and/or (b) to cause such payments and benefits to comply with the requirements of Section 409A of the Code and related Department of Treasury guidance.”

12. This Third Amendment shall be and, as of its effectiveness, is hereby incorporated in and forms a part of, the Employment Agreement.

13. Except as expressly provided herein, all terms and conditions of the Employment Agreement shall remain in full force and effect.

(signature page follows)

IN WITNESS WHEREOF , the parties hereto have executed this Third Amendment as of the date first written above.

APEX SYSTEMS, INC.

By: /s/ Carl Omohundro_________________

Carl Omohundro

Secretary and General Counsel

ON ASSIGNMENT, INC.

By: ______________________________

Peter Dameris

Chief Executive Officer

EMPLOYEE

/s/ Theodore S. Hanson

Theodore S. Hanson

Exhibit 10.33

FOURTH AMENDMENT TO EMPLOYMENT AGREEMENT

THIS FOURTH AMENDMENT TO EMPLOYMENT AGREEMENT (this “ Fourth Amendment ”), is made as of May15, 2012, by and between Apex Systems, Inc. (the “ Company ”) and Theodore S. Hanson (the “ Employee ”). Capitalized terms used and not otherwise defined herein shall have the meanings ascribed to such terms in the Employment Agreement (as defined below).

RECITALS


A.	The Company and the Employee entered into an employment agreement, dated January 15, 2008, as amended on December 31, 2008, as further amended on February 12, 2011, and as further amended on May 15, 2012 (the “ Employment Agreement ”).


B.	Effective May 15, 2012, the Company established “Apex Systems, Inc. Senior Management PTO Plan” (“PTO Plan”). The Employment Agreement is hereby amended to clarify Employee’s participation in the PTO Plan.

AMENDMENT


1.	Section 5 . Section 5 of the Employment Agreement is hereby deleted and replaced in its entirety with the PTO Plan, which is incorporated herein by reference.


2.	This Fourth Amendment is hereby incorporated in and forms a part of the Employment Agreement.


3.	Except as expressly provided herein, all terms and conditions of the Employment Agreement shall remain in full force and effect.

IN WITNESS WHEREOF , the parties hereto have executed this Fourth Amendment as of the date first written above.

APEX SYSTEMS, INC.

By: /s/ Buddy Carl Omohundro

Buddy Carol Omohundro

General Counsel

ON ASSIGNMENT, INC.

By: ______________________________

Peter Dameris

Chief Executive Officer

EMPLOYEE

/s/ Theodore S. Hanson

Theodore S. Hanson

Exhibit 10.35

APEX SYSTEMS, INC.

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this “Agreement”), made as of January 8, 2007, by and between RAND BLAZER (the "Employee") and APEX SYSTEMS, INC. , a Virginia corporation (the "Company"), provides:

1. Employment . The Company hereby employs the Employee, and the Employee hereby accepts employment with the Company to serve as Chief Operating Officer of the Company, upon and subject to the terms and conditions hereafter set forth.

2. Term of Employment . The term of this Agreement and of the Employee's employment with the Company shall be effective for the period beginning on the earlier of (i) June 1, 2007 and (ii) such other date as the Employee and the Company may agree (the “Effective Date”) and ending on December ____, 2010, unless sooner terminated in the manner herein provided. This Agreement shall automatically renew for one additional year unless either party provides the other with written notice on non-renewal after March 31, 2010 and before June 30, 2010, unless sooner terminated as provided herein.

3. Duties . The Employee shall perform to the very best of his ability and in the best interests of the Company all executive, managerial and other duties both (i)

mandated for the office of Chief Operating Officer pursuant to the By-laws of the Company as in force and effect from time to time and (ii) reasonably assigned to him by the Board of Directors of the Company. The Employee shall perform his duties hereunder on a full time and exclusive basis to the Company. Such duties shall be performed at the office of the Company located in Richmond, Virginia, approximately 2-3 business days of each week, and at the office of the Company located in Alexandria, Virginia, the remaining business days of the week. The Employee may also periodically perform such duties at any other reasonable location as determined by the Board of Directors.

4. Compensation .

4.1 Salary and Bonus . The Company shall pay to the Employee an annual salary at a rate not less than $500,000 per year and such bonus as determined by the Board of Directors of the Company in its sole discretion, not to exceed $100,000 per year. The Company, during the term of the Employee's employment, shall pay to the Employee his salary in equal weekly installments. The Board of Directors shall meet at least once each calendar year with the Employee to evaluate his performance and determine his bonus, if any.

4.2 Severance Pay . (a) In the event that the Employee's employment hereunder is terminated for any reason other than (i) by the Company as described under Section 8.1 below; (ii) by the Employee as described under Section 8.3 below; or (iii) as described under Section 8.4(b) below, or this Agreement expires, the Company shall have no further obligation to the Employee except to pay any unpaid and annual accrued salary up to the effective date of such termination.

(b) If the Employee’s employment hereunder is terminated (i) by the Company as described under Section 8.1(a) below; (ii) by the Employee as described under Section 8.3 below; or (iii) as described under Section 8.4(b) below, then the Employee shall receive severance pay on a monthly basis for the twelve (12) immediately subsequent months after his effective date of termination in an amount equal to one twelfth (1/12) of the Employee’s salary in effect as of such effective date, payable each month in accordance with the Company’s then current payroll procedures, provided, however, such monthly payments shall be reduced by the amount of any disability insurance payments which the Employee receives in such given month pursuant to any disability insurance policies insuring the Employee which are owned or purchased by the Company.

(c) If the Employee’s employment hereunder is terminated by the Company as described under Section 8.1(b) below, then the Employee shall receive severance pay on a monthly basis for the three (3) immediately subsequent months after his effective date of termination in an amount equal to one twelfth (1/12) of the Employee’s salary in effect as of such effective date, payable each month in accordance with the Company’s then current payroll procedures.

4.3 Withholding . The Company shall withhold any applicable federal or state income tax, social security taxes or other taxes from the Employee’s compensation paid hereunder.

5. Paid Time Off . During the term of this Agreement, the Employee shall be entitled to twenty-five (25) business days of paid time off per year for vacation, sick, education and other purposes for each calendar year, without loss of pay and such

other additional business days authorized by the Board of Directors of the Company. Such paid time off leave shall (a) be non-cumulative in that any unused leave may not be carried over to a subsequent year and (b) be forfeited to the extent unused as of the effective date of termination or non-renewal of this Agreement.

6. Benefits . During the term of the Employee's employment, the Employee shall receive and be entitled to participate in all benefits (in amounts as determined by the Board of Directors) offered or provided to Brian J. Callaghan, Edwin A. Sheridan, IV, Theodore Hanson and Jeffrey E. Veatch (collectively referred to herein as the “Executive Officers”), including but not limited to health insurance, life insurance and participation in the Company’s 401(k) retirement plan. The Company shall reimburse the Employee for all reasonable travel, entertainment and similar expenses incurred in the promotion of the Company's business according to the same standards that are applicable to the Executive Officers. The Company shall also reimburse the Employee for all reasonable cellular telephone, DSL, laptop computer and similar expenses incurred in the promotion of the Company's business according to the same standards that are applicable to the Executive Officers. The Employee shall also be entitled to an automobile allowance of up to $475 per month.

7. Relocation Expenses

7.1 If, during the term of this Agreement, the Employee, at the request of the Board of Directors of the Company, establishes a permanent residence in the Richmond, Virginia, Metropolitan Area (“Richmond Residence”), the Company, not more than ninety (90) days after the date on which the Employee shall purchase a Richmond

Residence, shall pay or reimburse the Employee for Relocation Expenses (as defined herein) in an amount in the aggregate not more than $500,000.

7.2 The term “Relocation Expenses” shall mean costs and expenses reasonable and necessarily incurred by the Employee as a result of and as a condition to his employment by the Company and which would not otherwise have been incurred by the Employee and are not otherwise recoverable by him. Relocation Expenses shall include: real estate commissions, legal fees, recording fees and other costs and expenses incurred in connection with the sale of the current residence of the Employee and reflected in the Settlement Statement on Form HUD 1 prepared in connection with the settlement or closing of the sale; appraisal fees, legal fees, recording fees and other costs and expenses incurred in connection with the purchase of a Richmond Residence and reflected on the Settlement Statement on Form HUD 1 prepared in connection with the settlement or closing of the purchase; and costs of moving the household goods of the Employee from his current residence to a New Residence.

7.3 The Employee shall maintain and furnish the Company with a statement of Relocation Expenses to be paid or reimbursed by the Company, together with copies of such vouchers, receipts and other documents as the Company may deem reasonably necessary to substantiate the same.

7.4 All payments or reimbursements of Relocation Expenses by the Company shall be made or paid upon and subject to the conditions that:

(a) If and to the extent that any Relocation Expenses shall be disallowed as payments deductible as “moving expenses” by the Employee or excludable from the gross income of the Employee under applicable federal and state

income tax laws and regulations or shall not be substantiated by the Employee, the same shall constitute additional compensation paid by the Company to the Employee.

(b) If, in the period of eighteen (18) months from and after the Effective Date, the Employee’s employment hereunder is terminated (i) by the Employee as described under Section 8.1(a) or (ii) by the Company as described under Section 8.2, the Employee, not more than thirty (30) days after the date on which the termination of employment is effective, shall repay or refund to the Company all Relocation Expenses theretofore paid or reimbursed by the Company; provided, however, that, if and to the extent that such Relocation Expenses shall not be repaid or refunded by the Employee to the Company, the Company shall deduct or offset the same from or against any amounts payable to the Employee hereunder as compensation, Severance Pay or otherwise.


8.	Termination of Employment .

8.1 Termination Without Cause . (a) This Agreement may be terminated without cause by either party delivering to the other one hundred eighty (180) days written notice of termination prior to the date of termination specified in the notice. For purposes hereof, any termination pursuant to this Section 8.1 shall be deemed a termination “Without Cause”.

(b) Notwithstanding anything to the contrary herein, in the event that there is a Change of Control Transaction (as defined below) with respect to the Company, the Company shall have the right to terminate the Agreement without cause by delivery to the Employee ninety (90) days written notice prior to the date of termination specified in the notice. The term “Change of Control Transaction” shall

mean (i) the transfer of capital stock, merger, reorganization, equity exchange or sale, exchange or disposition of assets as a result of which more than one-half of all shares of capital stock of the Company outstanding as of the date of the Change in Control Transaction are transferred or assigned to or (ii) the sale, assignment or other disposition of all or substantially all of the assets of the Company to, any person or entity other than one or more of the Executive Officers or any entity directly or indirectly controlling, controlled by, or in common control with one or more of the Executive Officers.

8.2 Termination for Cause by the Company . This Agreement may be terminated by the Company immediately upon and without an opportunity to cure upon the occurrence of any of the following:

(a) The conviction of the Employee for any felony or crime of moral turpitude or any other cause that constitutes a material adverse reflection upon the reputation or good standing of the Company as reasonably determined by the majority vote of the Board of Directors of the Company;

(c) The commission of an act of fraud, willful misconduct, dishonesty against the Company as reasonably determined by the majority vote of the Board of Directors of the Company;

(d) the Employee’s unauthorized disclosure of confidential information of the Company; or

(e) the Employee engages in a persistent pattern of conduct and/or omissions constituting his repeated failure to carry out the directions of the Company’s Board of Directors so long as the implementation of such directions would not cause the Employee to violate any law or regulation.

For purposes hereof, any termination pursuant to this Section 8.2 shall be deemed a termination “With Cause”.

8.3 Termination for Cause by the Employee . If the Company breaches any of the material terms of this Agreement and such breach continues for more than thirty (30) days the Employee has delivered written notice thereof to the Company, this Agreement may be terminated by the Employee immediately upon delivery of notice to the Company.

For purposes hereof, any termination pursuant to this Section 8.3 shall be deemed a termination “With Cause”.

8.4 Automatic Termination . This Agreement shall automatically terminate upon the occurrence of any of the following:

(a) The death of the Employee; or

(b) The disability of the Employee. For purposes of this Agreement, the Employee shall be deemed to have suffered a disability if a physician licensed to practice medicine in Virginia, as chosen by the President of the Company, delivers a written opinion to the Board of Directors of the Company that the Employee is and will be for a period more than twelve (12) months unable to fulfill his normal duties

and responsibilities as an officer and/or employee of the Company by reason of accident, physical illness or mental illness. If the Employee disputes such physician's opinion, he shall choose another physician licensed to practice medicine in Virginia who shall render a separate written opinion to the Board of Directors of the Company with reasonable speed. In the event the two opinions are at variance, such two physicians shall be asked to agree on a third physician licensed to practice medicine in Virginia to render a third or final opinion with reasonable speed. The written opinion of such third physician shall be controlling on the issue in question upon its receipt by the Board of Directors of the Company. The fees of any or all of such physicians shall be paid by the Company. Notwithstanding anything to the contrary above, in the event that the Company is beneficiary of a permanent disability insurance policy covering the Employee which provides for a lump sum benefit, and if the Employee has not yet been designated as disabled as provided hereunder, the Employee shall be deemed disabled on the date that he is so deemed under the aforementioned insurance policy. The effective date of the Employee’s termination hereunder due to disability shall be the earlier of (i) the date on which the first opinion or, in the event that the Employee disputes such, the third and final opinion of a physician is delivered to the Board of Directors of the Company or (ii) the date the Employee is deemed disabled under an insurance policy described above.

9. Confidential Information . As consideration for and to induce the employment of the Employee by the Company, the Employee hereby covenants and agrees that:

(d) Except in the regular course of his employment by the Company or as the Company may expressly authorize or direct in writing, the Employee

shall not, during or after the term of his employment, copy, reproduce, disclose or divulge to others, use or permit others to use any trade secrets of the Company or any confidential information which is the property of the Company or its customers, or any records of or materials relating to any such trade secrets or confidential information. The Employee further covenants and agrees that during the term of his employment he shall not remove from the custody and control of the Company any records or any materials relating to such trade secrets and confidential information and that upon the termination of his employment he shall deliver all such material to the Company. Notwithstanding anything to the contrary, the Employee shall not be deemed in violation of this Section if he is required to testify or produce documents pursuant to any court order, notice of deposition or subpoena related to any litigation or governmental proceeding or investigation provided that the Employee has given the Company reasonable prior written notice of such testimony or document production so that the Company may take such action as it desires to protect its trade secrets and confidential information.

10. Covenant Not To Compete . As consideration for and to induce the employment of the Employee by the Company, the Employee hereby covenants and agrees that:

management, operation, or control of, or serve as an employee, agent, or representative of, any corporation, association, partnership, proprietorship or other business entity that (A) provides technical personnel staffing services within a ten (10) mile radius of (i) any office of the Company which is in operation as of such termination (the “Restricted Territory”) and (B) employs or uses the Employee in any capacity related to the providing of technical personnel staffing services within the Restricted Territory. For purposes hereof, “Customer” shall mean any person to which the Company has provided of technical personnel staffing services within the Restricted Territory within the twelve (12) month period immediately preceding the termination of this Agreement.

11. Non-Hiring of Employer’s Employees . As consideration for and to induce the employment of the Employee by the Company, the Employee hereby covenants and agrees that beginning on the date of the termination of this Agreement, for any reason, including the resignation of the Employee or the non-renewal hereof, and continuing for a period of one (1) year thereafter, the Employee shall not directly solicit to hire or hire any employee of the Company for the Employee’s own account or for the account of any other person or entity, besides the Company, for any reason whatsoever. For purposes hereof, “employee of the Company” shall mean any person who is or was

employed by the Company at the time during the one (1) year period immediately preceding the date on which the Employee solicits to hire such person.


12.	Special Remedies . The Employee hereby covenants and agrees that:

(a) Any breach or threatened breach by him of Sections 9, 10 and 11 above will result in irreparable injury and damage to the Company for which the Company would have no adequate remedy at law because the duties which he rendered to the Company were of a special, unique and extraordinary character. The Employee further agrees that in the event of such a breach, that the Company shall be entitled to an immediate injunction to prevent such violations and to all costs and expenses incurred as a result, including reasonable attorney’s fees, in addition to any other remedies, including damages.

(b) The geographical area, activity and time period restrictions imposed upon him in Sections 9, 10 and 11 above, as the case may be, are fair and reasonably required for the protection of the Company. Each of Sections 8, 9 and 10, and the separate sections, paragraphs and items within such sections, are separate covenants. However, if a court of competent jurisdiction shall refuse to enforce all of the separate covenants of the aforementioned Sections, then such unenforceable covenants shall be separated from the provisions hereof to the extent necessary to permit the remaining covenants to be enforced. In the event that a court of competent jurisdiction determines that the geographical area, activity or time period restrictions exceed whatever standards which the court deems enforceable, then such restrictions shall be reformed by such court and be applicable for such lesser geographical area, activity or time period. The parties agree to be bound by such judicial modification with

the same force and effect as if such modification were contained in the covenants in the first instance.

(c) In the event that a legal action is commenced with respect to any of the provisions of this Section to enforce Section 10 above, the one (1) year period described in Section 9 shall run from the date of any Final Judicial Determination of such legal action. "Final Judicial Determination" shall mean the day on which the time to appeal from a final judgment in such legal action expires or, if an appeal be taken, the day on which a final determination of the appellate proceeding occurs.

13. Survival . The agreements and covenants made by the Employee in and the obligations of the Employee under Sections 9, 10, 11 and 12 above shall survive the expiration of this Agreement and the termination of the employment of the Employee hereunder. Each such agreement and covenant by the Employee shall be construed as a covenant and agreement independent of any other provisions herein, and the existence of any claim or cause of action by the Employee against the Company shall not constitute a defense to the enforcement of provisions of any such covenant or agreement.

14. Consent to Jurisdiction and Venue . The Employee hereby irrevocably submits to the non-exclusive jurisdictions of any Circuit Court of the Commonwealth of Virginia or United States District Court located in the City of Richmond or the County of Henrico, Virginia , in any action or proceeding arising out of, or relating to, this Agreement, and the Employee hereby irrevocably agrees that all claims in respect of any such action or proceeding may be heard and determined in such court. The Employee agrees that a final judgment in any action or proceeding shall, to the extent

permitted by applicable law, be conclusive and may be enforced in other jurisdictions by suit on the judgment, or in any other manner provided by applicable law related to the enforcement of judgments. Nothing contained herein shall affect the Employee’s right to appeal.

15. Attorneys’ Fees . If any action or proceeding is brought to enforce any rights or obligations hereunder, the party that substantially prevails in such action or proceeding shall be reimbursed by the other party for all costs and expenses (including any reasonable attorneys’ fees) incurred by such party with respect to such action or proceeding. Such reimbursement shall be payable upon demand.

16. Assignment . The Employee acknowledges that this Agreement is a personal services contract. Accordingly, this Agreement may not be assigned by the Employee without the prior written consent of the Company. Notwithstanding the foregoing, in the event that all or substantially all the assets of the Company are sold to any person or entity, the Company in its sole discretion shall have the right to assign this Agreement in connection with such sale to the pertinent purchaser and this Agreement shall continue in full force and effect. Similarly, if there is a merger, consolidation, share exchange of the Company with another entity and such other entity is the survivor of such transaction (that is, the Company does not survive), this Agreement shall be deemed automatically assigned to such other entity and continue in full and force and effect.

17. Notices . All notices, consents, and other communications to, upon, and between the respective parties hereto shall be in writing and shall be deemed to have been given, delivered, or made when sent or mailed by registered or certified mail,

postage prepaid, and return receipt requested addressed to the Company at 2235 Staples Mill Road, Suite 200, Richmond, Virginia 23230 and to the Employee at his address shown upon the employment records of the Company.

18. Modification . No provision of this Agreement, including any provision of this Section, may be modified, deleted or amended in any manner except by an agreement in writing executed by the parties hereto.

19. Benefit . All of the terms of this Agreement shall be binding upon, inure to the benefit of and be enforceable by the Company and its successors and assigns and by the Employee and his personal representatives.

20. Severability . In the event that any part of this Agreement shall be held to be unenforceable or invalid, the remaining parts shall nevertheless continue to be valid and enforceable as though the invalid portions were not a part hereof.

21. Construction . This Agreement is executed and delivered in the Commonwealth of Virginia and shall be construed and enforced in accordance with the laws of such state.

22. Headings . The underlined headings provided herein are for convenience only and shall not affect the interpretation of this Agreement.

23. Counterparts . This Agreement may be executed in one or more counterparts, each of which shall be deemed as original.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the day and year first above written.

APEX SYSTEMS, INC.

By: /s/ Theodore S. Hanson

Theodore S. Hanson

Its: Chief Financial Officer

EMPLOYEE

/s/ Rand Blazer

Rand Blazer

Exhibit 10.36

AMENDMENT TO EMPLOYMENT AGREEMENT

The Employment Agreement (the “Employment Agreement”) dated January 8, 2007 between Apex Systems, Inc. (the “Company”) and Rand Blazer “Employee”) is hereby amended in the following respects in order to comply with Section 409A of the Internal Revenue Code, as amended, and applicable guidance issued thereunder (collectively, “Code Section 409A”) effective January 1, 2009:

1. Section 4.2(a) of the Employment Agreement shall be amended by adding the following to the end:

Such accrued salary shall be paid within 15 days of the Employee’s termination of employment.

2. Section 4.2(b) of the Employment Agreement shall be amended by adding the following to the end:

3. A new Section 24 shall be added to the end of the Employment Agreement as follows:

24. Code Section 409A Compliance . To the extent that any payment or benefit under the Employment Agreement constitutes a “deferral of compensation” subject to Code Section 409A, then, notwithstanding anything in the Employment Agreement to the contrary, such payments or benefits that are to be paid upon the Employee’s termination of employment shall not be paid to the Employee until the Employee has experienced a “separation from service” as defined in Code Section 409A from the Company or an affiliate who is treated as the employer under Code Section 409A (collectively the “Company”). If under this Agreement, an amount is to be paid in two or more installments, for purposes of Code Section 409A, each installment shall be treated as a separate payment. With regard to any provision herein that provides for reimbursement of expenses or in-kind benefits, except as permitted by Code Section 409A, (i) the right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit, and (ii) the amount of expenses eligible for reimbursement, or in- kind benefits, provided during any taxable year shall not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year (except as otherwise allowed under Code Section 409A). All such reimbursements shall be reimbursed in accordance with the Company’s reimbursement policies but in no event later than the calendar year following the calendar year in which the related expense is incurred. The provisions of the Employment Agreement governing any payment or benefit constituting a “deferral of compensation” shall be

interpreted and operated consistently with the requirements of Code Section 409A. The Company shall not be liable to the Employee if any payment or benefit which is to be provided pursuant to the Employment Agreement and which is considered deferred compensation subject to Code Section 409A otherwise fails to comply with, or be exempt from, the requirements of Code Section 409A.

IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment to the Employment Agreement on this 31st day of December, 2008 to be effective on January 1, 2009.

/s/ Rand Blazer

Rand Blazer

APEX SYSTEMS, INC.

By: /s/ Carl Omohundro

Name: Carl Omohundro

Title: General Counsel

Exhibit 10.37

SECOND AMENDMENT TO EMPLOYMENT AGREEMENT

1. Section 2 of the Employment Agreement shall be replaced with the following provision:

The term of this Agreement and of the Employee’s employment with the Company shall be effective for the period beginning on the earlier of (i) June 1, 2007 and (ii) such other date as the Employee and the Company may agree (the “Effective Date”) and ending on December 31, 2012, unless sooner terminated in the manner herein provided. This Agreement shall automatically renew for one additional year unless either party provides the other with written notice of non-renewal after March 31, 2012 and before June 30, 2012, unless sooner terminated as provided herein.

2. Section 4.1 of the Employment Agreement shall be replaced with the following provision:

The Company shall pay to the Employee an annual salary at a rate not less than $550,000 per year and such bonus as determined by the Board of Directors of the Company in its sole discretion, not to exceed $100,000 per year. The Company, during the term of the Employee’s employment, shall pay to the Employee his salary in equal weekly installments. The Board of Directors shall meet at least once each calendar year with the Employee to evaluate his performance and determine his bonus, if any.

IN WITNESS WHEREOF, the parties hereto have duly executed this Second Amendment to the Employment Agreement on this 3rd day of August, 2009 to be effective on January 1, 2009.

/s/ Rand Blazer

Rand Blazer

APEX SYSTEMS, INC.

By: /s/ Carl Omohundro

Name: Carl Omohundro

Title: General Counsel

Exhibit 10.38

THIRD AMENDMENT TO EMPLOYMENT AGREEMENT

THIS THIRD AMENDMENT TO EMPLOYMENT AGREEMENT (this “ Third Amendment ”), is made as of May 15, 2012, by and between Apex Systems, Inc. (the “ Company ”), On Assignment, Inc. (“ OA ”) and Rand Blazer (the “ Employee ”). Capitalized terms used and not otherwise defined herein shall have the meanings ascribed to such terms in the Employment Agreement (as defined below).

RECITALS


A.	The Company and the Employee have entered into an employment agreement, dated January 8, 2007, as amended by an Amendment dated December 31, 2008 and as further amended on August 3, 2009 (the “ Employment Agreement ”).


C.	In connection with the closing of the transactions contemplated by the Merger Agreement, the Company, OA and the Employee wish to amend certain terms of the Employment Agreement.

AMENDMENT

1. Section 2 . Section 2 of the Employment Agreement is hereby deleted and replaced in its entirety with the following:

notifying the other party in accordance with the terms of the Agreement (in any case, the “ Employment Period ”).”

2. Section 3 . The phrase “Chief Operating Officer” in Section 3 of the Employment Agreement is hereby deleted and replaced in its entirety with the word “President”.

3. Section 4.1 . The second and third sentences of Section 4.1 of the Employment Agreement are hereby deleted and replaced in their entirety with the following:

4. Section 4.2 . Section 4.2 of the Employment Agreement is hereby deleted and replaced in its entirety with the following:

“[INTENTIONALLY OMITTED]”

5. Section 5 . Section 5 of the Employment Agreement is hereby deleted and replaced in its entirety with the following:

6. Section 6 . Section 6 of the Employment Agreement is hereby deleted and replaced in its entirety with the following:

executives of the Company, provided, that the Company shall have no obligation, in any case, to adopt, maintain or continue any such plans, policies or programs.

7. Section 7 . Section 7 of the Employment Agreement (together with its subsections) is hereby deleted and replaced in its entirety with the following:

“ Relocation Expenses . The Employee acknowledges and agrees that, as of the Closing, (a) the Company has satisfied in full its obligations with respect to Section 7 of the Employment Agreement as in effect prior to this Third Amendment, and (b) the Employee has no further right, claim, entitlement or interest in or to any Relocation Expenses (as defined in the Employment Agreement as in effect prior to this Third Amendment) or other payments or benefits under Section 7 of the Employment Agreement as in effect prior to this Third Amendment.”

8. Section 8 . Section 8 of the Employment Agreement (together with its subsections) is hereby deleted and replaced in its entirety with the following:

“8. Termination of Employment . Either the Company or the Employee may terminate the Employee’s employment at any time for any reason or no reason. The following provisions shall control any such termination of the Employee’s employment.

8.1 Termination by the Company Without Cause . The Company may terminate the Employee’s employment without Cause (as defined below) at any time during the Employment Period upon written notice to the Employee provided in accordance with Section 17 below. If the Employee’s employment is terminated as provided in this Section 8.1, the Company shall pay to the Employee (a) the Employee’s earned but unpaid salary accrued through the Date of Termination (as defined below), (b) accrued but unpaid vacation time through the Date of Termination, (c) reimbursement of any properly submitted business expenses incurred by the Employee prior to the Date of

Termination that are reimbursable under Sections 6.2 or 6.3 above, and (d) any vested benefits and other amounts due to the Employee under any plan, program or policy of the Company (together, all of these benefits shall be referred to as the “ Accrued Obligations ”). The Accrued Obligations described in clauses (a) – (c) above will be paid to the Employee as soon as practicable on or after the Date of Termination, but in any event within thirty (30) days following the Date of Termination (or such earlier date as may be required by applicable law), provided, in the case of reimbursable expenses, that such expenses have been properly substantiated in accordance with applicable Company policy within fourteen (14) calendar days following the Date of Termination. The Accrued Obligations described in clause (d) above shall be paid to the Employee as such obligations become due to the Employee in accordance with the applicable plan or program. In addition, subject to Sections 8.8 and 24 below, the Employee’s execution and non-revocation of a binding Release (as defined below) in accordance with Section 8.8 below and the Employee’s continued compliance with the Confidentiality Agreement (as defined below) and Sections 9 – 11 below, the Employee shall be entitled to the following payments and benefits from the Company (referred to collectively as the “ Severance ”):

(x) payment of one hundred percent (100%) of the Employee’s annual salary at the rate in effect as of the Date of Termination, payable in substantially equal installments for a period of twelve (12) months following the Date of Termination, in accordance with the Company’s normal payroll procedures applicable to senior executives of the Company, as in effect from time to time (but no less often than monthly), provided that, consistent with the provisions of Treasury Regulation Section 1.409A-3(d), the Company hereby determines in its sole discretion to make any such payments that are otherwise scheduled to be paid during the period beginning on the Date of Termination and ending on the first regularly scheduled payroll date occurring on or after the thirtieth (30 ^th ) day following the Date of Termination (the “ First Payroll Date ”) on a later date, provided that the Company shall make such payments on or before the earlier of (i) the First Payroll Date or (ii) the 15 ^th day of the third calendar month following the otherwise scheduled payment date, and such payments shall be treated as made upon the otherwise scheduled payment date pursuant to Treasury Regulation Section 1.409A-3(d). If the Date of Termination and the First Payroll Date are in different calendar years, the Company shall make any such payments that are otherwise scheduled to be made in the calendar year that includes the Date of Termination on the First Payroll Date to the extent permitted by Treasury Regulation Section 1.409A-3(d). In all events, the parties intend that any and all amounts delayed until the First Payroll Date (or earlier date described above) shall be treated for purposes of Code (as defined below) Section 409A as payments made upon their originally scheduled dates in accordance with Treasury Regulation Section 1.409A-3(d), and the originally scheduled date(s) of any such payment(s) shall continue to constitute the “designated payment date(s)” for such payment(s) (within the meaning of Code Section 409A) for all purposes of Code Section 409A. If, under applicable law, the Employee is afforded forty-five (45) days to execute a Release rather than twenty-one (21) days, Severance payments described in this Section 8.1(x) will commence on the date or dates determined above

whether or not the Employee has executed the Release and the applicable revocation period has expired (subject to the Company’s right to recoup any such payments if the Employee ultimately fails to timely execute or revokes the Release); and

(xi) subject to the Employee’s proper election to continue healthcare coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“ COBRA ”), for a period of twelve (12) months from the Date of Termination, the Company will pay the Employee no less frequently than monthly (unless otherwise agreed by the Company and the Employee in a manner that is permissible under Code Section 409A) the difference between the Employee’s COBRA premiums (in respect of COBRA benefits to be provided through third-party insurance maintained by the Company under the Company’s benefit plans for the Employee and his legal dependents to the extent each such individual received healthcare coverage provided by the Company immediately prior to such termination of employment), and the cost to the Employee of such coverage immediately prior to such termination (subject to premium increases affecting participants in such plan(s) generally). The Company shall provide this premium cost offset in a manner that causes such COBRA benefits to be exempt from the application of Section 409A under Treasury Regulation Section 1.409A-1(a)(5), provided, that if during such twelve (12) month period, (i) any plan pursuant to which such benefits are to be provided is not, or ceases to be, exempt from the application of Section 409A under Treasury Regulation Section 1.409A-1(a)(5), (ii) the Company cannot provide such COBRA benefits without violating applicable law (including, without limitation, Section 2716 of the Public Health Service Act), or (iii) the Company is otherwise unable under applicable law to continue to cover the Employee and/or the Employee’s dependents under its group health plans without violating a prohibition on such coverage or incurring penalties and/or additional taxes as a result of such coverage, then, in any such case, an amount equal to each such remaining premium cost offset shall thereafter be paid to the Employee as currently taxable compensation in substantially equal monthly installments over the remainder of the twelve (12) month period; following such twelve (12)-month continuation period, any further continuation of such coverage under applicable law shall be at the Employee’s sole expense. For the avoidance of doubt, Severance payments described in this Section 8.1(y) will commence on the date or dates determined above whether or not the Employee has executed the Release and the applicable revocation period has expired (subject to the Company’s right to recoup any such payments if the Employee ultimately fails to timely execute or revokes the Release).

8.2 Disability . If the Employee’s employment is terminated due to the Employee’s Disability (as defined below) during the Employment Period, the Employee shall be entitled to receive the Accrued Obligations in the manner described in Section 8.1 above. In addition, subject to Sections 8.8 and 24 below, the Employee’s execution and non-revocation of a binding Release in accordance with Section 8.8 below and the Employee’s continued compliance with the Confidentiality Agreement and Sections 9 – 12 below, the Employee shall be entitled to receive:


(b)	the benefits described in Section 8.1(y) above.

8.3 Death . If the Employee dies during the Employment Period, the Employee or the Employee’s estate shall be entitled to receive the Accrued Obligations in the manner described in Section 8.1(d) above. In addition, subject to Sections 8.8 and 24 below, the Employee’s estate’s execution and non-revocation of a binding Release in accordance with Section 8.8 below the Employee’s estate shall be entitled to receive the Severance, payable as set forth in Section 8.1 above.

8.4 Voluntary Termination . The Employee may voluntarily terminate the Employee’s employment upon ninety (90) days’ notice to the Company provided in accordance with Section 17 below, subject to the Company’s right to waive any or all of such notice period. If the Employee so terminates the Employee’s employment, the Employee shall be entitled to receive the Accrued Obligations in the manner described in Section 8.1 above. If the Company elects to waive all or any portion of the notice period provided for in this Section 8.4, the Employee shall terminate employment effective immediately prior to the commencement of the waived period and shall, subject to Sections 8.8 and 24 below, the Employee’s execution and non-revocation of a binding Release in accordance with Section 8.8 below and the Employee’s continued compliance with the Confidentiality Agreement and Sections 9 – 11 below, be entitled to payment of an amount equal to the salary that would otherwise become payable in respect of such waived period absent the Company’s waiver, payable over the waived period in substantially equal installments in accordance with the Company’s normal payroll procedures applicable to senior executives of the Company, as in effect from time to time (but no less often than monthly), provided, that such payments shall be paid in the manner described in Section 8.1(x) above.

8.5 Cause . If the Employee’s employment becomes terminable by the Company for Cause (as defined below), then the Company shall provide the Employee with written notice setting forth in reasonable detail the nature of such Cause and, to the extent capable of cure, the Employee shall have a period of fifteen (15) days to cure such Cause (or such longer period as may be permitted under the definition of Cause below). If the Employee has not cured such Cause within the applicable cure period (to the extent capable of cure), then the Company may terminate the Employee’s employment immediately and the Employee shall be entitled to receive the Accrued Obligations in the manner described in Section 8.1 above.

8.6 Non-Renewal of Employment Period . If the Company elects not to renew the Employment Period (or any extension thereof), the Employee shall be entitled to receive the Accrued Obligations in the manner described in Section 8.1 above. In addition, if, at the time of the Employee’s receipt of the Company’s notice of election not to renew the Employment Period (or any extension thereof), the Employee is willing and able to extend the Agreement and continue providing services on terms and conditions substantially similar to those contained in this Agreement, then subject to Sections 8.8 and 24 below, the Employee’s execution and non-revocation of a binding Release in accordance with Section 8.8 below and the Employee’s continued compliance with the Confidentiality Agreement and Sections 9 – 11 below, the Employee shall be entitled to receive the Severance in the manner describe in Section 8.1 above, except that (a) the cash component of the Severance shall equal fifty percent (50%) of the Employee’s annual salary at the rate in effect as of the Date of Termination (rather than one hundred percent (100%)) and shall be payable in substantially equal installments for a period of six (6) months following the Date of Termination (rather than twelve (12) months), and (b) subsidized COBRA benefits shall continue for a period of six (6) months (rather than twelve (12) months).

8.7 Change in Control Benefits . During the Employment Period, the Employee shall be eligible to participate in the On Assignment, Inc. Amended and Restated Change in Control Severance Plan (the “ CIC Plan ”) at the level of “Division President”, as such plan may be amended from time to time in accordance with its terms; provided, however , that notwithstanding anything to the contrary contained in the CIC Plan (but subject to the provisions therein relating to a “Potential Six-Month Delay”), if the Employee becomes entitled to receive benefits under the CIC Plan, a portion of the “Annual Base Pay” (as defined in the CIC Plan) equal to three (3) months’ of the Employee’s annualized base salary at the rate in effect during the last regularly scheduled payroll period immediately preceding the occurrence of the change in control ( i.e., the severance that would have been payable under the Employment Agreement as in effect immediately prior to this Third Amendment) shall be paid in substantially equal installments over a period of three (3) months following the Date of Termination ( i.e. , in the manner provided under the Employment Agreement as in effect immediately prior to this Third Amendment) in accordance with the Company’s normal payroll procedures applicable to senior executives of the Company, as in effect from time to time (but no less often than monthly) (and, for the avoidance of doubt, all remaining amounts that become payable

under the CIC Plan shall be paid as set forth in the CIC Plan). For the avoidance of doubt, the preceding sentence applies only to the timing of payments under the CIC Plan and shall in no way increase the amount of payments or benefits to which the Employee may become entitled under the CIC Plan. In the event that the Employee actually receives benefits under the CIC Plan, such benefits shall be in lieu and full replacement of any benefits to which the Employee would otherwise become entitled under this Section 8 and the Employee shall not be entitled to receive any of the benefits described in this Section 8.

8.8 Release; Exclusivity of Benefits . Notwithstanding anything in this Agreement to the contrary, it shall be a condition to the Employee’s right to receive or retain, as applicable, the Severance (as defined above) that the Employee (or his estate) execute and deliver to the Company a general release of claims in a form reasonably prescribed by the Company and (the “ Release ”) within twenty-one (21) days (or, to the extent required by law, forty-five (45) days) following the Date of Termination and that the Employee not revoke such Release during any applicable revocation period. Except as expressly provided in this Agreement and/or required by applicable law, upon the termination of the Employee’s employment, the Company shall have no obligation to the Employee in connection with the Employee’s employment with the Company or the termination thereof.

8.9 Definitions .

(b) “ Code ” shall mean the Internal Revenue Code of 1986, as amended.

employee of the Company by reason of such accident, physical illness or mental illness. If the Employee disputes such physician’s opinion, the Employee shall choose another physician licensed to practice medicine in Virginia who shall render a separate written opinion to the Board of Directors of the Company with reasonable speed, which shall be controlling on the issue in question upon its receipt by the Board of Directors of the Company if the opinion of the second physician is in agreement with the opinion of the first physician. In the event the two opinions are at a variance, such two physicians shall be asked to agree on a third physician licensed to practice medicine in Virginia to render a third or final opinion to the Board of Directors of the Company with reasonable speed. The written opinion of such third physician shall be controlling on the issue in question upon its receipt by the Board of Directors of the Company. The fees of any or all of such physicians shall be paid by the Company. Notwithstanding anything to the contrary above, in the event that the Company maintains a long-term disability insurance policy covering the Employee, and if the Employee has not yet been designated as having experienced a Disability as provided hereunder, the Employee shall be deemed to have a Disability for purposes of this Agreement on the date that he is deemed disabled under the aforementioned insurance policy. The effective date of the Employee’s termination hereunder due to Disability shall be the earlier of (i) the date on which the applicable controlling physician opinion (determined in accordance with this Section 8.9(d)) is delivered to the Board of Directors of the Company or (ii) the date the Employee is deemed disabled under an insurance policy described above.

(e) “ Separation from Service ” has the meaning assigned pursuant to Section 409A(a)(2)(A)(i) of the Code, and Treasury Regulation Section 1.409A-1(h).”

9. Section 12A . The following Section 12A is hereby added to the Employment Agreement immediately after Section 12 thereof:

“12A. Restrictive Covenants . The parties acknowledge and agree that OA and the Employee have entered into a Confidentiality, Noncompetition, Nonsolicitation and Nondisclosure Agreement (the “ Confidentiality Agreement ”), and that such Confidentiality Agreement shall be additional to, and not in limitation of, the covenants contained in this Agreement, and shall remain in full force and effect in accordance with its terms. The compensation and benefits provided under this Agreement, together with compensation and benefits provided under the Merger Agreement, any Severance obligations arising hereunder and other good and valuable consideration are hereby acknowledged by the parties hereto to constitute adequate consideration for the Employee’s entering into the Confidentiality Agreement.”

10. Section 13 . Reference to the phrase “Sections 9, 10, 11 and 12 above” in Section 13 of the Employment Agreement is hereby deleted and replaced in its entirety with the phrase “Sections 9, 10, 11, 12 and 12A above”.

11. Section 24 . The following language is hereby added to the end of Section 24 of the Employment Agreement:

12. This Third Amendment shall be and, as of its effectiveness, is hereby incorporated in and forms a part of, the Employment Agreement.

13. Except as expressly provided herein, all terms and conditions of the Employment Agreement shall remain in full force and effect.

(signature page follows)

IN WITNESS WHEREOF , the parties hereto have executed this Third Amendment as of the date first written above.

APEX SYSTEMS, INC.

By: /s/ Carl Omohundro

Carl Omohundro

Secretary and General Counsel

ON ASSIGNMENT, INC.

By: ______________________________

Peter Dameris

Chief Executive Officer

EMPLOYEE

/s/ Rand Blazer

Rand Blazer

Exhibit 10.39

FOURTH AMENDMENT TO EMPLOYMENT AGREEMENT

THIS FOURTH AMENDMENT TO EMPLOYMENT AGREEMENT (this “ Fourth Amendment ”), is made as of May 15, 2012, by and between Apex Systems, Inc. (the “ Company ”) and Rand Blazer (the “ Employee ”). Capitalized terms used and not otherwise defined herein shall have the meanings ascribed to such terms in the Employment Agreement (as defined below).

RECITALS


A.	The Company and the Employee entered into an employment agreement, dated January 8, 2007, as amended on December 31, 2008, as further amended on August 3, 2009, and as further amended on May 15, 2012 (the “ Employment Agreement ”).


B.	After May 15, 2012, the Company established “Apex Systems, Inc. Senior Management PTO Plan” (“PTO Plan”). The Employment Agreement is hereby amended to clarify Employee’s participation in the PTO Plan.

AMENDMENT


1.	Section 5 . Section 5 of the Employment Agreement is hereby deleted and replaced in its entirety with the PTO Plan, which is incorporated herein by reference.


2.	This Fourth Amendment is hereby incorporated in and forms a part of the Employment Agreement.


3.	Except as expressly provided herein, all terms and conditions of the Employment Agreement shall remain in full force and effect.

IN WITNESS WHEREOF , the parties hereto have executed this Fourth Amendment as of the date first written above.

APEX SYSTEMS, INC.

By: /s/ Buddy Carl Omohundro

Buddy Carl Omohundro

General Counsel

EMPLOYEE

/s/ Rand Blazer

Rand Blazer

LA\2543293.6

20039728v1

Exhibit 10.41

INDEMNIFICATION AGREEMENT

This Indemnification Agreement (“Agreement”) is made as of May 15, 2012 by and between On Assignment, Inc., a Delaware corporation (the “Company”), and Randolph C. Blazer (“Indemnitee”).

RECITALS

WHEREAS, highly competent persons have become more reluctant to serve publicly-held corporations as directors or in other capacities unless they are provided with adequate protection through insurance or adequate indemnification against inordinate risks of claims and actions against them arising out of their service to and activities on behalf of the corporation;

WHEREAS, the Board of Directors of the Company (the “Board”) has determined that, in order to attract and retain qualified individuals, the Company will attempt to continue to maintain on an ongoing basis, at its sole expense, liability insurance to protect persons serving the Company and its subsidiaries from certain liabilities. The Bylaws of the Company require indemnification of the officers and directors of the Company. Indemnitee may also be entitled to indemnification pursuant to the General Corporation Law of the State of Delaware (“DGCL”). The Bylaws and the DGCL expressly provide that the indemnification provisions set forth therein are not exclusive, and thereby contemplate that contracts may be entered into between the Company and members of the board of directors, officers and other persons with respect to indemnification;

WHEREAS, such persons are often concerned about the uncertainties relating to such insurance and indemnification;

WHEREAS, the Board has determined that the Company should act to assure such persons that there will be increased certainty of such protection in the future;

WHEREAS, it is reasonable, prudent and necessary for the Company contractually to obligate itself to indemnify, and to advance expenses on behalf of, such persons to the fullest extent permitted by applicable law so that they will serve or continue to serve the Company free from undue concern that they will not be so indemnified;

WHEREAS, this Agreement is a supplement to and in furtherance of the Bylaws of the Company and any resolutions adopted pursuant thereto, and shall not be deemed a substitute therefor, nor to diminish or abrogate any rights of Indemnitee thereunder; and

NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:

Section 1. Services to the Company. Indemnitee agrees to serve as an officer of the Company. Indemnitee may at any time and for any reason resign from such position (subject to any other contractual obligation or any obligation imposed by operation of law), in which event the Company shall have no obligation under this Agreement to continue Indemnitee in such position. This Agreement shall not be deemed an employment contract between the Company (or any of its

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subsidiaries or any Enterprise) and Indemnitee. Indemnitee specifically acknowledges that Indemnitee’s employment with the Company (or any of its subsidiaries or any Enterprise), if any, is at will, and the Indemnitee may be discharged at any time for any reason, with or without cause, except as may be otherwise provided in any written employment contract between Indemnitee and the Company (or any of its subsidiaries or any Enterprise), other applicable formal severance policies duly adopted by the Board, or, with respect to service as a director or officer of the Company, by the Company’s Certificate of Incorporation, the Company’s Bylaws, and the General Corporation Law of the State of Delaware. The foregoing notwithstanding, this Agreement shall continue in force after Indemnitee has ceased to serve as an officer of the Company.

Section 2. Definitions. As used in this Agreement:

(a) A “Change in Control” shall be deemed to occur upon the earliest to occur after the date of this Agreement of any of the following events:

(i) Acquisition of Stock by Third Party. Any Person (as defined below) is or becomes the Beneficial Owner (as defined below), directly or indirectly, of securities of the Company representing fifteen percent (15%) or more of the combined voting power of the Company’s then outstanding securities;

(ii) Change in Board of Directors. During any period of two (2) consecutive years (not including any period prior to the execution of this Agreement), individuals who at the beginning of such period constitute the Board, and any new director (other than a director designated by a person who has entered into an agreement with the Company to effect a transaction described in Sections 2(a)(i), 2(a)(iii) or 2(a)(iv)) whose election by the Board or nomination for election by the Company’s stockholders was approved by a vote of at least two-thirds of the directors then still in office who either were directors at the beginning of the period or whose election or nomination for election was previously so approved, cease for any reason to constitute a least a majority of the members of the Board;

(iii) Corporate Transactions. The effective date of a merger or consolidation of the Company with any other entity, other than a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity) more than 51% of the combined voting power of the voting securities of the surviving entity outstanding immediately after such merger or consolidation and with the power to elect at least a majority of the board of directors or other governing body of such surviving entity;

(iv) Liquidation. The approval by the stockholders of the Company of a complete liquidation of the Company or an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets; and

(v) Other Events. There occurs any other event of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or a response

On Assignment, Inc. Indemnification Agreement

to any similar item on any similar schedule or form) promulgated under the Exchange Act (as defined below), whether or not the Company is then subject to such reporting requirement.

For purposes of this Section 2(a), the following terms shall have the following meanings:

(A) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

(B) “Person” shall have the meaning as set forth in Sections 13(d) and 14(d) of the Exchange Act; provided, however, that Person shall exclude (i) the Company, (ii) any trustee or other fiduciary holding securities under an employee benefit plan of the Company, and (iii) any corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company.

(C) “Beneficial Owner” shall have the meaning given to such term in Rule 13d-3 under the Exchange Act; provided, however, that Beneficial Owner shall exclude any Person otherwise becoming a Beneficial Owner by reason of the stockholders of the Company approving a merger of the Company with another entity.

(b) “Corporate Status” describes the status of a person who is or was a director, officer, employee or agent of the Company or of any other corporation, partnership or joint venture, trust, employee benefit plan or other enterprise which such person is or was serving at the request of the Company.

(c) “Disinterested Director” means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.

(d) “Enterprise” shall mean the Company and any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise of which Indemnitee is or was serving at the request of the Company as a director, officer, employee, agent or fiduciary.

(e) “Expenses” shall include all reasonable attorneys’ fees, retainers, court costs, transcript costs, fees of experts, witness fees, travel expenses, duplicating costs, printing and binding costs, telephone charges, postage, delivery service fees, and all other disbursements or expenses of the types customarily incurred in connection with prosecuting, defending, preparing to prosecute or defend, investigating, being or preparing to be a witness in, or otherwise participating in, a Proceeding. Expenses also shall include Expenses incurred in connection with any appeal resulting from any Proceeding, including without limitation the premium, security for, and other costs relating to any cost bond, supersedeas bond, or other appeal bond or its equivalent. Expenses, however,

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shall not include amounts paid in settlement by Indemnitee or the amount of judgments or fines against Indemnitee.

(f) “Independent Counsel” means a law firm, or a member of a law firm, that is experienced in matters of corporation law and neither presently is, nor in the past five years has been, retained to represent: (i) the Company or Indemnitee in any matter material to either such party (other than with respect to matters concerning the Indemnitee under this Agreement, or of other indemnitees under similar indemnification agreements), or (ii) any other party to the Proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term “Independent Counsel” shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or Indemnitee in an action to determine Indemnitee’s rights under this Agreement. The Company agrees to pay the reasonable fees and expenses of the Independent Counsel referred to above and to fully indemnify such counsel against any and all Expenses, claims, liabilities and damages arising out of or relating to this Agreement or its engagement pursuant hereto.

(g) The term “Proceeding” shall include any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought in the right of the Company or otherwise, whether of a civil, criminal, administrative or investigative nature and whether formal or informal, in which Indemnitee was, is or will be involved as a party or otherwise by reason of the fact that Indemnitee is or was a director or officer of the Company, by reason of any action taken by him or of any action on his part while acting as director or officer of the Company, or by reason of the fact that he is or was serving at the request of the Company as a director, officer, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, in each case whether or not serving in such capacity at the time any liability or expense is incurred for which indemnification, reimbursement, or advancement of expenses can be provided under this Agreement; except one initiated by a Indemnitee to enforce his rights under this Agreement.

(h) Reference to “other enterprise” shall include employee benefit plans; references to “fines” shall include any excise tax assessed with respect to any employee benefit plan; references to “serving at the request of the Company” shall include any service as a director, officer, employee or agent of the Company which imposes duties on, or involves services by, such director, officer, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner he reasonably believed to be in the best interests of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in manner “not opposed to the best interests of the Company” as referred to in this Agreement.

On Assignment, Inc. Indemnification Agreement

paid in settlement actually and reasonably incurred by Indemnitee or on his behalf in connection with such Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company and, in the case of a criminal proceeding had no reasonable cause to believe that his conduct was unlawful.

Section 4. Indemnity in Proceedings by or in the Right of the Company. The Company shall indemnify Indemnitee in accordance with the provisions of this Section 4 if Indemnitee is, or is threatened to be made, a party to or a participant in any Proceeding by or in the right of the Company to procure a judgment in its favor. Pursuant to this Section 4, Indemnitee shall be indemnified against all Expenses actually and reasonably incurred by him or on his behalf in connection with such Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company. No indemnification for Expenses shall be made under this Section 4 in respect of any claim, issue or matter as to which Indemnitee shall have been finally adjudged by a court to be liable to the Company, unless and only to the extent that the Delaware Court of Chancery or any court in which the Proceeding was brought shall determine upon application that, despite the adjudication of liability but in view of all the circumstances of the case, Indemnitee is fairly and reasonably entitled to indemnification.

Section 5. Indemnification for Expenses of a Party Who is Wholly or Partly Successful . Notwithstanding any other provisions of this Agreement, to the extent that Indemnitee is a party to (or a participant in) and is successful, on the merits or otherwise, in any Proceeding or in defense of any claim, issue or matter therein, in whole or in part, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him in connection therewith. If Indemnitee is not wholly successful in such Proceeding but is successful, on the merits or otherwise, as to one or more but less than all claims, issues or matters in such Proceeding, the Company shall indemnify Indemnitee against all Expenses actually and reasonably incurred by him or on his behalf in connection with each successfully resolved claim, issue or matter. If the Indemnitee is not wholly successful in such Proceeding, the Company also shall indemnify Indemnitee against all Expenses reasonably incurred in connection with a claim, issue or matter related to any claim, issue, or matter on which the Indemnitee was successful. For purposes of this Section and without limitation, the termination of any claim, issue or matter in such a Proceeding by dismissal, with or without prejudice, shall be deemed to be a successful result as to such claim, issue or matter.

Section 6. Indemnification For Expenses of a Witness. Notwithstanding any other provision of this Agreement, to the extent that Indemnitee is, or in good faith believes it will become, by reason of his Corporate Status, a witness in any Proceeding to which Indemnitee is not a party, he shall be indemnified against all Expenses actually and reasonably incurred by him or on his behalf in connection therewith.

Section 7. Additional Indemnification.

On Assignment, Inc. Indemnification Agreement

procure a judgment in its favor) against all Expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by Indemnitee in connection with the Proceeding.

(b) For purposes of Section 7(a), the meaning of the phrase “to the fullest extent permitted by law” shall include, but not be limited to:

(i) to the fullest extent permitted by the provision of the DGCL that authorizes or contemplates additional indemnification by agreement, or the corresponding provision of any amendment to or replacement of the DGCL, and

(ii) to the fullest extent authorized or permitted by any amendments to or replacements of the DGCL adopted after the date of this Agreement that increase the extent to which a corporation may indemnify its officers and directors.

Section 8. Exclusions. Notwithstanding any provision in this Agreement, the Company shall not be obligated under this Agreement to make any indemnity in connection with any claim made against Indemnitee:

(a) for which payment has actually been made to or on behalf of Indemnitee under any insurance policy or other indemnity provision, except with respect to any excess beyond the amount paid under any insurance policy or other indemnity provision; or

(b) for an accounting of profits made from the purchase and sale (or sale and purchase) by Indemnitee of securities of the Company within the meaning of Section 16(b) of the Securities Exchange Act of 1934, as amended, or similar provisions of state statutory law or common law pursuant to a settlement by or judgment against Indemnitee; provided this shall not limit the Company’s ability to defend such claim if it elects to do so; or

(c) in connection with any Proceeding (or any part of any Proceeding) initiated by Indemnitee, including any Proceeding (or any part of any Proceeding) initiated by Indemnitee against the Company or its directors, officers, employees or other indemnitees, unless (i) the Board of Directors of the Company authorized or consented to the Proceeding (or any part of any Proceeding) prior to its initiation or joins in the Proceeding, (ii) the Proceeding is to enforce rights under this Agreement, (iii) the Proceeding is initiated after a Change of Control and Independent Counsel has approved its initiation and (iv) the Company provides the indemnification, in its sole discretion, pursuant to the powers vested in the Company under applicable law.

On Assignment, Inc. Indemnification Agreement

claimed. The Indemnitee shall qualify for advances upon the execution and delivery to the Company of this Agreement which shall constitute an undertaking providing that the Indemnitee undertakes to repay the advance to the extent that it is ultimately determined that Indemnitee is not entitled to be indemnified by the Company. This Section 9 shall not apply to any claim made by Indemnitee for which indemnity is excluded pursuant to Section 8.

Section 10. Procedure for Notification and Defense of Claim.

(a) To obtain indemnification under this Agreement, Indemnitee shall submit to the Company a written request, including therein or therewith such documentation and information as is reasonably available to Indemnitee and is reasonably necessary to determine whether and to what extent Indemnitee is entitled to indemnification, not later than thirty (30) days after receipt by Indemnitee of notice of the commencement of any Proceeding. The omission to notify the Company will not relieve the Company from any liability which it may have to Indemnitee otherwise than under this Agreement. The Secretary of the Company shall, promptly upon receipt of such a request for indemnification, advise the Board in writing that Indemnitee has requested indemnification.

(b) The Company will be entitled to participate in the Proceeding at its own expense.

Section 11. Procedure Upon Application for Indemnification.

(a) Upon written request by Indemnitee for indemnification pursuant to the first sentence of Section 10(a), a determination, if required by applicable law, with respect to Indemnitee’s entitlement thereto shall be made in the specific case: (i) if a Change in Control shall have occurred, by Independent Counsel in a written opinion to the Board of Directors, a copy of which shall be delivered to Indemnitee; or (ii) if a Change in Control shall not have occurred, (A) by a majority vote of the Disinterested Directors, even though less than a quorum of the Board, (B) by a committee of Disinterested Directors designated by a majority vote of the Disinterested Directors, even though less than a quorum of the Board, (C) if there are no such Disinterested Directors or, if such Disinterested Directors so direct, by Independent Counsel in a written opinion to the Board, a copy of which shall be delivered to Indemnitee or (D) if so directed by the Board, by the stockholders of the Company; and, if it is so determined that Indemnitee is entitled to indemnification, payment to Indemnitee shall be made within ten (10) days after such determination. Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitee’s entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination. Any costs or expenses (including attorneys’ fees and disbursements) incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee’s entitlement to indemnification) and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom.

On Assignment, Inc. Indemnification Agreement

(b) In the event the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 11(a) hereof, the Independent Counsel shall be selected as provided in this Section 11(b). If a Change in Control shall not have occurred, the Independent Counsel shall be selected by the Board of Directors, and the Company shall give written notice to Indemnitee advising him of the identity of the Independent Counsel so selected. If a Change in Control shall have occurred, the Independent Counsel shall be selected by Indemnitee (unless Indemnitee shall request that such selection be made by the Board of Directors, in which event the preceding sentence shall apply), and Indemnitee shall give written notice to the Company advising it of the identity of the Independent Counsel so selected. In either event, Indemnitee or the Company, as the case may be, may, within 10 days after such written notice of selection shall have been given, deliver to the Company or to Indemnitee, as the case may be, a written objection to such selection; provided, however, that such objection may be asserted only on the ground that the Independent Counsel so selected does not meet the requirements of “Independent Counsel” as defined in Section 2 of this Agreement, and the objection shall set forth with particularity the factual basis of such assertion. Absent a proper and timely objection, the person so selected shall act as Independent Counsel. If such written objection is so made and substantiated, the Independent Counsel so selected may not serve as Independent Counsel unless and until such objection is withdrawn or a court has determined that such objection is without merit. If, within 20 days after submission by Indemnitee of a written request for indemnification pursuant to Section 10(a) hereof, no Independent Counsel shall have been selected and not objected to, either the Company or Indemnitee may petition a court of competent jurisdiction for resolution of any objection which shall have been made by the Company or Indemnitee to the other’s selection of Independent Counsel and/or for the appointment as Independent Counsel of a person selected by the Court or by such other person as the Court shall designate, and the person with respect to whom all objections are so resolved or the person so appointed shall act as Independent Counsel under Section 11(a) hereof. Upon the due commencement of any judicial proceeding or arbitration pursuant to Section 13(a) of this Agreement, Independent Counsel shall be discharged and relieved of any further responsibility in such capacity (subject to the applicable standards of professional conduct then prevailing).

Section 12. Presumptions and Effect of Certain Proceedings.

(a) In making a determination with respect to entitlement to indemnification hereunder, the person or persons or entity making such determination shall presume that Indemnitee is entitled to indemnification under this Agreement if Indemnitee has submitted a request for indemnification in accordance with Section 10(a) of this Agreement, and the Company shall have the burden of proof to overcome that presumption in connection with the making by any person, persons or entity of any determination contrary to that presumption. Neither the failure of the Company (including by its directors or independent legal counsel) to have made a determination prior to the commencement of any action pursuant to this Agreement that indemnification is proper in the circumstances because Indemnitee has met the applicable standard of conduct, nor an actual determination by the Company (including by its directors or independent legal counsel) that Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct.

On Assignment, Inc. Indemnification Agreement

(b) If the person, persons or entity empowered or selected under Section 11 of this Agreement to determine whether Indemnitee is entitled to indemnification shall not have made a determination within thirty (30) days after receipt by the Company of the request therefor, the requisite determination of entitlement to indemnification shall be deemed to have been made and Indemnitee shall be entitled to such indemnification, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law; provided, however, that such 30-day period may be extended for a reasonable time, not to exceed an additional thirty (30) days, if the person, persons or entity making the determination with respect to entitlement to indemnification in good faith requires such additional time for the obtaining or evaluating of documentation and/or information relating thereto; and provided, further, that the foregoing provisions of this Section 12(b) shall not apply (i) if the determination of entitlement to indemnification is to be made by the stockholders pursuant to Section 11(a) of this Agreement and if (A) within fifteen (15) days after receipt by the Company of the request for such determination the Board of Directors has resolved to submit such determination to the stockholders for their consideration at an annual meeting thereof to be held within seventy five (75) days after such receipt and such determination is made thereat, or (B) a special meeting of stockholders is called within fifteen (15) days after such receipt for the purpose of making such determination, such meeting is held for such purpose within sixty (60) days after having been so called and such determination is made thereat, or (ii) if the determination of entitlement to indemnification is to be made by Independent Counsel pursuant to Section 11(a) of this Agreement.

(c) The termination of any Proceeding or of any claim, issue or matter therein, by judgment, order, settlement or conviction, or upon a plea of nolo contendere or its equivalent, shall not (except as otherwise expressly provided in this Agreement) of itself adversely affect the right of Indemnitee to indemnification or create a presumption that Indemnitee did not act in good faith and in a manner which he reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal Proceeding, that Indemnitee had reasonable cause to believe that his conduct was unlawful.

(d) Reliance as Safe Harbor . For purposes of any determination of good faith, Indemnitee shall be deemed to have acted in good faith if Indemnitee’s action is based on the records or books of account of the Enterprise, including financial statements, or on information supplied to Indemnitee by the officers of the Enterprise in the course of their duties, or on the advice of legal counsel for the Enterprise or on information or records given or reports made to the Enterprise by an independent certified public accountant or by an appraiser or other expert selected with the reasonable care by the Enterprise. The provisions of this Section 12(d) shall not be deemed to be exclusive or to limit in any way the other circumstances in which the Indemnitee may be deemed to have met the applicable standard of conduct set forth in this Agreement.

(e) Actions of Others . The knowledge and/or actions, or failure to act, of any director, officer, agent or employee of the Enterprise shall not be imputed to Indemnitee for purposes of determining the right to indemnification under this Agreement.

On Assignment, Inc. Indemnification Agreement

Section 13. Remedies of Indemnitee.

(a) In the event that (i) a determination is made pursuant to Section 11 of this Agreement that Indemnitee is not entitled to indemnification under this Agreement, (ii) advancement of Expenses is not timely made pursuant to Section 9 of this Agreement, (iii) no determination of entitlement to indemnification shall have been made pursuant to Section 11(a) of this Agreement within 45 days after receipt by the Company of the request for indemnification, (iv) payment of indemnification is not made pursuant to Section 5 or 6 or the last sentence of Section 11(a) of this Agreement within ten (10) days after receipt by the Company of a written request therefor, or (v) payment of indemnification pursuant to Section 3, 4 or 7 of this Agreement is not made within ten (10) days after a determination has been made that Indemnitee is entitled to indemnification, Indemnitee shall be entitled to an adjudication by a court of his entitlement to such indemnification or advancement of Expenses. Alternatively, Indemnitee, at his option, may seek an award in arbitration to be conducted by a single arbitrator pursuant to the Commercial Arbitration Rules of the American Arbitration Association. Indemnitee shall commence such proceeding seeking an adjudication or an award in arbitration within 180 days following the date on which Indemnitee first has the right to commence such proceeding pursuant to this Section 13(a); provided, however, that the foregoing clause shall not apply in respect of a proceeding brought by Indemnitee to enforce his rights under Section 5 of this Agreement. The Company shall not oppose Indemnitee’s right to seek any such adjudication or award in arbitration.

(b) In the event that a determination shall have been made pursuant to Section 11(a) of this Agreement that Indemnitee is not entitled to indemnification, any judicial proceeding or arbitration commenced pursuant to this Section 13 shall be conducted in all respects as a de novo trial, or arbitration, on the merits and Indemnitee shall not be prejudiced by reason of that adverse determination. In any judicial proceeding or arbitration commenced pursuant to this Section 13 the Company shall have the burden of proving Indemnitee is not entitled to indemnification or advancement of Expenses, as the case may be.

(c) If a determination shall have been made pursuant to Section 11(a) of this Agreement that Indemnitee is entitled to indemnification, the Company shall be bound by such determination in any judicial proceeding or arbitration commenced pursuant to this Section 13, absent (i) a misstatement by Indemnitee of a material fact, or an omission of a material fact necessary to make Indemnitee’s statement not materially misleading, in connection with the request for indemnification, or (ii) a prohibition of such indemnification under applicable law.

(d) The Company shall be precluded from asserting in any judicial proceeding or arbitration commenced pursuant to this Section 13 that the procedures and presumptions of this Agreement are not valid, binding and enforceable and shall stipulate in any such court or before any such arbitrator that the Company is bound by all the provisions of this Agreement. The Company shall indemnify Indemnitee against any and all Expenses and, if requested by Indemnitee, shall (within ten (10) days after receipt by the Company of a written request therefore) advance such expenses to Indemnitee, which are incurred by Indemnitee in connection with any action brought by Indemnitee for indemnification or advance of Expenses from the Company under this Agreement or under any directors’ and officers’ liability insurance policies maintained by the Company,

On Assignment, Inc. Indemnification Agreement

regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification, advancement of Expenses or insurance recovery, as the case may be.

Section 14. Non-exclusivity; Survival of Rights; Insurance; Subrogation.

(a) The rights of indemnification and to receive advancement of Expenses as provided by this Agreement shall not be deemed exclusive of any other rights to which Indemnitee may at any time be entitled under applicable law, the Company’s Certificate of Incorporation, the Company’s Bylaws, any agreement, a vote of stockholders or a resolution of directors, or otherwise. No amendment, alteration or repeal of this Agreement or of any provision hereof shall limit or restrict any right of Indemnitee under this Agreement in respect of any action taken or omitted by such Indemnitee in his Corporate Status prior to such amendment, alteration or repeal. To the extent that a change in Delaware law, whether by statute or judicial decision, permits greater indemnification or advancement of Expenses than would be afforded currently under the Company’s Bylaws and this Agreement, it is the intent of the parties hereto that Indemnitee shall enjoy by this Agreement the greater benefits so afforded by such change. No right or remedy herein conferred is intended to be exclusive of any other right or remedy, and every other right and remedy shall be cumulative and in addition to every other right and remedy given hereunder or now or hereafter existing at law or in equity or otherwise. The assertion or employment of any right or remedy hereunder, or otherwise, shall not prevent the concurrent assertion or employment of any other right or remedy.

(b) To the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, officers, employees, or agents of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which such person serves at the request of the Company, Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any such director, officer, employee or agent under such policy or policies. If, at the time of the receipt of a notice of a claim pursuant to the terms hereof, the Company has director and officer liability insurance in effect, the Company shall give prompt notice of the commencement of such proceeding to the insurers in accordance with the procedures set forth in the respective policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such proceeding in accordance with the terms of such policies. In the event of a Change in Control, the Company shall maintain in force any and all insurance policies then maintained by the Company in providing directors’ and officers’ insurance, in respect of Indemnitee, for a period of six years thereafter. This tail coverage shall be placed by the Company’s D&O insurance broker and shall be satisfactory to Indemnitee.

(c) In the event of any payment under this Agreement, the Company shall be subrogated to the extent of such payment to all of the rights of recovery of Indemnitee, who shall execute all papers required and take all action necessary to secure such rights, including execution of such documents as are necessary to enable the Company to bring suit to enforce such rights.

(d) The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable (or for which advancement is provided hereunder) hereunder

On Assignment, Inc. Indemnification Agreement

if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.

(e) The Company’s obligation to indemnify or advance Expenses hereunder to Indemnitee who is or was serving at the request of the Company as a director, officer, employee or agent of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise shall be reduced by any amount Indemnitee has actually received as indemnification or advancement of expenses from such other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise.

Section 15. Duration of Agreement. This Agreement shall continue until and terminate upon the later of: (a) 10 years after the date that Indemnitee shall have ceased to serve as a [director] [officer] of the Company or (b) 1 year after the final termination of any Proceeding then pending in respect of which Indemnitee is granted rights of indemnification or advancement of Expenses hereunder and of any proceeding commenced by Indemnitee pursuant to Section 13 of this Agreement relating thereto. This Agreement shall be binding upon the Company and its successors and assigns (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business and/or assets of the Company) and shall inure to the benefit of Indemnitee and his heirs, executors and administrators. The Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation, or otherwise) to all, substantially all, or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession has taken place. The indemnification provided under this Agreement shall continue as to Indemnitee for any action taken or not taken while serving in an indemnified capacity even though he may have ceased to serve in such capacity at the time of any Proceeding.

Section 16. Severability. If any provision or provisions of this Agreement shall be held to be invalid, illegal or unenforceable for any reason whatsoever: (a) the validity, legality and enforceability of the remaining provisions of this Agreement (including without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall not in any way be affected or impaired thereby and shall remain enforceable to the fullest extent permitted by law; (b) such provision or provisions shall be deemed reformed to the extent necessary to conform to applicable law and to give the maximum effect to the intent of the parties hereto; and (c) to the fullest extent possible, the provisions of this Agreement (including, without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.

Section 17. Enforcement.

(a) The Company expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on it hereby in order to induce Indemnitee to serve

On Assignment, Inc. Indemnification Agreement

or continue to serve as a director or officer of the Company, and the Company acknowledges that Indemnitee is relying upon this Agreement in serving as a director or officer of the Company.

(b) This Agreement constitutes the entire agreement between the parties hereto with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral, written and implied, between the parties hereto with respect to the subject matter hereof.

Section 18. Modification and Waiver. No supplement, modification or amendment of this Agreement shall be binding unless executed in writing by the parties thereto. No waiver of any of the provisions of this Agreement shall be deemed or shall constitute a waiver of any other provisions of this Agreement nor shall any waiver constitute a continuing waiver.

Section 19. Notice by Indemnitee and Company.

(a) Indemnitee agrees promptly to notify the Company in writing upon being served with any summons, citation, subpoena, complaint, indictment, information or other document relating to any Proceeding or matter which may be subject to indemnification or advancement of Expenses covered hereunder. The failure of Indemnitee to so notify the Company shall not relieve the Company of any obligation which it may have to the Indemnitee under this Agreement or otherwise.

(b) The Company agrees to promptly notify Indemnitee in writing upon becoming aware that Indemnitee is the subject of any Proceeding and will provide to Indemnitee, upon request, any information provided to third parties relating to Indemnitee in any such Proceeding.

Section 20. Notices. All notices, requests, demands and other communications under this Agreement shall be in writing and shall be deemed to have been duly given (a) if delivered by hand and receipted for by the party to whom said notice or other communication shall have been directed, or (b) mailed by certified or registered mail with postage prepaid, on the third business day after the date on which it is so mailed:

(a) If to Indemnitee, at the address indicated on the signature page of this Agreement, or such other address as Indemnitee shall provide to the Company.

(b) If to the Company to

On Assignment, Inc.

26745 Malibu Hills Road

Calabasas, CA 91301

or to any other address as may have been furnished to Indemnitee by the Company.

On Assignment, Inc. Indemnification Agreement

be paid in settlement and/or for Expenses, in connection with any claim relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits received by the Company and Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such Proceeding; and/or (ii) the relative fault of the Company (and its directors, officers, employees and agents) and Indemnitee in connection with such event(s) and/or transaction(s).

Section 22. Applicable Law and Consent to Jurisdiction. This Agreement and the legal relations among the parties shall be governed by, and construed and enforced in accordance with, the laws of the State of Delaware, without regard to its conflict of laws rules. Except with respect to any arbitration commenced by Indemnitee pursuant to Section 10(a) of this Agreement, the Company and Indemnitee hereby irrevocably and unconditionally (i) agree that any action or proceeding arising out of or in connection with this Agreement shall be brought only in the Chancery Court of the State of Delaware (the “Delaware Court”), and not in any other state or federal court in the United States of America or any court in any other country, (ii) consent to submit to the exclusive jurisdiction of the Delaware Court for purposes of any action or proceeding arising out of or in connection with this Agreement, (iii) appoint, to the extent such party is not otherwise subject to service of process in the State of Delaware, irrevocably The Corporation Trust Company, Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801 as its agent in the State of Delaware as such party’s agent for acceptance of legal process in connection with any such action or proceeding against such party with the same legal force and validity as if served upon such party personally within the State of Delaware, (iv) waive any objection to the laying of venue of any such action or proceeding in the Delaware Court, and (v) waive, and agree not to plead or to make, any claim that any such action or proceeding brought in the Delaware Court has been brought in an improper or inconvenient forum.

Section 23. Identical Counterparts. This Agreement may be executed in one or more counterparts, each of which shall for all purposes be deemed to be an original but all of which together shall constitute one and the same Agreement. Only one such counterpart signed by the party against whom enforceability is sought needs to be produced to evidence the existence of this Agreement.

Section 24. Miscellaneous. Use of the masculine pronoun shall be deemed to include usage of the feminine pronoun where appropriate. The headings of the paragraphs of this Agreement are inserted for convenience only and shall not be deemed to constitute part of this Agreement or to affect the construction thereof.

IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as of the day and year first above written.



ON ASSIGNMENT, INC.		INDEMNITEE

By: /s/ Peter. T. Dameris		/s/ Randolph C. Blazer
Peter T. Dameris		Randolph C. Blazer
President and Chief Executive Officer		President of Apex Systems, Inc.

On Assignment, Inc. Indemnification Agreement

Exhibit 10.44

INDEMNIFICATION AGREEMENT

This Indemnification Agreement (“Agreement”) is made as of May 15, 2012 by and between On Assignment, Inc., a Delaware corporation (the “Company”), and Theodore S. Hanson (“Indemnitee”).

RECITALS

WHEREAS, such persons are often concerned about the uncertainties relating to such insurance and indemnification;

WHEREAS, the Board has determined that the Company should act to assure such persons that there will be increased certainty of such protection in the future;

NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:

On Assignment, Inc. Indemnification Agreement

Section 2. Definitions. As used in this Agreement:

(a) A “Change in Control” shall be deemed to occur upon the earliest to occur after the date of this Agreement of any of the following events:

(v) Other Events. There occurs any other event of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or a response

On Assignment, Inc. Indemnification Agreement

to any similar item on any similar schedule or form) promulgated under the Exchange Act (as defined below), whether or not the Company is then subject to such reporting requirement.

For purposes of this Section 2(a), the following terms shall have the following meanings:

(A) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

(c) “Disinterested Director” means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.

On Assignment, Inc. Indemnification Agreement

shall not include amounts paid in settlement by Indemnitee or the amount of judgments or fines against Indemnitee.

On Assignment, Inc. Indemnification Agreement

Section 7. Additional Indemnification.

On Assignment, Inc. Indemnification Agreement

procure a judgment in its favor) against all Expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by Indemnitee in connection with the Proceeding.

(b) For purposes of Section 7(a), the meaning of the phrase “to the fullest extent permitted by law” shall include, but not be limited to:

On Assignment, Inc. Indemnification Agreement

Section 10. Procedure for Notification and Defense of Claim.

(b) The Company will be entitled to participate in the Proceeding at its own expense.

Section 11. Procedure Upon Application for Indemnification.

On Assignment, Inc. Indemnification Agreement

Section 12. Presumptions and Effect of Certain Proceedings.

On Assignment, Inc. Indemnification Agreement

Section 13. Remedies of Indemnitee.

On Assignment, Inc. Indemnification Agreement

regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification, advancement of Expenses or insurance recovery, as the case may be.

Section 14. Non-exclusivity; Survival of Rights; Insurance; Subrogation.

(d) The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable (or for which advancement is provided hereunder) hereunder

On Assignment, Inc. Indemnification Agreement

if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.

Section 17. Enforcement.

(a) The Company expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on it hereby in order to induce Indemnitee to serve

On Assignment, Inc. Indemnification Agreement

or continue to serve as a director or officer of the Company, and the Company acknowledges that Indemnitee is relying upon this Agreement in serving as a director or officer of the Company.

Section 19. Notice by Indemnitee and Company.

(a) If to Indemnitee, at the address indicated on the signature page of this Agreement, or such other address as Indemnitee shall provide to the Company.

(b) If to the Company to

On Assignment, Inc.

26745 Malibu Hills Road

Calabasas, CA 91301

or to any other address as may have been furnished to Indemnitee by the Company.

On Assignment, Inc. Indemnification Agreement

IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as of the day and year first above written.



ON ASSIGNMENT, INC.		INDEMNITEE
By: /s/ Peter. T. Dameris		/s/ Theodore S. Hanson
Peter T. Dameris		Theodore S. Hanson
President and Chief Executive Officer		Chief Financial Officer, Apex Systems

On Assignment, Inc. Indemnification Agreement

Exhibit 10.45

INDEMNIFICATION AGREEMENT

This Indemnification Agreement (“Agreement”) is made as of May 15, 2012 by and between On Assignment, Inc., a Delaware corporation (the “Company”), and Edwin A. Sheridan, IV (“Indemnitee”).

RECITALS

WHEREAS, such persons are often concerned about the uncertainties relating to such insurance and indemnification;

WHEREAS, the Board has determined that the Company should act to assure such persons that there will be increased certainty of such protection in the future;

NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:

On Assignment, Inc. Indemnification Agreement

This Agreement shall not be deemed an employment contract between the Company (or any of its subsidiaries or any Enterprise) and Indemnitee. Indemnitee specifically acknowledges that Indemnitee’s employment with the Company (or any of its subsidiaries or any Enterprise), if any, is at will, and the Indemnitee may be discharged at any time for any reason, with or without cause, except as may be otherwise provided in any written employment contract between Indemnitee and the Company (or any of its subsidiaries or any Enterprise), other applicable formal severance policies duly adopted by the Board, or, with respect to service as a director or officer of the Company, by the Company’s Certificate of Incorporation, the Company’s Bylaws, and the General Corporation Law of the State of Delaware. The foregoing notwithstanding, this Agreement shall continue in force after Indemnitee has ceased to serve as an officer of the Company.

Section 2. Definitions. As used in this Agreement:

(a) A “Change in Control” shall be deemed to occur upon the earliest to occur after the date of this Agreement of any of the following events:

(v) Other Events. There occurs any other event of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or a response

On Assignment, Inc. Indemnification Agreement

to any similar item on any similar schedule or form) promulgated under the Exchange Act (as defined below), whether or not the Company is then subject to such reporting requirement.

For purposes of this Section 2(a), the following terms shall have the following meanings:

(A) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

(c) “Disinterested Director” means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.

On Assignment, Inc. Indemnification Agreement

shall not include amounts paid in settlement by Indemnitee or the amount of judgments or fines against Indemnitee.

On Assignment, Inc. Indemnification Agreement

Section 7. Additional Indemnification.

On Assignment, Inc. Indemnification Agreement

procure a judgment in its favor) against all Expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by Indemnitee in connection with the Proceeding.

(b) For purposes of Section 7(a), the meaning of the phrase “to the fullest extent permitted by law” shall include, but not be limited to:

On Assignment, Inc. Indemnification Agreement

Section 10. Procedure for Notification and Defense of Claim.

(b) The Company will be entitled to participate in the Proceeding at its own expense.

Section 11. Procedure Upon Application for Indemnification.

On Assignment, Inc. Indemnification Agreement

Section 12. Presumptions and Effect of Certain Proceedings.

On Assignment, Inc. Indemnification Agreement

Section 13. Remedies of Indemnitee.

On Assignment, Inc. Indemnification Agreement

regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification, advancement of Expenses or insurance recovery, as the case may be.

Section 14. Non-exclusivity; Survival of Rights; Insurance; Subrogation.

(d) The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable (or for which advancement is provided hereunder) hereunder

On Assignment, Inc. Indemnification Agreement

if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.

Section 17. Enforcement.

(a) The Company expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on it hereby in order to induce Indemnitee to serve

On Assignment, Inc. Indemnification Agreement

or continue to serve as a director or officer of the Company, and the Company acknowledges that Indemnitee is relying upon this Agreement in serving as a director or officer of the Company.

Section 19. Notice by Indemnitee and Company.

(a) If to Indemnitee, at the address indicated on the signature page of this Agreement, or such other address as Indemnitee shall provide to the Company.

(b) If to the Company to

On Assignment, Inc.

26745 Malibu Hills Road

Calabasas, CA 91301

or to any other address as may have been furnished to Indemnitee by the Company.

On Assignment, Inc. Indemnification Agreement

IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as of the day and year first above written.



ON ASSIGNMENT, INC.		INDEMNITEE
By: /s/ Peter. T. Dameris		/s/ Edwin A. Sheridan, IV
Peter T. Dameris		Edwin A. Sheridan, IV
President and Chief Executive Officer		Board Member

On Assignment, Inc. Indemnification Agreement

Exhibit 10.46

INDEMNIFICATION AGREEMENT

This Indemnification Agreement (“Agreement”) is made as of May 15, 2012 by and between On Assignment, Inc., a Delaware corporation (the “Company”), and Brian J. Callaghan (“Indemnitee”).

RECITALS

WHEREAS, such persons are often concerned about the uncertainties relating to such insurance and indemnification;

WHEREAS, the Board has determined that the Company should act to assure such persons that there will be increased certainty of such protection in the future;

NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:

On Assignment, Inc. Indemnification Agreement

Section 2. Definitions. As used in this Agreement:

(a) A “Change in Control” shall be deemed to occur upon the earliest to occur after the date of this Agreement of any of the following events:

(v) Other Events. There occurs any other event of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or a response

On Assignment, Inc. Indemnification Agreement

to any similar item on any similar schedule or form) promulgated under the Exchange Act (as defined below), whether or not the Company is then subject to such reporting requirement.

For purposes of this Section 2(a), the following terms shall have the following meanings:

(A) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

(c) “Disinterested Director” means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.

On Assignment, Inc. Indemnification Agreement

shall not include amounts paid in settlement by Indemnitee or the amount of judgments or fines against Indemnitee.

On Assignment, Inc. Indemnification Agreement

Section 7. Additional Indemnification.

On Assignment, Inc. Indemnification Agreement

procure a judgment in its favor) against all Expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by Indemnitee in connection with the Proceeding.

(b) For purposes of Section 7(a), the meaning of the phrase “to the fullest extent permitted by law” shall include, but not be limited to:

On Assignment, Inc. Indemnification Agreement

Section 10. Procedure for Notification and Defense of Claim.

(b) The Company will be entitled to participate in the Proceeding at its own expense.

Section 11. Procedure Upon Application for Indemnification.

On Assignment, Inc. Indemnification Agreement

Section 12. Presumptions and Effect of Certain Proceedings.

On Assignment, Inc. Indemnification Agreement

Section 13. Remedies of Indemnitee.

On Assignment, Inc. Indemnification Agreement

regardless of whether Indemnitee ultimately is determined to be entitled to such indemnification, advancement of Expenses or insurance recovery, as the case may be.

Section 14. Non-exclusivity; Survival of Rights; Insurance; Subrogation.

(d) The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable (or for which advancement is provided hereunder) hereunder

On Assignment, Inc. Indemnification Agreement

if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.

Section 17. Enforcement.

(a) The Company expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on it hereby in order to induce Indemnitee to serve

On Assignment, Inc. Indemnification Agreement

or continue to serve as a director or officer of the Company, and the Company acknowledges that Indemnitee is relying upon this Agreement in serving as a director or officer of the Company.

Section 19. Notice by Indemnitee and Company.

(a) If to Indemnitee, at the address indicated on the signature page of this Agreement, or such other address as Indemnitee shall provide to the Company.

(b) If to the Company to

On Assignment, Inc.

26745 Malibu Hills Road

Calabasas, CA 91301

or to any other address as may have been furnished to Indemnitee by the Company.

On Assignment, Inc. Indemnification Agreement

IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as of the day and year first above written.



ON ASSIGNMENT, INC.		INDEMNITEE
By: /s/ Peter T. Dameris		/s/ Brian J. Callaghan
Peter T. Dameris		Brian J. Callaghan
President and Chief Executive Officer		Board Member

On Assignment, Inc. Indemnification Agreement

Exhibit 10.47

INDEMNIFICATION AGREEMENT

This Indemnification Agreement (“Agreement”) is made as of May 15, 2012 by and between On Assignment, Inc., a Delaware corporation (the “Company”), and Jeffrey E. Veatch (“Indemnitee”).

RECITALS

WHEREAS, such persons are often concerned about the uncertainties relating to such insurance and indemnification;

WHEREAS, the Board has determined that the Company should act to assure such persons that there will be increased certainty of such protection in the future;

NOW, THEREFORE, in consideration of the premises and the covenants contained herein, the Company and Indemnitee do hereby covenant and agree as follows:

Section 1. Services to the Company. Indemnitee agrees to serve as a Non-Executive Observer of the Company’s Board of Directors (“Non-Executive Observer”) pursuant to the Consulting Agreement between the Company and Indemnitee and the Investor Rights Agreement, dated as of May 15, 2012, by and among the Company and the persons listed on the signature pages

On Assignment, Inc. Indemnification Agreement

of the Investor Rights Agreement and Jeffrey E. Veatch, in his capacity as the shareholder representative under the Agreement of Merger, dated as of March 20, 2012, by and among the Company, OA Acquisition Corp., Apex Systems, Inc., and Jeffrey E. Veatch as shareholder representative. Indemnitee may at any time and for any reason resign from such position (subject to any other contractual obligation or any obligation imposed by operation of law), in which event the Company shall have no obligation under this Agreement to continue Indemnitee in such position. This Agreement shall not be deemed an employment contract between the Company (or any of its subsidiaries or any Enterprise) and Indemnitee. Indemnitee specifically acknowledges that Indemnitee’s employment with the Company (or any of its subsidiaries or any Enterprise), if any, is at will, and the Indemnitee may be discharged at any time for any reason, with or without cause, except as may be otherwise provided in any written employment contract between Indemnitee and the Company (or any of its subsidiaries or any Enterprise), other applicable formal severance policies duly adopted by the Board, or, with respect to service as a director, officer or Non-Executive Observer of the Company’s Board, by the Company’s Certificate of Incorporation, the Company’s Bylaws, and the General Corporation Law of the State of Delaware. The foregoing notwithstanding, this Agreement shall continue in force after Indemnitee has ceased to serve as a Non-Executive Observer of the Company’s Board.

Section 2. Definitions. As used in this Agreement:

(a) A “Change in Control” shall be deemed to occur upon the earliest to occur after the date of this Agreement of any of the following events:

On Assignment, Inc. Indemnification Agreement

(v) Other Events. There occurs any other event of a nature that would be required to be reported in response to Item 6(e) of Schedule 14A of Regulation 14A (or a response to any similar item on any similar schedule or form) promulgated under the Exchange Act (as defined below), whether or not the Company is then subject to such reporting requirement.

For purposes of this Section 2(a), the following terms shall have the following meanings:

(A) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended.

(c) “Disinterested Director” means a director of the Company who is not and was not a party to the Proceeding in respect of which indemnification is sought by Indemnitee.

On Assignment, Inc. Indemnification Agreement

(g) The term “Proceeding” shall include any threatened, pending or completed action, suit, arbitration, alternate dispute resolution mechanism, investigation, inquiry, administrative hearing or any other actual, threatened or completed proceeding, whether brought in the right of the Company or otherwise, whether of a civil, criminal, administrative or investigative nature and whether formal or informal, in which Indemnitee was, is or will be involved as a party or otherwise by reason of the fact that Indemnitee is or was a director or officer of the Company, by reason of any action taken by him or of any action on his part while acting as director or officer of the Company, or by reason of the fact that he is or was serving at the request of the Company as a director, officer, Non-Executive Observer of the Company’s Board, employee or agent of another corporation, partnership, joint venture, trust or other enterprise, in each case whether or not serving in such capacity at the time any liability or expense is incurred for which indemnification, reimbursement, or advancement of expenses can be provided under this Agreement; except one initiated by a Indemnitee to enforce his rights under this Agreement.

(h) Reference to “other enterprise” shall include employee benefit plans; references to “fines” shall include any excise tax assessed with respect to any employee benefit plan; references to “serving at the request of the Company” shall include any service as a director, officer, Non-Executive Observer of the Company’s Board, employee or agent of the Company which imposes duties on, or involves services by, such director, officer, Non-Executive Observer of the Company’s Board, employee or agent with respect to an employee benefit plan, its participants or beneficiaries; and a person who acted in good faith and in a manner he reasonably believed to

On Assignment, Inc. Indemnification Agreement

be in the best interests of the participants and beneficiaries of an employee benefit plan shall be deemed to have acted in manner “not opposed to the best interests of the Company” as referred to in this Agreement.

Section 3. Indemnity in Third-Party Proceedings . The Company shall indemnify Indemnitee in accordance with the provisions of this Section 3 if Indemnitee is, or is threatened to be made, or in good faith believes it will become, a party to or a participant in any Proceeding, other than a Proceeding by or in the right of the Company to procure a judgment in its favor. Pursuant to this Section 3, Indemnitee shall be indemnified against all Expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by Indemnitee or on his behalf in connection with such Proceeding or any claim, issue or matter therein, if Indemnitee acted in good faith and in a manner he reasonably believed to be in or not opposed to the best interests of the Company and, in the case of a criminal proceeding had no reasonable cause to believe that his conduct was unlawful.

On Assignment, Inc. Indemnification Agreement

Section 7. Additional Indemnification.

(a) Notwithstanding any limitation in Sections 3, 4, or 5, the Company shall indemnify Indemnitee to the fullest extent permitted by law if Indemnitee is a party to or threatened to be made a party to any Proceeding (including a Proceeding by or in the right of the Company to procure a judgment in its favor) against all Expenses, judgments, fines and amounts paid in settlement actually and reasonably incurred by Indemnitee in connection with the Proceeding.

(b) For purposes of Section 7(a), the meaning of the phrase “to the fullest extent permitted by law” shall include, but not be limited to:

On Assignment, Inc. Indemnification Agreement

Counsel has approved its initiation and (iv) the Company provides the indemnification, in its sole discretion, pursuant to the powers vested in the Company under applicable law.

Section 9. Advances of Expenses. Notwithstanding any provision of this Agreement to the contrary, the Company shall advance the expenses incurred by Indemnitee in connection with any Proceeding within 10 business days after the receipt by the Company of a statement or statements requesting such advances from time to time, whether prior to or after final disposition of any Proceeding. Advances shall be unsecured and interest free. Advances shall be made without regard to Indemnitee’s ability to repay the expenses and without regard to Indemnitee’s ultimate entitlement to indemnification under the other provisions of this Agreement. Advances shall include any and all reasonable Expenses incurred pursuing an action to enforce this right of advancement, including Expenses incurred preparing and forwarding statements to the Company to support the advances claimed. The Indemnitee shall qualify for advances upon the execution and delivery to the Company of this Agreement which shall constitute an undertaking providing that the Indemnitee undertakes to repay the advance to the extent that it is ultimately determined that Indemnitee is not entitled to be indemnified by the Company. This Section 9 shall not apply to any claim made by Indemnitee for which indemnity is excluded pursuant to Section 8.

Section 10. Procedure for Notification and Defense of Claim.

(b) The Company will be entitled to participate in the Proceeding at its own expense.

Section 11. Procedure Upon Application for Indemnification.

On Assignment, Inc. Indemnification Agreement

to Indemnitee shall be made within ten (10) days after such determination. Indemnitee shall cooperate with the person, persons or entity making such determination with respect to Indemnitee’s entitlement to indemnification, including providing to such person, persons or entity upon reasonable advance request any documentation or information which is not privileged or otherwise protected from disclosure and which is reasonably available to Indemnitee and reasonably necessary to such determination. Any costs or expenses (including attorneys’ fees and disbursements) incurred by Indemnitee in so cooperating with the person, persons or entity making such determination shall be borne by the Company (irrespective of the determination as to Indemnitee’s entitlement to indemnification) and the Company hereby indemnifies and agrees to hold Indemnitee harmless therefrom.

Section 12. Presumptions and Effect of Certain Proceedings.

On Assignment, Inc. Indemnification Agreement

indemnification in accordance with Section 10(a) of this Agreement, and the Company shall have the burden of proof to overcome that presumption in connection with the making by any person, persons or entity of any determination contrary to that presumption. Neither the failure of the Company (including by its directors or independent legal counsel) to have made a determination prior to the commencement of any action pursuant to this Agreement that indemnification is proper in the circumstances because Indemnitee has met the applicable standard of conduct, nor an actual determination by the Company (including by its directors or independent legal counsel) that Indemnitee has not met such applicable standard of conduct, shall be a defense to the action or create a presumption that Indemnitee has not met the applicable standard of conduct.

On Assignment, Inc. Indemnification Agreement

counsel for the Enterprise or on information or records given or reports made to the Enterprise by an independent certified public accountant or by an appraiser or other expert selected with the reasonable care by the Enterprise. The provisions of this Section 12(d) shall not be deemed to be exclusive or to limit in any way the other circumstances in which the Indemnitee may be deemed to have met the applicable standard of conduct set forth in this Agreement.

Section 13. Remedies of Indemnitee.

On Assignment, Inc. Indemnification Agreement

Section 14. Non-exclusivity; Survival of Rights; Insurance; Subrogation.

(b) To the extent that the Company maintains an insurance policy or policies providing liability insurance for directors, officers, Non-Executive Observer of the Company’s Board, employees, or agents of the Company or of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise which such person serves at the request of the Company, Indemnitee shall be covered by such policy or policies in accordance with its or their terms to the maximum extent of the coverage available for any such director, officer, Non-Executive Observer of the Company’s Board, employee or agent under such policy or policies. If, at the time of the receipt of a notice of a claim pursuant to the terms hereof, the Company has director and officer liability insurance in effect, the Company shall give prompt notice of the commencement of such proceeding to the insurers in accordance with the procedures set forth in the respective policies. The Company shall thereafter take all necessary or desirable action to cause such insurers to pay, on behalf of the Indemnitee, all amounts payable as a result of such proceeding in accordance with the terms of such policies. In the event of a Change in Control, the Company shall maintain in force any and all insurance policies then maintained by the Company in providing directors’ and

On Assignment, Inc. Indemnification Agreement

officers’ insurance, in respect of Indemnitee, for a period of six years thereafter. This tail coverage shall be placed by the Company’s D&O insurance broker and shall be satisfactory to Indemnitee.

(d) The Company shall not be liable under this Agreement to make any payment of amounts otherwise indemnifiable (or for which advancement is provided hereunder) hereunder if and to the extent that Indemnitee has otherwise actually received such payment under any insurance policy, contract, agreement or otherwise.

(e) The Company’s obligation to indemnify or advance Expenses hereunder to Indemnitee who is or was serving at the request of the Company as a director, officer, Non-Executive Observer of the Company’s Board, employee or agent of any other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise shall be reduced by any amount Indemnitee has actually received as indemnification or advancement of expenses from such other corporation, partnership, joint venture, trust, employee benefit plan or other enterprise.

Section 15. Duration of Agreement. This Agreement shall continue until and terminate upon the later of: (a) 10 years after the date that Indemnitee shall have ceased to serve as a Non-Executive Observer of the Company’s Board of the Company or (b) 1 year after the final termination of any Proceeding then pending in respect of which Indemnitee is granted rights of indemnification or advancement of Expenses hereunder and of any proceeding commenced by Indemnitee pursuant to Section 13 of this Agreement relating thereto. This Agreement shall be binding upon the Company and its successors and assigns (including any direct or indirect successor by purchase, merger, consolidation or otherwise to all or substantially all of the business and/or assets of the Company) and shall inure to the benefit of Indemnitee and his heirs, executors and administrators. The Company shall require and cause any successor (whether direct or indirect by purchase, merger, consolidation, or otherwise) to all, substantially all, or a substantial part, of the business and/or assets of the Company, by written agreement in form and substance satisfactory to Indemnitee, expressly to assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform if no such succession has taken place. The indemnification provided under this Agreement shall continue as to Indemnitee for any action taken or not taken while serving in an indemnified capacity even though he may have ceased to serve in such capacity at the time of any Proceeding.

On Assignment, Inc. Indemnification Agreement

possible, the provisions of this Agreement (including, without limitation, each portion of any Section of this Agreement containing any such provision held to be invalid, illegal or unenforceable, that is not itself invalid, illegal or unenforceable) shall be construed so as to give effect to the intent manifested thereby.

Section 17. Enforcement.

(a) The Company expressly confirms and agrees that it has entered into this Agreement and assumed the obligations imposed on it hereby in order to induce Indemnitee to serve or continue to serve as a director, Non-Executive Observer of the Company’s Board or officer of the Company, and the Company acknowledges that Indemnitee is relying upon this Agreement in serving as a director or officer of the Company.

Section 19. Notice by Indemnitee and Company.

(a) If to Indemnitee, at the address indicated on the signature page of this Agreement, or such other address as Indemnitee shall provide to the Company.

(b) If to the Company to

On Assignment, Inc. Indemnification Agreement

On Assignment, Inc.

26745 Malibu Hills Road

Calabasas, CA 91301

or to any other address as may have been furnished to Indemnitee by the Company.

Section 21. Contribution. To the fullest extent permissible under applicable law, if the indemnification provided for in this Agreement is unavailable to Indemnitee for any reason whatsoever, the Company, in lieu of indemnifying Indemnitee, shall contribute to the amount incurred by Indemnitee, whether for judgments, fines, penalties, excise taxes, amounts paid or to be paid in settlement and/or for Expenses, in connection with any claim relating to an indemnifiable event under this Agreement, in such proportion as is deemed fair and reasonable in light of all of the circumstances of such Proceeding in order to reflect (i) the relative benefits received by the Company and Indemnitee as a result of the event(s) and/or transaction(s) giving cause to such Proceeding; and/or (ii) the relative fault of the Company (and its directors, officers, employees and agents) and Indemnitee in connection with such event(s) and/or transaction(s).

On Assignment, Inc. Indemnification Agreement

IN WITNESS WHEREOF, the parties have caused this Agreement to be signed as of the day and year first above written.



ON ASSIGNMENT, INC.		INDEMNITEE
By: /s/ Peter. T. Dameris		/s/ Jeffrey E. Veatch
Peter T. Dameris		Jeffrey E. Veatch
President and Chief Executive Officer		Non-Executive Observer of the Company’s Board of Directors

On Assignment, Inc. Indemnification Agreement

Exhibit 18

March 18, 2013

On Assignment, Inc.

26745 Malibu Hills Road

Calabasas, CA 91301

Dear Sirs/Madams:

We have audited the financial statements of On Assignment, Inc. as of December 31, 2012 and 2011, and for each of the three years in the period ended December 31, 2012, included in your Annual Report on Form 10-K to the Securities and Exchange Commission and have issued our report thereon dated March 18, 2013, which expresses an unqualified opinion and includes an explanatory paragraph concerning the acquisition of Apex Systems, Inc. Note 1 to such financial statements contains a description of your adoption during the year ended December 31, 2012 of the change in the date for the annual goodwill impairment test from December 31 to October 31. In our judgment, such change is to an alternative accounting principle that is preferable under the circumstances.

Yours truly,

/s/ Deloitte & Touche LLP

Los Angeles, California

Exhibit 21.1

SUBSIDIARIES OF THE REGISTRANT

Assignment Ready, Inc., a Delaware corporation

On Assignment Staffing Services, Inc., a Delaware corporation

Apex Systems, Inc., a Virginia corporation

VSS Holding, Inc., a Nevada corporation

VISTA Staffing Solutions, Inc., a Utah corporation

VISTA Physician Search and Consulting, Inc., a Utah corporation

VISTA Staffing International, Inc., a Nevada corporation

VISTA Holdings (Hong Kong) Limited, a Hong Kong corporation

Oxford Global Resources, Inc., a Delaware corporation

Other subsidiaries of the Registrant are omitted from this exhibit pursuant to Regulation S-K 601(b)(21)(ii)

Exhibit 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in Registration Statement Nos. 333-38849, 333-61998, 333-106203, 333-143907, 333-148000, 333-168041, 333-181426 and 333-183863 on Form S-8 and 333-13065, 333-88034, 333-134479, 333-142382, 333-181570 and 333-182277 on Form S-3 of our reports dated March 18, 2013 relating to the financial statements and financial statement schedule of On Assignment, Inc. (which report expresses an unqualified opinion and includes an explanatory paragraph regarding the acquisition of Apex Systems, Inc.) and the effectiveness of On Assignment, Inc.'s internal control over financial reporting, appearing in this Annual Report on Form 10-K of On Assignment, Inc. for the year ended December 31, 2012.

/s/ Deloitte & Touche LLP

Los Angeles, California

March 18, 2013

Exhibit 31.1

CERTIFICATION PURSUANT TO RULES 13a-14(a) AND 15d-14(a)

UNDER THE SECURITIES EXCHANGE ACT OF 1934 AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Peter T. Dameris, certify that:

1. I have reviewed this annual report on Form 10-K of On Assignment, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s fourth fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.



Date: March 18, 2013	/s/ Peter T. Dameris
	Peter T. Dameris
	Chief Executive Officer and President

Exhibit 31.2

CERTIFICATION PURSUANT TO RULES 13a-14(a) AND 15d-14(a)

UNDER THE SECURITIES EXCHANGE ACT OF 1934 AS ADOPTED PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Edward L. Pierce certify that:

1. I have reviewed this annual report on Form 10-K of On Assignment, Inc.;

(b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.



Date: March 18, 2013		/s/ Edward L. Pierce
		Edward L. Pierce
		Executive Vice President and Chief Financial Officer

Exhibit 32.1

Written Statement of Chief Executive Officer and Chief Financial Officer

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 (18 U.S.C. Section 1350)

The undersigned, the Chief Executive Officer and the Chief Financial Officer of On Assignment, Inc. (the Company), each hereby certifies that, to his knowledge on the date hereof:

(a) the Annual Report on Form 10-K of the Company for the period ended December 31, 2012 filed on the date hereof with the Securities and Exchange Commission (the Report) fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(b) information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.



Date: March 18, 2013		/s/ Peter. T. Dameris
		Peter T. Dameris
		Chief Executive Officer and President

Date: March 18, 2013		/s/ Edward L. Pierce
		Edward L. Pierce
		Executive Vice President and Chief Financial Officer

A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signature that appears in typed form within the electronic version of this written statement required by Section 906, has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

The foregoing certification is being furnished to the Securities and Exchange Commission as an exhibit to the Annual Report on Form 10-K and shall not be deemed to be considered filed as part of the Annual Report on Form 10-K.