Exhibit 10.3
 
Conformed Copy
All Amendments Adopted Through
November 26, 2007

 
MAXIMUS, INC.
DEFERRED COMPENSATION PLAN

Adopted effective October 1, 2004
Amended and Restated Effective January 1, 2005
 
The MAXIMUS, INC. DEFERRED COMPENSATION PLAN (the “Plan”) was originally adopted
effective as of October 1, 2004, by MAXIMUS, Inc., a Virginia corporation (the
“Company”), primarily for the purpose of providing deferred compensation for a
select group of management or highly compensated employees of the Company.  The
Company amended and restated the Plan effective as of January 1, 2005 in order
to comply with the requirements of Section 409A of the Internal Revenue Code of
1986, as amended (the “Code”).  It is intended that this Plan be exempt from the
requirements of Parts II, III and IV of Title I of the Employee Retirement
Income Security Act of 1974, as amended (“ERISA”) pursuant to Sections 201(2),
301(a)(3) and 401(a)(1) of ERISA.  This Plan is intended to be an unfunded,
nonqualified deferred compensation plan.  Plan participants shall have the
status of unsecured creditors of the Company with respect to the payment of Plan
benefits.  All amounts deferred under the Plan shall be administered to comply
with Section 409A of the Code and any regulations or other interpretative
authority promulgated thereunder, without regard to whether such amounts were
deferred and vested before or after January 1, 2005.
 
ARTICLE I
 
TITLE AND DEFINITIONS
 
1.1  
Definitions.

 
Whenever the following words and phrases are used in this Plan, with the first
letter capitalized, they shall have the meanings specified below.
 
(a)  “Account” or “Accounts” shall mean all of such accounts as are specifically
authorized for inclusion in this Plan.
 
(b)  “Base Salary” shall mean a Participant’s annual base salary, excluding
bonus, commissions, incentive and all other remuneration for services rendered
to Company and prior to reduction for any salary contributions to a plan
established pursuant to Section 125 of the Code or qualified pursuant to Section
401(k) of the Code.
 
 
 

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(c)  “Beneficiary” or “Beneficiaries” shall mean the person or persons,
including a trustee, personal representative or other fiduciary, last designated
in writing by a Participant in accordance with procedures established by the
Committee to receive the benefits specified hereunder in the event of the
Participant’s death.  No beneficiary designation shall become effective until it
is filed with the Committee.  Any designation shall be revocable at any time
through a written instrument filed by the Participant with the Committee with or
without the consent of the previous Beneficiary.  No designation of a
Beneficiary other than the Participant’s spouse shall be valid unless consented
to in writing by such spouse.  If there is no such designation or if there is no
surviving designated Beneficiary, then the Participant’s surviving spouse shall
be the Beneficiary.  If there is no surviving spouse to receive any benefits
payable in accordance with the preceding sentence, the duly appointed and
currently acting personal representative of the Participant’s estate (which
shall include either the Participant’s probate estate or living trust) shall be
the Beneficiary.  In any case where there is no such personal representative of
the Participant’s estate duly appointed and acting in that capacity within 90
days after the Participant’s death (or such extended period as the Committee
determines is reasonably necessary to allow such personal representative to be
appointed, but not to exceed 180 days after the Participant’s death), then
Beneficiary shall mean the person or persons who can verify by affidavit or
court order to the satisfaction of the Committee that they are legally entitled
to receive the benefits specified hereunder.  In the event any amount is payable
under the Plan to a minor, payment shall not be made to the minor, but instead
be paid (a) to that person’s living parent(s) to act as custodian, (b) if that
person’s parents are then divorced, and one parent is the sole custodial parent,
to such custodial parent, or (c) if no parent of that person is then living, to
a custodian selected by the Committee to hold the funds for the minor under the
Uniform Transfers or Gifts to Minors Act in effect in the jurisdiction in which
the minor resides.  If no parent is living and the Committee decides not to
select another custodian to hold the funds for the minor, then payment shall be
made to the duly appointed and currently acting guardian of the estate for the
minor or, if no guardian of the estate for the minor is duly appointed and
currently acting within 60 days after the date the amount becomes payable,
payment shall be deposited with the court having jurisdiction over the estate of
the minor.  Payment by Company pursuant to any unrevoked Beneficiary
designation, or to the Participant’s estate if no such designation exists, of
all benefits owed hereunder shall terminate any and all liability of Company.
 
(d)  “Board of Directors” or “Board” shall mean the Board of Directors of
Company.
 
(e)  “Bonuses” shall mean the bonuses earned as of the last day of the Plan
Year, provided a Participant is in the employ of the Company on the last day of
the Plan Year.
 
(f)  “Code” shall mean the Internal Revenue Code of 1986, as amended.
 
(g)  “Committee” shall mean the Committee appointed by the Board to administer
the Plan in accordance with Article VII.
 
(h)  “Company” shall mean MAXIMUS, Inc., a Virginia corporation, and any
successor organization thereto, and shall also include any subsidiary of the
Company that the Committee has determined is eligible to participate in the
Plan.
 
(i)  “Company Contribution Account” shall mean the bookkeeping account
maintained by Company for each Participant that is credited with an amount equal
to the Company Discretionary Contribution Amount, if any, and Company Matching
Contribution Amount, if any, and earnings and losses on such amounts pursuant to
Section 4.2.
 
(j)  “Company Discretionary Contribution Amount” shall mean such discretionary
amount, if any, contributed by the Company for any Participant for a Plan
Year.  Such amount may differ, in the Committee’s sole and absolute discretion,
from Participant to Participant.
 
 
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(k)  “Company Matching Contribution Amount” shall mean such discretionary
amount, if any, contributed by the Company for each Participant for a Plan
Year.  Such amount may differ, in the Committee’s sole and absolute discretion,
from Participant to Participant.
 
(l)  “Compensation” shall mean the total amounts paid or accrued by the Company
or an Affiliate to an employee as remuneration for personal services rendered
during each Plan Year, including bonuses and commissions, as reported on the
employee’s federal income tax withholding statement or statements.
 
(m)  “Deferral Account” shall mean the bookkeeping account maintained by the
Committee for each Participant that is credited with amounts equal to (1) the
portion of the Participant’s Compensation that he or she elects to defer, (2)
the Stock Units representing Restricted Stock that a Participant has deferred,
and (3) earnings and losses pursuant to Section 4.1.
 
(n)  Designated Employees” shall mean Eligible Employees designated by the
Committee as eligible to defer Restricted Stock Awards.
 
(o)  “Disabled” means a determination by the insurer under the Company’s
long-term disability insurance policy that the Participant is disabled and
eligible for long-term disability benefits under such policy.  Notwithstanding
the foregoing, should regulations or other Internal Revenue Service (“IRS”)
guidance be interpreted by the Committee, in its sole and absolute discretion,
as not meeting the minimum requirements of Section 409A of the Code, “Disabled”
under this Plan shall automatically and without further action or amendment, be
determined to exist if the Participant is by reason of any medically
determinable physical or mental impairment which can be expected to result in
death or can be expected to last for a continuous period of not less than 12
months, and the Participant is receiving income replacement benefits for a
period of not less than 3 months under any disability benefit plan for covered
employees of the Employer.
 
(p)  “Distributable Amount” shall mean the vested balance in the Participant’s
Deferral Account and Company Contribution Account.
 
(q)  [DELETED]
 
(r)  “Effective Date” shall mean the date the Plan first became effective which
was October 1, 2004.  The Plan was amended, effective January 1, 2005, and may
be amended from time to time consistent with the requirements of Section 409A of
the Code.
 
(s)  “Eligible Employee” shall mean an employee of the Company who is a member
of a select group of management and/or highly compensated employees who has been
designated by the Committee, in its sole and absolute discretion, as eligible to
participate in the Plan and is notified of such eligibility.
 
 
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(t)  “Fund” or “Funds” shall mean one or more of the investment funds selected
by the Committee pursuant to Section 3.2(b).
 
(u)  “Hardship Distribution” shall mean a severe financial hardship to the
Participant resulting from a sudden and unexpected illness or accident of the
Participant or of his or her Dependent (as defined in Section 152(a) of the
Code), loss of a Participant’s property due to casualty, or other similar or
extraordinary and unforeseeable circumstances arising as a result of events
beyond the control of the Participant.  The circumstances that would constitute
an unforeseeable emergency will depend upon the facts of each case, but, in any
case, a Hardship Distribution may not be made to the extent that such hardship
is or may be relieved (i) through reimbursement or compensation by insurance or
otherwise, (ii) by liquidation of the Participant’s assets, to the extent the
liquidation of assets would not itself cause severe financial hardship, or (iii)
by cessation of deferrals under this Plan.
 
(v)  “Initial Election Period” shall mean the 30-day period prior to the
Effective Date of the Plan, or the 30-day period following the time an employee
shall be designated by the Company as an Eligible Employee.
 
(w)  “Interest Rate” shall mean, for each Fund, an amount equal to the net gain
or loss on the assets of such Fund during each month.
 
(x)  “Participant” shall mean any Eligible Employee who becomes a Participant in
this Plan in accordance with Article II.
 
(y)  “Payment Date” shall mean the February following the Plan Year in which
termination occurs or, if elected by the Participant, at such time following an
earlier “Change in Control” (as defined by Section 409A of the Code) as provided
in Section 6.1(e).
 
(z)  “Performance Based Compensation” means any compensation which may be paid
to an Eligible Employee based on services performed over a period of at least
twelve (12) months, or such other definition as may be required by applicable
regulations.
 
(aa)  “Plan” shall be The MAXIMUS, Inc. Deferred Compensation Plan.
 
(bb)  “Plan Year” shall be January 1 to December 31 of each year.
 
(cc)  “Restricted Stock” shall mean shares of Stock issued under the Restricted
Stock Plan, which by its terms are subject to vesting and/or forfeiture.
 
(dd)  “Restricted Stock Award” shall mean any award of Restricted Stock under
the Restricted Stock Plan.
 
(ee)  “Restricted Stock Plan” shall mean the MAXIMUS, Inc. 1997 Equity Incentive
Plan.
 
(ff)  “Scheduled Withdrawal Date” shall mean the distribution date elected by
the Participant for an in-service withdrawal of amounts from such Accounts
deferred in a given Plan Year, and earnings and losses attributable thereto, as
set forth on the election form for such Plan Year.
 
 
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(gg)  “Specified Employee” means any Participant who would be considered a
“Specified Employee” as the term is defined in Section 409A(a)(2)(B)(i) of the
Code.
 
(hh)  “Stock Unit” shall mean a bookkeeping entry representing a right to
receive a share of MAXIMUS, Inc. common stock on a date determined in accordance
with this Plan and pursuant to the terms and conditions of this Plan and the
Restricted Stock Plan.
 
(ii)  “Trust” shall mean the legal entity created by the Trust Agreement.
 
(jj)  “Trust Agreement” shall mean the agreement between the Company and the
Trustee that establishes a trust to hold and manage the assets contributed by
the Company in connection with the Plan.
 
(kk)  “Trustee” shall mean First American Trust, FSB or any other one or more
individuals or organizations that the Company may enter into a Trust Agreement
as trustee(s), and any duly appointed successors.
 
 
 
 
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ARTICLE II
 
PARTICIPATION
 
2.1  
Commencement of Participation.

 
An Eligible Employee shall become a Participant in the Plan for a Plan Year by
(a) electing to defer all or a portion of his or her Compensation for such Plan
Year in accordance with Section 3.1, by completing all required applications for
life insurance (as determined by Committee in its discretion), or (b) electing
to defer the receipt of Restricted Stock that has not vested.
 
2.2  
Cessation of Participation.

 
Active participation in the Plan shall end when a Participant’s terminates
employment with the Company for any reason or at such time as a Participant is
notified by the Committee, pursuant to Section 2.3, below, that he or she is no
longer eligible to participate in the Plan.  Upon termination of employment or
eligibility, a Participant shall remain an inactive Participant in the Plan
until all of the amounts to which he or she is entitled under this Plan have
been paid in full.
 
2.3  
Cessation of Eligibility.

 
The Committee may at any time, in its sole discretion, notify any Participant
that he or she is not eligible to participate in the Plan, or is not eligible
for Company Discretionary Contribution Amounts in any Plan Year.
 
ARTICLE III
 
DEFERRAL ELECTIONS
 
3.1  
Elections to Defer Compensation.

 
(a)  Initial Election Period.  Subject to the provisions of Article II, each
Eligible Employee may elect to defer Compensation by filing with the Committee
an election that conforms to the requirements of this Section 3.1, on a form
provided by the Committee, no later than the last day of his or her Initial
Election Period.  Notwithstanding the foregoing, the Initial Election Period for
deferrals of Performance Based Compensation may be different than that for other
deferrals and may end on a period no later than six (6) months prior to the end
of the performance period for which services are to be rendered.
 
(b)  General Rule.  The amount of Compensation which an Eligible Employee may
elect to defer is such Compensation earned on or after the time at which the
Eligible Employee elects to defer in accordance with Sections 1.1(l) and 3.1(a)
and shall be a percentage which shall not exceed 80% of the Eligible Employee’s
Base Salary and 100% of the Eligible Employee’s Compensation other than Base
Salary, provided that the total amount deferred by a Participant shall be
limited in any calendar year, if necessary, to satisfy Social Security Tax
(including Medicare), income tax, employment tax, all garnishments or other
amounts required to be withheld by applicable law or court order and employee
benefit plan withholding requirements as determined in the sole and absolute
discretion of the Committee.  The minimum contribution which may be made in any
Plan Year by an Eligible Employee shall not be less than $5,000, provided such
minimum contribution can be satisfied from any element of Compensation.
 
 
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(c)  Deferral of Restricted Stock.  A Designated Employee may elect to defer all
or a portion of Restricted Stock awarded pursuant to a Restricted Stock Award
and receive a credit of Stock Units.  Any such deferral election must be made in
a time period designated by the Committee from time to time and in accordance
with Sections 3.1(d) and (e).  No minimum annual deferral election applies to
the deferral of Restricted Stock.
 
(d)  Duration of Compensation Deferral Election.  An Eligible Employee’s initial
election to defer Compensation must be made prior to the Effective Date and is
to be effective with respect to Compensation received after such deferral
election is processed.  An election shall remain in effect for each successive
Plan Year unless the Participant changes such an election during an appropriate
enrollment period.  A Participant may increase, decrease or terminate a deferral
election with respect to Compensation for any subsequent Plan Year by filing a
new election during any enrollment period (which shall be such period as
specified by the Committee which ends no later than the last day of the
preceding Plan Year) which election shall be effective on the first day of the
next following Plan Year or in the case of Performance Based Compensation, no
later than six (6) months prior to the end of the performance period for which
services are to be rendered.  In the case of an employee who becomes an Eligible
Employee after the Effective Date, such Eligible Employee shall have 30 days
from the date he or she is notified he or she has become an Eligible Employee to
make an Initial Election with respect to Compensation earned following the
Initial Election period.  Such election shall be for the remainder of the Plan
Year, in the event the Plan Year has commenced.
 
(e)  Elections other than Elections during the Initial Election Period.  Subject
to the limitations of Section 3.1(b), (c) (d) above, any Eligible Employee who
has terminated a prior Compensation deferral election may elect to again defer
Compensation, by filing an election, on a form provided by the Committee, to
defer Compensation and/or Restricted Stock as described in Sections 3.1(b) and
(c) above.  An election to defer Compensation and/or Restricted Stock must be
filed in a timely manner in accordance with Section 3.1(c) and (d).
 
3.2  
Investment Elections.

 
(a)  At the time of making the deferral elections described in Section 3.1, the
Participant shall designate, on a form provided by the Committee, the types of
investment funds in which the Participant’s Account will be deemed to be
invested for purposes of determining the amount of earnings to be credited to
that Account.  In making the designation pursuant to this Section 3.2, the
Participant may specify that all or any multiple of his or her Account be deemed
to be invested, in whole percentage increments, in one or more of the types of
investment funds provided under the Plan as communicated from time to time by
the Committee.  Effective as of the next business day, a Participant may change
the designation made under this Section 3.2 by filing an election, on a form
provided by the Committee, at any time.  If a Participant fails to elect a type
of fund under this Section 3.2, he or she shall be deemed to have elected the
Money Market type of investment fund.
 
 
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(b)  Although the Participant may designate the type of investments, the
Committee shall not be bound by such designation.  The Committee shall select
from time to time, in its sole and absolute discretion, commercially available
investments of each of the types communicated by the Committee to the
Participant pursuant to Section 3.2(a) above to be the Funds.  The Interest Rate
of each such commercially available investment fund shall be used to determine
the amount of earnings or losses to be credited to Participant’s Account under
Article IV.
 
(c)  If any portion of a Participant’s Account is credited with Stock Units,
then the Participant shall not be permitted to select any other investment fund
with respect to such Stock Units, and distributions of such Stock Units shall
only be in the form of Company common stock and shall be settled solely out of
the Restricted Stock Plan.  In the event of a corporate transaction involving
the Company’s common stock, such Stock Units will be substituted and settled
with an equivalent form of consideration provided under the Restricted Stock
Plan pursuant to such transaction, which, if cash, will be deemed invested
during the deferral period pursuant to the Participant’s investment elections
under Section 3.2(a).
 
ARTICLE IV
 
DEFERRAL ACCOUNTS AND TRUST FUNDING
 
4.1  
Deferral Accounts.

 
The Committee shall establish and maintain a Deferral Account for each
Participant under the Plan.  Each Participant’s Deferral Account shall be
further divided into separate subaccounts (“investment fund subaccounts”), each
of which corresponds to an investment fund elected by the Participant pursuant
to Section 3.2(a) and/or a Stock Unit subaccount, if applicable.  A
Participant’s Deferral Account shall be credited as follows:
 
(a)  On the business day that amounts are withheld and deferred from a
Participant’s Compensation, the Committee shall credit the investment fund
subaccounts of the Participant’s Deferral Account with an amount equal to
Compensation deferred by the Participant in accordance with the Participant’s
election under Section 3.2(a); that is, the portion of the Participant’s
deferred Compensation that the Participant has elected to be deemed to be
invested in a certain type of investment fund shall be credited to the
investment fund subaccount corresponding to that investment fund;
 
(b)  Each business day, each investment fund subaccount of a Participant’s
Deferral Account shall be credited with earnings or losses in an amount equal to
that determined by multiplying the balance credited to such investment fund
subaccount as of the prior day plus contributions credited that day to the
investment fund subaccount by the Interest Rate for the corresponding fund
selected by the Company pursuant to Section 3.2(b).  The value of any Stock Unit
subaccount shall reflect only the current fair market value of the Company’s
common stock underlying such Stock Units.
 
 
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(c)  In the event that a Participant elects for a given Plan Year’s deferral of
Compensation to have a Scheduled Withdrawal Date, all amounts attributed to the
deferral of Compensation for such Plan Year shall be accounted for in a manner
which allows separate accounting for the deferral of Compensation and investment
gains and losses associated with such Plan Year’s deferral of Compensation.
 
4.2  
Company Contribution Account.

 
The Committee shall establish and maintain a Company Contribution Account for
each Participant under the Plan.  Each Participant’s Company Contribution
Account shall be further divided into separate investment fund subaccounts
corresponding to the investment fund elected by the Participant pursuant to
Section 3.2(a).  A Participant’s Company Contribution Account shall be credited
as follows:
 
(a)  On the business day of any Company Discretionary Contribution Amount or
Company Matching Contribution Amount, the Committee shall credit the investment
fund subaccounts of the Participant’s Company Contribution Account with an
amount equal to the Company Discretionary Contribution Amount, if any,
applicable to that Participant, that is, the proportion of the Company
Discretionary Contribution Amount, if any, or Company Matching Contribution
Amount, if any, which the Participant elected to be deemed to be invested in a
certain type of investment fund shall be credited to the corresponding
investment fund subaccount; and
 
(b)  Each business day, each investment fund subaccount of a Participant’s
Company Contribution Account shall be credited with earnings or losses in an
amount equal to that determined by multiplying the balance credited to such
investment fund subaccount as of the prior day plus contributions credited that
day to the investment fund subaccount by the Interest Rate for the corresponding
Fund selected by the Company pursuant to Section 3.2(b).
 
4.3  
Trust Funding.

 
The Company has created a Trust with the Trustee.  The Company shall cause the
Trust to be funded each year.  The Company shall contribute to the Trust (1) an
amount equal to the amount deferred by each Participant; (2) the aggregate
amount of Company Discretionary Contribution Amounts; and (3) the aggregate
amount of Company Matching Contribution Amounts for the Plan Year.
 
Although the principal of the Trust and any earnings thereon shall be held
separate and apart from other funds of Company and shall be used exclusively for
the uses and purposes of Plan Participants and Beneficiaries as set forth
therein, neither the Participants nor their Beneficiaries shall have any
preferred claim on, or any beneficial ownership in, any assets of the Trust
prior to the time such assets are paid to the Participants or Beneficiaries as
benefits and all rights created under this Plan shall be unsecured contractual
rights of Plan Participants and Beneficiaries against the Company.  Any assets
held in the Trust will be subject to the claims of Company’s general creditors
under federal and state law in the event of insolvency as defined in Section 3.2
of the Trust.
 
 
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The assets of the Plan and Trust shall never inure to the benefit of the Company
and the same shall be held for the exclusive purpose of providing benefits to
Participants and their Beneficiaries and for deferring reasonable expenses of
administering the Plan and Trust.
 
ARTICLE V
 
VESTING
 
A Participant shall be 100% vested in his or her Deferral Account.  A
Participant shall be vested in any Company Discretionary Contribution Amount
and/or Company Matching Contribution Amount, and the Interest thereon, in
accordance with the schedule specified by the Committee in its sole discretion
at such time any such contribution is made.  A Participant shall be vested in
any Stock Units under the Plan in accordance with the terms and conditions of
the Participant’s Restricted Stock Award.
 
ARTICLE VI
 
DISTRIBUTIONS
 
6.1  
Distribution of Deferred Compensation and Discretionary Company Contributions.

 
(a)  Distribution Without Scheduled Withdrawal Date.  In the case of a
Participant who terminates employment with Company, or is determined to have
become Disabled, and has an Account balance of $25,000 or more, the
Distributable Amount shall be paid to the Participant (and after his or her
death to his or her Beneficiary) in a lump sum on the Participant’s Payment
Date.  An optional form of benefit may be elected by the Participant, on the
form provided by Company, during his or her Initial Election Period of
substantially equal annual installments over two (2) to twenty (20) years
beginning on the Participant’s Payment Date.
 
A Participant may amend his or her form of distribution election from a single
lump sum to installments by filing an amended election at least twelve (12)
months in advance of the date the Participant terminates employment with the
Company.  The amended new distribution date must be in a Plan Year five (5)
years after the date the Participant terminates employment with the Company.  No
amendment may accelerate the date that any distribution would be made from the
Plan.
 
In the case of a Participant who terminates employment with Company, or is
determined to have become Disabled, and has an Account balance of less than
$25,000, the Distributable Amount shall be paid to the Participant (and after
his or her death to his or her Beneficiary) in a lump sum distribution on the
Participant’s Payment Date.
 
The Participant’s Account shall continue to be credited with earnings pursuant
to Section 4.1 of the Plan until all amounts credited to his or her Account
under the Plan have been distributed.
 
 
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(b)  Distribution With Scheduled Withdrawal Date.  In the case of a Participant
who has elected a Scheduled Withdrawal Date for a distribution while still in
the employ of the Company, such Participant shall receive his or her
Distributable Amount, but only with respect to those deferrals of Compensation,
vested Matching Contribution Amounts and vested Company Discretionary
Contribution Amounts, if any, and earnings on such deferrals of Compensation,
Matching Contribution Amounts and Company Discretionary Contribution Amounts as
shall have been elected by the Participant to be subject to the Scheduled
Withdrawal Date in accordance with Section 1.1(ee) of the Plan.  A Participant’s
Scheduled Withdrawal Date with respect to deferrals of Compensation, Matching
Contribution Amounts and Company Discretionary Contribution Amounts deferred in
a given Plan Year can be no earlier than two years from the last day of the Plan
Year for which the deferrals of Compensation, Matching Contribution Amounts and
Company Discretionary Contribution Amounts are made.  A Participant’s Scheduled
Withdrawal Date with respect to the deferral of Stock Units in a given Plan Year
can be no earlier than (a) two years from the last day of the Plan Year for
which the deferral of Stock Units was made and (b) two years from the vesting
date of the Restricted Stock Award.  A Participant may extend the Scheduled
Withdrawal Date for any Plan Year, provided such extension occurs at least one
year before the Scheduled Withdrawal Date and is for a period of not less than
five years from the Scheduled Withdrawal Date.  The Participant shall have the
right to modify any Scheduled Withdrawal Date one time.  In the event a
Participant terminates employment with Company prior to a Scheduled Withdrawal
Date, other than by reason of death, the portion of the Participant’s Account
associated with a Scheduled Withdrawal Date, which has not occurred prior to
such termination, shall be distributed in the manner selected for Termination.
 
(c)  Distribution for Termination of Employment due to Death.  In the case of
the death of a Participant while employed by the Company, the Participant’s
account balance shall be distributed to the Participant’s Beneficiary in a lump
sum following the end of the calendar quarter in which the receipt of
confirmation of death has been received.
 
(d)  Post-Termination Death Benefit.  In the event a Participant dies after his
or her termination of employment and still has a vested balance in his or her
Account, the vested balance of such Account shall continue to be paid in annual
installments for the remainder of the period in accordance with the election
previously made by the Participant.
 
(e)  Change in Control.  A Participant may elect, at such times and in such
manner as permitted by the Company, to receive a lump sum distribution of his or
her entire Account balance in the event of a subsequent Change in Control (as
defined by Section 409A of the Code).  Such payment shall be made in the month
following the month in which such Change in Control occurs; provided, however,
that if the Change in Control occurs in the 2007 calendar year, any such
distribution be made in February 2008.
 
6.2  
[DELETED]

 
 
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6.3  
Hardship Distribution.

 
A Participant shall be permitted to elect a Hardship Distribution from his or
her vested Accounts in accordance with Section 1.2(u) of the Plan prior to the
Payment Date, subject to the following restrictions:
 
(a)  The election to take a Hardship Distribution shall be made by filing a form
provided by and filed with Committee prior to the end of any calendar month.
 
(b)  The Committee shall have made a determination that the requested
distribution constitutes a Hardship Distribution in accordance with Section
1.2(u) of the Plan.
 
(c)  The amount determined by the Committee as a Hardship Distribution shall be
paid in a single cash lump sum as soon as practicable after the end of the
calendar month in which the Hardship Distribution election is made and approved
by the Committee.
 
(d)  If a Participant receives a Hardship Distribution, the Participant will be
ineligible to participate in the Plan for the balance of the Plan Year and the
following Plan Year.
 
6.4  
Inability to Locate Participant.

 
In the event that the Committee is unable to locate a Participant or Beneficiary
within two years following the required Payment Date, the amount allocated to
the Participant’s Deferral Account shall be forfeited.  If, after such
forfeiture, the Participant or Beneficiary later claims such benefit, such
benefit shall be reinstated without interest or earnings.
 
6.5  
Limitation on Distributions to Covered Employees.

 
Notwithstanding any other provision of this Article VI in the event that the
Participant is a “covered employee” as that term is defined in section 162(m)(3)
of the Code, or would be a covered employee if benefits were distributed in
accordance with his or her distribution election or early withdrawal request,
the maximum amount which may be distributed from the Participant’s Account in
any Plan Year shall not exceed one million dollars ($1,000,000) less the amount
of compensation paid to the Participant in such Plan Year which is not
“performance-based” (as defined in Code section 162(m)(4)(C)), which amount
shall be reasonably determined by the Committee at the time of the proposed
distribution.  Any amount which is not distributed to the Participant in a Plan
Year as a result of this limitation shall be distributed to the Participant in
the next Plan Year, subject to compliance with the foregoing limitations set
forth in this Section 6.5.
 
6.6  
Specified Employees.

 
In the event of a distribution to a Specified Employee based upon such
individual’s termination of employment with the Company, no distributions will
be made, irrespective of any deferral election to the contrary, before the date
which is six (6) months after the date of termination of employment, or if
earlier the date of the death of the Specified Employee.
 
 
12

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6.7  
Withholding.

 
There shall be deducted from each payment made under the Plan or any other
Compensation payable to the Participant (or Beneficiary) all taxes that are
required to be withheld by the Company in respect to such payment or this
Plan.  The Company shall have the right to reduce any payment (or compensation)
by the amount of cash sufficient to provide the amount of said taxes.
 
 
6.8  
Termination of Employment.

 
For purposes of this Plan, a Participant shall be deemed to have terminated from
employment with the Company when such Participant has experienced a ‘separation
from service’ under Code Section 409A.
 
 
ARTICLE VII
 
ADMINISTRATION
 
7.1  
Committee.

 
The Committee shall be appointed by, and serve at the pleasure of, the Board of
Directors.  The number of members comprising the Committee shall be determined
by the Board, which may from time to time vary the number of members.  A member
of the Committee may resign by delivering a written notice of resignation to the
Board.  The Board may remove any member by delivering a certified copy of its
resolution of removal to such member.  Vacancies in the membership of the
Committee shall be filled promptly by the Board.
 
7.2  
Committee Action.

 
The Committee shall act at meetings by affirmative vote of a majority of the
members of the Committee.  Any action permitted to be taken at a meeting may be
taken without a meeting if, prior to such action, a written consent to the
action is signed by all members of the Committee and such written consent is
filed with the minutes of the proceedings of the Committee.  A member of the
Committee shall not vote or act upon any matter which relates solely to himself
or herself as a Participant.  The Chairman or any other member or members of the
Committee designated by the Chairman may execute any certificate or other
written direction on behalf of the Committee.
 
7.3  
Powers and Duties of the Committee.

 
(a)  Committee Powers and Responsibilities.  The Committee shall have complete
control of the administration of the Plan herein set forth with all powers
necessary to enable it properly to carry out its duties in that respect.  Not in
limitation, but in amplification of the foregoing, the Committee shall have the
power and authority to:
 
 
13

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(1)  Construe the Plan and Trust Agreement to determine all questions that shall
arise as to interpretations of the Plan’s provisions including determination of
which individuals are Eligible Employees and the determination of the amounts
credited to a Participant’s Account, and the appropriate timing and method of
benefit payments;
 
(2)  Establish reasonable rules and procedures which shall be applied in a
uniform and nondiscriminatory manner with respect to elections, the
establishment of Accounts and Subaccounts, and all other discretionary
provisions of the Plan;
 
(3)  Establish the rules and procedures by which the Plan will operate that are
consistent with the terms of the Plan documents;
 
(4)  Establish the rules and procedures by which the Plan shall determine and
pay installment distributions and in-service distributions;
 
(5)  To provide for the disclosure of all information and the filing or
provision of all reports and statements to Participants, Beneficiaries or
governmental agencies as shall be required by law;
 
(6)  Compile and maintain all records it determines to be necessary, appropriate
or convenient in connection with the administration of the Plan;
 
(7)  Adopt amendments to the Plan document which are deemed necessary or
desirable to facilitate administration of the Plan and/or to bring these
documents into compliance with all applicable laws and regulations, provided
that the Committee shall not have the authority to adopt any Plan amendment that
will result in substantially increased costs to the Company unless such
amendment is contingent upon ratification by the Board before becoming
effective;
 
(8)  Employ such persons or organizations to render service or perform services
with respect to the administrative responsibilities of the Committee under the
Plan as the Committee determines to be necessary and appropriate, including but
not limited to attorneys, accountants, and benefit, financial and administrative
consultants;
 
(9)  Select, review and retain or change the investment which are used for
determining the Interest Rate under the Plan;
 
(10)  Direct the investment of the assets of the Trust;
 
(11)  Review the performance of the Trustee with respect to the Trustee’s
duties, responsibilities and obligations under the Plan and the Trust Agreement;
and
 
(12)  Take such other action as may be necessary or appropriate to the
management and investment of the Plan assets.
 
 
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7.4  
Construction and Interpretation.

 
The Committee shall have full discretion to construe and interpret the terms and
provisions of this Plan, which interpretations or construction shall be final
and binding on all parties, including but not limited to the Company and any
Participant or Beneficiary.  The Committee shall administer such terms and
provisions in a uniform and nondiscriminatory manner and in full accordance with
any and all laws applicable to the Plan.
 
7.5  
Information.

 
To enable the Committee to perform its functions, the Company shall supply full
and timely information to the Committee on all matters relating to the
Compensation of all Participants, their death or other events that cause
termination of their participation in this Plan, and such other pertinent facts
as the Committee may require.
 
 
 
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7.6  
Compensation, Expenses and Indemnity.

 
(a)  The members of the Committee shall serve without compensation for their
services hereunder.
 
(b)  The Committee is authorized at the expense of the Company to employ such
legal counsel as it may deem advisable to assist in the performance of its
duties hereunder.  Expenses and fees in connection with the administration of
the Plan shall be paid by the Company.
 
(c)  To the extent permitted by applicable state law, the Company shall
indemnify and hold harmless the Committee and each member thereof, the Board of
Directors and any delegate of the Committee who is an employee of the Company
against any and all expenses, liabilities and claims, including legal fees to
defend against such liabilities and claims arising out of their discharge in
good faith of responsibilities under or incident to the Plan, other than
expenses and liabilities arising out of willful misconduct.  This indemnity
shall not preclude such further indemnities as may be available under insurance
purchased by the Company or provided by the Company under any bylaw, agreement
or otherwise, as such indemnities are permitted under state law.
 
7.7  
Quarterly Statements.

 
Under procedures established by the Committee, a Participant shall receive a
statement with respect to such Participant’s Accounts on a quarterly basis.
 
7.8  
Disputes.

 
(a)  Claim.
 
A person who believes that he or she is being denied a benefit to which he or
she is entitled under this Plan (hereinafter referred to as “Claimant”) must
file a written request for such benefit with the Company, setting forth his or
her claim.  The request must be addressed to the President of the Company at its
then principal place of business.
 
(b)  Claim Decision.
 
Upon receipt of a claim, the Company shall advise the Claimant that a reply will
be forthcoming within ninety (90) days and shall, in fact, deliver such reply
within such period.  The Company may, however, extend the reply period for an
additional ninety (90) days for special circumstances.
 
If the claim is denied in whole or in part, the Company shall inform the
Claimant in writing, using language calculated to be understood by the Claimant,
setting forth:  (A) the specified reason or reasons for such denial; (B) the
specific reference to pertinent provisions of this  Plan on which such denial is
based; (C) a description of any additional material or information necessary for
the Claimant to perfect his or her claim and an explanation of why such material
or such information is necessary; (D) appropriate information as to the steps to
be taken if the Claimant wishes to submit the claim for review; and (E) the time
limits for requesting a review under subsection (c).
 
 
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(c)  Request For Review.
 
Within sixty (60) days after the receipt by the Claimant of the written opinion
described above, the Claimant may request in writing that the Committee review
the determination of the Company.  Such request must be addressed to the
Secretary of the Company, at its then principal place of business.  The Claimant
or his or her duly authorized representative may, but need not, review the
pertinent documents and submit issues and comments in writing for consideration
by the Committee.  If the Claimant does not request a review within such sixty
(60) day period, he or she shall be barred and estopped from challenging the
Company’s determination.
 
(d)  Review of Decision.
 
Within sixty (60) days after the Committee’s receipt of a request for review,
after considering all materials presented by the Claimant, the Committee will
inform the Participant in writing, in a manner calculated to be understood by
the Claimant, the decision setting forth the specific reasons for the decision
containing specific references to the pertinent provisions of this  Plan on
which the decision is based.  If special circumstances require that the sixty
(60) day time period be extended, the Committee will so notify the Claimant and
will render the decision as soon as possible, but no later than one hundred
twenty (120) days after receipt of the request for review.  No further legal
action may be initiated claiming benefits under this Plan until the claims
procedures set forth in this Article VII are completed.
 
7.9  
Plan Amendment.

 
This Plan may be amended by the Company at any time in its sole
discretion.  Additionally, the Plan may be amended upon an action of the members
of the Committee subject to the provisions in Section 7.3.  However, no
amendment may be made that alters the nature of an election or benefit
distribution election or which would reduce the amount credited to a
Participant’s Account on the date of such amendment, unless such amendment is
made pursuant to Section 8.9 of the Plan to comply with changes in applicable
law.
 
7.10  
Plan Termination.

 
The Company reserves the right to terminate the Plan in its entirety by an
action of the Board at any time upon fifteen (15) days notice to the
Participants.  The termination of the Plan shall automatically revoke all
outstanding deferral elections.  If the Plan is terminated, all benefits shall
continue to be paid in the form and at the times previously elected by the
Participants, unless at the time of such distribution Section 409A of the Code,
or other applicable IRS guidance, would authorize the distribution in a lump sum
of all Plan benefits.  Any amounts remaining in the Trust after all benefits
have been paid shall revert to the Company.
 
 
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ARTICLE VIII
 
MISCELLANEOUS
 
8.1  
Unsecured General Creditor.

 
Participants and their Beneficiaries, heirs, successors, and assigns shall have
no legal or equitable rights, claims, or interest in any specific property or
assets of the Company.  No assets of the Company shall be held in any way as
collateral security for the fulfilling of the obligations of the Company under
this Plan.  Any and all of the Company’s assets shall be, and remain, the
general unpledged, unrestricted assets of the Company.  The Company’s obligation
under the Plan shall be merely that of an unfunded and unsecured promise of the
Company to pay money in the future, and the rights of the Participants and
Beneficiaries shall be no greater than those of unsecured general creditors.  It
is the intention of the Company that this Plan be unfunded for purposes of the
Code and for purposes of Title 1 of the ERISA.
 
8.2  
Restriction Against Assignment.

 
The Company shall pay all amounts payable hereunder only to the person or
persons designated by the Plan and not to any other person or corporation.  No
part of a Participant’s Accounts shall be liable for the debts, contracts, or
engagements of any Participant, his or her Beneficiary, or successors in
interest, nor shall a Participant’s Accounts be subject to execution by levy,
attachment, or garnishment or by any other legal or equitable proceeding, nor
shall any such person have any right to alienate, anticipate, sell, transfer,
commute, pledge, encumber, or assign any benefits or payments hereunder in any
manner whatsoever.  If any Participant, Beneficiary or successor in interest is
adjudicated bankrupt or purports to anticipate, alienate, sell, transfer,
commute, assign, pledge, encumber or charge any distribution or payment from the
Plan, voluntarily or involuntarily, the Committee, in its discretion, may cancel
such distribution or payment (or any part thereof) to or for the benefit of such
Participant, Beneficiary or successor in interest in such manner as the
Committee shall direct.
 
8.3  
Governing Law.

 
This Plan shall be construed, governed and administered in accordance with the
laws of the State in which the Company is incorporated, except where pre-empted
by ERISA.
 
8.4  
Receipt or Release.

 
Any payment to a Participant or the Participant’s Beneficiary in accordance with
the provisions of the Plan shall, to the extent thereof, be in full satisfaction
of all claims against the Committee and the Company.  The Committee may require
such Participant or Beneficiary, as a condition precedent to such payment, to
execute a receipt and release to such effect.
 
8.5  
Payments on Behalf of Persons Under Incapacity.

 
In the event that any amount becomes payable under the Plan to a person who, in
the sole judgment of the Committee, is considered by reason of physical or
mental condition to be unable to give a valid receipt therefore, the Committee
may direct that such payment be made to any person found by the Committee, in
its sole judgment, to have assumed the care of such person.  Any payment made
pursuant to such determination shall constitute a full release and discharge of
the Committee and the Company.
 
 
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8.6  
Limitation of Rights and Employment Relationship

 
Neither the establishment of the Plan and Trust nor any modification thereof,
nor the creating of any fund or account, nor the payment of any benefits shall
be construed as giving to any Participant, or Beneficiary or other person any
legal or equitable right against the Company or the trustee of the Trust except
as provided in the Plan and Trust; and in no event shall the terms of employment
of any Employee or Participant be modified or in any way be affected by the
provisions of the Plan and Trust.
 
8.7  
Successors.

 
This Plan shall be binding upon and inure to the benefit of the Company, its
successors and assigns and the Participant and his or her heirs, executors,
administrators and legal representatives.
 
8.8  
Attorneys’ Fees.

 
If the Company, the Participant, any Beneficiary, and/or a successor in interest
to any of the foregoing, brings legal action to enforce any of the provisions of
this Plan, the prevailing party in such legal action shall be reimbursed by the
other party, the prevailing party’s costs of such legal action including,
without limitation, reasonable fees of attorneys, accountants and similar
advisors and expert witnesses.
 
8.9  
Severability.

 
If any provision of this Plan is held to be invalid, illegal or unenforceable,
such invalidity, illegality, or unenforceability shall not affect any other
provision of this Plan, and the Plan shall be construed and enforced as if such
provision had not been included.  In addition, if such provision is invalid,
illegal or unenforceable due to changes in applicable law, the Company may amend
the Plan, without the consent and without providing any advance notice to any
Participant, as may be necessary or desirable to comply with changes in the
applicable law or financial accounting of deferred compensation plans.
 
8.10  
Shareholder Rights.

 
A Participant shall have no rights as a shareholder with respect to any Stock
Units which may be credited by the Company to the Plan.  Notwithstanding the
foregoing, Stock Units allocated to a Participant’s Account shall be entitled to
receive such Stock Units prorata portion of any cash dividend declared by the
Company with respect to the shares of the Company’s common stock underlying such
Stock Units.  The Committee shall instruct the Trustee, in the Committee’s sole
and absolute discretion, on how to vote, or not vote, any shares of Company
common stock which may actually be allocated to the Trust and nothing contained
in this Plan shall be construed as permitting the Participant to vote any such
shares of Company common stock held by the Trust.
 
 
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8.11  
Headings.

 
Headings and subheadings in this Plan are inserted for convenience of reference
only and are not to be considered in the construction of the provisions hereof.
 
8.12  
Section 409A of the Code.

 
This Plan is intended to comply and shall be administered in a manner that is
intended to comply with Section 409A of the Code and the interpretative guidance
thereunder.  The Plan shall be construed and interpreted in accordance with such
intent.
 

 
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MAXIMUS, INC.
DEFERRED COMPENSATION PLAN
 
 
 
 
 
 
 
 
 
 
 
 

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 TABLE OF CONTENTS
 
 

     
Page
       
ARTICLE I TITLE AND DEFINITIONS  
1
 
1.1
Definitions.
1
ARTICLE II PARTICIPATION  
6
 
2.1
Commencement of Participation.
6
 
2.2
Cessation of Participation.
6
 
2.3
Cessation of Eligibility.
6
ARTICLE III DEFERRAL ELECTIONS  
6
 
3.1
Elections to Defer Compensation.
6
 
3.2
Investment Elections.
7
ARTICLE IV DEFERRAL ACCOUNTS AND TRUST FUNDING  
8
 
4.1
Deferral Accounts.
8
 
4.2
Company Contribution Account.
9
 
4.3
Trust Funding.
9
ARTICLE V VESTING  
10
ARTICLE VI DISTRIBUTIONS  
10
 
6.1
Distribution of Deferred Compensation and Discretionary Company Contributions.
10
 
6.2
[DELETED]
11
 
6.3
Hardship Distribution.
12
 
6.4
Inability to Locate Participant.
12
 
6.5
Limitation on Distributions to Covered Employees.
12
 
6.6
Specified Employees
12
 
6.7
Withholding
13
 
6.8
Termination of Employment.
13

 
 
(i)

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Page
       
ARTICLE VII ADMINISTRATION  
13
 
7.1
Committee.
13
 
7.2
Committee Action.
13
 
7.3
Powers and Duties of the Committee.
13
 
7.4
Construction and Interpretation.
14
 
7.5
Information.
15
 
7.6
Compensation, Expenses and Indemnity.
16
 
7.7
Quarterly Statements.
16
 
7.8
Disputes.
16
 
7.9
Plan Amendment.
17
 
7.10
Plan Termination.
17
ARTICLE VIII MISCELLANEOUS 
18
 
8.1
Unsecured General Creditor.
18
 
8.2
Restriction Against Assignment.
18
 
8.3
Governing Law.
18
 
8.4
Receipt or Release.
18
 
8.5
Payments on Behalf of Persons Under Incapacity.
18
 
8.6
Limitation of Rights and Employment Relationship
19
 
8.7
Successors.
19
 
8.8
Attorneys’ Fees.
19
 
8.9
Severability.
19
 
8.10
Shareholder Rights
19
 
8.11
Headings
20
 
8.12
Section 409A of the Code.
20

 
 
 
(ii)