a5555115-ex105.htm


     

    Exhibit
      10.5

     

    
      EXECUTIVE
        EMPLOYMENT, NON-COMPETE

      AND
        CONFIDENTIALITY AGREEMENT

      


      


                 THIS
        EXECUTIVE EMPLOYMENT, NON-COMPETE AND CONFIDENTIALITY AGREEMENT (“Agreement”),
        is entered into as of the date set forth on the signature page, by and between
        Bruce Caswell (the “Executive”) and MAXIMUS, Inc., a Virginia
        corporation with its principal place of business in Reston, Virginia (the
        “Corporation”) with reference to the following:

      


                 WHEREAS,
        the parties believe the Executive possesses the experience and capabilities
        to
        provide valuable service on behalf of the Corporation; and

       

                 WHEREAS,
        the Corporation desires to employ the Executive as Group
        President of the MAXIMUS Family Services Group;
        and

       

                 WHEREAS,
        the Executive desires to be employed by the Corporation at the salary, benefits
        and other terms and conditions specified herein.

       

                 NOW,
        THEREFORE, in consideration of these premises and for other good and valuable
        consideration, the receipt and adequacy of which are hereby acknowledged,
        the
        parties agree as follows:

      


      1.  Employment.

       

      1.1  Duties.  The
        Corporation hereby employs the Executive, and the Executive hereby accepts
        such
        employment, to serve as the Group President of the MAXIMUS Family Services
        Group.  The Executive hereby represents and warrants that he is in
        good health and capable of performing the services required
        hereunder.  The Executive shall perform such services and duties as
        are appropriate to such office or delegated to the Executive by his
        supervisor.   During the term of this Agreement, the Executive
        shall be a full-time employee of the Corporation and shall devote such time
        and
        attention to the discharge of his duties as may be necessary and appropriate
        to
        accomplish and complete such duties.

       

      1.2  Compensation.

       

      (a)  Salary.  As
        compensation for performance of his obligations hereunder, the Corporation
        shall
        pay the Executive an annual salary of not less than $350,000, such salary
        to be
        reviewed annually beginning on or about September 30, 2005.

       

      (b)  Signing
        Bonus.  Executive will receive a signing bonus of $35,000 on or
        about his first day of employment.  Executive agrees to repay
        a
        prorated portion of the signing bonus to the Corporation if, during the first
        12
        months of this Agreement, he terminates his employment for any reason or
        the
        Corporation terminates his employment for cause.

       

      (c)  Year-End
        Bonus.  The Executive will participate in the Corporation’s annual
        bonus program, with any awards dependent on the performance of the Executive
        and
        the Corporation.  Executive’s annual “target” bonus will be 30% of his
        annual base salary, but his actual bonus may be higher or lower based upon
        his
        and the Corporation’s achievement of specified goals and
        objectives.  The goals and objectives that govern Executive’s annual
        bonus determination will be agreed upon in writing by Executive and the
        Corporation within 30 days following the start of each
        year.  

       

      
        
           

        

        
           

          
            

          

        

        
           

        

         

         

      

      (d)  Stock
        Options.  Upon the Effective Date the Executive shall be awarded a
        non-qualified option to acquire 50,000 shares of MAXIMUS Common Stock in
        accordance with the MAXIMUS 1997 Equity Incentive Plan.  On the
        succeeding first through third anniversaries of the Effective Date, the
        Executive will receive non-qualified option grants to purchase MAXIMUS stock
        in
        the amounts of not less than 50,000, 20,000, and 20,000 shares
        respectively.  All option grants shall have a strike price equal to
        the New York Stock Exchange closing price of MAXIMUS Common Stock as of the
        trading day immediately preceding the date of grant, a four-year vesting
        schedule, a ten-year term and such other terms and conditions as are included
        in
        the standard MAXIMUS Stock Option Agreement which will be subsequently executed
        by the parties.
The Executive
        shall also be awarded 3,000 restricted stock units (RSUs)
        upon the Effective Date.  The RSUs will vest in equal installments
        over a six-year term, subject to possible acceleration in accordance with
        the
        terms of the RSU Award Program.  The Executive shall also be eligible
        to participate in stock option, RSU, and similar plans as currently exist
        or may
        be established by the Corporation from time to time.

       

      (e)           Vacation,
        Insurance, Expenses, Etc.  The Executive shall be entitled to
        20  days accrual paid vacation per year, and such benefits, health,
        disability and life insurance and other benefits and expense reimbursements
        in a
        manner consistent with the Corporation’s past practices and as are provided to
        executives at a similar level.

       

                            (f)           Indemnity.  Except
        to the extent the Board of Directors determines that the Executive violated
        the
        law or acted in bad faith or except as otherwise prohibited by law, the
        Corporation shall indemnify and hold harmless Executive from and against
        any and
        all claims, damages, expenses (including, but not limited to, attorneys’ fees
        and litigation and court costs), costs, and/or liabilities incurred or suffered
        by Executive that are based upon or arise out of any acts or omissions, or
        alleged acts or omissions, by Executive during his employment with the
        Corporation.  

       

      1.3  Non-Involvement
        In Certain Activities.  Prior to his employment by the
        Corporation, Executive was involved in two procurements for eligibility services
        in Florida and Texas on behalf of his former employer (the “Procurements”), and
        the Corporation is currently involved in the Procurements as
        well.  Neither Executive nor the Corporation wishes to have Executive
        utilize or disclose any proprietary information or trade secrets of his former
        employer in the course of his employment with the Corporation, and in
        furtherance of that desire, the parties agree that (i) the Corporation shall
        not
        request nor require that Executive be involved in any way with its work on
        the
        Procurements, (ii) Executive shall not become involved in any way with the
        Corporation’s work on the Procurements, and (iii) the Corporation shall issue to
        all of its employees who are involved in any way with its work on the
        Procurements written  instructions that they are not to discuss, share
        any information concerning, or seek any information concerning, the Procurements
        with/from Executive.  Executive and the Corporation agree that in the
        event that the nature, circumstances or timing of the Procurements changes
        then Executive shall discuss the changed circumstances with outside counsel
        to
        the Company to determine whether Executive may no longer have confidential
        or
        proprietary information relating to the Procurements.  In the event that
        outside counsel determines that Executive does not have confidential or
        proprietary information relating to the Procurements, then the Corporation
        may
        request that Executive be involved in the Procurements.  However, the
        foregoing shall not prohibit the Corporation from assigning the Executive
        to
        work on any programs or contracts that the Corporation may be awarded as
        a
        result of the Procurements, so long as the Executive does not share confidential
        information of his previous employer. 

       

      
        
           

        

        
           

          
            

          

        

        
           

        

         

         

      

      1.4  Term;
        Termination Without Severance.  The term of the
        employment agreement set forth in this Section 1 shall be for a period
        commencing at the Effective Date and continuing for two (2) years thereafter
        (the “Scheduled Term”) provided that this Agreement shall
        terminate:

       

      (a)  by
        mutual
        written consent of the parties;

       

      (b)  upon
        Executive’s death or inability, by reason of physical or mental
        impairment, to perform substantially all of Executive’s duties
        as contemplated herein for a continuous period of 120 days or more;
        or

       

      (c)  by
        the
        Corporation for cause, which shall mean the Executive’s (i) breach of any
        material duty or obligation hereunder, (ii) intentional or grossly negligent
        misconduct that is materially injurious to the Corporation, (iii) willful
        failure to follow the reasonable directions of the Executive’s supervisor, or
        (iv) failure to carry out his duties in a professional manner consistent
        with
        the standards of his profession and position; provided, however, that
        subsections (i), (iii) and (iv) of this paragraph are contingent upon the
        Corporation providing 30 days’ written notice to Executive and Executive’s
        failure to correct such breach, failure to follow instructions or failure
        to
        carry out his duties, as applicable.

       

                 Upon
        any termination of employment under this Section 1.4, neither party shall
        have
        any further obligation to the other pursuant to this Section 1, but such
        termination shall have no effect on the obligations of the parties under
        other
        provisions of this Agreement.

       

                 “Effective
        Date” means the date Executive commences work for the Corporation, which the
        parties anticipate will occur on or before October 1, 2004.

       

                 1.5           Termination
        By Executive For Good Reason.  In the event that the Corporation
        terminates the Executive without cause or the Executive resigns from his
        employment with the Corporation for Good Reason (as defined below), Executive
        shall be entitled to receive a lump sum severance payment equal to six months’
base salary (at Executive’s highest base salary rate during his employment with
        the Corporation) plus the pro-rated portion of Executive’s then-current annual
“target” bonus.  The severance payment described in the previous
        sentence will be paid to Executive within five business days following his
        resignation for Good Reason.     

       

                 For
        purposes of this Agreement, “Good Reason” means any of the following conditions,
        which condition(s) remain(s) in effect 30 days after written notice from
        the
        Executive to the Corporation of such condition(s):

      


      
        
           

        

        
           

          
            

          

        

        
           

        

         

         

      

                            (a)           a
        decrease in Executive’s existing base salary or annual “target” bonus
        percentage, and/or a material decrease in any of his employee benefits; provided
        that such decrease is not applicable to all officers of the
        Corporation;

      


                            (b)           a
        material diminution in Executive’s authority, responsibilities or duties
        (however, this clause shall not apply in the event of a reorganization of
        the
        company or a change in reporting relationships so long as the Executive’s
        authority, responsibilities or duties are not materially diminished thereby);
        

      


                            (c)           the
        relocation of Executive’s work place for the Corporation as of the Effective
        Date to a location that is not agreed to in writing by Executive;
        or

      


                            (d)           any
        failure by any successor to the Corporation to expressly assume, in writing,
        the
        Corporation’s obligations and liabilities under this Agreement.

      


       

                 1.6           Accelerated
        Vesting of Stock Options Upon Change of Control.  In the event
        there is a change of control of the Corporation such that the unvested stock
        options of the Corporation’s executive officers are accelerated, then the
        vesting of the unvested stock options of the Executive shall be accelerated
        as
        well. 

       

                 1.7           Renewal
        of Agreement.  At the end of the Scheduled Term, this Agreement
        shall automatically renew on a month-to-month basis (the “Renewal Term”) on the
        terms and conditions set forth herein, unless one of the parties hereto has
        given the other party written notice prior to the end of the Scheduled Term
        or
        any Renewal Term of his/its desire not to have the Renewal Term take
        effect.  If such notice is given by the Corporation to Executive,
        Executive shall be entitled to receive all of the severance benefits described
        in Section 1.5 at the end of the Scheduled Term. 

       

      2.  Non-Competition.

       

      2.1  Prohibited
        Activities.

       

      (a)  In
        the
        event that Executive resigns from the Corporation other than for Good Reason,
        the Executive agrees that, during his employment with the Corporation and
        for a
        period of two (2) years after the termination of such employment, the Executive
        will not engage in any Unethical Behavior which may adversely affect the
        Corporation.  For the purpose of this Section 2.1, “Unethical
        Behavior” is defined as:

       

      (i)  any
        attempt, successful or unsuccessful, by the Executive to divert any existing
        or
        pending contracts or subcontracts from the Corporation to any other firm,
        whether or not affiliated with the Executive;

       

      (ii)  any
        attempt, successful or unsuccessful, by the Executive, to solicit the business
        of any clients of the Corporation in the areas of business for which Executive
        has had responsibility (so long as such clients were clients of the Corporation
        during Executive’s employment with the Corporation);

       

      
        
           

        

        
           

          
            

          

        

        
           

        

         

         

      

      (iii)           any
        attempt, successful or unsuccessful, by the Executive to offer his services,
        or
        to influence any other employee of the Corporation to offer their services,
        to
        any firm to compete against the Corporation in the areas of business for
        which
        Executive had responsibility; or

       

      (iv)           any
        attempt, successful or unsuccessful, by the Executive to employ or offer
        employment to, or cause any other person to employ or offer employment to
        any
        other employee of the Corporation that is under the supervision of
        Executive. 

       

      (b)  The
        Executive shall notify any new employer, partner, association or any other
        firm
        or corporation actually or potentially in competition with the Corporation
        with
        whom the Executive shall become associated in any capacity whatsoever of
        the
        provisions of this Section 2 and the Executive agrees that the Corporation
        may give such notice to such firm, corporation or other person.

       

      2.2  Business
        Opportunities; Conflicts of Interest; Other Employment and Activities of
        the
        Executive.

       

      (a)  The
        Executive agrees promptly to advise the Corporation of, and provide the
        Corporation with an opportunity to pursue, all business opportunities that
        reasonably relate to the present business conducted by the
        Corporation.

       

      (b)  The
        Executive, in his capacity as an employee of the Corporation, shall not engage
        in any business with any member of the Executive’s immediate family or with any
        person or business entity in which the Executive or any member of the
        Executive’s immediate family has any ownership interest or financial interest,
        unless and until the Executive has first fully disclosed such interest to
        and
        received written consent from the Chief Executive Officer.  As used
        herein, the term “immediate family” means the Executive’s spouse, natural or
        adopted children, parents or siblings and the term “financial interest” means
        any relationship with such person or business entity that may monetarily
        benefit
        the Executive or member of the Executive’s immediate family, including any
        lending relationship or the guarantying of any obligations of such person
        or
        business entity by the Executive or member of his immediate
        family.   Provided, however, that the restrictions set forth in
        this subsection shall not apply to     (i) Executive’s
        personal/family investment activities, and (ii) Executive’s participation in the
        business activities of Sherwood Forest Coffee Company, Ltd. including, but
        not
        limited to, his role as a director and advisor to that entity so long as
        they do
        not compete with the business of the Corporation, interfere with the
        Corporation’s business operations, divert resources away from the Corporation or
        take the Executive’s time away from the Corporation.

       

      (c)  The
        parties hereto agree that the Executive may, consistent with this Section
        2.2,
        receive and retain speaking fees, referral fees from business opportunities
        not
        accepted by the Corporation, and fees from outside business activities and
        opportunities of the Executive consented to by the Chief Executive
        Officer.

       

      3.  Confidentiality.  The
        Executive agrees that the Corporation’s books, records, files and all other
        non-public information relating to the Corporation, its business, clients
        and
        employees are proprietary in nature and contain trade secrets and shall be
        held
        in strict confidence by the Executive, and shall not, either during the term
        of
        this Agreement or after the termination hereof, be used by Executive or
        disclosed by Executive, directly or indirectly, to any third party, except
        to
        the extent such use or disclosure is in furtherance of the Corporation’s
        business or required by court order or other legal process.  The trade
        secrets or other proprietary or confidential information referred to in the
        prior sentence includes, without limitation, all proposals to clients or
        potential clients, contracts, client or potential client lists, fee policies,
        financial information, administration or marketing practices or procedures
        and
        all other information regarding the business of the Corporation and its clients
        not generally known to the public.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

      

       

       

      4.  Miscellaneous.

       

      4.1  Notices.  All
        notices, requests, demands or other communications provided for in this
        Agreement shall be in writing and shall be delivered by hand, sent prepaid
        by
        overnight delivery service or sent by the United States mail, certified,
        postage
        prepaid, return receipt request, to the following:

       

      
        
          	 	
                  If
                    to the Corporation:

                
	 	 
	 	
                  MAXIMUS,
                    Inc.

                
	 	
                  11419
                    Sunset Hills Road

                
	 	
                  Reston,
                    Virginia 20190

                
	 	
                  Attention:  General
                    Counsel

                
	 	 
	 	
                  If
                    to the Executive:

                
	 	 
	 	
                  Bruce
                    L. Caswell

                
	 	
                  10312
                    Kensington Parkway

                
	 	
                  Kensington,
                    MD  20895

                


        



      Any
        notice, request, demand or other communication delivered or sent in the
        foregoing manner shall be deemed given or made (as the case may be) upon
        the
        earliest of (i) the date it is actually received, (ii) the business-day after
        the day on which it is delivered by hand, (iii) the business day after the
        day
        on which it is properly delivered to Federal Express (or a comparable overnight
        delivery service), or (iv) the third business day after the date on which
        it is
        deposited in the United States mail.  Either party may change its
        address by notifying the other party of the new address in any manner permitted
        by this paragraph.

       

      4.2  Remedies.  The
        parties agree and acknowledge that any violation by the Executive of the
        terms
        hereof may result in irreparable injury and damage to the Corporation or
        its
        clients, which will not adequately be compensable in monetary damages, that
        the
        Corporation will have no adequate remedy at law therefore, and that the
        Corporation may obtain such preliminary, temporary or permanent mandatory
        or
        restraining injunctions, orders or decrees as may be necessary to protect
        it
        against, or on account of, any breach of the provisions contained in this
        Agreement.

       

      4.3  No
        Obligation of Continued Employment.  The Executive understands
        that this Agreement does not create an obligation on the part of the Corporation
        to continue the Executive’s employment with the Corporation after the
        termination of this Agreement.  However, it is the present intention
        that the Executive remain employed by the Corporation following the expiration
        of this agreement, assuming a mutually satisfactory working
        arrangement.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

         

         

      

      4.4  Benefit;
        Assignment.  This Agreement shall bind and inure to the benefit of
        the parties and their respective personal representatives, heirs, successors
        and
        assigns, provided this Agreement may not be assigned by either party without
        the
        consent of the other, except that the Corporation may assign this Agreement
        in
        connection with the merger, consolidation or sale of all or substantially
        all of
        its business or assets.

       

      4.5  Entire
        Agreement.  This Agreement supersedes all prior agreements,
        written or oral, with respect to the subject matter of this
        Agreement.

       

      4.6  Severability.  In
        the event that any one or more of the provisions contained herein shall be
        held
        to be invalid, illegal, or unenforceable in any respect, such invalidity,
        illegality, or unenforceability shall not affect any other provisions of
        this
        Agreement, and all other provisions shall remain in full force and
        effect.  If any of the provisions of this Agreement is held to be
        excessively broad, it shall be reformed and construed by limiting and reducing
        it so as to be enforceable to the maximum extent permitted by law.

       

      4.7  Waivers.  No
        delay or omission by the Corporation or Executive in exercising any right
        under
        this Agreement will operate as a waiver of that or any other right.  A
        waiver or consent given by the Corporation or the Executive on any occasion
        is
        effective only in that instance and will not be construed as a bar to or
        waiver
        of any right on any other occasion.

       

      4.8  Captions.  The
        captions of the various sections and paragraphs of this Agreement have been
        inserted only for the purpose of convenience; such captions are not a part
        of
        this Agreement and shall not be deemed in any manner to modify, explain,
        enlarge
        or restrict any of the provisions of this Agreement.

       

      4.9  Governing
        Law.  This Agreement shall in all events and for all purposes be
        governed by, and construed in accordance with, the laws of the Commonwealth
        of
        Virginia.

       

      4.10  Amendments.  No
        changes to this Agreement shall be binding unless in writing and signed by
        both
        the parties.

       

      4.11  Counterparts.  This
        Agreement may be executed in several counterparts, each of which shall be
        deemed
        an original, and all such counterparts shall constitute one
        instrument.

       

      4.12     Survival.  Sections
        1.4, 2.1 and 3 shall survive the expiration or earlier
        termination of this Agreement in accordance with their terms.

       

      
        
           

        

        
           

          
            

          

        

        
           

        

         

         

      

                 THE
        EXECUTIVE HAS READ ALL OF THE PROVISIONS OF THIS AGREEMENT AND THE EXECUTIVE
        UNDERSTANDS, AND AGREES TO, EACH OF SUCH PROVISIONS.  THE EXECUTIVE
        UNDERSTANDS THAT THIS AGREEMENT MAY AFFECT THE EXECUTIVE’S RIGHT TO ACCEPT
        EMPLOYMENT WITH OTHER COMPANIES SUBSEQUENT TO THE EXECUTIVE’S EMPLOYMENT WITH
        THE CORPORATION.

       

                 IN
        WITNESS WHEREOF, the undersigned have executed this Agreement as of the date
        first above written.

      


      
         

        
          	EXECUTIVE	 	MAXIMUS,
                  Inc.
	 	 	 	 	 
	 	 	 	 	 
	 	 	 	By	 
	
                  Bruce
                    Caswell

                	 	 	
                  Lynn
                    Davenport

                
	 	 	 	 	
                  Chief
                    Operating Officer

                
	 	 	 	 	 
	 	 	 	 	 
	
                  Date