Document:

1997 Equity Incentive Plan (as amended to date)  (PLAN.DOC;7)

EXHIBIT

10.1

 

MAXIMUS, INC.

 

1997 Equity Incentive Plan

Section 1.  Purpose

 

The purpose of the

MAXIMUS, Inc. 1997 Equity Incentive Plan is to attract and retain key employees

and consultants of the Company and its Affiliates, to provide an incentive for

them to achieve long-range performance goals, and to enable them to participate

in the long-term growth of the Company.

 

Section 2.  Definitions

 

“Affiliate” means any

business entity that directly, or indirectly through one or more

intermediaries, controls, is controlled by or is under common control with the

Company.  For purposes hereof, “control”

(and with correlative meanings, the terms “controlled by” and “under common

control with”) shall mean the possession of the power to direct or cause the

direction of the management and policies of the Company, whether through the

ownership of voting stock, by contract or otherwise.  In the case of a corporation “control” shall mean, among other

things, the direct or indirect ownership of more than fifty percent (50%) of

its outstanding voting stock.

 

“Award” means any Option,

Stock Appreciation Right, Performance Share, Restricted Stock, Stock Unit or

Other Stock-Based Award awarded under the Plan.

 

“Board” means the Board

of Directors of the Company.

 

“Code” means the Internal

Revenue Code of 1986, as amended from time to time, and any successor to such

Code.

 

“Committee” means a

committee of not less than two members of the Board appointed by the Board to

administer the Plan, each of whom is a “Non-Employee Director” within the

meaning of Rule 16b-3 under the Securities Exchange Act of 1934 or any

successor provision, as applicable to the Company at the time (“Rule 16b-3”); provided,

however, that until such committee is appointed, “Committee” means the

Board.

 

“Common Stock” or “Stock”

means the common stock of the Company.

 

“Company” means MAXIMUS,

Inc.

 

“Designated Beneficiary”

means the beneficiary designated by a Participant, in a manner determined by

the Committee, to receive amounts due or exercise rights of the Participant in

the event of the Participant’s death. 

In the absence of an effective designation by a Participant, “Designated

Beneficiary” shall mean the Participant’s estate.

 

“Effective Date” means

January 31, 1997.

 

 

“Fair Market Value”

means, with respect to Common Stock or any other property, the fair market

value of such property as determined by the Committee in good faith or in the

manner established by the Committee from time to time.

 

“Incentive Stock Option”

means an option to purchase shares of Common Stock awarded to a Participant

under Section 6 that is intended to meet the requirements of Section 422 of the

Code or any successor provision.

 

“Nonstatutory Stock

Option” means an option to purchase shares of Common Stock awarded to a Participant

under Section 6 that is not intended to be an Incentive Stock Option.

 

“Option” means an

Incentive Stock Option or a Nonstatutory Stock Option.

 

“Other Stock-Based Award”

means an Award, other than an Option, Stock Appreciation Right, Performance Share,

Restricted Stock or Stock Unit, having a Common Stock element and awarded to a

Participant under Section 11.

 

“Participant” means a

person selected by the Committee to receive an Award under the Plan.

 

“Performance Cycle” or

“Cycle” means the period of time selected by the Committee during which

performance is measured for the purpose of determining the extent to which an

award of Performance Shares has been earned.

 

“Performance Shares” mean

shares of Common Stock, which may be earned by the achievement of performance

goals, awarded to a Participant under Section 8.

 

“Reporting Person” means

a person subject to Section 16 of the Securities Exchange Act of 1934 or any

successor provision.

 

“Restricted Period” means

the period of time during which an Award may be forfeited to the Company

pursuant to the terms and conditions of such Award.

 

“Restricted Stock” means

shares of Common Stock subject to forfeiture awarded to a Participant under

Section 9.

 

“Stock Appreciation

Right” or “SAR” means a right to receive any excess in value of shares of

Common Stock over the exercise price awarded to a Participant under Section 7.

 

“Stock Unit” means an

award of Common Stock or units that are valued in whole or in part by reference

to, or otherwise based on, the value of Common Stock, awarded to a Participant

under Section 10.

 

Section 3.  Administration

 

The Plan shall be

administered by the Committee.  The

Committee shall have authority to adopt, alter and repeal such administrative

rules, guidelines and practices governing the operation of the Plan as it shall

from time to time consider advisable, and to interpret the

 

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provisions of the

Plan.  The Committee’s decisions shall

be final and binding.  To the extent

permitted by applicable law, the Committee may delegate to one or more

executive officers of the Company the power to make Awards to Participants who

are not Reporting Persons and all determinations under the Plan with respect

thereto, provided that the Committee shall fix the maximum amount of such

Awards for all such Participants and a maximum for any one Participant.

 

Section 4.  Eligibility

 

All employees and, in the

case of Awards other than Incentive Stock Options, outside directors and

consultants of the Company or any Affiliate, capable of contributing

significantly to the successful performance of the Company are eligible to be

Participants in the Plan.  Incentive

Stock Options may be awarded only to persons eligible to receive such Options

under the Code.

 

Section 5.  Stock Available for Awards

 

(a)        Subject to adjustment under subsection

(b), Awards may be made under the Plan for up to 6,500,000 shares of Common

Stock.  If any Award in respect of

shares of Common Stock expires or is terminated unexercised or is forfeited

without the Participant having had the benefits of ownership (other than voting

rights), the shares subject to such Award, to the extent of such expiration,

termination or forfeiture, shall again be available for award under the Plan.  Common Stock issued through the assumption

or substitution of outstanding grants from an acquired company shall not reduce

the shares available for Awards under the Plan.  Shares issued under the Plan may consist in whole or in part of

authorized but unissued shares or treasury shares.

 

(b)        If the Committee determines that any

stock dividend, extraordinary cash dividend, creation of a class of equity

securities, recapitalization, reorganization, merger, consolidation, split-up,

spin-off, combination, exchange of shares, warrants or rights offering to

purchase Common Stock at a price substantially below fair market value, or

other similar transaction affects the Common Stock such that an adjustment is

required in order to preserve the benefits or potential benefits intended to be

made available under the Plan, then the Committee (subject, in the case of

Incentive Stock Options, to any limitation required under the Code) shall

equitably adjust any or all of (i) the number and kind of shares in respect of

which Awards may be made under the Plan, (ii) the number and kind of shares

subject to outstanding Awards, and (iii) the award, exercise or conversion

price with respect to any of the foregoing, and if considered appropriate, the

Committee may make provision for a cash payment with respect to an outstanding

Award, provided that the number of shares subject to any Award shall always be

a whole number.  However, except in the

case of a recapitalization of the Company, the exercise price of any Option

granted under the Plan may only be adjusted with the approval of the

shareholders of the Company at an annual or special meeting thereof.

 

Section 6.  Stock Options

 

(a)        Subject to the provisions of the Plan,

the Committee may award Incentive Stock Options and Nonstatutory Stock Options

and determine the number of shares to be covered by

 

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each Option, the option

price therefor and the conditions and limitations applicable to the exercise of

the Option.  The terms and conditions of

Incentive Stock Options shall be subject to and comply with Section 422 of the

Code or any successor provision and any regulations thereunder, and no

Incentive Stock Option may be granted hereunder more than ten years after the

Effective Date.

 

(b)        The Committee shall establish the option

price at the time each Option is awarded, which price shall not be less than

100% of the Fair Market Value of the Common Stock on the date of award with

respect to Incentive Stock Options and Nonstatutory Stock Options.

 

(c)        Each Option shall be exercisable at such

times and subject to such terms and conditions as the Committee may specify in

the applicable Award or thereafter. 

However, no Nonstatutory Stock Option shall be granted which is

exercisable, in whole or in part, more than ten years from the date of grant of

such Nonstatutory Stock Option.  The

Committee may impose such conditions with respect to the exercise of Options,

including conditions relating to applicable federal or state securities laws,

as it considers necessary or advisable.

 

(d)        No shares shall be delivered pursuant to

any exercise of an Option until payment in full of the option price therefor is

received by the Company.  Such payment

may be made in whole or in part in cash or, to the extent permitted by the

Committee at or after the award of the Option, by delivery of a note or shares

of Common Stock owned by the optionee, including Restricted Stock, or by

retaining shares otherwise issuable pursuant to the Option, in each case valued

at their Fair Market Value on the date of delivery or retention, or such other

lawful consideration as the Committee may determine.

 

(e)        The Committee may provide that, subject

to such conditions as it considers appropriate, upon the delivery or retention

of shares to the Company in payment of an Option, the Participant automatically

be awarded an Option for up to the number of shares so delivered.

 

Section 7.  Stock Appreciation Rights

 

(a)        Subject to the provisions of the Plan,

the Committee may award SARs in tandem with an Option (at or after the award of

the Option), or alone and unrelated to an Option.  SARs in tandem with an Option shall terminate to the extent that

the related Option is exercised, and the related Option shall terminate to the

extent that the tandem SARs are exercised. 

SARs granted in tandem with Options shall have an exercise price not

less than the exercise price of the related Option.  SARs granted alone and unrelated to an Option  may be granted at such

exercise prices as the Committee may determine.

 

(b)        An SAR related to an Option, which SAR

can only be exercised upon or during limited periods following a change in

control of the Company, may entitle the Participant to receive an amount based

upon the highest price paid or offered for Common Stock in any transaction

relating to the change in control or paid during the thirty-day period

immediately preceding the occurrence of the change in control in any

transaction reported in the stock market in which the Common Stock is normally

traded.

 

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Section 8.  Performance Shares

 

(a)        Subject to the provisions of the Plan,

the Committee may award Performance Shares and determine the number of such

shares for each Performance Cycle and the duration of each Performance

Cycle.  There may be more than one

Performance Cycle in existence at any one time, and the duration of Performance

Cycles may differ from each other.  The

payment value of Performance Shares shall be equal to the Fair Market Value of

the Common Stock on the date the Performance Shares are earned or, in the

discretion of the Committee, on the date the Committee determines that the

Performance Shares have been earned.

 

(b)        The committee shall establish

performance goals for each Cycle, for the purpose of determining the extent to

which Performance Shares awarded for such Cycle are earned, on the basis of

such criteria and to accomplish such objectives as the Committee may from time

to time select.  During any Cycle, the

Committee may adjust the performance goals for such Cycle as it deems equitable

in recognition of unusual or non-recurring events affecting the Company,

changes in applicable tax laws or accounting principles, or such other factors

as the Committee may determine.

 

(c)        As soon as practicable after the end of

a Performance Cycle, the Committee shall determine the number of Performance

Shares that have been earned on the basis of performance in relation to the

established performance goals.  The

payment values of earned Performance Shares shall be distributed to the

Participant or, if the Participant has died, to the Participant’s Designated

Beneficiary, as soon as practicable thereafter.  The Committee shall determine, at or after the time of award,

whether payment values will be settled in whole or in part in cash or other

property, including Common Stock or Awards.

 

Section 9.  Restricted Stock

 

(a)        Subject to the provisions of the Plan,

the Committee may award shares of Restricted Stock and determine the duration

of the Restricted Period during which, and the conditions under which, the

shares may be forfeited to the Company and the other terms and conditions of

such Awards.  Shares of Restricted Stock

may be issued for no cash consideration or such minimum consideration as may be

required by applicable law.

 

(b)        Shares of Restricted Stock may not be

sold, assigned, transferred, pledged or otherwise encumbered, except as

permitted by the Committee, during the Restricted Period.  Shares of Restricted Stock shall be evidenced

in such manner as the Committee may determine. 

Any certificates issued in respect of shares of Restricted Stock shall

be registered in the name of the Participant and unless otherwise determined by

the Committee, deposited by the Participant, together with a stock power

endorsed in blank, with the Company.  At

the expiration of the Restricted Period, the Company shall deliver such

certificates to the Participant or if the Participant has died, to the

Participant’s Designated Beneficiary.

 

Section 10.  Stock Units

 

(a)        Subject to the provisions of the Plan,

the Committee may award Stock Units subject to such terms, restrictions,

conditions, performance criteria, vesting requirements and payment rules as the

Committee shall determine.

 

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(b)        Shares of Common Stock awarded in

connection with a Stock Unit Award shall be issued for no cash consideration or

such minimum consideration as may be required by applicable law.

 

Section 11.     Other Stock-Based Awards

 

(a)        Subject to the provisions of the Plan,

the Committee may make other awards of Common Stock and other awards that are

valued in whole or in part by reference to, or are otherwise based on, Common

Stock, including without limitation convertible preferred stock, convertible

debentures, exchangeable securities and Common Stock awards or options.  Other Stock-Based Awards may be granted

either alone or in tandem with other Awards granted under the Plan and/or cash

awards made outside of the Plan.

 

(b)        The Committee may establish performance

goals, which may be based on performance goals related to book value,

subsidiary performance or such other criteria as the Committee may determine,

Restricted Periods, Performance Cycles, conversion prices, maturities and

security, if any, for any Other Stock-Based Award.  Other Stock-Based Awards may be sold to Participants at the face

value thereof or any discount therefrom or awarded for no consideration or such

minimum consideration as may be required by applicable law.

 

Section 12.  General Provisions Applicable to Awards

 

(a)        Limitations on Transferability.  Options shall not be transferable by the

recipient other than by will or the laws of descent and distribution and are

exercisable during such person’s lifetime only by such person or by such

person’s guardian or legal representative; provided that the Committee may in

its discretion waive such restriction in any case.

 

(b)        Documentation.  Each Award under the Plan shall be evidenced

by a writing delivered to the Participant specifying the terms and conditions

thereof and containing such other terms and conditions not inconsistent with

the provisions of the Plan as the Committee considers necessary or advisable to

achieve the purposes of the Plan or to comply with applicable tax and

regulatory laws and accounting principles.

 

(c)        Committee Discretion.  Each type of Award may be made alone, in

addition to or in relation to any other type of Award.  The terms of each type of Award need not be

identical, and the Committee need not treat Participants uniformly.  Except as otherwise provided by the Plan or

a particular Award, any determination with respect to an Award may be made by

the Committee at the time of award or at any time thereafter.

 

(d)        Settlement.  The Committee shall determine whether Awards

are settled in whole or in part in cash, Common Stock, other securities of the

Company, Awards or other property.  The

Committee may permit a Participant to defer all or any portion of a payment

under the Plan, including the crediting of interest on deferred amounts

denominated in cash and dividend equivalents on amounts denominated in Common

Stock.

 

(e)        Dividends and Cash Awards.  In the discretion of the Committee, any

Award under the Plan may provide the Participant with (i) dividends or dividend

equivalents payable

 

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currently or deferred

with or without interest, and (ii) cash payments in lieu of or in addition to

an Award.

 

(f)         Termination of Employment.  The Committee shall determine the effect on

an Award of the disability, death, retirement or other termination of

employment of a Participant and the extent to which, and the period during

which, the Participant’s legal representative, guardian or Designated Beneficiary

may receive payment of an Award or exercise rights thereunder.

 

(g)        Change in Control.  In order to preserve a Participant’s rights

under an Award in the event of a change in control of the Company, the

Committee in its discretion may, at the time an Award is made or at any time

thereafter, take one or more of the following actions: (i) provide for the

acceleration of any time period relating to the exercise or realization of the

Award, (ii) provide for the purchase of the Award upon the Participant’s request

for an amount of cash or other property that could have been received upon the

exercise or realization of the Award had the Award been currently exercisable

or payable, (iii) adjust the terms of the Award in a manner determined by the

Committee to reflect the change in control, (iv) cause the Award to be assumed,

or new rights substituted therefor, by another entity, or (v) make such other

provision as the Committee may consider equitable and in the best interests of

the Company.

 

(h)        Loans.  The Committee may authorize the making of

loans or cash payments to Participants in connection with any Award under the

Plan, which loans may be secured by any security, including Common Stock,

underlying or related to such Award (provided that such Loan shall not exceed

the Fair Market Value of the security subject to such Award), and which may be

forgiven upon such terms and conditions as the Committee may establish at the

time of such loan or at any time thereafter.

 

(i)         Withholding Taxes.  The Participant shall pay to the Company, or

make provision satisfactory to the Committee for payment of, any taxes required

by law to be withheld in respect of Options under the Plan no later than the

date of the event creating the tax liability. 

The Company and its Affiliates may, to the extent permitted by law,

deduct any such tax obligations from any payment of any kind otherwise due to

the Participant.  In the Committee’s

discretion, the Participant may pay any taxes due with respect to an Option in

whole or in part in shares of Common Stock, including shares retained from the

Option creating the tax obligation, valued at their Fair Market Value on the

date of retention or delivery.

 

(j)         Foreign Nationals.  Awards may be made to Participants who are

foreign nationals or employed outside the United States on such terms and

conditions different from those specified in the Plan as the Committee

considers necessary or advisable to achieve the purposes of the Plan or to

comply with applicable laws.

 

(k)        Amendment of Award.  The Committee may amend, modify or terminate

any outstanding Award, including substituting therefor another Award of the

same or a different type, changing the date of exercise or realization and

converting an Incentive Stock Option to a Nonstatutory Stock Option, provided

that the Participant’s consent to such action shall be required unless the

Committee determines that the action, taking into account any related action,

would not materially and adversely affect the Participant.  Notwithstanding

the foregoing, except

 

7

 

in

the case of a recapitalization of the Company, the Committee shall obtain

shareholder approval to: (i) amend the terms of any outstanding options under

the Plan to provide an option exercise price per share which is lower than the

then-current exercise price per share of such outstanding options or (ii)

cancel any outstanding options under the Plan and grant in substitution

therefor new options under the Plan covering the same or different numbers of

shares of Common Stock and having an option exercise price per share lower than

the exercise price per share of the cancelled options.

 

Section 13.  Miscellaneous

 

(a)        Limitation on Number of Shares Granted.  Notwithstanding any other provision of the

Plan, the aggregate number of shares of Common Stock subject to Options and

SARs that may be granted within any fiscal year to any one Eligible Person

under the Plan shall not exceed that number of shares equal to 20% of the total

number of shares reserved for issuance under the Plan, except for grants to new

hires during the fiscal year of hiring which shall not exceed that number of

shares equal to 30% of the total number of shares reserved for issuance under

the Plan.

 

(b)        No Right To Employment.  No person shall have any claim or right to

be granted an Award, and the grant of an Award shall not be construed as giving

a Participant the right to continued employment.  The Company expressly reserves the right at any time to dismiss a

Participant free from any liability or claim under the Plan, except as

expressly provided in the applicable Award.

 

(c)        No Rights As Stockholder.  Subject to the provisions of the applicable

Award, no Participant or Designated Beneficiary shall have any rights as a

stockholder with respect to any shares of Common Stock to be distributed under

the Plan until he or she becomes the holder thereof.  A Participant to whom Common Stock is awarded shall be considered

the holder of the Stock at the time of the Award except as otherwise provided

in the applicable Award.

 

(d)        Effective Date.  Subject to the approval of the stockholders

of the Company, the Plan shall be effective on the Effective Date.  Before such approval, Awards may be made

under the Plan expressly subject to such approval.

 

(e)        Amendment of Plan.  The Board may amend, suspend or terminate

the Plan or any portion thereof at any time, subject to any stockholder

approval that the Board determines to be necessary or advisable.

 

(f)         Governing Law.  The provisions of the Plan shall be governed

by and interpreted in accordance with the laws of the Commonwealth of Virginia.

 

1.       Adopted

by the Board of Directors on January 31, 1997

2.                    Approved

by the Shareholders on February 3, 1997

3.                    Amended

by the Board of Directors on August 26, 1998, as approved by the Shareholders

on February 23, 1999.

4.                    Amended

by the Board of Directors on June 13, 2000 and November 21, 2000, as approved

by the Shareholders on March 6, 2001.

 

8

 

5.                    Amended

by the Board of Directors on March 6, 2001.

6.                    Amended

by the Board of Directors on January 14, 2002; as approved by the Shareholders

on April 4, 2002.

 

9Glickman Executive Employment, Non-Compete and Conf. Agrmt.

(GLICKMAN.DOC;7)

EXHIBIT

10.2

 

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 Richard A. Montoni (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 Chief Financial Officer; 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

Chief Financial Officer reporting directly to David V. Mastran, the Chief

Executive Officer of the Corporation. 

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

the Chief Executive Officer.  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 and Year-End Bonus.  As compensation for performance of his

obligations hereunder, the Corporation shall pay the Executive an annual salary

of $325,000, such salary to be reviewed annually beginning on or about

September 30, 2002.  The Executive will

participate in the Corporation’s annual bonus program, with any awards

dependent on the performance of the Executive and the Corporation.  The target cash bonus for the Executive will

be $100,000 for accomplishing his annual goals, such amount to be pro-rated to

reflect actual months of service in fiscal year 2002.

 

 

(b)           Stock Options.  The Executive shall be awarded a

non-qualified option to acquire 60,000 shares of MAXIMUS Common Stock in

accordance with the MAXIMUS 1997 Equity Incentive Plan.  Such option shall have a strike price equal

to the New York Stock Exchange closing price of MAXIMUS Common Stock as of

February 19, 2002, 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.  In addition, the Executive shall be awarded

a supplemental grant of 15,000 MAXIMUS stock options on the first year

anniversary of employment, subject to approval by the Corporation’s Board

Directors.  The Executive shall also be

entitled to participate in stock option and similar plans as currently exist or

may be established by the Corporation from time to time.

 

(c)           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.

 

1.3           Term; Termination.  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 four (4) 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 Chief Executive Officer, or (iv) failure to carry out his

duties in a professional manner consistent with the standards of his profession

and position.

 

Upon any termination of

employment under this Section 1.3, neither party shall have any 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” shall mean March 18, 2002 or such

earlier date as the Executive shall commence working for the Corporation.

 

1.4           Severance.  The parties agree that in the event the

Corporation terminates the Executive’s employment without cause or the

Executive terminates the employment for “good reason” prior to the expiration

of the Scheduled Term, the Executive shall be entitled to receive salary and

benefits (including the vesting of stock options) for the remainder of the

Scheduled Term.  “Good reason” shall

mean (i) any action by the Corporation which results in a material diminution

in the Executive’s position (including status, titles, salary decrease or

reporting requirements), authority, duties or responsibilities or (ii) a

relocation of the Executive without his consent.

 

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2.             Non-Competition.

 

2.1           Prohibited Activities.

 

(a)           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 adversely influence clients of the

Corporation or organizations with which the Corporation has an existing or

pending contract or proposal;

 

(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; 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.

 

(b)           The Executive agrees that, in addition

to any other remedy available to the Corporation, in the event of a breach by

the Executive of the terms of this Section 2 the Corporation may set off

against any amounts due the Executive, an amount equal to the gross revenues

which such Executive, or any entity with which the Executive is employed,

affiliated or associated, receives or is entitled to receive, from any existing

clients (or potential clients with whom a proposal is pending) of the

Corporation during the two-year period provided in this Section 2.

 

(c)           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

 

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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.

 

(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 any third party or disclosed,

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

  	

   

  

 

4

 

	

   

  	

  If to the Executive:

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

  Richard A. Montoni

  	

   

  
	

   

  	

   

  	

   

  
	

   

  	

   

  	

   

  

 

 

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 therefor, 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.

 

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 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 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.

 

5

 

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.

 

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.

  
	

   

  	

   

  	

   

  	

   

  
	

    /s/ RICHARD A. MONTONI

  	

   

  	

  By

  	

    /s/ DAVID V. MASTRAN

  	

   

  
	

  Richard A. Montoni

  	

   

  	

   

  	

   

  	

  David V. Mastran

  
	

   

  	

   

  	

   

  	

   

  	

  Chief Executive Officer

  
	

   

  	

   

  	

   

  	

   

  
	

  February 20, 2002

  	

   

  	

   

  	

   

  
	

  Date

  	

   

  	

   

  	

   

  
						

 

6

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