Exhibit 10
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 Xxxxxx X. Xxxxxxx (the "Executive") and MAXIMUS, Inc., a Virginia
corporation with its principal place of business in McLean, 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 President of
the Government Operations 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 President of the
Corporation's Government Operations Group, reporting directly to Xxxxx X.
Xxxxxxx, 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 a monthly salary
of $25,000, such salary to be reviewed annually for adjustment beginning on or
about September 30, 1999. In addition, for the fiscal year ending September 30,
1999, the Executive will receive a combined bonus, consisting of 50% cash and
50% stock options, valued at between 30% and 70% of the Executive's actual
earnings through September 30, 1999. Thereafter, the Executive will participate
in the Corporation's annual bonus program, with any awards dependent on the
performance of the Executive and the Corporation. A target cash bonus for the
Executive would be $100,000 for accomplishing his annual goals.
(b) STOCK OPTIONS. Upon the effective date of this Agreement, the
Executive shall be awarded Incentive Stock Options (ISOs) to acquire 200,000
shares of MAXIMUS Common Stock in accordance with the MAXIMUS 1997 Equity
Incentive Plan. Such ISOs shall have a strike price equal to the New York Stock
Exchange closing price of MAXIMUS Common Stock as of February 10, 1999, a
four-year vesting schedule, a ten-year term and such other terms and conditions
as are included in the standard MAXIMUS Incentive Stock Option Agreement which
will be subsequently executed by the parties. The Executive shall also be
entitled to participate in stock option plans as currently exist or may be
established by the Corporation from time to time. The Executive shall receive an
annual stock option award equal to the value of his annual cash bonus as
described above.
(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 by
the Corporation to its Chief Executive Officer.
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
breach of any material duty or obligation hereunder, or intentional or grossly
negligent misconduct that is materially injurious to the Corporation, as
reasonably determined by the Corporation's Board of Directors, or willful
failure to follow the reasonable directions of the Corporation's Board of
Directors.
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 1, 1999 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 UNDERTAKING. The Executive agrees that while the Executive is employed
by the Corporation and for two (2) years following the termination of such
employment, he will not, without the prior written consent of the Corporation,
engage in Competition (as defined below) with the Corporation. For purposes of
this Agreement, "Competition" means participating in the management of any
business enterprise if such enterprise engages in substantial and direct
competition with the Corporation and such enterprise's sales of any product or
service competitive with any product or service of the Corporation amounted to
25% of such enterprise's net sales for its most recently completed fiscal year
and if the Corporation's sales of said product or service amounted to 25% of the
corporation's net sales for its most recently completed fiscal year.
"Competition" will not include (i) the mere ownership of securities in any
enterprise and exercise of rights appurtenant thereto or (ii) participation in
management of any enterprise or business operation thereof other than in
connection with the competitive operation of such enterprise.
2.2 OTHER 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 2.2,
"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.
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(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.
2.3 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.
(c) The parties hereto agree that the Executive may, consistent with
this Section 2.3, 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
disclosed, directly or indirectly, to any third party, except to the extent such
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
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delivery service or sent by the United States mail, certified, postage prepaid,
return receipt request, to the following:
If to the Corporation:
MAXIMUS, Inc.
0000 Xxxxxxx Xxxx
XxXxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx
If to the Executive:
Xxxxxx X Xxxxxxx
00000 Xxxxxx Xxxxx Xxxx
Xxxxxx, Xxxxxxxx 00000
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
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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.
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/ Xxxxxx X. Xxxxxxx By /s/ Xxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx Xxxxx X. Xxxxxxx
Chief Executive Officer
Date 2/10/99
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AMENDMENT NO. 1 TO
EXECUTIVE EMPLOYMENT, NON-COMPETE
AND CONFIDENTIALITY AGREEMENT
THIS AMENDMENT NO. 1 TO EXECUTIVE EMPLOYMENT, NON-COMPETE AND
CONFIDENTIALITY AGREEMENT ("Amendment"), is entered into as of March 2, 1999, by
and between Xxxxxx X. Xxxxxxx (the "Executive") and MAXIMUS, Inc., a Virginia
corporation with its principal place of business in McLean, Virginia (the
"Corporation") with reference to the following:
WHEREAS, the parties entered into an Executive Employment, Non-Compete and
Confidentiality Agreement dated February 10, 1999 ("Agreement"); and
WHEREAS, the parties desire to amend the Agreement as set forth 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. Section 1.2(b) of the Agreement is deleted in its entirety and replaced
with the following:
STOCK OPTIONS. The Executive is awarded Incentive Stock Options (ISOs) to
acquire 200,000 shares of MAXIMUS Common Stock in accordance with the
MAXIMUS 1997 Equity Incentive Plan. Such ISOs shall have a strike price
equal to the New York Stock Exchange closing price of MAXIMUS Common Stock
as of February 23, 1999, the date such award was approved by the Board of
Directors, a four-year vesting schedule, a ten-year term and such other
terms and conditions as are included in the standard MAXIMUS Incentive
Stock Option Agreement which will be subsequently executed by the parties.
The Executive shall also be entitled to participate in stock option plans
as currently exist or may be established by the Corporation from time to
time. The Executive shall receive an annual stock option award equal to the
value of his annual cash bonus as described above.
2. Except as described above, the Agreement shall remain in full force and
effect in all other respects.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first above written.
EXECUTIVE MAXIMUS, Inc.
/s/ Xxxxxx X. Xxxxxxx By /s/ Xxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx Xxxxx X. Xxxxxxx
Chief Executive Officer
