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Exhibit 10.10
FORM OF
INDEMNIFICATION AGREEMENT
[Director]
This Agreement dated __________ __, 199_ is between MAXIMUS, Inc. (the
"Company"), a Virginia corporation, and _______________________________ (the
"Indemnitee"), who is a director of the Company. Its purpose is to provide the
maximum protection for the Indemnitee against personal liability arising out of
his service to the Company so as to encourage the continuation of such service
and the effective exercise of his business judgment in connection herewith.
The parties hereto agree as follows:
1. DEFINITIONS. For purposes of this Agreement, the following terms shall
have the meanings hereafter assigned to them:
(a) "CHANGE IN CONTROL" shall mean that the following has occurred:
(i) there has been a change in control of the Company, not approved by a
resolution of the Company's Board of Directors, of a nature that would be
required to be reported in response to Item 6(e) of Schedule 14A of
Regulation 14A promulgated under the Securities Exchange Act of 1934, as
amended (the "Exchange Act") or any successor provision thereof, including
in any event the acquisition by any "person" (as such term is used in
Sections 13(d) and 14(d)(2) of the Exchange Act) of beneficial ownership,
directly or indirectly, of securities of the Company representing 25% or
more of the combined voting power of the Company's then outstanding
securities, (ii) followed within a period of not more than two years by a
change in the identity of a majority of the members of the Company's Board
of Directors otherwise than through death, disability or retirement in
accordance with the Company's normal retirement policies.
(b) "CLAIM" shall mean any threatened, pending or completed action,
suit or proceeding, or any inquiry or investigation, whether conducted by
the Company or any other party, that the Indemnitee in good faith believes
might lead to the institution of any such action, suit or proceeding,
whether civil, criminal, administrative, investigative or other.
(c) "EXPENSES" shall include attorneys' fees and all other costs,
expenses and obligations paid or incurred in connection with investigating,
defending, being a witness in or participating in (including on appeal), or
preparing to defend, be a witness in or participate in, any Claim relating
to any Indemnifiable Event.
(d) "INDEMNIFIABLE EVENT" shall mean any event or occurrence related
to the fact that the Indemnitee is or was a director, officer, employee,
agent or fiduciary of the Company, or is or was serving at the request of
the Company as a director, officer, employee, trustee, agent or fiduciary
of another corporation, partnership,
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joint venture, employee benefit plan, trust or other enterprise, or by
reason of anything done or not done by the Indemnitee in any such capacity.
(e) "POTENTIAL CHANGE IN CONTROL" shall mean that any of the following
have occurred: (i) any person publicly announces an intention to take or to
consider taking actions which if consummated might result in a Change in
Control, (ii) any "person" (as such term is used in Section 13(d) and
14(d)(2) of the Exchange Act) acquires beneficial ownership, directly or
indirectly, of securities of the Company representing 25% or more of the
combined voting power of the Company's then outstanding securities, or
(iii) the Company's Board of Directors adopts a resolution to the effect
that, for purposes of this Agreement, a Potential Change in Control has
occurred.
(f) "REVIEWING PARTY" shall mean the person or body appointed by the
Company's Board of Directors pursuant to SECTION 2(b) hereof, which shall
not be or include a person who is a party to the particular Claim for which
the Indemnitee is seeking indemnification.
2. BASIC INDEMNIFICATION ARRANGEMENT.
(a) If the Indemnitee was or is a party to or witness or other
participant in, or is threatened to be made a party to or witness or other
participant in, a Claim by reason of (or arising in part out of) an
Indemnifiable Event, the Company shall indemnify the Indemnitee to the
fullest extent permitted by law as soon as practicable but in any event no
later than thirty days after written demand is presented to the Company,
against all Expenses, judgments, fines, penalties and amounts paid in
settlement (including all interest, assessments and other charges paid or
payable in respect of such Expenses, judgments, fines, penalties or amounts
paid in settlement) of such Claim. If so requested by the Indemnitee, the
Company shall advance (within two business days of such request) all
Expenses to the Indemnitee (an "Expense Advance"). Notwithstanding anything
in this Agreement to the contrary, prior to a Change in Control, the
Indemnitee shall not be entitled to indemnification pursuant to this
Agreement in connection with any Claim initiated by the Indemnitee against
the Company or any director or officer of the Company (otherwise than to
enforce his rights under this Agreement) unless the Company has consented
to the initiation of such Claim.
(b) In the event of any demand by the Indemnitee for indemnification
hereunder or under the Company's Articles of Incorporation or By-laws, the
Board of Directors of the Company shall designate a Reviewing Party, who
shall, if there has been a Change of Control of the Company, be the special
independent counsel referred to in SECTION 3 hereof. The obligations of the
Company under SECTION 2(a) shall be subject to the condition that the
Reviewing Party shall not have determined (in a written opinion, in any
case in which the special independent counsel referred to in SECTION 3
hereof is involved) that the Indemnitee is not permitted to be indemnified
under applicable law, and the obligation of the Company to make an Expense
Advance pursuant to SECTION 2(a) shall be subject to the condition that,
if, when and
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to the extent that the Reviewing Party determines that the Indemnitee is
not permitted to be so indemnified under applicable law, the Company shall
be entitled to be reimbursed by the Indemnitee (who hereby agrees to
reimburse the Company) for all such amounts theretofore paid. If the
Indemnitee has commenced legal proceedings in a court of competent
jurisdiction to secure a determination that the Indemnitee may be
indemnified under applicable law, any determination made by the Reviewing
Party that the Indemnitee is not permitted to be indemnified under
applicable law shall not be binding, and the Indemnitee shall not be
required to reimburse the Company for any Expense Advance until a final
judicial determination is made with respect hereto (as to which all rights
of appeal therefrom have been exhausted or lapsed). If there has been no
determination by the Reviewing Party or if the Reviewing Party determines
that the Indemnitee is not permitted to be indemnified in whole or in part
under applicable law, the Indemnitee shall have the right to commence
litigation in any court in the Commonwealth of Virginia having subject
matter jurisdiction thereof and in which venue is proper seeking an initial
determination by the court or challenging any such determination by the
Reviewing Party or any aspect thereof, and the Company hereby consents to
service of process and to appear in any such proceeding. Any determination
by the Reviewing Party otherwise shall be conclusive and binding on the
Company and the Indemnitee.
3. CHANGE IN CONTROL. The Company agrees that if there is a Change in
Control of the Company, then with respect to all matters thereafter arising
concerning the rights of the Indemnitee to indemnity payments and Expense
Advances under this Agreement or any other agreement or under the Company's
Articles of Incorporation or By-laws now or hereafter in effect relating to
Claims for Indemnifiable Events, the Company shall seek legal advice only from
special independent counsel selected by the Indemnitee and approved by the
Company (which approval shall not be unreasonably withheld) who has not
otherwise performed services for the Company within the last ten years (other
than in connection with such matters) or for the Indemnitee. Such counsel among
other things, shall render its written opinion to the Company and the Indemnitee
as to whether and to what extent the Indemnitee is permitted to be indemnified
under applicable law. The Company agrees to pay the reasonable fees of the
special independent counsel and to indemnify such counsel against any and all
expenses (including attorneys' fees), claims, liabilities and damages relating
to this Agreement or its engagement pursuant hereto.
4. ESTABLISHMENT OF TRUST. In the event of a Potential Change in Control,
the Company may create a Trust for the benefit of the Indemnitee (either alone
or together with one or more other indemnitees) and from time to time fund such
Trust in such amounts as the Company's Board of Directors may determine to
satisfy Expenses reasonably anticipated to be incurred in connection with
investigating, preparing for and defending any Claim relating to an
Indemnifiable Event, and all judgments, fines, penalties and settlement amounts
of all Claims relating to an Indemnifiable Event from time to time paid or
claimed, reasonably anticipated or proposed to be paid. The terms of any Trust
established pursuant hereto shall provide that upon a Change in Control (i) the
Trust shall not be revoked or the principal thereof invaded, without the written
consent of the Indemnitee, (ii) the Trustee shall advance, within two business
days of a request by the Indemnitee, all Expenses to the Indemnitee (and the
Indemnitee hereby agrees to reimburse the Trust under the circumstances
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under which the Indemnitee would be required to reimburse the Company under
SECTION 2(b) of this Agreement), (iii) the Trustee shall promptly pay to the
Indemnitee all amounts for which the Indemnitee shall be entitled to
indemnification pursuant to this Agreement or otherwise, and (iv) all unexpended
funds in such Trust shall revert to the Company upon a final determination by
the Reviewing Party or a court of competent jurisdiction, as the case may be,
that the Indemnitee has been fully indemnified under the terms of this
Agreement. The Trustee shall be a person or entity satisfactory to the
Indemnitee. Nothing in this Section 4 shall relieve the Company of any of its
obligations under this Agreement.
5. INDEMNIFICATION FOR ADDITIONAL EXPENSES. The Company shall indemnify the
Indemnitee against all expenses (including attorneys' fees) and, if requested by
the Indemnitee, shall (within two business days of such request) advance such
expenses to the Indemnitee, which are incurred by the Indemnitee in connection
with any claim asserted against or action brought by the Indemnitee for (i)
indemnification or advance payment of Expenses by the Company under this
Agreement, any other agreement or provision of the Company's Articles of
Incorporation or By-laws now or hereafter in effect relating to Claims for
Indemnifiable Events or (ii) recovery under any directors' and officers'
liability insurance policies maintained by the Company, regardless of whether
the Indemnitee ultimately is determined to be entitled to such indemnification,
advance expense payment or insurance recovery, as the case may be.
6. PARTIAL INDEMNITY, ETC. If the Indemnitee is entitled under any
provision of this Agreement to indemnification by the Company for a portion of
the Expenses, judgments, fines, penalties and amounts paid in settlement of a
Claim but not for the total amount thereof, the Company shall indemnify the
Indemnitee for the portion thereof to which the Indemnitee is entitled.
Notwithstanding any other provision of this Agreement, to the extent that the
Indemnitee has been successful on the merits or otherwise in defense of Claims
relating to an Indemnifiable Event or in defense of any issue or matter therein,
including dismissal without prejudice, the Indemnitee shall be indemnified
against all Expenses incurred in connection therewith. In connection with any
determination by the Reviewing Party or otherwise as to whether the Indemnitee
is entitled to be indemnified hereunder, the burden of proof shall be on the
Company to establish that the Indemnitee is not so entitled.
7. NO PRESUMPTION. For purposes of this Agreement, the termination of any
claim, action, suit or proceeding by judgment, order, settlement (whether with
or without court approval) or conviction, or upon a plea of nolo contendere, or
its equivalent, shall not create a presumption that the Indemnitee did not meet
any particular standard of conduct or have any particular belief or that a court
has determined that indemnification is not permitted by applicable law.
8. NON-EXCLUSIVITY, ETC. The rights of the Indemnitee hereunder shall be in
addition to any other rights the Indemnitee may have under the Company's
Articles of Incorporation and By-laws or the Virginia Stock Corporation Act or
otherwise. To the extent that a change in the Virginia Stock Corporation Act
(whether by statute or judicial decision) permits greater indemnification by
agreement than would be afforded currently under the Company's Articles of
Incorporation and By-laws and this Agreement, it is the
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intent of the parties hereto that the Indemnitee shall enjoy by this Agreement
the greater benefits afforded by such change.
9. LIABILITY INSURANCE. To the extent the Company maintains an insurance
policy or policies providing directors' and officers' liability insurance, the
Indemnitee shall be covered by such policy or policies, in accordance with its
or their terms, to the maximum extent to the coverage available for any Company
director or officer.
10. AMENDMENTS, ETC. No supplement, modification or amendment of this
Agreement shall be binding unless executed in writing by both of the parties
hereto. No waiver of any of the provisions of this Agreement shall constitute a
waiver of any other provisions hereof (whether or not similar) nor shall such
waiver constitute a continuing waiver.
11. SUBROGATION. In the event of payment under this Agreement, the Company
shall be subrogated to the extent of such payment to all of the rights of
recovery of the Indemnitee, who shall execute all such papers and do all such
things as may be necessary or desirable to secure such rights.
12. NO DUPLICATION OF PAYMENTS. The Company shall not be liable under this
Agreement to make any payment in connection with any claim made against the
Indemnitee to the extent the Indemnitee has otherwise received payment (under
any insurance policy, the Company's Articles of Incorporation, or the Company's
By-laws or otherwise) of the amounts otherwise indemnifiable hereunder.
13. BINDING EFFECT, ETC. This Agreement shall be binding upon and inure to
the benefit of and be enforceable by the parties hereto and their respective
successors, assigns, including any direct or indirect successor by purchase,
merger, consolidation or otherwise to all or substantially all of the business
or assets of the Company, spouses, heirs, and personal and legal
representatives. This Agreement shall continue in effect regardless of whether
the Indemnitee continues to serve as an officer or director of the Company or of
any other enterprise at the Company's request.
14. SEVERABILITY. The provisions of this Agreement shall be severable in
the event that any of the provisions hereof (including any provision within a
single section, paragraph or sentence) are held by a court of competent
jurisdiction to be invalid, void or otherwise unenforceable, and the remaining
provisions shall remain enforceable to the fullest extent permitted by law.
15. GOVERNING LAW. This Agreement shall be governed by and construed and
enforced in accordance with the laws of The Commonwealth of Virginia applicable
to contracts made and to be performed in such commonwealth without giving effect
to the principles of conflicts of law.
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IN WITNESS WHEREOF, the undersigned have executed this Indemnification
Agreement as of the date first above written.
MAXIMUS, INC.
By:
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Name:
Title:
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[Director]
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