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EXHIBIT 10.5
EXECUTIVE EMPLOYMENT, NON-COMPETE, CONFIDENTIALITY AND
STOCK RESTRICTION AGREEMENT
[Xxxxx]
EMPLOYMENT AGREEMENT entered into this ___ day of ___________, 1997 by and
between Xxxxxxx X. Xxxxx (the "Executive") and MAXIMUS, Inc., a Virginia
corporation with a usual place of business in McLean, Virginia (the
"Corporation").
WHEREAS, Executive is a key employee of the Corporation and a holder of a
substantial number of shares of the issued and outstanding capital stock of the
Corporation, and
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 hereto hereby agree as follows:
1. EMPLOYMENT.
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1.1. DUTIES. The Corporation hereby employs the Executive, and the
Executive hereby accepts such employment, to serve as the Chairman of the Board
of Directors, Vice President, Consulting of the Corporation and President of
Consulting Group of the Corporation. The Executive shall provide day to day
management of the Corporation as Chairman of the Board of Directors, Vice
President, Consulting of the Corporation and President of Consulting Group and
shall perform such other services and duties as are appropriate to such office
or Chief Operating Officer of the Corporation. 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 Chairman
of the Board of Directors, Vice President, Consulting of the Corporation and
President of Consulting Group as may be necessary and appropriate to accomplish
and complete such duties.
1.2. COMPENSATION.
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(a) SALARY AND REGULAR YEAR-END BONUS. As compensation for
performance of his obligations hereunder, the Corporation shall pay the
Executive a salary of not less than $350,000 and regular year-end bonus
consistent with the Corporation's past practices; provided however that the
Executive's aggregate compensation shall not be less than that paid to the Chief
Executive Officer of the Corporation.
(b) VACATION, INSURANCE, EXPENSES. The Executive shall be entitled
to such vacation benefits, health, disability and life insurance 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.
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1.3. TERM; TERMINATION. The term of the employment agreement set
forth in this Section 1 shall be for a period commencing on the date hereof and
continuing until September 30, 2001, provided that this Agreement shall
terminate:
(a) by mutual written consent of the parties; or
(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 in the event of
Executive's breach of any material duty or obligation hereunder, or intentional
or grossly negligent conduct 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.
2. NON-COMPETITION.
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2.1. UNDERTAKING. The Executive agrees that while the Executive is
employed by the Corporation and thereafter, until _____________ [4 years after
the date hereof] (the "Expiration Date"), the Executive shall not, without the
Corporation's prior written consent, directly or indirectly, as a principal,
employee, consultant, partner, or stockholder of, or in any other capacity with,
any business enterprise (other than in the Executive's capacity as a holder of
not more than 1% of the combined voting power of the outstanding stock of a
publicly held company) (a) engage in direct or indirect competition with the
Corporation, (b) conduct a business of the type or character engaged in by the
Corporation at the time of termination or cessation of the Executive's
employment or (c) develop products or services competitive with those of the
Corporation.
2.2. PROHIBITED ACTIVITIES. (a) The Executive agrees that, during
his employment with the Corporation, and thereafter for a period of two
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:
(1) any attempt, successful or unsuccessful, by the Executive
to divert any existing contracts or subcontracts from the Corporation to any
other firm, whether or not affiliated with the Executive;
(2) any attempt, successful or unsuccessful by the Executive,
to adversely influence clients of the Corporation or organizations with which
the Corporation has a contract or a proposal pending as of the date of the
Executive's termination from the Corporation;
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(3) any attempt, successful or unsuccessful, by the Executive
to divert any contracts or subcontracts which are pending as of the date of
Executive's termination from the Corporation to any other firm, whether or not
affiliated with the Executive;
(4) 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
performance of services provided under existing contracts or follow-ons to
existing contracts or pending proposals with the Corporation's clients as of
the date of the Executive's termination; or
(5) 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 2.2 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 2.2.
(c) The provisions of this Section 2.2 shall continue for a period
of two years after termination of the Executive's employment with the
Corporation, whether voluntary or involuntary, with or without cause. 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 2.2 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 seek, 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 the Board of Directors and received written consent from the
Board of Directors, signed by the Chairman of such board. 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
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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 acknowledge and agree that the Executive may
engage in outside civic, political, social, educational and professional
activities and may serve on the boards of directors of other corporations;
provided, however, that such activities shall not have priority over or
adversely affect or conflict with the business of the Corporation or its
clients, or interfere with the mobility of the Executive to fulfill the
Executive's duties to the Corporation as a full-time employee and officer and
director of the Corporation, as conclusively determined by the Board of
Directors of the Corporation.
(d) The parties hereto agree that the Executive may, consistent with
this Section 1.3, 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 Board of
Directors of the Corporation.
3. CONFIDENTIALITY.
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3.1. NON-DISCLOSURE. The parties hereto agree that the Corporation's
books, records, files and all other information relating to the Corporation
(that is not otherwise available in the Public Domain), its business and its
clients are proprietary in nature and contain trade secrets and shall be held in
strict confidence by the parties hereto, and shall not, either during the term
of this Agreement or after the termination hereof, be intentionally disclosed,
directly or indirectly, to any third party, person, firm, corporation or other
entity, irrespective of whether such person or entity is a competitor of the
Corporation or is engaged in a business similar to that of the Corporation;
except in furtherance of the Corporation's business. 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.
3.2. TRADE SECRETS. The parties hereto hereby acknowledge and agree
that all proprietary information referred to in this Section 2 shall be deemed
trade secrets of the Corporation and that each party hereto shall take such
steps, undertake such actions and refrain from taking such other actions, as
mandated by the provisions hereof and by the provisions of the laws of the
Commonwealth of Virginia.
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4. STOCK RESTRICTIONS.
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4.1. TRANSFERS. The Executive may not offer, sell, assign, grant a
participation in, pledge or otherwise transfer ("Transfer") any of the
Executive's shares of Common Stock of the Corporation (including shares acquired
after the date hereof) (the "Shares") except in compliance with the Securities
Act of 1933, as amended (the "Act"), and any applicable state securities laws.
In addition, until the Expiration Date, the Executive may not Transfer any of
the Executive's Shares without the prior written consent of the Corporation
after complying with Section 4.3 below, other than (i) subject to Section 4.4
below, to any Permitted Transferee (as defined in Section 4.4) or (ii) as may be
required by applicable federal or state law or regulation or (iii) pursuant to a
registration of such shares under Section 5 below.
4.2. RESTRICTIVE LEGEND. Until the Expiration Date, each certificate
representing Shares owned by the Executive shall include a legend in
substantially the following form:
UNTIL ________ __, 2001, THE SHARES REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO RESTRICTIONS ON TRANSFER AS SET FORTH IN AN EXECUTIVE
NON-COMPETE, CONFIDENTIALITY AND STOCK RESTRICTION AGREEMENT, DATED AS OF
________ __, 1997, A COPY OF WHICH MAY BE OBTAINED FROM MAXIMUS, INC.
4.3. REQUEST FOR CONSENT TO TRANSFER. The Executive may request
consent to transfer from the Corporation by providing written notice to the
Corporation of such holder's intention to effect such transfer, setting forth
the manner and circumstances of the proposed transfer in reasonable detail. In
the discretion of the Corporation, such consent may be conditioned upon the
delivery to the Corporation of an instrument substantially in the form of
EXHIBIT A hereto pursuant to which the transferee shall have agreed to be bound
by the terms of this Section 4. In such case, each certificate evidencing Shares
or interests therein transferred as provided in this Section 4.3 shall bear the
legend set forth in Section 4.2 hereof.
4.4. TRANSFERS TO PERMITTED TRANSFEREE. "Permitted Transferee" shall
mean (i) the spouse, ancestor, lineal descendants and other family members of
the Executive, and any trust for the benefit of the foregoing, (including
adopted descendants), (ii) any entities established principally for charitable
purposes to which the Executive Transfers any Shares by way of gift and (iii)
any person or entity to whom the Shares are Transferred by virtue of a pledge by
the Executive to secure a borrowing from such Permitted Transferee. The
Executive may transfer some or all of the Shares to a Permitted Transferee only
if the Corporation shall have received notice of such transfer and an instrument
substantially in the form of Exhibit A hereto pursuant to which the Permitted
Transferee shall have agreed to be bound by the terms of this Section 4. Each
certificate evidencing Shares or interests therein transferred as provided in
this Section 4.4 shall bear the legend set forth in Section 4.2 hereof.
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4.5. IMPROPER TRANSFER. (a) Any attempt to Transfer any Shares not
in compliance with this Agreement shall be null and void and neither the
Corporation nor any transfer agent of the Corporation shall register, or
otherwise recognize in the Corporation's records, any such improper Transfer.
(b) The Executive shall not enter into any transaction or series of
transactions for the purpose or with the effect of, directly or indirectly,
denying or impairing the rights or obligations of the Corporation under this
Agreement, and any such transaction shall be null and void and, to the extent
that such transaction requires any action by the Corporation, it shall not be
registered or otherwise recognized in the Corporation's records or otherwise.
4.6. ACCESS TO RECORDS AND DOCUMENTS. At any time during which the
Executive is a stockholder and/or a member of the Board of Directors of the
Corporation, the Executive shall be entitled to inspect and copy such records
and documents to the extent provided by the Stock Corporation Act of the
Commonwealth of Virginia and any other applicable law.
4.7. ELECTION OF XXXXXXX AS A DIRECTOR. The Executive agrees to vote
his shares of Common Stock of the Corporation (and any other shares of the
capital stock of the Company over which he exercises voting control) and take
such other actions as are necessary to elect Xxxxx X. Xxxxxxx as a Director of
the Corporation and thereafter continue Xx. Xxxxxxx in office as a Director of
the Corporation, provided, however, that in the event that either Xx. Xxxxxxx or
the Executive holds less than 20% of the outstanding Common Stock of the
Company, the Executive's obligation under this Section 4.7 shall terminate.
4.8. VOTING AGREEMENT. Until September 30, 2001, the Executive
agrees to vote his shares of the Corporation Common Stock (and any other shares
of the capital stock of the Corporation over which he exercises voting control)
and take such other actions as are necessary, in connection with any action of
the stockholders of the Corporation in a manner consistent with any instructions
received by the Executive from Xxxxx Xxxxxxx. The Executive shall make
reasonable efforts prior to any stockholder action to obtain such instructions
from Xxxxx Xxxxxxx and if such instructions are not obtained prior to the date
of a stockholder action, the Executive shall abstain from voting his shares in
such action.
5. Registration Rights.
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5.1. Secondary Registration.
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(a) REGISTRATION FOR RESALE. The Corporation intends to seek
to create liquidity for the Shares held by the Executive prior to the Expiration
Date. In the sole discretion of the Corporation, the Corporation may file with
the Securities and Exchange Commission (the "Commission") a Registration
Statement on Form S-8 or Form S-3 (or similar form) sufficient to permit the
public offering and sale of the Registrable Shares (as defined below) through
all securities exchanges and over-the-counter markets on which the Corporation's
Common Stock is then traded. For the purposes of this Agreement, "Registrable
Shares" shall mean outstanding Shares and Shares issuable upon exercise of
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then-exercisable options held by the Executive and any other person holding
registration rights substantially the same as the rights set forth in this
Section 5, which Shares are not at that time the subject of an effective
registration statement filed with the Commission. For the purposes of this
Agreement, "Holders" shall mean all persons holding Registrable Shares
including Permitted Transferees.
(b) NOTICE OF FILING OF REGISTRATION STATEMENT. In the event
the Corporation determines to file a registration pursuant to Section 5.1(a),
the Corporation shall notify each Holder of the proposed filing and request that
each Holder notify the Corporation within 15 days thereafter of the number of
Registrable Shares such Holder wishes the Corporation to register on such
Holder's behalf. Each Holder shall, prior to the end of such 15 day period,
request in writing that the Corporation register the sale of all or part of such
Holder's Registrable Shares.
5.2. Piggyback Registration Rights.
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(a) OFFER TO INCLUDE REGISTRABLE SHARES IN CORPORATION
OFFERING. If, at any time prior to the Expiration Date, the Corporation shall
file a registration statement to register shares of Common Stock for its own
account in an underwritten offering with the Commission while any Registrable
Shares are outstanding, the Corporation shall give all the Holders at least 45
days prior written notice of the filing of such registration statement. Subject
to 5.2(b) below, if requested by any Holder in writing within 30 days after
receipt of any such notice, the Corporation shall register or qualify all or, at
each Holder's option, any portion of the Registrable Shares of any Holders who
shall have made such request, concurrently with the registration of such other
securities, all to the extent requisite to permit the public offering and sale
of the Registrable Shares through the facilities of all appropriate securities
exchanges and the over-the-counter market, and will use its best efforts through
its officers, directors, auditors, and counsel to cause such registration
statement to become effective as promptly as practicable.
(b) CUTBACK OF PARTICIPATION IN CORPORATION OFFERING.
Notwithstanding Section 5.2(a), if the managing underwriter of any such offering
shall advise the Corporation in writing that, in its opinion, the distribution
of all or a portion of the Registrable Shares requested to be included in the
registration concurrently with the securities being registered by the
Corporation would materially adversely affect the distribution of such
securities by the Corporation for its own account, then the number of
Registrable Shares held by such Holder to be included in such registration
statement shall be reduced to the extent advised by such managing underwriter,
provided that any such reduction shall be made pro rata among the Holders
electing to participate in such registration based on the aggregate number of
Registrable Shares held by each Holder electing to so participate, and provided
further that the total number of Registrable Shares included in any such
registration shall not be less than 25% of the total number of shares of Common
Stock included in the registration for the Corporation's account, the Holders
account and the account of any other person.
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5.3. Underwriting.
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(a) UNDERWRITING IN SECONDARY REGISTRATION. If the Corporation
undertakes a registration under Section 5.1, any Holder wishing to distribute
the Registrable Shares which such Holder has requested to be registered in such
registration by means of an underwriting, such Holder shall so advise the
Corporation in such Holder's request to participate in such registration under
Section 5.1(b). The Holders of a majority of the Registrable Shares being
offered may select one or more underwriters for the registration under Section
5.1, which selection shall be approved by the Corporation, which approval shall
not be unreasonably withheld provided such underwriter(s) are experienced and
reputable. The Corporation shall, together with the Holders engaged in the
registration hereunder, enter into an underwriting agreement with the
representative of the underwriter or underwriters selected for such underwriting
in accordance with this Section 5.3(a).
(b) UNDERWRITING IN PIGGYBACK REGISTRATION. In the event of an
underwritten registration pursuant to the provisions of Section 5.2, any Holder
who requests to have Registrable Shares included in such registration shall
enter into such custody agreements and powers of attorney as are reasonably
requested by the Corporation and any such underwriter, and, if requested, enter
into an underwriting agreement containing customary terms.
(c) RIGHT OF WITHDRAWAL FROM UNDERWRITING. In the event of an
underwritten offering under Section 5.3(a) or (b), the right of a Holder to
participate in a registration hereunder shall be conditioned upon the inclusion
of such Holder's Registrable Shares in such underwriting. If a Holder
disapproves of the terms of the underwriting, such Holder may elect to withdraw
therefrom by written notice to the Corporation and the underwriter delivered at
least seven days prior to the effective date of the Registration Statement. The
securities so withdrawn shall also be withdrawn from the Registration Statement.
5.4. EFFECTIVENESS AND EXPENSES. The Corporation will use its best
efforts through its officers, directors, auditors and counsel to cause any
Registration Statement filed pursuant to this Section 5 to become effective as
promptly as practicable. The Corporation shall be obligated to use its best
efforts to maintain the effectiveness of such Registration Statement only until
the earlier of (i) the Expiration Date, and (ii) the date on which no
Registrable Shares remain outstanding (the "Registration Termination Date"). The
Corporation shall be obligated to pay all expenses (other than the fees and
disbursements of counsel for the Holders and underwriting discounts, if any,
payable in respect of the Registrable Shares sold by the Holders) in connection
with any such registration statement.
5.5. BLUE SKY REGISTRATIONS. In the event of a registration pursuant
to the provisions of this Section 5, the Corporation shall use its best efforts
to cause the Registrable Shares so registered to be registered or qualified for
sale under the securities or blue sky laws of such jurisdictions as the Holders
may reasonably request;
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PROVIDED, HOWEVER, that the Corporation shall not be required to qualify to do
business in any state by reason of this Section 5.5 in which it is not otherwise
required to qualify to do business.
5.6. CONTINUING EFFECTIVENESS. Until the Registration Termination
Date, the Corporation shall use its best efforts to keep effective any
registration or qualification contemplated by this Section 5 and shall from time
to time amend or supplement each applicable registration statement, preliminary
prospectus, final prospectus, application, document and communication for such
period of time as shall be required to permit the Holders to complete the offer
and sale of the Registrable Shares covered thereby.
5.7. COPIES OF REGISTRATION STATEMENT AND RELATED DOCUMENTS. In the
event of a registration pursuant to the provisions of this Section 5, the
Corporation shall furnish to each Holder a copy of the Registration Statement
and of each amendment and supplement thereto (in each case, including all
exhibits), and a reasonable number of copies of each prospectus contained in
such registration statement and each supplement or amendment thereto (including
each preliminary prospectus), all of which shall conform to the requirements of
the Act, and the rules and regulations thereunder, and such other documents, as
any Holder may reasonably request to facilitate the disposition of the
Registrable Shares included in such registration.
5.8. RULE 144 ELIGIBILITY. The Corporation agrees that, following
the Expiration Date, until all the Registrable Shares have been sold under a
registration statement or pursuant to Rule 144 under the Act, the Corporation
shall use its best efforts to keep current in filing all reports, statements and
other materials required to be filed with the Commission to permit holders of
the Registrable Shares to sell such securities under Rule 144.
6. Indemnity.
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6.1. CORPORATION INDEMNIFICATION OF THE HOLDERS. Subject to the
conditions set forth below, the Corporation agrees to indemnify and hold
harmless each Holder, its officers, directors, partners, employees, agents and
counsel, if any, and each person, if any, who controls any such person within
the meaning of Section 15 of the Act or Section 20(a) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), if any, from and
against any and all loss, liability, charge, claim, damage and expense
whatsoever (which shall include, for all purposes of this Section 6, without
limitation, attorneys' fees and any and all expenses whatsoever incurred in
investigating, preparing or defending against any litigation, commenced or
threatened, or any claim whatsoever, and any and all amounts paid in settlement
of any claim or litigation), as and when incurred, arising out of, based upon,
or in connection with any untrue statement or alleged untrue statement of a
material fact contained in any registration statement, preliminary prospectus
or final prospectus (as from time to time amended and supplemented), or any
amendment or supplement thereto, relating to the sale of any of the Registrable
Shares, filed with the Commission or any securities exchange; or any omission
or alleged omission to state a material fact required to be
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stated therein or necessary to make the statements therein not misleading,
unless such statement or omission was made in reliance upon and in conformity
with written information furnished to the Corporation with respect to such
Holder by or on behalf of such person expressly for inclusion in any
registration statement, preliminary prospectus, or final prospectus, or any
amendment or supplement thereto, as the case may be. The foregoing agreement to
indemnify shall be in addition to any liability the Corporation may otherwise
have, including liabilities arising under this Agreement.
If any action is brought against any Holder or any of its officers,
directors, partners, employees, agents or counsel, or any controlling persons of
such person (an "Indemnified Party") in respect of which indemnity may be sought
against the Corporation pursuant to the foregoing paragraph, such Indemnified
Party or Parties shall promptly notify the Corporation in writing of the
institution of such action (but the failure so to notify shall not relieve the
Corporation from any liability other than pursuant to this Section 6.1) and the
Corporation shall promptly assume the defense of such action, including the
employment of counsel (reasonably satisfactory to such Indemnified Party or
parties) and payment of expenses. Such Indemnified Party or parties shall have
the right to employ its or their own counsel in any such case, but the fees and
expenses of such counsel shall be at the expense of such Indemnified Party or
parties unless the employment of such counsel shall have been authorized in
writing by the Corporation in connection with the defense of such action or the
Corporation shall not have promptly employed counsel reasonably satisfactory to
such Indemnified Party or Parties to have charge of the defense of such action
or such Indemnified Party or parties shall have reasonably concluded that there
may be one or more legal defenses available to it or them or to other
indemnified parties which are different from or additional to those available to
the Corporation, in any of which events such fees and expenses shall be borne by
the Corporation, and the Corporation shall not have the right to direct the
defense of such action on behalf of the Indemnified Party or Parties. Anything
in this Section 5 to the contrary notwithstanding, the Corporation shall not be
liable for any settlement of any such claim or action effected without its
written consent, which shall not be unreasonably withheld. The Corporation shall
not, without the prior written consent of each Indemnified Party that is not
released as described in this sentence, settle or compromise any action, or
permit a default or consent to the entry of judgment in or otherwise seek to
terminate any pending or threatened action, in respect of which indemnity may be
sought hereunder (whether or not any Indemnified Party is a party thereto),
unless such settlement, compromise, consent or termination includes an
unconditional release of each Indemnified Party from all liability in respect of
such action. The Corporation agrees promptly to notify the Holders of the
commencement of any litigation or proceedings against the Corporation or any of
its officers or directors in connection with the sale of any Registrable Shares
or any preliminary prospectus, prospectus, registration statement or amendment
or supplement thereto, or any application relating to any sale of any
Registrable Shares.
6.2. HOLDER INDEMNIFICATION OF THE CORPORATION. Each Holder
participating in any such registration shall indemnify and hold harmless the
Corporation, each director of the Corporation, each officer of the Corporation
who shall have signed the registration statement covering Registrable Shares
held by the
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Holder, each other person, if any, who controls the Corporation within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act, and its
or their respective counsel, to the same extent as the foregoing indemnity from
the Corporation to the Holders in Section 6.1, but only with respect to
statements or omissions, if any, made in any registration statement, preliminary
prospectus or final prospectus (as from time to time amended and supplemented),
or any amendment or supplement thereto, in reliance upon and in conformity with
written information furnished to the Corporation with respect to such Holder by
or on behalf of such Holder expressly for inclusion in any such registration
statement, preliminary prospectus or final prospectus, or any amendment or
supplement thereto, as the case may be. If any action shall be brought against
the Corporation or any other person so indemnified based on any such
registration statement, preliminary prospectus or final prospectus, or any
amendment or supplement thereto, or in any application, and in respect of which
indemnity may be sought against such Holder pursuant to this Section 6.2, such
Holder shall have the rights and duties given to the Corporation and the
Corporation and each other person so indemnified shall have the rights and
duties given to the indemnified parties, by the provisions of Section 6.1.
6.3. CONTRIBUTION. To provide for just and equitable contribution,
if (i) an Indemnified Party makes a claim for indemnification pursuant to
Section 6.1 or 6.2 but it is found in a final judicial determination, not
subject to further appeal, that such indemnification may not be enforced in such
case, even though this Agreement expressly provides for indemnification in such
case, or (ii) any indemnified or indemnifying party seeks contribution under the
Act, the Exchange Act or otherwise, then the Corporation (including for this
purpose any contribution made by or on behalf of any director of the
Corporation, any officer of the Corporation who signed any such registration
statement, any controlling person of the Corporation, and its or their
respective counsel), as one entity, and the Holders of the Registrable Shares
included in such registration in the aggregate (including for this purpose any
contribution by or on behalf of an Indemnified Party), as a second entity, shall
contribute to the losses, liabilities, claims, damages and expenses whatsoever
to which any of them may be subject, on the basis of relevant equitable
considerations such as the relative fault of the Corporation and such Holders in
connection with the facts which resulted in such losses, liabilities, claims,
damages and expenses. The relative fault, in the case of an untrue statement,
alleged untrue statement, omission or alleged omission, shall be determined by,
among other things, whether such statement, alleged statement, omission or
alleged omission relates to information supplied by the Corporation or by such
Holders, and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement, alleged statement, omission or
alleged omission. The Corporation and the Holder agree that it would be unjust
and inequitable if the respective obligations of the Corporation and the Holders
for the contribution were determined by pro rata or per capita allocation of the
aggregate losses, liabilities, claims, damages and expenses (even if the Holder
and the other indemnified parties were treated as one entity for such purpose)
or by any other method of allocation that does not reflect the equitable
considerations, referred to in this Section 6.3. In no case shall any Holder be
responsible for a portion of the contribution obligation imposed on all Holders
in excess of its PRO RATA share based on
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the number of Registrable Shares of by it and included in such registration as
compared to the number of Registrable Shares owned by all Holders and included
in such registration. No person guilty of a fraudulent misrepresentation (within
the meaning of Section 11(f) of the Act) shall be entitled to contribution from
any person who is not guilty of such fraudulent misrepresentation. For purposes
of this Section 6.3, each person, if any, who controls any Holder within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act and each
officer, director, partner, employee, agent and counsel of each such Holder or
control person shall have the same rights to contribution as such Holder or
control person and each person, if any, who controls the Corporation within the
meaning of Section 15 of the Act or Section 20(a) of the Exchange Act, each
officer of the Corporation who shall have signed any such registration
statement, each director of the Corporation and its or their respective counsel
shall have the same right to contribution as the Corporation, subject in each
case to the provisions of this Section 6.3. Anything in this Section 6.3 to the
contrary notwithstanding, no party shall be liable for contribution with respect
to the settlement of any claim or action effected without its written consent.
This Section 6.3 is intended to supersede any right to contribution under the
Act, the Exchange Act or otherwise.
7. MISCELLANEOUS.
-------------
7.1. 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 Federal Express (or a comparable 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.
0000 Xxxxxxx Xxxx
XxXxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx
If to the Executive,
Xxxxxxx X. Xxxxx
00 Xxxxxxx Xxxx
Xxxxx, XX 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
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13
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. Rejection or other refusal to accept or
the inability to deliver because of a changed address of which no notice was
given shall not affect the date of such notice, election or demand sent in
accordance with the foregoing provisions.
7.2. REMEDIES. The parties hereto further agree and acknowledge that
any violation by the Executive of the terms hereof may result in irreparable
injury and damage to the Executive, Corporation or its clients, as the case may
be, 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.
7.3. NO OBLIGATION OF CONTINUED EMPLOYMENT AFTER TERMINATION OF
SECTION 1. Except as set forth in Section 1 hereof, the Executive understands
that this Agreement does not constitute a contract of employment or create an
obligation on the part of the Corporation to continue the Executive's employment
with the Corporation.
7.4. BENEFIT; ASSIGNMENT. This Agreement shall bind and inure to the
benefit of the parties and their respective personal representatives, heirs,
successors and assigns, provided the obligations of the Executive under Sections
4.7 and 4.8 shall also inure to the benefit of Xxxxx X. Xxxxxxx 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. This Agreement shall be binding upon and shall inure to the benefit of
the parties hereto and their respective successors and other legal
representatives and, to the extent that any assignment hereof is permitted
hereunder, their assignees.
7.5. ENTIRE AGREEMENT. This Agreement supersedes all prior
agreements, written or oral, with respect to the subject matter of this
Agreement, including the Shareholder Agreement dated January 2, 1996.
7.6. SEVERABILITY. In the event that any one or more of the
provisions contained herein shall, for any reason, 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.
7.7. 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
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14
waiver or consent given by the Corporation on any occasion if effective only in
that instance and will not be construed as a bar to or waiver of any right on
any other occasion.
7.8. 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.
7.9. GOVERNING LAW. This Agreement shall be construed as a sealed
instrument and shall in all events and for all purposes be governed by, and
construed in accordance with, the laws of the Commonwealth of Virginia without
regard to any choice of law principle that would dictate the application of the
laws of another jurisdiction. Any action, suit or other legal proceeding which
the Executive may commence to resolve any matter arising under or relating to
any provision of this Agreement shall be commenced only in a court of the
Commonwealth of Virginia (or, if appropriate, a federal court located within
Virginia), and the Executive hereby consent to the jurisdiction of such court
with respect to any action, suit or proceeding commenced in such court by the
Corporation. The Section headings are included solely for convenience and shall
in no event affect or be used in connection with, the interpretation of this
Agreement.
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.
7.10. AMENDMENTS. No alterations or additions to this Agreement
shall be binding unless in writing and signed by both the parties, an d no
alteration or addition may be made to the provisions of Section 4.7 without the
consent of Xxxxx X. Xxxxxxx.
7.11. GENDERS. Whenever reasonably necessary, pronouns of any gender
shall be deemed synonymous, as shall singular and plural pronouns.
7.12. 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.
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15
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first above written.
-----------------------------------------
Xxxxxxx X. Xxxxx
MAXIMUS, INC.
By:
--------------------------------------
Name:
Title:
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EXHIBIT A
FORM OF AGREEMENT TO BE BOUND
[DATE]
MAXIMUS, INC.
0000 Xxxxxxx Xxxx
XxXxxx, XX 00000
Ladies and Gentlemen:
Reference is made to the Executive Non-Compete, Confidentiality and
Stock Restriction Agreement (the "Agreement") dated as of _____________ __, 1997
between MAXIMUS, Inc. (the "Company") and Xxxxxxx X. Xxxxx (the
"Transferor").
The undersigned is the transferee of _________ shares of
_____________ Common Stock of the Corporation from the Transferor (the
"Shares").
In consideration of the representations, covenants and agreements
contained in the Agreement, the undersigned hereby confirms and agrees to be
bound by all of the provisions of Section 3 of the Agreement applicable to the
Transferor with respect to the Shares.
This letter shall be construed and enforced in accordance with the
laws of the Commonwealth of Virginia without regard to the conflicts of law
rules of such state.
Very truly yours,
--------------------------
