MAXIMUS,
INC.
DEFERRED
COMPENSATION PLAN
Adopted
effective October 1, 2004
Amended
and Restated Effective January 1, 2005
The
MAXIMUS, INC. DEFERRED COMPENSATION PLAN (the “Plan”) was originally adopted
effective as of October 1, 2004, by MAXIMUS, Inc., a Virginia corporation
(the
“Company”), primarily for the purpose of providing deferred compensation for a
select group of management or highly compensated employees of the
Company. The Company amended and restated the Plan effective as of
January 1, 2005 in order to comply with the requirements of Section 409A
of the
Internal Revenue Code of 1986, as amended (the “Code”). It is
intended that this Plan be exempt from the requirements of Parts II, III
and IV
of Title I of the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”) pursuant to Sections 201(2), 301(a)(3) and 401(a)(1) of
ERISA. This Plan is intended to be an unfunded, nonqualified deferred
compensation plan. Plan participants shall have the status of
unsecured creditors of the Company with respect to the payment of Plan
benefits. All amounts deferred under the Plan shall be administered
to comply with Section 409A of the Code and any regulations or other
interpretative authority promulgated thereunder, without regard to whether
such
amounts were deferred and vested before or after January 1, 2005.
TITLE
AND DEFINITIONS
Whenever
the following words and phrases are used in this Plan, with the first letter
capitalized, they shall have the meanings specified below.
(a) “Account”
or “Accounts” shall mean all of such accounts as are specifically authorized for
inclusion in this Plan.
(b) “Base
Salary” shall mean a Participant’s annual base salary, excluding bonus,
commissions, incentive and all other remuneration for services rendered to
Company and prior to reduction for any salary contributions to a plan
established pursuant to Section 125 of the Code or qualified pursuant to
Section
401(k) of the Code.
(c) “Beneficiary”
or “Beneficiaries” shall mean the person or persons, including a trustee,
personal representative or other fiduciary, last designated in writing by
a
Participant in accordance with procedures established by the Committee to
receive the benefits specified hereunder in the event of the Participant’s
death. No beneficiary designation shall become effective until it is
filed with the Committee. Any designation shall be revocable at any
time through a written instrument filed by the Participant with the Committee
with or without the consent of the previous Beneficiary. No
designation of a Beneficiary other than the Participant’s spouse shall be valid
unless consented to in writing by such spouse. If there is no such
designation or if there is no surviving designated Beneficiary, then the
Participant’s surviving spouse shall be the Beneficiary. If there is
no surviving spouse to receive any benefits payable in accordance with the
preceding sentence, the duly appointed and currently acting personal
representative of the Participant’s estate (which shall include either the
Participant’s probate estate or living trust) shall be the
Beneficiary. In any case where there is no such personal
representative of the Participant’s estate duly appointed and acting in that
capacity within 90 days after the Participant’s death (or such extended period
as the Committee determines is reasonably necessary to allow such personal
representative to be appointed, but not to exceed 180 days after the
Participant’s death), then Beneficiary shall mean the person or persons who can
verify by affidavit or court order to the satisfaction of the Committee that
they are legally entitled to receive the benefits specified
hereunder. In the event any amount is payable under the Plan to a
minor, payment shall not be made to the minor, but instead be paid (a) to
that
person’s living parent(s) to act as custodian, (b) if that person’s parents are
then divorced, and one parent is the sole custodial parent, to such custodial
parent, or (c) if no parent of that person is then living, to a custodian
selected by the Committee to hold the funds for the minor under the Uniform
Transfers or Gifts to Minors Act in effect in the jurisdiction in which the
minor resides. If no parent is living and the Committee decides not
to select another custodian to hold the funds for the minor, then payment
shall
be made to the duly appointed and currently acting guardian of the estate
for
the minor or, if no guardian of the estate for the minor is duly appointed
and
currently acting within 60 days after the date the amount becomes payable,
payment shall be deposited with the court having jurisdiction over the estate
of
the minor. Payment by Company pursuant to any unrevoked Beneficiary
designation, or to the Participant’s estate if no such designation exists, of
all benefits owed hereunder shall terminate any and all liability of
Company.
(d) “Board
of
Directors” or “Board” shall mean the Board of Directors of Company.
(e) “Bonuses”
shall mean the bonuses earned as of the last day of the Plan Year, provided
a
Participant is in the employ of the Company on the last day of the Plan
Year.
(f) “Code”
shall mean the Internal Revenue Code of 1986, as amended.
(g) “Committee”
shall mean the Committee appointed by the Board to administer the Plan in
accordance with Article VII.
(h) “Company”
shall mean MAXIMUS, Inc., a Virginia corporation, and any successor organization
thereto, and shall also include any subsidiary of the Company that the Committee
has determined is eligible to participate in the Plan.
(i) “Company
Contribution Account” shall mean the bookkeeping account maintained by Company
for each Participant that is credited with an amount equal to the Company
Discretionary Contribution Amount, if any, and Company Matching Contribution
Amount, if any, and earnings and losses on such amounts pursuant to Section
4.2.
(j) “Company
Discretionary Contribution Amount” shall mean such discretionary amount, if any,
contributed by the Company for any Participant for a Plan Year. Such
amount may differ, in the Committee’s sole and absolute discretion, from
Participant to Participant.
(k) “Company
Matching Contribution Amount” shall mean such discretionary amount, if any,
contributed by the Company for each Participant for a Plan Year. Such
amount may differ, in the Committee’s sole and absolute discretion, from
Participant to Participant.
(l) “Compensation”
shall mean the total amounts paid or accrued by the Company or an Affiliate
to
an employee as remuneration for personal services rendered during each Plan
Year, including bonuses and commissions, as reported on the employee’s federal
income tax withholding statement or statements.
(m) “Deferral
Account” shall mean the bookkeeping account maintained by the Committee for each
Participant that is credited with amounts equal to (1) the portion of the
Participant’s Compensation that he or she elects to defer, (2) the Stock Units
representing Restricted Stock that a Participant has deferred, and (3) earnings
and losses pursuant to Section 4.1.
(n) Designated
Employees” shall mean Eligible Employees designated by the Committee as eligible
to defer Restricted Stock Awards.
(o) “Disabled”
means a determination by the insurer under the Company’s long-term disability
insurance policy that the Participant is disabled and eligible for long-term
disability benefits under such policy. Notwithstanding the foregoing,
should regulations or other Internal Revenue Service (“IRS”) guidance be
interpreted by the Committee, in its sole and absolute discretion, as not
meeting the minimum requirements of Section 409A of the Code, “Disabled” under
this Plan shall automatically and without further action or amendment, be
determined to exist if the Participant is by reason of any medically
determinable physical or mental impairment which can be expected to result
in
death or can be expected to last for a continuous period of not less than
12
months, and the Participant is receiving income replacement benefits for
a
period of not less than 3 months under any disability benefit plan for covered
employees of the Employer.
(p) “Distributable
Amount” shall mean the vested balance in the Participant’s Deferral Account and
Company Contribution Account.
(q) [DELETED]
(r) “Effective
Date” shall mean the date the Plan first became effective which was October 1,
2004. The Plan was amended, effective January 1, 2005, and may be
amended from time to time consistent with the requirements of Section 409A
of
the Code.
(s) “Eligible
Employee” shall mean an employee of the Company who is a member of a select
group of management and/or highly compensated employees who has been designated
by the Committee, in its sole and absolute discretion, as eligible to
participate in the Plan and is notified of such eligibility.
(t) “Fund”
or
“Funds” shall mean one or more of the investment funds selected by the Committee
pursuant to Section 3.2(b).
(u) “Hardship
Distribution” shall mean a severe financial hardship to the Participant
resulting from a sudden and unexpected illness or accident of the Participant
or
of his or her Dependent (as defined in Section 152(a) of the Code), loss
of a
Participant’s property due to casualty, or other similar or extraordinary and
unforeseeable circumstances arising as a result of events beyond the control
of
the Participant. The circumstances that would constitute an
unforeseeable emergency will depend upon the facts of each case, but, in
any
case, a Hardship Distribution may not be made to the extent that such hardship
is or may be relieved (i) through reimbursement or compensation by insurance
or
otherwise, (ii) by liquidation of the Participant’s assets, to the extent the
liquidation of assets would not itself cause severe financial hardship, or
(iii)
by cessation of deferrals under this Plan.
(v) “Initial
Election Period” shall mean the 30-day period prior to the Effective Date of the
Plan, or the 30-day period following the time an employee shall be designated
by
the Company as an Eligible Employee.
(w) “Interest
Rate” shall mean, for each Fund, an amount equal to the net gain or loss on the
assets of such Fund during each month.
(x) “Participant”
shall mean any Eligible Employee who becomes a Participant in this Plan in
accordance with Article II.
(y) “Payment
Date” shall mean the February following the Plan Year in which termination
occurs or, if elected by the Participant, at such time following an earlier
“Change in Control” (as defined by Section 409A of the Code) as provided in
Section 6.1(e).
(z) “Performance
Based Compensation” means any compensation which may be paid to an Eligible
Employee based on services performed over a period of at least twelve (12)
months, or such other definition as may be required by applicable
regulations.
(aa) “Plan”
shall be The MAXIMUS, Inc. Deferred Compensation Plan.
(bb) “Plan
Year” shall be January 1 to December 31 of each year.
(cc) “Restricted
Stock” shall mean shares of Stock issued under the Restricted Stock Plan, which
by its terms are subject to vesting and/or forfeiture.
(dd) “Restricted
Stock Award” shall mean any award of Restricted Stock under the Restricted Stock
Plan.
(ee) “Restricted
Stock Plan” shall mean the MAXIMUS, Inc. 1997 Equity Incentive
Plan.
(ff) “Scheduled
Withdrawal Date” shall mean the distribution date elected by the Participant for
an in-service withdrawal of amounts from such Accounts deferred in a given
Plan
Year, and earnings and losses attributable thereto, as set forth on the election
form for such Plan Year.
(gg) “Specified
Employee” means any Participant who would be considered a “Specified Employee”
as the term is defined in Section 409A(a)(2)(B)(i) of the Code.
(hh) “Stock
Unit” shall mean a bookkeeping entry representing a right to receive a share of
MAXIMUS, Inc. common stock on a date determined in accordance with this Plan
and
pursuant to the terms and conditions of this Plan and the Restricted Stock
Plan.
(ii) “Trust”
shall mean the legal entity created by the Trust Agreement.
(jj) “Trust
Agreement” shall mean the agreement between the Company and the Trustee that
establishes a trust to hold and manage the assets contributed by the Company
in
connection with the Plan.
(kk) “Trustee”
shall mean First American Trust, FSB or any other one or more individuals
or
organizations that the Company may enter into a Trust Agreement as trustee(s),
and any duly appointed successors.
PARTICIPATION
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Commencement
of Participation.
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An
Eligible Employee shall become a Participant in the Plan for a Plan Year
by (a)
electing to defer all or a portion of his or her Compensation for such Plan
Year
in accordance with Section 3.1, by completing all required applications for
life
insurance (as determined by Committee in its discretion), or (b) electing
to
defer the receipt of Restricted Stock that has not vested.
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Cessation
of Participation.
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Active
participation in the Plan shall end when a Participant’s terminates employment
with the Company for any reason or at such time as a Participant is notified
by
the Committee, pursuant to Section 2.3, below, that he or she is no longer
eligible to participate in the Plan. Upon termination of employment
or eligibility, a Participant shall remain an inactive Participant in the
Plan
until all of the amounts to which he or she is entitled under this Plan have
been paid in full.
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Cessation
of Eligibility.
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The
Committee may at any time, in its sole discretion, notify any Participant
that
he or she is not eligible to participate in the Plan, or is not eligible
for
Company Discretionary Contribution Amounts in any Plan Year.
DEFERRAL
ELECTIONS
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Elections
to Defer Compensation.
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(a) Initial
Election Period. Subject to the provisions of Article II, each
Eligible Employee may elect to defer Compensation by filing with the Committee
an election that conforms to the requirements of this Section 3.1, on a form
provided by the Committee, no later than the last day of his or her Initial
Election Period. Notwithstanding the foregoing, the Initial Election
Period for deferrals of Performance Based Compensation may be different than
that for other deferrals and may end on a period no later than six (6) months
prior to the end of the performance period for which services are to be
rendered.
(b) General
Rule. The amount of Compensation which an Eligible Employee may
elect to defer is such Compensation earned on or after the time at which
the
Eligible Employee elects to defer in accordance with Sections 1.1(l) and
3.1(a)
and shall be a percentage which shall not exceed 80% of the Eligible Employee’s
Base Salary and 100% of the Eligible Employee’s Compensation other than Base
Salary, provided that the total amount deferred by a Participant shall be
limited in any calendar year, if necessary, to satisfy Social Security Tax
(including Medicare), income tax, employment tax, all garnishments or other
amounts required to be withheld by applicable law or court order and employee
benefit plan withholding requirements as determined in the sole and absolute
discretion of the Committee. The minimum contribution which may be
made in any Plan Year by an Eligible Employee shall not be less than $5,000,
provided such minimum contribution can be satisfied from any element of
Compensation.
(c) Deferral
of Restricted Stock. A Designated Employee may elect to defer all
or a portion of Restricted Stock awarded pursuant to a Restricted Stock Award
and receive a credit of Stock Units. Any such deferral election must
be made in a time period designated by the Committee from time to time and
in
accordance with Sections 3.1(d) and (e). No minimum annual deferral
election applies to the deferral of Restricted Stock.
(d) Duration
of Compensation Deferral Election. An Eligible Employee’s initial
election to defer Compensation must be made prior to the Effective Date and
is
to be effective with respect to Compensation received after such deferral
election is processed. An election shall remain in effect for each
successive Plan Year unless the Participant changes such an election during
an
appropriate enrollment period. A Participant may increase, decrease
or terminate a deferral election with respect to Compensation for any subsequent
Plan Year by filing a new election during any enrollment period (which shall
be
such period as specified by the Committee which ends no later than the last
day
of the preceding Plan Year) which election shall be effective on the first
day
of the next following Plan Year or in the case of Performance Based
Compensation, no later than six (6) months prior to the end of the performance
period for which services are to be rendered. In the case of an
employee who becomes an Eligible Employee after the Effective Date, such
Eligible Employee shall have 30 days from the date he or she is notified
he or
she has become an Eligible Employee to make an Initial Election with respect
to
Compensation earned following the Initial Election period. Such
election shall be for the remainder of the Plan Year, in the event the Plan
Year
has commenced.
(e) Elections
other than Elections during the Initial Election Period. Subject
to the limitations of Section 3.1(b), (c) (d) above, any Eligible Employee
who
has terminated a prior Compensation deferral election may elect to again
defer
Compensation, by filing an election, on a form provided by the Committee,
to
defer Compensation and/or Restricted Stock as described in Sections 3.1(b)
and
(c) above. An election to defer Compensation and/or Restricted Stock
must be filed in a timely manner in accordance with Section 3.1(c) and
(d).
(a) At
the
time of making the deferral elections described in Section 3.1, the Participant
shall designate, on a form provided by the Committee, the types of investment
funds in which the Participant’s Account will be deemed to be invested for
purposes of determining the amount of earnings to be credited to that
Account. In making the designation pursuant to this Section 3.2, the
Participant may specify that all or any multiple of his or her Account be
deemed
to be invested, in whole percentage increments, in one or more of the types
of
investment funds provided under the Plan as communicated from time to time
by
the Committee. Effective as of the next business day, a Participant
may change the designation made under this Section 3.2 by filing an election,
on
a form provided by the Committee, at any time. If a Participant fails
to elect a type of fund under this Section 3.2, he or she shall be deemed
to
have elected the Money Market type of investment fund.
(b) Although
the Participant may designate the type of investments, the Committee shall
not
be bound by such designation. The Committee shall select from time to
time, in its sole and absolute discretion, commercially available investments
of
each of the types communicated by the Committee to the Participant pursuant
to
Section 3.2(a) above to be the Funds. The Interest Rate of each such
commercially available investment fund shall be used to determine the amount
of
earnings or losses to be credited to Participant’s Account under Article
IV.
(c) If
any
portion of a Participant’s Account is credited with Stock Units, then the
Participant shall not be permitted to select any other investment fund with
respect to such Stock Units, and distributions of such Stock Units shall
only be
in the form of Company common stock and shall be settled solely out of the
Restricted Stock Plan. In the event of a corporate transaction
involving the Company’s common stock, such Stock Units will be substituted and
settled with an equivalent form of consideration provided under the Restricted
Stock Plan pursuant to such transaction, which, if cash, will be deemed invested
during the deferral period pursuant to the Participant’s investment elections
under Section 3.2(a).
DEFERRAL
ACCOUNTS AND TRUST FUNDING
The
Committee shall establish and maintain a Deferral Account for each Participant
under the Plan. Each Participant’s Deferral Account shall be further
divided into separate subaccounts (“investment fund subaccounts”), each of which
corresponds to an investment fund elected by the Participant pursuant to
Section
3.2(a) and/or a Stock Unit subaccount, if applicable. A Participant’s
Deferral Account shall be credited as follows:
(a) On
the
business day that amounts are withheld and deferred from a Participant’s
Compensation, the Committee shall credit the investment fund subaccounts
of the
Participant’s Deferral Account with an amount equal to Compensation deferred by
the Participant in accordance with the Participant’s election under Section
3.2(a); that is, the portion of the Participant’s deferred Compensation that the
Participant has elected to be deemed to be invested in a certain type of
investment fund shall be credited to the investment fund subaccount
corresponding to that investment fund;
(b) Each
business day, each investment fund subaccount of a Participant’s Deferral
Account shall be credited with earnings or losses in an amount equal to that
determined by multiplying the balance credited to such investment fund
subaccount as of the prior day plus contributions credited that day to the
investment fund subaccount by the Interest Rate for the corresponding fund
selected by the Company pursuant to Section 3.2(b). The value of any
Stock Unit subaccount shall reflect only the current fair market value of
the
Company’s common stock underlying such Stock Units.
(c) In
the
event that a Participant elects for a given Plan Year’s deferral of Compensation
to have a Scheduled Withdrawal Date, all amounts attributed to the deferral
of
Compensation for such Plan Year shall be accounted for in a manner which
allows
separate accounting for the deferral of Compensation and investment gains
and
losses associated with such Plan Year’s deferral of Compensation.
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Company
Contribution Account.
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The
Committee shall establish and maintain a Company Contribution Account for
each
Participant under the Plan. Each Participant’s Company Contribution
Account shall be further divided into separate investment fund subaccounts
corresponding to the investment fund elected by the Participant pursuant
to
Section 3.2(a). A Participant’s Company Contribution Account shall be
credited as follows:
(a) On
the
business day of any Company Discretionary Contribution Amount or Company
Matching Contribution Amount, the Committee shall credit the investment fund
subaccounts of the Participant’s Company Contribution Account with an amount
equal to the Company Discretionary Contribution Amount, if any, applicable
to
that Participant, that is, the proportion of the Company Discretionary
Contribution Amount, if any, or Company Matching Contribution Amount, if
any,
which the Participant elected to be deemed to be invested in a certain type
of
investment fund shall be credited to the corresponding investment fund
subaccount; and
(b) Each
business day, each investment fund subaccount of a Participant’s Company
Contribution Account shall be credited with earnings or losses in an amount
equal to that determined by multiplying the balance credited to such investment
fund subaccount as of the prior day plus contributions credited that day
to the
investment fund subaccount by the Interest Rate for the corresponding Fund
selected by the Company pursuant to Section 3.2(b).
The
Company has created a Trust with the Trustee. The Company shall cause
the Trust to be funded each year. The Company shall contribute to the
Trust (1) an amount equal to the amount deferred by each Participant; (2)
the
aggregate amount of Company Discretionary Contribution Amounts; and (3) the
aggregate amount of Company Matching Contribution Amounts for the Plan
Year.
Although
the principal of the Trust and any earnings thereon shall be held separate
and
apart from other funds of Company and shall be used exclusively for the uses
and
purposes of Plan Participants and Beneficiaries as set forth therein, neither
the Participants nor their Beneficiaries shall have any preferred claim on,
or
any beneficial ownership in, any assets of the Trust prior to the time such
assets are paid to the Participants or Beneficiaries as benefits and all
rights
created under this Plan shall be unsecured contractual rights of Plan
Participants and Beneficiaries against the Company. Any assets held
in the Trust will be subject to the claims of Company’s general creditors under
federal and state law in the event of insolvency as defined in Section 3.2
of
the Trust.
The
assets
of the Plan and Trust shall never inure to the benefit of the Company and
the
same shall be held for the exclusive purpose of providing benefits to
Participants and their Beneficiaries and for deferring reasonable expenses
of
administering the Plan and Trust.
VESTING
A
Participant shall be 100% vested in his or her Deferral Account. A
Participant shall be vested in any Company Discretionary Contribution Amount
and/or Company Matching Contribution Amount, and the Interest thereon, in
accordance with the schedule specified by the Committee in its sole discretion
at such time any such contribution is made. A Participant shall be
vested in any Stock Units under the Plan in accordance with the terms and
conditions of the Participant’s Restricted Stock Award.
DISTRIBUTIONS
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Distribution
of Deferred Compensation and Discretionary Company
Contributions.
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(a) Distribution
Without Scheduled Withdrawal Date. In the case of a Participant
who terminates employment with Company, or is determined to have become
Disabled, and has an Account balance of $25,000 or more, the Distributable
Amount shall be paid to the Participant (and after his or her death to his
or
her Beneficiary) in a lump sum on the Participant’s Payment Date. An
optional form of benefit may be elected by the Participant, on the form provided
by Company, during his or her Initial Election Period of substantially equal
annual installments over two (2) to twenty (20) years beginning on the
Participant’s Payment Date.
A
Participant may amend his or her form of distribution election from a single
lump sum to installments by filing an amended election at least twelve (12)
months in advance of the date the Participant terminates employment with
the
Company. The amended new distribution date must be in a Plan Year
five (5) years after the date the Participant terminates employment with
the
Company. No amendment may accelerate the date that any distribution
would be made from the Plan.
In
the
case of a Participant who terminates employment with Company, or is determined
to have become Disabled, and has an Account balance of less than $25,000,
the
Distributable Amount shall be paid to the Participant (and after his or her
death to his or her Beneficiary) in a lump sum distribution on the Participant’s
Payment Date.
The
Participant’s Account shall continue to be credited with earnings pursuant to
Section 4.1 of the Plan until all amounts credited to his or her Account
under
the Plan have been distributed.
(b) Distribution
With Scheduled Withdrawal Date. In the case of a Participant who
has elected a Scheduled Withdrawal Date for a distribution while still in
the
employ of the Company, such Participant shall receive his or her Distributable
Amount, but only with respect to those deferrals of Compensation, vested
Matching Contribution Amounts and vested Company Discretionary Contribution
Amounts, if any, and earnings on such deferrals of Compensation, Matching
Contribution Amounts and Company Discretionary Contribution Amounts as shall
have been elected by the Participant to be subject to the Scheduled Withdrawal
Date in accordance with Section 1.1(ee) of the Plan. A Participant’s
Scheduled Withdrawal Date with respect to deferrals of Compensation, Matching
Contribution Amounts and Company Discretionary Contribution Amounts deferred
in
a given Plan Year can be no earlier than two years from the last day of the
Plan
Year for which the deferrals of Compensation, Matching Contribution Amounts
and
Company Discretionary Contribution Amounts are made. A Participant’s
Scheduled Withdrawal Date with respect to the deferral of Stock Units in
a given
Plan Year can be no earlier than (a) two years from the last day of the Plan
Year for which the deferral of Stock Units was made and (b) two years from
the
vesting date of the Restricted Stock Award. A Participant may extend
the Scheduled Withdrawal Date for any Plan Year, provided such extension
occurs
at least one year before the Scheduled Withdrawal Date and is for a period
of
not less than five years from the Scheduled Withdrawal Date. The
Participant shall have the right to modify any Scheduled Withdrawal Date
one
time. In the event a Participant terminates employment with Company
prior to a Scheduled Withdrawal Date, other than by reason of death, the
portion
of the Participant’s Account associated with a Scheduled Withdrawal Date, which
has not occurred prior to such termination, shall be distributed in the manner
selected for Termination.
(c) Distribution
for Termination of Employment due to Death. In the case of the
death of a Participant while employed by the Company, the Participant’s account
balance shall be distributed to the Participant’s Beneficiary in a lump sum
following the end of the calendar quarter in which the receipt of confirmation
of death has been received.
(d) Post-Termination
Death Benefit. In the event a Participant dies after his or her
termination of employment and still has a vested balance in his or her Account,
the vested balance of such Account shall continue to be paid in annual
installments for the remainder of the period in accordance with the election
previously made by the Participant.
(e) Change
in Control. A Participant may elect, at such times and in such
manner as permitted by the Company, to receive a lump sum distribution of
his or
her entire Account balance in the event of a subsequent Change in Control
(as
defined by Section 409A of the Code). Such payment shall be made in
the month following the month in which such Change in Control occurs; provided,
however, that if the Change in Control occurs in the 2007 calendar year,
any
such distribution be made in February 2008.
A
Participant shall be permitted to elect a Hardship Distribution from his
or her
vested Accounts in accordance with Section 1.2(u) of the Plan prior to the
Payment Date, subject to the following restrictions:
(a) The
election to take a Hardship Distribution shall be made by filing a form provided
by and filed with Committee prior to the end of any calendar month.
(b) The
Committee shall have made a determination that the requested distribution
constitutes a Hardship Distribution in accordance with Section 1.2(u) of
the
Plan.
(c) The
amount
determined by the Committee as a Hardship Distribution shall be paid in a
single
cash lump sum as soon as practicable after the end of the calendar month
in
which the Hardship Distribution election is made and approved by the
Committee.
(d) If
a
Participant receives a Hardship Distribution, the Participant will be ineligible
to participate in the Plan for the balance of the Plan Year and the following
Plan Year.
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Inability
to Locate Participant.
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In
the
event that the Committee is unable to locate a Participant or Beneficiary
within
two years following the required Payment Date, the amount allocated to the
Participant’s Deferral Account shall be forfeited. If, after such
forfeiture, the Participant or Beneficiary later claims such benefit, such
benefit shall be reinstated without interest or earnings.
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Limitation
on Distributions to Covered
Employees.
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Notwithstanding
any other provision of this Article VI in the event that the Participant is
a “covered employee” as that term is defined in section 162(m)(3) of the
Code, or would be a covered employee if benefits were distributed in accordance
with his or her distribution election or early withdrawal request, the maximum
amount which may be distributed from the Participant’s Account in any Plan Year
shall not exceed one million dollars ($1,000,000) less the amount of
compensation paid to the Participant in such Plan Year which is not
“performance-based” (as defined in Code section 162(m)(4)(C)), which amount
shall be reasonably determined by the Committee at the time of the proposed
distribution. Any amount which is not distributed to the Participant
in a Plan Year as a result of this limitation shall be distributed to the
Participant in the next Plan Year, subject to compliance with the foregoing
limitations set forth in this Section 6.5.
In
the
event of a distribution to a Specified Employee based upon such individual’s
termination of employment with the Company, no distributions will be made,
irrespective of any deferral election to the contrary, before the date which
is
six (6) months after the date of termination of employment, or if earlier
the
date of the death of the Specified Employee.
There
shall be deducted from each payment made under the Plan or any other
Compensation payable to the Participant (or Beneficiary) all taxes that are
required to be withheld by the Company in respect to such payment or this
Plan. The Company shall have the right to reduce any payment (or
compensation) by the amount of cash sufficient to provide the amount of said
taxes.
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Termination
of Employment.
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For
purposes of this Plan, a Participant shall be deemed to have terminated from
employment with the Company when such Participant has experienced a ‘separation
from service’ under Code Section 409A.
ADMINISTRATION
The
Committee shall be appointed by, and serve at the pleasure of, the Board
of
Directors. The number of members comprising the Committee shall be
determined by the Board, which may from time to time vary the number of
members. A member of the Committee may resign by delivering a written
notice of resignation to the Board. The Board may remove any member
by delivering a certified copy of its resolution of removal to such
member. Vacancies in the membership of the Committee shall be filled
promptly by the Board.
The
Committee shall act at meetings by affirmative vote of a majority of the
members
of the Committee. Any action permitted to be taken at a meeting may
be taken without a meeting if, prior to such action, a written consent to
the
action is signed by all members of the Committee and such written consent
is
filed with the minutes of the proceedings of the Committee. A member
of the Committee shall not vote or act upon any matter which relates solely
to
himself or herself as a Participant. The Chairman or any other member
or members of the Committee designated by the Chairman may execute any
certificate or other written direction on behalf of the Committee.
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Powers
and Duties of the Committee.
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(a) Committee
Powers and Responsibilities. The Committee shall have complete
control of the administration of the Plan herein set forth with all powers
necessary to enable it properly to carry out its duties in that
respect. Not in limitation, but in amplification of the foregoing,
the Committee shall have the power and authority to:
(1) Construe
the Plan and Trust Agreement to determine all questions that shall arise
as to
interpretations of the Plan’s provisions including determination of which
individuals are Eligible Employees and the determination of the amounts credited
to a Participant’s Account, and the appropriate timing and method of benefit
payments;
(2) Establish
reasonable rules and procedures which shall be applied in a uniform and
nondiscriminatory manner with respect to elections, the establishment of
Accounts and Subaccounts, and all other discretionary provisions of the
Plan;
(3) Establish
the rules and procedures by which the Plan will operate that are consistent
with
the terms of the Plan documents;
(4) Establish
the rules and procedures by which the Plan shall determine and pay installment
distributions and in-service distributions;
(5) To
provide
for the disclosure of all information and the filing or provision of all
reports
and statements to Participants, Beneficiaries or governmental agencies as
shall
be required by law;
(6) Compile
and maintain all records it determines to be necessary, appropriate or
convenient in connection with the administration of the Plan;
(7) Adopt
amendments to the Plan document which are deemed necessary or desirable to
facilitate administration of the Plan and/or to bring these documents into
compliance with all applicable laws and regulations, provided that the Committee
shall not have the authority to adopt any Plan amendment that will result
in
substantially increased costs to the Company unless such amendment is contingent
upon ratification by the Board before becoming effective;
(8) Employ
such persons or organizations to render service or perform services with
respect
to the administrative responsibilities of the Committee under the Plan as
the
Committee determines to be necessary and appropriate, including but not limited
to attorneys, accountants, and benefit, financial and administrative
consultants;
(9) Select,
review and retain or change the investment which are used for determining
the
Interest Rate under the Plan;
(10) Direct
the
investment of the assets of the Trust;
(11) Review
the
performance of the Trustee with respect to the Trustee’s duties,
responsibilities and obligations under the Plan and the Trust Agreement;
and
(12) Take
such
other action as may be necessary or appropriate to the management and investment
of the Plan assets.
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Construction
and Interpretation.
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The
Committee shall have full discretion to construe and interpret the terms
and
provisions of this Plan, which interpretations or construction shall be final
and binding on all parties, including but not limited to the Company and
any
Participant or Beneficiary. The Committee shall administer such terms
and provisions in a uniform and nondiscriminatory manner and in full accordance
with any and all laws applicable to the Plan.
To
enable
the Committee to perform its functions, the Company shall supply full and
timely
information to the Committee on all matters relating to the Compensation
of all
Participants, their death or other events that cause termination of their
participation in this Plan, and such other pertinent facts as the Committee
may
require.
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Compensation,
Expenses and Indemnity.
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(a) The
members of the Committee shall serve without compensation for their services
hereunder.
(b) The
Committee is authorized at the expense of the Company to employ such legal
counsel as it may deem advisable to assist in the performance of its duties
hereunder. Expenses and fees in connection with the administration of
the Plan shall be paid by the Company.
(c) To
the
extent permitted by applicable state law, the Company shall indemnify and
hold
harmless the Committee and each member thereof, the Board of Directors and
any
delegate of the Committee who is an employee of the Company against any and
all
expenses, liabilities and claims, including legal fees to defend against
such
liabilities and claims arising out of their discharge in good faith of
responsibilities under or incident to the Plan, other than expenses and
liabilities arising out of willful misconduct. This indemnity shall
not preclude such further indemnities as may be available under insurance
purchased by the Company or provided by the Company under any bylaw, agreement
or otherwise, as such indemnities are permitted under state law.
Under
procedures established by the Committee, a Participant shall receive a statement
with respect to such Participant’s Accounts on a quarterly basis.
(a) Claim.
A
person
who believes that he or she is being denied a benefit to which he or she
is
entitled under this Plan (hereinafter referred to as “Claimant”) must file a
written request for such benefit with the Company, setting forth his or her
claim. The request must be addressed to the President of the Company
at its then principal place of business.
(b) Claim
Decision.
Upon
receipt of a claim, the Company shall advise the Claimant that a reply will
be
forthcoming within ninety (90) days and shall, in fact, deliver such reply
within such period. The Company may, however, extend the reply period
for an additional ninety (90) days for special circumstances.
If
the
claim is denied in whole or in part, the Company shall inform the Claimant
in
writing, using language calculated to be understood by the Claimant, setting
forth: (A) the specified reason or reasons for such denial; (B) the
specific reference to pertinent provisions of this Plan on which such
denial is based; (C) a description of any additional material or information
necessary for the Claimant to perfect his or her claim and an explanation
of why
such material or such information is necessary; (D) appropriate information
as
to the steps to be taken if the Claimant wishes to submit the claim for review;
and (E) the time limits for requesting a review under subsection
(c).
(c) Request
For Review.
Within
sixty (60) days after the receipt by the Claimant of the written opinion
described above, the Claimant may request in writing that the Committee review
the determination of the Company. Such request must be addressed to
the Secretary of the Company, at its then principal place of
business. The Claimant or his or her duly authorized representative
may, but need not, review the pertinent documents and submit issues and comments
in writing for consideration by the Committee. If the Claimant does
not request a review within such sixty (60) day period, he or she shall be
barred and estopped from challenging the Company’s determination.
(d) Review
of Decision.
Within
sixty (60) days after the Committee’s receipt of a request for review, after
considering all materials presented by the Claimant, the Committee will inform
the Participant in writing, in a manner calculated to be understood by the
Claimant, the decision setting forth the specific reasons for the decision
containing specific references to the pertinent provisions of
this Plan on which the decision is based. If special
circumstances require that the sixty (60) day time period be extended, the
Committee will so notify the Claimant and will render the decision as soon
as
possible, but no later than one hundred twenty (120) days after receipt of
the
request for review. No further legal action may be initiated claiming
benefits under this Plan until the claims procedures set forth in this Article
VII are completed.
This
Plan
may be amended by the Company at any time in its sole
discretion. Additionally, the Plan may be amended upon an action of
the members of the Committee subject to the provisions in
Section 7.3. However, no amendment may be made that alters the
nature of an election or benefit distribution election or which would reduce
the
amount credited to a Participant’s Account on the date of such amendment, unless
such amendment is made pursuant to Section 8.9 of the Plan to comply with
changes in applicable law.
The
Company reserves the right to terminate the Plan in its entirety by an action
of
the Board at any time upon fifteen (15) days notice to the
Participants. The termination of the Plan shall automatically revoke
all outstanding deferral elections. If the Plan is terminated, all
benefits shall continue to be paid in the form and at the times previously
elected by the Participants, unless at the time of such distribution Section
409A of the Code, or other applicable IRS guidance, would authorize the
distribution in a lump sum of all Plan benefits. Any amounts
remaining in the Trust after all benefits have been paid shall revert to
the
Company.
MISCELLANEOUS
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Unsecured
General Creditor.
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Participants
and their Beneficiaries, heirs, successors, and assigns shall have no legal
or
equitable rights, claims, or interest in any specific property or assets
of the
Company. No assets of the Company shall be held in any way as
collateral security for the fulfilling of the obligations of the Company
under
this Plan. Any and all of the Company’s assets shall be, and remain,
the general unpledged, unrestricted assets of the Company. The
Company’s obligation under the Plan shall be merely that of an unfunded and
unsecured promise of the Company to pay money in the future, and the rights
of
the Participants and Beneficiaries shall be no greater than those of unsecured
general creditors. It is the intention of the Company that this Plan
be unfunded for purposes of the Code and for purposes of Title 1 of the
ERISA.
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Restriction
Against Assignment.
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The
Company shall pay all amounts payable hereunder only to the person or persons
designated by the Plan and not to any other person or corporation. No
part of a Participant’s Accounts shall be liable for the debts, contracts, or
engagements of any Participant, his or her Beneficiary, or successors in
interest, nor shall a Participant’s Accounts be subject to execution by levy,
attachment, or garnishment or by any other legal or equitable proceeding,
nor
shall any such person have any right to alienate, anticipate, sell, transfer,
commute, pledge, encumber, or assign any benefits or payments hereunder in
any
manner whatsoever. If any Participant, Beneficiary or successor in
interest is adjudicated bankrupt or purports to anticipate, alienate, sell,
transfer, commute, assign, pledge, encumber or charge any distribution or
payment from the Plan, voluntarily or involuntarily, the Committee, in its
discretion, may cancel such distribution or payment (or any part thereof)
to or
for the benefit of such Participant, Beneficiary or successor in interest
in
such manner as the Committee shall direct.
This
Plan
shall be construed, governed and administered in accordance with the laws
of the
State in which the Company is incorporated, except where pre-empted by
ERISA.
Any
payment to a Participant or the Participant’s Beneficiary in accordance with the
provisions of the Plan shall, to the extent thereof, be in full satisfaction
of
all claims against the Committee and the Company. The Committee may
require such Participant or Beneficiary, as a condition precedent to such
payment, to execute a receipt and release to such effect.
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Payments
on Behalf of Persons Under
Incapacity.
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In
the
event that any amount becomes payable under the Plan to a person who, in
the
sole judgment of the Committee, is considered by reason of physical or mental
condition to be unable to give a valid receipt therefore, the Committee may
direct that such payment be made to any person found by the Committee, in
its
sole judgment, to have assumed the care of such person. Any payment
made pursuant to such determination shall constitute a full release and
discharge of the Committee and the Company.
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Limitation
of Rights and Employment
Relationship
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Neither
the establishment of the Plan and Trust nor any modification thereof, nor
the
creating of any fund or account, nor the payment of any benefits shall be
construed as giving to any Participant, or Beneficiary or other person any
legal
or equitable right against the Company or the trustee of the Trust except
as
provided in the Plan and Trust; and in no event shall the terms of employment
of
any Employee or Participant be modified or in any way be affected by the
provisions of the Plan and Trust.
This
Plan
shall be binding upon and inure to the benefit of the Company, its successors
and assigns and the Participant and his or her heirs, executors, administrators
and legal representatives.
If
the
Company, the Participant, any Beneficiary, and/or a successor in interest
to any
of the foregoing, brings legal action to enforce any of the provisions of
this
Plan, the prevailing party in such legal action shall be reimbursed by the
other
party, the prevailing party’s costs of such legal action including, without
limitation, reasonable fees of attorneys, accountants and similar advisors
and
expert witnesses.
If
any
provision of this Plan is held to be invalid, illegal or unenforceable, such
invalidity, illegality, or unenforceability shall not affect any other provision
of this Plan, and the Plan shall be construed and enforced as if such provision
had not been included. In addition, if such provision is invalid,
illegal or unenforceable due to changes in applicable law, the Company may
amend
the Plan, without the consent and without providing any advance notice to
any
Participant, as may be necessary or desirable to comply with changes in the
applicable law or financial accounting of deferred compensation
plans.
A
Participant shall have no rights as a shareholder with respect to any Stock
Units which may be credited by the Company to the
Plan. Notwithstanding the foregoing, Stock Units allocated to a
Participant’s Account shall be entitled to receive such Stock Units prorata
portion of any cash dividend declared by the Company with respect to the
shares
of the Company’s common stock underlying such Stock Units. The
Committee shall instruct the Trustee, in the Committee’s sole and absolute
discretion, on how to vote, or not vote, any shares of Company common stock
which may actually be allocated to the Trust and nothing contained in this
Plan
shall be construed as permitting the Participant to vote any such shares
of
Company common stock held by the Trust.
Headings
and subheadings in this Plan are inserted for convenience of reference only
and
are not to be considered in the construction of the provisions
hereof.
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Section
409A of the Code.
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This
Plan
is intended to comply and shall be administered in a manner that is intended
to
comply with Section 409A of the Code and the interpretative guidance
thereunder. The Plan shall be construed and interpreted in accordance
with such intent.
MAXIMUS,
INC.
DEFERRED
COMPENSATION PLAN