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Preliminary proxy statement
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Confidential, for use of the Commission only (as permitted by Rule 14a-6(e)(2))
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Definitive proxy statement
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Definitive additional materials
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Soliciting material pursuant to section 240.14a-12
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MAXIMUS Inc.
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(Name of Registrant as Specified in Its Charter)
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Registrant
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(Name of Person(s) Filing Proxy Statement, if Other Than the Registrant)
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2 Maximus
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Our revenue increase was driven primarily by the Census contract in the U.S. Federal Services Segment
and new COVID-19 response work to assist governments in supporting individuals and families during the global pandemic.
Our revenue growth was offset by reductions in volumes and revenue resulting from temporary program
changes instituted by our government clients in response to the global pandemic.
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8.3%
Full year
operating profit margin
$3.39
Diluted earnings
per share
Our full year
operating profit margin and diluted earnings per share reflect the negative volume impacts as well as a greater mix of cost plus revenue driven by the Census contract.
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~$245M
Cash flow from
operations
~$204M
Free cash flow*
Our cash flows
in fiscal year 2020 were tempered by the unfavorable impacts of the global pandemic.
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$0.28
Quarterly dividend per share
$0.25 (fiscal year 2019)
We increased our quarterly dividend per share of Maximus common stock compared to the prior fiscal year. ~$72M Cash and cash equivalents held We had no outstanding borrowings on our corporate credit facility at September 30, 2020. |
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“Organic revenue growth” and “free cash flow” are non-GAAP terms. A description of how we calculate this information and a summary of
our use of non-GAAP numbers may be found in Item 7 of our Annual Report on Form 10-K for the year ended September 30, 2020, filed with the SEC on November 19, 2020.
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2021 Proxy Statement 3
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4 Maximus
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Dear Maximus Shareholders,
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Our mission of Helping Government Serve the People® has
guided our business for more than 45 years. This mission has never been more important as we help individuals and families connect to critical government programs, many of which were designated as “essential” services during the pandemic.
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Supporting our people through a global health pandemic.
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When faced with the COVID-19 global pandemic, we knew that in order to protect the people we serve, we
had to protect our own people first.
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We took quick and decisive steps to safeguard the wellbeing of our people. We rapidly implemented new
policies that emphasized paid sick leave and social distancing, and significantly enhanced cleaning regimens. We developed our COVID-19 emergency income-continuity plan which covered scenarios such as quarantine, childcare,
government-mandated restrictions, office closures, and employees who are in high risk categories in the early months of the pandemic, while protecting their health insurance. To further support our team members, we launched topical videos
from our Chief Medical Officer, mental health seminars, virtual development training classes, as well as wellness mobile apps.
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One of the most important and challenging things we did involved the systematic transition of
employees to a work from home model. This was a heroic effort in procuring new equipment, increasing network capacity and security, and deploying new services all while keeping operations running to meet program needs. Many government
programs were never designed to be carried out in a remote environment, presenting high hurdles to immediately enable a remote workforce. Our ability to deploy HIPAA-compliant work from home capabilities enables us to maintain operational
continuity and assist program participants remotely for more complex services, including clinical and social assessments required to access important government benefits and services.
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2021 Proxy Statement 5
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At peak, we successfully transitioned 63% of our U.S. workforce to work from home, while 32% remained
in an office setting and the remainder were on leave. Outside of the U.S., 76% of our employees shifted to a work from home model at peak.
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While both tragic and challenging, the pandemic provides us the opportunity to test new ways to serve
citizens who need access to vital services. We are also gaining new data related to citizen engagement, channel preferences, and agent performance which enables us to optimize this model. This also allows us to evaluate the optimal
environment for each individual employee over the longer term.
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Opportunities and challenges for the business as a result of COVID-19.
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While the pandemic created new demands, such as contact tracing and unemployment insurance claims, it
reduced volumes for other core programs where our government clients instituted temporary changes to ensure continuity of access to vital programs and to slow the spread of the pandemic. Currently, we are working in partnership with our
clients to carefully plan the resumption of prior operational levels. Meanwhile, we continue to manage our costs prudently and invest in new capabilities, while at the same time, new demands have enabled us to hire thousands of employees
with work from home flexibility, creating opportunities for many in the face of historic unemployment levels.
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Diversity, equity, and inclusion at Maximus.
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Diversity, equity, and inclusion (“DE&I”) are central to our company identity, and we are proud to
contribute to and positively impact our communities.
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We are all shocked and saddened by the needless deaths of black Americans and other people of color as
the result of racial prejudice and injustice. Such tragic events should never be tolerated or forgotten. We owe our employees, our clients, our citizens, and the communities we serve the assurance that these issues will not be brushed
aside. So, we are taking action. We are holding listening sessions in which difficult discussions on racism and injustice can constructively and safely occur. We are seeking to provide resources for our employees who want to be part of
constructive change in their communities. These actions are consistent with the human rights principles we adopted in 2020 that reflect the principles in the UN Global Compact and the UN Guiding Principles of Business and Human Rights.
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6 Maximus
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Continuing to implement our long-term strategy.
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We hope to advance three key elements of our strategy in 2021:
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Digital Transformation: We are building on 2020
by implementing the next stage of our digital transformation as we look to use more language processing, artificial intelligence, and cognitive computing.
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Clinical Evolution: Through our newly formed
Maximus Public Health, we are supporting efforts to contain COVID-19. We believe this is just the beginning of an increase in governmental demand for public health support and the modernization of public health infrastructure. We have hired leading public health experts as we expand into this emerging market.
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Market Expansion: We continue to bring core
capabilities to new programs and clients, add new capabilities to access adjacent markets, and expand geographically. In 2020 this included an expansion into the unemployment insurance market and an acquisition in South Korea to deliver employment services.
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We look to 2021 to be a year of progressive stability as we continue to work with our government
clients to effectively respond to the extraordinary needs of their citizens in the wake of the pandemic.
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We welcome the opportunity that our annual meeting gives us to receive your feedback. We ask for your
voting support and encourage you to provide us input anytime throughout the year.
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Sincerely,
Bruce L. Caswell
Chief Executive Officer and President
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2021 Proxy Statement 7
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Proposal
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Description
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Board’s Voting
Recommendation
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Page
Reference
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1
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The election of one Class I Director to serve until the 2022 Annual Meeting of Shareholders, one
Class II Director to serve until the 2023 Annual Meeting of Shareholders and three Class III Directors nominated by the Board of Directors of the Company to serve until the 2022 Annual Meeting of Shareholders.
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FOR each nominee
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2
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The approval of our 2021 Omnibus Incentive Plan.
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3
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The ratification of the appointment of Ernst & Young LLP as our independent registered
accounting firm for our 2021 fiscal year.
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An advisory vote to approve the compensation of the named executive officers.
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5
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A shareholder proposal pertaining to the disclosure by the Company of certain lobbying
expenditures and activities.
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8 Maximus
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Via the Internet
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By Mail
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Go to proxyvote.com
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Sign, date, and return your proxy card in the enclosed envelope
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By Telephone
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In Person, Virtually
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(+1) 800-586-1548 (toll-free)
(+1) 303-562-9288 (international)
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Attend the virtual Annual Meeting
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By Order of the Board of Directors
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By:
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David R. Francis
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General Counsel and Secretary
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2021 Proxy Statement 9
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• Aging populations with complex healthcare needs;
• Rising living standards in emerging markets
creating new demands for our services;
• Growing complexity of programs, such as evolving
eligibility requirements;
• The creation of new programs and initiatives such
as long-term services and support;
• Increased appetite for outsourcing due to flexibility,
scalability, and accountability; and
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• Our strong reputation and long-term relationships
with clients which enable us to:
− Win long-term contracts;
− Achieve high renewal rates;
− Provide additional services to supplement our
core services;
− Deliver strong and steady margins; and
− Grow organically and through acquisitions.
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We run programs that connect people with disabilities and long-term health conditions to sustainable, long-term employment
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We help people, including many of society's most vulnerable populations, access, connect to, and use government benefit programs
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We provide comprehensive employee benefits to our people
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We offer ongoing education and advancement opportunities via our Center for Employee Development and Maximus University
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We implement recycling efforts in our operations and provide innovative solutions to support client efforts to reduce paper
consumption and increase use of cloud solutioning
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We are committed to protecting the rights of our employees and complying with all federal, state, and local laws
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10 Maximus
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2021 Proxy Statement 11
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12 Maximus
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maintaining long-term customer relationships while steadily seeking new business opportunities;
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recruiting and retaining best-in-class human capital, complimented with leading technology;
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managing an enterprise-wide risk strategy while being willing to consider innovative opportunities;
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supplementing and supporting governmental entities;
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maintaining sustainable, long-term strategies while being able to pivot quickly when needed; and
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supporting management, while also holding them accountable.
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newly appointed members with fresh ideas as well as members with meaningful tenure;
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mid-career and later-career members;
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directors with operational, financial, human resources, and governmental expertise on a global scale; and
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a diverse array of backgrounds, skills, and experiences.
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Who We Are
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How We Are Selected
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How We Are Elected
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How We Are Governed
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How We Are Organized
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How We Are Paid
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How to Communicate with Us
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14 Maximus
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2021 Proxy Statement 15
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Bruce L. Caswell
Age 55
Director Since: 2018
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Why he is valuable to Maximus:
Mr. Caswell
provides subject matter expertise in government policy and health and human services programs together with his
detailed knowledge of the Company's operations gained through his service as our Chief Executive Officer, President,
and other senior leadership positions at the Company. The Board of Directors believes that it is important to have the
Company’s chief executive also serve as a director.
Career Snapshot:
Mr. Caswell
was appointed Chief Executive Officer of Maximus effective April 1, 2018. He was named President of Maximus in 2014,
and prior to that served as the President of our Health Services Segment from 2007 through 2014. Before that he was
President of Operations from 2005 to 2007 and President of our Human Services Group from 2004 to 2005. Previously, he
worked at IBM Corporation for nine years, serving most recently as Vice President, State and Local Government &
Education Industries for IBM Business Consulting Services.
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Education:
• Masters, Public Policy,
John F. Kennedy School
of Government at
Harvard University
• B.A., Economics,
Haverford College
More:
• Board of Directors, Wolf Trap Foundation for the Performing Arts, a nonprofit organization
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Richard A. Montoni
Age 69
Director Since: 2006
Vice Chairman Since: 2018
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Why he is valuable to Maximus:
Mr. Montoni
brings to Maximus audit and financial experience together with the detailed knowledge of the operations of the Company
gained through his prior service as our Chief Executive Officer and other senior leadership positions at the Company.
Career Snapshot:
Mr. Montoni
served as Senior Advisor to the Chief Executive Officer of Maximus from April 1, 2018 to September 30, 2019. He was
the Company's Chief Executive Officer from 2006 to April 1, 2018. He also served as President from 2006 through 2014.
Previously, Mr. Montoni served as our Chief Financial Officer and Treasurer from 2002 to 2006. Before his employment with Maximus, Mr. Montoni served as Chief Financial Officer and Executive Vice President for Managed Storage International, Inc. in Broomfield, Colorado from 2000 to 2001. From 1996 to 2000, he was Chief Financial Officer and Executive Vice President for CIBER, Inc., a New York Stock Exchange (“NYSE”)-listed company in Englewood, Colorado where he also served as a director until 2002. Before joining CIBER, he was an audit partner with KPMG LLP, where he worked for nearly 20 years.
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Education:
• Masters, Accounting,
Northeastern University
• B.S., Economics, Boston
University
More:
• Chairman, Northern Virginia
Technology Council, a
membership and trade
association
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16 Maximus
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Raymond B. Ruddy
Age 77
Director Since: 2004
Vice Chairman: 2005 – 2018
Chairman of the Audit
Committee Since: 2018
Prior Tenure: 1985 - 2001
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Why he is valuable to Maximus:
Mr. Ruddy's qualifications and
skills include, among other things, his consulting and financial experience as well as his knowledge of government
programs and our business from his prior service with the Company.
Career Snapshot:
Mr. Ruddy retired from Maximus in
2001. Before his retirement Mr. Ruddy served as the Chairman of the Board of Directors from 1985 to 2001 and President
of our Consulting Group from 1989 to 2000. From 1969 until he joined us, Mr. Ruddy served in various capacities with Touche Ross & Co., including Associate National Director of Consulting from 1982 to 1984 and Director of Management Consulting (Boston, Massachusetts office) from 1978 to 1983.
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Education:
• MBA, Wharton School of
Business of the University of
Pennsylvania
• B.S., Economics, Holy Cross
College
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2021 Proxy Statement 17
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John J. Haley
Age 71
Director Since: 2020
Prior Tenure: 2002 – January 4, 2019
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Why he is valuable to Maximus:
Mr. Haley’s qualifications and
skills include, among other things, his experience as the Chief Executive Officer and Chairman of a large,
publicly-traded consulting firm together with his knowledge of finances, human resources and compensation matters, as
well as his public company directorship experience. Mr. Haley has been instrumental in listening to feedback from Maximus shareholders and embracing a forward-looking view on ESG matters. He has been a champion of the board refreshment strategy and provides human resources expertise.
Career Snapshot:
John J. Haley served as one of
our directors from 2002 to January 2019 and then rejoined the Board in March 2020. Since January 2016, Mr. Haley has
served as the Chief Executive Officer of Willis Towers Watson, an insurance broker and human resources and employee benefits consulting firm formed through the merger of Willis Group Holdings Public Limited Company and Towers Watson & Co. From 2010 until January 2016, Mr. Haley served as the Chief Executive Officer and Chairman of the Board of Towers Watson & Co. Previously he served as President and Chief Executive Officer of Watson Wyatt Worldwide, Inc. from 1999 until its merger with Towers Perrin, Forster & Crosby, Inc. in 2010. Mr. Haley joined Watson Wyatt in 1977. Mr. Haley is a Fellow of the Society of Actuaries and is a co-author of Fundamentals of Private Pensions (University of Pennsylvania Press).
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Education:
• A.B., Rutgers University
More:
• Director, Willis Towers Watson
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18 Maximus
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2021 Proxy Statement 19
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Anne K. Altman
Age 61
Director Since: 2016
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Why she is valuable to Maximus:
Ms. Altman’s qualifications and
skills include, among other things, her experience with public sector clients and the information technology industry
including security, analytics, cognitive, digital, commerce, and cloud capabilities. She provides expertise around ESG
and responsible stewardship.
Career Snapshot:
Ms. Altman retired from IBM in
2016 having served since 2013 as the company’s General Manager for U.S. Federal and Government Industries. Previously
she served as General Manager for IBM's Global Public Sector with responsibilities for global government—national, regional, and local—as well as education, healthcare, and life sciences. Ms. Altman joined IBM in 1981 as a systems engineer and held a number of roles with increasing responsibility in areas pertaining to government and technology
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Education:
• B.S., George Mason University
More:
• Director, SPX FLOW, Inc.
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Peter B. Pond
Age 76
Director Since: 1997
Chairman of the Board Since: 2001
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Why he is valuable to Maximus:
Mr. Pond brings to Maximus his
experience in the investment and financial industry and as a public company director. The Board of Directors believes
that he possesses the leadership skills that allow him to effectively lead our Board as independent, non-executive Chairman. He serves as a champion of board diversity, ESG, and DE&I.
Career Snapshot:
Mr. Pond is a founder of ALTA
Equity Partners LLC, a venture capital firm, and has been a General Partner of that firm since June 2000. Prior to
that, Mr. Pond was a Principal and Managing Director in the Investment Banking Department at Donaldson, Lufkin & Jenrette Securities Corporation in Chicago and was head of that company’s Midwest Investment Banking Group.
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Education:
• MBA, University of Chicago
• B.S., Economics,
Williams College
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20 Maximus
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Gayathri Rajan
Age 53
Director Since: 2016
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Why she is valuable to Maximus:
Ms. Rajan brings to Maximus
cutting-edge information technology expertise that has been used to build secure, scalable financial platforms and innovative consumer-centric products.
Career Snapshot:
Ms. Rajan is General Manager and
Vice President of Geo-Enterprises at Google. She joined Google in 2006 and has served in roles of increasing responsibility leading product development for the Internet of Things, Commerce and Payments. From 2016 to 2018 she was Vice President of Product Management for Geo Monetization, and from 2014 to 2016 she was Vice President of Product Management for Android Things. Prior to that, Ms. Rajan held engineering
and product management roles at Financial Engines, eCal Corp, and The Vanguard Group.
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Education:
• MBA Stanford University
• MSc Computer Science,
University of Pennsylvania
• B.A. and M.Eng,
Chemical Engineering,
Cambridge University
More:
• Commonwealth Scholar
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Michael J. Warren
Age 53
Director Since: 2019
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Why he is valuable to Maximus:
Mr. Warren brings familiarity
with government programs and operations and investment, strategic planning and financial expertise gained through his
service on other boards and his current and prior positions in government and private industry.
Career Snapshot:
Mr. Warren is the Managing
Director of Albright Stonebridge Group (“ASG”). He served as ASG's Managing Principal from 2013 to 2017 and as
Principal from 2009 to 2013. Prior to ASG, he served as the Chief Operating Officer and Chief Financial Officer of Stonebridge International from 2004 to 2009, where he managed operations, business development, finance, and personnel portfolios before the firm's merger with The Albright Group. Mr. Warren served in various capacities in the Obama Administration, including as Senior Advisor in the White House Presidential
Personnel Office and as co-lead for the Treasury and Federal Reserve agency review teams of the Obama-Biden
Presidential Transition.
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Education:
• B.A., Yale University
• B.A., Balliol College,
University of Oxford
More:
• Rhodes Scholar
• Board of Trustees, District of
Columbia Retirement Board
• Board of Directors and
Chairman of the Audit
Committee, Overseas Private
Investment Corporation
(“OPIC”)
• Board of Trustees and of the
Risk and Audit Committees,
Commonfund
• Yale University Council and
Yale School of Management
Board of Advisors
• Director, Walker & Dunlop,
Inc.
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2021 Proxy Statement 21
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Key Qualifications
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Relevance to Maximus
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Additional CEO/CFO, Public Board and/or NEO Experience
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Experience in this environment outside of Maximus offers insight into the need for integrity and
transparency, provides practical experience in risk management at the operational and enterprise level, and contributes seasoned views on issues from strategy to succession.
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Innovation and Technology Expertise
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Technology and innovation drive our business forward, increase our stickiness with clients,
differentiate our solutions, and ensure we provide more efficient and cost-effective services.
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International Expertise
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With global operations, understanding of international environments, geo-political risk, and foreign
government structure and operations is critical.
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Financial Expertise
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Our business involves complex financial and disclosure requirements; skills include financial
literacy, and expertise in accounting and financial statements.
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M&A Experience
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M&A experience ensures a focus on shareholder value creation, provides insight to the due
diligence process to ensure strategic decisions are made, and offers best practices for seamless integration.
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Risk, Privacy, Data Security Management Expertise
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Within our highly regulated environment, understanding the policies and procedural requirements to
best manage compliance and risk is essential.
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Government Services Experience
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Our business is in a unique environment as a government services provider and knowledge of the
regulatory and procurement environment is of utmost value, particularly as governments implement outcome-based services to drive value for money and ensure accountability.,
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Human Resources
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With a diverse global workforce, our Company benefits from Board level HR expertise, which guides
strategic HR initiatives, enables stronger diversity, equity, and inclusion management, and provides for positive labor relations.
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Independence
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Independence enables directors to provide unbiased oversight with no material relationship to
the Company.
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22 Maximus
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Board Member
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Additional
CEO/CFO,
Public
Board
and/or
NEO
Experience
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Innovation
and
Technology
Expertise
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International
Expertise
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Financial
Expertise
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M&A
Experience
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Risk,
Privacy,
Data
Security
Management
Expertise
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Independence
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Government
Services
Experience
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Human
Resources
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Anne Altman
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Bruce Caswell
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John Haley
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Jan Madsen
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Richard Montoni
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Peter Pond
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Gayathri Rajan
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Raymond Ruddy
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Michael Warren
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2021 Proxy Statement 23
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24 Maximus
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2021 Proxy Statement 25
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26 Maximus
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2021 Proxy Statement 27
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•
|
personal characteristics, such as the highest personal and professional ethics, integrity and values, an inquiring and independent
mind, with a respect for the views of others, ability to work well with others and practical wisdom and mature judgment;
|
•
|
broad, policy-making level experience in business, government, academia or science to understand business problems and evaluate and
formulate solutions;
|
•
|
experience and expertise that is useful to the Company and complementary to the background and experience of other directors;
|
28 Maximus
|
•
|
willingness and ability to devote the time necessary to carry out duties and responsibilities of directors and to be an active,
objective and constructive participant at meetings of the Board and its committees;
|
•
|
commitment to serve on the Board over a period of several years to develop knowledge about the Company’s principal operations;
|
•
|
willingness to represent the best interests of all shareholders and objectively evaluate management performance; and
|
•
|
diversity.
|
•
|
evaluating the performance and setting the compensation of the Chief Executive Officer and other members of senior management;
|
2021 Proxy Statement 29
|
•
|
reviewing the Company’s compensation policies and practices;
|
•
|
reviewing executive succession plans; and
|
•
|
reviewing our executive development programs, including the performance evaluation process and incentive compensation programs.
|
30 Maximus
|
(1)
|
The amounts in this column reflect the aggregate grant date fair values, computed in accordance with FASB ASC Topic 718, of RSU awards
made on March 17, 2020 under our 2017 Equity Incentive Plan. For each of the RSU awards, the grant date fair value is calculated using the closing price of our common stock on the grant date as if these awards were vested and issued on
the grant date. The amounts shown disregard estimated forfeitures.
|
(2)
|
As of September 30, 2020, Ms. Altman held 3,056 RSUs.
|
(3)
|
As of September 30, 2020, Mr. Haley held 6,113 RSUs.
|
(4)
|
As of September 30, 2020, Ms. Madsen held 5,705 RSUs.
|
(5)
|
As of September 30, 2020, Mr. Montoni held 39,037 RSUs.
|
(6)
|
As of September 30, 2020, Mr. Pond held 248,983 RSUs.
|
(7)
|
As of September 30, 2020, Ms. Rajan held 1,019 RSUs.
|
(8)
|
As of September 30, 2020, Mr. Ruddy held 192,022 RSUs.
|
(9)
|
As of September 30, 2020, Mr. Warren held 5,094 RSUs.
|
2021 Proxy Statement 31
|
•
|
An annual retainer of $300,000 payable in restricted stock units (“RSUs”) or cash.
|
•
|
Ms. Altman received an additional $10,000 retainer for her services as the Chair of the Nominating and Governance Committee.
|
•
|
Mr. Pond received an additional $150,000 retainer for his services as Chairman of the Board and a $15,000 retainer for his services as
the Chair of the Compensation Committee.
|
•
|
Mr. Ruddy received a $20,000 retainer for his services as Chair of the Audit Committee and an additional $35,000 retainer, which is a
continuation of the additional retainer he previously received for his services as Vice-Chairman of the Board, which reflects the continuation of his leadership role on the Board and recognizes the additional time that he continues to
spend on Company matters over and above his normal director duties in his current unofficial leadership capacity.
|
•
|
RSU awards granted to our non-employee directors vest after one year; directors may elect to defer receipt of shares for their RSUs
for a longer period up to termination of service on the Board of Directors.
|
32 Maximus
|
•
|
Who We Are — Our Leadership
|
•
|
Who We Are — All of Us
|
−
|
How we value and support our human capital
|
•
|
Recruiting
|
•
|
Education and Training
|
•
|
Benefits and Rewards
|
•
|
How We Support Our Communities
|
•
|
How We Protect the Planet
|
•
|
How We Use Compliance and Control Functions to Protect our Company
|
•
|
How We Performed in 2020
|
•
|
How We are Looking Forward
|
|
Name
|
| |
Age
|
| |
Position
|
|
|
Bruce L. Caswell
|
| |
55
|
| |
Chief Executive Officer, President and Director
|
|
|
Richard J. Nadeau
|
| |
66
|
| |
Chief Financial Officer and Treasurer
|
|
|
Ilene R. Baylinson
|
| |
64
|
| |
General Manager, U.S. Services
|
|
|
Thomas D. Romeo
|
| |
65
|
| |
General Manager, U.S. Federal Services
|
|
|
Michelle F. Link
|
| |
46
|
| |
Chief Human Resources Officer
|
|
|
David R. Francis
|
| |
59
|
| |
General Counsel and Secretary
|
|
2021 Proxy Statement 33
|
•
|
Core Business Acumen: Time management, professionalism, problem solving, business writing, presentations, communications, desktop
technology, and Maximus systems
|
•
|
People Management and Leadership Development: Supervisory skills, performance management, teamwork, coaching and mentoring, and
leadership
|
•
|
Client Management and Business Development: Customer service, client relationship management, consulting skills, sales and marketing,
and proposal writing
|
•
|
Project Management: Scope, contracts, financials, quality, risk, and communications management
|
•
|
Maximus University: The Company’s internal development site where employees can:
|
−
|
Access training tools and systems
|
−
|
Register for upcoming courses
|
−
|
View past training recordings
|
−
|
Explore working from home resources
|
34 Maximus
|
•
|
Workday Learning (U.S. only): The Company’s web-based learning enablement system through which employees can:
|
−
|
Register and take self-paced training
|
−
|
View training history
|
−
|
Complete onboarding tasks and compliance training
|
−
|
Complete annual compliance training
|
•
|
Workday Performance (U.S. only): The Company’s web-based performance system where employees can set and maintain business goals
|
•
|
Percipio (Global): An online learning tool providing more than 13,195 online learning resources to our global exempt and professional
employees
|
|
EMPLOYEES TRAINED
|
| |||
|
Compliance (Global)
|
| |
|
|
|
New Hires:
|
| |
25,921
|
|
|
Annual Compliance Refresher:
|
| |
20,273
|
|
|
Outside of the U.S.
|
| |
6,433
|
|
|
Total Number of Employees Trained (Compliance): 52,627
|
| |||
|
Ongoing Development* (Global)
*Employees engaged in
elective training
|
| |
|
|
|
Self-Directed:
|
| |
14,106
|
|
|
Instructor-Led (CED sessions only):
|
| |
8,888
|
|
|
Total Number of Employees Trained (Ongoing Development): 22,994
|
|
2021 Proxy Statement 35
|
•
|
Providing core benefits that help bring employees peace of mind and financial stability should the unexpected occur, with some of
those benefits covered at 100% by Maximus;
|
•
|
Partnering with benefit carriers that provide strong networks of physicians to provide employees and their family with the best
available care;
|
•
|
Offering a competitive, yet affordable package that provides comprehensive coverage.
|
•
|
401(k) Retirement Plan with 50% company match up to the first 6% contributed;
|
•
|
Account based medical coverage, either and HRA or HSA;
|
•
|
Prescription drug coverage, which includes free generic drugs for chronic conditions;
|
•
|
Dental and vision insurance;
|
•
|
Flexible Spending Account (“FSA”) for eligible healthcare and dependent care expenses;
|
•
|
Short and Long Term Disability Insurance;
|
•
|
Life Insurance/Accidental Death and Dismemberment Insurance;
|
•
|
Nationwide childcare discounts;
|
•
|
Legal Services;
|
•
|
Employee Assistance Program;
|
•
|
Paid time off;
|
•
|
Project bonuses for employee accomplishments above and beyond expectations; and
|
•
|
Project manager awards for employees who demonstrate an unparalleled commitment to our clients.
|
36 Maximus
|
•
|
Retention support for all military connected employees and benefits and programming designed specifically for active Guard and Reserve
employees
|
•
|
Partnering with the Posse Foundation’s Veterans Program to provide professional development workshops and orientation support for
post-9/11 veterans pursuing bachelor’s degrees at colleges and universities across the country
|
2021 Proxy Statement 37
|
•
|
Promoting the hiring of veterans through targeted sourcing strategies and outreach to veteran service organizations to increase the
pool of qualified military-related applicants
|
•
|
Veterans recognition month every November and spotlights of our military and veteran employees
|
•
|
Military Spouse Employment Partnership participation in hiring events, quarterly partner meetings, and employer roundtables
|
•
|
Eliminating paper waste through innovative solutions. We work hand-in-hand with our government clients to recommend ways to reduce
paper consumption; this can often be a more cost-effective way to achieve business goals. For example:
|
−
|
Replacing traditional paper services with electronic services
|
−
|
Developing intranet sites to post program information and reports using electronic “fast alerts” to keep staff abreast of important
information
|
−
|
Encouraging clients to authorize telephone and web program enrollments as opposed to using and mailing paper enrollments, resulting in
a reduced reliance on printed collateral materials and paper products
|
−
|
Enabling community-based organizations to implement efficient business practices by providing technology and technical assistance to
submit program enrollments electronically
|
•
|
Reducing, reusing and recycling office waste wherever possible. For example:
|
−
|
Installing safe and efficient water filtration systems to replace bottled water coolers
|
−
|
Using recycled paper for mailings and promotional materials
|
•
|
Conserving energy to reduce carbon emissions. For example:
|
−
|
Implementing staggered climate control daily start-up times and building temperature standards for summer cooling and winter heating
|
−
|
Installing sun film on sun-exposed windows to reduce glare and hot spots within our facility to lower electricity usage from climate
control systems
|
−
|
Piloting our LED light installation program across 13 sites in the U.S. during fiscal year 2020 which is projected to provide more
than $1 million and 5.5 million kWh in savings per year.
|
•
|
ensure the integrity of our operations and financial reporting as a global business with multiple foreign operations;
|
•
|
prevent, manage and mitigate enterprise-wide risk;
|
•
|
provide for independent review and assurance of our operations with early identification of contractual or operational performance
issues;
|
•
|
promote the safety, security and integrity of our technology and services; and
|
•
|
safeguard the value of the Maximus brand through the consistent delivery of quality services that lead to long-term
client relationships.
|
38 Maximus
|
•
|
a formal structure for overseeing compliance;
|
•
|
written standards and policies;
|
•
|
regular training and education to promote compliance;
|
•
|
effective, retaliation-free lines of communication for reporting suspected violations;
|
•
|
mandatory data and privacy security training on an annual basis supplemented by internal testing throughout the year to ensure
employees understand the appropriate processes;
|
•
|
information security controls frameworks, such as HIPAA, NIST SP800-53, CMS MARS-E, IRS 1075, ISO27001, and more that define how we
ensure confidentiality, integrity, and the availability of information that can be measured;
|
•
|
internal monitoring and auditing;
|
•
|
response and corrective action plans; and
|
•
|
well-publicized disciplinary guidelines.
|
•
|
Our revenue increased to $3.46 billion compared to $2.89 billion reported for fiscal year 2019, driven primarily by the Census
contract in the U.S. Federal Services Segment and new COVID-19 response work to assist governments in supporting individuals and families during the global pandemic.
|
•
|
We reported operating profit margin of 8.3% and diluted earnings per share of $3.39.
|
•
|
We had cash flows from operations of approximately $245 million and free cash flow1 of approximately $204 million
|
•
|
We held cash and cash equivalents of approximately $72 million and had no outstanding borrowings on our corporate credit facility at
September 30, 2020.
|
•
|
We increased our quarterly dividend to $0.28 per share of Maximus common stock compared to $0.25 per share in the prior year
|
•
|
We performed new services to assist government clients in the U.S. in their COVID-19 response efforts. Our revenue on these contracts,
which excludes the extension of planned work related to the Census Questionnaire Assistance (“Census”) contract, was approximately $200 million and was earned in the second half of the fiscal year.
|
•
|
We continued our work on the Census contract in support of the U.S. decennial census. Our revenue on this contract was $515 million,
compared to $185 million in the prior year.
|
1
|
"Free cash flow" is a non-GAAP term. A description of how we calculate free cash flow, as well as a
summary of our use of non-GAAP numbers, may be found in Item 7 of our Annual Report on Form 10-K for the year ended September 30, 2020, and filed with the SEC on November 19, 2020.
|
2021 Proxy Statement 39
|
A.
|
The lines represent index levels derived from compounded daily returns that include all dividends.
|
B.
|
The indexes are reweighted daily, using the market capitalization on the previous trading day.
|
C.
|
If the monthly interval, based on the fiscal year-end, is not a trading day, the preceding trading day is used.
|
D.
|
The index level for all series was set to $100.00 on September 30, 2015.
|
40 Maximus
|
2021 Proxy Statement 41
|
2021 Proxy Statement 43
|
|
|
44 Maximus
|
|
|
| |
2020
|
| |
2019
|
| |
2018
|
| |
3-Year
Average
|
|
|
Stock Options/ SARs Granted
|
| |
0
|
| |
0
|
| |
0
|
| |||
|
Stock-Settled Full-Value Shares/Units Granted
|
| |
382,795
|
| |
382,706
|
| |
365,071
|
| |||
|
Weighted-Average Basic Common Shares Outstanding at year end
|
| |
63,062,000
|
| |
64,498,000
|
| |
65,501,000
|
| |||
|
Share Usage Rate
|
| |
0.61%
|
| |
0.59%
|
| |
0.56%
|
| |
0.59%
|
|
|
Stock Options/SARs Outstanding
|
| |
0
|
|
|
Weighted-Average Exercise Price of Outstanding Stock Options/SARs
|
| |
N/A
|
|
|
Weighted-Average Remaining Term of Outstanding Stock Options/SARS
|
| |
N/A
|
|
|
Total Stock-Settled Full-Value Awards Outstanding
|
| |
642,411
|
|
|
Remaining shares available for grant under the 2017 Plan as of September 30, 2020*
|
| |
520,364
|
|
|
Proposed share reserve under the 2021 Plan**
|
| |
3,100,000
|
|
|
Basic common shares outstanding as of the record date (January 15, 2021)
|
| |
61,452,520
|
|
*
|
For reference purposes, the remaining shares available for grant under the 2017 Plan is specified as of fiscal year end.
|
**
|
The proposed share reserve will be increased by the number of shares (if any) that remain available for grant under the 2017 Plan as
of the Effective Date of the 2021 Plan. Upon shareholder approval of the 2021 Plan, no further awards will be made under the 2017 Plan.
|
2021 Proxy Statement 45
|
46 Maximus
|
2021 Proxy Statement 47
|
48 Maximus
|
•
|
Require that shares of stock of the corporation resulting from such Change in Control, or a parent corporation thereof, be equitably
substituted for some or all of the shares subject to an outstanding award;
|
•
|
Provide that (A) some or all outstanding options and SARs shall become exercisable in full or in part, either immediately or upon a
subsequent termination of employment, (B) the restriction period applicable to some or all outstanding awards shall lapse in full or in part, either immediately or upon a subsequent termination of employment, (C) the performance period
applicable to some or all outstanding awards shall lapse in full or in part, and (D) the performance criteria applicable to some or all outstanding awards shall be deemed to be satisfied at the target or any other level; and/or
|
•
|
Require outstanding awards, in whole or in part, to be surrendered to the Company by the holder, and to be immediately cancelled by
the Company, and to provide for the holder to receive (A) a cash payment in an amount equal to (1) in the case of an option or an SAR, the aggregate number of shares then subject to the portion of such option or SAR surrendered multiplied
by the excess, if any, of the Change in Control Price (as defined below), over the exercise price or grant price per share subject to such option or SAR, (2) in the case of a performance-based award denominated in shares, the aggregate
number of shares then subject to the portion of such award surrendered to the extent the performance criteria applicable to such award have been satisfied or are deemed satisfied, multiplied by the Change in Control Price, and (3) in the
case of a performance-based award denominated in cash, the value of the award then subject to the portion of such award surrendered to the extent the performance criteria applicable to such award have been satisfied or are deemed
satisfied; (B) shares of capital stock of the corporation resulting from or succeeding to the business of the Company pursuant to such Change in Control, or a parent corporation thereof, having a fair market value not less than the amount
determined under clause (A) above; or (C) a combination of the payment of cash pursuant to clause (A) above and the issuance of shares pursuant to clause (B) above.
|
2021 Proxy Statement 49
|
50 Maximus
|
2021 Proxy Statement 51
|
52 Maximus
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
54 Maximus
|
•
|
establishing and maintaining our internal control over financial reporting;
|
•
|
assessing the effectiveness of our internal control over financial reporting as of the end of each year; and
|
•
|
the preparation, presentation and integrity of our consolidated financial statements.
|
2021 Proxy Statement 55
|
•
|
performing an independent audit of our consolidated financial statements and our internal control over financial reporting;
|
•
|
expressing an opinion as to the conformity of our consolidated financial statements with U.S. generally accepted accounting
principles; and
|
•
|
expressing an opinion as to management’s assessment of the effectiveness of our internal control over financial reporting and the
effectiveness of our internal control over financial reporting.
|
•
|
the appointment, compensation, retention and oversight of the work of the independent registered accounting firm engaged for the
purpose of preparing or issuing an audit report or performing other audit, review or attestation services for us; and
|
•
|
overseeing and reviewing our accounting and financial reporting processes.
|
56 Maximus
|
|
Name
|
| |
Position
|
| |
|
|
|
Bruce L. Caswell
|
| |
Chief Executive Officer, President and Director
|
| |
|
|
|
Richard J. Nadeau
|
| |
Chief Financial Officer and Treasurer
|
| |
|
|
|
Ilene R. Baylinson
|
| |
General Manager, U.S. Services
|
| |
|
|
|
Thomas D. Romeo
|
| |
General Manager, U.S. Federal Services
|
| |
|
|
|
David R. Francis
|
| |
General Counsel and Secretary
|
| |
|
|
•
|
Solid fiscal year 2020 performance despite significant COVID-19 global pandemic impact
|
•
|
Underscoring the importance of the services we provide, many of our U.S. contracts were designated as “essential” by government
agencies in the midst of COVID-19
|
•
|
Board of Directors and management prioritized employee health & wellbeing and operational continuity during these unprecedented
times
|
•
|
The Compensation Committee established a second half management bonus plan based on revised fiscal year 2020 guidance which remained
consistent with our internal business plan
|
•
|
Introducing performance stock units in the 2021 compensation plan, in response to shareholder feedback
|
•
|
Renamed the U.S. Health & Human Services Segment to the U.S. Services Segment
|
•
|
an aim to increase its growing clinical services;
|
2021 Proxy Statement 57
|
•
|
a digital transformation embedded in its service offerings; and
|
•
|
a desire to seek strategic acquisitions as a means to set the platform for organic revenue growth.
|
•
|
We assisted the Centers for Disease Control and Prevention (“CDC”) by deploying additional
agents to expand operations to 24/7 coverage. When call volumes peaked in April 2020, 500 agents were responding to more than 16,000 calls and 2,000 emails per day from healthcare providers and the public.
|
•
|
As one of the nation’s leading providers of contact tracing, we gathered new insights and
quality measures to increase the probability of success. Since early May 2020, we hired, trained and deployed more than 1,100 agents.
|
•
|
In just four days, we launched an outbound call center for the Office of the Assistant Secretary for Health (“OASH”). More than 260
onsite and home-based agents provided COVID-19 testing results notification to individuals, and we provided HHS staff with real-time reports of results by area and age.
|
•
|
Since March 2020, we hired, trained, and deployed nearly 2,500 work from home agents to support unemployment
programs in the U.S., with the majority of these programs launched in less than a week.
|
•
|
We worked tirelessly to ensure that we protected our employees while still serving the
government and the vulnerable populations who rely on the health and human services programs we operate. The resilience of our business model has been impressive,
and of our employees even more so.
|
•
|
Revenue increased to $3.46 billion in fiscal year 2020 compared to $2.89 billion reported for fiscal year 2019, driven by the Census
contract in the U.S. Federal Services Segment and new COVID-19 response work to assist governments in supporting individuals and families during the global pandemic
|
•
|
Organic revenue growth of 15.7% in fiscal year 2020, or 4.6% excluding the Census contract
|
•
|
Operating margin of 8.3% and diluted earnings per share of $3.39 for fiscal year 2020 were lower compared to the prior year. Reduced
volumes on core programs in the U.S. where pandemic-related program changes were instituted at the direction of our state and federal clients, a greater mix of cost-plus work in fiscal year 2020, and unfavorable pandemic-related impacts
in operations outside the U.S.
|
•
|
Continued our quarterly cash dividend of $0.28 for each share of our common stock throughout fiscal 2020
|
58 Maximus
|
•
|
Our financial and operating performance, measured by attainment of specific objectives including a variety of organizational financial
and non-financial measures;
|
•
|
The duties, responsibilities, and performance of each executive officer, including the achievement of identified goals for the year as
they pertain to the business operations for which the executive is personally responsible and accountable;
|
•
|
Total overall compensation levels, as well as the mix of salary, cash bonus incentives, and equity incentives;
|
•
|
Comparative industry market data to assess compensation competitiveness; and
|
•
|
Internal pay equity considerations.
|
|
Compensation
Component
|
| |
|
| |
Link to Business
and Talent Strategies
|
| |
|
| |
Fiscal Year 2020
Compensation Actions
|
|
|
Base Salary (Page 63)
|
| |
•
|
| |
Competitive base salaries help attract and retain executive talent.
|
| |
•
|
| |
Mr. Caswell’s salary increased 3.4%.
|
|
|
|
| |
|
| |
•
|
| |
Salary increases of 3.0% - 5.0% for other NEOs.
|
| |||
|
Management Bonus Plan (“MBP”) Compensation (Page 65)
|
| |
•
|
| |
Focus executives on achieving annual financial and non-financial results that are key indicators of
annual financial and operational performance.
|
| |
•
|
| |
Distributable Income and Revenue exceeded target performance. The Company did not achieve the
threshold level of performance for New Business Awards.
|
|
|
•
|
| |
MBP pool is funded based on three metrics – Distributable Income (70% weighting), Revenue (15%
weighting) and New Business Awards (15% weighting).
|
| |
•
|
| |
The MBP payouts for NEOs, based on the compensation formulas and prior to discretion, were calculated
at 133% of target.
|
| |||
|
•
|
| |
Individual payouts are determined based on the Compensation Committee’s assessment of the Company’s
financial performance and individual contribution.
|
| |
•
|
| |
However, given the ongoing COVID-19 impact, the Compensation Committee exercised negative discretion
with respect to the NEOs – accordingly, our CEO was paid 88% of target bonus and the other NEOs were paid 90% of target bonus.
|
| |||
|
|
| |
|
| |
•
|
| |
MBP funding released due to discretionary reductions re-allocated to other plan participants
|
| |||
|
Long-Term Incentive Plan Compensation (Page 66)
|
| |
•
|
| |
Fiscal year 2020 annual equity-based awards consist of restricted stock units (“RSUs”).
|
| |
•
|
| |
RSUs vest over five years, in equal annual installments.
|
|
|
•
|
| |
RSUs provide focus on stock price growth and serve our talent retention objectives.
|
| |
|
|
2021 Proxy Statement 59
|
•
|
We will introduce performance stock units (“PSUs”), which will be weighted at 50% of the annual long-term equity grant value; and
|
•
|
All equity award grants will have “double trigger” change in control provisions.
|
|
Name and Position
|
| |
2021 Annual Salary
|
| |
2020 Annual Salary
|
| |
Percentage Change
|
|
|
Bruce L. Caswell
Chief Executive Officer and President
|
| |
$750,000
|
| |
$750,000
|
| |
0.0%
|
|
|
Richard J. Nadeau
Chief Financial Officer
|
| |
$525,000
|
| |
$525,000
|
| |
0.0%
|
|
|
Ilene R. Baylinson
GM U.S. Services
|
| |
$515,000
|
| |
$515,000
|
| |
0.0%
|
|
|
Thomas D. Romeo
GM U.S. Federal Services
|
| |
$465,000
|
| |
$465,000
|
| |
0.0%
|
|
|
David R. Francis
General Counsel
|
| |
$427,450
|
| |
$427,450
|
| |
0.0%
|
|
•
|
Financial measures, consisting of net operating income and new business awards, will be the predominant factors and weighted 85%; and
|
•
|
New strategic objectives, including relating to diversity and inclusion, will be weighted 15%.
|
60 Maximus
|
•
|
3-year adjusted earnings per share growth, and
|
•
|
3-year total shareholder return (“TSR”) relative to the companies comprising the S&P 400 Index.
|
|
|
| |
Fiscal Year 2021 Total Direct Compensation Element
|
| |||||||||
|
|
| |
Base Salary
|
| |
Annual Cash
Incentive
|
| |
PSU
|
| |
RSU
|
|
|
Who Receives
|
| |
All NEOs
|
| |||||||||
|
When Granted
|
| |
Annually
|
| |||||||||
|
Form of Delivery
|
| |
Cash
|
| |
Equity
|
| ||||||
|
Type of Performance
|
| |
Short-term emphasis (fixed)
|
| |
Short-term emphasis (variable)
|
| |
Long-term emphasis (variable)
|
| |||
|
Performance Period
|
| |
1 year
|
| |
1 year
|
| |
3 years
|
| |
3 years (ratable annual vesting)
|
|
|
How Payout Determined
|
| |
Compensation Committee determination
|
| |
Pre-established formula
|
| |
Pre-established formula
|
| |
Stock price at each vesting date
|
|
|
Fiscal Year 2021 Performance Measures
|
| |
Individual. There will be no base salary increase for fiscal year 2021
|
| |
Net Operating Income; New Contract Awards; Strategic Objectives
|
| |
Earnings per Share Growth; Relative TSR
|
| |
Stock price
|
|
•
|
Performance-oriented and tied to individual and Company-wide achievement to motivate
executives to attain the Company’s short and long-term financial and strategic objectives. Variable pay constitutes a majority of total compensation.
|
•
|
Alignment with external talent markets we compete in, to support the attraction, motivation
and retention of top talent while remaining competitive with Maximus peer companies.
|
•
|
Fair and equitable compensation allocated based on the expected contributions of an individual
along with their skills, abilities, competencies and performance.
|
2021 Proxy Statement 61
|
|
✔
|
| |
Provide short-term and long-term incentive plans with performance targets aligned to business goals
|
| |
✘
|
| |
Do not allow directors or executives to engage in hedging or pledging of Maximus securities
|
|
|
✔
|
| |
Maintain a Compensation Committee composed entirely of independent directors who are advised by an
independent compensation consultant
|
| |
✘
|
| |
Do not encourage or reward executives for excessive, imprudent, inappropriate, or unnecessary
risk-taking
|
|
|
✔
|
| |
Require stock ownership for all senior leaders
|
| |
✘
|
| |
Do not allow the repricing or backdating of equity awards
|
|
|
✔
|
| |
Beginning with fiscal year 2021 grants, require equity awards to have double trigger change in
control provisions
|
| |
✘
|
| |
Do not have excise tax gross-ups
|
|
|
✔
|
| |
Complete an annual incentive compensation risk review
|
| |
✘
|
| |
Do not allow dividends or dividend equivalents on unearned performance-based awards
|
|
|
✔
|
| |
Require cash and equity incentive awards for all executive officers to be subject to clawback and
cancellation provisions
|
| |
✘
|
| |
Do not allow repricing of underwater stock options without stockholder approval
|
|
|
✔
|
| |
Strong shareholder and stakeholder engagement
|
| |
|
| |
|
|
|
Compensation Committee
|
| |
•
|
| |
Establishes executive compensation philosophy
|
|
|
|
| |
•
|
| |
Approves incentive compensation programs and target performance expectations for the short-term and
long-term incentive awards
|
|
|
|
| |
•
|
| |
Approves all compensation actions for the NEOs
|
|
|
Independent Board Members
|
| |
•
|
| |
Assess performance of the CEO
|
|
|
Independent Committee Consultant
|
| |
•
|
| |
Provides independent advice, research, and analytical services on a variety of subjects to the
Compensation Committee, including compensation of executive officers, non-employee director compensation and executive compensation trends
|
|
|
|
| |
•
|
| |
Participates in Committee meetings as requested and communicates with the Chair of the Compensation
Committee between meetings
|
|
|
|
| |
•
|
| |
Pay Governance (former consultant) and FW Cook (current consultant) report solely to the Compensation
Committee; neither has performed any other services for the Company nor has economic or other ties to the Company or the management team that could compromise its independence or objectivity
|
|
|
CEO and Management
|
| |
•
|
| |
Management, including the CEO, develops preliminary recommendations regarding compensation matters
with respect to all NEOs, other than the CEO, and provides these recommendations to the Compensation Committee, which makes the final decisions, with advice from FW Cook, as appropriate
|
|
|
|
| |
•
|
| |
Responsible for the administration of the compensation programs once Compensation Committee decisions
are finalized
|
|
62 Maximus
|
|
Booz Allen Hamilton Holding Corp.
|
| |
Leidos Holdings
|
|
|
CACI International
|
| |
ManTech International
|
|
|
Conduent
|
| |
Science Applications International Corp.
|
|
|
Gartner
|
| |
Tetra Tech Inc.
|
|
|
ICF International
|
| |
Unisys Corp.
|
|
|
KBR Inc.
|
| |
|
|
•
|
Harris Corp. was removed following its merger with L3 Technologies, and
|
•
|
KBR Inc. and Tetra Tech Inc. were added to the peer group.
|
2021 Proxy Statement 63
|
|
|
| |
Fiscal Year 2019
Base Salary
|
| |
Increase
(%)
|
| |
Fiscal Year 2020 Base
Salary
|
|
|
Bruce L. Caswell
|
| |
$725,000
|
| |
3.4%
|
| |
$750,000
|
|
|
Richard J. Nadeau
|
| |
$500,000
|
| |
5.0%
|
| |
$525,000
|
|
|
Ilene R. Baylinson
|
| |
$500,000
|
| |
3.0%
|
| |
$515,000
|
|
|
Thomas D. Romeo
|
| |
$450,000
|
| |
3.3%
|
| |
$465,000
|
|
|
David R. Francis
|
| |
$415,000
|
| |
3.0%
|
| |
$427,450
|
|
•
|
Tying metrics and key indicators to our Company’s success and short-term strategic objectives;
|
•
|
Establishing performance goals that are reasonably achievable and viewed as fair, while at the same time, encouraging stretch
performance;
|
•
|
Identifying metrics that are simple to understand and can be influenced by the executives participating in the plan;
|
•
|
Increasing the executive’s target annual cash compensation with successively higher levels of responsibility; and
|
•
|
Basing annual incentive payouts earned on overall Company, as well as individual, performance.
|
|
|
| |
Fiscal Year 2020
Target Annual
Incentive as Percent
of Base Salary (%)
|
|
|
Bruce L. Caswell
|
| |
150%
|
|
|
Richard J. Nadeau
|
| |
75%
|
|
|
Ilene R. Baylinson
|
| |
60%
|
|
|
Thomas D. Romeo
|
| |
60%
|
|
|
David R. Francis
|
| |
60%
|
|
64 Maximus
|
|
|
| |
Weight
|
| |
2019 Actual
|
| |
2020
Original
Target
|
| |
2020
Revised
Target
|
| |
2020 Actual
|
|
|
Distributable Income
|
| |
70%
|
| |
$339M
|
| |
$375M
|
| |
$293M
|
| |
$315M
|
|
|
Revenue
|
| |
15%
|
| |
$2.89B
|
| |
$3.25B
|
| |
Not changed
|
| |
$3.46B
|
|
|
New Business Awards
|
| |
15%
|
| |
$1.18B
|
| |
$1.9B
|
| |
Not changed
|
| |
$1.0B
|
|
|
|
| |
Threshold
|
| |
Target
|
| |
Superior
|
| |
Actual
|
| |
Achievement
%
|
| |
Component
Payout %
|
|
|
Distributable Income ($ millions)
|
| |
$270M
|
| |
$293M
|
| |
$316M
|
| |
$314M
|
| |
107%
|
| |
146%
|
|
|
Revenues ($ billions)
|
| |
$3.15B
|
| |
$3.25B
|
| |
$3.35B
|
| |
$3.46B
|
| |
106%
|
| |
205%
|
|
|
New Business Awards ($ billions)
|
| |
$1.3B
|
| |
$1.9B
|
| |
$2.5B
|
| |
$0.9B
|
| |
47%
|
| |
0%
|
|
|
Weighted Average Payout for Financial Goals: 133%
|
|
|
|
| |
Target Annual Cash
Incentive Opportunity
|
| |
Annual Cash
Incentive Paid
|
| |
% of Target
|
|
|
Bruce L. Caswell
|
| |
$1,125,000
|
| |
$992,500
|
| |
88%
|
|
|
Richard J. Nadeau
|
| |
$393,750
|
| |
$354,375
|
| |
90%
|
|
|
Ilene R. Baylinson
|
| |
$309,000
|
| |
$278,100
|
| |
90%
|
|
|
Thomas D. Romeo
|
| |
$279,000
|
| |
$251,100
|
| |
90%
|
|
|
David R. Francis
|
| |
$256,470
|
| |
$230,823
|
| |
90%
|
|
2021 Proxy Statement 65
|
66 Maximus
|
2021 Proxy Statement 67
|
68 Maximus
|
|
Summary Compensation Table
|
| |||||||||||||||||||||
|
Name and Principal Position
|
| |
Fiscal
Year
|
| |
Salary ($)
|
| |
Bonus ($)
|
| |
Stock
Awards
($)(1)
|
| |
Non-Equity
Incentive Plan
Compensation ($)(2)
|
| |
All Other
Compensation ($)(3)
|
| |
Total ($)
|
|
|
Bruce L. Caswell
Chief Executive Officer
and President
|
| |
2020
|
| |
743,269
|
| |
0
|
| |
4,400,037
|
| |
992,500
|
| |
8,525
|
| |
6,144,331
|
|
|
2019
|
| |
718,750
|
| |
0
|
| |
4,000,000
|
| |
250,000
|
| |
7,000
|
| |
4,975,750
|
| |||
|
2018
|
| |
667.500
|
| |
0
|
| |
2,500,000
|
| |
0
|
| |
6.875
|
| |
3,174,375
|
| |||
|
Richard J. Nadeau
Chief Financial Officer
|
| |
2020
|
| |
518,269
|
| |
0
|
| |
2,000,031
|
| |
354,375
|
| |
7,125
|
| |
2,879,800
|
|
|
2019
|
| |
493,750
|
| |
0
|
| |
2,000,000
|
| |
318,750
|
| |
7,000
|
| |
2,819,500
|
| |||
|
2018
|
| |
468,750
|
| |
0
|
| |
1,400,000
|
| |
0
|
| |
6,875
|
| |
1,875,625
|
| |||
|
Ilene R. Baylinson(4)
GM U.S. Services
|
| |
2020
|
| |
510,962
|
| |
0
|
| |
1,200,003
|
| |
278,100
|
| |
7,125
|
| |
1,996,190
|
|
|
Thomas D. Romeo(4)
GM U.S. Federal Services
|
| |
2020
|
| |
455,811
|
| |
0
|
| |
1,200,003
|
| |
251,100
|
| |
8,525
|
| |
1,915,439
|
|
|
David R. Francis
General Counsel
|
| |
2020
|
| |
424,098
|
| |
0
|
| |
850,034
|
| |
230,823
|
| |
7,125
|
| |
1,512,080
|
|
|
2019
|
| |
411,250
|
| |
0
|
| |
850,000
|
| |
186,750
|
| |
7,000
|
| |
1,455,000
|
| |||
|
2018
|
| |
396,250
|
| |
0
|
| |
750,000
|
| |
0
|
| |
6,875
|
| |
1,153,125
|
|
(1)
|
The amounts in this column reflect the aggregate grant date fair values, computed in accordance with FASB ASC Topic 718, of RSU awards
granted during the applicable year. For each of the RSU awards, the grant date fair value is calculated using the closing price of our common stock on the grant date as if the awards were vested and issued on the grant date. The amounts
shown disregard estimated forfeitures. There can be no assurance that these grant date fair values will ever be realized by the named executive officers.
|
(2)
|
The amounts in this column reflect annual cash incentive awards earned by our named executive officers.
|
(3)
|
The amounts in this column reflect the Company match for 401(k) and Deferred Compensation Plan contributions.
|
(4)
|
Ms. Baylinson and Mr. Romeo were first designated as executive officers in fiscal year 2020.
|
2021 Proxy Statement 69
|
(1)
|
These amounts reflect the potential range of payouts for threshold to superior performance levels (there is no maximum amount that may
be paid) under the 2020 MBP. Actual amounts paid for fiscal year 2020 performance are set forth in the Summary Compensation Table.
|
(2)
|
Threshold has been established at 50% of the executive’s target bonus.
|
(3)
|
Each executive’s target bonus is set as a percent of base pay as follows: Mr. Caswell 150%, Mr. Nadeau 75%, Ms. Baylinson 60%,
Mr. Romeo 60% and Mr. Francis 60%.
|
(4)
|
Superior has been established at 150% of the executive’s target bonus; however, that amount does not constitute an upper limit and may
be exceeded depending on Company and individual performance.
|
(5)
|
The amounts in this column reflect the aggregate grant date fair values, computed in accordance with FASB ASC Topic 718, of RSU awards
made during the applicable fiscal year under our 2017 Equity Incentive Plan. For each of the RSU awards, the grant date fair value is calculated using the closing price of our common stock on the grant date as if these awards were vested
and issued on the grant date. The amounts shown disregard estimated forfeitures.
|
4
|
This number accounts for an earlier employee count than the September 30, 2020 employee count of
approximately 34,000 which we note elsewhere in this document and the 10K. This exercise was completed earlier this year to allow additional time for data collection outside of the United States,
due to the additional constraints on the business resources caused by COVID-19.
|
70 Maximus
|
(1)
|
The market value of the RSUs is based on the $68.41 closing price of a share of our common stock as of September 30, 2020, the last
trading day of our fiscal year as reported on the NYSE.
|
(2)
|
RSUs will vest on September 30, 2021, the fifth year after the year of grant.
|
(3)
|
One-half of these RSUs will vest on each of September 30, 2021 and September 30, 2022, the fourth and fifth years, respectively, after
the year of grant.
|
(4)
|
One-third of these RSUs will vest on each of September 30, 2021, September 30, 2022 and September 30, 2023, the third, fourth and
fifth years, respectively, after the year of grant.
|
(5)
|
One-fourth of these RSUs will vest on each of September 30, 2021, September 30, 2022, September 30, 2023 and September 30, 2024, the
second, third, fourth and fifth years, respectively, after the year of grant.
|
|
Stock Vested in Fiscal Year 2020
|
| ||||||
|
|
| |
Stock (RSU) Awards Vested
|
| |||
|
Name
|
| |
Number of Shares
Acquired on Vesting
|
| |
Value Realized
on Vesting ($)(1)
|
|
|
Bruce L. Caswell
|
| |
48,241
|
| |
$3,300,147
|
|
|
Richard J. Nadeau(2)
|
| |
25,574
|
| |
$1,749,490
|
|
|
Ilene R. Baylinson
|
| |
18,322
|
| |
$1,253,415
|
|
|
Thomas D. Romeo
|
| |
12,951
|
| |
$885,961
|
|
|
David R. Francis
|
| |
12,926
|
| |
$884,269
|
|
(1)
|
The value realized on vesting is calculated as the number of shares acquired on vesting multiplied by the market value of the
underlying shares on the vesting date.
|
(2)
|
Pursuant to the 2017 Equity Incentive Plan, Mr. Nadeau elected to defer settlement of 15,896 RSUs that vested on September 30, 2020.
Those shares will be distributed in ratable annual installments beginning October 1, 2022. The shares underlying such RSUs and the value realized on vesting are reflected in this table.
|
2021 Proxy Statement 71
|
(1)
|
For Mr. Caswell and Mr. Romeo, the deferrals were made under the Deferred Compensation Plan. For Mr. Nadeau, the deferral was made
under the 2017 Equity Incentive Plan.
|
(2)
|
Amount reflects the value of RSUs granted under the 2017 Equity Incentive Plan (and described in footnote 2 to the Stock Vested in
Fiscal Year 2020 Table above), that vested in 2020 which Mr. Nadeau elected to defer. The value was determined based on the number of RSUs vested and deferred multiplied by the market value of the underlying shares on the vesting date.
|
(3)
|
Amount reflects the aggregate value of the vested and deferred RSUs based on the $68.41 closing price of a share of our common stock
on the last business day of our fiscal year ended September 30, 2020.
|
72 Maximus
|
|
|
| |
Continued Vesting
of RSUs over Their
Stated Terms ($)
|
|
|
Bruce L. Caswell
|
| |
$7,322,179
|
|
|
Richard J. Nadeau(1)
|
| |
$3,612,809
|
|
|
Ilene R. Baylinson
|
| |
$2,448,202
|
|
|
Thomas D. Romeo
|
| |
$1,737,902
|
|
|
David R. Francis
|
| |
$1,664,883
|
|
(1)
|
As previously announced, Mr. Nadeau elected to retire effective November 30, 2021. Mr. Nadeau will participate in this program.
|
•
|
a severance amount equal to one time (two times in the case of the CEO) an executive’s base salary plus the lesser of his/her target
bonus or previous year’s actual bonus;
|
•
|
one year’s worth of executive-level outplacement services;
|
•
|
benefits continuation for one year;
|
•
|
unvested stock options and RSUs shall generally be forfeited; however, the Compensation Committee retains discretion to approve
continued or accelerated vesting, with the expectation that such discretion shall be exercised rarely;
|
•
|
executives with written agreements or offer letters that address severance shall be entitled to whatever higher level of compensation
and benefits might be set forth in those documents.
|
|
|
| |
Cash-Based
|
| |
Equity-Based
|
| |
|
| ||||||
|
Name
|
| |
Cash
Severance ($)
|
| |
Misc.
Benefits ($)(1)
|
| |
Total
Cash-Based ($)
|
| |
Stock-Based
Awards ($)(2)
|
| |
Total
Pre-Tax
Benefit ($)
|
|
|
Bruce L. Caswell(3)
|
| |
2,000,000
|
| |
107,304
|
| |
2,107,304
|
| |
7,322,179
|
| |
9,429,483
|
|
|
Richard J. Nadeau
|
| |
843,750
|
| |
67,353
|
| |
911,103
|
| |
0
|
| |
911,103
|
|
|
Ilene R. Baylinson
|
| |
765,000
|
| |
59,062
|
| |
824,062
|
| |
0
|
| |
824,062
|
|
|
Thomas D. Romeo
|
| |
715,000
|
| |
67,353
|
| |
782,353
|
| |
0
|
| |
782,353
|
|
|
David R. Francis
|
| |
614,200
|
| |
67,353
|
| |
681,553
|
| |
0
|
| |
681,553
|
|
(1)
|
The miscellaneous benefits amount includes an estimated $50,000 intended for outplacement services. It also includes 12 months’ worth
of employee benefits (30 months in the case of Mr. Caswell pursuant to the terms of his employment agreement) which include medical, dental, life insurance, and disability benefits made available to an executive (and his or her eligible
dependents) prior to termination.
|
(2)
|
An executive may also be entitled to continued vesting of equity awards provided he or she has complied with the terms of the
Retirement Program for Key Executives described above.
|
(3)
|
Mr. Caswell's entitlement to compensation upon termination of employment is governed by his Employment Agreement as described above in
Supplemental Discussion of Compensation. His RSUs will continue to vest over their stated terms pursuant to that agreement.
|
2021 Proxy Statement 73
|
•
|
a lump sum cash payment equal to the sum of (i) any unpaid salary through the date of termination, (ii) any bonus earned but unpaid as
of the date of termination for any previously completed year, (iii) reimbursement for any unreimbursed expenses incurred prior to the date of termination, and (iv) an amount equal to 200% (300% in the case of the Chief Executive Officer)
of base salary and bonus (which is defined as the higher of the individual’s target bonus or the average of the actual bonuses paid over the previous three years);
|
•
|
the vesting of any unvested stock options, RSUs, or similar equity incentives that are outstanding on the date of termination (to the
extent that such awards have not vested in connection with a change in control; see the description of terms applicable to RSU awards in the next section below);
|
•
|
continued eligibility for employee benefits for a period of 24 months (36 months in the case of the Chief Executive Officer) following
the date of termination; and
|
•
|
a lump sum, payable within ten days following the date of termination, equal to $50,000, which is intended for outplacement and
financial planning services.
|
|
|
| |
Cash-Based
|
| |
Equity-Based
|
| |
|
| ||||||
|
Name
|
| |
Cash
Severance ($)
|
| |
Misc.
Benefits ($)(1)
|
| |
Total
Cash-Based ($)
|
| |
Stock-Based
Awards ($)(2)
|
| |
Total Pre-Tax
Benefit ($)
|
|
|
Bruce L. Caswell(2)
|
| |
5,625,000
|
| |
117,031
|
| |
5,742,031
|
| |
7,322,179
|
| |
13,064,210
|
|
|
Richard J. Nadeau
|
| |
1,837,500
|
| |
84,705
|
| |
1,922,205
|
| |
3,612,809
|
| |
5,535,014
|
|
|
Ilene R. Baylinson
|
| |
1,648,000
|
| |
68,124
|
| |
1,716,124
|
| |
2,448,202
|
| |
4,164,326
|
|
|
Thomas D. Romeo
|
| |
1,488,000
|
| |
84,705
|
| |
1,572,705
|
| |
1,737,902
|
| |
3,310,607
|
|
|
David R. Francis
|
| |
1,367,840
|
| |
84,705
|
| |
1,452,545
|
| |
1,664,883
|
| |
3,117,428
|
|
(1)
|
The miscellaneous benefits amount includes $50,000 intended for outplacement and financial planning services, but which may be used
for any purpose. It also includes 36 months’ worth of employee benefits in the case of the Chief Executive Officer and 24 months’ worth of employee benefits in the case of the other NEOs which include medical, dental, life insurance and
disability benefits made available to an executive (and his or her eligible dependents) prior to a change in control.
|
(2)
|
Mr. Caswell's Employment Agreement incorporates the terms of the Company's Income Continuity Program.
|
74 Maximus
|
|
|
| |
Cash-Based
|
| |
Equity-Based
|
| |
|
|
|
Name
|
| |
Cash
Severance ($)
|
| |
Stock-Based
Awards ($)(1)
|
| |
Total Pre-Tax
Benefit ($)
|
|
|
Bruce L. Caswell
|
| |
—
|
| |
7,322,179
|
| |
7,322,179
|
|
|
Richard J. Nadeau
|
| |
—
|
| |
3,612,809
|
| |
3,612,809
|
|
|
Ilene R. Baylinson
|
| |
—
|
| |
2,448,202
|
| |
2,448,202
|
|
|
Thomas D. Romeo
|
| |
—
|
| |
1,737,902
|
| |
1,737,902
|
|
|
David R. Francis
|
| |
—
|
| |
1,664,883
|
| |
1,664,883
|
|
(1)
|
Note that the amounts in this column are included in the preceding table reflecting Potential
Payments upon Change in Control Involving Employment Termination and are not in addition to those amounts.
|
|
|
| |
Number of securities to
be issued upon exercise
of outstanding options,
warrants and rights
|
| |
Weighted average
exercise price of
outstanding options,
warrants and rights
|
| |
Number of securities
remaining available for
future issuance under
equity compensation
plans(1)
|
|
|
Equity compensation plans/arrangements approved by the shareholders
|
| |
642,411
|
| |
—
|
| |
520,364
|
|
|
Equity compensation plans/arrangements not approved by the shareholders
|
| |
—
|
| |
—
|
| |
—
|
|
|
Total
|
| |
642,411
|
| |
—
|
| |
520,364
|
|
(1)
|
In addition to being available for future issuance upon exercise of options that may be granted after September 30, 2020, all shares
under the 2017 Equity Incentive Plan may be issued in the form of restricted stock, performance shares, stock appreciation rights, stock units, or other stock-based awards. Upon shareholder approval of the 2021 Omnibus Incentive Plan (as
described in Proposal 2), no further awards will be made under the 2017 Equity Plan.
|
2021 Proxy Statement 75
|
76 Maximus
|
2021 Proxy Statement 77
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
•
|
substantial emphasis on performance-based incentive compensation -- 85% of the target compensation of
Mr. Caswell and at least 67% of the target compensation of the other named executive officers is variable, at-risk compensation
|
•
|
no guarantees of salary increases, bonuses, or equity awards
|
•
|
modest executive benefits and perquisites
|
•
|
no extraordinary relocation benefits (including home buy-outs)
|
•
|
no repricing of stock options without mandatory shareholder consent
|
•
|
cash-based payments under the Income Continuity Program based on a double trigger (i.e., a change in
control coupled with a termination of employment) and no tax gross-up
|
•
|
equity ownership requirements for directors and executive officers
|
•
|
anti-hedging and anti-pledging policies applicable to all directors, officers, and employees
|
•
|
clawback policy applicable to executive officers for incentive payments and equity-based awards
|
•
|
reasonable burn rate for equity awards
|
•
|
overall compensation in line with that of comparable companies.
|
2021 Proxy Statement 79
|
|
1.
|
Company policy and procedures governing lobbying, both direct and indirect, and grassroots lobbying communications.
|
2.
|
Payments by MAXIMUS used for (a) direct or indirect lobbying or (b) grassroots lobbying communications, in each case including the
amount of the payment and the recipient.
|
3.
|
MAXIMUS's membership in and payments to any tax-exempt organization that writes and endorses model legislation.
|
4.
|
Description of management's and the Board's decision-making process and oversight for making payments described in sections 2 and 3
above.
|
5
|
https://publicintegrity.org/state-politics/here-are-the-interests-lobbying-in-every-statehouse/
|
6
|
https://www.typeinvestigations.org/blog/2020/20/tipsheet-tracking-the monetization-of-the-safety-net/
|
2021 Proxy Statement 81
|
|
7
|
https://maximus.com/our-company
|
8
|
https://nymag.com/intelligencer/2020/02/for-maximus-inequality-is-big-business.html
|
9
|
https://www.motherjones.com/politics/2018/12/how-one-company-is-making-millions-off-trumps-war-on-the-poor/
|
|
82 Maximus
|
2021 Proxy Statement 83
|
|
|
Name and Address of Beneficial Owner
|
| |
Amount and Nature of
Beneficial Ownership
|
| |
Percent of
Class
|
|
|
BlackRock, Inc.
55 East 52nd
Street
New York, New York 10055
|
| |
7,568,140(1)
|
| |
12.3%
|
|
|
The Vanguard Group
100 Vanguard Boulevard
Malvern, Pennsylvania 19355
|
| |
7,085,384(2)
|
| |
11.5%
|
|
|
Victory Capital Management Inc.
4900 Tiedeman Road, 4th
Floor
Brooklyn, Ohio 44144
|
| |
4,411,659(3)
|
| |
7.2%
|
|
(1)
|
According to a Schedule 13G/A filed with the SEC on February 4, 2020, BlackRock, Inc. reported that through BlackRock Advisors, LLC,
BlackRock (Netherlands) B.V., BlackRock Fund Advisors, BlackRock Institutional Trust Company, N.A., BlackRock Asset Management Ireland Limited, BlackRock Financial Management, Inc., BlackRock Japan Co., Ltd., BlackRock Asset Management
Shweiz AG, BlackRock Investment Management LLC, FutureAdvisor, Inc., BlackRock Investment Management (UK) Limited, BlackRock Asset Management Canada Limited and BlackRock Investment Management (Australia) Limited, it had sole dispositive
power over 7,568,140 shares of common stock and sole voting power with respect to 7,451,184 shares of common stock.
|
(2)
|
According to a Schedule 13G/A filed with the SEC on February 12, 2020, The Vanguard Group reported that it had sole dispositive power
over 6,950,473 shares of common stock, shared dispositive power over 134,911 shares of common stock, sole voting power with respect to 135,206 shares of common stock and shared voting power with respect to 8,905 shares of common stock.
|
(3)
|
According to a Schedule 13G/A filed with the SEC on January 30, 2020, Victory Capital Management Inc. reported that it had sole
dispositive power over 4,411,659 shares of common stock and sole voting power with respect to 4,262,934 shares of common stock.
|
84 Maximus
|
|
|
| |
Amount and Nature of
Beneficial Ownership(1)
|
| |
Percent of
Class
|
|
|
Directors and Director Nominees
|
| |
|
| |
|
|
|
Anne K. Altman
|
| |
17,234
|
| |
*
|
|
|
Bruce L. Caswell
|
| |
116,816
|
| |
*
|
|
|
John J. Haley
|
| |
92,033
|
| |
*
|
|
|
Jan D. Madsen
|
| |
5,727
|
| |
*
|
|
|
Richard A. Montoni
|
| |
174,436
|
| |
*
|
|
|
Peter B. Pond
|
| |
278,582
|
| |
*
|
|
|
Gayathri Rajan
|
| |
9,538
|
| |
*
|
|
|
Raymond B. Ruddy
|
| |
331,419
|
| |
*
|
|
|
Michael J. Warren
|
| |
9,422
|
| |
*
|
|
|
Named Executive Officers (except Directors)
|
| |
|
| |
|
|
|
Richard J. Nadeau
|
| |
81,047
|
| |
*
|
|
|
Ilene R. Baylinson
|
| |
19,672
|
| |
*
|
|
|
Thomas D. Romeo
|
| |
10,705
|
| |
*
|
|
|
David R. Francis
|
| |
10,024
|
| |
*
|
|
|
All directors and executive officers as a group (14 persons)
|
| |
1,157,257
|
| |
1.9%
|
|
*
|
Percentage is less than 1% of all outstanding shares of common stock.
|
(1)
|
Certain non-employee directors have elected to defer receipt of RSUs for tax purposes over periods varying from one year until
termination of their Board service. Therefore, the amounts also include the following deferred/unvested RSUs that will vest within 60 days or could vest within 60 days in the event a non-employee director’s service on the Board of
Directors terminated: Altman 3,067, Haley 6,136, Madsen 5,727, Pond 249,954, Rajan 1,023, Ruddy 192,771, Warren 5,114, and all directors and executive officers as a group 463,792.
|
2021 Proxy Statement 85
|
86 Maximus
|
•
|
By Internet. You may vote online by accessing proxyvote.com and following the on-screen instructions. Have your Notice or proxy card available when you vote. You may vote online 24 hours a day. If you vote online, you do not need to return a proxy card.
|
•
|
By Telephone. You may vote by calling toll free 1-800-690-6903 and following the
instructions. You will need the control number included on the Notice or on your proxy card, as applicable. Have your Notice or proxy card available when you vote. If you vote by telephone, you do not need to return a proxy card.
|
•
|
By Mail. If you requested printed copies of the proxy materials, you will receive a proxy
card, and you may vote by signing, dating and mailing the proxy card in the envelope provided.
|
•
|
At the Annual Meeting. If you are a shareholder of record, you may vote online at the Annual
Meeting. You will need the 16-digit control number included on your proxy card or the instructions that accompanied your proxy materials.
|
2021 Proxy Statement 87
|
|
|
| |
Proposal
|
| |
Required Vote
|
|
|
1.
|
| |
Election of directors
|
| |
For each nominee, a majority of the votes cast are “for” such nominee.
|
|
|
2.
|
| |
2021 Omnibus Incentive Plan
|
| |
The number of votes cast “for” the proposal must exceed the number of votes cast “against” the
proposal.
|
|
|
3.
|
| |
Ratification of the Audit Committee’s selection of independent registered accounting firm
|
| |
The number of votes cast “for” the proposal must exceed the number of votes cast “against” the
proposal.
|
|
|
4.
|
| |
Advisory vote to approve named executive officer compensation
|
| |
The number of votes cast “for” the proposal must exceed the number of votes cast “against” the
proposal.
|
|
|
5.
|
| |
Shareholder proposal regarding disclosure of lobbying activities and expenditures
|
| |
The number of votes cast “for” the proposal must exceed the number of votes cast “against” the
proposal.
|
|
88 Maximus
|
2021 Proxy Statement 89
|
90 Maximus
|
|
| |
|
| |
By Order of the Board of Directors,
|
|
| |
|
| |
|
Date:January 27, 2021
|
| |
By:
|
| |
/s/ David R. Francis
|
|
| |
|
| |
David R. Francis
|
|
| |
|
| |
General Counsel and Secretary
|
2021 Proxy Statement 91
|
|
|
| |
|
| |
Page
|
|
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| | | | | |
A-2 Maximus
|
(a)
|
the willful and continued failure of the Participant substantially to perform his or her duties with or for the Company or an
Affiliate;
|
(b)
|
the Participant’s engaging in conduct that is significantly injurious to the Company or an Affiliate, monetarily or otherwise; or
|
(c)
|
the Participant’s commission of a crime that is significantly injurious to the Company or an Affiliate, monetarily, reputationally, or
otherwise.
|
2021 Proxy Statement A-3
|
(a)
|
The Beneficial Ownership of securities representing more than twenty-five percent (25%) of the combined voting power of the then
outstanding voting securities of the Company entitled to vote generally in the election of directors (the “Company Voting Securities”) is accumulated, held or acquired by a Person (other than the Company, any trustee or other fiduciary
holding securities under an employee benefit plan of the Company or an Affiliate thereof, or any corporation owned, directly or indirectly, by the Company’s shareholders in substantially the same proportions as their ownership of stock of
the Company); provided, however, that any acquisition from the Company or any acquisition pursuant to a transaction that complies with clauses (i), (ii) and (iii) of subparagraph (c) of this definition will not be a Change of Control
under this subparagraph (a), and provided further, that immediately prior to such accumulation, holding or acquisition, such Person was not a direct or indirect Beneficial Owner of twenty-five percent (25%) or more of the Company Voting
Securities; or
|
(b)
|
Individuals who, as of the Effective Date of this Plan, constitute the Board (the “Incumbent Board”) cease for any reason to
constitute at least a majority of the Board; provided, however, that an individual becoming a director subsequent to the date hereof whose election, or nomination for election by the Company’s shareholders, was approved by a vote of at
least a majority of the directors then comprising the Incumbent Board will be considered as though such individual were a member of the Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of
office occurs as a result of an actual or threatened election contest with respect to the election or removal of directors or other actual or threatened solicitation of proxies or consents by or on behalf of a Person other than the Board;
or
|
(c)
|
Consummation by the Company of a reorganization, merger or consolidation, or sale or other disposition of all or substantially all of
the assets of the Company or the acquisition of assets or stock of another entity (a “Business Combination”), in each case, unless immediately following such Business Combination: (i) more than sixty percent (60%) of the combined voting
power of then outstanding voting securities entitled to vote generally in the election of directors of (A) the corporation resulting from such Business Combination (the “Surviving Corporation”), or (B) if applicable, a corporation that as
a result of such transaction owns the Company or all or substantially all of the Company’s assets either directly or through one or more subsidiaries (the “Parent Corporation”), is represented, directly or indirectly, by Company Voting
Securities outstanding immediately prior to such Business Combination (or, if applicable, is represented by shares into which such Company Voting Securities were converted pursuant to such Business Combination), and such voting power
among the holders thereof is in substantially the same proportions as their ownership, immediately prior to such Business Combination, of the Company Voting Securities, (ii) no Person (excluding any employee benefit plan (or related
trust) of the Company or such corporation resulting from such Business Combination) beneficially owns, directly or indirectly, twenty-five percent (25%) or more of the combined voting power of the then outstanding voting securities
eligible to elect directors of the Parent Corporation (or, if there is no Parent Corporation, the Surviving Corporation) except to the extent that such ownership of the Company existed prior to the Business Combination, and (iii) at least
a majority of the members of the board of directors of the Parent Corporation (or, if there is no Parent Corporation, the Surviving Corporation) were members of the Incumbent Board at the time of the execution of the initial agreement, or
of the action of the Board, providing for such Business Combination; or
|
(d)
|
Approval by the Company’s shareholders of a complete liquidation or dissolution of the Company.
|
A-4 Maximus
|
2021 Proxy Statement A-5
|
A-6 Maximus
|
2021 Proxy Statement A-7
|
A-8 Maximus
|
(a)
|
The Committee may, in its discretion and on such terms and conditions as the Committee considers appropriate in the circumstances,
grant Substitute Awards under the Plan. Substitute Awards shall not be counted against or otherwise reduce the number of Shares available for Awards under the Plan. For purposes of this Section 4.3, “Substitute Award” means an Award
granted under the Plan in substitution for stock and stock-based awards (“Acquired Entity Awards”) held by current and former employees or non-employee directors of, or consultants to, another corporation or entity who become Eligible
Employees or whose awards are assumed or substituted as the result of a merger, consolidation or combination of the employing corporation or other entity (the “Acquired Entity”) with the Company or an Affiliate or the acquisition by the
Company or an Affiliate of property or stock of the Acquired Entity immediately prior to such merger, consolidation, acquisition or combination (“Acquisition Date”) in order to preserve for the Participant the economic value of all or a
portion of such Acquired Entity Award at such price as the Committee determines necessary to achieve preservation of economic value.
|
(b)
|
If a company acquired by the Company or any Affiliate or with which the Company or any Affiliate combines has shares available under a
pre-existing plan approved by shareholders and not adopted in contemplation of such acquisition or combination, the shares available for grant pursuant to the terms of such pre-existing plan (as adjusted, to the extent appropriate, using
the exchange ratio or other adjustment or valuation ratio or formula used in such acquisition or combination to determine the consideration payable to the holders of common stock of the entities party to such acquisition or combination)
may be used for Awards and shall not reduce the Shares available for Awards under the Plan. Awards using such available shares under acquired plans shall not be made after the date awards could have been made under the terms of the
acquired plan, absent the acquisition or combination, and shall only be made to individuals who were not eligible to participate in the Plan prior to such acquisition or combination.
|
2021 Proxy Statement A-9
|
(a)
|
The holder of an Option may exercise the Option only by delivering a written notice of exercise to the Company setting forth the
number of Shares as to which the Option is to be exercised, together with full payment at the Exercise Price for the Shares and any withholding tax relating to the exercise of the Option.
|
(b)
|
The Exercise Price and any related withholding taxes will be payable to the Company in full either: (a) in cash, or its equivalent, in
United States dollars; (b) by tendering Shares owned by the Participant and duly endorsed for transfer to
|
A-10 Maximus
|
(c)
|
To the extent permitted by the Company, the number of Shares tendered pursuant to clause (b) may have a Fair Market Value equal to the
amount required to be withheld or other greater amount up to the maximum statutory rate under applicable law, as applicable to such Participant, so long as such other greater amount is permitted under applicable withholding rules
promulgated by the Internal Revenue Service or another applicable governmental entity and would not result in adverse financial accounting treatment, as determined by the Committee (including in connection with the effectiveness of FASB
Accounting Standards Update 2016-09).
|
(a)
|
Except as otherwise provided in a Participant’s Award Agreement, no Option granted under the Plan may be sold, transferred, pledged,
assigned, or otherwise alienated or hypothecated, other than by will or by the laws of descent and distribution, or pursuant to a domestic relations order (as defined in Code Section 414(p)). Further, except as otherwise provided in a
Participant’s Award Agreement, all Options will be exercisable during the Participant’s lifetime only by the Participant or his or her guardian or legal representative. The Committee may, in its discretion, require a Participant’s
guardian or legal representative to supply it with the evidence the Committee deems necessary to establish the authority of the guardian or legal representative to act on behalf of the Participant. In no event may an Option be transferred
by a Participant for consideration.
|
(b)
|
The Committee may impose any other restrictions on any Shares acquired through exercise of an Option as it deems necessary or
advisable, including, without limitation, restrictions under applicable federal securities laws, under the requirements of any stock exchange or market upon which the Shares are then listed or traded, and under any blue sky or state
securities laws applicable to the Shares.
|
(c)
|
Notwithstanding the foregoing, a Participant, at any time prior to his or her death, may assign all or any portion of a vested Option
(other than an Incentive Stock Option) granted to him or her to a family member or a charitable organization or Code Section 501(c) private foundation meeting the requirements of Code Section 170(c). For purposes of Section 12(a), “family
member” shall mean a Participant’s child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law, or sister-in-law,
including adoptive relationships, any person sharing the Participant’s household (other than a tenant of the Participant), a trust in which these persons (or the Participant) have more than fifty percent (50%) of the beneficial interest,
a foundation in which these persons (or the Participant) control the management of assets, and any other entity in which these persons (or the Participant) own more than fifty percent (50%) of the voting interests. Any such transferee
shall enter into a written agreement with the Company authorizing the Company to withhold Shares of Stock that would otherwise be delivered to such person upon an exercise of the Option to pay any federal, state, local, or other taxes
that may be required to be withheld or paid in connection with such exercise, in the
|
2021 Proxy Statement A-11
|
(a)
|
The Committee may award Incentive Stock Options only to Employees (for purposes of this Article 6, the term “Employee” shall not
include a Director who is not employed by the Company or an Affiliate).
|
(b)
|
In no event shall more than 3,100,000 Shares be cumulatively available for Awards of Incentive Stock Options under the Plan.
|
(c)
|
An Option will not constitute an Incentive Stock Option under this Plan to the extent it would cause the aggregate Fair Market Value
of Shares with respect to which Incentive Stock Options are exercisable by the Participant for the first time during a year (under all plans of the Company and its Affiliates) to exceed $100,000. Such Fair Market Value shall be determined
as of the date on which each such Incentive Stock Option is granted.
|
(d)
|
If the Employee to whom the Incentive Stock Option is granted owns stock possessing more than ten percent (10%) of the total combined
voting power of all classes of the Company or any Affiliate, then: (i) the Exercise Price for each Share subject to an Option will be at least one hundred ten percent (110%) of the Fair Market Value of the Share on the date the Option is
granted; and (ii) the Option will expire upon the earlier of (A) the time specified by the Committee in the Award Agreement, or (B) the fifth (5th)
anniversary of the date of grant.
|
(e)
|
No Option that is intended to be an Incentive Stock Option may be granted under the Plan until the Effective Date, as defined in
Article 2, provided, however, that no Option will qualify as an Incentive Stock Option unless shareholder approval is obtained within twelve (12) months of the Effective Date. No Option that is intended to be an Incentive Stock Option may
be granted under the Plan after the tenth (10th) anniversary of Board approval of the Plan.
|
(f)
|
An Incentive Stock Option must be exercised, if at all, by the earliest of (i) the time specified in the Award Agreement, (ii) three
(3) months after the Participant’s termination of Service for a reason other than death or Disability, or (iii) twelve months after the Participant’s termination of Service for death or Disability.
|
(g)
|
An Option that is intended but fails to be an ISO shall be treated as an NQSO for purposes of the Plan.
|
(a)
|
Subject to the terms and conditions of the Plan, SARs may be granted to Participants at any time and from time to time, as determined
by the Committee. The Committee may grant Freestanding SARs, Tandem SARs or any combination of the two.
|
A-12 Maximus
|
(b)
|
Within the limits of Article 4, the Committee will have sole discretion to determine the number of SARs granted to each Participant
and, consistent with the provisions of the Plan, to determine the terms and conditions pertaining to SARs.
|
(c)
|
Other than with respect to Substitute Awards, (i) SARs granted in tandem with Options shall have a grant price not less than the
Exercise Price of the related Option and (ii) SARs granted alone and unrelated to an Option will have a grant price equal to at least one hundred percent (100%) of the Fair Market Value on the date the SAR is granted.
|
(a)
|
Tandem SARs may be exercised for all or part of the Shares subject to the related Option, upon the surrender of the right to exercise
the equivalent portion of the related Option. A Tandem SAR may be exercised only with respect to the Shares for which its related Option is then exercisable.
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(b)
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An SAR related to an Option, which SAR can only be exercised upon or during limited periods following a Change in Control of the
Company, may entitle the Participant to receive an amount based upon the highest price paid or offered for Common Stock in any transaction relating to the Change in Control or paid during the thirty (30) day period immediately preceding
the occurrence of the Change in Control in any transaction reported in the stock market in which the Common Stock is normally traded.
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2021 Proxy Statement A-13
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A-14 Maximus
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(a)
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Subject to the terms of the Plan, the Committee shall have the authority to grant Performance Units, Performance Shares, or
Performance Awards to Participants in such amounts and upon such terms, and at any time and from time to time, as the Committee determines. Each grant of Performance Shares, Performance Units, and Performance Awards (other than annual
cash bonus Awards) shall be evidenced by an Award Agreement that shall specify the number of Performance Shares and the number and value of Performance Units awarded to the Participant, the Performance Criteria applicable thereto, and
such other terms and conditions not inconsistent with the Plan as the Committee shall determine.
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(b)
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The Committee will set performance objectives in its discretion which, depending on the extent to which they are met, will determine
the number or value (or both) of Performance Units or Performance Shares that will be paid out to the Participant. For purposes of this Article 9, the time period during which the performance objectives must be met will be called a
“Performance Period” and will be set by the Committee in its discretion.
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2021 Proxy Statement A-15
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A-16 Maximus
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(a)
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earnings growth;
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(b)
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earnings per share of common stock;
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(c)
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net earnings;
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(d)
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operating earnings or income;
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(e)
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earnings before interest, taxes, depreciation and amortization (EBITDA);
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(f)
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net sales growth;
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(g)
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net income (absolute or competitive growth rates comparative);
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(h)
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net income applicable to common stock;
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(i)
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cash flow, including operating cash flow, free cash flow, discounted cash flow return on investment, and cash flow in excess of cost
of capital;
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(j)
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operating earnings or income per share of common stock;
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(k)
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revenues;
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(l)
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shareholders’ equity;
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(m)
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return on shareholders’ equity (absolute or peer-group comparative);
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(n)
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stock price (absolute or peer-group comparative);
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(o)
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absolute and/or relative return on common shareholders equity;
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(p)
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absolute and/or relative return on capital;
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(q)
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absolute and/or relative return on assets;
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(r)
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economic value added (income in excess of cost of capital);
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(s)
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operating margins;
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(t)
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total shareholder return;
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(u)
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customer satisfaction;
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(v)
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quality metrics;
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(w)
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expenses or expense reduction;
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2021 Proxy Statement A-17
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(x)
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debt-to-capital ratio;
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(y)
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market share;
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(z)
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ratio of operating expenses to operating revenues; and
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(aa)
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any other objective or subjective metric selected by the Committee.
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A-18 Maximus
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(a)
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Require that shares of stock of the corporation resulting from such Change in Control, or a parent corporation thereof, be substituted
for some or all of the Shares subject to an outstanding Award, with an appropriate and equitable adjustment to such Award as shall be determined in accordance with Section 4.4 of the Plan;
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(b)
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Provide that (A) some or all outstanding options and SARs shall become exercisable in full or in part, either immediately or upon a
subsequent termination of employment, (B) the Restriction Period applicable to some or all outstanding Awards shall lapse in full or in part, either immediately or upon a subsequent termination of employment, (C) the Performance Period
applicable to some or all outstanding Awards shall lapse in full or in part, and (D) the Performance Criteria applicable to some or all outstanding Awards shall be deemed to be satisfied at the target or any other level; and/or
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(c)
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Require outstanding Awards, in whole or in part, to be surrendered to the Company by the holder, and to be immediately cancelled by
the Company, and to provide for the holder to receive (A) a cash payment in an amount equal to (1) in the case of an Option or an SAR, the aggregate number of Shares then subject to the portion of such Option or SAR surrendered multiplied
by the excess, if any, of the Change in Control Price, over the Exercise Price or grant price per Share subject to such Option or SAR, (2) in the case of a performance-based Award denominated in Shares, the aggregate number of Shares then
subject to the portion of such Award surrendered to the extent the Performance Criteria applicable to such Award have been satisfied or are deemed satisfied pursuant to Section 14.1(b), multiplied by the Change in Control Price, and (3)
in the case of a performance-based Award denominated in cash, the value of the Award then subject to the portion of such Award surrendered to the extent the Performance Criteria applicable to such Award have been satisfied or are deemed
satisfied pursuant to Section 14.1(b); (B) shares of capital stock of the corporation resulting from or succeeding to the business of the Company pursuant to such Change in Control, or a parent corporation thereof, having a fair market
value not less than the amount determined under clause (A) above; or (C) a combination of the payment of cash pursuant to clause (A) above and the issuance of shares pursuant to clause (B) above.
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2021 Proxy Statement A-19
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A-20 Maximus
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2021 Proxy Statement A-21
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A-22 Maximus
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