Exhibit 10.1
EMPLOYMENT AGREEMENT
     AGREEMENT dated the 26th day of January, 2009, between Jonathan Walker
(“Employee”) and America Service Group Inc., a Delaware Corporation (the
“Company”).
     WHEREAS, the Company seeks to employ the Employee; and
     WHEREAS, the Employee accepts the positions contemplated herein;
     NOW, THEREFORE, the parties hereby agree as follows:
     1. Employment and Duties. The Company hereby employs the Employee as Senior
Vice President, Business Development of the Company and/or such other offices
and duties as the Company shall reasonably determine from time to time,
consistent with Employee’s responsibilities. Employee shall perform the duties
and services of the offices and titles for which he is employed from time to
time hereunder.
     2. Performance. From the date hereof, Employee agrees to actively devote
all of his time and effort to the performance of his duties hereunder and to use
his reasonable best efforts and endeavors to promote the interests and welfare
of the Company.
     3. Term. The term of Employee’s employment hereunder shall commence as of
March 9, 2009 and shall continue until terminated in accordance with the
provisions of Paragraph 7 of this Agreement.
     4. Compensation. For all services rendered by Employee, the Company agrees
to pay Employee from and after the date hereof: (i) a salary (the “Base Salary”)
at a gross annual rate of not less than $250,000 Dollars and 00/100’s, less
applicable withholdings, payable in such installments as the parties shall
mutually agree; plus (ii) such additional compensation as the CEO and/or the
Incentive Stock and Compensation Committee of the Board (the “committee”) shall
from time to time determine.
     5. Employee Benefits. During the period of his employment under this
Agreement, Employee shall be entitled to vacation, insurance, and other
employment benefits customarily provided by the Company to its executives,
including increased or changed benefits as are from time to time provided to the
Company’s executives generally. Upon employment, Employee will be entitled to
accrue Paid Annual Leave (vacation pay) at the rate of 15 days per year,
pro-rated in accordance with the normal bi-weekly pay schedule.

 

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     6. Expenses. The Company shall promptly pay or reimburse Employee for all
reasonable expenses incurred by him in connection with the performance of his
duties and responsibilities hereunder, including, but not limited to, payment or
reimbursement of reasonable expenses paid or incurred for travel and
entertainment relating to the business of the Company.
     7. Termination.
     (a) Termination Without Cause. The Company shall have the right to
terminate the employment of Employee at any time, without cause, upon thirty
(30) days advance written notice.
     (b) Termination for Cause. The Company shall have the right to terminate
the employment of Employee at any time, without advance notice, for “cause.” For
purposes hereof, “cause” shall mean: (i) violation of the material terms of this
Agreement, (ii) intentional commission of an act, or failure to act, in a manner
which constitutes dishonesty or fraud or which has a direct material adverse
effect on the Company or its business; (iii) Employee’s conviction of or a plea
of guilty to any felony or crime involving moral turpitude; (iv) continued
incompetence, as determined by the chief executive officer of the Company, using
reasonable standards; (v) drug and/or alcohol abuse which impairs Employee’s
performance of his duties or employment; (vi) breach of loyalty to the Company,
whether or not involving personal profit, as determined by the chief executive
officer of the Company using reasonable standards; or (vii) failure to follow
the directions of the chief executive officer of the Company, provided that the
directions are not inconsistent with Employee’s duties and further provided that
Employee is not directed to violate any law or take any action that he
reasonably deems to be immoral or unethical.
     (c) Disability, Death. If Employee shall fail to or be unable to perform
the essential functions of his position, with or without a reasonable
accommodation, because of any physical or mental infirmity, and such failure or
inability shall continue for any six (6) consecutive months while Employee is
employed hereunder, the Company shall have the right to terminate this
Agreement. Except as otherwise provided herein, this Agreement shall terminate
upon the death of Employee, and the estate of Employee shall be entitled to
receive all unpaid amounts due Employee hereunder to such date of death as
provided for in this Agreement.
     (d) Change in Control. For purposes of this Agreement, a “change in
control” shall mean a change in control of America Service Group
Inc.(hereinafter referred to as ‘ASG’) involving (a) a change in control of a
nature that would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A promulgated under the Securities Exchange Act of
1934 (“Exchange Act”); provided however, that without limitation, such a change
in control shall be deemed to have occurred if (i) any “person” (as such term is
used in Sections 13(d) and 14(d) (2) of the Exchange Act) other than Employee or
any other person currently the beneficial owner of 10% or more of the
outstanding common stock of ASG, becomes the beneficial owner, directly or
indirectly, of securities of ASG representing 50% or more of the combined voting
power of the ASG’s then outstanding securities and (b) as a result of such
change in control Employee will not be offered a continuation of his job after
such change in control.

 

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     (e) Voluntary Termination. Employee may voluntarily terminate his
employment hereunder at any time, for any reason or for no reason.
     (f) Termination Compensation. If Employee’s employment hereunder is
terminated pursuant to Sections 7(b), 7(c) or 7(e) of this Agreement, the
Company shall pay the Employee his full base salary through the Termination
Date, plus, within five (5) business days of the Termination Date, any bonuses,
incentive compensation, or other payments due which pursuant to the terms of any
compensation or benefit plan have been earned or vested as of the Termination
Date. If Employee’s employment is terminated by the Company under Section 7(a)
without cause, or if there is a “Change in Control” as defined in Section 7(d),
all unexercised options granted to Employee under the Company’s Incentive Stock
Plan or Amended Incentive Stock Plan shall accelerate and shall immediately
vest. If Employee’s employment is terminated pursuant to Sections 7(a), 7(c) or
7(d) of this Agreement, the Company shall pay the Employee the following:

   
(i) within five (5) business days of the termination, his full base salary
through the Termination Date, plus any bonuses, incentive compensation, or other
payments due which pursuant to the terms of any compensation or benefit plan
have been earned or vested as of the Termination Date;
     
(ii) as of the termination pursuant to Section 7(a), 7(c) or 7(d), a
continuation, on a monthly basis, of Employee’s monthly base salary for one year
following the Termination Date.

     8. Covenant Not to Compete, Nonemployment, Noninducement.
          (a) Employee acknowledges that in the course of his employment he will
become familiar with and have access to the Company and its affiliates’
confidential business information and trade secrets concerning the Company and
its affiliates and that his services are of special, unique and extraordinary
value to the Company and its affiliates. Therefore, Employee agrees that, during
his employment with the Company, and for one year after Employee’s employment
with the Company is terminated for any reason, neither Employee nor any company
with which Employee is affiliated as an owner, agent, employee, consultant or
independent contractor, will directly or indirectly (A) engage in any business
similar to the Business of the Company, as described below, anywhere in the
United States of America, or have interest directly or indirectly in any
Business; provided, however, that nothing herein shall prohibit Employee from
(i) owning in the aggregate not more than 5% of the outstanding stock of any
class of stock of a corporation so long as Employee has no active participation
in the business of such corporation; (ii) affiliating with any company which may
participate in the Business, so long as that participation at the time of
affiliation aggregates less than 10% of such company’s revenue, and so long as
Employee

 

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has no active participation in the Business on behalf of such company; or
(iii) directly or through an affiliate, acquiring, merging or otherwise gaining
control, or purchasing an interest in an organization as long as the Business
represents less than 10% of the acquiree’s revenue at the time of the
transaction, and so long as Employee has no active participation in the Business
on behalf of such company, (B) employ or retain as an independent contractor any
employee of the Company, or (C) recruit, solicit or otherwise induce any
employee of the Company to discontinue such employment relationship. For
purposes hereof, the term “Business” shall consist of (A) delivery of medical
services, mental health services, dental services, pharmaceuticals or supplies
to correctional facilities, and (B) any other business in which the Company is
significantly engaged as of the date that Employee ceases to perform duties
hereunder.
     (b) If, at the time of enforcement of this Section 8 a court shall hold
that the duration, scope or area restrictions stated herein are unreasonable
under circumstances then existing, the parties agree that the maximum duration,
scope or area reasonable under such circumstances shall be substituted for the
stated duration, scope or area.
     (c) Employee agrees and understands that his duty to maintain the
confidentiality of and protect the Company’s confidential business information
and trade secrets continues indefinitely after his employment with the Company
has been terminated. Employee further agrees that, after the termination of his
employment with the Company, he is absolutely precluded from using, in any way,
the Company’s confidential business information or trade secrets for any
purpose.
     (d) Employee acknowledges and recognizes that if he breaches any of the
provisions of this Section 8, the Company will suffer serious and irreparable
harm as a result. In the event of the breach by Employee of any of the
provisions of this Section 8, the Company, in addition and supplementary to
other rights and remedies existing in its favor, may apply to any court of law
or equity of competent jurisdiction for specific performance and/or injunctive
or other relief in order to enforce or prevent any violations of the provisions
hereof.
     9. Notices. All notices hereunder, to be effective, shall be in writing and
shall be deemed delivered when delivered by and or when sent by first-class,
certified mail, postage and fees prepaid, to the following addresses or as
otherwise indicated in writing by the parties:

     
(i)
  If to the Company:
 
   
 
  America Service Group Inc.
105 Westpark Drive, Suite 200
Nashville, TN 37027
Attn:Chief Legal Officer
 
   
(ii)
  If to Employee:
Jonathan Walker
105 West Park Drive, Suite 200
Nashville, Tennessee 37027

 

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     10. Assignment. The Company has the right to assign this Agreement as
appropriate to an affiliate or successor entity. Except as otherwise provided
herein, Employee may not assign his rights and obligations hereunder to another
person or entity.
     11. Entire Agreement. This Agreement supersedes all prior understandings
and agreements with respect to the provisions hereof and contains the entire
agreement of the parties and may be amended only in writing, signed by the
parties hereto.
     12. Severability. The provisions of this Agreement are severable, and the
invalidity of any provision shall not affect the validity of any other
provision. In the event that any arbitrator or court of competent jurisdiction
shall determine that any provision of this Agreement or the application thereof
is unenforceable because of the duration or scope thereof, the parties hereto
agree that said arbitrator or court in making such determination shall have the
power to reduce the duration and scope of each provision to the extent necessary
to make it enforceable, and that the Agreement in its reduced form shall be
valid and enforceable to the full extent permitted by law.
     13. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or
limit the Employee’s continuing or future participation in any benefit, bonus,
incentive or other plan or program provided by the Company (except for any
severance or termination policies, plans, programs or practices) and for which
the Employee may qualify, nor shall anything herein limit or reduce such rights
as the Employee may have under any other Agreement with the Company. Amounts
which are vested benefits or which the Employee is otherwise entitled to receive
under any plan or program of the Company shall be payable in accordance with
such plan or program, except as explicitly modified by this Agreement.
     14. Governing Law. This Agreement shall be construed under the governed by
the internal laws of the State of Tennessee.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as a
binding contract as of the day and year first above written.
AMERICA SERVICE GROUP INC.
By: /s/ Richard Hallworth
EMPLOYEE: Jonathan B. Walker
By: /s/ Jonathan B. Walker