EXHIBIT-10.1



 






	 	 	 	 	 



EXHIBIT 10.1




FIRST AMENDMENT

TO

EMPLOYMENT AGREEMENT



A. The Employment Agreement (the “Agreement”) made and entered into on October 28, 2004,
effective as of May 1, 2004, by and between CentraCore Properties Trust (f/k/a Correctional
Properties Trust), a Maryland real estate investment trust (the “Company”), and Charles R. Jones
(the “Executive”) is hereby amended as follows:





     1. Section 5.6(a) of the Agreement is hereby amended by deleting said subsection in its
entirety and substituting the following in lieu thereof:




          “a. In the event that (i) a Change in Control (as defined in
paragraph (b) of this Section 5.6) in the Company shall occur during
the Term of Employment, and (ii) prior to the earlier of the
Expiration Date and one year after the date of the Change in
Control, either (x) the Term of Employment is terminated by the
Company without Cause, pursuant to Section 5.4 hereof or (y) the
Executive terminates the Term of Employment for Good Reason as
defined in Section 5.5(e) hereof, the Company shall (1) pay to the
Executive any unpaid Base Salary through the effective date of
termination, (2) pay to the Executive the Incentive Compensation, if
any, not yet paid to the Executive for any year prior to
termination, at such time as the Incentive Compensation otherwise
would have been payable to the Executive, (3) pay to the Executive a
Termination Year Bonus as provided in Section 3.2(c), (4) pay to the
Executive as a single lump sum payment, within 30 days of the
termination of his employment hereunder, a lump sum payment equal to
three (3) times the sum of the Executive’s then current Base Salary
and average Cash Bonuses for the three (3) calendar years preceding
the date of the Change in Control and (5) unless otherwise provided
in any agreement relating to the vesting of restricted stock or
other equity of the Company granted to the Executive by the Company,
the Executive’s equity awards, if any, shall immediately vest. The
Company shall have no further liability hereunder (other than for
reimbursement for reasonable business expenses incurred prior to the
date of termination, subject, however, to the provisions of Section
4.1).”



 









 





     2. Section 5 of the Agreement is hereby further amended by adding the following Sections 5.10
and 5.11 at the end of Section 5.9:




     “5.10 Section 409A. Notwithstanding anything herein to
the contrary, if at the time of the Executive’s termination of
employment with the Company, the Executive is a ‘specified employee’
within the meaning of Section 409A of the Internal Revenue Code of
1986, as amended (the ‘Code’) and the regulations promulgated
thereunder, and the Company notifies the Executive that, based on
the advice of counsel, the deferral of the commencement of any
severance benefits payable under Section 5 is necessary in order to
comply with Section 409A of the Code, then the Company shall defer
the commencement of the severance benefits (without any reduction)
by a period of at least six months after the Executive’s termination
of employment and any payments so deferred shall earn interest
calculated at the prime rate of interest reported by The Wall
Street Journal as of the date of termination. Any severance
benefits that would have been paid during such six-month period but
for the provisions of the preceding sentence shall be paid in a lump
sum to the Executive six (6) months and one (1) day after the
Executive’s termination of employment. The provisions of this
Section 5.10 shall apply only to the extent required to avoid the
Executive’s incurrence of any accelerated or additional tax under
Section 409A of the Code.




     5.11 Tax Gross-Up for Excise Tax.




          a. Anything in this Agreement to the contrary notwithstanding,
in the event it shall be determined that any compensation, payment
or distribution by the Company to or for the benefit of the
Executive, whether paid or payable or distributed or distributable
pursuant to the terms of this Agreement or otherwise (the ‘Severance
Payments’), would be subject to the excise tax imposed by Section
4999 of the Code, or any interest or penalties are incurred by the
Executive with respect to such excise tax (such excise tax, together
with any such interest and penalties, are hereinafter collectively
referred to as the ‘Excise Tax’), then the Executive shall be
entitled to receive an additional payment (a ‘Gross-Up Payment’)
such that the net amount retained by the Executive, after deduction
of any Excise Tax on the Severance Payments, any Federal, state, and
local income tax, employment tax and Excise Tax upon the payment
provided by this subsection, and any interest and/or penalties
assessed with respect to such Excise Tax, shall be equal to the
Severance Payments.




          b. Subject to the provisions of paragraph (c) below, all
determinations required to be made under this paragraph (b),
including whether a Gross-Up Payment is required and the amount of
such Gross-Up Payment, shall be made by a nationally



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recognized accounting firm selected by the Company (the
‘Accounting Firm’), which shall provide detailed supporting
calculations both to the Company and the Executive within 15
business days of the date of termination, if applicable, or at such
earlier time as is reasonably requested by the Company or the
Executive. For purposes of determining the amount of the Gross-Up
Payment, the Executive shall be deemed to pay Federal income taxes
at the highest marginal rate of Federal income taxation applicable
to individuals for the calendar year in which the Gross-Up Payment
is to be made, and state and local income taxes at the highest
marginal rates of individual taxation in the state and locality of
the Executive’s residence on the date of termination, net of the
maximum reduction in Federal income taxes which could be obtained
from deduction of such state and local taxes. If the Accounting
Firm determines that no Excise Tax is payable by the Executive, the
Company shall furnish the Executive with an opinion of counsel that
failure to report the Excise Tax on the Executive’s applicable
Federal income tax return would not result in the imposition of a
negligence or similar penalty. Any determination by the Accounting
Firm shall be binding upon the Company and the Executive. As a
result of the uncertainty in the application of Section 4999 of the
Code at the time of the initial determination by the Accounting Firm
hereunder, it is possible that Gross-Up Payments which will not have
been made by the Company should have been made (an ‘Underpayment’).
In the event that the Company exhausts its remedies pursuant to
paragraph (c) below and the Executive thereafter is required to make
a payment of any Excise Tax, the Accounting Firm shall determine the
amount of the Underpayment that has occurred, consistent with the
calculations required to be made hereunder, and any such
Underpayment, and any interest and penalties imposed on the
Underpayment and required to be paid by the Executive in connection
with the proceedings described in paragraph (c) below, shall be
promptly paid by the Company to or for the benefit of the Executive.




          c. The Executive shall notify the Company in writing of any
claim by the Internal Revenue Service that, if successful, would
require the payment by the Company of the Gross-up Payment. Such
notification shall be given as soon as practicable but no later than
10 business days after the Executive knows of such claim and shall
apprise the Company of the nature of such claim and the date on
which such claim is requested to be paid. The Executive shall not
pay such claim prior to the expiration of the 30-day period
following the date on which he gives such notice to the Company (or
such shorter period ending on the date that any payment of taxes
with respect to such claim is due). If the Company notifies the
Executive in writing prior to the expiration of such period that it
desires to contest such claim, provided that the Company has set
aside adequate reserves to cover



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the Underpayment and any interest and penalties thereon that
may accrue, the Executive shall:




               (i) give the Company any information reasonably
requested by the Company relating to such claim,




               (ii) take such action in connection with contesting
such claim as the Company shall reasonably request in
writing from time to time, including, without limitation,
accepting legal representation with respect to such claim by
an attorney selected by the Company,




               (iii) cooperate with the Company in good faith in order
to effectively contest such claim, and




               (iv) permit the Company to participate in any
proceedings relating to such claim; provided, however, that
the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties)
incurred in connection with such contest and shall indemnify
and hold the Executive harmless, on an after-tax basis, for
any Excise Tax or income tax, including interest and
penalties with respect thereto, imposed as a result of such
representation and payment of costs and expenses. Without
limitation on the foregoing provisions of this paragraph
(c), the Company shall control all proceedings taken in
connection with such contest and, at its sole option, may
pursue or forego any and all administrative appeals,
proceedings, hearings and conferences with the taxing
authority in respect of such claim and may, at its sole
option, either direct the Executive to pay the tax claimed
and sue for a refund or contest the claim in any permissible
manner, and the Executive agrees to prosecute such contest
to a determination before any administrative tribunal, in a
court of initial jurisdiction and in one or more appellate
courts, as the Company shall determine; provided, however,
that if the Company directs the Executive to pay such claim
and sue for a refund, the Company shall advance the amount
of such payment to the Executive on an interest-free basis
(to the extent not prohibited by applicable law) and shall
indemnify and hold the Executive harmless, on an after-tax
basis, from any Excise Tax or income tax, including interest
or penalties with respect thereto, imposed with respect to
such advance or with respect to any imputed income with
respect to such advance; and further provided that any
extension of the statute of limitations relating to payment
of taxes for the taxable year of the Executive with respect
to which such contested amount is claimed to be due is
limited solely to



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such contested amount. Furthermore, the Company’s
control of the contest shall be limited to issues with
respect to which a Gross-Up Payment would be payable
hereunder and the Executive shall be entitled to settle or
contest, as the case may be, any other issues raised by the
Internal Revenue Service or any other taxing authority.




          d. If, after the receipt by the Executive of an amount
advanced by the Company pursuant to paragraph (c) above, the
Executive becomes entitled to receive any refund with respect to
such claim, the Executive shall (subject to the Company’s complying
with the requirements of paragraph (c) above) promptly pay to the
Company the amount of such refund (together with any interest paid
or credited thereon after taxes applicable thereto). If, after the
receipt by the Executive of an amount advanced by the Company
pursuant to paragraph (c) above, a determination is made that the
Executive shall not be entitled to any refund with respect to such
claim and the Company does not notify the Executive in writing of
its intent to contest such denial of refund prior to the expiration
of 30 days after such determination, then such advance shall be
forgiven and shall not be required to be repaid and the amount of
such advance shall offset, to the extent thereof, the amount of
Gross-Up Payment required to be paid.”



     3. Section 6 of the Agreement is hereby further amended by adding the following subsection (d)
immediately after subsection (c) thereof:




          “d. Notwithstanding any other provision of this Agreement to
the contrary, in no event shall the restrictions contained in
subsection (a) of this Section 6 apply to the Executive in the event
of a termination of the Term of Employment in connection with a
Change of Control (as defined in Section 5.6(b) hereof) in the
Company, whether by the Company without Cause pursuant to Section
5.4 hereof or by the Executive for Good Reason as defined in Section
5.5(e) hereof.”



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B. Except as amended herein, the Agreement is hereby confirmed in all other respects.




     IN WITNESS WHEREOF, this First Amendment is entered into this twenty-seventh day of July, 2006
by the parties hereto.



	 	 	 	 	 
	 	CENTRACORE PROPERTIES TRUST,

a Maryland real estate investment trust

 	 
	 	By:  	/s/ Clarence Anthony
 	 
	 	 	Name:  	Clarence Anthony 	 
	 	 	Title:  	Chairman of the Compensation
Committee 	 
	 
	 	 	 
	 	                                                  /s/ Charles R. Jones
 	 
	 	Charles R. Jones 	 
	 	 	 



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