Exhibit
10.3
 Confidential Treatment Requested by America Service Group Inc.Confidential portions of this
document have been redacted and have been separately filed with the Securities and Exchange
Commission.
 2009 INCENTIVE COMPENSATION PLAN
America Service Group Inc.
 Overall Compensation Philosophy :
   Overall Structure of the Plan
 1)
    
    Adjusted EBITDA based bonus(50% of total bonus target as a percent of base pay)
 
    
    No bonus paid if corporate Earnings before share-based compensation, interest,
taxes, depreciation, and amortization (Adjusted EBITDA) is 100% of Target or less.
Adjusted EBITDA Target is defined as that amount set forth as Earnings Guidance in
March 2009.
    
    After bonuses derived from the Other Key Company Goals based bonus are accrued and
the 2009 Adjusted EBITDA Target is reached, 50% of earnings generated above the
Adjusted EBITDA Target will be used to fund this portion of the incentive, to the
maximums as set forth later in this document.
    
    Payout is subject to Board confirmation of satisfactory balance sheet management.
 2)
    
    Other Key Company Goals based bonus(50% of total bonus target as a percent of base
pay)
 
    
    Pre-selected goals will be used for this part of the incentive program
    
    For the non-financial objectives, there are two possible levels of achievement under
this portion of the bonus  Minimum achievement to get an award for that portion of
the plan and Target achievement. For the financial objectives, achievement between
Minimum and Target will be interpolated.
 Incentive Opportunities by position




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Target as a percentPosition
    
    of base payExecutive ManagementPresident and Chief Executive Officer
    
    
    70
    %Executive Vice President and Chief Financial Officer
    
    
    60
    %Chief
Administration Officer, Chief Information Officer, 
 Chief Legal Officer, Chief Medical Officer,
Chief Development Officer, Operating Presidents,
Operations Group Vice Presidents
    
    
    50
    %Operating PositionsDivision Vice Presidents
    
    
    40
    %Regional Vice Presidents
    
    
    30
    %Regional Directors
    
    
    20
    %Regional Mgrs, Health Service Administrators (HSAs), 
District Administrators and Regional Managers
    
    
    15
    %Corporate PositionsCorporate Controller, VP-Finance/Asst. Treasurer, VP 
Provider Operations, VP Human Resources, VP Project Development
    
    
    35
    %Corporate Vice Presidents
    
    
    30
    %Corporate Middle Managers
    
    
    20
    %Non-Management Corporate Office Employees
    
    
    10
    %




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##### 



Executive Management (other than CMO)
 Positions covered:
 
    
    President and Chief Executive Officer
    
    Executive Vice President and Chief Financial Officer
    
    Chief Administrative Officer
    
    Chief Information Officer
    
    Chief Legal Officer
    
    Chief Development Officer Operating Presidents
    
    Operations Group Vice Presidents1)
    
    Adjusted EBITDA based bonus(50% of total bonus target for those positions as a percent
of base pay)
 
    
    No bonus paid if corporate Earnings before share-based compensation, interest,
taxes, depreciation, and amortization (Adjusted EBITDA) is 100% of Target or less.
    
    After bonuses derived from the Other Key Company Goals based bonus are accrued and
the 2009 Adjusted EBITDA Target is reached, 50% of earnings generated above the
Adjusted EBITDA Target will be used for this portion of the incentive funding, to a
maximum of 150% of Target payout*.
    
    Payout is subject to Board confirmation of satisfactory balance sheet management.
 2)
    
    Other Key Company Goals based bonus(50% of total bonus target for this position as a
percent of base pay)
 
    
    Pre-selected goals will be used for this part of the incentive program, as follows:
 -
    
    Corporate Net New Revenue
    
     10% of target award-
    
    **[Confidential Treatment Requested]
    
     15% of target award-
    
    **[Confidential Treatment Requested]
    
     15% of target award-
    
    Key individual objective
    
     10% of target award
 
    
    For Corporate Net New Revenue, the Minimum level is 90% of Goal, and for
achievements between Minimum and Goal, payouts will be interpolated. For the other
measures, there are two possible levels of achievement: a) Minimum achievement to get
an award for that portion of the plan and b) Goal achievement
    
    The Minimum payout for each level will be 50% of Target Payout for that level. For
example, if the achievement for Corporate Net New Revenue is at Minimum levels, the
payout would be 5% of Target (50% X 10%)
 
 *
    
    Total Maximum under the plan equals the maximums as indicated for the Adjusted
EBITDA base portion of the plan (150%) plus Target amounts earned under the Other Key
Company Goals based bonus portion of the plan (50%), or 200% of Target**
    
    [Confidential Treatment Requested]  indicates that this portion of the document has been
deleted from this document and such portion has been separately filed with the Securities and
Exchange Commission.




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##### 



Corporate Medical Director
  
    
    Goals will be as follows:
 -
    
    Deployment of Telemedicine
    
     40% of target award-
    
    **[Confidential Treatment Requested]
    
     30% of target award-
    
    **[Confidential Treatment
Requested]
    
     20% of target award-
    
    Key individual objective
    
     10% of target award
 
    
    For each of the measures above, there are three possible levels of achievement: a)
Minimum achievement b) Target achievement, and c) Maximum achievement
    
    The Minimum payout for each level will be 50% of Target Payout for that level,
Target will be 100% and Maximum will be 200%.
 
 **
    
    [Confidential Treatment Requested]  indicates that this portion of the document has been
deleted from this document and such portion has been separately filed with the Securities and
Exchange Commission.




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##### 



Corporate Management
 Positions covered:
 
    
    Corporate Controller, VP-Finance/Asst. Treasurer, VP Provider Operations, VP Human
Resources, VP Project Development
    
    Corporate Vice Presidents
    
    Corporate Middle Managers1)
    
    Adjusted EBITDA based bonus(50% of total bonus target for those positions as a percent
of base pay)
 
    
    No bonus paid if corporate Earnings before share-based compensation, interest,
taxes, depreciation, and amortization (Adjusted EBITDA) is 100% of Target or less.
    
    After bonuses derived from the Other Key Company Goals based bonus are accrued and
the 2009 Adjusted EBITDA Target is reached, 50% of earnings generated above the
Adjusted EBITDA Target will be used for this portion of the incentive funding, to a
maximum of 70% of Target payout*.
    
    Payout is subject to Board confirmation of satisfactory balance sheet management.
 2)
    
    Other Key Company Goals based bonus(50% of total bonus target for this position as a
percent of base pay)
 
    
    Pre-selected goals will be used for this part of the incentive program, as follows:
 -
    
    Corporate Net New Revenue
    
     10% of target award-
    
    **[Confidential Treatment Requested]
    
     15% of target award-
    
    **[Confidential Treatment Requested]
    
     15% of target award-
    
    Key individual objective
    
     10% of target award
 
    
    For Corporate Net New Revenue, the Minimum level is 90% of Goal, and for
achievements between Minimum and Goal, payouts will be interpolated. For the other
measures, there are two possible levels of achievement: a) Minimum achievement to get
an award for that portion of the plan and b) Goal achievement
    
    The Minimum payout for each level will be 50% of Target Payout for that level. For
example, if the achievement for Corporate Net New Revenue is at Minimum levels, the
payout would be 5% of Target (50% X 10%)
 
 *
    
    Total Maximum under the plan equals the maximums as indicated for the Adjusted
EBITDA base portion of the plan (70%)plus Target amounts earned under the Other Key
Company Goals based bonus portion of the plan (50%), or 120% of Target**
    
    [Confidential Treatment Requested]  indicates that this portion of the document has been
deleted from this document and such portion has been separately filed with the Securities and
Exchange Commission.




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##### 



Division VP, Regional VP, Regional Directors, Regional Managers
 1)
    
    Adjusted EBITDA based bonus(50% of total bonus target for those positions as a percent
of base pay)
 
    
    No bonus paid if corporate Earnings before share-based compensation, interest,
taxes, depreciation, and amortization (Adjusted EBITDA) is 100% of Target or less.
    
    After bonuses derived from the Other Key Company Goals based bonus are accrued and
the 2009 Adjusted EBITDA Target is reached, 50% of earnings generated above the
Adjusted EBITDA Target will be used for this portion of the incentive funding, to a
maximum of 70% of Target payout*
    
    Payout is subject to Board confirmation of satisfactory balance sheet management
 2)
    
    Other Key Company Goals based bonus(50% of total bonus target for this position as a
percent of base pay)
 
    
    Pre-selected goals will be used for this part of the incentive program, as follows:
 -
    
    Market Operating Earnings
    
     30% of target award-
    
    Corporate Net New Revenue
    
     10% of target award-
    
    Key Individual Objective
    
     10% of target award
 
    
    For Market Operating Earnings and Corporate Net New Revenue, the Minimum level is
90% of Goal, and for achievements between Minimum and Goal, payouts will be
interpolated. For the Key Individual Objective, there are two possible levels of
achievement: a) Minimum achievement to get an award for that portion of the plan and
b) Goal achievement
    
    The Minimum payout for each level will be 50% of Target Payout for that level. For
example, if the achievement for Corporate Net New Revenue is at Minimum levels, the
payout would be 5% of Target (50% X 10%)
 
 *
    
    Total Maximum under the plan equals the maximums as indicated for the Adjusted
EBITDA base portion of the plan (70%) plus Target amounts earned under the Other Key
Company Goals based bonus portion of the plan (50%), or 120% of Target




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##### 



HSA
 1)
    
    Adjusted EBITDA based bonus(50% of total bonus target for those positions as a percent
of base pay)
 
    
    No bonus paid if corporate Earnings before share-based compensation, interest,
taxes, depreciation, and amortization (Adjusted EBITDA) is 100% of Target or less.
    
    After bonuses derived from the Site Operating Earnings based bonus are accrued and
the 2009 Adjusted EBITDA Target is reached, 50% of earnings generated above the
Adjusted EBITDA Target will be used for this portion of the incentive funding, to a
maximum of 70% of Target payout*
    
    Payout is subject to Board confirmation of satisfactory balance sheet management
 2)
    
    Other Key Company Goals based bonus(50% of total bonus target for this position as a
percent of base pay)
 
    
    Pre-selected goals will be used for this part of the incentive program, as follows:
 -
    
    Site Operating Earnings
    
     50% of target award
 
    
    The Minimum level is 90% of Target, and for achievements between Minimum and Target,
payouts will be interpolated.
    
    The Minimum payout will be 50% of Target Payout for that level, or 25% of the
overall Target bonus (50% X 50%)
 
 *
    
    Total Maximum under the plan equals the maximums as indicated for the Adjusted
EBITDA base portion of the plan plus Target amounts earned under the Other Key
Company Goals based bonus portion of the plan, or 120% of Target




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##### 



For
Non-Management Corporate Office Employees  Key Contributor Pool




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##### 



Bonus Payment (applies to all employee categories covered in this Plan)
 ths