**Exhibit 10.2**

**EMPLOYMENT AGREEMENT**

**CORNELL COMPANIES, INC.**

This EMPLOYMENTAGREEMENT is made and entered into as of the 19th day of March, 2007, by andbetween Cornell Companies, Inc., a Delaware corporation (the “Company”),and William E. Turcotte (“Employee”).

WHEREAS, theCompany wishes to employ the Employee and to enter into an agreement embodyingthe terms of such employment (this “Agreement”) and Employee desires toenter into this Agreement and to accept such employment, subject to the termsand provisions of this Agreement.

NOW, THEREFORE, inconsideration of the promises and mutual covenants contained herein and forother good and valuable consideration, the receipt and sufficiency of which aremutually acknowledged, the Company and Employee hereby agree as follows:

# Section 1.               **Definitions**.

## (a)           “AccruedObligations” shall mean (i) all accrued but unpaid Base Salary through thedate of termination of Employee’s employment, (ii) any unpaid or unreimbursedbusiness expenses incurred in accordance with Section 8 below, (iii) anybenefits provided under the Company’s employee benefit plans or arrangements,in accordance with the terms of any such benefit plans or arrangements, and(iv) payments or benefits required to be provided Employee by operation of applicablelaw.

## (b)           “BaseSalary” shall mean the salary provided for in Section 6(a), below, or anyincreased salary granted to Employee pursuant to Section 6(a).

## (c)           “Board”shall mean the Board of Directors of the Company.

## (d)           “Cause”shall mean (i) material acts of personal dishonesty substantially relevant toCompany matters, gross negligence or willful misconduct by Employee inconnection with Employee’s employment duties; (ii) failure or refusal byEmployee to perform in any material respect his duties or responsibilitiesunder this Agreement; (iii) misappropriation by Employee of the assets orbusiness opportunities of the Company or its affiliates; (iv) embezzlement orother financial fraud committed by Employee, at his direction, or with hispersonal knowledge; (v) Employee’s indictment for, conviction of, admission to,or entry of pleas of no contest to any felony or any crime involving moralturpitude; (vi) public or consistent drunkenness by Employee or his illegal useof narcotics which is, or could reasonably be expected to become, materiallyinjurious to the reputation or business of the Company or its affiliates orwhich impairs, or could reasonably be expected to impair, the performance ofEmployee’s duties hereunder; or (vii) Employee’s breach of any materialprovision of this Agreement or violation of the Company’s practices orpolicies.

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## (e)           A “Change in Control” shall bedeemed to have occurred on the earliest of the following dates:  (i) the date the Company merges orconsolidates with any other entity, and the Company’s stockholders do not own,directly or indirectly, at least 50% of the voting capital stock of thesurviving entity; (ii) the date the Company sells all or substantially all ofits assets to any other person or entity; provided that the sale or othertransfer of Company facilities to a real estate investment trust, in asale-leaseback transaction, or any similar transaction shall not be considereda sale of all or substantially all of the Company’s assets; (iii) the date theCompany is dissolved; or (iv) the date any third person or entity together withits Affiliates becomes, directly or indirectly, the beneficial owner of theleast 51% of the Voting Stock of the Company; provided, however, thatnotwithstanding anything to the contrary contained in clauses (i) — (iv), aChange in Control shall not be deemed to have occurred in connection with anybankruptcy or insolvency of the Company, or any transaction in connectiontherewith.

### (i)             “Affiliate” shallmean, with respect to any person or entity, any person or entity that directlyor indirectly Controls, is Controlled by, or is under common Control with suchperson or entity;

### (ii)           “Control” shallmean, with respect to a person or entity, the possession, directly orindirectly, of the power to direct or cause the direction of the management andpolicies of such person or entity, in any way.

### (iii)          “Voting Stock”shall mean the outstanding shares of capital stock of the Company entitled tovote generally in elections for directors, considered as one class, providedthat if any shares are entitled to more or less than one vote, the term VotingStock shall refer to such proportion of the votes entitled to be cast by suchshares.

Notwithstandinganything to the contrary above, if the Employee’s position, duties andresponsibilities on behalf of the Company are devoted entirely to one distinctoperating division of the Company, and that operating division of the Companyis the subject of a Sale, then such Sale of that operating division shall bedeemed a Change in Control for that Employee. In the event the Company and theEmployee do not agree whether he was employed by such a distinct operationdivision, the issue shall be determined with finality by the Company’sthen-Chief Executive Officer in his sole and absolute discretion.

## (f)               “CommencementDate” shall mean March 19, 2007.

## (g)              “Company”shall mean Cornell Companies, Inc., a Delaware corporation.

## (h)              “CompetitiveActivities” shall mean any business activities in which the Company or itssubsidiaries are engaged or have plans to engage either (i) during the periodof Employee’s employment, or (ii) for purposes of Employee’s obligations underSubsection 10(b) after the period of Employee’s employment, at the time oftermination of Employee’s employment, including without limitation, (i)correctional services, (ii) half-way house services or treatment programs,(iii) juvenile justice programs or facilities, and (iv) related educational,correctional, rehabilitative, or treatment services.

## (i)               “ConfidentialInformation” shall have the meaning set forth in Subsection 10(a), below.

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## (j)               “Developments”shall have the meaning set forth in Subsection 10(e), below.

## (k)              “Disability” shall mean anyphysical or mental disability or infirmity that prevents the performance ofEmployee’s duties (despite reasonable accommodation) for a period of (i) sixty(60) consecutive days or (ii) ninety (90) non-consecutive days during anytwelve (12) month period.  Any questionas to the existence, extent or potentiality of Employee’s Disability upon whichEmployee and the Company cannot agree shall be determined by a qualified,independent physician selected by the Company and approved by Employee (whichapproval shall not be unreasonably withheld). The determination of any such physician shall be final and conclusivefor all purposes of this Agreement.

(l)               “Entity”shall mean any “person” other than an individual person.

## (m)             “Long-termIncentive Plan” shall mean the Cornell Companies, Inc. Long-term IncentivePlan, as the same may be established, amended, modified or supplemented(including replacement or additional plans) from time to time in the solediscretion of the Company.

## (n)             “Non-competition Restricted Period” shall mean the period commencing onthe Commencement Date and extending through (a) the twelve (12) monthanniversary of the date of Employee’s termination of employment hereunderpursuant to Section 9 for any reason, but (b) the eighteen (18) monthanniversary of the date of Employee’s termination of employment hereunderfollowing a Change in Control in accordance with Subsection 9(f).

## (o)              “Non-solicitationRestricted Period” shall mean the period commencing on the CommencementDate and extending through the (a) twelve (12) month anniversary of the date ofEmployee’s termination of employment hereunder pursuant to Section 9 for anyreason, but (b)  the eighteen (18) monthanniversary of the date of Employee’s termination hereunder following a Changein Control in accordance with Subsection 9(f). .

(p)              “Sale” shall mean atransfer of all or substantially all of the interests of the Company, or aChange in Control of the Company, or any transaction having a similar effect(including, without limitation, a merger or consolidation).

## (q)              “SeveranceAmount” shall mean the amount specified in Subsection 9(d)(ii) or, in thealternative, Subsection 9(f), as applicable, below.

# Section 2.               **Acceptance;“At Will” Employment**.

The Company agreesto employ Employee and Employee agrees to serve the Company on the terms and conditionsset forth herein.  Employee’s employmentis and shall at all times be on an “at will” basis, meaning that either theCompany or the Employee may terminate the employment relation, at any time,without notice to the other, for any lawful reason, except as may otherwise berequired to satisfy the obligations of Company and Employee to each otherpursuant to the terms of this Agreement.

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Section3.               **Position, Duties and Responsibilities**.

## (a)         Position;Duties:  Throughout his period ofemployment, Employee shall be employed and serve as the Corporate GeneralCounsel of the Company (together with such other position or positionsconsistent with Employee’s title as the Company shall specify from time totime) and shall have such duties typically associated with such title and asmay otherwise be assigned to him by the Company. Employee also agrees to serveas an officer and/or director of any subsidiary of the Company withoutadditional compensation.

## (b)        FullBusiness Time: Employee shall devote his full business time, attention,skill and best efforts to the performance of his duties under this Agreementand shall not engage in any other occupation or active business during theperiod of his employment, including, without limitation, any such activity that(x) conflicts with the interests of the Company, (y) interferes with the properand efficient performance of his duties for the Company or (z) interferes withthe exercise of his judgment in the Company’s best interests.

## (c)           Company Policies:  The Employee shall comply with all Companypractices, policies and procedures (including the Company’s conflict ofinterest policy) as in effect from time to time.

# Section4.               **Location.**

The location of Employee’s employment by the Company shall be in thegreater metropolitan area of Houston, Texas, or within fifty (50) milesof such greater metropolitan area, except where Employee and Company haveentered into a written arrangement that provides for the Employee to workprimarily from Employee’s own home office.

# Section5.               **Relocation.**

## In the eventthat the Company shall request Employee to relocate his principal residence,the Company shall reimburse employee for any reasonable moving expenses thatare actually incurred by Employee in connection with any such relocation,provided Employee furnishes to the Company any documentation reasonablyrequested by the Company evidencing any such reasonable moving expenses.

# Section6.               **Compensation**.

# Duringthe period of his employment, Employee shall be entitled to the following compensation:

## (a)           Base Salary.  Employee shall be paid an annualized BaseSalary, payable in accordance with the regular payroll practices of theCompany, of $230,000.00, with increases, if any, as may be approved in writingby the Company, in its sole discretion. During the Employment Period, the BaseSalary shall be reviewed at least annually. Any increase in Base Salary shall not serve to limit or reduce any otherobligation to the Employee under this Agreement.  The term Base Salary as utilized in this Agreementshall refer to Base Salary as so increased.

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## (b)           Incentive Compensation.   Employee shall be eligible for the annualdiscretionary incentive compensation plan as determined by the Company, in itssole discretion (the “Incentive Compensation”).  Employee shall receive the IncentiveCompensation, if any, in respect of any year at the same time as incentivecompensation awards are paid to other executive officers of the Company, but inno event later than one hundred twenty (120) days after the end of the fiscalyear for which the incentive compensation is payable. The annual target bonusforming part or all of the Incentive Compensation shall be no less thanthirty-five percent (35%) of Employee’s Base Salary.

## (c)           Long-termIncentive Plan.  Employee will beeligible to participate in the Long-term Incentive Plan, subject to the termsand provisions of such Plan.

# Section 7.               **Employee Benefits; Vacation, etc.**

## During theperiod of his employment, Employee shall be entitled to participate in suchhealth, insurance, retirement and other benefits generally provided to othermembers of the senior management team of the Company.  Employee shall also be entitled to the samenumber of holidays, paid time off and other employment policies and practicesas are generally allowed to members of the senior management team of theCompany in accordance with the Company policy in effect from time to time.    Nothing in this Agreement shall prevent orlimit the Employee’s continuing or future participation in any plan, program,policy or practice provided by the Company and for which the Employee mayqualify according to the terms therein as may be modified from time totime.  Amounts that are vested benefitsor that the Employee is otherwise entitled to receive under any plan, policy,practice or program of, or any contract or agreement with the Company at orsubsequent to the termination shall be payable in accordance with the terms ofsuch plan, policy, practice or program, or contract or agreement as may bemodified from time to time.

# Section8.               **Reimbursement of Business Expenses**.

Employee isauthorized to incur reasonable business expenses in carrying out his duties andresponsibilities under this Agreement and the Company shall promptly reimbursehim for all reasonable business expenses incurred in connection with carryingout the business of the Company, subject to documentation in accordance withthe Company’s policy, as in effect from time to time.

# Section9.               **Termination of Employment**.

## (a)           General.  The Employee’s employment hereunder shallterminate upon the earliest to occur of (i) Employee’s death, (ii) atermination by reason of a Disability, (iii) a termination by the Company withCause, (iv) a termination by the Company without Cause, (v) termination bythe Employee, or a termination by the Company without Cause following a Changein Control. Upon any termination of Employee’s employment for any reason,except as may otherwise be requested by the Company in writing, Employee shallresign from any and all directorships, committee memberships or any otherpositions Employee holds with the Company or any of its affiliates.  Notwithstanding any other provision of this Agreement, theprovisions of this Section 9 shall exclusively govern Employee’s rights upontermination of employment with 

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## the Company, provided,however, that nothing contained in this Section 9 shall diminishEmployee’s rights with respect to the Long-term Incentive Plan, the terms andprovisions of which shall continue to govern Employee’s rights and interests inthe Long-term Incentive Plan following any termination in accordance therewith,or the Accrued Obligations.

## (b)           Terminationdue to Death or Disability.  Employee’semployment shall terminate automatically upon his death.  The Company may terminate Employee’semployment immediately upon the occurrence of a Disability, as defined inSubsection 1(k) above, such termination to be effective upon Employee’s receiptof written notice of such termination. In the event Employee’s employment is terminated due to his death orDisability, Employee or his estate or his beneficiaries, as the case may be,shall be entitled to:

### (i)               The AccruedObligations; and

### (ii)              Any unpaid Incentive Compensation in respect to anycompleted fiscal year which has ended prior to the date of such termination,which amount shall be paid at such time as incentive compensation awards arepaid to other senior executives of the Company.

Following such termination of Employee’s employment by the reason ofdeath or Disability, except as set forth in this Subsection 9(b), Employeeshall have no further rights to any compensation or any other benefits underthis Agreement.

## (c)              Terminationby the Company for Cause.

### (i)               A termination for Cause shall not take effect unlessthe provisions of this Subsection (i) are complied with.  Employee shall be given not less thanfourteen (14) days written notice by the Company of the intention to terminatehim for Cause, which notice shall describe the particular act or acts orfailure or failures to act that constitute the grounds on which the proposedtermination for Cause is based.  If thenature of the alleged Cause is capable of cure, Employee shall have fourteen(14) days after the date that such written notice has been given to Employee inwhich to cure such conduct. If he fails to cure such conduct within that timeperiod, the termination shall be effective on the date immediately followingthe expiration of the fourteen (14) day notice period.  During any cure period provided hereunder,the Company may, in its sole and absolute discretion, prohibit Employee fromentering the premises of the Company or otherwise performing his dutieshereunder, provided it does not prevent the cure by doing so.

### (ii)              In the event the Company terminates Employee’s employmentfor Cause, he shall be entitled only to the Accrued Obligations.

### Following such termination of Employee’semployment for Cause, except as set forth in this Subsection 9(c), Employeeshall have no further rights to any compensation or any other benefits underthis Agreement.

## (d)           Terminationby the Company without Cause.  TheCompany may terminate Employee’s employment at any time without Cause,effective upon Employee’s receipt of written notice of such termination.  In the event Employee’s employment isterminated by the Company without Cause (other than due to death orDisability), Employee shall be entitled to:

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### (i)               The AccruedObligations;

### (ii)              Payment in twenty-six (26) equal bi-monthlyinstallments of twelve (12) months of then-Base Salary (the “Severance Amount”),less applicable withholdings and deductions, subject in all events to Section21 of this Agreement.

### (iii)             Any unpaid Incentive Compensation in respect to anycompleted fiscal year which has ended prior to the date of such termination, whichamount shall be paid at such time as incentive compensation awards are paid toother senior executives of the Company; and

### (iv)             Should Employee be eligible for and elect to continuehis health insurance pursuant to COBRA following the date of such termination,the Company will pay the COBRA premiums, less the amount deducted from Employee’sseverance in an amount equal to that which had been deducted for such insurancecoverage when he was a regular employee, until the earlier of: (A) twelve (12)months or (B) the date Employee commences employment with any person or entityand, thus, is eligible for health insurance benefits.

Notwithstanding the foregoing, the payments and benefits described inSubsections (ii), (iii) and (iv) above shall immediately terminate, and theCompany shall have no further obligations to Employee with respect thereto, inthe event that Employee breaches any provision of Section 10 hereof.

Following suchtermination of Employee’s employment by the Company without Cause, except asset forth in this Subsection 9(d), Employee shall have no further rights to anycompensation or any other benefits under this Agreement.

## (e)         Terminationby Employee.  Employee may terminatehis employment by providing the Company thirty (30) days written or oral noticeof such termination.  In the event of atermination of employment by Employee under this Subsection 9(e), Employeeshall be entitled only to the Accrued Obligations.  In the event of termination of Employee’semployment under this Subsection 9(e), the Company may, in its sole andabsolute discretion, prohibit Employee from entering the premises of theCompany for all or any portion of the notice period (which in no event shall betreated as a termination without Cause), provided that the Company shallcontinue to pay to Employee his then current Base Salary and continue benefitsprovided for the duration of the notice period.

Following such termination of Employee’s employment by Employee, exceptas set forth in this Subsection 9(e), Employee shall have no further rights toany compensation or any other benefits under this Agreement.

## (f)            Terminationby Company Without Cause Following a Change in Control.  If, within one hundred eighty (180) daysfollowing a Change in Control, the Company terminates the employment of theEmployee without Cause, then the Employee shall be treated in all respects asif he was terminated Without Cause in accordance with Subsection 9(d), above,except that (1) the Severance Amount shall represent eighteen (18) months ofthen-Base Salary, payable in eighteen (18) equal monthly installments, (2)payment of employee’s COBRA premiums, as described in Subsection 9(d)(iv)above, shall continue until the earlier of: (A) 

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## eighteen (18) months or (B) the date Employee commences employment withany person or entity and, thus, is eligible for health insurance benefits, and(3) the Employee will also receive in “lump sum” fashion, less applicabledeductions and withholdings, a payment representing the discretionary IncentiveCompensation he would have been awarded following the fiscal year’s end, asdetermined by the Company in its sole discretion, pro-rated for the period oftime he was employed by the Company in the fiscal year for which the bonus ispayable.

Notwithstanding the foregoing, the payments and benefits described inthis Subsections 9(f) shall immediately terminate, and the Company shall haveno further obligations to Employee with respect thereto, in the event thatEmployee breaches any provision of Section 10 hereof.

Following suchtermination of Employee’s employment by the Company without Cause within OneHundred Eighty (180) days of a Change of Control, except as set forth in thisSubsection 9(f), Employee shall have no further rights to any compensation orany other benefits under this Agreement.

## (g)           Release.  Notwithstanding any provision herein to thecontrary, the Company may require that, prior to payment of any amount orprovision of any benefit other than the Accrued Obligations, Employee shallhave executed a customary general release in favor of the Company and itsaffiliates and related parties in such form as is reasonably required by theCompany, and any waiting periods contained in such release shall have expired.

# Section10.             **Restrictive Covenants**.

# Employeeacknowledges and agrees that (A) the agreements and covenants contained in thisSection 10 are (i) reasonable and valid in geographical and temporal scope andin all other respects, and (ii) essential to protect the value of the Company’sbusiness and assets, and (B) by his employment with the Company, Employee willobtain knowledge, contacts, know-how, training and experience and there is asubstantial probability that such knowledge, know-how, contacts, training andexperience could be used to the substantial advantage of a competitor of theCompany and to the Company’s substantial detriment.  For purposes of this Section 10, referencesto the Company shall be deemed to include its subsidiaries.

## (a)           ConfidentialInformation.  At any time during andafter the end of the period of Employee’s employment by the Company, withoutthe prior written consent of the Company, except to the extent required by anorder of a court having jurisdiction or under subpoena from an appropriategovernment agency, in which event, Employee shall use his best efforts toconsult with the Company prior to responding to any such order or subpoena, andexcept as required in the performance of his duties hereunder, Employee shallnot disclose to or use for his benefit or the benefit of any third party anyconfidential or proprietary trade secrets, customer lists, drawings, designs,information regarding legislative initiatives, contract negotiations, vendorarrangements, product development, marketing plans, sales plans, manufacturingplans, management organization information, operating policies or manuals,business plans, financial records, packaging design or other financial,commercial, business or technical information (i) relating to the Company, or(ii) that the Company may receive belonging to suppliers, customers, or otherswho do business with the Company (collectively, 

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## “Confidential Information”). Employee’s obligation under this Subsection 10(a) shall not apply to anyinformation which (i) is known publicly; or (ii) is in the public domain orhereafter enters the public domain without the breach of Employee of thisSubsection 10(a); or (iii) is made available to Employee by a third party notin breach of an obligation of confidentiality.

## (b)        Non-Competition.** **Employee covenantsand agrees that during the Non-competition Restricted Period, with respect toany State of the United States of America or any other jurisdiction in whichthe Company engages in business during his employment, or, followingtermination of Employee’s employment, was engaged in business at the time ofsuch termination, Employee shall not, directly or indirectly, individually orjointly, own any interest in, operate, join, control or participate as apartner, director, principal, officer, or agent of, enter into the employmentof, act as a consultant to, or perform any services for any person or entity(i) that engages in Competitive Activities or (ii) in which any suchrelationship with Employee would result in the likely, probable or inevitableuse or disclosure of Confidential Information; provided that nothing shallprohibit Employee from being a partner or employee of, or otherwise beingassociated with, a professional services firm as long as Employee is notdirectly engaged in the provision of services to any such person orentity.  Notwithstanding anything hereinto the contrary, this Subsection 10(b) shall not prevent Employee fromacquiring as an investment securities representing not more than three percent(3%) of the outstanding voting securities of any publicly-held corporation.

## (c)         Non-Solicitation;Non-Interference.  During theNon-solicitation Restricted Period, Employee shall not, directly or indirectly,for his own account or for the account of any other person or entity, (i)encourage, solicit or induce, or in any manner attempt to encourage, solicit orinduce, any person or entity employed by, as an agent of, or a service providerto, the Company to terminate (or, in the case of an agent or service provider,reduce) such person’s or entity’s employment, agency or service, as the casemay be, with the Company; (ii) solicit or accept business from any individualor entity for whom the Company provided services or products within theone-year period immediately preceding the date of Employee’s termination ofemployment; or (iii) solicit or accept business from any prospective customeror client of the Company who, within the one-year period immediately precedingthe date of Employee’s termination of employment, Employee had directlysolicited or where, directly or indirectly, in whole or in part, Employeesupervised or participated in the Company’s solicitation activities related tosuch prospective customer or client, nor shall he assist any person or entityto engage in any activity prohibited by this Subsection 10(c).

## (d)       Return of Documents.  In the event of the termination of Employee’semployment for any reason, Employee shall deliver to the Company all of (i) theproperty of the Company, and (ii) the documents and data of any nature and inwhatever medium of the Company, and he shall not take with him any suchproperty, documents or data or any reproduction thereof, or any documentscontaining or pertaining to any Confidential Information.

## (e)       Worksfor Hire.  Employee agrees that theCompany shall own all right, title and interest throughout the world in and toany and all inventions, original works of authorship, developments, concepts,know-how, improvements or trade secrets, whether or not patentable orregisterable under copyright or similar laws, which Employee may solely orjointly conceive or develop or reduce to practice, or cause to be conceived ordeveloped or reduced to 

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## practice during Employee’s period of Employment, whether or not duringregular working hours, provided they either (i) relate at the time ofconception or development to the actual or demonstrably proposed business orresearch and development activities of the Company; (ii) result from or relateto any work performed for the Company; or (iii) are developed through the useof Confidential Information and/or Company resources or in consultation withCompany personnel (collectively referred to as “Developments”).  Employee hereby assigns all right, title andinterest in and to any and all of these Developments to the Company.  Employee agrees to assist the Company, at theCompany’s expense, to further evidence, record and perfect such assignments,and to perfect, obtain, maintain, enforce, and defend any rights specified tobe so owned or assigned.  Employee herebyirrevocably designates and appoints the Company and its agents asattorneys-in-fact to act for and on Employee’s behalf to execute and file anydocument and to do all other lawfully permitted acts to further the purposes ofthe foregoing with the same legal force and effect as if executed byEmployee.  In addition, and not incontravention of any of the foregoing, Employee acknowledges that all originalworks of authorship which are made by him (solely or jointly with others)within the scope of employment and which are protectable by copyright are “worksmade for hire,” as that term is defined in the United States Copyright Act (17USC Sec. 101).  To the extent allowed bylaw, this includes all rights of paternity, integrity, disclosure andwithdrawal and any other rights that may be known as or referred to as “moralrights.”  To the extent Employee retainsany such moral rights under applicable law, Employee hereby waives such moralrights and consents to any action consistent with the terms of this Agreementwith respect to such moral rights, in each case, to the full extent of suchapplicable law.  Employee will confirmany such waivers and consents from time to time as requested by the Company.

## (f)        BluePencil.  If any court of competentjurisdiction shall at any time deem the duration or the geographic scope of anyof the provisions of this Section entitled “Restrictive Covenants”unenforceable, the other provisions of this Section entitled “RestrictiveCovenants” shall nevertheless stand and the duration and/or geographic scopeset forth herein shall be deemed to be the longest period and/or greatest sizepermissible by law under the circumstances, and the parties hereto agree thatsuch court shall reduce the time period and/or geographic scope to permissibleduration or size.

# Section11.             **Injunctive Relief**.

Without limitingthe remedies available to the Company, Employee acknowledges that a breach orthreatened breach of any of the covenants contained this Section 10 hereof mayresult in material irreparable injury to the Company or its subsidiaries oraffiliates for which there is no adequate remedy at law, that it will not bepossible to measure damages for such injuries precisely and that, in the eventof such a breach or threat thereof, the Company shall be entitled to obtain atemporary restraining order and/or a preliminary or permanent injunction,without the necessity of proving irreparable harm or injury as a result of suchbreach or threatened breach of Section 10 hereof, restraining Employee fromengaging in activities prohibited by Section 10 hereof or such other relief asmay be required specifically to enforce any of the covenants in Section 10hereof.  Notwithstanding any otherprovision to the contrary, the Non-competition Restriction Period and theNon-solicitation Restriction Period shall be tolled during any period ofviolation of any of the covenants in Subsections 10(b) or (c) hereof and duringany other period required for litigation during which the Company seeks toenforce 

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suchcovenants against Employee or another person or entity with whom Employee isaffiliated if it is ultimately determined that Employee was in breach of suchcovenants.

# Section12.             **Representations and Warranties of Employee**.

Employeerepresents and warrants to the Company that:

## (a)           Employeeis entering into this Agreement voluntarily and that his execution of thisAgreement, his employment hereunder and compliance with the terms andconditions hereof will not conflict with or result in the breach by him of anyagreement to which he is a party or by which he may be bound;

## (b)           He has not, and in connection withhis employment with the Company will not, violate any non-solicitation or othersimilar covenant or agreement by which he is or may be bound;

## (c)           in connection with his employmentwith the Company he will not use any confidential or proprietary information hemay have obtained in connection with employment with any prior employer; and

(d)           The Company has suggested to theEmployee that he seek legal counsel of his choice to review this Agreementbefore he signs it, and he has been given full and ample opportunity to do so.

# Section13.             **Taxes**.  

The Company maywithhold from any payments made under this Agreement all applicable taxes,including but not limited to income, employment and social security taxes, asshall be required by law or governmental regulation or ruling.

# Section 14.             **Set Off; No Mitigation**.  

The Company’sobligation to pay Employee the amounts provided and to make the arrangementsprovided hereunder shall be subject to set-off, counterclaim or recoupment ofamounts owed by Employee to the Company or its affiliates. Employee shall notbe required to mitigate the amount of any payment provided for pursuant to thisAgreement by seeking other employment or otherwise and, except as expresslyprovided for in this Agreement, the amount of any payment provided for pursuantto this Agreement shall not be reduced by any compensation earned as a resultof Employee’s other employment or otherwise.

# Section15.             **Successors and Assigns; No Third-Party Beneficiaries**.

# (a)           The Company. This Agreementshall inure to the benefit of, be binding upon, and be enforceable by, and may be assigned by the Company to, anypurchaser of all or substantially all of the Company’s business or assets, oran operating division thereof, any successor to the Company or any assigneethereof (whether direct or indirect, by stock purchase, asset purchase, merger,consolidation or otherwise).  The Companywill require any such purchaser, successor or assignee to expressly assume andagree to perform this Agreement in the 

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# same manner and to thesame extent that the Company would be required to perform it if no suchpurchase, succession or assignment had taken place.

## (b)           Employee.  Employee’s rights and obligations under thisAgreement shall not be transferable by Employee by assignment or otherwise,without the prior written consent of the Company; provided, however,that if Employee shall die, all amounts then payable to Employee hereundershall be paid in accordance with the terms of this Agreement to Employee’sestate.

## (c)           NoThird-PartyBeneficiaries.  Nothing expressed orreferred to in this Agreement will be construed to give any person or entityother than the Company and Employee any legal or equitable right, remedy orclaim under or with respect to this Agreement or any provision of thisAgreement.

# Section16.             **Waiver and Amendments**.

Any amendment ormodification of any of the terms of this Agreement shall be valid only if madein writing and signed by each of the parties hereto.  No waiver by either of the parties hereto oftheir rights hereunder or of compliance by the other party of any of the termsor conditions hereof shall be effective unless the party waiving its rightshereunder or compliance with the terms hereof shall have executed a writteninstrument setting forth the terms and conditions of such waiver.  In addition, no waiver by either of theparties hereto of their rights hereunder or of compliance by the other party ofany of the terms or conditions hereof shall be deemed to constitute a waiverwith respect to any subsequent occurrences or transactions hereunder unlesssuch waiver specifically states that it is to be construed as a continuingwaiver.

# Section17.             **Severability and Governing Law**.

Without limitingthe terms of Section 10 above, if any covenants or such other provisions ofthis Agreement are found to be invalid or unenforceable by a finaldetermination of a court of competent jurisdiction: (a) the remaining terms andprovisions hereof shall be unimpaired, and (b) the invalid or unenforceableterm or provision hereof shall be deemed replaced by a term or provision thatis valid and enforceable and that comes closest to expressing the intention ofthe invalid or unenforceable term or provision hereof.  This Agreement shall be governed by andconstrued in accordance with the laws of the State of Texas (without  giving effect to the choice of law principlesthereof) applicable to contracts made and to be performed entirely within suchstate.

# Section 18.             **Notices.**

# Every notice or other communication relating to this Agreement shall bein writing, and shall be mailed or delivered to the party for whom it isintended at such address as may from time to time be designated by it in anotice mailed or delivered to the other party as herein provided, providedthat, unless and until some other address shall be so designated, all noticesor communications by Employee to the Company shall be mailed or delivered tothe Company at its principal executive office, and all notices orcommunications by the Company to Employee may be given to Employee personallyor may be mailed to Employee at Employee’s last known address, as reflected inthe Company’s records.  A copy of anynotice provided to the 

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# Company byEmployee hereunder shall be sent simultaneously to the Company’s ChiefExecutive Officer, or the Company’s Corporate Secretary, at the address of theCompany’s primary corporate office.

## Any notice so addressed shallbe deemed to be given:  (i) if deliveredby hand, on the date of such delivery; (ii) if mailed by courier or byovernight mail, on the first business day following the date of such mailing;and (iii) if mailed by registered or certified mail, on the third business dayafter the date of such mailing.

# Section 19.             **Section Headings**.

The headings ofthe Sections and Subsections of this Agreement are inserted for convenienceonly and shall not be deemed to constitute a part thereof, affect the meaningor interpretation of this Agreement or of any term or provision hereof.

# Section20.             **IRS Code Section 409A**

Notwithstandingany other provision of this Agreement to the contrary, if the Employee is a “SpecifiedEmployee” as defined in IRS Code (“the Code”) Section 409A, and if any amountsthat the Employee is entitled to receive pursuant to this Agreement areotherwise not exempt from Code Section 409A as a short-term deferral orotherwise, then to the extent necessary to comply with Code Section 409A, nopayments may be made and no benefits may be provided under this Agreementbefore the date which is six (6) months after the Employee’s “separation fromservice” within the meaning of Code Section 409A or, if earlier, the Employee’sdeath.  Any payments which would haveotherwise been required to be paid during such six (6) months or, if earlier,before the Employee’s death, shall be paid to the Employee in one lump sumpayment as soon as administratively practical after the date which is six (6)months after the Employee’s separation from service or, if earlier, theEmployee’s date of death. The Employee’s termination of employment under thisAgreement shall be interpreted in a manner consistent with the definition of “Separationfrom Service” in Code Section 409A. To the extent this Agreement is subject toCode Section 409A, it is intended to comply with the applicable requirements ofCode Section 409A and shall be construed and interpreted in accordancetherewith.

# Section21.             **Entire Agreement**.

This Agreement,together with any agreements executed by the Company and Employee in respect ofawards under the Plan, constitutes the entire understanding and agreement ofthe parties hereto regarding the employment of Employee.  This Agreement supersedes all priornegotiations, discussions, correspondence, communications, understandings andagreements between the parties relating to the subject matter of thisAgreement.

# Section22.             **Survival of Operative Sections**.

Upon anytermination of Employee’s employment, the provisions of Sections 9, 10, 11, 13,14, 15, 16, 17, 18 and 23 of this Agreement (and any related definitions setforth in Section 1 hereof) shall survive to the extent necessary to give effectto the provisions thereof.

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# Section 23.             **Gender Neutrality.**

Any use of themale or female pronouns in this Agreement, whether “he,” “she,” “him,” “her” orwords or phrases to similar effect, shall have no significance in theinterpretation and application of the terms, provisions and conditions of thisAgreement, such use being solely for the sake of convenience.

# Section24.             **Counterparts; Facsimile Signature.**

This Agreement maybe executed in two or more counterparts, each of which shall be deemed to be anoriginal but all of which together shall constitute one and the sameinstrument.  The execution of thisAgreement may be by actual or facsimile signature.

**INWITNESS WHEREOF**, the undersigned have executed thisEmployment Agreement as of the date first above written.
|            | ** ** | ** ** | ** ** | **CORNELL COMPANIES, INC.**  |
|------------|------------|------------|------------|------------------------------|
| ** ** | ** ** | ** ** | ** ** | ** **                   |
| ** ** | ** ** | ** ** | ** ** | ** **                   |
| ** ** |       | By:        |       | /s/ Patrick N. Perrin        |
| ** ** | ** ** | ** ** |       | Patrick N. Perrin,           |
| ** ** | ** ** | ** ** |       | Sr. V.P. &               |
| ** ** | ** ** | ** ** |       | Chief Administrative Officer |
| ** ** | ** ** | ** ** |       |                         |
| ** ** | ** ** | ** ** |       |                         |
| ** ** | ** ** | ** ** |       | Employee                     |
| ** ** | ** ** | ** ** |       |                         |
| ** ** | ** ** | ** ** |       |                         |
| ** ** | ** ** | ** ** |       | /s/ William E. Turcotte      |
| ** ** | ** ** | ** ** |       | William E. Turcotte          |

 

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