Document:

EX-10.1

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.

 

 

     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.

 

 

     (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

 

 

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

 

 

     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. WalkerEX-10.2

Exhibit 10.2

AMERICA SERVICE GROUP INC.

1999 AMENDED AND RESTATED INCENTIVE STOCK PLAN

STOCK GRANT CERTIFICATE

This Stock Grant Certificate evidences a Stock Grant made pursuant to the America Service Group
Inc. (the “Company”) Amended and Restated 1999 Incentive
Stock Plan (the “Plan”) of ____________ shares
of restricted Stock to ____________, who shall be referred to as “Employee.” This Stock Grant is
granted effective as of March 9, 2009, which shall be referred to as the “Grant Date.”

	 	 	 	 	 
	 

	 	AMERICA SERVICE GROUP INC.
	 
	 	 	 	 
	 

	 	By:	 	 
	 

	 	 	 	 
	 

	 	 	 	Richard Hallworth, President & CEO

TERMS AND CONDITIONS

     § 1. Plan and Stock Grant Certificate. This Stock Grant is subject to all of the
terms and conditions set forth in this Stock Grant Certificate and in the Plan. If a determination
is made that any term or condition set forth in this Stock Grant Certificate is inconsistent with
the Plan, the Plan shall control. All of the capitalized terms not otherwise defined in this Stock
Grant Certificate shall have the same meaning in this Stock Grant Certificate as in the Plan. A
copy of the Plan will be made available to Employee upon written request to the corporate Secretary
of the Company

     § 2. Stockholder Status. Employee shall have the right under this Stock Grant to
receive cash dividends on all of the shares of Stock subject to this Stock Grant when and as the
same are paid to the stockholders of the Company and to vote such shares until Employee’s right to
such shares is forfeited or becomes nonforfeitable. If Employee forfeits any shares under § 3,
Employee shall at the same time forfeit Employee’s right to vote such shares and to receive future
dividends paid with respect to such shares. Any Stock dividends or other distributions of property
(other than cash dividends) made with respect to shares that remain subject to forfeiture under § 3
shall be held by the Company, and Employee’s rights to receive such dividends or other property
(other than cash dividends) shall be forfeited or shall be nonforfeitable at the same time the
shares of Stock with respect to which the dividends or other property are attributable are
forfeited or become nonforfeitable. Except for (1) the right to receive cash dividends, which
shall be paid when and if paid to the stockholders of the Company and (2) the right to vote the
shares of Stock subject to this Stock Grant which are described in the first sentence of this § 2,
Employee shall have no rights as a Stockholder with respect to such shares of Stock until
Employee’s interest in such shares has become nonforfeitable.

 

 

     § 3. Vesting and Forfeiture.

	 	a.	 	Vesting. Subject to § 3(b), Employee’s interest in the Stock subject
to this Stock Grant shall become nonforfeitable in accordance with Exhibit B.

	 
	 	b.	 	Forfeiture. If the employee’s employment is terminated for any reason,
except as set forth below, before his or her interest in all of the shares shall have
become nonforfeitable (as set forth in § 3(a) above), then he or she shall forfeit that
portion of shares which have not then previously become nonforfeitable.
Notwithstanding the foregoing, that portion of the shares that have not previously
become nonforfeitable in accordance with § 3(a) above shall become fully nonforfeitable
prior to the dates set forth in § 3(a) above if any of the following occur:

	 	1.	 	If there is Change in Control of America
Service Group Inc., the shares shall become fully nonforfeitable
immediately upon the occurrence of the event causing the Change in
Control. For purposes of this Agreement, the term Change in
Control shall have the meaning ascribed to it in Section 2 of the
Plan; provided, however, that if any Employee has a separate
written employment agreement that specifically defines Change in
Control, such definition shall be used for that Employee only.

	 
	 	2.	 	If the Employee’s employment with the Company
or any of its affiliates, parents or subsidiaries, is terminated
due to the death of the Employee, the shares shall become fully
nonforfeitable upon the date of death.

	 
	 	3.	 	If the Employee’s employment with the Company
or any of its affiliates, parents or subsidiaries is terminated due
to the Disability of the Employee, the shares shall become fully
nonforfeitable upon such date of termination. For purposes of this
Agreement, the term Disability shall be defined as the Employee
failing to or being unable to perform, as determined by the
Committee in its sole discretion, the duties required of his or her
job because of any physical or mental infirmity, and such failure
or inability shall continue for any six consecutive months;
provided, however that if any Employee has a separate written
employment agreement that specifically defines Disability, such
definition shall be used for that Employee only.

	 
	 	4.	 	If the Employee’s employment with the Company
or any of its affiliates, parents or subsidiaries is terminated by
the company due to any reason other than as set forth above or
other than for a “Termination for Cause”, the shares shall become
fully nonforfeitable upon the date of such termination. For
purposes of this Agreement a “Cause” shall mean: (i) intentional
commission of an act, or failure to act, in a manner which
constitutes

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	 	 	 	dishonesty or fraud or which has a direct material adverse effect on
the Company or any of its affiliates, parents or subsidiaries or
their respective businesses, in each case as determined by the
Committee in its sole discretion; or (ii) Employee’s conviction of
or a plea of guilty to any felony or crime involving moral
turpitude; provided, however that if any Employee has a separate
written employment agreement that specifically defines “Cause”, such
definition shall be used for that Employee only.

     § 4. Stock Certificates. Company shall issue a stock certificate for the shares of
Stock subject to this Stock Grant in the name of Employee upon Employee’s execution of the
irrevocable stock power in favor of Company attached as Exhibit A. The Secretary of
Company shall hold such stock certificate representing such shares and any distributions made with
respect to such shares (other than cash dividends) until such time as his or her interest in such
shares have become nonforfeitable or have been forfeited. As soon as practicable after each date
as of which his or her interest in any shares becomes nonforfeitable under § 3(a), Company shall
issue to Employee a stock certificate reflecting the shares in which his or her interest has become
nonforfeitable on such date (together with any distributions made with respect to the shares that
have been held by Company). If shares are forfeited, the shares (together with any distributions
made with respect to the shares that have been held by Company) automatically shall revert back to
Company.

     § 5. Nontransferable. No rights, other than nonforfeitable rights, granted under this
Stock Grant Certificate shall be transferable by Employee, other than by will or by the laws of
descent and distribution. The person or persons, if any, to whom this Stock Grant is transferred
by will or by the laws of descent and distribution shall be treated after Employee’s death the same
as Employee under this Stock Grant.

     § 6. Other Laws. Company shall have the right to refuse to transfer shares of Stock
subject to this Stock Grant to Employee if Company acting in its absolute discretion determines
that the transfer of such shares might violate any applicable law or regulation.

     § 7. No Right to Continue Service. Neither the Plan, this Stock Grant Certificate,
nor any related material shall give Employee the right to continue in employment by the Company or
any of its affiliates, parents or subsidiaries, or shall adversely affect the right of ASG or any
of its affiliates, parents or subsidiaries to terminate Employee’s employment with or without cause
at any time.

     § 8. Governing Law. The Plan and this Stock Grant Certificate shall be governed by
the laws of the State of Delaware.

     § 9. Binding Effect. This Stock Grant Certificate shall be binding upon Company and
Employee and their respective heirs, executors, administrators and successors.

     § 10. Headings and Sections. The headings contained in this Stock Grant Certificate
are for reference purposes only and shall not affect in any way the meaning or interpretation of
this Stock Grant Certificate. All references to sections in this Stock Grant Certificate shall be
to

3

 

sections of this Stock Grant Certificate unless otherwise expressly stated as part of such
reference.

     § 11. Tax Withholding. This Stock Grant has been granted subject to the condition
that Employee consents to whatever action the Company directs to satisfy the minimum statutory
federal and state withholding requirements, if any, which the Company determines are applicable.

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Exhibit A

IRREVOCABLE STOCK POWER

     As
a condition to the issuance to the undersigned of a stock certificate for the
____________ shares of Stock which were granted to the undersigned as a Stock Grant under the America Service
Group Inc. 1999 Amended and Restated Incentive Stock Plan in the Stock Grant Certificate dated
March 9, 2008, the undersigned hereby executes this Irrevocable Stock Power in order to sell,
assign and transfer to America Service Group Inc. the shares of Stock subject to such Stock Grant
for purposes of effecting any forfeiture called for under § 3(b) of the Stock Grant Certificate and
does hereby irrevocably give America Service Group Inc. the power (without any further action on
the part of the undersigned) to transfer such shares of Stock on its books and records back to
America Service Group Inc. to effect any such forfeiture. This Irrevocable Stock Power shall
expire automatically with respect to the shares of Stock on the date such shares of Stock are no
longer subject to forfeiture under § 3(b) of such Stock Grant Certificate or, if earlier,
immediately after such a forfeiture has been effected with respect to such shares of Stock.

	 	 	 
	 
	 	 
	 

	 	 
	 

	 	Signature
	 
	 	 
	 
	 	 
	 

	 	 
	 

	 	Employee Name
	 
	 	 
	 
	 	 
	 

	 	 
	 

	 	Date

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Exhibit B

Vesting.

1. The Employee’s interest in the shares of Stock subject to this Stock
Grant shall become nonforfeitable on the third anniversary of the Grant Date
unless prior to the third anniversary of the Grant Date the employee’s
employment is terminated for any reason except for the reasons set forth §§
3(b)(2) through 3(b)(4).

2. In the event the Company’s common stock, $0.01 par value per share
(“Common Stock”), shall achieve an average closing stock price equal to or
greater than $17.00 per share for ninety (90) consecutive calendar days (the
“Stock Price Vesting Date”) on the NASDAQ Stock Market or such other primary
stock exchange on which the Common Stock is listed and traded, all of the
shares of Stock subject to this Stock Grant (to the extent such shares are
not already nonforfeitable) shall become nonforfeitable on the Stock Price
Vesting Date.

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