Document:

exv10w2

Exhibit 10.2

2011 INCENTIVE COMPENSATION PLAN

America Service Group Inc.

Overall Compensation Philosophy: America Service Group (ASG) strives to provide
an equitable and market-based compensation program for employees. In addition to a
comprehensive benefit program, ASG compensates employees through competitive base salaries, a
merit system and an incentive compensation plan. Eligible employees include designated
executive managers, corporate managers, corporate employees, division vice presidents,
regional vice president, regional directors and health services administrators.

In accordance with the PHS Policy on Medical Autonomy, clinical decisions and actions
regarding health care provided to inmates to meet their serious medical needs are the sole
responsibility of qualified health care professionals. No financial incentives are available
to clinicians based upon medical utilization.

The 2011 Incentive Compensation Plan is designed to foster the accomplishment of several of
the key objectives of the Company set forth at the beginning of the year. Three goals were
established. These three goals will be used for all positions covered by the 2011 program.

Overall
Structure of the Plan

The plan is composed of two parts, each of which work independently of the other (except for
the Company’s Chief Medical Officer):

	 	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 2011.
	 
	 	•	 	After bonuses derived from the Other Key Company Goals based bonus are accrued
and the 2011 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)

	 	•	 	Net New Revenue goal accounts for 30% of bonus award.

	 	•	 	Obtain one new DOC contract that will be bid in
2011. If two or more DOC Greenfield opportunities are awarded in 2011,
we must win two total DOC new contracts with one of those being a
Greenfield opportunity.
	 
	 	•	 	Obtain $10mm in net new revenue combined from
County/Metro business.
	 
	 	•	 	Successfully retain 3 out of 4 of the following rebids of current contracts:
	 
	 	•	 	Arlington
	 
	 	•	 	Gwinnett
	 
	 	•	 	Hudson
	 
	 	•	 	Guilford

 

 

	 	•	 	Catalyst goal accounts for 20% of bonus award.

	 	•	 	Upgrade all currently deployed Catalyst sites (11) to current version.
	 
	 	•	 	Deploy Catalyst to all three women facilities,
the Pennsylvania DOC main site facilities co-located with the intake
sites and two other PA DOC sites.
	 
	 	•	 	Release at least four feature releases in 2011
to include CPOE (Labs, Meds/eRx), Chronic Care, NETS,
Tasking/Messaging, Exam Engine, and Document Management.
	 
	 	•	 	Deploy to eight non PA sites.
	 
	 	•	 	Implement Client and PHS satisfaction surveys
to new Catalyst installations.

	 	•	 	For the non-financial objectives, there are two possible levels of achievement
under this plan 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

2011 targeted payouts (as a percentage of base salary) are outlined as follows:

 

 

	 	 	 	 	 
	 	 	Target as a percent
	Position	 	of base pay
	Executive Management
	 	 	 	 
	President and Chief Executive Officer

	 	 	70	%
	Executive Vice President and Chief Financial Officer

	 	 	60	%
	Chief Human Resource Officer, Chief Risk Officer, 

Chief Information Officer, Chief Legal Officer, 

Chief Medical Officer, SVP Business Development, 

Operating Presidents, Operations Group Vice 

Presidents

	 	 	50	%

	 	 	 

	Operating Positions
	 	 
	Division Vice Presidents
	 	40%
	Regional Vice Presidents
	 	30%
	Regional Directors
	 	20%
	Regional Mgrs, Health Service Administrators (HSAs),
District Administrators and Regional Managers
	 	15%

	 	 	 

	Corporate Positions
	 	 
	Corporate Controller, VP-Finance/Asst. Treasurer, VP
Project Development
	 	35%
	Corporate Vice Presidents
	 	30%
	Corporate Middle Managers
	 	20%
	Non-Management Corporate Office Employees
	 	10%

 

 

Executive Management (other than CMO)

Positions covered:

	 	•	 	President and Chief Executive Officer
	 
	 	•	 	Executive Vice President and Chief Financial Officer
	 
	 	•	 	Chief Human Resource Officer
	 
	 	•	 	Chief Risk Officer
	 
	 	•	 	Chief Information Officer
	 
	 	•	 	Chief Legal Officer
	 
	 	•	 	SVP, Business Development
	 
	 	•	 	Operating Presidents
	 
	 	•	 	Operations Group Vice Presidents

	 	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 2011 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
	 	-     30% of target award
	 

	 	-     Catalyst
	 	-     20% of target award

 

			
	* 	 	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.

 

 

Corporate Medical Director

Given the unique nature of the Corporate Medical Director job in ensuring the quality of the
delivery
of health care by setting standards and monitoring care, the incentive for this position will
not be a function of financial performance, but emphasize the achievement of critical quality
and patient care initiatives. It will work as follows:

	 	1.	 	Deployment of Telemedicine: 30% of target award

	 	a.	 	Increase use of Telemedicine at Jail facilities by 100%
	 
	 	b.	 	Telemedicine Presentation at 2 national meetings

	 	i.	 	ACHSA
	 
	 	ii.	 	ATA

	 	c.	 	Audio Visual conferencing for Patient Safety Committee attendance by
RMDs

 

	*	 	RMDs will rotate weekly attendance at PSC by AV teleconference beginning
March 1, 2011

	 	2.	 	Catalyst: 30% of target award

	 	a.	 	Upgrade all currently deployed Catalyst ® sites (11) to
current version
	 
	 	b.	 	Re-establish PADOC deployments by second quarter
	 
	 	c.	 	Deploy Catalyst ® to all three women facilities, the
Pennsylvania DOC main side
	 
	 	 	 	facilities co-located with the intake sites, and 2 other PA DOC sites.
	 
	 	d.	 	Release at least four feature releases in 2011
	 
	 	e.	 	Enhance Catalyst ® functionality to include CPOE (Labs, Meds /eRX),
Chronic Care, NETS, Tasking/Messaging, Exam Engine, Document Management
	 
	 	f.	 	Deploy to eight non PA sites
	 
	 	g.	 	Implement Client and PHS satisfaction surveys to new Catalyst
installations
	 
	 	h.	 	Deploy Medical Watch Application to bring high risk patient to
attention of

	 	i.	 	Site Medical Director
	 
	 	ii.	 	Regional Medical Director
	 
	 	iii.	 	Specialty Panel Clinicians

	 	3.	 	Improve Patient Safety and Risk Management 30% of target award
	 
	 	 	 	The creation of a health care Culture of Safety with specific deliverables to include:

	 	a.	 	Article in every issue of Beyond the Bars
	 
	 	b.	 	Presentation at all regional meetings
	 
	 	c.	 	Update new hire orientation to include this training
	 
	 	d.	 	Participate in National Patient Safety Week
	 
	 	e.	 	Perform Clinical/Operations Site Audits at each facility
	 
	 	f.	 	Leverage membership in National Patient Safety Foundation
	 
	 	g.	 	Coordinate Activities with Chief Risk Officer

	 	4.	 	Attain Just Culture Certification 10% of target award

 

 

Corporate Management

Positions covered:

	 	•	 	Corporate Controller, VP-Finance/Asst. Treasurer
	 
	 	•	 	Corporate Vice Presidents
	 
	 	•	 	Corporate Middle 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 2011 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
	 	-     30% of target award
	 

	 	-     Catalyst
	 	-     20% of target award

 

			
	* 	 	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.

 

 

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 2011 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 New New Revenue
	 	-     20% of target award

 

			
	*	 	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.

 

 

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 2011 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)

	 	•	 	The pre-selected goal used for this part of the incentive program is:

	 	-	 	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.

 

 

For Non-Management Corporate Office Employees — Key Contributor Pool

At the end of the year, those corporate employees who are considered to have made a
significant contribution to the company’s success will be considered for a “key contributor”
bonus. When Adjusted EBITDA Target is exceeded, a pool of up to 10% of underlying base
salaries will be funded and distributed based on the recommendation of individual corporate
managers, with the approval of executive management. Payment requirements for ‘Corporate
Management’ positions apply to ‘Key Contributor Pool’ funding.

 

 

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

All incentive compensation payments will be made to the extent of available funding. Eligible
employees must be employed by the company at the time of incentive compensation distribution
to be eligible to receive the incentive compensation amount. The incentive compensation of
employees transferring within the company will be prorated between the sites. The proration
is based upon the total number of months at each site. Employees hired after July 1 will not
be eligible for an incentive compensation payment. The incentive compensation payments for
newly hired eligible employees or employees promoted to bonus eligible positions on July 1 or
earlier will be prorated based on the full calendar months of employment. (For example, an
employee hired on April 1 is eligible for 75% (9/12ths) of the bonus amount
earned.) Bonus payments for employees terminated as a result of a change in control or in
connection with death or permanent disability will also be prorated. The incentive
compensation payment checks will be distributed to employees after applicable annual financial
audits are completed and related earnings releases. The Company reserves the right, at the
sole discretion of the Board of Directors, to alter or eliminate this Plan or a Participant’s
Award at any time without prior notice to Participants.

The 2011 Incentive Plan Adjusted EBITDA Target is $26.0 million.exv10w15

Exhibit 10.15

America Service Group Inc. (the “Company”)

Summary of 2011 Director and Executive Officer Compensation

	I.	 	DIRECTOR COMPENSATION. Directors who are employees of, or paid consultants to, the
Company do not receive additional compensation for serving as directors of the Company. The
following table sets forth current rates of cash compensation for the Company’s
non-employee directors.

	 	 	 	 	 

	Non-Executive Chairman of the Board
	 	$	156,000	 
	 
	 	 	 	 
	Annual retainer
	 	$	40,000	 
	 
	 	 	 	 
	Board meeting attendance fee
	 	$	1,500	 
	 
	 	 	 	 
	Audit Committee Chair annual retainer
	 	$	15,000	 
	 
	 	 	 	 
	Audit Committee meeting fee for all Audit Committee
meetings held on a date other than a Board meeting date
	 	$	2,500	 
	 
	 	 	 	 
	Incentive Stock and Compensation Committee Chair and
Annual retainer
	 	$	10,000	 
	 
	 	 	 	 
	Corporate Governance and Nominating Committee Chair
and Ethics and Quality Assurance Committee Chair
annual retainer
	 	$	7,500	 
	 
	 	 	 	 
	Committee meeting fee for all committee meetings other
than Audit Committee held on a date other than a Board
meeting date
	 	$	1,000	 

     The Board compensation program provides that each new Director (as defined by the 2009
Equity Incentive Plan) upon election to the Board receive 5,000 restricted shares of the
Company’s common stock. Under the terms of the restricted shares, each new Director shall
have the right, among other rights, to receive cash dividends on all of the shares and to
vote such shares until the Director’s right to such shares is forfeited of becomes
nonforfeitable. These shares become nonforfeitable in equal annual installments over four
years beginning on the first anniversary of the date the shares are issued.

     In addition, the Board compensation program provides that each non-employee director
will receive 4,000 restricted shares of the Company’s common stock on an annual basis. Each
non-employee director shall have the right, among other rights, to receive cash dividends on
all of these shares and to vote such shares until the non-employee director’s right to such shares is forfeited or becomes nonforfeitable. These shares become nonforfeitable in equal
annual installments over three years beginning on the first anniversary of the date the shares are issued.

 

 

	II.	 	EXECUTIVE OFFICER COMPENSATION. The following table sets forth the current
annual base salaries provided to the Company’s Chief Executive Officer and most highly
compensated executive officers.

	 	 	 	 	 
	Executive Officer	 	Current Salary	 
	Richard Hallworth
	 	$	571,000	 
	Michael W. Taylor
	 	 	420,000	 
	Dr. Carl J. Keldie
	 	 	361,000	 
	Jonathan B. Walker
	 	 	270,000	 
	J. Scott King
	 	 	235,000	 

          In addition to their base salaries, the Company’s Chief Executive Officer and most highly
compensated executive officers are also eligible to:

	 	•	 	receive cash bonuses under the Company’s Annual Incentive Compensation Plan;

	 	•	 	participate in the Company’s long-term incentive program, which currently involves the
award of stock options or restricted stock pursuant to the Company’s 2009 Equity Incentive
Plan; and

	 	•	 	participate in the Company’s broad-based benefit programs generally available to its
salaried employees, including health, disability and life insurance programs, 401(k) Plan
and Employee Stock Purchase Plan.

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