Exhibit 10.1
EMPLOYMENT AGREEMENT
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AGREEMENT dated the 28th day of March, 2006, between Xxxxxxx Xxxxxxxxx
("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
Chief Operating Officer of the Company and President and CEO of Prison Health
Services, Inc. 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 during normal business hours as agreed with
the Company, 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 the date hereof and shall continue as an employment at will unless terminated
by written notice from either party to the other at least thirty (30) days prior
to termination.
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 an annual rate of not less than $315,000 Dollars, payable in such
installments as the parties shall mutually agree; plus (ii) such additional
compensation as the Incentive Stock and Compensation Committee of the Board of
Directors (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, decreased or changed benefits as are from time to time
provided to the Company's executives generally.
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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 for Cause. Employee may be terminated from his
employment hereunder without advance notice, by the Company 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) 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 within 20 days after notice to
Employee of such failure provided that the directions are not inconsistent with
Employee's duties and further provided that Employee is not directed to violate
any law.
(b) Disability, Death. If Employee shall fail to or be unable to
perform the duties required hereunder 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.
(c) Termination Without Cause. The Company shall have the right to
terminate the employment of Employee at any time, without cause, cause being
determined under Section 7(a), upon thirty (30) days advance written notice.
(d) Change in Control. For purposes of this Agreement, a change in
control of the Company shall mean 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
the Company , becomes the beneficial owner, directly or indirectly, of
securities of ASG representing 50% or more of the combined voting power of the
Company'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.
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(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(a), 7(b) 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 at of the Termination
Date. If Employee's employment is terminated by the Company under Section 7(c)
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(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) within five (5) business days of the termination, to compensate
for all accrued but unpaid holiday and annual leave (vacation) under
the Company's paid leave plan, an amount equal to the Employee's then
current base salary multiplied by the product of (A) the total number
of leave days accrued, divided by (B) the total number of work days in
the fiscal year in which the Termination Date occurs;
(iii) as of the termination pursuant to Section 7(b), 7(c) or 7(d), a
continuation, on at least a monthly basis, of Employee's annual 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 the Company's and its affiliates confidential information
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 twelve months after Employee ceases to
perform duties hereunder, neither Employee nor any company with which Employee
is affiliated as an 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
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company's revenue; 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, (B) employ or retain as an independent contractor any
employee of the Company, or (C) recruit, solicit or otherwise induce any
employee or contractor of the Company to discontinue such employment or
contractual relationship. For purposes hereof, the term Business shall consist
of (A) delivery of medical 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) 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,
the parties agreeing economic damages alone are insufficient for a breach.
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.
000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Attn: Chief Legal Officer
(ii) If to Employee:
Xxxxxxx Xxxxxxxxx
000 Xxxx Xxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, Xxxxxxxxx 00000
10. Assignment. This Agreement is based upon the personal services of
Employee and the rights and obligations of Employee hereunder shall not be
assignable except as herein expressly provided. This Agreement shall inure to
the benefit of and be enforceable by the Employee's personal and legal
representatives, executors, administrators, successors, heirs, and distributees,
devisees and legatees. All such amounts, unless otherwise provided herein, shall
be paid in accordance with the terms of this Agreement to the Employee's
devisee, legatee or other designee and if there is no such devisee, legatee or
designee, to the Employee's estate.
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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. It may only be amended by a specific
written amendment appended to this agreement and 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.
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IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement in
Brentwood, Tennessee as a binding contract as of the day and year first above
written.
AMERICA SERVICE GROUP INC.
By: /s/ Xxxxxxx Xxxxxxxx
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Chairman, President and
Chief Executive Officer
EMPLOYEE:
By: /s/ Xxxxxxx Xxxxxxxxx
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