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Amendment No. 1
to Employment Agreement
Amendment dated the 30th day of June, 1997, to Employment Agreement
("Agreement") dated the 1st day of April, 1996, between Xxxxx X. Mercy
("Employee") and America Service Group Inc., a Delaware corporation (the
"Company").
Whereas, the Employee and the Company desire to amend the Agreement as
set forth herein.
NOW, THEREFORE, the Company and the Employee hereby agree that the
Agreement shall be, and hereby is, amended as follows:
1. The first sentence of Section 5(b) shall be amended to read as
follows:
"Upon termination of Employee's employment hereunder for any
reason or without cause, Employee, or Employee's estate if
applicable, shall, for a period of forty-five (45) days
following the Termination Date (as defined hereafter), have the
right to sell, and the Company shall thereupon have an
obligation to purchase (or cause a third party to purchase)
such number of the shares purchased under Section 5(a) (the
"Mercy Shares") and of the shares vested pursuant to the stock
award received under Section 6(a) (the "Vested Award Shares")
as Employee, or Employee's estate if applicable, shall elect,
at $9.90 per share.
2. New Sections 5(f), 5(g) and 5(h) shall be inserted following
Section 5(e), to read as follows:
"(f) Transfer of Mercy Shares and Vested Award Shares. Sections
5(b), 5(c) and 5(e) hereof shall continue to apply to any Mercy
Shares and/or Vested Award Shares transferred by Employee to
trusts for his benefit or to his spouse or direct descendants
or trusts for their benefit (collectively, "Permitted
Transferees")." Each such person shall have the same rights and
obligations under Sections 5(b), 5(c) and 5(e) as Employee or
his estate, if applicable, would have with respect to such
shares upon termination of Employee's employment hereunder.
Sections 5(b), 5(c) and 5(e) hereof shall cease to
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apply to any Mercy Shares and/or Vested Award Shares otherwise
transferred by Employee (or by his Permitted Transferees) and
the transferee thereof shall have no rights or obligations
under Sections 5(b), 5(c) or 5(e).
"(g) Legend. All certificates representing Mercy Shares and
Vested Award Shares, including any Mercy Shares or Vested Award
Shares transferred to a Permitted Transferee, shall bear the
following legend:
"The shares represented by this certificate are subject to
certain options and rights to repurchase, as set forth in an
Employment Agreement between America Service Group Inc. and
Xxxxx X. Mercy dated April 1, 1996, as amended by agreement
dated June 30, 1997."
"(h) Precedence. In the event rights to sell are exercised
under Section 5(b) and rights to purchase are exercised under
Section 5(c), following Employee's termination of employment,
then, notwithstanding the order in which such rights are
exercised, rights to sell exercised under Section 5(b) by the
Employee, his estate or Permitted Transferees shall take
precedence."
3. Section 9(g) (ii) shall be amended to read as follows:
"(ii) An amount equal to the Target Payout that the Employee
could have earned under the Company's annual incentive
compensation plan with respect to the fiscal year of the
Company in which the Termination Date occurs multiplied by a
fraction, the numerator of which is the number of full months
the Employee was employed by the Company during the fiscal year
of the Company in which the Termination Date occurs and the
denominator of which is 12."
4. Section 9(g) (iv) shall be amended to read as follows:
"(iv) A lump sum severance payment equal to the sum of (A) 250%
of the Employee's annual base salary as of the Termination
Date and
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(B) the Target Payout that the Employee could have earned
under the Company's annual incentive plan with respect to the
then current fiscal year."
5. Section 11(i) shall be amended to read as follows:
"(i) If to the Company:
America Service Group Inc.
000 Xxxxxxxx Xxxxx, Xxxxx 000
Xxxxxxxxx, XX 00000
Attn: Chairman of the Board
IN WITNESS WHEREOF, the parties hereto have duly executed this
Amendment to Employment Agreement as of the day and year first above written.
AMERICA SERVICE GROUP INC.
By: /s/ X. X. Xxxxxx
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X. X. Xxxxxx
Chairman of the Board of Directors
EMPLOYEE:
By: /s/ Xxxxx X. Mercy
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Xxxxx X. Mercy
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