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Exhibit 10.1
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
AGREEMENT originally dated the 12th day of July, 1996 (the "Original
Date"), amended and restated by these presents dated September 1, 1998, between
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (the "Employee") and America Service Group, Inc., a Delaware
corporation (the "Company").
WHEREAS, the Company has heretofore employed the Employee as Executive
Vice President of Development, General Counsel and Secretary of the Company;
WHEREAS, the Board of Directors (the "Board") of the Company desires
to ▇▇▇▇▇▇ the continued employment and services of the Employee as President
and Chief Executive Officer of the Company and a Director of the Company;
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 President and Chief Executive Officer of the Company to perform the
duties and services of such offices. The Board shall take all necessary steps
to ensure that Employee is slated as a management nominee to the Board during
his employment.
2. Performance. Employee agrees to actively devote all of his
time and effort during normal business hours 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 commenced as
of the Original Date and from the date hereof shall continue as an employment
as will unless terminated by written notice from either party to the other as
herein provided.
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 $190,000.00, payable in
such installments as the parties shall mutually agree; plus (ii) such
additional compensation as the 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.
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
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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.
1. Termination.
(a) Termination for Cause. Employee may be terminated from
his employment without advance notice by the Company for "cause". For the
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, or (iii) Employee's conviction
of or a plea of guilty to any felony or crime involving moral turpitude.
(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
the 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 the Employee at any time without cause,
cause being determined under Section 7(a), upon ninety (90) days advance
written notice. If there is any change in the Employee's title, authority or
responsibilities which, in the Employee's reasonable judgment, represents an
adverse change from his status, title, positions or responsibilities in effect
immediately prior to such change, or the assignment to him of any duties or
work responsibilities which, in his reasonable judgment, are inconsistent with
such status, title, positions or work responsibilities; or any removal of the
Employee from, or failure to reappoint, nominate or reelect him to, any such
positions, or the Company violates or is in violation of material term of this
Agreement; then at the Employee's election (and in addition to other available
rights and remedies), any such event shall be deemed a termination without
cause pursuant to this Section 7(c).
(d) Change in Control. Employee may terminate his employment
hereunder in the event of a change in control of the Company within ninety (90)
days after such 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 the Company representing 30% or more of the
combined voting power of the Company's then outstanding securities; (ii) during
any period of two consecutive years, individuals who at the beginning of such
period constituted the Board of Directors of the Company cease for any reason
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to constitute at least a majority thereof (unless the election of each
director, who was not a director at the beginning of the period, was approved
by a vote of at least two-thirds of the directors then still in office who were
directors at the beginning of the period); or (iii) approval by the
stockholders of the Company of (A) a complete liquidation of the Company; (B)
an agreement for the sale or other disposition of all or substantially all of
the assets of the Company to any "person", or (C) a merger, consolidation or
reorganization involving the Company, unless (1) the stockholders of the
Company immediately before such merger, consolidation or reorganization, own,
directly or indirectly, immediately following such merger, consolidation or
reorganization, at least two thirds of the of the combined voting power of the
outstanding voting securities of the corporation resulting from such merger or
consolidation or reorganization or its parent company (the "Surviving
Corporation") in substantially the same proportion as their ownership of the
voting shares immediately before such merger, consolidation or reorganization,
or (2) the individuals who were members of the Board immediately prior to the
execution of the agreement for such merger, consolidation or reorganization
constitute at least two-thirds of the members of the board of directors of the
Surviving Corporation.
(e) Voluntary Termination. Employee may voluntarily
terminate his employment hereunder at any time, for any reason or for no
reason, upon ninety (90) days advance written notice.
(f) Termination Compensation. If Employee's employment
hereunder is terminated pursuant to Section 7(a) 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, including those described in (ii) below. If Employee's
employment is terminated by the Company under Section 7(c) without cause, or if
there is a change in control of the Company as defined in Section 7(d), all
unexercised options granted to Employee under the Company's Amended Incentive
Stock Plan shall accelerate and shall immediately vest. If Employee's
employment is terminated pursuant to Sections 7(b), 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 leave such as holidays, vacation and
sick pay 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;
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(iii) within five (5) business days of the termination,
a lump sum severance payment equal to two hundred percent (200%) of the
Employee's annual base salary as of the Termination Date;
(iv) within five (5) business days of the
termination, a lump sum severance payment in an amount equal to the incentive
compensation that the Employee could have earned under the Company's annual
incentive plan for the current fiscal year, said amount to be determined by
projecting the then current financial results of the Company on an annualized
basis throughout the remainder of the fiscal year, but in no event to be less
than 45% of the Employee's annual Base Salary as of the termination date.
If Employee's employment is terminated pursuant to Sections
7(b), 7(c) or 7(d) of this Agreement, the Company shall maintain, for eighteen
(18) months following the Termination Date, in full force and effect for the
benefit of the Employee and Employee's dependents and beneficiaries, at the
Company's expense, all medical insurance under plans and programs in which the
Employee and/or the Employee's dependents and beneficiaries participated
immediately prior to the Termination Date, provided that continued
participation is possible under the general terms and provisions of such plans
and programs. If continued participation in any such plan or program is barred,
the Company shall arrange at its own expense to provide the Employee with
benefits substantially similar to those which he was entitled to receive under
such plans and programs.
8. Covenant Not to Compete, Nonemployment, Noninducement.
(a) Employee acknowledges that in the course of his
employment he will become familiar with the Company and its affiliates'
confidential information 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 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
engage in any business similar to the Business of the Company, as described
below, anywhere in the United States of America, or have any 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, 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. For purposes hereof, the "Business"
shall consist of (A) delivery of contract health care 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.
Notwithstanding the foregoing, after the termination of this Agreement,
Employee shall not be restricted from the practice of law under any
circumstances which do not involve a professional conflict of interest.
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(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.
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:
(a) If to the Company:
America Service Group Inc.
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: Chairman
(b) If to Employee:
Mr. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
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, distributees,
devisees and legatees. If the Employee should die while any amounts would still
be payable to him hereunder if he would have continued to live, 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.
11. Entire Agreement. This Agreement supersedes all prior
understandings and agreements with respect to 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 (as
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the parties may agree) 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 and
governed by the internal laws of the State of Delaware.
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:
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▇▇▇▇▇ ▇. Mercy
Chairman of the Board of Directors
EMPLOYEE:
By:
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▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
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