2009 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
presidents, 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 2009
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. Ten goals were established.
Some selection from these ten goals will be used for all positions
covered by the 2009 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):
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1)
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Adjusted EBITDA based
bonus (50% of
total bonus target as a percent of base pay)
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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 2009.
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After bonuses derived from the Other
Key Company Goals based bonus are accrued and the 2009 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.
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Payout is subject to Board
confirmation of satisfactory balance sheet management.
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2)
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Other Key Company Goals based
bonus (50%
of total bonus target as a percent of base pay)
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Pre-selected goals will be used for
this part of the incentive program
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For
the non-financial objectives, there are two possible levels of
achievement under this 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.
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Incentive
Opportunities by position
2009 targeted
payouts (as a percentage of base salary) are outlined as
follows:
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Target as a percent
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Position
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of base pay
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President and Chief Executive Officer
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70
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Executive Vice President and Chief Financial
Officer
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60
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%
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Chief Administration Officer, Chief Information
Officer, Chief Legal Officer, Chief Medical Officer, Chief
Development Officer, Operating Presidents, Operations Group Vice
Presidents
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50
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%
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40
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%
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30
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%
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20
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Regional Mgrs, Health Service Administrators
(HSAs), District Administrators and Regional Managers
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15
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%
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Corporate Controller, VP-Finance/Asst.
Treasurer, VP Provider Operations, VP Human Resources, VP Project
Development
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35
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%
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Corporate Vice Presidents
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30
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Corporate Middle Managers
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20
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%
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Non-Management Corporate Office
Employees
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10
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%
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Executive Management (other than
CMO)
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President and Chief Executive
Officer
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Executive Vice President and Chief
Financial Officer
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Chief Administrative
Officer
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Chief Information
Officer
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Chief Legal Officer
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•
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Chief Development Officer Operating
Presidents
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Operations Group Vice
Presidents
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1)
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Adjusted EBITDA based
bonus (50% of
total bonus target for those positions as a percent of base
pay)
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•
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No
bonus paid if corporate Earnings before share-based compensation,
interest, taxes, depreciation, and amortization (Adjusted EBITDA)
is 100% of Target or less.
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After bonuses derived from the Other
Key Company Goals based bonus are accrued and the 2009 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*.
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Payout is subject to Board
confirmation of satisfactory balance sheet management.
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2)
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Other Key Company Goals based
bonus (50%
of total bonus target for this position as a percent of base
pay)
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Pre-selected goals will be used for
this part of the incentive program, as follows:
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- Corporate Net New
Revenue
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— 10% of
target award
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- Integration of Michigan DOC
contract with acceptable clinical, operational, and financial
performance
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— 15% of
target award
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- Implementation of Catalyst
in Pennsylvania DOC
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— 15% of
target award
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- Key individual
objective
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— 10% of
target award
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For
Corporate Net New Revenue, the Minimum level is 90% of Goal, and
for achievements between Minimum and Goal, payouts will be
interpolated. For the other measures, there are two possible levels
of achievement: a) Minimum achievement to get an award for that
portion of the plan and b) Goal achievement
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The
Minimum payout for each level will be 50% of Target Payout for that
level. For example, if the achievement for Corporate Net New
Revenue is at Minimum levels, the payout would be 5% of Target (50%
X 10%)
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