AMERICA SERVICE GROUP INC /DE
EX-10.17 EMPLOYMENT AGREEMENT
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<TYPE>EX-10.17
<SEQUENCE>3
<FILENAME>g87738exv10w17.txt
<DESCRIPTION>EX-10.17 EMPLOYMENT AGREEMENT
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                                                                   Exhibit 10.17

                              EMPLOYMENT AGREEMENT

                  AGREEMENT dated the 11th day of January, 2004, between Richard
D. Wright ("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 Vice Chairman of Operations of the Company 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: (a) a salary
(the "Base Salary") at an annual rate of not less than $305,318 Dollars and
No/100's, payable in such installments as the parties shall mutually agree; plus
(b) such additional compensation as the Incentive Stock and 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 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.

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                  7.       Termination.

                  (a)      Termination for Cause. Employee may be terminated
from his employment hereunder, either before Term End or thereafter, and 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) continued 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 or take any action that he reasonably deems to be immoral or unethical.

                  (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) 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 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.

                  (e)      Voluntary Termination. Employee may voluntarily
terminate his employment hereunder at any time, for any reason or for no reason.

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                  (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 sate. 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 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 leave such as holidays
                  and 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;

                  (g)      as of the termination pursuant to Section 7(b), 7(c)
or 7(d), a continuation, on 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 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 (i)
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 (A) 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; (B) 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 (C) 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; (ii) employ or retain as an independent contractor any
employee of the Company; or (iii) recruit,

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solicit or otherwise induce any employee of the Company to discontinue such
employment relationship. For purposes hereof, the term "Business" shall consist
of (i) delivery of medical services, pharmaceuticals or supplies to correctional
facilities, and (ii) 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.

                  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. 105
Westpark Drive, Suite 200 Brentwood, TN 37027 Attn: Chief Legal Officer

                  (b)      If to Employee: Richard D. Wright 105 West Park
Drive, Suite 200 Brentwood, Tennessee 37027

                  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. If the Employee should die while entitled to any payments
hereunder, any amounts would still be payable to his estate hereunder as 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.

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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 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 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 Tennessee.

                  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: /s/ Carol R. Goldberg
                                     -------------------------------------------
                                 Title: Chairperson, Incentive Stock and
                                        Compensation Committee of the Board of
                                        Directors

                                 EMPLOYEE:

                                 /s/ Richard D. Wright
                                 -----------------------------------------------
                                 Richard D. Wright

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