| Frontline Vacancy Reduction. The Compensation Committee requiredspecified the Company to satisfy no fewer than three offollowing goal for a reduction in vacancies in frontline personnel positions: Achieve a 7.1-point reduction in the four conditions to achievefrontline vacancy rate by December 31, 2023 as compared with the goal. The Strategic Business Goals modifier can increase or decrease the amount of annual cash incentive compensation calculated basedfrontline vacancy rate on Adjusted EBITDA and the Lease Conversion, which could also result in annual cash incentive compensation above the maximums or below the minimums described below.December 31, 2022.
CoreCivic, Inc. | | | 55
| | | 2024 Proxy Statement |
TABLE OF CONTENTS The Strategic Business Goals modifier can increase or decrease the amount of annual cash incentive compensation calculated based on Adjusted EBITDA and the Short-Term Business Goals, which could also result in annual cash incentive compensation above the maximums or below the minimums described below
Calculation of the Short-Term Cash Incentive TABLE OF CONTENTS
CoreCivic, Inc. | | | 56
| | | 2024 Proxy StatementThe table below sets forth the performance targets and corresponding percentage of base salary amounts to be awarded to our CEO and other NEOs based on the achievement of Adjusted EBITDA during the year ended December 31, 2021, as established by the Compensation Committee on March 30, 2021. Under this established framework, Adjusted EBITDA and the Lease Conversion metric determine the percentage of the annual cash incentive award before that award is adjusted upward or downward based on the achievement of Strategic Business Goals:
| Min | | | $275,109,600 | | | 31.25% | | | 25.00% | | | | | | Achieved | | | 31.25% | | | 25.00% | | | | | | $281,987,340 | | | 37.50% | | | 30.00% | | | | | | Not Achieved | | | 0.00% | | | 0.00% | | | | | | $288,865,080 | | | 43.75% | | | 35.00% | | | | | | | | | | | | | | | | | | $295,742,820 | | | 50.00% | | | 40.00% | | | | | | | | | | | | | | | | | | $302,620,560 | | | 56.25% | | | 45.00% | | | | | | | | | | | | | | | | | | $309,498,300 | | | 62.50% | | | 50.00% | | | | | | | | | | | | | | | | | | $316,376,040 | | | 68.75% | | | 55.00% | | | | | | | | | | | | | | | | | | $323,253,780 | | | 75.00% | | | 60.00% | | | | | | | | | | | | | | | | | | $330,131,520 | | | 81.25% | | | 65.00% | | | | | | | | | | | | | | | | | | $337,009,260 | | | 87.50% | | | 70.00% | | | + | | | | | | | | | | | | Target | | | $343,887,000 | | | 93.75% | | | 75.00% | | | | | | | | | | | | | | | | | | $350,764,740 | | | 100.00% | | | 80.00% | | | | | | | | | | | | | | | | | | $357,642,480 | | | 106.25% | | | 85.00% | | | | | | | | | | | | | | | | | | $364,520,220 | | | 112.50% | | | 90.00% | | | | | | | | | | | | | | | | | | $371,397,960 | | | 118.75% | | | 95.00% | | | | | | | | | | | | | | | | | | $378,275,700 | | | 125.00% | | | 100.00% | | | | | | | | | | | | | | | | | | $385,153,440 | | | 131.25% | | | 105.00% | | | | | | | | | | | | | | | | | | $392,031,180 | | | 137.50% | | | 110.00% | | | | | | | | | | | | | | | | | | $398,908,920 | | | 143.75% | | | 115.00% | | | | | | | | | | | | | | | | | | $405,786,660 | | | 150.00% | | | 120.00% | | | | | | | | | | | | | | | Max | | | $412,664,400 | | | 156.25% | | | 125.00% | | | | | | | | | | | | | |
|
65
TABLE OF CONTENTS The table below sets forth the performance targets and corresponding percentage of base salary amounts to be awarded to our CEO and other NEOs based on the achievement of Adjusted EBITDA during the year ended December 31, 2023, as established by the Compensation Committee on February 16, 2023. Under this established framework, Adjusted EBITDA and the Short-Term Goals metric determine the percentage of the annual cash incentive award before such award is adjusted upward or downward based on the achievement of Strategic Business Goals: | Min | | | $244,501,600 | | | 72.50% | | | 58.00% | | | | | | Achieved | | | 30.00% | | | 24.00% | | | | | | $250,614,140 | | | 78.75% | | | 63.00% | | | | | | Not Achieved | | | 0.00% | | | 0.00% | | | | | | $256,726,680 | | | 85.00% | | | 68.00% | | | | | | | | | | | | | | | | | | $262,839,220 | | | 91.25% | | | 73.00% | | | | | | | | | | | | | | | | | | $268,951,760 | | | 97.50% | | | 78.00% | | | | | | | | | | | | | | | | | | $275,064,300 | | | 103.75% | | | 83.00% | | | | | | | | | | | | | | | | | | $281,176,840 | | | 110.00% | | | 88.00% | | | | | | | | | | | | | | | | | | $287,289,380 | | | 116.25% | | | 93.00% | | | | | | | | | | | | | | | | | | $293,401,920 | | | 122.50% | | | 98.00% | | | | | | | | | | | | | | | | | | $299,514,460 | | | 128.75% | | | 103.00% | | | + | | | | | | | | | | | | Target | | | $305,627,000 | | | 135.00% | | | 108.00% | | | | | | | | | | | | | | | | | | $311,739,540 | | | 141.25% | | | 113.00% | | | | | | | | | | | | | | | | | | $317,852,080 | | | 147.50% | | | 118.00% | | | | | | | | | | | | | | | | | | $323,964,620 | | | 153.75% | | | 123.00% | | | | | | | | | | | | | | | | | | $330,077,160 | | | 160.00% | | | 128.00% | | | | | | | | | | | | | | | | | | $336,189,700 | | | 166.25% | | | 133.00% | | | | | | | | | | | | | | | | | | $342,302,240 | | | 172.50% | | | 138.00% | | | | | | | | | | | | | | | | | | $348,414,780 | | | 178.75% | | | 143.00% | | | | | | | | | | | | | | | | | | $354,527,320 | | | 185.00% | | | 148.00% | | | | | | | | | | | | | | | | | | $360,639,860 | | | 191.25% | | | 153.00% | | | | | | | | | | | | | | | Maximum | | | $366,752,400 | | | 197.50% | | | 158.00% | | | | | | | | | | | | | |
Under the annual cash incentive opportunity, a failure to achieve the minimum bonus level in the Adjusted EBITDA category or a failure to achieve any of the Short-Term Goals results in zero bonus opportunity for that category. The CEO and NEOs may achieve a pro-rata share of the Short-Term Goals amount by satisfying one, two, or three of the four Short-Term Goal components. Similarly, achievement of performance above the maximum bonus level in the Adjusted EBITDA category results in a bonus opportunity at the maximum level only for that category. Assuming the achievement of Adjusted EBITDA at or above the minimum level, the percentage of salary awarded for performance falling between the listed achievement levels is determined by using straight-line interpolation. Because the Short-Term Goals category components are each success or failure only, there is no means by which an NEO could exceed that measure nor is any straight-line interpolation necessary or possible. |
CoreCivic, Inc. | | | 57
| | | TABLE OF CONTENTS
Under the annual cash incentive opportunity, a failure to achieve the minimum bonus level in the Adjusted EBITDA category or a failure to achieve the Lease Conversion results in zero bonus opportunity for that category. Similarly, achievement of performance above the maximum bonus level in the Adjusted EBITDA category results in a bonus opportunity at the maximum level only for that category. Assuming the achievement of Adjusted EBITDA at or above the minimum level, the percentage of salary awarded for performance falling between the listed achievement levels is determined by using straight-line interpolation. Because the Lease Conversion category is success or failure only, there is no means by which an NEO could exceed that measure or for the utilization of straight-line interpolation.2024 Proxy Statement
Cash incentive awards achieved under the 2021 Annual Cash Incentive Opportunity table above are further increased or decreased based upon the achievement of Strategic Business Goals established by our Compensation Committee on March 30, 2021
|
TABLE OF CONTENTS Cash incentive awards achieved under the 2023 Annual Cash Incentive Opportunity table above are further increased or decreased based upon the achievement of Strategic Business Goals established by our Compensation Committee on February 16, 2023, in accordance with the table below. | One
| | | 0.933x
| | | Two
| | | 1.067x
| | | Three
| | | 1.200x | DEI Behavior training and deployment of Denison Culture survey | | | 90% and Yes | | | 98% and Yes | | | Yes | | | Human rights training and human rights policy implementation goals | | | 90% and Yes | | | 98% and Yes | | | Yes | | | Reentry, rehabilitation, and recidivism reduction programs development - Achieve 80% on CTS scores and three program implementation goals (1) | | | 80%, Yes, Yes, and Yes | | | 82%, Yes, Yes, and Yes | | | Yes | | | Reduce frontline vacancies | | | Reduce by 7.1 pts. | | | 7.9 pt. reduction | | | Yes | | | Resulting Modifier | | | | | | | | | 1.2x | |
For 2021, we generated $402.0 million(1)
| The Compensation Committee required a minimum achievement of Adjusted EBITDA, but were unsuccessful in achieving the pass/fail targetthree of the lease conversion goal. Asfollowing four reentry, rehabilitation, and recidivism reduction goals: (a) 80% of Company facilities that offer cognitive behavioral programming such as Go Further, Threshold, RDAP, Interactive Journaling, Moral Reconation Therapy, or Thinking for a result,Change will show a reduction in Criminal Thinking scores as measured by pre/post CTS scores (actual performance: 82%); (b) the Company’s implementation of a new Academic or Vocational Program at three or more facilities during 2023 (actual performance: three facilities); (c) the Company identifies and implements at least three new overdose prevention strategies during 2023 (actual performance: three strategies); and (d) the Company establishes relationships with at least five new organizations to offer reentry programs in our CEO’s annual cash incentive opportunity was 146.58% of base salary and our other NEOs’ annual cash incentive opportunity was 117.27% of base salary, before the application of the Strategic Business Goals modifier. As indicated in the table below, the Compensationreentry facilities (actual performance: 23 new organizational relationships). The Committee determined that we achievedthe Company met or exceeded all three of our Strategic Business Goals, which resulted in a Strategic Business Goals modifier of 1.200x.The following table reflects our Compensation Committee’s determinationfour of the appropriate modifier based on Strategic Business Goals established by the Committee on March 30, 2021:
| DEI leader development (1)
| | | 95%
| | | >=95%
| | | YES
| | | Human rights development (2)
| | | Yes
| | | Pass
| | | YES
| | | Reentry program growth and performance (3)
| | | Yes
| | | Pass
| | | YES(4)
| | | Resulting Modifier
| | | | | | | | | 1.200x
| goals during 2023. |
(1)
| Completion of DEI/Conscious Inclusion training by no less than 80% of all Company leaders. |
(2)
| Completion of three human rights-related objectives: (a) Completion of Company-wide human rights training by no less than 95% of our remaining employees; (b) Adoption of a new human rights policy; and (c) Development and deployment of a facility-level human rights assessment. |
(3)
| Completion of no fewer than three of four programming goals: (a) Reduction in CT in no less than 75% of facilities offering cognitive behavioral programming as measured by a standardized and validated assessment instrument; (b) Achieve no less than a 75% completion rate for Go Further reentry programs/journals for facilities offering the Go Further reentry program during 2021; (c) Initiation of National Career Readiness Certificate testing in no fewer than ten facilities with educational goals in areas such as GED/HISET and industry-recognized certificate vocational programs in 2021; and (d) Implementation of new reentry-focused programs at three or more sites during 2021. |
(4)
| The Company satisfied the criteria of three of the four programming goals, meeting the three-of-four completion requirement.CoreCivic, Inc. | | | 58
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TABLE OF CONTENTS
Based on our 2021
TABLE OF CONTENTS Based on our 2023 performance, the following annual cash incentive plan compensation was awarded to our NEOs in February 2023: | Hininger | | | 1,060,751 | | | 135% | | | 1,432,014 | | | 140.5% | | | 1,490,315 | | | 0% | | | $0.00 | | | 1.2x | | | 168.6% | | | 1,788,378 | | | Garfinkle | | | 559,185 | | | 108% | | | 603,920 | | | 112.4% | | | 628,506 | | | 0% | | | $0.00 | | | 1.2x | | | 134.9% | | | 754,207 | | | Swindle | | | 526,936 | | | 108% | | | 569,091 | | | 112.4% | | | 592,259 | | | 0% | | | $0.00 | | | 1.2x | | | 134.9% | | | 710,711 | | | Grande | | | 568,617 | | | 108% | | | 614,106 | | | 112.4% | | | 639,107 | | | 0% | | | $0.00 | | | 1.2x | | | 134.9% | | | 766,928 | | | Mayberry | | | 526,936 | | | 108% | | | 569,091 | | | 112.4% | | | 592,259 | | | 0% | | | $0.00 | | | 1.2x | | | 134.9% | | | 710,711 | |
(1)
| The amounts in this column reflect the following annual cash incentive plan compensation was awardedbase salary actually paid by the Company to our NEOsthe NEO during the year and reflect, to the extent applicable, any changes in February 2022: | Damon T. Hininger | | | $963,540 | | | 146.6% | | | $1,412,381 | | | 0% | | | $— | | | 1.2x | | | 175.9% | | | $1,694,859 | | | David M. Garfinkle | | | $507,940 | | | 117.3% | | | $595,641 | | | 0% | | | $— | | | 1.2x | | | 140.7% | | | $714,770 | | | Patrick D. Swindle | | | $475,357 | | | 117.3% | | | $557,432 | | | 0% | | | $— | | | 1.2x | | | 140.7% | | | $668,919 | | | Anthony L. Grande | | | $516,506 | | | 117.3% | | | $605,685 | | | 0% | | | $— | | | 1.2x | | | 140.7% | | | $726,823 | | | Lucibeth N. Mayberry | | | $475,357 | | | 117.3% | | | $557,432 | | | 0% | | | $— | | | 1.2x | | | 140.7% | | | $668,919 | |
(1)
| The amounts in this column reflect the base salary actually paid by the Company to the NEO during the year and reflect, to the extent applicable, any changes in base salary during the year. |
Long-Term Incentive CompensationOur pay mix is weighted toward equity compensation because we believe long-term, equity-based incentive compensation strengthens and aligns the interests of our executive officers with our stockholders. Equity incentive awards are generally granted to our executive officers on an annual basis. In 2021, long-term equity incentive compensation represented approximately 52.7% of our CEO’s total direct compensation package and, on average, approximately 49.4% of our other NEOs’ total compensation package (calculated in the manner described on page 55year. |
Long-Term Incentive Compensation Our pay mix is weighted toward equity compensation because we believe long-term, equity-based incentive compensation strengthens and aligns the interests of our executive officers with our stockholders. Equity incentive awards are generally granted to our executive officers on an annual basis. In 2023, long-term equity incentive compensation represented approximately 51.7% of our CEO’s total direct compensation package and, on average, approximately 48.0% of our other NEOs’ total compensation package (calculated in the manner described on page 47). Long-Term Equity Incentive Compensation Plan Components Our long-term equity incentive plan components are: Performance-Based RSUsRSUsVest over a three-year period based on the achievement of an annual Normalized FFO performance target (subject to the Refinancing Adjustment, if any, during the 2021 Performance Period) and subject to an rTSR modifier, which may positively or negatively adjust the number of performance-based RSUs vesting. Awards settled in stock, with cash dividends on RSUs, if any, being paid in cash only for RSUs that ultimately vest upon the achievement of performance targets. Granted to NEOs, executive officers and other vice presidents. Time-Based RSUsRSUs Annual time-based RSU awards vest in equal amounts over three years beginning on the later of (i) the anniversary date of the grant or (ii) the delivery of the audited financial statements by the Company’s independent registered public accountant for the applicable fiscal year (in the Company’s filing of the Annual Report on Form 10-K).year. Awards settled in stock, with cash dividends on RSUs, if any, being paid in cash only for RSUs that ultimately vest. Granted to the NEOs as well as to other eligible employees. TABLE OF CONTENTS
20212023 Long-Term Equity Incentive Compensation Awards As part of its 2019 review of the executive compensation programs described above, the Compensation Committee discussed with Exequity the most appropriate way to motivate and retain our executives. The Compensation Committee believed it was important to continue to use RSU awards instead of stock options to better align the interest of our executives with our stockholders, to encourage executive retention and to conform to compensation practices which provide for granting of both time-based and performance-based equity awards to executive officers. CoreCivic, Inc. | | | 59
| | | 2024 Proxy Statement |
TABLE OF CONTENTS As a result of these discussions, the Compensation Committee made the decision to structure long-term equity incentive compensation awards in 20212023 as a combination of performance-based RSUs and time-based RSUs. Our Compensation Committee considered many factors in determining the mix and value of the time-based and performance-based RSUs to be granted to our NEOs. Factors considered included our financial performance, our progress in the successful execution of our capital allocation and growth strategies, competitive market practices, internal pay equity, executive recruitment and retention, our focus on equity compensation in our pay mix to encourage long-term value creation, and the volatile nature of the stock market in general and the Company’s common stock in particular. In addition, the Compensation Committee sought to transition from its previous approach, which amounted to an “all-or-nothing” RSU vesting to a design that created a range of upside and downside risk for our NEOs, thereby providing an incentive to maximize the value of our common stock even when our executives earn less than the targeted equity compensation. Performance-based RSUs create substantial upside opportunity in that vesting depends on the achievement of targets aligned with the Company’s business strategy, while time-based RSUs offer a level of predictability in that they vest in accordance with a preset schedule so long as the grantee remains employed at the time of vesting. Both performance-based and time-based RSUs offer upside and downside potential because each type of RSU is tied to our stock price and each offers the opportunity to accrue dividend equivalents before vesting (if dividends are distributed), but are not paid until vesting, and then only to the extent the associated performance-based RSUs or time-based RSUs vest and the underlying shares are issued (see Compensation Discussion and Analysis—NEO Compensation for 2021—2023—Dividend Equivalent Rights). Utilizing both types of RSUs closely alignaligns our CEO and other NEOs with the long-term interests of our stockholders. The Compensation Committee believed the use of Normalized FFO as a performance metric for purposes of our performance-based RSUs reflects the value we deliver to our stockholders, as well as the earnings and cash-generating potential of our portfolio and is comparable to performance metrics used by real estate operating companies. For the 2021 Performance Period, the Compensation Committee determined the Normalized FFO would be subject to the Refinancing Adjustment, if any, to properly capture the value to our Company and stockholders from the accomplishment of refinancing initiatives approved by the Board. See Compensation Discussion and Analysis—Long-Term Incentive Compensation—20212023 Performance-Based RSU Awards (2021-2023(2023-2025 Performance Period). Additionally, by subjecting the performance-based RSUs to the rTSR modifier, the Compensation Committee effected a change designed to better align NEO long-term compensation more fullyfor our NEOs is brought into better alignment with the market results experienced by investors.our stockholders. TABLE OF CONTENTS
As a result of the determination discussed above, on February 16, 2023, the Compensation Committee made the following long-term incentive compensation awards to the NEOs in the form of time-based RSUs on February 17, 2021 and performance-based RSUs on March 30, 2021:RSUs: | Damon T. Hininger | | | 157,895 | | | 136,842 | | | $2,600,002 | | | David M. Garfinkle | | | 50,607 | | | 65,789 | | | $999,993 | | | Patrick D. Swindle | | | 50,607 | | | 65,789 | | | $999,993 | | | Anthony L. Grande | | | 50,607 | | | 65,789 | | | $999,993 | | | Lucibeth N. Mayberry | | | 50,607 | | | 65,789 | | | $999,993 | |
| Damon T. Hininger | | | 132,911 | | | 101,911 | | | 2,799,997 | | | David M. Garfinkle | | | 43,710 | | | 50,273 | | | 1,104,994 | | | Patrick D. Swindle | | | 42,722 | | | 49,136 | | | 1,080,011 | | | Anthony L. Grande | | | 43,710 | | | 50,273 | | | 1,104,994 | | | Lucibeth N. Mayberry | | | 42,722 | | | 49,136 | | | 1,080,011 | |
(1)
| The performance-based RSUs vest annually in three anniversary tranches subject to the achievement of the annual Normalized FFO performance target, (subject to the Refinancing Adjustment, if any, during the 2021 Performance Period), and further subject to an rTSR modifier. Based on Normalized FFO performance, (subject to the Refinancing Adjustment, if any, during the 2021 Performance Period), our NEOs are eligible to earn as high as 150% of the original grant value, subject to adjustment by an rTSR modifier, which may positively or negatively adjust the number of performance-based RSUs vesting, or as low as 0% of the original grant value if the threshold performance metric is not achieved. |
(2)
| The time-based RSUs vest in equal amounts over three years on the later of (i) the anniversary date of the grant or (ii) the delivery of the audited financial statements by the Company’s independent registered public accountant for the applicable fiscal year (in the Company’s filing of the Annual Report on Form 10-K).year. |
(3)
| The grant date fair value was calculated using a Monte Carlo valuation of $9.88$12.64 per share for the performance-based RSUs and a closing share price of $7.60$10.99 per share for the time-based RSUs, in each case, as of the respective grant date. The amounts presented above do not include the impact of the rTSR modifier. |
The grant date fair value of performance-based RSUs awarded to NEOs in 20212023 was consistent withapproximately 8% higher than the performance-based RSUs awarded in 2020.2022. The last adjustment to the grant date fair value for performance-based RSUs awards occurred in 2019. The Compensation Committee determined to make this adjustment upon review of peer compensation data, other market data, and the recommendations of Exequity. 20212023 Time-Based RSU Awards The time-based RSUs granted to the NEOs reflected in the table above vest in equal amounts over three years on the later of (i) the anniversary date of the grant or (ii) the delivery of the audited financial statements by the Company’s independent registered public accountant for the applicable fiscal year (in the Company’s filing of the Annual Report on Form 10-K).year. The Compensation Committee believes the amount of the time-based RSUs granted to our CoreCivic, Inc. | | | 60
| | | 2024 Proxy Statement |
TABLE OF CONTENTS NEOs was appropriate given our compensation philosophy and objectives, including our retention objectives. In 2021,2023, time-based RSUs represented approximately 21.1%20.7% of our CEO’s total compensation package, and on average, 24.7%24.0% of our other NEOs’ total compensation package (calculated in the manner described on page 5547). Revised Peer Group for Determining rTSRrTSR Modifier for Performance-Based RSU AwardsOurIn setting the performance goal for the performance-based RSU awards for 2023, our Compensation Committee, determined that,consistent with its approach in light of2021 (following the Company'sCompany’s transition to a taxable C Corporation for the year commencing January 1, 2021, the most appropriate rTSR comparator group was no longer the group it utilized in 2020, which was comprised exclusively of equity REITs. Instead, the Compensation Committee determined that the broader group of companies comprisingcorporation) and 2022, evaluated whether the Russell 2000 was the appropriate rTSR comparator peer group for the Company in 2021.2023. Because the Russell 2000 includesmeasures the smaller companies withinperformance of the smallest 2,000 members of the Russell 3000Index based on market cap and because it covers a broad array of industries, the Compensation Committee determinedreasoned that the Russell 2000 providedcontinues to provide a useful comparison source that is both reflective of broader market performance and investor expectations. Because of this substantial reset, the Compensation Committee determined to set the rTSR performance period for all performance-based RSUs vesting in 2022 based on 2021 rTSR performance.expectation.
On February 16, 2022,2023, our Compensation Committee, utilizing the same rTSR comparator group in 2021, established a two-yearthree-year rTSR performance period (2021-2022)(2021-2023) for the vesting of the first tranche of NEO RSU awards made in 20222023 as well as for the vesting TABLE OF CONTENTS
of the second tranche of RSU awards made in 20212022 and for vesting of the third tranche of RSU awards made in 2020. On that same date, our Compensation Committee determined to again use the companies comprising the Russell 2000 to calculate our Company's rTSR for the two-year performance period.2021. 20212023 Performance-Based RSU Awards (2021-2023(2023-2025 Performance Period) In 2021,2023, after taking into accountconsidering the dynamic nature of our Company’s business, industry and growth strategy, the Compensation Committee decidedelected to establish an annual Normalized FFO performance target for the first award tranche, subject to further adjustment, if any, to eliminate the after-tax impact of the net incremental interest expense resulting from refinancing activities approved by the Board and completed in 2021, to the extent they would otherwise be reflected in Normalized FFO (the “Refinancing Adjustment”) during the performance period beginning on January 1, 2021 and ending December 31, 2021 (the “2021 Performance Period”). The Compensation Committee determined that the Refinancing Adjustment, if any, would be appropriate to eliminate the negative short-term impact of any such refinancing activities completed in the 2021 Performance Period.tranche. The Compensation Committee established the vesting targets for the 20212023 Performance Period on March 30, 2021,February 16, 2023, in accordance with the following table. Subject to the application of the Refinancing Adjustment, if any, during the 2021 Performance Period, the failureFailure to achieve the minimum Normalized FFO performance target in a particular year results in no RSUs vesting and the forfeiture of that year’s tranche of performance-based award. Additionally, the amount of RSUs that will ultimately vest based on the Normalized FFO targets subject to the Refinancing Adjustment, if any, in the table below will be adjusted positively or negatively based on the rTSR modifier. | $1.30 | | | 50.00% | | | Min (80%) | | | $ 1.62 | | | 100.00% | | | Target | | | $ 1.31 | | | 51.56% | | | | | | $1.63 | | | 101.56% | | | | | | $ 1.32 | | | 53.13% | | | | | | $1.64 | | | 103.13% | | | | | | $ 1.33 | | | 54.69% | | | | | | $1.65 | | | 104.69% | | | | | | $ 1.34 | | | 56.25% | | | | | | $1.66 | | | 106.25% | | | | | | $ 1.35 | | | 57.81% | | | | | | $1.67 | | | 107.81% | | | | | | $ 1.36 | | | 59.38% | | | | | | $1.68 | | | 109.38% | | | | | | $ 1.37 | | | 60.94% | | | | | | $1.69 | | | 110.94% | | | | | | $ 1.38 | | | 62.50% | | | | | | $1.70 | | | 112.50% | | | | | | $ 1.39 | | | 64.06% | | | | | | $1.71 | | | 114.06% | | | | | | $ 1.40 | | | 65.63% | | | | | | $1.72 | | | 115.63% | | | | | | $ 1.41 | | | 67.19% | | | | | | $1.73 | | | 117.19% | | | | | | $ 1.42 | | | 68.75% | | | | | | $1.74 | | | 118.75% | | | | | | $ 1.43 | | | 70.31% | | | | | | $1.75 | | | 120.31% | | | | | | $ 1.44 | | | 71.88% | | | | | | $1.76 | | | 121.88% | | | | | | $ 1.45 | | | 73.44% | | | | | | $1.77 | | | 123.44% | | | | | | $ 1.46 | | | 75.00% | | | | | | $1.78 | | | 125.00% | | | | | | $ 1.47 | | | 76.56% | | | | | | $1.79 | | | 126.56% | | | | | | $ 1.48 | | | 78.13% | | | | | | $1.80 | | | 128.13% | | | | | | $ 1.49 | | | 79.69% | | | | | | $1.81 | | | 129.69% | | | | | | $ 1.50 | | | 81.25% | | | | | | $1.82 | | | 131.25% | | | | | | $ 1.51 | | | 82.81% | | | | | | $1.83 | | | 132.81% | | | | | | $ 1.52 | | | 84.38% | | | | | | $1.84 | | | 134.38% | | | | |
| Minimum | | | $1.14 | | | 50.00% | | | Target | | | $1.43 | | | 100.00% | | | | | | | | | $1.15 | | | 51.72% | | | | | | $1.44 | | | 101.72% | | | | | | | | | $1.16 | | | 53.45% | | | | | | $1.45 | | | 103.45% | | | | | | | | | $1.17 | | | 55.17% | | | | | | $1.46 | | | 105.17% | | | | | | | | | $1.18 | | | 56.90% | | | | | | $1.47 | | | 106.90% | | | | | | | | | $1.19 | | | 58.62% | | | | | | $1.48 | | | 108.62% | | | | | | | | | $1.20 | | | 60.34% | | | | | | $1.49 | | | 110.34% | | | | | | | | | $1.21 | | | 62.07% | | | | | | $1.50 | | | 112.07% | | | | | | | | | $1.22 | | | 63.79% | | | | | | $1.51 | | | 113.79% | | | | | | | | | $1.23 | | | 65.52% | | | | | | $1.52 | | | 115.52% | | | | | | | | | $1.24 | | | 67.24% | | | | | | $1.53 | | | 117.24% | | | | | | | | | $1.25 | | | 68.97% | | | | | | $1.54 | | | 118.97% | | | | | | | | | $1.26 | | | 70.69% | | | | | | $1.55 | | | 120.69% | | | | | | | | | $1.27 | | | 72.41% | | | | | | $1.56 | | | 122.41% | | | | | | | | | $1.28 | | | 74.14% | | | | | | $1.57 | | | 124.14% | | | | | | | | | $1.29 | | | 75.86% | | | | | | $1.58 | | | 125.86% | | | | | | | | | $1.30 | | | 77.59% | | | | | | $1.59 | | | 127.59% | | | | | | | | | $1.31 | | | 79.31% | | | | | | $1.60 | | | 129.31% | | | | | | | | | $1.32 | | | 81.03% | | | | | | $1.61 | | | 131.03% | | | | | | | | | $1.33 | | | 82.76% | | | | | | $1.62 | | | 132.76% | | | | |
70 CoreCivic, Inc.
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TABLE OF CONTENTS | Normalized
FFO(1) | | Normalized
FFO
Modifier | | | | | | 2021
Normalized
FFO(1) | | Normalized
FFO
Modifier | | | | | | | 2023
Normalized
FFO(1)
($) | | Normalized
FFO Modifier
(%) | | | | 2023
Normalized
FFO(1)
($) | | Normalized
FFO Modifier
(%) | | | $ 1.53 | | 85.94% | | | | $1.85 | | 135.94% | | | | | | $1.34 | | 84.48% | | | | $1.63 | | 134.48% | | | | | $ 1.54 | | 87.50% | | | | $1.86 | | 137.50% | | | | | | $1.35 | | 86.21% | | | | $1.64 | | 136.21% | | | | | $ 1.55 | | 89.06% | | | | $1.87 | | 139.06% | | | | | | $1.36 | | 87.93% | | | | $1.65 | | 137.93% | | | | | $ 1.56 | | 90.63% | | | | $1.88 | | 140.63% | | | | | | $1.37 | | 89.66% | | | | $1.66 | | 139.66% | | | | | $ 1.57 | | 92.19% | | | | $1.89 | | 142.19% | | | | | | $1.38 | | 91.38% | | | | $1.67 | | 141.38% | | | | | $ 1.58 | | 93.75% | | | | $1.90 | | 143.75% | | | | | | $1.39 | | 93.10% | | | | $1.68 | | 143.10% | | | | | $ 1.59 | | 95.31% | | | | $1.91 | | 145.31% | | | | | | $1.40 | | 94.83% | | | | $1.69 | | 144.83% | | | | | $ 1.60 | | 96.88% | | | | $1.92 | | 146.88% | | | | | | $1.41 | | 96.55% | | | | $1.70 | | 146.55% | | | | | $ 1.61 | | 98.44% | | | | $1.93 | | 148.44% | | | | | | $1.42 | | 98.28% | | | | $1.71 | | 148.28% | | | | | $ 1.62 | | 100.00% | | Target | | $1.94 | | 150.00% | | Max (120%) | | Target | | $1.43 | | 100.00% | | | | $1.72 | | 150.00% | | Maximum | |
(1)
| SubjectNormalized FFO is an amount calculated and presented on the basis of methodologies other than in accordance with GAAP. Please refer to the Refinancing Adjustment, if any.Appendix A for further explanation and reconciliation of our 2023 Normalized FFO to net income, its most directly comparable GAAP measure. |
Normalized FFO is an amount calculated and presented on the basis of methodologies other than in accordance with GAAP. Please refer to Appendix A for further explanation and reconciliation of Normalized FFO to net income, its most directly comparable GAAP measure.
At the same time our Compensation Committee established the Normalized FFO performance targets for the 20212023 Performance Period, (subject to the Refinancing Adjustment, if any), the Compensation Committee also established the following rTSR modifier levels, which positively or negatively modify any Normalized FFO performance achieved (subject to the Refinancing Adjustment, if any) based on the table below. | 25th | | | 0.800x0.8x
| | | 50th | | | 1.000x1.0x
| | | 75th | | | 1.200x1.2x
| |
(1)
| In the event thatIf the Company’s absolute TSR for the performance period is less than zero, the rTSR modifier shall not exceed 1.000x1.0x for the performance period. |
(2)
| If the applicable rTSR percentile performance falls between the listed rTSR percentiles, straight-line interpolation is used to determine the applicable modifier. |
As described above, for 2021,2023, our Company’s rTSR was calculated based on the TSRs of the companies comprising the Russell 2000. The Compensation Committee chose this comparison group as it believes that it represents the most appropriate set of companies on which to base the Company’s rTSR performance. The Compensation Committee determinedbelieves that calculating rTSR against the companies comprising the Russell 2000 provides a more comprehensive comparison forof our share price performance compared tothan our compensation peer group which is comprised of a customized comparator based onnarrower industry base and a limited number of companies. The Compensation Committee also believes that comparing our Company’s shareholder return against the shareholder return of the companies in this group closely aligns this key compensation metric with the expectations of investors in small cap companies. For 2021,2023, our Company achieved a Normalized FFO of $1.85. As described above, the Compensation Committee determined that Normalized FFO would be subject to the Refinancing Adjustment, if any, for the 2021 performance period. As a result of the refinancing activities approved by our Board and completed by the Company during 2021, the Compensation Committee determined that the Refinancing Adjustment caused Normalized FFO to increase $0.12,$1.47, which resulted in the achievement of an adjusteda Normalized FFO (i.e., Normalized FFO after the Refinancing Adjustment) performance of $1.97 or 150%106.9%. TABLE OF CONTENTS
The refinancing transactions completed in 2021 for purposes of determining the Refinancing Adjustment included the issuance the 8.25% Senior Notes, and the utilization of proceeds to (i) redeem all of our $250.0 million 5.0% senior unsecured notes, including the payment of the applicable “make-whole” redemption amount and accrued interest, (ii) repurchase $176.3 million of our 4.625% senior unsecured notes, and (iii) pay down a portion of the amounts outstanding under our revolving credit facility.
The Company’s one-yearthree-year (2021-2023) rTSR performance of 37%94.4% landed in the upper half of the thirdhighest quartile, resulting in an rTSR modifier of 1.142x.1.2x. As a result of the application of the rTSR modifier, the number of 20212023 performance-based RSUs that actually vested amounted to 171.3%128.28% of the original grant amount, or 114.2%120% of the adjusted Normalized FFO performance achieved of 150%106.9%. The Compensation Committee believed the amount of these awards was appropriate given our compensation philosophy and objectives. The Compensation Committee believed that the effect of the combined adjusted Normalized FFO and rTSR calculations properly rewarded our CEO and other NEOs because the rTSR modifier further increased the impact of adjusted Normalized FFO performance on CEO and NEO equity incentive awards. Finally, the Compensation Committee determined the modifier was appropriate because it rewards the NEOs for the Company’s stock performance when compared to the Russell 2000. In 2021,2023, performance-based RSUs represented approximately 31.6%31.0% of our CEO’s total compensation package, and on average, 24.7%24.0% of our other NEOs’ total compensation package (calculated in the manner described on page 5547). CoreCivic, Inc. | | | 62
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TABLE OF CONTENTS Outstanding 20202022 Performance-Based RSU Awards (2020-2022(2022-2024 Performance Period) The second tranche of performance-based RSUs granted in 20202022 are subject to the same adjusted Normalized FFO modifier of 150%106.9% described above and the same one-yearthree-year rTSR modifier of 1.2x described above. The Compensation Committee determined that using a one-yearthree-year rTSR modifier for the second tranche of the 20202022 RSUs was appropriate due toconsistent with the Company’s substantial revisionintention of its rTSR comparator group from publicly traded REITs with revenues between $1 billionthe incentive plan and $6 billion to the Russell 2000 following our conversion from a REIT to a taxable C Corporation.approach applied for 2023 awards. As a result of the application of the one-yearthree-year rTSR modifier, the number of the second tranche of 20202022 performance-based RSUs that actually vested amounted to 171.3%128.28% of the original grant amount, or 114.2%120% of the adjusted Normalized FFO performance achieved of 150%106.9%. Outstanding 20192021 Performance-Based RSU Awards (2019-2021(2021-2023 Performance Period) The third tranche of performance-based RSUs granted in 20192021 are subject to the same adjusted Normalized FFO modifier of 150%106.9% described above and the same one-yearthree-year rTSR modifier of 1.2x described above. The Compensation Committee determined that using a one-yearthree-year rTSR modifier for the final third of the 20192021 RSUs was appropriate due toconsistent with the Company’s substantial revisionintention of its rTSR comparator group from publicly traded REITs with revenues between $1 billionthe incentive plan and $6 billion to the Russell 2000 following our conversion from a REIT to a taxable C Corporation.approach applied for 2023 awards. As a result of the application of the one-yearthree-year rTSR modifier, the number of the third tranche of 20192021 performance-based RSUs that actually vested amounted to 171.3%128.28% of the original grant amount, or 114.2%120% of the adjusted Normalized FFO performance achieved of 150%106.9%. Vesting of 2019-20212021-2023 Time-Based RSUs Based on the Passage of Time and 2019-20212021-2023 Performance-Based RSUs Based on 20212023 Performance. As set forth in the table below, as a result of our adjusted Normalized FFO performance of $1.97$1.47 for 2021,2023, and the application of the applicable rTSR modifier of 1.2 x described above, the 20212023 performance period tranches for outstanding performance-based RSUs granted in 2019, 20202021, 2022 and 20212023 vested in the amounts set forth below. In accordance with the terms of the awards, the vesting occurs and shares are issued on the later of (i) delivery of the audited financial statements by the Company’s independent registered public accountant for the applicable fiscal year (in the Company’s filing of the Annual Report on Form 10-K) and (ii) the applicable anniversary of the grant date. Additionally, as set TABLE OF CONTENTS
forth in the table below, the 2023 period tranches for the time-based RSUs granted in 2019, 2020 and 2021 vested on February 18, 2022. The performance-based RSUs granted in 20202021, 2022 and 2019 also2023 vested on February 18, 2022. The performance-based RSUs for 2021 vested on March 30, 2022.20, 2024. | Damon T. Hininger | | | 45,614 | | | 20,684 | | | 16,245 | | | 90,157 | | | 52,121 | | | 40,954 | | | David M. Garfinkle | | | 21,929 | | | 9,944 | | | 7,810 | | | 28,897 | | | 16,705 | | | 13,127 | | | Patrick D. Swindle | | | 21,929 | | | 9,944 | | | 7,810 | | | 28,897 | | | 16,705 | | | 13,127 | | | Anthony L. Grande | | | 21,929 | | | 9,944 | | | 7,810 | | | 28,897 | | | 16,705 | | | 13,127 | | | Lucibeth N. Mayberry | | | 21,929 | | | 9,944 | | | 7,810 | | | 28,897 | | | 16,705 | | | 13,127 | |
| Damon T. Hininger | | | 33,970 | | | 35,230 | | | 45,614 | | | 56,831 | | | 60,752 | | | 67,517 | | | David M. Garfinkle | | | 16,757 | | | 16,937 | | | 21,931 | | | 18,690 | | | 19,471 | | | 21,639 | | | Patrick D. Swindle | | | 16,378 | | | 16,937 | | | 21,931 | | | 18,267 | | | 19,471 | | | 21,639 | | | Anthony L. Grande | | | 16,757 | | | 16,937 | | | 21,931 | | | 18,690 | | | 19,471 | | | 21,639 | | | Lucibeth N. Mayberry | | | 16,378 | | | 16,937 | | | 21,931 | | | 18,267 | | | 19,471 | | | 21,639 | |
(1)
| “TBRSUs” refers to time-based restricted stock units as described in the section of this Proxy titled 20212023 Long-Term Equity Incentive Compensation Awards. |
(2)
| “PBRSUs” refers to performance-based restricted stock units as described in the section of this Proxy titled 20212023 Long-Term Equity Incentive Compensation Awards. |
Dividend Equivalent Rights. The performance-based RSUs and time-based RSUs have associated dividend equivalent rights that are earned based on cash dividends, if any, paid by the Company while the award is unvested and outstanding. The dividend equivalent rights, if any, are paid in cash, and do not vest and are not paid unless and until, and then only to the extent, the associated performance-based RSUs or time-based RSUs vest and the underlying shares are issued. This further aligns the executive officer’s interests with our stockholders, encourages dividend growth performance and does not result in payment of any unearned compensation. The Company has not declared a dividend since the payment of our first quarter dividend in 2020. In August 2020, our Board unanimously voted to discontinue our quarterly dividend and prioritize allocating our free cash flow to reduce debt levels. Any future dividend is subject to our Board’s determinations as to the amount and timing thereof, as well as limitations under the Company’s debt covenants. Substantial Compensation Tied to Our Objective Performance RSUs granted in 20212023 comprised both performance-based RSUs that vest based on the achievement of an annually set Normalized FFO (subject to the Refinancing Adjustment, if any, during the 2021 Performance Period) performance target, subject to a positive or negative adjustment by an rTSR modifier, and time-based RSUs that vest ratably over three years. In 2021,2023, our annual cash incentives were earned based upon our objective performance against a pre-established CoreCivic, Inc. | | | 63
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TABLE OF CONTENTS financial performance target (Adjusted EBITDA) and a pass/fail business target (Lease Conversion)Short-Term Business Goals and modified positively or negatively based on our achievement of objective Strategic Business Goals. As a result, a substantial portion of executive compensation is at risk, paid based on our objective performance and tied to the interests of our stockholders and long-term value creation. Severance and Change in Control Benefits We believe reasonable severance and change in control benefits are necessary in order to recruit and retain effective senior managers. These severance benefits reflect the fact that it may be difficult for such executives to find comparable employment within a short period of time and are a product of a generally competitive recruiting environment within our industry. We also believe a change in control arrangement will provide ansome level of protection to our executive security that will likely reduce any reluctance of an executive to pursueofficers who might be terminated involuntarily in connection with such a change in control transaction that could be in the best interests of our stockholders.transaction. In addition, we have sought to TABLE OF CONTENTS
maintain a high level of consistency in the contractualseverance terms applicable to all members of the executive team. We maintainThrough December 31, 2023, we had executive employment agreements in place with each of our executive officers thatofficers. Such executive employment agreements provide cash severance equal to theirone year of the executive officer’s then-current annual base salary for termination of employment by the Company without “cause” or resignation for “good reason,” and a double trigger payment of 2.99 times their base salary, plus certain other benefits, in the event of termination of the executive’s employment by the Company without “cause” or resignation for “good reason” in connection with a “change in control.”control” (collectively, the “Severance Benefits”). The executive employment agreements and the potential costs in the event of a change in control are reviewed periodically by our Compensation Committee, which stays abreast ofremains informed with respect to developments and suggested best practices in compensation structure and design. In 2020, we undertook a review of the provisions of the executive employment agreements (including protections provided in the event of a change in control, compliance with applicable law and provisions related to post-termination non-competition, non-solicitation, confidentiality, and non-disclosure) and, effective January 1, 2021, we entered into newthe executive employment agreements with each of our then-current senior executives.executive officers. The newexecutive employment agreements provideprovided for an initial term expiring December 31, 2022, with automatic renewal for an additional year absent notice of nonrenewal by the Company or the executive at least 60 days in advance of the expiration of the initial term. The newPursuant to those terms, all the current executive officers' executive employment agreements automatically renewed for a one-year period expiring December 31, 2023. Each of these executive employment agreements also implementimplements revised confidentiality, non-disclosure, non-competition, and non-solicitation provisions. Each of these agreements provides for a minimum annual salary. In addition, during the term, the executives are eligible to participate in all compensation or employee benefit plans or programs maintained by the Company for the benefit of its salaried employees or senior executives from time to time. These plans and programs may include health and life insurance. In addition, during the term, these agreements provide for reimbursement for certain professional and civic memberships that are approved in advance by the Company. Each of the executive employment agreements provides for severance benefits, which are described above and more fully discussed under the heading Compensation Discussion and Analysis—Potential Payments Upon Termination or Change in Control in this Proxy Statement. Under our equity award agreements, all outstanding equity awards would accelerate upon a change in control. Our Compensation Committee believes the single trigger equity acceleration encourages managementWe continue to stay committed towards any potential transaction that may be in the best interests of our stockholders. For a detailed discussion of potentialbelieve reasonable severance and change in control benefits see are necessary to recruit and retain effective senior managers, and, in connection with expiration of the executive employment agreements on December 31, 2023, our Compensation DiscussionCommittee determined that the Company should adopt an Executive Severance and Analysis—Potential Payments Upon Termination or Change in Control, beginning Plan (the “Severance Plan”) applicable to each of our executive officers. Our Compensation Committee believes that the Severance Plan was preferable to individual executive employment agreements because the Severance Plan ensures continuity of terms between our executive officers and facilitates ease of administration. The Severance Plan was adopted in late 2023 and became effective January 1, 2024. The Severance Plan retains the Severance Benefits from the executive employment agreements that expired on page 83December 31, 2023, and, as a result, provides for substantially the same benefits as those provided in such executive employment agreements. Each of this Proxy Statement.our named executive officers is a participant under the Severance Plan. In connection with each such named executive officer’s participation in the Severance Plan, each such executive officer entered into a Confidentiality, Intellectual Property and Non-Competition Restrictive Covenants Agreement with the Company (the “Confidentiality Agreement”). The Confidentiality Agreement contains terms that are substantially the same as the comparable provisions contained in the executive employment agreements that expired on December 31, 2023.CoreCivic, Inc. | | | 64
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TABLE OF CONTENTS Perquisites and Other Benefits The Company has paid relocation expenses, either in the form of reimbursement or a lump sum payment, to the NEOs who have relocated to Nashville, Tennessee in order to assume their positions with the Company. We permit limited tax gross up payments to our executives to cover the income tax associated with the taxable portions (if any) of such relocation reimbursement payments. The NEOs are also eligible for benefits generally available to and on the same terms as the Company’s employees who are exempt for purposes of the Fair Labor Standards Act, including health insurance, short-term disability insurance, and dental insurance. Additionally, the Company pays supplemental life and long-term disability insurance premiums for the NEOs. Pursuant to their employment agreements and in order toTo encourage community involvement, the NEOs are also eligible for reimbursement for certain civic and professional memberships that are approved in advance. We also pay for physicals for executive officers up to $2,000$3,500 per individual on an annual basis and provide an optional concierge physician service benefit up to $3,000 per year to our officers, including our executive officers. We also reimburse our NEOs for certain wellness memberships. TABLE OF CONTENTS
Retirement Plans The Company maintains a qualified 401(k) plan. The Company matches a percentage of eligible employee contributions to our 401(k) Plan. Employer matching contributions are made in cash on a dollar-for-dollar basis up to 5% of the employee’s base salary and are 100% vested immediately. The Company also maintains a non-qualifiednonqualified deferred compensation plan covering our executive officers and certain key employees (the “Executive Deferred Compensation Plan”). Under the terms of the Executive Deferred Compensation Plan, participants are eligible to defer up to 50% of their annual base salary and 100% of their cash incentive bonus each plan year. The Company, in its discretion, may make matching contributions to the plan. Currently, the Company makes matching contributions equal to 100% of amounts deferred up to 5% of total cash compensation. The matching contribution is credited on a monthly basis but is reduced at the end of the plan year for any matching amounts contributed to the participant’s 401(k) account. Any compensation deferred and matching contributions, if any, earn a return based on a fixed rate that is established by the Company based on the return received by the Company on certain investments designated as a funding mechanism for meeting its obligations under the Executive Deferred Compensation Plan. Participants are 100% vested in amounts deferred under the Executive Deferred Compensation Plan and earnings on those amounts, while the matching contributions vest 20% after two years of service, 40% after three years of service, 80% after four years of service and 100% after five years of service, subject to accelerated vesting in the event of a change in control, death, disability, or retirement (age 62). Executive Officer Stock Ownership Guidelines We maintain stock ownership guidelines applicable to our executive officers and non-executive directors. The stock ownership guidelines are designed to align the economic interests of executive officers and our Board with those of stockholders and to discourage excessive risk-taking by management and directors. Under these guidelines, each of our executive officers is expected to own a fixed number of shares of the Company’s common stock equal to three times such executive officer’s base salary on his or her hire or promotion date divided by the Company’s closing common stock price, as reported by the NYSE, on such date. Executive officers are expected to achieve these ownership levels, subject to a limited hardship exemption, within five years following their date of hire or promotion.See Executive and Director Compensation—Guidelines and Policies—Executive Officer Stock Ownership Guidelines and Executive and Director Compensation—Director Compensation—Director Stock Ownership Guidelines. The following rules are used in determining share ownership of our executive officers and directors under the guidelines: shares of common stock owned outright by the executive officer or director and his or her immediate family members who share the same household, whether held individually or jointly; shares of restricted stock or RSUs where the restrictions have lapsed, even though such shares may be subject to an election made by the holder to defer receipt of the shares; and shares held in trusts or other legal entities established for estate planning purposes with respect to which the executive officer or director retains beneficial ownership (due to complexities of these arrangements, requests to include shares held in such arrangements must be reviewed and approved by our Compensation Committee). CoreCivic, Inc. | | | 65
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TABLE OF CONTENTS Based on a review of such programs at Fortune 500 companies, our Board determined that the Company’s ownership requirements were fair, yet challenging, and that five years was a reasonable time period during TABLE OF CONTENTS
which executives and directors would be able to comply. Our Board believes these ownership guidelines encourage executive officers of the Company and the Board to act in the long-term interests of our stockholders, while discouraging excessive risk-taking. Our guidelines and the compliance status of our NEOs as of the last quarterly review date of February 18, 202222, 2024, are shown in the table below: | Damon T. Hininger | | | 87,138 | | | 438,002 | | | 10/15/2014 | | | David M. Garfinkle | | | 32,777 | | | 225,893 | | | 5/1/2019 | | | Patrick D. Swindle | | | 53,119 | | | 102,661 | | | 1/1/2023 (1) | | | Anthony L. Grande | | | 35,671 | | | 83,209 | | | 8/21/2013 | | | Lucibeth N. Mayberry | | | 22,340 | | | 182,655 | | | 11/1/2018 | |
(1)
| Mr. Swindle first became subject to the stock ownership guidelines beginning January 1, 2018, with a five-year compliance period. |
| Damon T. Hininger | | | 87,138 | | | 683,345 | | | 10/15/2014 | | | David M. Garfinkle | | | 32,777 | | | 292,274 | | | 5/1/2019 | | | Patrick D. Swindle | | | 53,119 | | | 145,886 | | | 1/1/2023 | | | Anthony L. Grande | | | 35,671 | | | 112,438 | | | 8/21/2013 | | | Lucibeth N. Mayberry | | | 22,340 | | | 176,115 | | | 11/1/2018 | |
Grant Timing Policy Grants of equity awards for executive officers are typically made on the date of the February Compensation Committee meeting, after our Compensation Committee has had the opportunity to review full year results for the prior year and consider anticipated results for the current year. Our Compensation Committee occasionally approves additional equity awards in certain special circumstances, such as upon an executive officer’s initial employment with the Company, the promotion of an executive officer to a new position or in recognition of special contributions made by an executive officer. For grants to executive officers, all such grants are approved by our Compensation Committee with an effective date of grant on or after the date of such approval. If the grant date is after the date of approval, it is on a date that is specified by our Compensation Committee at the time of approval. The Company strives to ensure equity grants are made following the public release of important information such as year-end results or anticipated results for the succeeding year. Deductibility of Executive Compensation Section 162(m) of the Code limits the tax deductibility of compensation over $1.0 million paid to certain executive officers of the Company. Prior to the 2017 enactment of the Tax Cuts and Jobs Act (the “TCJA”), Section 162(m) provided an exemption from the deduction limitation for compensation that constituted “qualified performance-based compensation.” The TCJA, however, repealed the exemption for “qualified performance-based compensation,” effective for taxable years beginning after December 31, 2017, subject to transitional relief for certain arrangements in place as of November 2, 2017. This change, among others, has caused more of the compensation we pay to our executive officers to be non-deductible under Section 162(m) and has eliminated our ability to structure performance-based awards to be exempt from the Section 162(m) limitations. In designing our executive compensation program and determining the compensation of our executive officers, the Compensation Committee considers multiple factors, including the potential impact of the deduction limitation contained in Section 162(m). However, the Compensation Committee will not necessarily limit executive compensation to that which is or may be deductible under Section 162(m). The deductibility of some types of compensation depends upon the timing of an executive officer’s vesting or exercise of previously granted rights. Additionally, interpretations of and changes in the tax laws, and other TABLE OF CONTENTS
factors beyond the Compensation Committee’s control will also affect the deductibility of compensation. The Compensation Committee will consider alternative arrangements to preserve the deductibility of compensation payments and benefits to the extent consistent with its compensation goals and will continue to monitor any developments regarding Section 162(m). To maintain flexibility to compensate our executive officers in a manner designed to promote our short-term and long-term corporate goals, the Compensation Committee has not adopted a policy that all compensation must be deductible. The Compensation Committee believes our stockholders’ interests are best served if its discretion and flexibility in awarding compensation is not restricted, even though some compensation awards may result in a non-deductible compensation expense. 77 CoreCivic, Inc.
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TABLE OF CONTENTS Compensation Committee Report
The following Report of the Compensation Committee does not constitute soliciting material and should not be deemed filed or incorporated by reference into any other Company filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent the Company specifically incorporates this Report by reference therein. Our Compensation Committee has reviewed and discussed the Compensation Discussion and Analysis set forth above with our management. Taking this review and discussion into account, the undersigned Committee members recommended to our Board that our Board approve the inclusion of the Compensation Discussion and Analysis in our Proxy Statement on Schedule 14A for filing with the SEC. Submitted by the Compensation Committee:
Robert J. Dennis, Chair
Mark A. Emkes
Anne L. Mariucci
John R. Prann, Jr. 78 CoreCivic, Inc.
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TABLE OF CONTENTS Summary Compensation Table The following table summarizes the compensation earned or paid to our NEOs for service in the fiscal years ended December 31, 2021, 20202023, 2022 and 2019:2021: | Damon T. Hininger | | | 2021 | | | $963,540 | | | $2,600,002 | | | $1,694,859 | | | $85,678 | | | $101,237 | | | $5,445,316 | | | President & | | | 2020 | | | $940,040 | | | $2,600,000 | | | $658,978 | | | $55,536 | | | $150,897 | | | $4,405,451 | | | Chief Executive Officer | | | 2019 | | | $940,040 | | | $2,600,002 | | | $1,677,556 | | | $19,569 | | | $111,759 | | | $5,348,926 | | | David M. Garfinkle | | | 2021 | | | $507,940 | | | $999,993 | | | $714,770 | | | $15,694 | | | $34,824 | | | $2,273,221 | | | Executive Vice President & | | | 2020 | | | $495,551 | | | $1,000,003 | | | $277,910 | | | $10,839 | | | $34,480 | | | $1,818,783 | | | Chief Financial Officer | | | 2019 | | | $488,335 | | | $1,000,007 | | | $697,170 | | | $4,246 | | | $34,182 | | | $2,223,940 | | | Patrick D. Swindle | | | 2021 | | | $475,357 | | | $999,993 | | | $668,919 | | | $— | | | $28,753 | | | $2,173,022 | | | Executive Vice President & | | | 2020 | | | $460,394 | | | $1,000,003 | | | $258,193 | | | $— | | | $28,223 | | | $1,746,813 | | | Chief Operating Officer | | | 2019 | | | $444,334 | | | $1,000,007 | | | $634,352 | | | $— | | | $27,900 | | | $2,106,593 | | | Anthony L. Grande | | | 2021 | | | $516,506 | | | $999,993 | | | $726,823 | | | $36,385 | | | $58,184 | | | $2,337,891 | | | Executive Vice President & | | | 2020 | | | $503,908 | | | $1,000,003 | | | $282,595 | | | $30,099 | | | $79,212 | | | $1,895,817 | | | Chief Development Officer | | | 2019 | | | $496,570 | | | $1,000,007 | | | $708,927 | | | $10,795 | | | $65,686 | | | $2,281,985 | | | Lucibeth N. Mayberry | | | 2021 | | | $475,357 | | | $999,993 | | | $668,919 | | | $13,965 | | | $30,521 | | | $2,188,755 | | | Executive Vice President, | | | 2020 | | | $460,394 | | | $1,000,003 | | | $258,193 | | | $9,644 | | | $29,986 | | | $1,758,220 | | | Real Estate | | | 2019 | | | $444,334 | | | $1,000,007 | | | $634,352 | | | $3,778 | | | $29,644 | | | $2,112,115 | |
| Damon T. Hininger
President &
Chief Executive Officer | | | 2023 | | | $1,060,751 | | | $2,799,997 | | | $1,788,378 | | | $— | | | $142,911 | | | $5,792,037 | | | 2022 | | | $1,014,374 | | | $2,600,005 | | | $1,305,217 | | | $77,723 | | | $162,422 | | | $5,159,741 | | | 2021 | | | $963,540 | | | $2,600,002 | | | $1,694,859 | | | $85,678 | | | $101,237 | | | $5,445,316 | | | David M. Garfinkle
Executive Vice President &
Chief Financial Officer | | | 2023 | | | $559,185 | | | $1,104,994 | | | $754,207 | | | $— | | | $76,587 | | | $2,494,973 | | | 2022 | | | $534,737 | | | $999,996 | | | $550,446 | | | $13,106 | | | $37,841 | | | $2,136,126 | | | 2021 | | | $507,940 | | | $999,993 | | | $714,770 | | | $15,694 | | | $34,824 | | | $2,273,221 | | | Patrick D. Swindle
Executive Vice President &
Chief Operating Officer | | | 2023 | | | $526,936 | | | $1,080,011 | | | $710,711 | | | $— | | | $70,633 | | | $2,388,291 | | | 2022 | | | $503,899 | | | $999,996 | | | $518,702 | | | $697 | | | $63,722 | | | $2,087,016 | | | 2021 | | | $475,357 | | | $999,993 | | | $668,919 | | | $— | | | $28,753 | | | $2,173,022 | | | Anthony L. Grande
Executive Vice President &
Chief Development Officer | | | 2023 | | | $568,617 | | | $1,104,994 | | | $766,928 | | | $— | | | $80,660 | | | $2,521,199 | | | 2022 | | | $543,757 | | | $999,996 | | | $559,731 | | | $21,921 | | | $84,263 | | | $2,209,668 | | | 2021 | | | $516,506 | | | $999,993 | | | $726,823 | | | $36,385 | | | $58,184 | | | $2,337,891 | | | Lucibeth N. Mayberry
Executive Vice President,
Real Estate | | | 2023 | | | $526,936 | | | $1,080,011 | | | $710,711 | | | $— | | | $36,721 | | | $2,354,379 | | | 2022 | | | $503,899 | | | $999,996 | | | $518,702 | | | $11,662 | | | $38,546 | | | $2,072,805 | | | 2021 | | | $475,357 | | | $999,993 | | | $668,919 | | | $13,965 | | | $30,521 | | | $2,188,755 | |
(1)
| Amounts shown are not reduced to reflect the NEO’s contributions to our 401(k) plan or elections to defer receipt of salary under the Company’s Executive Deferred Compensation Plan (“DCP”). Amounts shown include the amounts actually paid to the NEO during the year and reflect, to the extent applicable, any changes in the base salary during the year. Due to timing of payroll cycles, as well as the timing of changes to base salary during the year, amounts paid to each NEO as base salary may differ from the annual base pay amount set forth above. |
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| The amounts shown in this column represent the aggregate grant date fair value of performance-based RSUs and time-based RSUs granted during the given year calculated in accordance with FASB ASC Topic 718. Beginning in 2019,2020, the Compensation Committee began granting a mix of performance-based RSUs and time-based RSUs. Amounts in this column for 2019-20212021-2023 include the target amount awarded by the Compensation Committee for the first, second and third tranches of performance-based RSU’s granted in 2019-2021,2021-2023, which vest annually in three anniversary tranches subject to the achievement of annual Normalized FFO performance targets established at the beginning of each year (for the 2021 Performance Period, the Normalized FFO performance was subject to the Refinancing Adjustment discussed under the heading Compensation Discussion and Analysis—Long-Term Incentive Compensation—2021 Performance-Based RSU Awards (2021-2023 Performance Period).year. In addition, as discussed on page 6759 under the heading Compensation Discussion and Analysis—Long-Term Incentive Compensation in this Proxy Statement, the 2019-20212021-2023 performance-based RSUs are also subject to an rTSR modifier, which increases or reduces the number of performance-based RSUs vesting in accordance with the table presented on page 7161 of this Proxy Statement (the amounts presented above do not include the impact of the rTSR modifier). The table below presents the grant date fair value of the 20212023 time-based RSUs and the 2021 performance-based RSUs (the amounts presented below do not include the impact of the rTSR modifier). As a result ofRSUs. In addition, because the performance criteria for each tranche of the 2021 performance-based RSUs beingare established on an annual basis, the performance-based RSU amounts presentedtable below are forreflects the fair value of the first year of the three-year performance periodcycle beginning in 2021 based2023, plus the second year of the three-year performance cycle beginning in 2022, plus the third year of the three-year performance cycle beginning in 2021. The fair value of the performance-based RSUs in the table below was determined using a Monte Carlo valuation of $12.64 per share, which was the value on the target amount awarded.date the performance criteria was established for the year ending December 31, 2023, for the performance-based RSUs, and the fair value of the time-based RSUs in the table below was determined using $10.99 per share, which was the closing price of the shares of our common stock on the grant date. |
| Damon T. Hininger | | | $1,039,999 | | | $520,001 | | | $1,560,000 | | | David M. Garfinkle | | | $499,996 | | | $166,666 | | | $666,662 | | | Patrick D. Swindle | | | $499,996 | | | $166,666 | | | $666,662 | | | Anthony L. Grande | | | $499,996 | | | $166,666 | | | $666,662 | | | Lucibeth N. Mayberry | | | $499,996 | | | $166,666 | | | $666,662 | |
| Damon T. Hininger | | | $1,120,002 | | | $1,823,880 | | | $2,943,882 | | | David M. Garfinkle | | | $552,500 | | | $589,252 | | | $1,141,752 | | | Patrick D. Swindle | | | $540,005 | | | $585,089 | | | $1,125,094 | | | Anthony L. Grande | | | $552,500 | | | $589,252 | | | $1,141,752 | | | Lucibeth N. Mayberry | | | $540,005 | | | $585,089 | | | $1,125,094 | |
(a)
| The maximum value of such awards assuming the highest level of performance conditions will be achieved (not including the impact of the rTSR modifier) would amount to $780,001are as follows: $3,855,823 for Mr. Hininger, and $249,999$1,436,377 for each of Messrs. Garfinkle Swindle,and Grande, and $1,417,638 for Mr. Swindle and Ms. Mayberry. All grants of equity awards were made under the 2020 Plan and are subject to the terms and conditions included in the individual award agreements. RSUs earn dividend equivalent rights, if any, that accumulate and are paid in cash when and only to the extent the underlying award vests. |
All grants of equity awards were made under the 2020 Plan and are subject to individual award agreements. RSUs earn dividend equivalent rights, if any, that accumulate and are paid in cash when and only to the extent the underlying award vests.
(2) (3)
| The amounts shown in this column reflect cash incentive plan compensation earned pursuant to the Company’s annual cash incentive plan. A detailed discussion of the amounts paid in 20212023 begins on page 6354 under the heading Compensation Discussion and Analysis—Annual Cash Incentive Plan in this Proxy Statement. |
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(3) (4)
| The amounts shown in this column represent above-market earnings on amounts that the NEO chose to defer pursuant to the Company’s Executive Deferred Compensation Plan (“DCP”),DCP, which is more fully described on page 8272 under the heading Compensation Discussion and Analysis—Non-qualifiedNonqualified Deferred Compensation in 20212023. AmountsNo amounts are shown are based on the excess of the Company’s fixed rate for 2021 of 5.00% over2023 because 120% of the applicable federal long-term rate, with compounding (as prescribed under section 1274(d) of the Code) of 1.58%5.22% exceeds the Company's rate of 5.00%. |
(4) (5)
| The amounts shown as All Other Compensation for 20212023 include the following: |
| Damon T. Hininger | | | $14,500 | | | $66,626 | | | $2,375 | | | $17,736 | | | $— | | | David M. Garfinkle | | | $14,500 | | | $— | | | $3,810 | | | $16,514 | | | $— | | | Patrick D. Swindle | | | $14,500 | | | $— | | | $2,369 | | | $11,884 | | | $— | | | Anthony L. Grande | | | $14,500 | | | $25,455 | | | $2,532 | | | $15,043 | | | $654 | | | Lucibeth N. Mayberry | | | $14,500 | | | $— | | | $2,933 | | | $13,088 | | | $— | |
| Damon T. Hininger | | | $16,500 | | | $101,798 | | | $5,724 | | | $17,857 | | | $1,032 | | | David M. Garfinkle | | | $16,500 | | | $33,959 | | | $6,077 | | | $17,051 | | | $3,000 | | | Patrick D. Swindle | | | $16,500 | | | $35,782 | | | $3,143 | | | $12,208 | | | $3,000 | | | Anthony L. Grande | | | $16,500 | | | $39,918 | | | $5,691 | | | $15,551 | | | $3,000 | | | Lucibeth N. Mayberry | | | $16,500 | | | $— | | | $3,708 | | | $13,513 | | | $3,000 | |
(a)
| The Company pays the long-term disability premiums of its executive officers and certain other employees but does not pay such premiums for all employees. |
(b)
| During 2021,For its officers, including its executive officers, the Company pays for optional physicals costing up to $3,500 per year and provides an optional concierge physician service benefit costing $3,000 per year. Ms. Mayberry and Messrs. Garfinkle, Swindle, and Grande used the $3,000 concierge physician benefit. Mr. GrandeHininger received a taxable perquisite in the form of a reimbursementairfare for a health club membershiphis spouse to accompany him on Company-related travel amounting to $654.$1,032. |
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TABLE OF CONTENTS Grants of Plan-Based Awards in 20212023The following table sets forth the grants of plan-based awards that were made to the NEOs during the fiscal year ended December 31, 2021:2023: | Damon T.
Hininger | | | | | | $301,106 | | | $1,204,425 | | | $1,806,638 | | | — | | | — | | | — | | | — | | | $— | | | 3/30/2021 | | | $— | | | $— | | | $— | | | 78,948 | | | 157,895 | | | 236,843 | | | — | | | $1,560,003 | | | 2/17/2021 | | | $— | | | $— | | | $— | | | — | | | — | | | — | | | 136,842 | | | $1,039,999 | | | David M.
Garfinkle | | | | | | $126,985 | | | $507,940 | | | $761,910 | | | — | | | — | | | — | | | — | | | $— | | | 3/30/2021 | | | $— | | | $— | | | $— | | | 25,304 | | | 50,607 | | | 75,911 | | | — | | | $499,997 | | | 2/17/2021 | | | $— | | | $— | | | $— | | | — | | | — | | | — | | | 65,789 | | | $499,996 | | | Patrick D.
Swindle | | | | | | $118,839 | | | $475,357 | | | $713,036 | | | — | | | — | | | — | | | — | | | $— | | | 3/30/2021 | | | $— | | | $— | | | $— | | | 25,304 | | | 50,607 | | | 75,911 | | | — | | | $499,997 | | | 2/17/2021 | | | $— | | | $— | | | $— | | | — | | | — | | | — | | | 65,789 | | | $499,996 | | | Anthony L.
Grande | | | | | | $129,127 | | | $516,506 | | | $774,759 | | | — | | | — | | | — | | | — | | | $— | | | 3/30/2021 | | | $— | | | $— | | | $— | | | 25,304 | | | 50,607 | | | 75,911 | | | — | | | $499,997 | | | 2/17/2021 | | | $— | | | $— | | | $— | | | — | | | — | | | — | | | 65,789 | | | $499,996 | | | Lucibeth N. Mayberry | | | | | | $118,839 | | | $475,357 | | | $713,036 | | | — | | | — | | | — | | | — | | | $— | | | 3/30/2021 | | | $— | | | $— | | | $— | | | 25,304 | | | 50,607 | | | 75,911 | | | — | | | $499,997 | | | 2/17/2021 | | | $— | | | $— | | | $— | | | — | | | — | | | — | | | 65,789 | | | $499,996 | |
| Damon T. Hininger | | | | | | $318,225 | | | $1,432,014 | | | $2,413,209 | | | — | | | — | | | — | | | — | | | — | | | 2/16/2023 | | | — | | | — | | | — | | | 66,456 | | | 132,911 | | | 199,367 | | | — | | | $1,679,995 | | | 2/16/2023 | | | — | | | — | | | — | | | — | | | — | | | — | | | 101,911 | | | $1,120,002 | | | David M. Garfinkle | | | | | | $134,204 | | | $603,920 | | | $1,017,717 | | | — | | | — | | | — | | | — | | | — | | | 2/16/2023 | | | — | | | — | | | — | | | 21,855 | | | 43,710 | | | 65,565 | | | — | | | $552,494 | | | 2/16/2023 | | | — | | | — | | | — | | | — | | | — | | | — | | | 50,273 | | | $552,500 | | | Patrick D. Swindle | | | | | | $126,465 | | | $569,091 | | | $959,024 | | | — | | | — | | | — | | | — | | | — | | | 2/16/2023 | | | — | | | — | | | — | | | 21,361 | | | 42,722 | | | 64,083 | | | — | | | $540,006 | | | 2/16/2023 | | | — | | | — | | | — | | | — | | | — | | | — | | | 49,136 | | | $540,005 | | | Anthony L. Grande | | | | | | $136,468 | | | $614,106 | | | $1,034,883 | | | — | | | — | | | — | | | — | | | — | | | 2/16/2023 | | | — | | | — | | | — | | | 21,855 | | | 43,710 | | | 65,565 | | | — | | | $552,494 | | | 2/16/2023 | | | — | | | — | | | — | | | — | | | — | | | — | | | 50,273 | | | $552,500 | | | Lucibeth N. Mayberry | | | | | | $126,465 | | | $569,091 | | | $959,024 | | | — | | | — | | | — | | | — | | | — | | | 2/16/2023 | | | — | | | — | | | — | | | 21,361 | | | 42,722 | | | 64,083 | | | — | | | $540,006 | | | 2/16/2023 | | | — | | | — | | | — | | | — | | | — | | | — | | | 49,136 | | | $540,005 | |
(1)
| The amounts shown in these columns reflect the minimum (31.25%minimum/threshold (30% of base salary), target (125%(135% of base salary) and maximum (187.5%(227.5% of base salary) amounts that the Chief Executive Officer or the minimum (25%minimum/threshold (24% of base salary), target (100%(108% of base salary) and maximum (150%(182% of base salary) amounts that each of the other NEOs could have earned for the fiscal year ended December 31, 2021,2023, respectively, pursuant to the Company’s annual cash incentive plan, based on Adjusted EBITDA, the Short-Term Business Goals and Strategic Business Goals, as discussed in detail on page 6354 under the heading Compensation Discussion and Analysis—Annual Cash Incentive Plan in this Proxy Statement. The amounts actually awarded to each of the NEOs are reflected in the Summary Compensation Table. The amounts presented in these columns do not include the impact of the Strategic Business Goals modifier, which increases or reduces any payout in accordance with the table presented on page 6658. Because of the impact of this modifier, the actual minimum could be lower and the maximum higher than presented. |
(2)
| The amounts shown in the threshold column reflect the minimum number (or 50% of the granted amount) of RSUs that could vest if the minimum performance-based condition of vesting is satisfied. Maximum reflects 150% of the performance-based RSUs granted if the maximum performance-based condition to vest is satisfied. Target reflects 100% of the number of performance-based shares awarded. The performance-based RSUs were awarded pursuant to the Company’s 2020 Plan and have dividend equivalent rights, if any, payable in cash, |
80 but only to the extent and when the performance-based RSUs vest and the underlying shares are issued. The performance-based RSUs are discussed in detail, including the portion of the awards vesting for the 2023 Performance Period, beginning on page 59 under the heading Compensation Discussion and Analysis—Long-Term Incentive Compensation in this Proxy Statement. The amounts presented in these columns do not include the impact of the rTSR modifier, which increases or reduces any vested RSUs in accordance with the table presented on page 62. Because of the impact of this modifier, the actual minimum could be lower, and the maximum could be higher than presented. |
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but only to the extent and when the performance-based RSUs vest and the underlying shares are issued. The performance-based RSUs are discussed in detail, including the portion of the awards vesting for the 2021 Performance Period, beginning on page 67 under the heading Compensation Discussion and Analysis—Long-Term Incentive Compensation in this Proxy Statement. The amounts presented in these columns do not include the impact of the rTSR modifier, which increases or reduces any vested RSUs in accordance with the table presented on page 71. Because of the impact of this modifier, the actual minimum could be lower, and the maximum could be higher than presented.(3)
| The amounts shown in this column represent the time-based RSUs which vest in equal amounts over three years on the later of (i) the anniversary date of the grant or (ii) the delivery of the audited financial statements by the Company’s independent registered public accountant for the applicable fiscal year (in the Company’s filing of the Annual Report on Form 10-K).year. The time-based RSUs were awarded pursuant to the Company’s 2020 Plan and have dividend equivalent rights, if any, payable in cash, but only to the extent and when the time-based RSUs vest and the underlying shares are issued. |
(4)
| The amounts shown in this column represent the target amountamounts for time-based and performance-based RSUs awarded by the Compensation Committee on February 17, 2021 (for time-based RSUs) and March 30, 2021 (for performance-based RSUs) (both representing the grant dates).16, 2023. The targeted number of performance-based RSU awards was based on the grant date fair value determined using a Monte Carlo valuation of $9.88$12.64 per share, and the number of time-based RSU awards was based on the grant date fair value of $7.60$10.99 per share reflecting the closing price of the shares of our common stock on the grant date. Consistent with the presentation in the Summary Compensation Table, amounts in this column include the target amount awarded by the Compensation Committee for the performance-based RSUs. Performance-based RSUs awarded in 20212023 vest annually in three anniversary tranches subject to the achievement of annual Normalized FFO performance targets established at the beginning of each year during the performance period. For a presentation of the 20212023 performance-based RSU amounts for the first tranche of the three-year performance period beginning in 20212023 based on the target amount awarded by the Compensation Committee, see footnote 1 to the Summary Compensation Table. |
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TABLE OF CONTENTS Outstanding Equity Awards at 20212023 Fiscal Year-End The following table sets forth information concerning the equity awards held by our NEOs that were outstanding as of December 31, 2021:2023: | Damon T. Hininger | | | 139,273 | | | — | | | $ 22.34 | | | 3/16/2022 | | | 57,199 | | | $570,274 | | | | | | | | | | | | | | | 123,917 | | | $1,235,452 | | | | | | | | | | | | | | | 332,263 | | | $3,312,662 | | | David M. Garfinkle | | | 21,175 | | | — | | | $22.34 | | | 3/16/2022 | | | 20,937 | | | $208,742 | | | | | | | | | | | | | | | 46,348 | | | $462,090 | | | | | | | | | | | | | | | 128,424 | | | $1,280,387 | | | Patrick D. Swindle | | | — | | | — | | | $— | | | — | | | 20,937 | | | $208,742 | | | | | | | | | | | | | | | 46,348 | | | $462,090 | | | | | | | | | | | | | | | 128,424 | | | $1,280,387 | | | Anthony L. Grande | | | — | | | — | | | $— | | | — | | | 20,937 | | | $208,742 | | | | | | | | | | | | | | | 46,348 | | | $462,090 | | | | | | | | | | | | | | | 128,424 | | | $1,280,387 | | | Lucibeth N. Mayberry | | | 21,175 | | | — | | | $22.34 | | | 3/16/2022 | | | 20,937 | | | $208,742 | | | | | | | | | | | | | | | 46,348 | | | $462,090 | | | | | | | | | | | | | | | | | | 128,424 | | | $1,280,387 | |
| Damon T. Hininger | | | 113,131 | | | $1,643,793 | | | 178,572 | | | $2,594,651 | | | 247,351 | | | $3,594,010 | | | David M. Garfinkle | | | 43,570 | | | $633,072 | | | 68,526 | | | $995,683 | | | 98,103 | | | $1,425,437 | | | Patrick D. Swindle | | | 43,570 | | | $633,072 | | | 68,526 | | | $995,683 | | | 95,885 | | | $1,393,209 | | | Anthony L. Grande | | | 43,570 | | | $633,072 | | | 68,526 | | | $995,683 | | | 98,103 | | | $1,425,437 | | | Lucibeth N. Mayberry | | | 43,570 | | | $633,072 | | | 68,526 | | | $995,683 | | | 95,885 | | | $1,393,209 | |
(1)
| Option awards reflect the equitable and proportionate adjustments made to our outstanding options as a result of our REIT conversion special dividend of $6.66 per share paid in May 2013, resulting in an increase in the outstanding number of options and a corresponding reduction in the exercise price. |
(2)
| The vesting date does not occur until delivery of the audited financial statements by the Company’s independent registered public accountant for the respective fiscal year, or one-year anniversary of the grant date, whichever is later. As a result, this table includes (a) the final 1/3rd tranche of 20192021 performance-based RSUs that vested in February 20222024 based on 20212023 performance subject to an rTSR modifier; (b) the second 1/3rd tranche of 20202022 performance-based RSUs that vested in February 20222024 based on 20212023 performance subject to an rTSR modifier; (c) the first 1/3rd tranche of the 20212023 performance-based RSUs that vested in March 2022February 2024 based on 20212023 performance subject to an rTSR modifier; (d) the third 1/3rd tranche of the time-based RSUs granted in 2021; (e) the second and third 1/3rd tranches of the time-based RSUs granted in 2022; and (f) the first, second and third 1/3rd tranches of the time-based RSUs granted in 2023. This table also includes the remaining 1/3rd tranches that could vest based on 2024 and 2025 performance, as applicable, from the 2022 and 2023 awards. For further discussion of the performance-based RSUs, seeCompensation Discussion and Analysis—2022 Long-Term Equity Incentive Compensation Awards in this Proxy Statement. The market or payout value was based on the closing price of our common stock of $14.53 on December 29, 2023. |
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TABLE OF CONTENTS an rTSR modifier; (d) the third 1/3rd tranche of the time-based RSUs granted in 2019; (e) the second and third 1/3rd tranches of the time-based RSUs granted in 2020; and (f) the first, second and third 1/3rd tranches of the time-based RSUs granted in 2021. This table also includes the remaining 1/3rd tranches that could vest based on 2022 and 2023 performance, as applicable, from the 2020 and 2021 awards. For further discussion of the performance-based RSUs, see Compensation Discussion and Analysis—2021 Long-Term Equity Incentive Compensation Awards in this Proxy Statement. The market or payout value was based on the closing price of our common stock of $9.97 on December 31, 2021.
Option Exercises and Stock Vested in 20212023The following table sets forth information regarding the exercise of stock options and the vesting of RSUs during the fiscal year ended December 31, 20212023, for each of the NEOs. | Damon T. Hininger | | | — | | | $ — | | | 92,640 | | | $703,138 | | | David M. Garfinkle | | | — | | | $— | | | 40,932 | | | $310,674 | | | Patrick D. Swindle | | | — | | | $— | | | 40,932 | | | $310,674 | | | Anthony L. Grande | | | — | | | $— | | | 40,932 | | | $310,674 | | | Lucibeth N. Mayberry | | | — | | | $— | | | 40,932 | | | $310,674 | |
| Damon T. Hininger | | | — | | | 186,681 | | | $1,960,151 | | | David M. Garfinkle | | | — | | | 76,104 | | | $799,092 | | | Patrick D. Swindle | | | — | | | 76,104 | | | $799,092 | | | Anthony L. Grande | | | — | | | 76,104 | | | $799,092 | | | Lucibeth N. Mayberry | | | — | | | 76,104 | | | $799,092 | |
(1)
| The value realized upon exercise of stock options reflects the price at which shares acquired upon exercise of the stock options were sold or valued for income tax purposes, net of the exercise price for acquiring such shares. |
(2)
| The value realized on vesting of RSUs was calculated as the product of the closing price on the New York Stock Exchange of a share of our common stock on the vesting date, multiplied by the number of RSUs vested. vested. |
Non-qualifiedNonqualified Deferred Compensation in 20212023The following table sets forth information concerningrelated to contributions made by the NEOs and the Company pursuant to the Company’s Executive Deferred Compensation Plan as well as aggregate individual account balances as of December 31, 2021:2023: | Damon T. Hininger | | | $71,490 | | | $66,626 | | | $125,261 | | | $— | | | $2,690,113 | | | David M. Garfinkle | | | $— | | | $— | | | $22,945 | | | $— | | | $481,849 | | | Patrick D. Swindle | | | $— | | | $— | | | $— | | | $— | | | $— | | | Anthony L. Grande | | | $39,955 | | | $25,455 | | | $53,195 | | | $(696,829) | | | $733,510 | | | Lucibeth N. Mayberry | | | $— | | | $— | | | $20,417 | | | $— | | | $428,752 | |
| Damon T. Hininger | | | $107,691 | | | $101,798 | | | $160,745 | | | $— | | | $3,448,751 | | | David M. Garfinkle | | | $27,959 | | | $33,959 | | | $23,745 | | | $(60,745) | | | $530,859 | | | Patrick D. Swindle | | | $52,282 | | | $35,782 | | | $5,533 | | | $— | | | $150,518 | | | Anthony L. Grande | | | $56,418 | | | $39,918 | | | $47,235 | | | $— | | | $1,029,185 | | | Lucibeth N. Mayberry | | | $— | | | $— | | | $22,509 | | | $— | | | $472,698 | |
(1)
| Of the amounts shown in this column, the following amounts are included in the “Salary” column of the Summary Compensation Table for 2021:2023: Mr. Hininger − $38,541;- $42,430; Mr. Garfinkle - 27,959; Mr. Swindle - $26,347; and Mr. Grande − $25,825;- $28,431; the remaining amounts are included in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table for 2020.2022. |
(2)
| The amounts shown in this column are also reported in the “All Other Compensation” column of the Summary Compensation Table for 2021.2023. |
(3)
| Of the amounts shown in this column, the following amounts are reported in the “Change in Non-qualified Deferred Compensation Earnings” column of the Summary Compensation Table for 2021: Mr. Hininger − $85,678; Mr. Garfinkle − $15,694; Mr. Grande − $36,385; and Ms. Mayberry − $13,965. |
(4)
| Of the amounts shown in this column, the following amounts were reported as compensation to the NEOs in the Summary Compensation Table for 2021, 20202023, 2022 and 2019:2021: Mr. Hininger – $190,845$144,228 for 2021, $242,7162023, $303,771 for 20202022 and $218,250$275,588 for 2019;2021; Mr. Garfinkle – $61,918 for 2023, $13,106 for 2022 and $15,694 for 2021, $10,8392021; Mr. Swindle - $62,129 for 20202023 and $4,246$82,272 for 2019;2022; Mr. Grande – $87,665$68,349 for 2021, $115,8162023, $125,375 for 20202022 and $103,990$124,006 for 2019;2021; and Ms. Mayberry ––$11,662 for 2022 and $13,965 for 2021, $9,644 for 2020 and $3,778 for 2019.2021. |
TABLE OF CONTENTS
The Executive Deferred Compensation Plan is an unfunded, non-qualified deferred compensation plan maintained by the Company for certain of its senior executives and other key employees, including the NEOs. Eligible employees who participate in the Executive Deferred Compensation Plan may defer a portion of their compensation by electing to contribute such compensation to the plan. Pursuant to the Executive Deferred Compensation Plan, participating executives may elect to contribute on a pre-tax basis up to 50% of their base salary and up to 100% of their annual cash bonus. The Company matches 100% of contributions up to 5% of total cash compensation. The matching contribution is credited on a monthly basis but is reduced at the end of the plan year for any matching amounts contributed to the participant’s 401(k) account. The Company also contributes a fixed rate of return on balances in the Executive Deferred Compensation Plan, determined at the beginning of each plan year. Participants are 100% vested in amounts deferred under the plan and earnings on those amounts, while the matching contributions vest 20% after two years of service, 40% after three years of service, 80% after four years of service and 100% after five years of service. Each participant, however, shall become 100% vested CoreCivic, Inc. | | | 72
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TABLE OF CONTENTS in the matching contribution amounts upon termination of employment by reason of death, disability or retirement or upon the occurrence of a change in control; provided, however, that the participant shall not become vested upon the occurrence of a change in control to the extent such vesting would cause any portion of his or her deferred compensation benefits to constitute an “excess parachute payment” under Section 280G of the Code. Distributions to senior executives are generally payable no earlier than five years subsequent toafter the date an executive becomes a participant in the Plan, or upon termination of employment, at the election of the participant, but not later than the 15th day of the month following the month the individual attains age 65. During 2021,2023, the Company provided a fixed return of 5.00% to participants in the Executive Deferred Compensation Plan, which rate was based on the return received by the Company on the life insurance policies the Company has purchased on the lives of certain participating executives, including each of the NEOs. The life insurance policies are intended to partially fund distributions from the Executive Deferred Compensation Plans, and the Company is the sole beneficiary of such policies. The Company has established an irrevocable Rabbi Trust to secure the plan’s obligations. However, assets in the Executive Deferred Compensation Plan are subject to creditor claims in the event of bankruptcy. Potential Payments upon Termination or Change in Control Each of our NEOs is eligible to receive certain payments upon termination of employment under the circumstances described below: Retirement. Retirement. In the event of a termination of employment due to retirement (generally after attaining age 62), our equity award agreements provide that:
vested options would be exercisable for the remaining stated term of the option (as opposed to a voluntary or for “cause” termination, in which case the NEO would generally have three months following termination to exercise vested options); and if the retirement is effective after December 31 of any fiscal year but prior to the applicable performance-based RSU vesting date with respect to such year (which typically occurs in February of the immediately following fiscal year), the applicable portion of unvested performance-based RSUs, if any, that would vest on such vesting date but for the NEO’s termination of employment would vest and be issued to the NEO despite the fact that the NEO is no longer an employee of the Company on such vesting date. Furthermore, in the event of an NEO’s retirement, matching contributions under the Executive Deferred Contribution Plan would become 100% vested. TABLE OF CONTENTS
Death or Disability. Disability. In the event of death or disability, benefits under our disability plan and payments under our life insurance plan, as applicable, would be payable, which, in the event of death, would equal twice the executive’s compensation subject to certain caps. In addition, matching contributions under the Executive Deferred Contribution Plan would become 100% vested. In accordance with the terms of our equity award agreements, in the event of the death or disability of an NEO (1) all performance-based RSUs and time-based RSUs will become immediately and fully vested and non-forfeitable and (2) all unvested options that have not earlier terminated or expired in accordance with their terms will automatically vest in full and will be exercisable until the expiration of their stated term. Termination Without Cause or for Good Reason. Reason. In accordance with the executive employment agreements with our current executive officers, if we terminate the employment of the executive without “cause,” or if the executive terminates the employment for “good reason,” we generally are required to pay a cash severance amount equal to the executive’s annual base salary then in effect, payable in installments in accordance with the terms of the agreements.policy. Change in Control. Control. In accordance with the terms of our equity award agreements, in the event of a change of control (1) all performance-based RSUs and time-based RSUs will become immediately and fully vested and non-forfeitable and (2) all unvested options that have not earlier terminated or expired in accordance with their terms will automatically vest in full and will be exercisable until the expiration of their stated term. Our Executive Deferred Compensation Plan provides that upon a change in control, the matching contributions would become 100% vested, unless such vesting would cause any portion of the deferred compensation benefits to constitute an “excess parachute payment” under Section 280G of the Code. CoreCivic, Inc. | | | 73
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TABLE OF CONTENTS Qualifying Termination Within 180 days of a Change in Control. Control. Pursuant to each of the executive employment agreements with our current executive officers, in the event of a termination by the Company (other than for “cause”) or (subject to certain procedural requirements) termination by the executive for “good reason,” within one-hundred eighty (180) days following a change in control, each NEO would be entitled to receive a lump sum cash payment equal to 2.99 times his or her base salary then in effect, and the NEO would continue to be coveredcosts of the NEO’s continuing coverage under existing life, medical, disability and health insurance plans for a period of one year.year would be paid by the Company. All severance payments are made promptly after the time of termination in order to make a clean separation from, and avoid continued entanglement with, the NEO. Definitions. Our executive employment agreements with our current executive officers and our equity plans generally provide for the following definitions: The definition of “Good Reason” means when the executive terminates employment with the Company due to (i) a material reduction in the duties, powers, or authority of the executive as an officer or employee of the Company or (ii) relocation of the Company’s headquarters to a location more than 30 miles outside of the Brentwood, Tennessee metropolitan area, in either case without the executive’s consent. A termination under these circumstances shall be due to Good Reason only if (A) the executive notifies the Company of the existence of the condition that otherwise constitutes Good Reason within thirty (30) days of the initial existence of the condition, (B) the Company fails to remedy the condition within thirty (30) days following its receipt of executive’s notice of the condition constituting Good Reason (the “Cure Period”) and the executive terminates employment with the Company due to the condition within thirty (30) days of the expiration of the Cure Period. The definition of “Cause” includes, among other things, the death or permanent disability of the executive, conviction of certain felonies or criminal acts, willful or material wrongdoing (including dishonesty or fraud), material breach by the executive of his or her executive employment agreement or of his or her fiduciary duty to the Company or its stockholders, material violations of the Company’s Code of Ethics, or intentional violation of any applicable law or regulation affecting the Company in a material respect, which event, action or breach may be subject to a right of the executive to cure under certain conditions. TABLE OF CONTENTS
The definition of “Change in Control” generally means: a “change in the ownership of the Company”; a “change in the effective control of the Company”; or a “change in the ownership of a substantial portion of the assets of the Company” as such terms are defined in Section 1.409A-3(i)(5) of the Treasury Regulations. In addition, under our 2008 Plan and 2020 Plan, the vesting of all or a portion of an outstanding restricted stock award will be accelerated upon a “change in control,” as defined in the plans. The 2008 Plan (pursuant to which certain options remain outstanding, but no further options are being granted) provides that upon a “change in control,” as defined in the 2008 Plan, all unvested options that have not earlier terminated or expired in accordance with their terms will automatically vest in full and will be exercisable for one year following the change in control. 85 CoreCivic, Inc.
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TABLE OF CONTENTS Table of Potential Payments upon Termination or Change in Control The table below reflects the amount of compensation payable to each of the NEOs in the event of termination of such executive’s employment.employment in accordance with the executive employment agreements in place during the year ended December 31, 2023. The amount of compensation payable to each NEO upon a change of control, qualifying termination in connection with a change in control, involuntary termination not for cause, and in the event of disability or death of the executive is shown below. The amounts assume that such event was effective as of December 31, 2021,2023, and thus do not include amounts earned through such time and are estimates of the awards and amounts that would be paid out to the NEOs upon their termination. The amounts shown do not include: (i) benefits earned during the term of our NEOs’ employment that are available to all salaried employees, and (ii) 20212023 cash incentives that were earned as of December 31, 2021.2023. The actual awards and amounts to be paid out can only be determined at the time of such executive’s separation from the Company. Reference below to RSUs means our time-time-based and performance-based RSUs and includes all dividend equivalent rights, if any. | Name | | Change in
Control
Only | | Qualifying
Termination
upon Change
in Control | | Involuntary
Termination
Without Cause | | Death or
Disability | | Name | | CATEGORY | | Change in
Control
Only
($) | | Qualifying
Termination
upon Change
in Control
($) | | Involuntary
Termination
Without Cause
($) | | Death or
Disability
($) | | | Damon T. Hininger | | | | | | | | | | Damon T. Hininger
| | | Accelerated Vesting of RSUs(1) | | $7,832,454 | | $7,832,454 | | $— | | $7,832,454 | | | Accelerated Vesting of RSUs(1) | | $5,298,750 | | $5,298,750 | | $— | | $5,298,750 | | | Cash Severance(2) | | $— | | $3,222,179 | | td,077,652 | | $— | | | Cash Severance(2) | | $— | | td,951,256 | | $987,042 | | $— | | | Insurance Benefits(3) | | $— | | $42,648 | | $— | | td,500,000 | | | Insurance Benefits (3) | | $— | | $39,434 | | $— | | td,500,000 | | | Total: | | $7,832,454 | | td1,097,281 | | td,077,652 | | $9,332,454 | | | Total: | | $5,298,750 | | $8,289,440 | | $987,042 | | $6,798,750 | | David M. Garfinkle | | | Accelerated Vesting of RSUs(1) | | $3,054,192 | | $3,054,192 | | $— | | $3,054,192 | | | David M. Garfinkle | | | | | | | | | | | Cash Severance(2) | | $— | | $1,698,604 | | $568,095 | | $— | | | Accelerated Vesting of RSUs(1) | | td,017,673 | | td,017,673 | | $— | | td,017,673 | | | Insurance Benefits(3) | | $— | | $42,343 | | $— | | td,500,000 | | | Cash Severance(2) | | $— | | td,555,784 | | $520,329 | | $— | | | Total: | | $3,054,192 | | $4,795,139 | | $568,095 | | $4,554,192 | | | Insurance Benefits (3) | | $— | | $38,787 | | $— | | td,500,000 | | Patrick D. Swindle | | | Accelerated Vesting of RSUs(1) | | $3,021,964 | | $3,021,964 | | $— | | $3,021,964 | | | Total: | | td,017,673 | | $3,612,244 | | $520,329 | | $3,517,673 | | | Cash Severance(2) | | $— | | $1,600,643 | | $535,332 | | $— | | | Patrick D. Swindle | | | | | | | | | | | Insurance Benefits(3) | | $— | | $32,982 | | $— | | td,500,000 | | | Accelerated Vesting of RSUs (1) | | td,017,673 | | td,017,673 | | $— | | td,017,673 | | | Total: | | $3,021,964 | | $4,655,589 | | $535,332 | | $4,521,964 | | | Cash Severance(2) | | $— | | td,466,057 | | $490,320 | | $— | | Anthony L. Grande | | | Accelerated Vesting of RSUs(1) | | $3,054,192 | | $3,054,192 | | $— | | $3,054,192 | | | Insurance Benefits(3) | | $— | | $30,846 | | $— | | td,500,000 | | | Cash Severance(2) | | $— | | $1,727,251 | | $577,676 | | $— | | | Total: | | td,017,673 | | $3,514,576 | | $490,320 | | $3,517,673 | | | Insurance Benefits(3) | | $— | | $33,051 | | $— | | td,500,000 | | | Anthony L. Grande | | | | | | | | | | | Total | | $3,054,192 | | $4,814,494 | | $577,676 | | $4,554,192 | | | Accelerated Vesting of RSUs(1) | | td,017,673 | | td,017,673 | | $— | | td,017,673 | | Lucibeth N. Mayberry | | | Accelerated Vesting of RSUs(1) | | $3,021,964 | | $3,021,964 | | $— | | $3,021,964 | | | Cash Severance(2) | | $— | | td,582,018 | | $529,103 | | $— | | | Cash Severance(2) | | $— | | $1,600,643 | | $535,332 | | $— | | | Insurance Benefits(3) | | $— | | $31,514 | | $— | | td,500,000 | | | Insurance Benefits(3) | | $— | | $36,364 | | $— | | td,500,000 | | | Total: | | td,017,673 | | $3,631,205 | | $529,103 | | $3,517,673 | | | Total: | | $3,021,964 | | $4,658,971 | | $535,332 | | $4,521,964 | | | Lucibeth N. Mayberry | | | | | | | | | | | | Accelerated Vesting of RSUs(1) | | $2,017,673 | | $2,017,673 | | $— | | $2,017,673 | | | | Cash Severance(2) | | $— | | $1,466,057 | | $490,320 | | $— | | | | Insurance Benefits (3) | | $— | | $32,615 | | $— | | $1,500,000 | | | | Total: | | $2,017,673 | | $3,516,345 | | $490,320 | | $3,517,673 | | |
(1)
| Represents the value of accelerated vesting of RSUs, which occurs upon a change in control (whether or not the executive’s employment is terminated) and upon the death or disability of the executive. Accelerated vesting of RSUs is calculated using the NYSE closing market price on December 31, 202129, 2023 ($9.9714.53 per share), and includes the outstanding dividend equivalents associated with such RSUs that similarly vest on an accelerated basis. |
(2)
| In the event of an involuntary termination absent a change in control and without cause, represents an amount equal to 100% of current base salary paid out on the same terms and with the same frequency as the executive’s base salary was paid prior to December 31, 2021.2023. In the event of a qualifying termination upon a change in control, represents an amount equal to 2.99 times current base salary, to be paid out in a lump sum within 40 days of the termination date. |
(3)
| In the event of a qualifying termination upon a change in control, represents the premiums expected to be paid based upon the types of insurance coverage the Company carried for such executive as of December 31, 2021,2023, and the premiums in effect on such date. In the event of death, represents the payouts under life insurance policies, equal to two times total cash compensation, subject to certain caps. The benefits payable under supplemental long-term disability policies in the event of a disability are not shown in the table. In general, executive officers are entitled to higher payment formulas and higher caps for a potentially longer period of time than other employees under supplemental long-term disability policies. |
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TABLE OF CONTENTS In accordance with SEC Rules,As required by Section 953(b) of the Dodd-Frank Wall Street Reform and Consumer Protection Act and Regulation S-K under the Exchange Act, we are disclosing the ratio of CEO pay to the median employee pay of all our employees (other than the CEO) in 2021,2023, calculated in accordance with Item 402(u) of Regulation S-K.
The ratio of the annual total compensation of our CEO to the median total compensation of all employees (other than our CEO) for 20212023 was 12396 to one. This ratio was based on the following: the annual total compensation of our CEO, determined as described in the Summary Compensation Table included in this Proxy Statement, was $5,445,316$5,792,037; and the median of the total compensation of our median employeeall employees (other than our CEO), determined in accordance with SEC rules, was $44,154.$60,493. For 2021,2023, the Company identified its median employee in accordance with the rules prescribed by law. The methodology and the material assumptions and estimates we used to determine the median employee in 20212023 were as follows: Total Employee Population:Population: We determined that, as of November 30, 2021,2023, the date we selected to identify the median employee, our employee population consisted of approximately 10,70211,884 individuals. Compensation Measure Used to Identify the Median Employee:Employee: For purposes of measuring the total compensation of our employees to identify the median employee, we used the annualized base salary including overtime pay, for the period beginning December 1, 20202022, and ending November 30, 2021.2023. Compensation for non-seasonal employees hired during the period was annualized as permitted by SEC rules. Total Compensation of Median Employee: In order toEmployee: To determine the total compensation of the median employee, we identified and calculated that employee’s base salary including overtime pay, for the period beginning December 1, 20202022, and ending November 30, 20212023, in accordance with the requirements of Item 402(u) of Regulation S-K, resulting in total compensation of $44,154. $ $60,493.Annual Total Compensation of CEO:CEO: With respect to the annual total compensation of our CEO, in accordance with SEC rules, we used the amount reported for Mr. Hininger in the “Total” column for 20212023 in the Summary Compensation Table included in this Proxy Statement. Our reported pay ratio information is a reasonable estimate calculated in a manner consistent with Item 402(u) of Regulation S-K. The SEC rules for identifying the median employee and calculating pay ratio allow companies to use different methodologies, exemptions, estimates and assumptions. As a result, our pay ratio may not be comparable to the pay ratio reported by other companies. CoreCivic, Inc. | | | 76
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TABLE OF CONTENTS Pay Versus Performance In accordance with rules adopted by the SEC pursuant to the Dodd-Frank Act, we provide the following disclosure regarding executive compensation for our principal executive officer (“PEO”) and Non-PEO NEOs and company performance for the fiscal years listed below. Compensation Actually Paid figures do not reflect the actual amount of compensation earned by or paid to our PEO or our non-PEO NEOs during the applicable year. The Compensation Committee did not consider the pay versus performance disclosure below in making its compensation decisions for any of the years shown. For information regarding the compensation decisions made by the Compensation Committee with respect to the PEO's or non-PEO NEOs' compensation for each fiscal year, please see the Compensation Discussion and Analysis section of the Proxy Statement reporting compensation for the fiscal years presented in the Pay Versus Performance table. | 2020 | | | $4,405,451 | | | $1,440,049 | | | $1,804,908 | | | $645,024 | | | $40 | | | $92 | | | $54,157 | | | $271,768 | | | 2021 | | | $5,445,316 | | | $7,174,536 | | | $2,243,222 | | | $2,892,714 | | | $61 | | | $126 | | | $(51,896) | | | $225,484 | | | 2022 | | | $5,159,741 | | | $5,286,571 | | | $2,126,404 | | | $2,223,381 | | | $71 | | | $91 | | | $122,320 | | | $165,216 | | | 2023 | | | $5,792,037 | | | $7,581,408 | | | $2,439,711 | | | $3,113,536 | | | $89 | | | $97 | | | $67,590 | | | $168,436 | |
Explanation of information in the columns of the table: Columns (b) and (d) Reflects compensation amounts reported in the Summary Compensation Table for the PEO, our CEO, and the Non-PEO NEOs, respectively, for the years shown. CoreCivic, Inc. | | | 77
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TABLE OF CONTENTS Columns (c) and (e) Below is an explanation of the amounts added to and deducted from the Summary Compensation table total compensation amounts to determine “compensation actually paid” in accordance with Item 402(v)(2) of Regulation S-K: | Summary Compensation Table Total | | | $4,405,451 | | | $5,445,316 | | | $5,159,741 | | | $5,792,037 | | | $1,804,908 | | | $2,243,222 | | | $2,126,404 | | | $2,439,711 | | | Less grant date fair value of stock awards | | | (2,600,000) | | | (2,600,002) | | | (2,600,005) | | | (2,799,997) | | | (1,000,003) | | | (999,993) | | | (999,996) | | | (1,092,503) | | | Add year-end fair value of awards granted during the covered fiscal year that are outstanding and unvested as of the end of the covered fiscal year | | | 947,738 | | | 3,312,666 | | | 2,674,182 | | | 3,594,010 | | | 373,274 | | | 1,280,383 | | | 1,052,904 | | | 1,409,316 | | | Add change in fair value as of fiscal year-end compared to prior year-end fair value for unvested and outstanding awards granted in prior fiscal years | | | (1,300,015) | | | 920,210 | | | 55,790 | | | 1,193,240 | | | (526,071) | | | 326,533 | | | 46,397 | | | 437,682 | | | Add change in fair value as of vesting date compared to prior year-end fair value for vested and outstanding awards granted in prior fiscal years | | | (13,125) | | | 96,346 | | | (3,137) | | | (197,882) | | | (7,084) | | | 42,569 | | | (2,328) | | | (80,670) | | | Less amount equal to the fair value at end of the prior fiscal year for any awards granted in any prior fiscal year that fail to meet applicable vesting conditions | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | Add dividends paid on unvested equity awards during fiscal year | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | — | | | Compensation Actually Paid | | | $1,440,049 | | | $7,174,536 | | | $5,286,571 | | | $7,581,408 | | | $645,024 | | | $2,892,714 | | | $2,223,381 | | | $3,113,536 | |
Principal Executive Officer and Non-PEO Named Executive Officers (Non-PEO NEOs) Damon T. Hininger served as PEO for each of the years in the table. The Non-PEO NEOs included in columns (d) and (e) are as follows: | David M. Garfinkle | | | David M. Garfinkle | | | David M. Garfinkle | | | David M. Garfinkle | | | Patrick D. Swindle | | | Patrick D. Swindle | | | Patrick D. Swindle | | | Patrick D. Swindle | | | Anthony L. Grande | | | Anthony L. Grande | | | Anthony L. Grande | | | Anthony L. Grande | | | Lucibeth N. Mayberry | | | Lucibeth N. Mayberry | | | Lucibeth N. Mayberry | | | Lucibeth N. Mayberry | |
Stock awards for our PEO and Non-PEO NEOs consist of a combination of time-based RSUs and performance-based RSUs. See the notes to the Summary Compensation Table and Grants of Plan-Based Awards table for more information on how we determine fair value for equity awards. Our Compensation Committee did not grant stock options to our PEO or Non-PEO NEOs in fiscal years 2020-2023. Additionally, neither our PEO, nor our Non-PEO NEOs, participate in a defined benefit or actuarial pension plan. CoreCivic, Inc. | | | 78
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TABLE OF CONTENTS Columns (f) and (g) As calculated in the manner prescribed by Item 201(e) of Regulation S-K. Columns (f) and (g) represent the cumulative total shareholder return of the Company and the FTSE NAREIT All Equity REITs Index, respectively, over the applicable measurement period. TSR is determined based on the value of an initial fixed investment of $100 on December 31, 2019. Column (h) and (i) The dollar amounts reported in columns (h) and (i) represent the amount of net income attributable to common stockholders reflected in the Company’s audited financial statements and the Company-selected measure of Normalized FFO, respectively, for the applicable year. The Company believes Normalized FFO is the financial performance measure most closely linked to the calculation of compensation actually paid. Amounts in these columns are in thousands. Analysis of the Information Presented in the Pay Versus Performance Table Below are graphs showing the relationship of “compensation actually paid” to our PEO and Non-PEO NEOs in 2020, 2021, 2022, and 2023 to (1) TSR of both the Company and the FTSE NAREIT All Equity REITs Index, (2) the Company’s net income, and (3) the Company’s Normalized FFO. CoreCivic, Inc. | | | 79
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TABLE OF CONTENTS Tabular List of Financial Performance Measures The most important financial performance measures used by the Company to link executive compensation actually paid to the Company’s PEO and Non-PEO NEOs, for the most recently completed fiscal year, to the Company’s performance are as follows: | Normalized FFO | | | Adjusted EBITDA | |
See the Compensation Discussion and Analysis for more information regarding how these financial performance measures are used in our executive compensation program. Non-employee directors (i.e., all directors other than Mr. Hininger and Mr. Lappin until February 2022)Hininger) are compensated pursuant to our Non-Employee Directors’ Compensation Plan and the 2020 Plan, which for 20212023 provided for the following: Annual equity grants; Annual Board, committee, and committee chair retainers; and Board and committee unscheduled meeting fees. TABLE OF CONTENTS
Non-employee directors may elect to receive all or a portion of their retainers in the form of commonrestricted stock units rather than cash. Non-executiveNon-employee directors may also defer all or a portion of their retainer and meeting fees pursuant to our Non-Employee Directors’ Deferred Compensation Plan. In addition, non-employee directors are reimbursed for reasonable expenses incurred to attend Board and committee meetings, as well as director education programs. The retainers paid to our non-employee directors for 2021in 2023 are as follows: | Independent Board Chair retainer | | | $ 100,000
| | | Non-Chair Board retainer | | | $80,000
| | | Board and committee unscheduled meeting fee | | | $1,000
| | | Audit Committee chair retainer | | | $20,00025,000
| | | Audit Committee member retainer | | | $8,00010,000
| | | Compensation Committee chair retainer | | | $15,00020,000
| | | Compensation Committee member retainer | | | $4,00010,000
| | | Nominating and Governance Committee chair retainer | | | $10,00015,000
| | | Nominating and Governance Committee member retainer | | | $4,0007,500
| | | Risk Committee chair retainer | | | $15,00020,000
| | | Risk Committee member retainer | | | $4,00010,000
| | | DEI Committee chair retainer
| | | $28,000
| | | DEI Committee member retainer
| | | $20,000
| | | Special Litigation Committee chair retainer
| | | $28,000
| | | Special Litigation Committee member retainer
| | | $20,000
| | | Demand Review Committee member retainer(1)
| | | $20,000
| | | Demand Review Committee chair retainer(1)
| | | $20,000
| |
(1)
| The Demand Review Committee completed its work and was dissolved by the Board of Directors on March 31, 2021. For this reason, the committee members and chair were paid approximately 25% of the listed amounts during 2021. |
In addition to cash compensation, non-employee directors are granted RSUs with a grant date fair market value of approximately $135,000 per year, generally on the same date as grants of equity awards are made to our executive officers and other employees. Subject to certain exceptions contained in the award agreement, these RSUs vest on the one-year anniversary of the grant date. 88 CoreCivic, Inc.
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TABLE OF CONTENTS 20212023 Director Compensation Table The following table summarizes the annual compensation paid with respect to the fiscal year ended December 31, 2021,2023, to each of the Company’s non-employee directors except Mr. Hininger whose compensation is reflected in the Summary Compensation Table:who served as directors during 2023: | Donna M. Alvarado | | | $131,868 | | | $134,997 | | | $— | | | $ — | | | $266,865 | | | Robert J. Dennis | | | $99,694 | | | $134,997 | | | $— | | | $— | | | $234,691 | | | Mark A. Emkes | | | $149,722 | | | $184,995 | | | $— | | | $— | | | $334,717 | | | Stacia A. Hylton | | | $144,261 | | | $134,997 | | | $— | | | $— | | | $279,258 | | | Harley G. Lappin(1) | | | $— | | | $— | | | $— | | | $— | | | $— | | | Anne L. Mariucci | | | $127,000 | | | $134,997 | | | $18,599 | | | $— | | | $280,596 | | | Thurgood Marshall, Jr. | | | $126,000 | | | $134,997 | | | $— | | | $— | | | $260,997 | | | Devin I. Murphy | | | $116,000 | | | $134,997 | | | $4,427 | | | $— | | | $255,424 | | | Charles L. Overby(4) | | | $117,220 | | | $134,997 | | | $— | | | $— | | | $252,217 | | | John R. Prann, Jr. | | | $111,000 | | | $134,997 | | | $— | | | $— | | | $245,997 | |
| Donna M. Alvarado | | | $116,000 | | | $134,999 | | | $— | | | $— | | | $250,999 | | | Robert J. Dennis | | | $100,000 | | | $134,999 | | | $— | | | $— | | | $234,999 | | | Mark A. Emkes | | | $148,500 | | | $185,002 | | | $— | | | $— | | | $333,502 | | | Stacia A. Hylton | | | $98,500 | | | $134,999 | | | $— | | | $— | | | $233,499 | | | Harley G. Lappin | | | $80,000 | | | $134,999 | | | $— | | | $— | | | $214,999 | | | Anne L. Mariucci | | | $100,000 | | | $134,999 | | | $— | | | $— | | | $234,999 | | | Thurgood Marshall, Jr. | | | $108,500 | | | $134,999 | | | $— | | | $— | | | $243,499 | | | Devin I. Murphy | | | $108,500 | | | $134,999 | | | $— | | | $— | | | $243,499 | | | John R. Prann, Jr. | | | $115,000 | | | $134,999 | | | $— | | | $— | | | $249,999 | |
(1)
| In 2021, Mr. Lappin was employed as a special operations advisor to the leadership team of the Company and is compensated for the services provided in such capacity. Mr. Lappin is not compensated for his services as a director of the Company. Mr. Lappin was paid a salary of $190,000 for his services as a special operations advisor to the leadership team of the Company. The Company provided a matching contribution of $9,500 to his 401(k) account. In 2021, he also earned $4,157 of above-market earnings on amounts he chose to defer pursuant to the Company’s Deferred Compensation Plan. This amount is based on the excess of the Company’s fixed rate for 2021 of 5.00% over 120% of the applicable federal long-term rate, with compounding (as prescribed under section 1274(d) of the Code) of 1.58%. Mr. Lappin is also eligible to participate in various benefit programs generally made available to employees of the Company. |
(2)
| The amounts shown in this column represent the aggregate grant date fair value of RSUs based on the closing stock price of $6.95$10.56 on February 18, 2021,17, 2023, the date of an annual grant of 19,42412,784 RSUs to each non-employee director. Mr. EmkesʼEmkes’ stock awards also include an award of $49,998$50,003 or 6,4105,447 RSUs, which he elected to receive on May 13, 202110, 2023, as compensation for 50% of his annual independent Board Chair retainer. The director RSUs vest on the anniversary date of the grant and have dividend equivalent rights, if any, that are payable in cash only when and to the extent the RSUs vest and the underlying shares are issued. All grants of RSUs and dividend equivalents were made under the 2020 Plan. |
(3) (2)
| The amounts shown in this column represent above-market earnings (if any) on fees the director elected to defer pursuant to the Non-Employee Directors’ Deferred Compensation Plan, which is more fully described under the heading Compensation Discussion and Analysis—Non-qualifiedNonqualified Deferred Compensation Plan in 20212023 in this Proxy Statement. Amounts shown are based on the excess of the Company’s fixed rate for 2021 of 5.00%, over 120% of the applicable federal long-term rate, with compounding (as prescribed under section 1274(d) of the Code) of 1.58%. |
As of December 31, 2023, the aggregate number of unvested stock awards outstanding for each of the Company’s non-employee directors were as follows: (5) | As of December 31, 2021, the aggregate number of unvested stock awards and option awards outstanding for each of the Company’s non-employee directors were as follows:Donna M. Alvarado | | | 12,784 | |
| Donna M. Alvarado | | | 19,424 | | | 7,888 | | | Robert J. Dennis | | | 19,424 | | | — | | | Mark A. Emkes | | | 25,834 | | | — | | | Stacia A. Hylton | | | 19,424 | | | — | | | Anne L. Mariucci | | | 19,424 | | | 7,888 | | | Thurgood Marshall, Jr. | | | 19,424 | | | 7,888 | | | Devin I. Murphy | | | 19,424 | | | — | | | Charles L. Overby(a) | | | 19,424 | | | — | | | John R. Prann, Jr. | | | 19,424 | | | 7,888 | |
(a) | Mr. Overby will not stand for reelection at the Company's virtual Annual Meeting and plans to retire from service on that date.Robert J. Dennis | | | 12,784 | | | Mark A. Emkes | | | 18,231 | | | Stacia A. Hylton | | | 12,784 | | | Harley G. Lappin | | | 12,784 | | | Anne L. Mariucci | | | 12,784 | | | Thurgood Marshall, Jr. | | | 12,784 | | | Devin I. Murphy | | | 12,784 | | | John R. Prann, Jr. | | | 12,784 | |
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TABLE OF CONTENTS Director Stock Ownership Guidelines We maintain stock ownership guidelines applicable to our executive officers and non-executive directors. The stock ownership guidelines are designed to align the economic interests of executive officers and the Board with those of stockholders and to discourage excessive risk-taking by management and directors. The guidelines as applied to our directors provide that the Company’s non-executive directors are expected to own a fixed number of shares of common stock of the Company equal to four times such director’s annual retainer (excluding any retainer for chairing or serving as a member of a committee) in effect as of the later of March 1, 2012 or the date of their initial election or appointment to the Board, divided by the Company’s closing common stock price, as reported on the NYSE, on such date. The stock ownership guidelines were amended by our Board in May 2013 to increase the number of shares our executive officers and non-executive directors are expected to own to give effect to the REIT conversion special dividend. Non-executive directors are expected to achieve these ownership levels, subject to a limited hardship exemption, five years following their initial election or appointment to the Board, or (in the case of directors serving on the Board at the time the guidelines were adopted) by March 1, 2012. See ExecutiveCompensation Discussion and Director Compensation—Analysis—Guidelines and Policies—Executive Officer Stock Ownership Guidelines in this Proxy Statement for a description of the shares counted in determining share ownership. Our guidelines and the compliance status of the Company’s current non-executive directors as of the last quarterly review date of February 18, 202222, 2024, are shown in the table below. | Donna M. Alvarado | | | 9,105 | | | 98,404 | | | 3/1/2012 | | | Robert J. Dennis | | | 7,112 | | | 60,577 | | | 2/21/2018 | | | Mark A. Emkes | | | 6,050 | | | 99,497 | | | 8/14/2019 | | | Stacia A. Hylton | | | 12,353 | | | 44,920 | | | 8/11/2021 | | | Harley G. Lappin | | | 14,222 | | | 59,755 | | | 1/1/2023 | | | Anne L. Mariucci | | | 11,909 | | | 76,185 | | | 12/8/2016 | | | Thurgood Marshall, Jr. | | | 9,105 | | | 45,827 | | | 3/1/2012 | | | Devin I. Murphy | | | 14,685 | | | 35,192 | | | 11/6/2023 | | | John R. Prann, Jr. | | | 9,105 | | | 77,547 | | | 3/1/2012 | |
| Donna M. Alvarado | | | 9,105 | | | 124,908 | | | 3/1/2012 | | | Robert J. Dennis | | | 7,112 | | | 87,081 | | | 2/21/2018 | | | Mark A. Emkes | | | 6,050 | | | 147,214 | | | 8/14/2019 | | | Stacia A. Hylton | | | 12,353 | | | 71,424 | | | 8/11/2021 | | | Harley G. Lappin | | | 14,222 | | | 84,259 | | | 1/1/2023 | | | Anne L. Mariucci | | | 11,909 | | | 102,689 | | | 12/8/2016 | | | Thurgood Marshall, Jr. | | | 9,105 | | | 37,678 | | | 3/1/2012 | | | Devin I. Murphy | | | 14,685 | | | 61,696 | | | 11/6/2023 | | | John R. Prann, Jr. | | | 9,105 | | | 91,051 | | | 3/1/2012 | |
(1)
| Each of Ms. Hernandez-Blades and Mr. Fischer became directors on March 15, 2024, and were not directors at the time of the last quarterly review date, February 22, 2024. Each of Ms. Hernandez-Blades and Mr. Fischer will be required to own no fewer than 21,549 shares by March 15, 2029, in accordance with the Company's Director Stock Ownership Guidelines. |
90 CoreCivic, Inc.
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TABLE OF CONTENTS SECURITY Security Ownership of Certain Beneficial Owners and Management
OWNERSHIP OF CERTAIN BENEFICIAL OWNERSCOMMON STOCK – DIRECTORS AND MANAGEMENTOwnership of Common Stock – Directors and Executive OfficersEXECUTIVE OFFICERSThe following table contains information regarding the beneficial ownership of our common stock as of Monday, March 16, 202218, 2024, by (i) each current director and nominee, (ii) our NEOs, and (iii) all of our current directors and executive officers as a group. | Donna M. Alvarado | | | 98,404 | | | 7,888 | | | 106,292 | | | * | | | Robert J. Dennis | | | 60,577 | | | — | | | 60,577 | | | * | | | Mark A. Emkes | | | 109,497 | | | 6,410 | | | 115,907 | | | * | | | Damon T. Hininger | | | 438,002 | | | 229,430 | | | 667,432 | | | * | | | Stacia A. Hylton | | | 44,920 | | | — | | | 44,920 | | | * | | | Harley G. Lappin | | | 59,755 | | | — | | | 59,755 | | | * | | | Anne L. Mariucci | | | 76,185 | | | 7,888 | | | 84,073 | | | * | | | Thurgood Marshall, Jr. | | | 45,827 | | | 7,888 | | | 53,715 | | | * | | | Devin I. Murphy | | | 35,192 | | | — | | | 35,192 | | | * | | | Charles L. Overby | | | 61,257 | | | — | | | 61,257 | | | * | | | John R. Prann, Jr. | | | 77,547 | | | 7,888 | | | 85,435 | | | * | | | David M. Garfinkle | | | 225,893 | | | 50,072 | | | 275,965 | | | * | | | Anthony L. Grande | | | 83,209 | | | 28,897 | | | 112,106 | | | * | | | Lucibeth N. Mayberry | | | 182,655 | | | 50,072 | | | 232,727 | | | * | | | Patrick D. Swindle | | | 102,661 | | | 28,897 | | | 131,558 | | | * | | | All current directors and executive officers as a group (17 persons) | | | 1,853,463 | | | 483,124 | | | 2,336,587 | | | 1.93% | |
| Donna M. Alvarado | | | 124,908 | | | — | | | 124,908 | | | * | | | Robert J. Dennis | | | 87,081 | | | — | | | 87,081 | | | * | | | Mark A. Emkes | | | 147,214 | | | 5,447 | | | 152,661 | | | * | | | Alexander R. Fischer | | | — | | | — | | | — | | | — | | | Catherine Hernandez-Blades | | | — | | | — | | | — | | | — | | | Damon T. Hininger | | | 632,820 | | | — | | | 632,820 | | | * | | | Stacia A. Hylton | | | 71,424 | | | — | | | 71,424 | | | * | | | Harley G. Lappin | | | 84,259 | | | — | | | 84,259 | | | * | | | Anne L. Mariucci | | | 102,689 | | | — | | | 102,689 | | | * | | | Thurgood Marshall, Jr. | | | 37,678 | | | — | | | 37,678 | | | * | | | Devin I. Murphy | | | 61,696 | | | — | | | 61,696 | | | * | | | John R. Prann, Jr. | | | 91,051 | | | — | | | 91,051 | | | * | | | David M. Garfinkle | | | 292,274 | | | — | | | 292,274 | | | * | | | Anthony L. Grande | | | 94,126 | | | — | | | 94,126 | | | * | | | Lucibeth N. Mayberry | | | 176,115 | | | — | | | 176,115 | | | * | | | Patrick D. Swindle | | | 130,886 | | | — | | | 130,886 | | | * | | | All current directors and executive officers as a group (18 persons) | | | 2,462,123 | | | 5,447 | | | 2,467,570 | | | 2.21% | |
*
| Represents beneficial ownership of less than 1% of the outstanding shares of our common stock. |
(1)
| The address for each listed person is our corporate headquarters. |
(2)
| Each person in the table has sole voting and investment power over the shares listed. |
(3)
| Pursuant to SEC rules, reflects the number of shares that could be purchased by exercise of stock options that are exercisable aton Monday, March 16, 2022,18, 2024, or within 60 days thereafter under the Company’s stock option plans and the number of shares underlying restricted stock units that vest within 60 days of Monday, March 16, 2022. In addition, Mr. Emkes vests in 6,410 RSUs on May 12, 2022 (57 days from record date).18, 2024. |
(4)
| The percentages in this column are based on 121,369,554111,633,150 shares outstanding as of March 16, 2022.18, 2024. In addition, pursuant to SEC rules, shares of the Company’s common stock that an individual owner has a right to acquire within 60 days pursuant to the exercise of stock options and that vest pursuant to RSUs are deemed to be outstanding for the purpose of computing the ownership of that owner and for the purpose of computing the ownership of all directors and executive officers as a group but are not deemed outstanding for the purpose of computing the ownership of any other owner. |
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TABLE OF CONTENTS Ownership of Common StockOWNERSHIP OF COMMON STOCK – Principal StockholdersPRINCIPAL STOCKHOLDERSThe following table sets forth certain information with respect to the beneficial ownership of our voting securities as of March 16, 202218, 2024, by each person who is known by the Company to own beneficially more than 5% of any class of our outstanding voting securities of the Company: | BlackRock, Inc. (2)
55 East 52nd Street
New York, NY 1055 | | | 18,955,374 | | | 15.6% | | | FMR, LLC (3)
245 Summer Street
Boston, MA 02210 | | | 18,042,290 | | | 14.9% | | | The Vanguard Group (4)
100 Vanguard Blvd
Malvern, PA 19355 | | | 12,926,740 | | | 10.7% | | | River Road Asset Management (5)
462 S. 4th St., Suite 2000
Louisville, KY 40202 | | | 7,963,742 | | | 6.6% | |
| BlackRock Inc.(2)
50 Hudson Yards
New York, NY 10001 | | | 18,878,825 | | | 16.9% | | | The Vanguard Group, Inc.(3)
100 Vanguard Blvd.
Malvern, PA 19355 | | | 12,433,919 | | | 11.1% | | | River Road Asset Management, LLC(4)
462 S. 4th St, Ste 2000
Louisville, KY 40202 | | | 9,047,989 | | | 8.1% | |
(1)
| The percentages in this column are based on 121,369,554111,633,150 shares outstanding as of March 16, 2022.18, 2024. |
(2)
| Based on the Schedule 13G filed with the SEC on January 22, 2024, by Blackrock, Inc., which reported sole voting power over 18,615,619 shares and sole dispositive power over 18,878,825 shares. |
(3)
| Based on the Schedule 13G/A filed with the SEC on February 13, 2024, by Vanguard Group, Inc., which reported shared voting power over 140,652 shares, sole dispositive power over 12,187,096 shares, and shared dispositive power over 246,823 shares. |
(4)
| Based on the Schedule 13G/A filed with the SEC on January 27, 2022,30, 2024, by BlackRock, Inc., which reported sole voting power over 18,737,896 shares and sole dispositive power over 18,955,374 shares. |
(3)
| Based on the Schedule 13G/A filed with the SEC on February 9, 2022, by FMR,River Road Asset Management, LLC, which reported sole voting power over 1,414,7558,670,494 shares, and sole dispositive power over 18,042,2909,047,989 shares. |
(4)
| Based on the Schedule 13G/A filed with the SEC on February 9, 2022, by The Vanguard Group, which reported sole voting power over 0 shares, shared voting power over 126,403 shares, sole dispositive power over 12,716,236 shares and shared dispositive power over 210,504 shares. |
(5)
| Based on the Schedule 13G filed with the SEC on February 9, 2022, by River Road Asset Management, Inc., which reported sole voting power over 7,775,625 shares and sole dispositive power over 7,963,742 shares. |
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Section 16(a) Beneficial Ownership Reporting ComplianceSECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCEDelinquent Section 16(a) Reports. Section 16(a) of the Exchange Act requires our executive officers and directors to file reports of ownership and changes in ownership with the SEC and the NYSE. Based on our records and other information, all Section 16(a) filing requirements were satisfied by our executive officers and directors in 2021,2023, except for the following: A Form 4 for Mr. Damon HiningerMark A. Emkes was filed late on February 22, 2021December 7, 2023, to report the granting of 136,8425,447 restricted stock units on February 17, 2021. A Form 4 for Mr. Anthony Grande was filed late on February 22, 2021 to report the granting of 65,789 restricted stock units on February 17, 2021.
A Form 4 for Mr. Cole Carter was filed late on February 22, 2021 to report the granting of 65,789 restricted stock units on February 17, 2021.
A Form 4 for Mr. Patrick Swindle was filed late on February 22, 2021 to report the granting of 65,789 restricted stock units on February 17, 2021.
A Form 4 for Ms. Lucibeth Mayberry was filed late on February 22, 2021 to report the granting of 65,789 restricted stock units on February 17, 2021.
A Form 4 for Mr. David Garfinkle was filed late on February 22, 2021 to report the granting of 65,789 restricted stock units on February 17, 2021.
A Form 4 for Mr. David Churchill was filed late on February 22, 2021 to report the granting of 65,789 restricted stock units on February 17, 2021.May 10, 2023.
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TABLE OF CONTENTS No Incorporation by ReferenceNO INCORPORATION BY REFERENCETo the extent that this Proxy Statement is incorporated by reference into any other filing by us under the Securities Act of 1933 or the Exchange Act, the sections of this Proxy Statement entitled “Report of the Audit Committee”, or “Report of the Compensation Committee” will not be deemed incorporated, unless specifically provided otherwise in such filing. In addition, references to our website are not intended to function as a hyperlink and the information contained on our website is not intended to be part of this Proxy Statement. Information on our website, other than this Proxy Statement, Notice of Annual Meeting of Stockholders and form of proxy, is not part of the proxy soliciting material and is not incorporated herein by reference. Forward-Looking StatementsFORWARD-LOOKING STATEMENTSThis Proxy Statement contains “forward-looking statements” (as defined in the Private Securities Litigation Reform Act of 1995). These statements are based on our current expectations and beliefs and are subject to a number of risks, uncertainties and assumptions that could cause actual results to differ materially from those set forth in the statements. All statements, other than statements of historical fact, are statements that could be deemed forward-looking statements. The forward-looking statements may include statements regarding actions to be taken by us. We undertake no obligation to publicly update any forward-looking statement, whether as a result of new information, future events or otherwise. Forward-looking statements involve significant risks and uncertainties, including those mentioned in the risk factors in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 20212023, and in our most recent periodic reports on Form 10-Q and Form 8-K filed with the SEC, and actual results may vary materially. By Order of the Board of Directors,
| | |
| | | | | /s/ Cole G. Carter
| | | | Cole G. Carter
| | | | Executive Vice President,
General Counsel & Secretary | | | |
94 CoreCivic, Inc.
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TABLE OF CONTENTS APPENDIXAppendix A: RECONCILIATION OF NON-GAAP DISCLOSURESAPPENDIX A TO 2021 PROXY STATEMENT
Reconciliation of Non-GAAP Disclosures
Appendix A to Proxy Statement
Reconciliation of Non-GAAP Disclosures
($AMOUNTS in thousands, except per share amounts)DATA) | Net income (loss) attributable to common stockholders | | | $54,157 | | | $(51,896) | | | $122,320 | | | $67,590 | | | Non-controlling interest | | | 1,181 | | | — | | | — | | | — | | | Net income (loss) | | | 55,338 | | | (51,896) | | | 122,320 | | | 67,590 | | | Special items: | | | | | | | | | | | | | | | Expenses associated with debt repayments and refinancing transactions | | | 7,141 | | | 56,279 | | | 8,077 | | | 686 | | | Expenses associated with mergers and acquisitions | | | 338 | | | — | | | — | | | — | | | Expenses associated with COVID-19 | | | 13,777 | | | 2,434 | | | — | | | — | | | Loss (gain) on sale of real estate assets, net | | | 13,023 | | | (38,766) | | | (87,728) | | | (798) | | | Shareholder litigation expense | | | — | | | 54,295 | | | 1,900 | | | — | | | Expenses associated with changes in corporate tax structure | | | 5,240 | | | — | | | — | | | — | | | Income tax expense associated with change in corporate tax structure and other special tax items | | | 3,085 | | | 114,249 | | | — | | | 930 | | | Contingent consideration for acquisition of businesses | | | 620 | | | — | | | — | | | — | | | Asset impairments | | | 60,628 | | | 11,378 | | | 4,392 | | | 2,710 | | | Income tax expense (benefit) for special items | | | 532 | | | (21,227) | | | 19,338 | | | (758) | | | Adjusted net income | | | $159,722 | | | $126,746 | | | $68,299 | | | $70,360 | | | Weighted average common shares outstanding – basic | | | 119,559 | | | 120,192 | | | 118,199 | | | 113,798 | | | Effect of dilutive securities: | | | | | | | | | | | | | | | Non-controlling interest - operating partnership units | | | 1,342 | | | 952 | | | — | | | — | | | Restricted stock-based awards | | | 28 | | | 531 | | | 899 | | | 852 | | | Weighted average shares and assumed conversions - diluted | | | 120,929 | | | 121,675 | | | 119,098 | | | 114,650 | | | Adjusted Earnings Per Diluted Share | | | $1.32 | | | $1.04 | | | $0.57 | | | $0.61 | |
| CoreCivic, Inc. | | | For the Year Ended
December 31, 2021
| | | Net loss attributable to common stockholders86
| | | $ (51,896)
| | | Non-controlling interest
| | | —
| | | Diluted net loss attributable to common stockholders
| | | $(51,896)
| | | Special items:
| | | | | | Expenses associated with debt repayments and refinancing transactions
| | | 56,279
| | | Expenses associated with COVID-19
| | | 2,434
| | | Income taxes associated with change in corporate tax structure and other special tax items
| | | 114,249
| | | Gain on sale of real estate assets, net
| | | (38,766)
| | | Shareholder litigation expense
| | | 54,295
| | | Asset impairments
| | | 11,378
| | | Income tax benefit for special items
| | | (21,227)
| | | Adjusted net income
| | | $126,746
| | | Weighted average common shares outstanding - basic
| | | 120,192
| | | Effect of dilutive securities:
| | | | | | Restricted stock-based awards
| | | 531
| | | Non-controlling interest - operating partnership units
| | | 952
| | | Weighted average shares and assumed conversions - diluted
| | | 121,675
| | | Adjusted Earnings Per Diluted Share
| | | $1.04
| |
| Net loss
| | | $ (51,896)
| | | Depreciation and amortization of real estate assets
| | | 98,738
| | | Impairment of real estate assets
| | | 3,335
| | | Gain on sale of real estate assets, net
| | | (38,766)
| | | Income tax expense for special items
| | | 8,785
| | | Funds From Operations
| | | $20,196
| | | Expenses associated with debt repayments and refinancing transactions
| | | 56,279
| | | Expenses associated with COVID-19
| | | 2,434
| | | Income taxes associated with change in corporate tax structure and other
| | | | | | special tax items
| | | 114,249
| | | Shareholder litigation expense
| | | 54,295
| | | Goodwill and other impairments
| | | 8,043
| | | Income tax benefit for special items
| | | (30,012)
| | | Normalized Funds From Operations
| | | $225,484
| | | Funds From Operations Per Diluted Share
| | | $0.17
| | | Normalized Funds From Operations Per Diluted Share
| | | $1.85
| |
TABLE OF CONTENTS APPENDIXAppendix A TO 2021 PROXY STATEMENT to Proxy Statement
Appendix A to Proxy Statement
Reconciliation of Non-GAAP Disclosures
($Amounts in thousands)thousands, except per share data) | Net income (loss) | | | $55,338 | | | $(51,896) | | | $122,320 | | | $67,590 | | | Depreciation and amortization of real estate assets | | | 112,046 | | | 98,738 | | | 96,917 | | | 98,076 | | | Impairment of real estate assets | | | 14,380 | | | 3,335 | | | 4,392 | | | — | | | Loss (gain) on sale of real estate assets, net | | | 13,023 | | | (38,766) | | | (87,728) | | | (798) | | | Income tax expense for special items | | | 532 | | | 8,785 | | | 21,995 | | | 226 | | | Funds From Operations | | | $195,319 | | | $20,196 | | | $157,896 | | | $165,094 | | | Expenses associated with debt repayments and refinancing transactions | | | 7,141 | | | 56,279 | | | 8,077 | | | 686 | | | Expenses associated with mergers and acquisitions | | | 338 | | | — | | | — | | | — | | | Contingent consideration for acquisition of businesses | | | 620 | | | — | | | — | | | — | | | Expenses associated with COVID-19 | | | 13,777 | | | 2,434 | | | — | | | — | | | Expenses associated with changes in corporate tax structure | | | 5,240 | | | — | | | — | | | — | | | Income tax expense associated with change in corporate tax structure and other special tax items | | | 3,085 | | | 114,249 | | | — | | | 930 | | | Shareholder litigation expense | | | — | | | 54,295 | | | 1,900 | | | — | | | Goodwill and other asset impairments | | | 46,248 | | | 8,043 | | | — | | | 2,710 | | | Income tax benefit for special items | | | — | | | (30,012) | | | (2,657) | | | (984) | | | Normalized Funds From Operations | | | $271,768 | | | $225,484 | | | $165,216 | | | $168,436 | | | Funds From Operations Per Diluted Share | | | $1.62 | | | $0.17 | | | $1.33 | | | $1,44 | | | Normalized Funds From Operations Per Diluted Share | | | $2.25 | | | $1.85 | | | $1.39 | | | $1.47 | |
| CoreCivic, Inc. | | | For the Year Ended
December 31, 2021
| | | Net loss87
| | | $ (51,896)2024 Proxy Statement
| | | Interest expense
| | | 95,565
| | | Depreciation and amortization
| | | 134,738
| | | Income tax expense
| | | 137,999
| | | EBITDA
| | | $316,406
| | | Expenses associated with debt repayments and refinancing transactions
| | | 56,279
| | | Expenses associated with COVID-19
| | | 2,434
| | | Gain on sale of real estate assets, net
| | | (38,766)
| | | Shareholder litigation expense
| | | 54,295
| | | Asset impairments
| | | 11,378
| | | Adjusted EBITDA
| | | $402,026
| |
TABLE OF CONTENTS Appendix A to Proxy Statement
APPENDIX A TO PROXY STATEMENT
Reconciliation of Non-GAAP Disclosures
(amounts in thousands) | Net income (loss) | | | $55,338 | | | $(51,896) | | | $122,320 | | | $67,590 | | | Interest expense | | | 93,453 | | | 95,565 | | | 95,851 | | | 85,265 | | | Depreciation and amortization | | | 150,861 | | | 134,738 | | | 127,906 | | | 127,316 | | | Income tax expense | | | 4,386 | | | 137,999 | | | 42,982 | | | 28,233 | | | EBITDA | | | $304,038 | | | $316,406 | | | $389,059 | | | $308,404 | | | Expenses associated with debt repayments and refinancing transactions | | | 7,141 | | | 56,279 | | | 8,077 | | | 686 | | | Expenses associated with mergers and acquisitions | | | 338 | | | — | | | — | | | — | | | Expenses associated with COVID-19 | | | 13,777 | | | 2,434 | | | — | | | — | | | Expenses associated with changes in corporate tax structure | | | 5,240 | | | — | | | — | | | — | | | Contingent consideration for acquisition of businesses | | | 620 | | | — | | | — | | | — | | | Loss (gain) on sale of real estate assets, net | | | 13,023 | | | (38,766) | | | (87,728) | | | (798) | | | Shareholder litigation expense | | | — | | | 54,295 | | | 1,900 | | | — | | | Asset impairments | | | 60,628 | | | 11,378 | | | 4,392 | | | 2,710 | | | Adjusted EBITDA | | | $404,805 | | | $402,026 | | | $315,700 | | | $311,002 | |
Adjusted Net Income, EBITDA, Adjusted EBITDA, Funds From Operations (FFO), Normalized FFO and, where appropriate, their corresponding per share metrics, are non-GAAP financial measures. CoreCivic believes that these measures are important operating measures that supplement discussion and analysis of the Company’s results of operations and are used to review and assess operating performance of the Company and its properties and their management teams. CoreCivic believes that it is useful to provide investors, lenders, and security analysts disclosures of its results of operations on the same basis that is used by management. FFO, in particular, is a widely accepted non-GAAP supplemental measure of performance of real estate companies, grounded in the standards for FFO established by the National Association of Real Estate Investment Trusts (NAREIT). NAREIT defines FFO as net income computed in accordance with generally accepted accounting principles, excluding gains (or losses) from sales of property and extraordinary items, plus depreciation and amortization of real estate and impairment of depreciable real estate and after adjustments for unconsolidated partnerships and joint ventures calculated to reflect FFO on the same basis. As a company with extensive real estate holdings, we believe FFO and FFO per share are important supplemental measures of our operating performance and believe they are frequently used by securities analysts, investors and other interested parties in the evaluation of REITs and other real estate operating companies many of which present FFO and FFO per share when reporting results. EBITDA, Adjusted EBITDA and Normalized FFO are useful as supplemental measures of performance of the Company’s properties because such measures do not take into account depreciation and amortization, or with respect to EBITDA, the impact of the Company’s tax provisions and financing strategies. Because the historical cost accounting convention used for real estate assets requires depreciation (except on land), this accounting presentation assumes that the value of real estate assets diminishes at a level rate over time. Because of the unique structure, design and use of the Company’s properties, management believes that assessing performance of the Company’s properties without the impact of depreciation or amortization is useful. CoreCivic may make adjustments toadjust FFO from time to time for certain other income and expenses that it considers non-recurring, infrequent or unusual, even though such items may require cash settlement, because such items do not reflect a necessary or ordinary component of the ongoing operations of the Company. Normalized FFO excludes the effects of such items. CoreCivic calculates Adjusted Net Income by adding to GAAP Net Income expenses associated with the Company’s debt repayments and refinancing transactions, and certain impairments and other charges that the Company believes are unusual or CoreCivic, Inc. | | | 88
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TABLE OF CONTENTS non-recurring to provide an alternative measure of comparing operating performance for the periods presented. Other companies may calculate Adjusted Net Income, EBITDA, Adjusted EBITDA, FFO and Normalized FFO differently than the Company does, or adjust for other items, and therefore comparability may be limited. Adjusted Net Income, EBITDA, Adjusted EBITDA, FFO and Normalized FFO and, where appropriate, their corresponding per share measures are not measures of performance under GAAP, and should not be considered as an alternative to cash flows from operating activities, a measure of liquidity or an alternative to net income as indicators of the Company’s operating performance or any other measure of performance derived in accordance with GAAP. This data should be read in conjunction with the Company’s consolidated financial statements and related notes included in its filings with the Securities and Exchange Commission. A-2 CoreCivic, Inc.
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TABLE OF CONTENTS APPENDIX B – AMENDED AND RESTATED 2020 STOCK INCENTIVE PLAN
APPENDIX B TO PROXY STATEMENT
TABLE OF CONTENTS CORECIVIC, INC.
AMENDED AND RESTATED
2020 STOCK INCENTIVE PLAN
Section 1. Purpose.
This plan shall be known as the CoreCivic, Inc. Amended and Restated 2020 Stock Incentive Plan (the “Plan”). The purpose of the Plan is to promote the interests of CoreCivic, Inc., a Maryland corporation (the “Company”), its Subsidiaries and its stockholders by (i) attracting and retaining key officers, employees, and directors of, and consultants to, the Company and its Subsidiaries and Affiliates; (ii) motivating such individuals by means of performance-related incentives to achieve long-range performance goals; (iii) enabling such individuals to participate in the long-term growth and financial success of the Company; (iv) encouraging ownership of stock in the Company by such individuals; and (v) linking their compensation to the long-term interests of the Company and its stockholders.
Section 2. Definitions.
As used in the Plan, the following terms shall have the meanings set forth below:
(a) “Affiliate” means (i) any entity that, directly or indirectly, is controlled by the Company, (ii) any entity in which the Company has a significant equity interest, (iii) an affiliate of the Company, as defined in Rule 12b-2 promulgated under Section 12 of the Exchange Act, and (iv) any entity in which the Company has at least twenty percent (20%) of the combined voting power of the entity’s outstanding voting securities, in each case as designated by the Board as being a participating employer in the Plan.
(b) “Award” means any Option, Stock Appreciation Right, Restricted Share Award, Restricted Share Unit, Performance Award, Other Stock-Based Award or other award granted under the Plan, whether singly, in combination or in tandem, to a Participant by the Committee (or the Board) pursuant to such terms, conditions, restrictions and/or limitations, if any, as the Committee (or the Board) may establish or which are required by applicable legal requirements.
(c) “Award Agreement” means any written agreement, contract or other instrument or document evidencing any Award, which may, but need not, be executed or acknowledged by a Participant.
(d) “Board” means the Board of Directors of the Company.
(e) “Cause” means, unless otherwise defined in the applicable Award Agreement, (i) the engaging by the Participant in willful misconduct that is injurious to the Company or its Subsidiaries or Affiliates, or (ii) the embezzlement or misappropriation of funds or property of the Company or its Subsidiaries or Affiliates by the Participant. For purposes of this paragraph, no act, or failure to act, on the Participant’s part shall be considered “willful” unless done, or omitted to be done, by the Participant not in good faith and without reasonable belief that the Participant’s action or omission was in the best interest of the Company. Any determination of Cause for purposes of the Plan or any Award shall be made by the Committee in its sole discretion. Any such determination shall be final and binding on a Participant.
(f) “Change in Control” means, unless otherwise defined in the applicable Award Agreement, any of the following events:
(i) any person or entity, including a “group” as defined in Section 13(d)(3) of the Exchange Act, other than the Company or a wholly-owned subsidiary thereof or any employee benefit plan of the Company or any of its Subsidiaries, becomes the beneficial owner of the Company’s securities having 35% or more of the combined voting power of the then outstanding securities of the Company that may be cast for the election of directors of the Company (other than as a result of an issuance of securities initiated by the Company in the ordinary course of business);
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(ii) as the result of, or in connection with, any cash tender or exchange offer, merger or other business combination or contested election, or any combination of the foregoing transactions, less than a majority of the combined voting power of the then outstanding securities of the Company or any successor company or entity entitled to vote generally in the election of the directors of the Company or such other corporation or entity after such transaction are held in the aggregate by the holders of the Company’s securities entitled to vote generally in the election of directors of the Company immediately prior to such transaction;
(iii) during any period of twelve (12) consecutive months, a majority of the members of the Board or other equivalent governing body of the Company cease to be composed of individuals (i) who were members of the Board or equivalent governing body on the first day of such period, (ii) whose election or nomination to the Board or equivalent governing body was approved by individuals referred to in clause (i) above constituting at the time of such election or nomination at least a majority of the Board or equivalent governing body, or (iii) whose election or nomination to the Board or other equivalent governing body was approved by individuals referred to in clauses (i) and (ii) above constituting at the time of such election or nomination at least a majority of the Board or equivalent governing body;
(iv) a complete liquidation or dissolution of the Company; or
(v) the sale or other disposition of all or substantially all of the assets of the Company to any Person (other than a transfer to a Subsidiary).
Notwithstanding the foregoing, (x) unless otherwise provided in an applicable Award Agreement, with respect to Awards constituting a “deferral of compensation” subject to Section 409A of the Code and solely for the purpose of determining the timing of any payments thereunder, a Change in Control shall be limited to a “change in the ownership of the Company,” a “change in the effective control of the Company,” or a “change in the ownership of a substantial portion of the assets of the Company” as such terms are defined in Section 1.409A-3(i)(5) of the U.S. Treasury Regulations, and (y) no Award Agreement shall define a Change in Control in such a manner that a Change in Control would be deemed to occur prior to the actual consummation of the event or transaction that results in a change of control of the Company (e.g., upon the announcement, commencement, or stockholder approval of any event or transaction that, if completed, would result in a change in control of the Company).
(g) “Code” means the Internal Revenue Code of 1986, as amended from time to time.
(h) “Committee” means a committee of the Board composed of not less than two Non-Employee Directors, at least two of whom shall qualify as a “non-employee director” for purposes of Exchange Act Section 16 and Rule 16b-3 thereunder, and each of whom shall be “independent” within the meaning of the listing standards of the New York Stock Exchange.
(i) “Consultant” means any consultant to the Company or its Subsidiaries or Affiliates.
(j) “Data” has the meaning set forth in Section 15.15 hereof.
(k) “Director” means a member of the Board.
(l) “Disability” means, unless otherwise defined in the applicable Award Agreement, a disability that would qualify as a total and permanent disability under the Company’s then current long-term disability plan.
(m) “Effective Date” has the meaning set forth in Section 16.1 hereof.
(n) “Employee” means a current or prospective officer or employee of the Company or of any Subsidiary or Affiliate.
(o) “Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time.
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(p) “Fair Market Value” with respect to the Shares, means, for purposes of a grant of an Award as of any date, (i) the closing sales price of the Shares on the New York Stock Exchange, or any other such exchange or market as is the principal trading market for the Shares, on such date, or in the absence of reported sales on such date, the closing sales price on the immediately preceding date on which sales were reported (or in either case, such other price based on actual trading on the applicable date that the Committee determines is appropriate) or (ii) in the event there is no public market for the Shares on such date, the fair market value as determined, in good faith and by the reasonable application of a reasonable valuation method, by the Board or Committee in its sole discretion, and for purposes of a sale of a Share as of any date, the actual sales price on that date.
(q) “Grant Price” means the base price per Share subject to a Stock Appreciation Right with respect to which the value of such Stock Appreciation Right is determined.
(r) “Incentive Stock Option” means an option to purchase Shares from the Company that is granted under Section 6 of the Plan and that is intended to meet the requirements of Section 422 of the Code or any successor provision thereto. Any Option that is intended to meet the requirements of Section 422 of the Code, but fails to so qualify for any reason, shall be treated as a Non-Qualified Stock Option.
(s) “Non-Qualified Stock Option” means an option to purchase Shares from the Company that is granted under Sections 6 or 10 of the Plan and is not intended to be an Incentive Stock Option.
(t) “Non-Employee Director” means a member of the Board who is not an officer or employee of the Company or any Subsidiary or Affiliate.
(u) “Option” means an Incentive Stock Option or a Non-Qualified Stock Option.
(v) “Option Price” means the purchase price payable to purchase one Share upon the exercise of an Option.
(w) “Other Stock-Based Award” means any Award granted under Sections 9 or 10 of the Plan.
(x) “Participant” means any Employee, Director or Consultant who receives an Award under the Plan.
(y) “Performance Award” means any Award granted under Section 8 of the Plan that is subject to the achievement of Performance Objectives.
(z) “Performance Objectives” means the measurable performance objective or objectives established pursuant to this Plan for Participants who have received grants of Performance Awards. If the Committee determines that a change in the business, operations, corporate structure or capital structure of the Company, or the manner in which it conducts its business, or other events or circumstances render the Performance Objectives unsuitable, the Committee may in its discretion modify such Performance Objectives or the acceptable levels of achievement, in whole or in part, as the Committee deems appropriate and equitable. A non-exhaustive list of the potential Performance Objectives that may be used for awards under this Plan includes the following (including ratios or other relationships between one or more, or a combination, of the following examples of Performance Objectives, which may be measured on an absolute basis or relative to peer companies or specific business units of peer companies): earnings before interest, taxes, depreciation and/or amortization (“EBITDA”) or adjusted EBITDA; funds from operations (“FFO”) or adjusted FFO; operating income or profit; operating efficiencies; return on equity, assets, capital, capital employed or investment; after tax operating income; net income; earnings or book value per Share; utilization; net investment income; gross profit; loan loss ratios; stock price or total stockholder return; net asset growth; debt reduction; individual performance; environmental, social and governance related objectives; strategic business objectives, consisting of one or more objectives based on meeting specified cost targets, business expansion goals and goals relating to acquisitions or divestitures; any combination thereof.
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(aa) “Person” means any individual, corporation, partnership, limited liability company, association, joint-stock company, trust, unincorporated organization, government or political subdivision thereof or other entity.
(bb) “Prior Plan” means the CoreCivic, Inc. Second Amended and Restated 2008 Stock Incentive Plan, as amended.
(cc) “Restricted Share” means any Share granted under Sections 7 or 10 of the Plan.
(dd) “Restricted Share Unit” means any unit granted under Sections 7 or 10 of the Plan.
(ee) “Retirement” means a Participant’s termination of employment in accordance with the provisions of the CoreCivic 401(k) Savings and Retirement Plan on or after such Participant’s Normal Retirement Date, as defined in such plan or, if a Participant is not covered by the CoreCivic 401(k) Savings and Retirement Plan, the Participant’s voluntary termination of employment on or after such Participant’s 62nd birthday.
(ff) “SEC” means the Securities and Exchange Commission or any successor thereto.
(gg) “Section 16” means Section 16 of the Exchange Act and the rules promulgated thereunder and any successor provision thereto as in effect from time to time.
(hh) “Shares” means shares of common stock, $0.01 par value per share, of the Company.
(ii) “Share Reserve” has the meaning set forth in Section 4.1 hereof.
(jj) “Stock Appreciation Right” or “SAR” means a stock appreciation right granted under Section 6 of the Plan that entitles the holder to receive, upon exercise of such stock appreciation right, an amount equal to the product of (i) the excess of (A) the Fair Market Value of one Share on the exercise date (or, if the Committee shall so determine, at any time during a specified period before or after the exercise date), over (B) the Grant Price per Share of such stock appreciation right, multiplied by (ii) the number of Shares covered by the stock appreciation right.
(kk) “Subsidiary” means any corporation or other entity in an unbroken chain of corporations or other entities beginning with the Company if each of the corporations or other entities, or group of commonly controlled corporations or other entities, other than the last corporation or other entity in the unbroken chain then owns stock or other equity interests possessing 50% or more of the total combined voting power of all classes of stock or other equity interests in one of the other corporations or other entities in such chain.
(ll) “Substitute Awards” means Awards granted solely in assumption of, or in substitution for, outstanding awards previously granted by a company acquired by the Company or with which the Company combines.
(mm) “Vesting Period” means the period of time specified by the Committee during which vesting restrictions for an Award are applicable.
Section 3. Administration.
3.1 Authority of Committee. The Plan shall be administered by the Committee, which shall be appointed by and serve at the pleasure of the Board; provided, however, with respect to Awards to Non-Employee Directors, all references in the Plan to the Committee shall be deemed to be references to the Board. Subject to the terms of the Plan and applicable law, and in addition to other express powers and authorizations conferred on the Committee by the Plan, the Committee shall have full power and authority in its discretion to: (i) designate Participants; (ii) determine the type or types of Awards to be granted to a Participant; (iii) determine the number of Shares to be covered by, or with respect to which payments, rights or other matters are to be calculated in connection with Awards; (iv) determine the timing, terms,
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and conditions of any Award; (v) accelerate the time at which all or any part of an Award may be settled or exercised; (vi) determine whether, to what extent, and under what circumstances, Awards may be settled or exercised in cash, Shares, other securities, other Awards or other property, or canceled, forfeited or suspended and the method or methods by which Awards may be settled, exercised, canceled, forfeited or suspended; (vii) determine whether, to what extent, and under what circumstances cash, Shares, other securities, other Awards, other property, and other amounts payable with respect to an Award shall be deferred either automatically or at the election of the holder thereof or of the Committee; (viii) interpret and administer the Plan and any instrument or agreement relating to, or Award made under, the Plan; (ix) except to the extent prohibited by Section 6.2 or any other provision of the Plan, amend or modify the terms of any Award at or after grant with or without the consent of the holder of the Award; (x) establish, amend, suspend or waive such rules and regulations and appoint such agents as it shall deem appropriate for the proper administration of the Plan; and (xi) make any other determination and take any other action that the Committee deems necessary or desirable for the administration of the Plan, subject to the exclusive authority of the Board under Section 14 hereunder to amend or terminate the Plan. The exercise of an Option or receipt of an Award shall be effective only if an Award Agreement shall have been duly executed and delivered on behalf of the Company following the grant of the Option or other Award.
3.2 Committee Discretion Binding. Unless otherwise expressly provided in the Plan, all designations, determinations, interpretations, and other decisions under or with respect to the Plan or any Award shall be within the sole discretion of the Committee, may be made at any time and shall be final, conclusive, and binding upon all Persons, including the Company, any Subsidiary or Affiliate, any Participant and any holder or beneficiary of any Award.
3.3 Action by the Committee. The exercise of an Option or receipt of an Award shall be effective only if an Award Agreement shall have been duly executed and delivered on behalf of the Company following the grant of the Option or other Award by the Committee. Subject to the Committee’s charter and applicable legal requirements (including the rules and regulations of the New York Stock Exchange), the Committee may make such rules and regulations for the conduct of its business as it shall deem advisable.
3.4 Delegation. Subject to the terms of the Plan, the Committee’s charter and applicable law, the Committee may delegate to one or more officers or managers of the Company or of any Subsidiary or Affiliate, or to a Committee of such officers or managers, the authority, subject to such terms and limitations as the Committee shall determine, to grant Awards to or to cancel, modify or waive rights with respect to, or to alter, discontinue, suspend or terminate Awards held by Participants who are not officers or directors of the Company for purposes of Section 16 or who are otherwise not subject to such Section. The Committee delegates the authority for ministerial administration of the Plan and Awards made under the Plan to the Company.
3.5 No Liability. No member of the Board or Committee shall be liable for any action taken or determination made in good faith with respect to the Plan or any Award granted hereunder.
Section 4. Shares Available for Awards.
4.1 Shares Available; Share Counting.
Subject to the provisions of Section 4.2 hereof, the maximum aggregate number of Shares which may be issued pursuant to all Awards after the Effective Date of this Plan is equal to (a) the sum of (i) 5,900,000 Shares plus (ii) 889,490 Shares which represents the number of Shares available for grant under the CoreCivic, Inc. 2020 Stock Incentive Plan (the “Original Plan”) as of February 28, 2022, less (b) one (1) Share for every Share that was subject to an Award granted after February 28, 2022 under the Original Plan (such aggregate amount, as further adjusted pursuant to this Section 4.1, the “Share Reserve”). Following the Original Effective Date of the Original Plan, no further grants have been made, nor shall be made, under the Prior Plan, and no further grants under the Prior Plan will be made under the Plan. Following the Effective
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Date, no further grants shall be made under the Original Plan. The number of Shares with respect to which Incentive Stock Options may be granted after the Effective Date shall be no more than 1,000,000. Each Share subject to the grant of an Award shall reduce the Share Reserve by one (1) Share. If any Award (or portion thereof) granted under this Plan shall expire, terminate, be settled in cash or otherwise be forfeited or canceled for any reason before it has vested or been exercised in full, the Shares subject to such Award shall, to the extent of such expiration, cash settlement, forfeiture, or termination, again be available for Awards under the Plan and the Share Reserve shall be increased in accordance with this Section 4.1. If any Award (or portion thereof) granted under the Original Plan or Prior Plan shall thereafter expire, terminate, be settled in cash or otherwise be forfeited or canceled for any reason before it has vested or been exercised in full, the Shares subject to such Award shall, to the extent of such expiration, cash settlement, forfeiture, or termination, again be available for Awards under this Plan, and the Share Reserve shall be increased, in accordance with this Section 4.1. Any Shares that again become available for grant pursuant to this Section 4.1 shall be added back as one (1) Share. Notwithstanding the foregoing, Shares relating to any Award under the Plan, the Original Plan or the Prior Plan will not again become available for Awards under this Plan in the following circumstances: (i) Shares tendered or withheld in payment of the Option Price of an Option, (ii) Shares tendered or withheld to satisfy any tax withholding obligation with respect to an Option or Stock Appreciation Right, (iii) Shares repurchased by the Company with proceeds received from the exercise of an Option, and (iv) Shares subject to a Stock Appreciation Right that are not issued in connection with the Share settlement of that Stock Appreciation Right upon its exercise. Shares tendered or withheld to satisfy any tax withholding obligation with respect to the settlement or payment of Restricted Shares, Restricted Share Units and Performance Awards and Other Stock-Based Awards denominated in the full value of Shares shall again be available for Awards under the Plan. For purposes of this Section 4.1, if an Award entitles the holder thereof to receive or purchase Shares, the number of Shares covered by such Award or to which such Award relates shall be counted on the date of grant of such Award against the aggregate number of Shares available for Awards under the Plan; provided, however, that the number of Shares covered by a Performance Award or to which such Performance Award relates shall be counted against the aggregate number of Shares available for Awards under the Plan on the date such Performance Awards vest, if at all.
4.2 Adjustments. In the event that any unusual or non-recurring transactions, including an unusual or non-recurring dividend or other distribution (whether in the form of an extraordinary cash dividend, dividend of Shares, other securities or other property), recapitalization, stock split, reverse stock split, reorganization, merger, consolidation, split-up, spin-off, combination, repurchase or exchange of Shares or other securities of the Company, issuance of warrants or other rights to purchase Shares or other securities of the Company, or other similar corporate transaction or event affects the Shares, then the Committee shall in an equitable and proportionate manner (and, as applicable, in such equitable and proportionate manner as is consistent with Sections 422 and 409A of the Code, either: (i) adjust any or all of (1) the aggregate number of Shares or other securities of the Company (or number and kind of other securities or property) with respect to which Awards may be granted under the Plan; (2) the number of Shares or other securities of the Company (or number and kind of other securities or property) subject to outstanding Awards under the Plan, provided that the number of Shares subject to any Award shall always be a whole number; (3) the grant or exercise price with respect to any Award under the Plan; and (4) the limits on the number of Shares or Awards that may be granted to Participants under the Plan in any calendar year; (ii) provide for an equivalent award in respect of securities of the surviving entity of any merger, consolidation or other transaction or event having a similar effect; or (iii) make provision for a cash payment to the holder of an outstanding Award.
4.3 Substitute Awards. Any Shares issued by the Company as Substitute Awards in connection with the assumption or substitution of outstanding grants from any acquired corporation shall not reduce the Shares available for Awards under the Plan.
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4.4 Sources of Shares Deliverable Under Awards. Any Shares delivered pursuant to an Award may consist, in whole or in part, of authorized and unissued Shares or of issued Shares which have been reacquired by the Company.
Section 5. Eligibility.
Any Employee, Director or Consultant shall be eligible to be designated a Participant; provided, however, that Non-Employee Directors shall only be eligible to receive Awards granted consistent with Section 10. Incentive Stock Options may be granted only to employees of the Company or any Subsidiary that is a “subsidiary corporation” within the meaning of Section 424(f) of the Code.
Section 6. Stock Options and Stock Appreciation Rights.
6.1 Grant. Subject to the provisions of the Plan, including, without limitation, Section 3.4 and Section 6.6, the Committee shall have sole and complete authority to determine the Participants to whom Options and SARs shall be granted, the number of Shares subject to each such Award, the Option Price (or Grant Price) and the conditions and limitations applicable to the exercise of each Option and SAR. An Option may be granted with or without a related SAR. A SAR may be granted with or without a related Option. The grant of an Option or SAR shall occur when the Committee by resolution, written consent or other appropriate action determines to grant such Option or SAR for a particular number of Shares to a particular Participant at a particular Option Price or Grant Price, as the case may be, or such later date as the Committee shall specify in such resolution, written consent or other appropriate action. The Committee shall have the authority to grant Incentive Stock Options and to grant Non-Qualified Stock Options. In the case of Incentive Stock Options, the terms and conditions of such grants shall be subject to and comply with Section 422 of the Code, as from time to time amended, and any regulations implementing such statute. A person who has been granted an Option or SAR under this Plan may be granted additional Options or SARs under the Plan if the Committee shall so determine.
6.2 Price. The Committee in its sole discretion shall establish the Option Price at the time each Option is granted. The Option Price of an Option may not be less than one hundred percent (100%) of the Fair Market Value of the Shares with respect to which the Option is granted on the date of grant of such Option. The Committee in its sole discretion shall establish the Grant Price at the time each SAR is granted. The Grant Price of an SAR may not be less than one hundred percent (100%) of the Fair Market Value of the Shares with respect to which the SAR is granted on the date of grant of such SAR. Notwithstanding the foregoing and except as permitted by the provisions of Section 4.2 and Section 14 hereof, the Committee shall not have the power to (i) amend the terms of previously granted Options or SARs to reduce the Option Price of such Options or the Grant Price of such SARs, (ii) cancel such Options or SARS in exchange for a cash payment or any other Award, including substitute Options or SARs with a lower Option Price than the canceled Options or a lower Grant Price than the canceled SARs, or (iii) take any other action with respect to an Option or SAR that would be treated as a repricing under the rules and regulations of the New York Stock Exchange or such other principal securities exchange on which the Shares are traded, in each case without the approval of the Company’s stockholders.
6.3 Term. Subject to the Committee’s authority under Section 3.1 and the provisions of Section 6.4, each Option and SAR and all rights and obligations thereunder shall expire on the date determined by the Committee and specified in the Award Agreement. The Committee shall be under no duty to provide terms of like duration for Options or SARs granted under the Plan. Notwithstanding the foregoing and except as provided in Section 6.4(a) hereof, no Option or SAR shall be exercisable after the expiration of ten (10) years from the date such Option or SAR was granted.
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6.4 Exercise.
(a) Each Option and SAR shall be exercisable at such times and subject to such terms and conditions as the Committee may, in its sole discretion, specify in the applicable Award Agreement or thereafter. The Committee shall have full and complete authority to determine, subject to Section 6.5 herein, whether an Option or SAR will be exercisable in full at any time or from time to time during the term of the Option or SAR, or to provide for the exercise thereof in such installments, upon the occurrence of such events and at such times during the term of the Option or SAR as the Committee may determine. The Committee may provide, at or after grant, that the period of time over which an Option, other than an Incentive Stock Option, or SAR may be exercised shall be automatically extended if on the scheduled expiration of such Award, the Participant’s exercise of such Award would violate applicable securities law; provided, however, (i) that during the extended exercise period the Option or SAR may only be exercised to the extent such Award was exercisable in accordance with its terms immediately prior to such scheduled expiration date, (ii) that such extended exercise period shall end not later than thirty (30) days after the exercise of such Option or SAR first would no longer violate such laws, and (iii) if such extension is not provided by the original Award Agreement, such extension shall not extend beyond the tenth anniversary of the applicable grant date.
(b) The Committee may impose such conditions with respect to the exercise of Options or SARs, including without limitation, any relating to the application of federal, state or foreign securities laws or the Code, as it may deem necessary or advisable. The exercise of any Option granted hereunder shall be effective only at such time as the sale of Shares pursuant to such exercise will not violate any state or federal securities or other laws.
(c) An Option or SAR may be exercised in whole or in part at any time, with respect to whole Shares only, within the period permitted thereunder for the exercise thereof, and shall be exercised by written notice of intent to exercise the Option or SAR, delivered to the Company at its principal office, and payment in full to the Company at the direction of the Committee of the amount of the Option Price for the number of Shares with respect to which the Option is then being exercised.
(d) Payment of the Option Price shall be made (i) in cash or cash equivalents, (ii) at the discretion of the Committee, by transfer, either actually or by attestation, to the Company of unencumbered Shares previously acquired by the Participant valued at the Fair Market Value of such Shares on the date of exercise (or next succeeding trading date, if the date of exercise is not a trading date), together with any applicable withholding taxes, such transfer to be upon such terms and conditions as determined by the Committee, (iii) by a combination of such cash (or cash equivalents) and Shares, or (iv) at the discretion of the Committee and subject to applicable securities laws, by (A) delivering a notice of exercise of the Option and simultaneously selling the Shares thereby acquired, pursuant to a brokerage or similar agreement approved in advance by proper officers of the Company, using the proceeds of such sale as payment of the Option Price, together with any applicable withholding taxes or (B) the Company withholding Shares otherwise deliverable to the Participant pursuant to the Option having an aggregate Fair Market Value at the time of exercise equal to the total Option Price together with any applicable withholding taxes, subject to Section 15.6. Until the Participant has been issued the Shares subject to such Option exercise, they shall possess no rights as a stockholder with respect to such Shares.
(e) At the Committee’s discretion, the amount payable as a result of the exercise of an SAR may be settled in cash, Shares or a combination of cash and Shares. A fractional Share shall not be deliverable upon the exercise of a SAR, but a cash payment will be made in lieu thereof.
6.5 Transferability of Options. Except as provided in this Section 6.5, no Options or SARs shall be (i) transferable otherwise than by will or the laws of descent and distribution, or (ii) exercisable during the lifetime of the Participant by anyone other than the Participant. Non-Qualified Stock Options granted to a Participant may be transferred by such Participant to a permitted transferee (as defined below), provided
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that (i) such Non-Qualified Stock Options shall be fully vested; (ii) there is no consideration for such transfer (other than receipt by the Participant of interest in an entity that is a permitted transferee); (iii) the participant (or such Participant’s estate or representative) shall remain obligated to satisfy all income or other tax withholding obligations associated with the exercise of such Non-Qualified Stock Options; (iv) the Participant shall notify the Company in writing prior to such transfer and disclose to the Company the name and address of the permitted transferee and the relationship of the permitted transferee to the Participant; and (v) such transfer shall be effected pursuant to transfer documents in a form approved by the Company. A permitted transferee may not further assign or transfer any such Non-Qualified Stock Options otherwise than by will or the laws of descent and distribution. Following the transfer of Non-Qualified Stock Options to a permitted transferee, such Non-qualified Options shall continue to be subject to the same terms and conditions that applied to them prior to their transfer by the Participant, except that they shall be exercisable by the permitted transferee to whom such transfer was made rather than by the transferring Participant. For the purposes of the Plan, the term “permitted transferee” means, with respect to a Participant, (i) any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, sibling, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law of the Participant, including adoptive relationships, and (ii) a trust, partnership or other entity in which the Participant or the persons described in clause (i) above have more than fifty percent of the beneficial interest.
6.6 Minimum Vesting Period. Except for Substitute Awards, or in connection with the death or Disability of the Participant, or in the event of a Change in Control, Options and SARs shall have a Vesting Period of not less than one (1) year from the date of grant; provided, that the Committee has the discretion to waive this requirement with respect to an Award at or after grant, so long as the total number of Shares that are issued pursuant to Awards having an originally stated Vesting Period of less than one year from the date of grant (inclusive of any performance periods related thereto) shall not exceed 5% of the Share Reserve.
Section 7. Restricted Shares and Restricted Share Units.
7.1 Grant.
(a) Subject to the provisions of the Plan, including, but not limited to, Section 7.5, and other applicable legal requirements, the Committee shall have sole and complete authority to determine the Participants to whom Restricted Shares and Restricted Share Units shall be granted, the number of Restricted Shares and/or the number of Restricted Share Units to be granted to each Participant, the duration of the period during which, and the conditions under which, the Restricted Shares and Restricted Share Units may be forfeited to the Company, and the other terms and conditions of such Awards. The Restricted Share and Restricted Share Unit Awards shall be evidenced by Award Agreements in such form as the Committee shall from time to time approve, which agreements shall comply with and be subject to the terms and conditions provided hereunder and any additional terms and conditions established by the Committee that are consistent with the terms of the Plan.
(b) Each Restricted Share Award and Restricted Share Unit Award made under the Plan shall be for such number of Shares as shall be determined by the Committee and set forth in the Award Agreement containing the terms of such Award. Such agreement shall set forth a period of time during which the grantee must remain in the continuous employment (or other service-providing capacity) of the Company in order for the forfeiture and transfer restrictions to lapse. If the Committee so determines or the Award Agreement so provides, the restrictions may lapse during such restricted period in installments with respect to specified portions of the Shares covered by the Restricted Share Award or Restricted Share Unit Award. The Award Agreement may also, in the discretion of the Committee, set forth performance or other
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conditions under which restrictions on the Shares may lapse or that will subject the Shares to forfeiture and transfer restrictions, including the Performance Objectives. The Committee may, at its discretion, waive all or any part of the restrictions applicable to any or all outstanding Restricted Share Awards and Restricted Share Unit Awards.
7.2 Delivery of Restricted Shares and Transfer Restrictions.
(a) At the time of grant of a Restricted Share Award, a certificate representing the number of Shares awarded thereunder shall be registered in the name of the Participant receiving the Award. Such certificate shall be held by the Company or any custodian appointed by the Company for the account of the Participant subject to the terms and conditions of the Plan, and shall bear such a legend setting forth the restrictions imposed thereon as the Committee, in its discretion, may determine. The foregoing to the contrary notwithstanding, the Committee may, in its discretion, provide that a Participant’s ownership of Restricted Shares prior to the lapse of any transfer restrictions or any other applicable restrictions shall, in lieu of such certificates, be evidenced by a “book entry” (i.e., a computerized or manual entry) in the records of the Company or its designated agent in the name of the Participant who has received such Award, and confirmation and account statements sent to the Participant with respect to such book-entry Shares may bear the restrictive legend referenced in the preceding sentence. Such records of the Company or such agent shall, absent manifest error, be binding on all Participants who receive Restricted Share Awards evidenced in such manner. The holding of Restricted Shares by the Company or such an escrow holder, or the use of book entries to evidence the ownership of Restricted Shares, in accordance with this Section 7.2(a), shall not affect the rights of Participants as owners of the Restricted Shares awarded to them, nor affect the restrictions applicable to such shares under the Award Agreement or the Plan, including the transfer restrictions.
(b) Unless otherwise provided in the applicable Award Agreement, a Participant receiving an Award of Restricted Shares shall have all rights of a stockholder with respect to the Restricted Shares, including the right to receive dividends and the right to vote such Shares, subject to the following restrictions: (i) the Participant shall not be entitled to delivery of the stock certificate until the expiration of the restricted period and the fulfillment of any other restrictive conditions set forth in the Award Agreement with respect to such Shares; (ii) none of the Shares may be sold, assigned, transferred, pledged, hypothecated or otherwise encumbered or disposed of during such restricted period or until after the fulfillment of any such other restrictive conditions; and (iii) except as otherwise determined by the Committee at or after grant or as provided in the applicable Award Agreement, all of the Shares shall be forfeited and all rights of the Participant to such Shares shall terminate, without further obligation on the part of the Company, unless the Participant remains in the continuous employment (or other service-providing capacity) of the Company for the entire restricted period in relation to which such Shares were granted and unless any other restrictive conditions relating to the Restricted Share Award are met. Any dividends payable with respect to the Restricted Shares (whether in the form of cash, Shares, other securities of the Company or any other property) shall be subject to the same restrictions, terms and conditions as such Restricted Shares and paid to the Participant only if, when and to the extent the restrictions on such Restricted Shares lapse.
7.3 Termination of Restrictions on Restricted Shares. At the end of the restricted period and provided that any other restrictive conditions of a Restricted Share Award are met, or at such earlier time as otherwise determined by the Committee, all restrictions set forth in the Award Agreement relating to the Restricted Share Award or in the Plan shall lapse as to the Restricted Shares subject thereto, and a stock certificate for the appropriate number of Shares, free of the restrictions and restricted stock legend, shall be delivered to the Participant or the Participant’s beneficiary or estate, as the case may be (or, in the case of book-entry Shares, such restrictions and restricted stock legend shall be removed from the confirmation and account statements delivered to the Participant or the Participant’s beneficiary or estate, as the case may be, in book-entry form).
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7.4 Restricted Share Units. Each Restricted Share Unit shall have a value equal to the Fair Market Value of a Share. Restricted Share Units shall be paid in cash, Shares, other securities or other property, as determined in the sole discretion of the Committee, upon the lapse of the restrictions applicable thereto, or otherwise in accordance with the applicable Award Agreement. Except as otherwise provided herein, a Participant receiving a grant of Restricted Share Units shall have no rights of a stockholder with respect to such Restricted Share Units until the restrictions set forth in the applicable Award Agreement have lapsed and any Shares payable thereunder have been delivered to the Participant. The applicable Award Agreement will specify whether a Participant will be entitled to receive dividend equivalent rights in respect of Restricted Share Units at the time of any payment of dividends to stockholders on Shares. If the applicable Award Agreement specifies that a Participant will be entitled to receive dividend equivalent rights, (i) the amount of any such dividend equivalent right shall equal the amount that would be payable to the Participant as a stockholder in respect of a number of Shares equal to the number of Restricted Share Units then credited to the Participant, and (ii) no dividend equivalents shall be paid on unvested Restricted Share Units until such Restricted Share Units have vested. Except as otherwise determined by the Committee at or after grant, Restricted Share Units may not be sold, assigned, transferred, pledged, hypothecated or otherwise encumbered or disposed of. In addition, except as otherwise determined by the Committee at or after grant or as may otherwise be provided in any Award Agreement (but in any event subject to Section 7.5) all Restricted Share Units and all rights of the Participant to such Restricted Share Units shall terminate, without further obligation on the part of the Company, unless the Participant remains in continuous employment (or other service-providing capacity) of the Company for the entire restricted period in relation to which such Restricted Share Units were granted and unless any other restrictive conditions relating to the Restricted Share Unit Award are met.
7.5 Minimum Vesting Period. Except for Substitute Awards, or the death or Disability of the Participant, or in the event of a Change in Control, Restricted Share Awards and Restricted Share Unit Awards (including those issued as or as payment for Performance Awards) shall have a Vesting Period of not less than one (1) year from the date of grant (inclusive of any performance periods related thereto); provided, that the Committee has the discretion to waive this requirement with respect to an Award at or after grant, so long as the total number of Shares that are issued pursuant to Awards having an originally stated Vesting Period of less than one year from the date of grant (inclusive of any performance periods related thereto) shall not exceed 5% of the Share Reserve.
Section 8. Performance Awards.
8.1 Grant. The Committee shall have sole and complete authority to determine the Participants who shall receive a Performance Award, which shall consist of a right that is (i) denominated in cash or Shares (including but not limited to Restricted Shares and Restricted Share Units), (ii) valued, as determined by the Committee, in accordance with the achievement of such Performance Objectives during such performance periods as the Committee shall establish, and (iii) payable at such time and in such form as the Committee shall determine.
8.2 Terms and Conditions. Subject to the terms of the Plan and any applicable Award Agreement, the Committee shall determine the Performance Objectives to be achieved during any performance period, the length of any performance period, the amount of any Performance Award and the amount and kind of any payment or transfer to be made pursuant to any Performance Award, and may amend specific provisions of the Performance Award; provided, that such amendment may not adversely affect existing Performance Awards made within a performance period commencing prior to implementation of the amendment without the consent of the affected Participant; provided further, that the minimum Vesting Period requirements set forth in Section 6.6 and Section 7.5 shall apply to grants of Performance Awards hereunder. No Performance Award shall have a term in excess of ten (10) years.
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8.3 Payment of Performance Awards. Performance Awards may be paid in a lump sum or in installments following the close of the performance period or, in accordance with the procedures established by the Committee, on a deferred basis. Termination of employment (or other service-providing capacity) prior to the end of any performance period, other than for reasons of death or Disability, will result in the forfeiture of the Performance Award, and no payments will be made. The Committee may, in its discretion, waive any Performance Objectives and/or other terms and conditions relating to a Performance Award. A Participant’s rights to any Performance Award may not be sold, assigned, transferred, pledged, hypothecated or otherwise encumbered or disposed of in any manner, except by will or the laws of descent and distribution, and/or except as the Committee may determine at or after grant.
Section 9. Other Stock-Based Awards.
The Committee shall have the authority to determine the Participants who shall receive an Other Stock-Based Award, which shall consist of any right that is (i) not an Award described in Section 6, Section 7 or Section 8 above and (ii) an Award of Shares or an Award denominated or payable in, valued in whole or in part by reference to, or otherwise based on or related to, Shares (including, without limitation, securities convertible into Shares), as deemed by the Committee to be consistent with the purposes of the Plan. Subject to the terms of the Plan and any applicable Award Agreement, the Committee shall determine the terms and conditions of any such Other Stock-Based Award; provided further, that the minimum Vesting Period requirements set forth in Section 6.6 and Section 7.5 and the treatment of dividends and dividend equivalents as set forth in Section 15.2 shall apply to Other Stock-Based Awards. No Other Stock-Based Award shall have a term in excess of ten (10) years.
Section 10. Non-Employee Director Awards.
10.1 The Board may provide that all or a portion of a Non-Employee Director’s annual retainer, meeting fees and/or other awards or compensation as determined by the Board, be payable (either automatically or at the election of a Non-Employee Director) in the form of Non-Qualified Stock Options, Restricted Shares, Restricted Share Units and/or Other Stock-Based Awards, including unrestricted Shares. The Board shall determine the terms and conditions of any such Awards, including the terms and conditions which shall apply upon a termination of the Non-Employee Director’s service as a member of the Board, and shall have full power and authority in its discretion to administer such Awards, subject to the terms of the Plan and applicable law.
10.2 Notwithstanding anything herein to the contrary, the aggregate value of all compensation paid or granted, as applicable, to any individual for service as a Non-Employee Director with respect to any calendar year, including Awards granted and cash fees paid by the Company to such Non-Employee Director, shall not exceed five hundred thousand dollars ($500,000) in value, calculating the value of any equity Awards granted during such calendar year based on the grant date fair value of such Awards for financial reporting purposes. The Board may make exceptions to the applicable limit in this Section 10.2 for individual Non-Employee Directors in extraordinary circumstances, such as where any such individual Non-Employee Directors are serving on a special litigation or transactions committee of the Board, as the Board may determine in its discretion, provided that the Non-Employee Director receiving such additional compensation may not participate in the decision to award such compensation involving such Non-Employee Director.
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Section 11. Transfers and Leaves of Absence.
For purposes of the Plan, unless the Committee determines otherwise: (a) a transfer of a Participant’s employment or other service-providing capacity without an intervening period of separation among the Company or any other Subsidiary shall not be deemed a termination of employment, and (b) a Participant who is granted in writing a leave of absence or who is entitled to a statutory leave of absence shall be deemed to have remained in the employ of the Company (or other Subsidiary) during such leave of absence.
Section 12. Termination of Employment.
The Committee shall have the full power and authority to determine the terms and conditions that shall apply to any Award upon a termination of employment (or other service-providing capacity) with the Company, its Subsidiaries and Affiliates, including a termination by the Company with or without Cause, by a Participant voluntarily, or by reason of death, Disability or Retirement, and may provide such terms and conditions in the Award Agreement or in such rules and regulations as it may prescribe.
Section 13. Change in Control.
Unless otherwise provided in an Award Agreement at or after grant, or by the Committee by resolution prior to a Change in Control, a Change in Control shall not affect the vesting or exercisability of, or restrictions applicable to, outstanding Awards.
Section 14. Amendment and Termination.
14.1 Amendments to the Plan. The Board may amend, alter, suspend, discontinue or terminate the Plan or any portion thereof at any time (and in accordance with Section 409A of the Code with regard to Awards subject thereto); provided that no such amendment, alteration, suspension, discontinuation or termination shall be made without stockholder approval if such approval is necessary to comply with any tax or regulatory requirement (including the rules and regulations of the New York Stock Exchange) for which or with which the Board deems it necessary or desirable to comply.
14.2 Amendments to Awards. Subject to the restrictions of Section 6.2, the Committee may waive any conditions or rights under, amend any terms of or alter, suspend, discontinue, cancel or terminate, any Award theretofore granted, prospectively or retroactively (and in accordance with Section 409A of the Code with regard to Awards subject thereto); provided, that any such waiver, amendment, alteration, suspension, discontinuance, cancellation or termination that would materially and adversely affect the rights of any Participant under any Award theretofore granted shall not to that extent be effective without the consent of the affected Participant.
14.3 Adjustments of Awards Upon the Occurrence of Certain Unusual or Nonrecurring Events. The Committee is hereby authorized to make equitable and proportionate adjustments in the terms and conditions of, and the criteria included in, Awards in recognition of unusual or nonrecurring events (and shall make such adjustments for events described in Section 4.2 hereof) affecting the Company, any Subsidiary or Affiliate, or the financial statements of the Company or any Subsidiary or Affiliate, or of changes in applicable laws, regulations or accounting principles, subject to any restrictions otherwise set forth in the Plan.
14.4 Recoupment of Awards. Any Award granted pursuant to this Plan shall be subject to mandatory repayment by the Participant to the Company (i) to the extent set forth in any Award Agreement, (ii) to the extent that such Participant is, or in the future becomes, subject to (a) any “clawback” or recoupment policy adopted by the Company or any Affiliate thereof to comply with the requirements of any applicable
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laws, rules or regulations, including pursuant to final rules adopted by the SEC pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act, or otherwise, or (b) any applicable laws which impose mandatory recoupment, under circumstances set forth in such applicable laws, including the Sarbanes-Oxley Act of 2002.
Section 15. General Provisions.
15.1 Limited Transferability of Awards. Except as otherwise provided in the Plan, no Award shall be assigned, alienated, pledged, attached, sold or otherwise transferred or encumbered by a Participant, except by will or the laws of descent and distribution and/or as may be provided by the Committee in its discretion, at or after grant, in the Award Agreement, but in no event shall an Award be transferred to a third party for consideration. No transfer of an Award by will or by laws of descent and distribution shall be effective to bind the Company unless the Company shall have been furnished with written notice thereof and an authenticated copy of the will and/or such other evidence as the Committee may deem necessary or appropriate to establish the validity of the transfer.
15.2 Dividend Equivalents. In the sole and complete discretion of the Committee, an Award (excluding Options and SARs other than in connection with Section 4.2) may provide the Participant with dividends or dividend equivalents. All dividend or dividend equivalents which are not paid currently may, at the Committee’s discretion, accrue interest or be reinvested into additional Shares. In the case of dividends or dividend equivalents credited in connection with Performance Awards or Other Stock-Based Awards, dividends or dividend equivalent rights, if any, shall be credited as additional Performance Awards or Other Stock-Based Awards (including cash if so determined by the Committee) and paid to the Participant only if and when, and to the extent that, payment is made pursuant to such Award.
15.3 Compliance with Section 409A of the Code. No Award (or modification thereof) shall provide for deferral of compensation that does not comply with Section 409A of the Code unless the Committee, at the time of grant, specifically provides that the Award is not intended to comply with Section 409A of the Code. Notwithstanding any provision of this Plan to the contrary, if one or more of the payments or benefits received or to be received by a Participant pursuant to an Award would cause the Participant to incur any additional tax or interest under Section 409A of the Code, the Committee may reform such provision to maintain to the maximum extent practicable the original intent of the applicable provision without violating the provisions of Section 409A of the Code. In the event that it is reasonably determined by the Committee that, as a result of Section 409A of the Code, payments in respect of any Award under the Plan may not be made at the time contemplated by the terms of the Plan or the relevant Award Agreement, as the case may be, without causing the Participant holding such Award to be subject to taxation under Section 409A of the Code, the Company will make such payment on the first day that would not result in the Participant incurring any tax liability under Section 409A of the Code; which, if the Participant is a “specified employee” within the meaning of the Section 409A, shall be the first day following the six-month period beginning on the date of Participant’s termination of employment. Unless otherwise provided in an Award Agreement or other document governing the issuance of such Award, payment of any Award intended to qualify as a “short term deferral” within the meaning of Section 1.409A-1(b)(4)(i) of the U.S. Treasury Regulations shall be made between the first day following the close of the applicable performance period and the last day of the “applicable 2 1⁄2 month period” as defined therein. Notwithstanding the foregoing, each Participant is solely responsible and liable for the satisfaction of all taxes and penalties that may be imposed on him or her, or in respect of any payment or benefit delivered in connection with the Plan (including any taxes and penalties under Section 409A of the Code), and the Company shall not have any obligation to indemnify or otherwise hold any Participant harmless from any or all such taxes or penalties.
15.4 No Rights to Awards. No Person shall have any claim to be granted any Award, and there is no obligation for uniformity of treatment of Participants or holders or beneficiaries of Awards. The terms and conditions of Awards need not be the same with respect to each Participant.
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15.5 Share Certificates. All certificates for Shares or other securities of the Company or any Subsidiary or Affiliate delivered under the Plan pursuant to any Award or the exercise thereof shall be subject to such stop transfer orders and other restrictions as the Committee may deem advisable under the Plan or the rules, regulations and other requirements of the SEC or any state securities commission or regulatory authority, any stock exchange or other market upon which such Shares or other securities are then listed, and any applicable Federal or state laws, and the Committee may cause a legend or legends to be put on any such certificates to make appropriate reference to such restrictions.
15.6 Withholding. The Company shall have the right to deduct from any payment made under the Plan, or from any compensation or other amount owing to a Participant by the Company, any Affiliate or any Subsidiary, any federal, state or local income or other taxes required by law to be withheld with respect to such payment. It shall be a condition to the obligation of the Company to deliver Shares upon the exercise, vesting or payment of any Award that the Participant pays to the Company such amount as may be requested by the Company for the purpose of satisfying any liability for such withholding taxes; provided however, that the Committee may in its discretion permit a Participant to satisfy or arrange to satisfy, in whole or in part, the tax obligations incident to an Award by: (a) electing to have the Company withhold Shares or other property otherwise deliverable to such Participant pursuant to the Award and/or (b) tendering to the Company Shares owned by such Participant (or by such Participant and his or her spouse jointly) and purchased or held for the requisite period of time (if any) as may be required to avoid the Company’s or the Affiliates’ or Subsidiaries’ incurring an adverse accounting charge, based, in each case, on the Fair Market Value of the Shares on the payment or other relevant date as determined by the Committee. In no event will the Fair Market Value of the Shares to be withheld and delivered pursuant to this Section 15.6 exceed the minimum amount required to be withheld, unless (i) an additional amount can be withheld and not result in adverse accounting consequences, (ii) such additional withholding amount is authorized by the Committee, and (iii) the total amount withheld does not exceed the Participant’s estimated tax obligations attributable to the applicable transaction. Participants will also make such arrangements as the Company may require for the payment of any withholding tax or other obligation that may arise in connection with the disposition of Shares acquired upon the exercise of Stock Options. All such elections shall be irrevocable, made in writing, signed by the Participant, and shall be subject to any restrictions or limitations that the Committee, in its sole discretion, deems appropriate.
15.7 Award Agreements. Each Award hereunder shall be evidenced by a form of Award Agreement approved by the Board that shall be delivered to the Participant and may specify the terms and conditions of the Award and any rules applicable thereto. In the event of a conflict between the terms of the Plan and any Award Agreement, the terms of the Plan shall prevail. The Committee shall, subject to applicable law, determine the date an Award is deemed to be granted. The Committee or, except to the extent prohibited under applicable law, its delegate(s) may establish the terms of agreements or other documents evidencing Awards under this Plan and may, but need not, require as a condition to any such agreement’s or document’s effectiveness that such agreement or document be executed by the Participant, including by electronic signature or other electronic indication of acceptance, and that such Participant agree to such further terms and conditions as specified in such agreement or document. The grant of an Award under this Plan shall not confer any rights upon the Participant holding such Award other than such terms, and subject to such conditions, as are specified in this Plan as being applicable to such type of Award (or to all Awards) or as are expressly set forth in the agreement or other document evidencing such Award.
15.8 No Limit on Other Compensation Arrangements. Nothing contained in the Plan shall prevent the Company or any Subsidiary or Affiliate from adopting or continuing in effect other compensation arrangements, which may, but need not, provide for the grant of Options, Restricted Shares, Restricted Share Units or other types of Awards provided for hereunder.
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15.9 No Right to Employment. The grant of an Award shall not be construed as giving a Participant the right to be retained in the employ of the Company or any Subsidiary or Affiliate. Further, the Company or a Subsidiary or Affiliate may at any time dismiss a Participant from employment, free from any liability or any claim under the Plan, unless otherwise expressly provided in an Award Agreement.
15.10 No Rights as Stockholder. Subject to the provisions of the Plan and the applicable Award Agreement, no Participant or holder or beneficiary of any Award shall have any rights as a stockholder with respect to any Shares to be distributed under the Plan until such person has become a holder of such Shares.
15.11 Governing Law. The validity, construction and effect of the Plan and any rules and regulations relating to the Plan and any Award Agreement shall be determined in accordance with the laws of the State of Tennessee without giving effect to conflicts of laws principles.
15.12 Severability. If any provision of the Plan or any Award is, or becomes, or is deemed to be invalid, illegal or unenforceable in any jurisdiction or as to any Person or Award, or would disqualify the Plan or any Award under any law deemed applicable by the Committee, such provision shall be construed or deemed amended to conform to the applicable laws, or if it cannot be construed or deemed amended without, in the determination of the Committee, materially altering the intent of the Plan or the Award, such provision shall be stricken as to such jurisdiction, Person or Award and the remainder of the Plan and any such Award shall remain in full force and effect.
15.13 Other Laws. The Committee may refuse to issue or transfer any Shares or other consideration under an Award if, acting in its sole discretion, it determines that the issuance or transfer of such Shares or such other consideration might violate any applicable law or regulation (including applicable non-U.S. laws or regulations) or entitle the Company to recover the same under Exchange Act Section 16(b), and any payment tendered to the Company by a Participant, other holder or beneficiary in connection with the exercise of such Award shall be promptly refunded to the relevant Participant, holder or beneficiary.
15.14 No Trust or Fund Created. Neither the Plan nor any Award shall create or be construed to create a trust or separate fund of any kind or a fiduciary relationship between the Company or any Subsidiary or Affiliate and a Participant or any other Person. To the extent that any Person acquires a right to receive payments from the Company or any Subsidiary or Affiliate pursuant to an Award, such right shall be no greater than the right of any unsecured general creditor of the Company or any Subsidiary or Affiliate.
15.15 Data Privacy. As a condition for receiving any Award, each Participant explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of personal data as described in this Section 15.5 by and among the Company and its Subsidiaries and Affiliates exclusively for implementing, administering and managing the Participant’s participation in the Plan. The Company and its Subsidiaries and Affiliates may hold certain personal information about a Participant, including the Participant’s name, address and telephone number; birthdate; social security, insurance or other identification number; salary; nationality; job title(s); any shares held in the Company or its Subsidiaries and Affiliates; and Award details, to implement, manage and administer the Plan and Awards (the “Data”). The Company and its Subsidiaries and Affiliates may transfer the Data amongst themselves as necessary to implement, administer and manage a Participant’s participation in the Plan, and the Company and its Subsidiaries and Affiliates may transfer the Data to third parties assisting the Company with Plan implementation, administration and management. These recipients may be located in the Participant’s country, or elsewhere, and the Participant’s country may have different data privacy laws and protections than the recipient’s country. By accepting an Award, each Participant authorizes such recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, to implement, administer and manage the Participant’s participation in the Plan, including any required Data transfer to a broker or other third party with whom the Company or the Participant may elect to deposit any Shares. The Data related to a Participant will be held only as long as necessary to implement, administer and manage the Participant’s
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participation in the Plan. A Participant may, at any time, view the Data that the Company holds regarding such Participant, recommend any necessary corrections to the Data regarding the Participant or refuse or withdraw the consents in this Section 15.15 in writing, without cost, by contacting the local human resources representative. The Company may cancel the Participant’s ability to participate in the Plan and, in the Committee’s discretion, the Participant may forfeit any outstanding Awards if the Participant refuses or withdraws the consents in this Section 15.15. For more information on the consequences of refusing or withdrawing consent, Participants may contact their local human resources representative.
15.16 Headings. Headings are given to the sections and subsections of the Plan solely as a convenience to facilitate reference. Such headings shall not be deemed in any way material or relevant to the construction or interpretation of the Plan or any provision thereof.
Section 16. Term of the Plan.
16.1 Effective Date. The Original Plan was originally effective on May 14, 2020 (the “Original Effective Date”). This Plan shall be effective as of May 12, 2022 (the “Effective Date”), provided that the Plan has been approved by the Company’s stockholders at the Company’s 2022 virtual annual meeting of stockholders. Except as otherwise provided in this Plan, any Award made under the Plan on or after the Effective Date shall be subject to the terms of this Plan, any Award made under the Original Plan prior to the Effective Date shall be subject to the terms of the Original Plan.
16.2 Expiration Date. No new Awards shall be granted under the Plan after the tenth (10th) anniversary of the Original Effective Date. Unless otherwise expressly provided in the Plan or in an applicable Award Agreement, any Award granted hereunder may, and the authority of the Board or the Committee to amend, alter, adjust, suspend, discontinue or terminate any such Award or to waive any conditions or rights under any such Award shall, continue after the tenth (10th) anniversary of the Original Effective Date.
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