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Exhibit 4.3
CCA PRISON REALTY TRUST
NON-EMPLOYEE TRUSTEES' SHARE OPTION PLAN
1. Purpose. The purpose of the CCA Prison Realty Trust Non-Employee
Trustees' Share Option Plan (the "Plan") is to advance the interests of CCA
Prison Realty Trust (the "Company") and its shareholders by encouraging
increased share ownership by members of the Board of Trustees (the "Board") of
the Company who are not employees of the Company, any subsidiary of the Company,
Corrections Corporation of America ("CCA"), or any subsidiary of CCA to enhance
long-term shareholder value through continuing ownership of the Company's common
shares.
2. Administration.
(a) The Plan shall be administered by the Compensation
Committee of the Board. The Compensation Committee shall have all the
powers vested in it by the terms of the Plan, which shall include the
authority (within the limitations described herein) to prescribe the
form of the agreements embodying awards of non-qualified options (the
"Options"). The Compensation Committee, subject to the provisions of
the Plan, shall grant Options under the Plan and shall have the power
to construe the Plan, to determine all questions arising hereunder, and
to adopt and amend such rules and regulations for the administration of
the Plan as it may deem desirable. Any decision of the Compensation
Committee in the administration of the Plan shall be final and
conclusive. The Compensation Committee may act only by a majority of
its members in office, except that the members of the Compensation
Committee may authorize any one or more of their members or the
Secretary or any other officer of the Company to execute and deliver
documents on behalf of the Compensation Committee.
(b) Each person who is or shall have been a member of the
Compensation Committee shall be indemnified and held harmless by the
Company against and from any and all loss, cost, liability, or expense
that may be imposed upon or reasonably incurred by him in connection
with or resulting from any claim, action, suit, or proceeding to which
he may be or become involved by reason of any action taken or failure
to act under the Plan and against and from any and all amounts paid by
him in settlement thereof (with the Company's written approval) or paid
by him in satisfaction of a judgment in any such action, suit, or
proceeding, except a judgment in favor of the Company based upon a
finding of his lack of good faith; subject, however, to the conditions
that upon the institution of any claim, action, suit, or proceeding
against him, he shall in writing give the Company an opportunity, at
its expense, to handle and defend the same before he undertakes to
handle and defend it on such person's own behalf. The foregoing right
of indemnification shall not be exclusive of any other right to which
such person may be entitled as a matter of law or otherwise, or any
power that the Company may have to indemnify him or hold him harmless.
Each member of the Compensation Committee and each officer and employee
of the Company shall be fully justified in relying or acting in good
faith upon any information furnished in connection with the
administration of the Plan by an appropriate person or persons other
than himself. In no event shall any person who is or shall have been a
member of the Compensation
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Committee or an officer or employee of the Company be held liable for
any determination made or other action taken or any omission to act in
reliance upon any such information as referred to in the preceding
sentence, or for any action (including the furnishing of information)
taken or any omission to act, when such determination, action, or
omission is made in good faith.
3. Participation. Each member of the Board of the Company who is not an
employee of the Company, any subsidiary of the Company, CCA or any subsidiary of
CCA (a "Non-Employee Trustee") shall receive Options in accordance with Section
5 below. As used herein, the term "subsidiary" means any corporation at least
40% of the outstanding voting stock of which is owned, directly or indirectly,
by the Company or CCA, as the case may be.
4. Awards Under the Plan.
(a) Type of Awards. Awards under the Plan shall include only
Options, which are rights to purchase common shares of the Company
having a par value of $.01 per share (the "Shares"). All Options are
subject to the terms, conditions, and restrictions specified in
Paragraph 5 below.
(b) Maximum Number of Shares That May Be Issued. No more than
150,000 Shares, subject to adjustment as provided in Paragraph 6 below,
may be issued under the Plan pursuant to the exercise of Options.
(c) Rights with Respect to Shares. A Non-Employee Trustee to
whom an Option is granted (and any person succeeding to such a
Non-Employee Trustee rights pursuant to the Plan) shall have no rights
as a shareholder with respect to any Shares issuable pursuant to any
such Option until the date of the issuance of a share certificate to
him for such Shares. Except as provided in Paragraph 6 below, no
adjustment shall be made for dividends, distributions, or other rights
(whether ordinary or extraordinary, and whether in cash, securities, or
other property) for which the record date is prior to the date such
share certificate is issued.
5. Non-Qualified Options. All Options shall be options which are not
"incentive stock options" within the meaning of Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"). Each Option shall be evidenced by
an agreement in such form as the Board shall prescribe from time to time in
accordance with the Plan and shall be subject to the following terms and
conditions:
(a) The option price per Share shall be 100% of the fair
market value per Share at grant. The fair market value per Share on any
given date, unless otherwise determined by the Compensation Committee
in good faith, shall be the reported closing price of a Share on the
New York Stock Exchange or, if no such sale of Shares is reported on
the New York Stock Exchange on such date, the fair market value of the
Share as determined by the Board
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in good faith. The options granted to Founding Trustees (as defined
below) upon effectiveness of the Registration Statement (as defined
below) will have an exercise price equal to the initial public
offering price.
(b) Each Non-Employee Trustee as of the date the initial
Registration Statement on Form S-11(the "Registration Statement") is
declared effective by the Securities and Exchange Commission relating
to the offering of 18,500,000 Shares will receive an Option to purchase
5,000 Shares on the date of the Registration Statement (each such
trustee, a "Founding Trustee"). Each Non-Employee Trustee who is not a
Founding Trustee (a "Non-Founding Trustee") will receive an Option to
purchase 5,000 Shares on the date the Non-Founding Trustee is first
elected or appointed to the Board of Trustees. In addition to the
foregoing, each Non-Employee Trustee will receive an Option to purchase
5,000 Shares on each of the nine anniversary dates of the adoption of
the Plan.
(c) The term of each Option shall be fixed by the Compensation
Committee, but no Option shall be exercisable more than ten years after
the date the Option is granted.
(d) Options shall be exercisable at such time or times and
subject to such terms and conditions as shall be determined by the
Board at or after grant. If the Compensation Committee provides, in its
sole discretion, that any Option is exercisable only in installments,
the Compensation Committee may waive such installment exercise
provisions at any time at or after grant in whole or in part, based on
such factors as the Compensation Committee shall determine, in its sole
discretion.
(e) Subject to whatever installment exercise provisions apply
under subparagraph (d), Options may be exercised in whole or in part at
any time during the option period, by giving written notice of exercise
to the Company specifying the number of Shares to be purchased. Such
notice shall be accompanied by payment in full of the purchase price
either by check, note or such other instrument as the Compensation
Committee may accept. As determined by the Compensation Committee in
its sole discretion, at or after grant, payment in full or in part may
also be made in the form of a share option or Shares already owned by
the Non-Employee Trustee (based, in each case, on the fair market value
of the share option or the Shares on the date the Option is exercised,
as determined by the Compensation Committee in accordance with
subparagraph (a)). No Shares shall be issued until full payment
therefor has been made. Upon purchase of Shares, an optionee shall make
such representations, warranties and covenants as the Compensation
Committee may request.
(f) The Compensation Committee may, in its discretion,
authorize all or a portion of the Options to be granted to a
Non-Employee Trustee to be on terms which permit transfer by such
optionee to (i) the spouse, children or grandchildren of the
Non-Employee Trustee ("Immediate Family Members"), (ii) a trust or
trusts for the exclusive benefit of such Immediate Family Members,
(iii) a partnership in which such Immediate Family Members are the only
partners, or (iv) certain affiliates of the Non-Employee Trustee, as
determined
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by the Compensation Committee, provided that (x) there may be no
consideration for any such transfer, (y) the share option agreement
pursuant to which such Options are granted must be approved by the
Compensation Committee, and must expressly provide for transferability
in a manner consistent with this Section, and (z) subsequent transfers
of transferred Options shall be prohibited except those in accordance
with this subparagraph (f). Following transfer, any such Options shall
continue to be subject to the same terms and conditions as were
applicable immediately prior to transfer, provided that for purposes
of this Plan or the option agreement executed pursuant hereto, the
term "optionee" or "Non-Employee Trustee" shall be deemed to refer to
the transferee.
6. Capital Adjustments. In the event of any merger, reorganization,
consolidation, recapitalization, share dividend, share split or other change in
corporate structure affecting the Shares, an adjustment shall be made in the
aggregate number of Shares reserved for issuance under the Plan and in the
number and price of Shares subject to outstanding Options granted under the
Plan, as may be determined to be appropriate by the Compensation Committee, in
its sole discretion, provided that the number of Shares subject to an Option
shall always be a whole number.
7. Authority to Issue Shares. The Company, during the term of the
Options granted hereunder, will at all times reserve and keep available, and
will seek to obtain from any regulatory body having jurisdiction, any requisite
authority in order to issue and sell such number of Shares as shall be
sufficient to satisfy the requirements of the Options granted under the Plan. If
in the opinion of its counsel the issuance or sale of any Shares hereunder shall
not be lawful for any reason, including the inability of the Company to obtain
from any regulatory body having jurisdiction, authority deemed by such counsel
to be necessary to such issuance or sale, the Company shall not be obligated to
issue or sell any such Shares.
8. Ownership Limitation. All Options shall be subject to the ownership
limitations set forth in the Declaration of Trust of the Company. Without
limiting the generality of the foregoing, any Option which causes a Non-Employee
Trustee, or any constructive or beneficial owner of Shares subject to such
Option (as determined under Sections 318 and 544, respectively, of the Code), to
own or be deemed to own Shares in excess of such ownership limitations shall be
void ab initio.
9. Miscellaneous Provisions.
(a) No Non-Employee Trustee or other person shall have any
claim or right to be granted an Option under the Plan. Neither the Plan
nor any action taken hereunder shall be construed as giving a
Non-Employee Trustee any right to be retained in the service of the
Company.
(b) Except as provided in Section 5 (f), an optionee's rights
and interests under the Plan may not be assigned or transferred in
whole or in part either directly or by operation of law or otherwise
(except in the event of a optionee's death, by will or the laws of
descent and distribution), including, but not by way of limitation,
execution, levy, garnishment,
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attachment, pledge, bankruptcy, or in any manner, and no such right or
interest of any participant in the Plan shall be subject to any
obligation or liability of such participant.
(c) No Shares shall be issued hereunder unless counsel for the
Company shall be satisfied that such issuance will be in compliance
with applicable federal, state, and other securities laws.
(d) The expenses of administration of the Plan shall be borne
by the Company.
(e) The Plan shall be unfunded. The Company shall not be
required to establish any special or separate fund or to make any other
segregation of assets to ensure the issuance of Shares upon exercise of
any Option under the Plan and issuance of Shares upon exercise of
Options shall be subordinate to the claims of the Company's general
creditors.
(f) By accepting any Option or other benefit under the Plan,
each optionee and each person claiming under or through an optionee
shall be conclusively deemed to have indicated his or her acceptance
and ratification of, and consent to, any action taken under the Plan by
the Company or the Compensation Committee.
(g) The appropriate officers of the Company shall cause to be
filed any reports, returns, or other information regarding Options
hereunder or any Shares issued pursuant hereto as may be required by
the Securities Exchange Act of 1934, as amended, the Securities Act of
1933, as amended, or any other applicable statute, rule, or regulation
(excluding reports pursuant to Section 16 of the Securities Exchange
Act of 1934, which shall be the sole responsibility of a Non-Employee
Trustee who exercises an Option).
10. Amendment. The Plan may be amended at any time and from time to
time by the Board as the Board shall deem advisable. No amendment of the Plan
shall materially and adversely affect any right of any optionee with respect to
any Option theretofore granted without such optionee's written consent.
11. Effective Date. This Plan shall be effective on Monday,
April 21, 1997.
12. Termination. This Plan shall terminate upon the earlier of the
following dates or events to occur:
(a) the adoption of a resolution of the Board terminating the
Plan; or
(b) December 31, 2007.
No termination of the Plan shall materially and adversely affect any of
the rights or obligations of any person, without his consent, under any Option
theretofore granted under the Plan.
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