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Exhibit 4.3
CORRECTIONS CORPORATION OF AMERICA
NON-EMPLOYEE DIRECTORS' COMPENSATION PLAN
RECITALS
WHEREAS, Corrections Corporation of America (the "Company") pays its
Non-Employee Directors (as hereinafter defined) an Annual Retainer (as
hereinafter defined) as partial compensation for their services as directors of
the Company;
WHEREAS, the Board of Directors of the Company has determined it is in
the Company's best interest to encourage equity ownership in the Company by
Non-Employee Directors and to provide them with a further incentive to remain as
directors of the Company by allowing them to elect to receive between 50 and 100
percent of each of their Annual Retainer in shares of the Company's Common
Stock, $1.00 par value per share, (the "Common Stock"); and
WHEREAS, the terms and conditions under which such Non-Employee
Directors may elect to receive such Common Stock are set forth herein.
I. PLAN ADMINISTRATION AND ELIGIBILITY.
A. PURPOSE OF THE PLAN.
The purpose of this Non-Employee Directors' Compensation Plan (the
"Plan") is to encourage equity ownership in the Company by Non-Employee
Directors whose continued services are considered essential to the Company's
continued progress and thus to provide them with a further incentive to remain
as directors of the Company.
B. ADMINISTRATION OF THE PLAN.
The Board of Directors of the Company (the "Board") or any committee of
the Board (the "Committee") that will satisfy Rule 16b-3 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and any regulations
promulgated thereunder, as from time to time may be in effect, including any
successor rule ("Rule 16b-3"), shall supervise and administer the Plan. The
Committee, if such is created, shall consist solely of two or more "non-employee
directors," each of whom shall be appointed by the Board. For purposes of
determining who may serve on the Committee only, a member of the Board shall be
deemed to be a "non-employee director" only if he satisfies such requirements as
the Securities and Exchange Commission may establish for "non-employee
directors" under Rule 16b-3. Members of the Board or the Committee, if such is
created, shall receive no additional compensation for their services in
connection with the administration of the Plan.
The Board or the Committee, if such is created, may adopt such rules or
guidelines as they deem appropriate to implement the Plan. All questions of
interpretation of the Plan or of any shares
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issued under it shall be determined by the Board or the Committee, if such is
created, and such determination shall be final and binding upon all persons
having an interest in the Plan. Any or all powers and discretion vested in the
Board or the Committee, if such is created, under this Plan may be exercised by
any subcommittee so authorized by the Board or the Committee, if such is
created, that satisfies the requirements of Rule 16b-3.
C. PARTICIPATION IN THE PLAN.
Each member of the Board who is not an employee of the Company or its
subsidiaries (each, a "Non-Employee Director" or collectively, the "Non-Employee
Directors") shall be eligible to elect to receive up to 100 percent of each of
his Annual Retainer in Common Stock pursuant to the terms and conditions of the
Plan (a "Common Stock Payment"); provided however, that no Non-Employee
Director shall be allowed to request that less than 50% of such director's
Annual Retainer be received in Common Stock.
D. SHARES SUBJECT TO THE PLAN.
The maximum number of shares of the Company's common stock, $1.00 par
value per share (the "Common Stock"),which may be issued under the Plan shall be
100,000. The limitation on the number of shares of Common Stock which may be
issued under the Plan shall be subject to adjustment as provided in Section
III(C) of the Plan.
II. TERMS OF THE PLAN.
A. EFFECTIVE DATE AND DURATION OF THE PLAN.
The Plan shall take effect on June 1, 1998, pending adoption by the
shareholders of the Company at the Company's 1998 Annual Meeting of
Shareholders, and shall terminate only upon action by the Board. The Plan shall
terminate on May 31, 2008, unless earlier terminated by the Board of Directors
of the Company. No Common Stock Payments shall be made after the date on which
the Plan terminates. The applicable terms of the Plan, and any terms and
conditions applicable to the Common Stock Payments made prior to such date,
shall survive termination of the Plan and continue to apply to such Common Stock
Payments.
B. TIME FOR ISSUING SHARES.
No payments shall be made in Common Stock pursuant to the Plan after
the date the Plan is terminated. The applicable terms of this Plan, and any
terms and conditions applicable to the Common Stock issued prior to such date,
shall survive the termination of the Plan and continue to apply to such Common
Stock.
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C. TERMS AND CONDITIONS OF THE PLAN.
i. COMPENSATION ALTERNATIVES.
Commencing on June 1, 1998, a Non-Employee Director may make one
election to receive up to 100 percent of his Annual Retainer to be paid for the
year beginning on June 1, 1998, and ending on May 31, 1999 (the "Initial Plan
Year"), in Common Stock. Such election must be in writing and shall be delivered
to the Corporate Secretary of the Company no later than May 25, 1998. This
election shall be irrevocable and shall specify the applicable percentage of the
Annual Retainer that such participant wishes to receive in Common Stock;
provided, however, that no Non-Employee Director shall be allowed to request
that less than 50% of such director's Annual Retainer be received in Common
Stock. Common Stock payments pursuant to this paragraph will be made on July 1,
1998; provided, however, that should a Non-Employee Director fail to make an
election by May 25, 1998, as provided in this paragraph, the Annual Retainer
payable to such director pursuant to this paragraph shall be paid in cash in
quarterly installments paid in advance on the first day of each quarter of the
Initial Plan Year.
For all subsequent years, a Non-Employee Director may make one election
(the "Annual Election") for the period from June 1 of one calendar year to May
31 of the next calendar year (the "Plan Year" or the "Election Period") to
receive up to 100 percent of each of his Annual Retainer in Common Stock. The
Annual Election must be in writing and shall be delivered to the Corporate
Secretary of the Company not later than May 25 of each year. The Annual Election
shall be irrevocable with respect to the Election Period for which it pertains
and shall specify the applicable percentage of the Annual Retainer that such
Non-Employee Director wishes to receive in Common Stock; provided, however, that
no Non-Employee Director shall be allowed to request that less than 50% of such
director's Annual Retainer be received in Common Stock. If a Non-Employee
Director fails to make a timely Annual Election for any Election Period in
accordance herewith, the Annual Retainer payable to such director for such
period shall be paid in cash on the Payment Dates (as hereinafter defined).
ii. PAYMENT OF SHARES.
Payment of the Annual Retainer, whether in the form of Common Stock or
in cash, pursuant to this Plan, shall be made as follows:
(a) The amount of each Non-Employee Director's Annual Retainer to
be paid in Common Stock, if any, shall be annually paid in
advance on June 1 of each Plan Year. The amount to be paid in
cash, if any, shall be prorated and paid quarterly, in equal
amounts, on the Payment Dates (i.e., if the Annual Retainer
for directors is $24,000 for a given Election Period and he or
she elects 50% in Common Stock and 50% in cash, then $12,000
worth of Common Stock will be paid on June 1 and $3,000 in
cash paid on each of June 1, September 1, December 1, and
March 1 of the Plan Year).
(b) The number of shares of Common Stock to be issued in payment
of retainers and
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fees that have been denominated in dollars shall be calculated
on the basis of the Fair Market Value (as hereinafter defined)
on the first Business Day preceding the Payment Date as of
which such Common Stock is to be issued.
iii. FORM OF ISSUANCE OF COMMON STOCK.
Common Stock issued under the Plan shall be in either book entry form
or in certificate form pursuant to the instructions given by the Non-Employee
Director to the Company's transfer agent.
iv. FRACTIONS OF SHARES.
The Company shall not issue fractions of shares of Common Stock.
Whenever, under the terms of the Plan, a fractional share of Common Stock would
otherwise be required to be issued, the Non-Employee Director shall be paid in
cash for such fractional share of Common Stock based upon the same Fair Market
Value which was utilized to determine the number of shares of Common Stock to be
issued on the Payment Date.
H. BENEFIT UPON DEATH.
In the event of a Non-Employee Director's death, any and all unpaid
Annual Retainer will be paid in accordance with such Non-Employee Director's
then current Annual Election to his estate, and such person's payments will be
transferable by will or pursuant to laws of descent and distribution applicable
to such person.
III. GENERAL PROVISIONS.
A. ASSIGNMENTS.
The rights and benefits accruing to the Company's Non-Employee
Directors under this Plan may not be assigned by any such director.
B. LIMITATION OF RIGHTS.
Neither the Plan, nor the issuance of any shares of Common Stock nor
any other action taken pursuant to the Plan, shall constitute or be evidence of
any agreement or understanding, express or implied, that the Company will retain
a director for any period of time, or at any particular rate of compensation.
C. SHARE ADJUSTMENT.
In the event of any merger, consolidation, reorganization,
recapitalization, stock dividend, share split, or other change in the corporate
structure or capitalization affecting the Company's Common Stock, at the time of
such event the Board or the Committee, if such is created, shall make
appropriate adjustments to the number (including the aggregate numbers specified
in Section I (D)
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above) and kind of shares to be issued under the Plan.
D. AMENDMENT OF THE PLAN.
The Board shall have the right to amend, modify, suspend or terminate
the Plan at any time for any purpose; provided, that following the initial
approval of the Plan by the Company's shareholders, the Company will seek
shareholder approval for any change to the extent required by applicable law,
regulation or rule or any rule or regulation of the New York Stock Exchange (or
any other applicable national stock exchange).
E. DEFINITIONS.
"Annual Retainer" shall mean the amount of cash compensation to which a
Non-Employee Director will be entitled to receive for serving as a director for
one Plan Year or Election Period, but shall not include reimbursement for
expenses, Meeting Fees, fees associated with service on any committee of the
Board or fees with respect to any other services to be provided to the Company.
"Business Day" shall mean, if relevant to a determination of the value
of Common Stock, a day on which shares of Common Stock are or could be traded on
the New York Stock Exchange (or other national stock exchange, or if not so
listed, could be traded over-the-counter). In all other cases, the term shall
mean a day on which the offices of the Company are open for the conduct of
business in the normal course.
"Fair Market Value" shall be the mean of the highest and lowest selling
prices for the Common Stock on the New York Stock Exchange on the date in
question, as reported in The Wall Street Journal, or if no sales of Common Stock
were made on that date, the mean of the highest and lowest prices of the Common
Stock on the first preceding day on which sales were made.
"Meeting Fees" shall mean the amount to which a Non-Employee Director
will be entitled to receive for attending meetings, whether annual or special,
of the Board and of any committee of the Board on which the Non-Employee
Director serves, or for any other fees to be paid to the members of the Board,
but shall not include reimbursement for expenses.
"Payment Date" shall mean June 1, September 1, December 1 and March 1
of any Election Period, or if any such day is not a Business Day, on the first
Business Day following such day.
F. COMPLIANCE WITH SECTION 16 OF THE EXCHANGE ACT.
It is the Company's intent that the Plan comply in all respects with
Rule 16b-3. If any provision of this Plan is found not to be in compliance with
such rule (or any successor provision), the provision shall be deemed null and
void, and the remaining provisions of the Plan shall continue in full force and
effect. All transactions under this Plan shall be executed in accordance with
the requirements of Section 16 of the Exchange Act and the rules and regulations
promulgated thereunder. The Board or the Committee, if such is created, may, in
its sole discretion, modify the terms and conditions of this Plan in response to
and consistent with any changes in applicable law,
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rule or regulation.
G. NOTICE.
Any written notice to the Company required by any of the provisions of
this Plan shall be addressed to the Corporate Secretary of the Company and shall
become effective when it is received by the Corporate Secretary.
H. GOVERNING LAW.
This Plan and all determinations made and actions taken pursuant hereto
shall be governed by the law of the State of Tennessee and construed
accordingly.