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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 17, 2011 (May 11, 2011)
Corrections Corporation of America
(Exact name of registrant as specified in its charter)
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Maryland
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001-16109
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62-1763875 |
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(State or Other Jurisdiction of Incorporation)
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(Commission File Number)
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(I.R.S. Employer
Identification No.) |
10 Burton Hills Boulevard, Nashville, Tennessee 37215
(Address of principal executive offices) (Zip Code)
(615) 263-3000
(Registrants telephone number, including area code)
Not Applicable
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following provisions (see General
Instruction A.2. below):
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Written communications pursuant to Rule 425 under the Securities
Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act
(17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under
the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c)) |
Item 5.02 Departure of Directors or Principal Officers; Election of Directors; Appointment of
Certain Officers; Compensatory Arrangements of Certain Officers.
At the Annual Meeting of Stockholders of Corrections Corporation of America (the Company)
held on May 12, 2011, the Companys stockholders approved the amendment and restatement of the
Corrections Corporation of America 2008 Stock Incentive Plan (the 2008 Plan).
The following is a brief summary of the principal features of the 2008 Plan, as amended and
restated, which is qualified in its entirety by reference to the full text of the 2008 Plan, a copy
of which is attached hereto as Exhibit 10.1 and incorporated herein by reference.
Shares Available for Awards under the Plan. Under the 2008 Plan, awards may be made in common
stock of the Company. Subject to adjustment as provided by the terms of the 2008 Plan, the maximum
aggregate number of shares of common stock with respect to which awards may be granted under the
2008 Plan is 18.0 million. Each share subject to an option or stock appreciation right (SAR), or
a performance award or other stock-based award if the amounts payable thereunder will be determined
by reference to the appreciation of a share, shall reduce the aggregate number of Shares with
respect to which awards may be granted by one share. For awards granted prior to the date on which
the stockholders of the Company approved an amendment and restatement, each share issued pursuant
to a restricted share award, restricted share unit award, performance award or other stock-based
award (including any dividends or dividend equivalents payable in shares with respect to such
awards prior to the vesting of such awards), if the amounts payable thereunder will be determined
by reference to the full value of a share, shall reduce the aggregate number of shares with respect
to which awards may be granted by three shares. For awards granted on or after the date on which
the stockholders of the Company approved the amendment and restatement, each share issued pursuant
to a restricted share award, restricted share unit award, performance award or other stock-based
award (including any dividends or dividend equivalents payable in shares with respect to such
awards prior to the vesting of such awards), if the amounts payable thereunder will be determined
by reference to the full value of a share, shall reduce the aggregate number of Shares with respect
to which Awards may be granted by 2.25 Shares. Notwithstanding the foregoing and subject to
adjustment as provided in the 2008 Plan, no Participant may receive stock options or SARs under the
Plan in any calendar year that, taken together, relate to more than 300,000 shares.
If any shares covered by an award under the 2008 Plan are forfeited or if any such award
otherwise terminates, expires unexercised, is settled in cash or is canceled, such shares shall
again become shares with respect to which awards can be made under the 2008 Plan in accordance with
the formula described above. Shares of common stock issued under the 2008 Plan may be either newly
issued shares or shares that have been reacquired by the Company. However, (i) the gross number of
shares issued pursuant to an award under the 2008 Plan that is not later forfeited, terminated,
expired, settled in cash or canceled shall be deducted from the total number of shares available
for grant under the 2008 Plan, (ii) any SARs to be settled in shares shall be counted in full
against the number of shares available for issuance under the 2008 Plan, regardless of the number
of shares issued upon settlement of the SARs, and (iii) shares that are canceled, tendered or
withheld in payment of all or part of the exercise price of an award or in satisfaction of
withholding tax obligations, and shares that are reacquired with cash tendered in payment of the
exercise price of an award, shall not be included in or added to the number of shares available for
grant under the 2008 Plan. Shares issued by the Company as substitute awards granted solely in
connection with the assumption of outstanding awards previously granted by a company acquired by
the Company, or with which the Company combines (Substitute Awards), do not reduce the number of
shares available for awards under the 2008 Plan.
In addition, the 2008 Plan imposes individual limitations on the amount of certain awards in
order to comply with Section 162(m) of the Internal Revenue Code of 1986, as amended (the Code).
Under these limitations, no single participant may receive options or stock appreciation rights
(SARs) in any calendar year that, taken together, relate to more than 300,000 shares of common
stock, subject to adjustment in certain circumstances.
With certain limitations, awards made under the 2008 Plan shall be adjusted by the
Compensation Committee of the Board of Directors (the Committee) to prevent dilution or
enlargement of benefits or potential benefits intended to be made available under the 2008 Plan in
the event of any stock dividend, reorganization, recapitalization, stock split, combination,
merger, consolidation, change in laws, regulations or accounting principles or other relevant
unusual or nonrecurring event affecting the Company.
Eligibility and Administration. Current and prospective officers and employees, and directors
of, and consultants to, the Company or its subsidiaries or affiliates are eligible to be granted
awards under the 2008 Plan. As of February 28, 2011, approximately 175 individuals were eligible to
participate in the 2008 Plan. The Committee will administer the 2008 Plan, except with respect to
awards to non-employee directors, for which the 2008 Plan will be administered by the Board. The
Committee will be composed of not less than two non-employee directors, each of whom will be a
Non-Employee Director for purposes of Section 16 of the Exchange Act and Rule 16b-3 thereunder,
an outside director within the meaning of Section 162(m) and the regulations promulgated under
the Code and will be an independent director as defined by the listing standards of the NYSE.
Subject to the terms of the 2008 Plan, the Committee is authorized to select participants,
determine the type and number of awards to be granted, determine and later amend (subject to
certain limitations) the terms and conditions of any award, interpret and specify the rules and
regulations relating to the 2008 Plan, and make all other determinations which may be necessary or
desirable for the administration of the 2008 Plan.
Stock Options and Stock Appreciation Rights. The Committee is authorized to grant stock
options, including both incentive stock options, which can result in potentially favorable tax
treatment to the participant, and non-qualified stock options. The Committee may specify the terms
of such grants subject to the terms of the 2008 Plan. The Committee is also authorized to grant
SARs, either with or without a related option. The exercise price per share subject to an option is
determined by the Committee, but may not be less than the fair market value of a share of common
stock on the date of the grant, except in the case of Substitute Awards. The maximum term of each
option or SAR, the times at which each option or SAR will be exercisable, and the provisions
requiring forfeiture of unexercised options at or following termination of employment generally are
fixed by the Committee, except that no option or SAR relating to an option may have a term
exceeding 10 years. Incentive stock options that are granted to holders of more than 10% of the
Companys voting securities are subject to certain additional restrictions, including a five-year
maximum term and a minimum exercise price of 110% of fair market value.
A stock 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. Stock options and
SARs shall be exercised by written notice of intent to exercise the stock option or SAR and, with
respect to options, payment in full to the Company of the amount of the option price for the number
of shares with respect to which the option is then being exercised.
Payment of the option price must 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 such 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)
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. Until the optionee has been issued the shares subject to such
exercise, he or she shall possess no rights as a stockholder with respect to such shares.
Restricted Shares and Restricted Share Units. The Committee is authorized to grant restricted
shares of common stock and restricted share units. Restricted shares are shares of common stock
subject to transfer restrictions as well as forfeiture upon certain terminations of employment
prior to the end of a restricted period or other conditions specified by the Committee in the award
agreement. A participant granted restricted shares of common stock generally has most of the rights
of a stockholder of the Company with respect to the restricted shares, including the right to
receive dividends and the right to vote such shares. None of the restricted shares may be
transferred, encumbered or disposed of during the restricted period or until after fulfillment of
the restrictive conditions.
Each restricted share unit has a value equal to the fair market value of a share of common
stock on the date of grant. The Committee determines, in its sole discretion, the restrictions
applicable to the restricted share units. A participant will be credited with dividend equivalents
on any vested restricted share units at the time of any payment of dividends to stockholders on
shares of common stock. Except as determined otherwise by the Committee, restricted share units may
not be transferred, encumbered or disposed of, and such units shall terminate, without further
obligation on the part of the Company, unless the participant remains in continuous employment of
the Company for the restricted period and any other restrictive conditions relating to the
restricted share units are met.
Performance Awards. A performance award consists of a right that is denominated in cash or
shares of common stock, valued in accordance with the achievement of certain performance goals
during certain performance periods as established by the Committee, and payable at such time and in
such form as the Committee shall determine. Performance awards may be paid in a lump sum or in
installments following the close of a performance period or on a deferred basis, as determined by
the Committee. Termination of employment prior to the end of any performance period, other than for
reasons of death or total disability, will result in the forfeiture of the performance award. A
participants rights to any performance award may not be transferred, encumbered or disposed of in
any manner, except by will or the laws of descent and distribution or as the Committee may
otherwise determine. No performance award may have a term in excess of 10 years.
Performance awards are subject to certain specific terms and conditions under the 2008
Plan. Unless otherwise expressly stated in the relevant award agreement, each award granted to a
Covered Officer under the 2008 Plan is intended to be performance-based compensation within the
meaning of Section 162(m). Performance goals for Covered Officers (as defined in the 2008 Plan)
will be limited to one or more of the following financial performance measures relating to the
Company or any of its subsidiaries, operating units, business segments or divisions: (a) earnings
before interest, taxes, depreciation and/or amortization; (b) operating income or profit; (c)
operating efficiencies; (d) return on equity, assets, capital, capital employed or investment; (e)
net income; (f) earnings per share; (g) utilization; (h) net investment income; (i) gross profit;
(j) loan loss ratios; (k) stock price or total stockholder return; (l) net asset growth; (m) debt
reduction; (n) 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; or (o) any combination thereof. Each goal may be expressed on an absolute and/or
relative basis, may be based on or otherwise employ comparisons based on internal targets, the past
performance of the Company or any subsidiary, operating unit or division of the
Company and/or the past or current performance of other companies, and in the case of
earnings-based measures, may use or employ comparisons relating to capital, stockholders stock
and/or shares outstanding, or to assets or net assets. The Committee may appropriately adjust any
evaluation of performance under criteria set forth in the 2008 Plan to exclude any of the following
events that occurs during a performance period: (i) asset impairments or write-downs, (ii)
litigation or claim judgments or settlements, (iii) the effect of changes in tax law, accounting
principles or other such laws or provisions affecting reported results, (iv) accruals for
reorganization and restructuring programs, (v) any extraordinary non-recurring items as described
in Financial Accounting Standard 144 and/or in managements discussion and analysis of financial
condition and results of operations appearing in the Companys annual report to stockholders for
the applicable year, (vi) the effect of adverse governmental or regulatory action, or delays in
governmental or regulatory action; provided, that the Committee commits to make any such
adjustments within the 90 day period described in the following paragraph, (vii) any event either
not directly related to the operations of the Company or not within the reasonable control of the
Companys management, or (viii) any other similar item selected by the Committee in its sole
discretion.
To the extent necessary to comply with Section 162(m) of the Code, with respect to grants of
performance awards, no later than 90 days following the commencement of each performance period (or
such other time as may be required or permitted by Section 162(m)), the Committee will, in writing,
(1) select the performance goal or goals applicable to the performance period, (2) establish the
various targets and bonus amounts which may be earned for such performance period, and (3) specify
the relationship between performance goals and targets and the amounts to be earned by each Covered
Officer for such performance period. Following the completion of each performance period, the
Committee will certify in writing whether the applicable performance targets have been achieved and
the amounts, if any, payable to Covered Officers for such performance period. In determining the
amount earned by a Covered Officer for a given performance period, subject to any applicable award
agreement, the Committee shall have the right to reduce (but not increase) the amount payable at a
given level of performance to take into account additional factors that the Committee may deem
relevant to the assessment of individual or corporate performance for the performance period. With
respect to any Covered Officer, the maximum annual number of shares in respect of which all
performance awards may be granted under the 2008 Plan is 300,000 and the maximum annual amount of
all performance awards that are settled in cash is $3,500,000.
Other Stock-Based Awards. The Committee is authorized to grant any other type of awards that
are denominated or payable in, valued by reference to, or otherwise based on or related to shares
of common stock. The Committee will determine the terms and conditions of such awards, consistent
with the terms of the 2008 Plan. No such award may have a term in excess of ten (10) years.
Non-Employee Director Awards. Subject to applicable legal requirements, the Board may provide
that all or a portion of a non-employee directors annual retainer and/or retainer fees or other
awards or compensation as determined by the Board be payable in non-qualified stock options,
restricted shares, restricted share units and/or other stock-based awards, including unrestricted
shares, either automatically or at the option of the non-employee directors. The Board will
determine the terms and conditions of any such awards, including those that apply upon the
termination of a non-employee directors service as a member of the Board. Non-employee directors
are also eligible to receive other awards pursuant to the terms of the 2008 Plan, including options
and SARs, restricted shares and restricted share units, and other stock-based awards upon such
terms as the Committee may determine; provided, however, that with respect to awards made
to members of the Committee, the 2008 Plan will be administered by the Board.
Termination of Employment. The Committee will determine the terms and conditions that apply to
any award upon the termination of employment with the Company, its subsidiaries and affiliates, and
provide such terms in the applicable award agreement or in its rules or regulations.
Change in Control. The Committee may specify in the applicable award agreement at or after
grant, or otherwise by resolution prior to a Change in Control (as defined in the plan), that
all or a portion of the outstanding awards under the 2008 Plan shall vest, become immediately
exercisable or payable and have all restrictions lifted upon a Change in Control.
Amendment and Termination. The Board may amend, alter, suspend, discontinue or terminate the
2008 Plan or any portion of the 2008 Plan at any time, provided that no such amendment, alteration,
suspension, discontinuation or termination shall be made without stockholder approval if (a) such
approval is necessary to comply with any tax or regulatory requirement for which or with which the
Board deems it necessary or desirable to comply or (b) if such amendment, alteration, suspension,
discontinuation or termination constitutes a material revision to the Plan. Among other things, a
material revision includes (i) a material increase in the number of shares subject to the 2008
Plan; (ii) an expansion of the types of awards under the 2008 Plan; (iii) a material expansion of
the class of employees, directors or other participants eligible to participate in the 2008 Plan;
(iv) a material extension of the term of the 2008 Plan and (v) a material change to the method of
determining option price under the 2008 Plan. A material revision does not include any revision
that curtails rather than expands the scope of the Plan. Subject to certain restrictions in the
2008 Plan, the Committee may waive any conditions or rights under, amend any terms of, or alter,
suspend, discontinue, cancel or terminate any award, either prospectively or retroactively. The
Committee does not have the power, however, to amend the terms of previously granted options to
reduce the exercise price per share subject to such option or to cancel such options and grant
substitute options with a lower exercise price per share than the canceled options. The Committee
also may not materially and adversely affect the rights of any award holder without the award
holders consent.
Other Terms of Awards. The Company may take action, including the withholding of amounts from
any award made under the 2008 Plan, to satisfy withholding and other tax obligations. The Committee
may provide for additional cash payments to participants to defray any tax arising from the grant,
vesting, exercise or payment of any award.
Effective Date. The 2008 Plan became effective as of January 1, 2008. No new awards may be
granted under the 2008 Plan after January 1, 2018, the tenth anniversary of the effective date of
the 2008 Plan.
In addition, on May 11, 2011 the Compensation Committee of the Companys Board of Directors
approved a new form of restricted stock award agreement to be utilized with respect to awards of
restricted stock to non-employee directors under the 2008 Plan, which is attached hereto as
Exhibit 10.2, and is incorporated herein by reference.
Item 5.07 Submission of Matters to a Vote of Security Holders.
On May 12, 2011, the Company held its Annual Meeting of Stockholders (the Annual Meeting),
for which the Board of Directors solicited proxies, at 10:00 a.m. local time at the Companys
headquarters located at 10 Burton Hills Boulevard, Nashville, Tennessee. At the Annual Meeting,
the stockholders voted on the following proposals as described in the Companys Proxy Statement
dated March 25, 2011. A total of 99,701,966 of the Companys common stock, out of a total of
109,181,122 shares of common stock outstanding and entitled to vote, were present in person or
represented by proxies at the Annual Meeting. The proposals voted on and approved by the
stockholders at the Annual Meeting were as follows:
Proposal 1: Election of Directors
The election of 13 persons, named in the Proxy Statement, to serve as members of the Companys
Board of Directors until the Annual Meeting of Stockholders in 2012. The following is a list of
the directors elected at the Annual Meeting with the number of votes For and Withheld, as well
as the number of Broker Non-Votes:
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NOMINEE |
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FOR |
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WITHHELD |
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BROKER NON-VOTES |
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John D. Ferguson |
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88,842,342 |
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2,380,092 |
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8,479,532 |
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Damon T. Hininger |
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88,913,201 |
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2,309,233 |
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8,479,532 |
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Donna M. Alvarado |
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90,731,840 |
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490,594 |
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8,479,532 |
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William F. Andrews |
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81,267,640 |
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9,954,794 |
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8,479,532 |
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John D. Correnti |
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86,840,569 |
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4,381,865 |
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8,479,532 |
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Dennis W. DeConcini |
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91,160,602 |
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61,832 |
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8,479,532 |
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John R. Horne |
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88,961,182 |
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2,261,252 |
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8,479,532 |
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C. Michael Jacobi |
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87,736,474 |
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3,485,960 |
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8,479,532 |
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Thurgood
Marshall, Jr. |
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91,159,121 |
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63,313 |
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8,479,532 |
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Charles L. Overby |
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90,738,942 |
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483,492 |
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8,479,532 |
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John R. Prann, Jr. |
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86,840,289 |
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4,382,145 |
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8,479,532 |
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Joseph V. Russell |
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86,836,524 |
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4,385,910 |
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8,479,532 |
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Henri L. Wedell |
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88,680,154 |
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2,542,280 |
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8,479,532 |
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Proposal 2: Ratification of Appointment of Independent Registered Public Accounting
Firm
The ratification of the appointment of Ernst & Young LLP as the Companys independent registered
public accounting firm for the fiscal year ending December 31, 2011 was approved. The following is
a list of the number of votes For and Against with regard to this proposal, as well as the
number of Abstentions:
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FOR |
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AGAINST |
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ABSTENTIONS |
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BROKER NON-VOTES |
96,336,942 |
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3,352,077 |
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12,947 |
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Proposal 3: Advisory Vote on Executive Compensation
The advisory vote on the executive compensation paid to the Companys Named Executive Officers was
approved. The following is a list of the number of votes For and Against with regard to this
proposal, as well as the number of Abstentions:
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FOR |
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AGAINST |
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ABSTENTIONS |
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BROKER NON-VOTES |
86,405,463 |
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4,624,107 |
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192,864 |
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8,479,532 |
Proposal 4: Advisory Vote on Frequency of Future Advisory Votes on Executive
Compensation
The advisory vote on the frequency of future advisory votes on executive compensation paid to the
Companys Named Executive Officers was for 1 Year. The following is a list of the number of
votes cast for the frequency of 1 Year, 2 Years and 3 Years with regard to this proposal, as
well as the number of Abstentions:
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1 Year |
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2 Years |
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3 Years |
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Abstain |
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BROKER NON-VOTES |
76,582,923
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395,825 |
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14,192,266 |
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51,420 |
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8,479,532 |
Proposal 5: Approval of the Companys Amended and Restated 2008 Stock Incentive Plan
The Companys Amended and Restated 2008 Stock Incentive Plan was approved. The following is a list
of the number of votes For and Against with regard to this proposal, as well as the number of
Abstentions:
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FOR |
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AGAINST |
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ABSTENTIONS |
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BROKER NON-VOTES |
71,487,965 |
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19,191,895 |
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542,574 |
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8,479,532 |
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Item 9.01 Financial Statements and Exhibits
(d) Exhibits.
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10.1
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Corrections Corporation of America Amended and Restated 2008 Stock Incentive Plan. |
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10.2
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Form of Director Restricted Stock Agreement for the Companys Amended and Restated 2008
Stock Incentive Plan. |
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly
caused this report to be signed on its behalf by the undersigned, hereunto duly authorized.
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Date: May 17, 2011 |
CORRECTIONS CORPORATION OF AMERICA
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By: |
/s/ Todd J Mullenger
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Todd J Mullenger |
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Executive Vice President and
Chief Financial Officer |
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