EXHIBIT 10.2
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "Agreement"), dated as of this 3rd day
of January, 2005, is by and between Corrections Corporation of America, a
Maryland corporation with its principal place of business at 00 Xxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxx, Xxxxxxxxx (the "Company"), and Xxxxxxx X. Xxxxxx, a
resident of St. Louis, Missouri (the "Executive").
W I T N E S S E T H:
WHEREAS, the Company desires to engage Executive as its Chief
Corrections Officer, subject to the terms of an executive employment agreement;
and
WHEREAS, the Company and the Executive now desire to enter into this
Agreement and set forth the terms and conditions of the Executive's employment
with the Company.
NOW, THEREFORE, for and in consideration of the foregoing recitals, the
mutual promises and covenants set forth below, and other good and valuable
consideration, receipt of which is hereby acknowledged, the Company and the
Executive do hereby agree as follows:
1. Employment. The Executive shall serve as the Chief Corrections
Officer of the Company and such other office or offices to which Executive may
be appointed or elected by the Board of Directors. Subject to the direction and
supervision of the Board of Directors of the Company, the Executive shall
perform such duties as are customarily associated with the office of Chief
Corrections Officer and such other offices to which Executive may be appointed
or elected by the Board of Directors. The Executive's principal base of
operations for the performance of his duties and responsibilities under this
Agreement shall be the offices of the Company located in Nashville, Tennessee.
It is expressly acknowledged by the Company that the Executive shall perform his
duties and responsibilities under this Agreement during the first six months of
the Term (as hereinafter defined) while commuting on a weekly basis from his
home in St. Louis, Missouri. The Executive agrees to abide by the Company's
Charter and Bylaws as in effect from time to time and the direction of its Board
of Directors except to the extent such direction would be inconsistent with
applicable law or the terms of this Agreement.
2. Term. Subject to the provisions of termination as hereinafter
provided, the initial term of the Executive's employment under this Agreement
shall begin on the date hereof, and shall terminate on December 31, 2005 (the
"Initial Term"). Unless the Company notifies the Executive that his employment
under this Agreement will not be extended or the Executive notifies the Company
that he is not willing to extend his employment, the term of his employment
under this Agreement shall automatically be extended for a series of three (3)
additional one (1) year periods on the same terms and conditions as set forth
herein (individually, and collectively, the "Renewal Term"). The Initial Term
and the Renewal Term are sometimes referred to collectively herein as the
"Term."
3. Notice of Non-Renewal. If the Company or the Executive elects not to
extend the Executive's employment under this Agreement, the electing party shall
do so by notifying the other party in writing not less than sixty (60) days
prior to the expiration of the Initial Term, or sixty (60) days prior to the
expiration of any Renewal Term. The Executive's date of termination, for
purposes of this Agreement, shall be the date of the Company's last payment to
the
Executive. For the purposes of this Agreement, the election by either the
Company or the Executive not to extend the Executive's employment hereunder for
any renewal term shall be deemed a termination of the Executive's employment
without "Cause," as hereinafter defined.
4. Compensation.
4.1 Base Salary. The Company shall pay the Executive an annual salary
("Base Salary") of $270,000, which shall be payable to the Executive hereunder
in accordance with the Company's normal payroll practices, but in no event less
often than bi-weekly. Commencing in February 2006 (or at such other time during
the first or second quarter of 2006 when annual compensation for 2006 is
reviewed and considered) and following each year of the Executive's employment
with the Company thereafter, the Executive's compensation will be reviewed by
the Board of Directors of the Company, or a committee or subcommittee thereof to
which compensation matters have been delegated, and after taking into
consideration both the performance of the Company and the personal performance
of the Executive, the Board of Directors of the Company, or any such committee
or subcommittee, in their sole discretion, may increase the Executive's
compensation to any amount it may deem appropriate.
4.2 Bonus. In the event both the Company and the Executive each
respectively achieve certain financial performance and personal performance
targets as established by the Board of Directors, or a committee or subcommittee
thereof to which compensation matters have been delegated, of the Company
pursuant to a cash compensation incentive plan or similar plan established by
the Company, the Company shall pay to the Executive an annual cash bonus during
the Term of this Agreement pursuant to the terms of such plan. This bonus shall
be payable to the Executive within ten (10) days following the confirmation by
the Board of Directors or applicable committee or subcommittee that such targets
have been met under the applicable plan for the relevant fiscal year. The Board
of Directors of the Company, or applicable committee or subcommittee, may review
and revise the terms of the cash compensation incentive plan or similar plan
referenced above at any time, after taking into consideration both the
performance of the Company and the personal performance of the Executive, among
other factors, and may, in their sole discretion, amend the cash compensation
incentive plan or similar plan in any manner it may deem appropriate; provided,
however, that any such amendment to the plan shall not affect the Executive's
right to participate in such amended plan or plans.
4.3 Benefits. The Executive shall be entitled to four (4) weeks of paid
vacation annually. In addition, the Executive shall be entitled to participate
in all compensation or employee benefit plans or programs and receive all
benefits and perquisites for which any salaried employees are eligible under any
existing or future plan or program established by the Company for salaried
employees. The Executive will participate to the extent permissible under the
terms and provisions of such plans or programs in accordance with program
provisions. These may include group hospitalization, health, dental care, life
or other insurance, tax qualified pension, savings, thrift and profit sharing
plans, termination pay programs, sick leave plans, travel or accident insurance,
disability insurance, and contingent compensation plans including unit purchase
programs and unit option plans. Nothing in this Agreement shall preclude the
Company from amending or terminating any of the plans or programs applicable to
salaried or senior executives as long as such amendment or termination is
applicable to all salaried employees or senior executives. In addition, the
Company shall pay, or reimburse Executive for,
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all membership fees and related costs in connection with Executive's membership
in professional and civic organizations which are approved in advance by the
Company.
4.4 Relocation Expenses. The Company shall reimburse the Executive for
all reasonable moving expenses and other customary relocation expenses incurred
in connection with the sale of the Executive's principal residence located in
St. Louis, Missouri and the Executive's purchase of a new principal residence in
the Nashville, Tennessee metropolitan area. In addition, the Company shall
reimburse the Executive for all reasonable and customary real estate brokerage
costs related to the sale of the Executive's principal residence in St. Louis,
Missouri. All such expenses for which reimbursement is sought under this Section
4.4 shall be approved in advance by the Company.
4.5 Expenses Incurred in Performance of Duties. The Company shall
promptly reimburse the Executive for all reasonable travel and other business
expenses incurred by the Executive in the performance of his duties under this
Agreement upon evidence of receipt. In addition, until June 30, 2005 and upon
evidence of receipt, the Company shall reimburse the Executive for all
reasonable travel expenses related to Executive's weekly commute between St.
Louis, Missouri and Nashville, Tennessee and shall reimburse the Executive for
reasonable living expenses in the Nashville, Tennessee area. All such expenses
for which reimbursement is sought under this Section 4.5 shall be approved in
advance by the Company.
4.6 Withholdings. All compensation payable hereunder shall be subject
to withholding for federal income taxes, FICA and all other applicable federal,
state and local withholding requirements.
4.7 Stock Option or Restricted Stock. Subject to the future approval of
the Board of Directors, or a committee or subcommittee thereof to which
compensation matters have been delegated, the Company shall grant to the
Executive an option to purchase an amount of shares of common stock, $0.01 par
value per share, of the Company, as determined by the Board of Directors, or
such committee of the Board of Directors, to be appropriate for the position of
Chief Corrections Officer. The option to be granted to the Executive hereunder
shall be subject to the applicable equity incentive plan of the Company
governing the Company's stock options in effect on the date of the option grant.
The terms and conditions of the option shall be set forth in an option agreement
in form and substance mutually satisfactory to the Company and the Executive and
as provided for under the terms of such equity incentive plan and the terms of
this Agreement. The Executive hereby agrees to execute any other documents
deemed reasonably necessary by the Company and its legal counsel in connection
with the stock option. At the discretion of the Board of Directors, or a
committee or subcommittee thereof, the Company may choose to grant certain
restricted stock to Executive, and such a grant may reduce or eliminate the
option discussed in this section. In the event a grant of restricted stock is
made, the terms and conditions of such a grant of restricted stock shall be set
forth in an agreement in form and substance mutually satisfactory to the Company
and the Executive, such terms and conditions shall be subject to any applicable
restricted stock plan the Company may have in place at such time as the award,
and the Executive hereby agrees to execute any other documents deemed reasonably
necessary by the Company and its legal counsel in connection with the grant of
restricted stock.
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5. Termination of Agreement.
5.1 General. During the term of this Agreement, the Company may, at any
time and in its sole discretion, terminate this Agreement with or without Cause
(as hereinafter defined) or upon a Change in Control (as hereinafter defined),
effective as of the date of provision of written notice to the Executive
thereof.
5.2 Effect of Termination With Cause. If the Executive's employment
with the Company shall be terminated with Cause: (i) the Company shall pay the
Executive his Base Salary earned through the date of termination of the
Executive's employment with the Company (the "Termination Date"); and (ii) the
Company shall not have any further obligations to the Executive under this
Agreement except those required to be provided by law or under the terms of any
other agreement between the Company and the Executive.
5.3 Definition of "Cause." For purposes of this Agreement, "Cause"
shall mean: (i) the death of the Executive; (ii) the permanent disability of the
Executive, which shall be defined as the inability of the Executive, as a result
of physical or mental illness or incapacity, to substantially perform his duties
pursuant to this Agreement for a period of one hundred eighty (180) days during
any twelve (12) month period; (iii) the Executive's conviction of a felony or of
a crime involving dishonesty or moral terpitude, including, without limitation,
any act or crime involving misappropriation or embezzlement of Company assets or
funds; (iv) willful or material wrongdoing by the Executive, including, but not
limited to, acts of dishonesty or fraud, which could be expected to have a
materially adverse effect on the Company or its subsidiaries or affiliates, as
determined by the Company and its Board of Directors; (v) material breach by the
Executive of a material obligation under this Agreement or of his fiduciary duty
to the Company or its stockholders; or (vi) the Executive's intentional
violation of any applicable local, state or federal law or regulation affecting
the Company in any material respect, as determined by the Company and its Board
of Directors. Notwithstanding the foregoing, to the extent that any of the
events, actions or breaches set forth above are able to be remedied or cured by
the Executive, Cause shall not be deemed to exist (and thus the Company may not
terminate the Executive for Cause hereunder) unless the Executive fails to
remedy or cure such event, action or breach within twenty (20) days after being
given written notice by the Company of such event, action or breach.
5.4 Effect of Termination Without Cause. If the Executive's employment
with the Company is terminated without Cause, the Company shall pay to the
Executive an amount equal to the Executive's Base Salary, based upon the annual
rate payable as of the date of termination, without any cost of living
adjustments (the "Severance Amount"), which shall be payable as provided below.
If the Executive is terminated under this Section 5.4 on or between January 1
and March 14 of any given calendar year during the Term, then the Severance
Amount shall be payable for a period of one (1) year from the date of
termination on the same terms and with the same frequency as the Executive's
Base Salary was paid prior to termination. If the executive is terminated under
this Section 5.4 on or after March 15 and on or before December 31 of any given
calendar year during the Term, then the Severance Amount shall be payable on the
same terms and with the same frequency as the Executive's Base Salary was paid
prior to termination until March 14 of the following calendar year whereupon the
remainder of the Severance Amount shall be paid in a lump sum payment to the
Executive.
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5.5 Effect of Termination Upon a Change in Control. If the Executive's
employment with the Company is terminated upon a Change in Control, the Company
shall (i) pay to the Executive a one-time payment, to be paid within sixty (60)
days of the date of termination, in an amount equal to 2.99 times the
Executive's Base Salary, based upon the annual rate payable as of the date of
termination, without any cost of living adjustments; (ii) reimburse Executive
for any Gross-Up Payment (as hereinafter defined) or other payment payable
pursuant to the provisions of Section 8 herein; and (iii) continue to provide
hospitalization, health, dental care, and life and other insurance benefits to
the Executive for a period of one (1) year following such termination on the
same terms and conditions existing immediately prior to termination.
Notwithstanding the foregoing, each of the following events shall be considered
a termination upon a Change in Control for purposes of this paragraph: (i) the
Executive's voluntary resignation for any reason within one-hundred eighty (180)
days following a Change in Control, or (ii) a material reduction in the duties,
powers or authority of the Executive as an officer or employee of the Company
within one-hundred eighty (180) days following a Change in Control.
5.6 Definition of a "Change of Control". "Change of Control" shall mean
the occurrence of any of the following events:
(i) the acquisition by any individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange
Act of 1934, as amended), of beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the Securities Exchange Act) of fifty
percent (50%) or more of the combined voting power of the
then-outstanding voting securities of the Company entitled to vote
generally in the election of directors, but excluding for the purpose
of this section, any such acquisition by (A) the Company or any of its
subsidiaries, (B) any employee benefit plan (or related trust) or (C)
any corporation with respect to which, following such acquisition, more
than fifty percent (50%) of the combined voting power of the
then-outstanding voting securities of the Company entitled to vote
generally in the election of directors is then beneficially owned,
directly or indirectly, by individuals and entities who, immediately
prior to such acquisition, were the beneficial owners of the then
outstanding voting securities of the Company entitled to vote generally
in the election of directors; or
(ii) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation or entity
regardless of which entity is the survivor, other than a merger or
consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or being converted into voting
securities of the surviving entity) at least fifty percent (50%) of the
combined voting power of the voting securities of the Company or such
surviving entity outstanding immediately after such merger or
consolidation; or
(iii) the stockholders of the Company approve a plan of
complete liquidation or winding-up of the Company or an agreement for
the sale or disposition by the Company of all or substantially all of
the Company's assets; or
(iv) any event which the Board of Directors determines should
constitute a Change in Control.
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5.7 Resignation by the Executive. The Executive shall be entitled to
resign his employment with the Company at any time during the term of this
Agreement. If the Executive resigns his employment with the Company for any
reason other than as set forth in Section 5.5 herein: (i) the Company shall pay
the Executive his Base Salary earned through the date of termination of the
Executive's employment with the Company as the result of his resignation; and
(ii) the Company shall not have any further obligations to the Executive under
this Agreement except those required to be provided by law or under the terms of
any other agreement between the Company and the Executive.
6. Non-Competition, Non-Solicitation and Confidentiality and
Non-Disclosure.
6.1 Non-Competition, Non-Solicitation. The Executive hereby covenants
and agrees that during the Term of the Executive's employment hereunder and for
a period of one (1) year thereafter, Executive shall not, directly or
indirectly: (i) own any interest in, operate, join, control or participate as a
partner, director, principal, officer or agent of, enter into the employment of,
act as a consultant to, or perform any services for any entity (each a
"Competing Entity") which has material operations which compete with any
business in which the Company or any of its subsidiaries is then engaged or, to
the then existing knowledge of the Executive, proposes to engage; (ii) solicit
any customer or client of the Company or any of its subsidiaries (other than on
behalf of the Company) with respect to any business in which the Company or any
of its subsidiaries is then engaged or, to the then existing knowledge of the
Executive, proposes to engage; or (iii) induce or encourage any employee of the
Company or any of its subsidiaries to leave the employ of the Company or any of
its subsidiaries; provided, that the Executive may, solely as an investment,
hold not more than five percent (5%) of the combined voting securities of any
publicly-traded corporation or other business entity. The foregoing covenants
and agreements of the Executive are referred to herein as the "Restrictive
Covenant." The Executive acknowledges that he has carefully read and considered
the provisions of the Restrictive Covenant and, having done so, agrees that the
restrictions set forth in this Section 6.1, including without limitation the
time period of restriction set forth above, are fair and reasonable and are
reasonably required for the protection of the legitimate business and economic
interests of the Company. The Executive further acknowledges that the Company
would not have entered into this Agreement absent Executive's agreement to the
foregoing.
In the event that, notwithstanding the foregoing, any of the provisions
of this Section 6.1 or any parts hereof shall be held to be invalid or
unenforceable, the remaining provisions or parts hereof shall nevertheless
continue to be valid and enforceable as though the invalid or unenforceable
portions or parts had not been included herein. In the event that any provision
of this Section 6.1 relating to the time period and/or the area of restriction
and/or related aspects shall be declared by a court of competent jurisdiction to
exceed the maximum restrictiveness such court deems reasonable and enforceable,
the time period and/or area of restriction and/or related aspects deemed
reasonable and enforceable by such court shall become and thereafter be the
maximum restrictions in such regard, and the provisions of the Restrictive
Covenant shall remain enforceable to the fullest extent deemed reasonable by
such court.
6.2 Confidentiality and Non-Disclosure. In consideration of the rights
granted to the Executive hereunder, the Executive hereby agrees that during the
term of this Agreement and for a period of three (3) years thereafter to hold in
confidence all information concerning the Company or its business, including,
but not limited to contract terms, financial information,
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operating data, or business plans or models, whether for existing, new or
developing businesses, and any other proprietary information (hereinafter,
collectively referred to as the "Proprietary Information"), whether communicated
orally or in documentary or other tangible form. The parties to this Agreement
recognize that the Company has invested considerable amounts of time and money
in attaining and developing all of the information described above, and any
unauthorized disclosure or release of such Proprietary Information in any form
would irreparably harm the Company.
7. Indemnification. The Company shall indemnify the Executive to the
fullest extent that would be permitted by law (including a payment of expenses
in advance of final disposition of a proceeding) as in effect at the time of the
subject act or omission, or by the Charter or Bylaws of the Company as in effect
at such time, or by the terms of any indemnification agreement between the
Company and the Executive, whichever affords greatest protection to the
Executive, and the Executive shall be entitled to the protection of any
insurance policies the Company may elect to maintain generally for the benefit
of its officers or, during the Executive's service in such capacity, directors
(and to the extent the Company maintains such an insurance policy or policies,
in accordance with its or their terms to the maximum extent of the coverage
available for any company officer or director), against all costs, charges and
expenses whatsoever incurred or sustained by the Executive (including but not
limited to any judgment entered by a court of law) at the time such costs,
charges and expenses are incurred or sustained, in connection with any action,
suit or proceeding to which the Executive may be made a party by reason of his
being or having been an officer or employee of the Company, or serving as an
officer or employee of an affiliate of the Company, at the request of the
Company, other than any action, suit or proceeding brought against the Executive
by or on account of his breach of the provisions of any employment agreement
with a third party that has not been disclosed by the Executive to the Company.
The provisions of this Section 7 shall specifically survive the expiration or
earlier termination of this Agreement.
8. Tax Reimbursement Payment.
(i) Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that any payment
or distribution by or on behalf of the Company to or for the benefit of
Executive as a result of a Change in Control, as defined herein,
(whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement or otherwise, a "Payment") would be subject
to the excise tax imposed by Section 4999 of the Code, or any interest
or penalties are incurred by Executive with respect to such excise tax
(such excise tax together with any such interest and penalties are
hereinafter collectively referred to as the "Excise Tax"), then
Executive shall be entitled to receive an additional payment (a
"Gross-Up Payment") in an amount such that after payment by Executive
of all taxes (including any interest or penalties imposed with respect
to such taxes), including, without limitation, any income taxes (and
any interest and penalties imposed with respect thereto) and Excise Tax
imposed upon the Gross-Up Payment, Executive retains an amount of the
Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
(ii) Subject to the provisions of subsection (iii) below, all
determinations required to be made under this Section 8, including
whether and when a Gross-Up Payment is required, the amount of such
Gross-Up Payment and the assumptions to be
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utilized in arriving at such determination, shall be made by a
nationally recognized accounting firm or law firm selected by the
Executive, subject to the consent of the Company, which consent shall
not be unreasonably withheld (the "Tax Firm"); provided, however, that
the Tax Firm shall not determine that no Excise Tax is payable by the
Executive unless it delivers to Executive a written opinion (the "Tax
Opinion") that failure to pay the Excise Tax and to report the Excise
Tax and the payments potentially subject thereto on or with Executive's
applicable federal income tax return will not result in the imposition
of an accuracy-related or other penalty on Executive. All fees and
expenses of the Tax Firm shall be borne solely by the Company. Within
fifteen (15) business days of the receipt of notice from Executive that
there has been a Payment, or such earlier time as is requested by the
Company, the Tax Firm shall make all determinations required under this
Section 8, shall provide to the Company and Executive a written report
setting forth such determinations, together with detailed supporting
calculations, and, if the Tax Firm determines that no Excise Tax is
payable, shall deliver the Tax Opinion to the Executive. Any Gross-Up
Payment, as determined pursuant to this Section 8, shall be paid by the
Company to Executive within fifteen (15) days of the receipt of the Tax
Firm's determination. Subject to the other provisions of this Section
8, any determination by the Tax Firm shall be binding upon the Company
and the Executive; provided, however, that the Executive shall only be
bound to the extent that the determinations of the Tax Firm hereunder,
including the determinations made in the Tax Opinion, are reasonable
and reasonably supported by applicable law. The parties acknowledge,
however, that as a result of the uncertainty in the application of
Section 4999 of the Code at the time of the initial determination by
the Tax Firm hereunder or as a result of a contrary determination by
the Internal Revenue Service, it is possible that Gross-Up Payments
which will not have been made by the Company should have been made
("Underpayment"), consistent with the calculations required to be made
hereunder. In the event that it is ultimately determined in accordance
with the procedures set forth in subsection (iii) below that the
Executive is required to make a payment of any Excise Tax, the Tax Firm
shall reasonably determine the amount of the Underpayment that has
occurred and any such Underpayment shall be promptly paid by the
Company to or for the benefit of Executive. In determining the
reasonableness of the Tax Firm's determinations hereunder and the
effect thereof, the Executive shall be provided a reasonable
opportunity to review such determinations with the Tax Firm and the
Executive's tax counsel. The Tax Firm's determinations hereunder, and
the Tax Opinion, shall not be deemed reasonable until the Executive's
reasonable objections and comments thereto have been satisfactorily
accommodated by the Tax Firm.
(iii) The Executive shall notify the Company in writing of any
claims by the Internal Revenue Service that, if successful, would
require the payment by the Company of the Gross-Up Payment. Such
notification shall be given as soon as practicable but no later than
thirty (30) calendar days after Executive actually receives notice in
writing of such claim and shall apprise the Company of the nature of
such claim and the date on which such claim is requested to be paid;
provided however, that the failure of Executive to notify the Company
of such claim (or to provide any required information with respect
thereto) shall not affect any rights granted to the Executive under
this Section 8 except to the extent that the Company is materially
prejudiced in the defense of such claim as a direct result of such
failure. The Executive shall not, unless otherwise required by the
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Internal Revenue Service, pay such claim prior to the expiration of the
30-day period following the date on which he gives such notice to the
Company (or such shorter period ending on the date that any payment of
taxes with respect to such claim is due). If the Company notifies the
Executive in writing prior to the expiration of such 30-day period that
it desires to contest such claim, the Executive shall:
(1) give the Company any information reasonably
requested by the Company relating to such claim;
(2) take such action in connection with contesting
such claim as the Company shall reasonably request in writing
from time to time, including, without limitation, accepting
legal representation with respect to such claim by an attorney
selected by the Company and reasonably acceptable to
Executive;
(3) cooperate with the Company in good faith in order
effectively to contest such claim; and
(4) if the Company elects not to assume and control
the defense of such claim, permit the Company to participate
in any proceedings relating to such claim;
provided, however, that the Company shall bear and pay directly all
costs and expenses (including additional interest and penalties
incurred in connection with such contest and shall indemnify and hold
the Executive harmless, on an after-tax basis, for any Excise Tax or
income tax (including interest and penalties with respect thereto)
imposed as a result of such representation and payment of costs and
expenses. Without limiting the foregoing provisions of this subsection
(iii), the Company shall have the right, at its sole option, to assume
the defense of and control all proceedings in connection with such
contest, in which case it may pursue or forego any and all
administrative appeals, proceedings, hearings and conferences with the
taxing authority in respect of such claim and may either direct the
Executive to pay the tax claimed and xxx for a refund or contest the
claim in any permissible manner, and the Executive agrees to prosecute
such contest to a determination before any administrative tribunal, in
a court of initial jurisdiction and in one or more appellate courts, as
the Company shall determine; provided, however, that if the Company
directs the Executive to pay such claim and xxx for a refund, the
Company shall advance the amount of such payment to the Executive, on
an interest-free basis and shall indemnify and hold the Executive
harmless, on an after-tax basis, from any Excise Tax or income tax
(including interest or penalties with respect thereto) imposed with
respect to such advance or with respect to any imputed income with
respect to such advance; and further provided that any extension of the
statue of limitations relating to payment of taxes for the taxable year
of the Executive with respect to which such contested amount is claimed
to be due is limited solely to such contested amount. Furthermore, the
Company's right to assume the defense of and control the contest shall
be limited to issues with respect to which a Gross-Up Payment would be
payable hereunder, and the Executive shall be entitled to settle or
contest, as the case may be, any other issue raised by the Internal
Revenue Service or any other taxing authority.
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(iv) If, after the receipt by the Executive of an amount
advanced by the Company pursuant to this Section 8, the Executive
becomes entitled to receive any refund with respect to such claim, the
Executive shall (subject to the Company's complying with the
requirements of subsection (iii) above) promptly pay to the Company the
amount of such refund (together with any interest paid or credited
thereon after taxes applicable thereto). If, after the receipt by the
Executive of an amount advanced by the Company pursuant to subsection
(iii) above, a determination is made that the Executive is not entitled
to a refund with respect to such claim and the Company does not notify
the Executive in writing of its intent to contest such denial of refund
prior to the expiration of thirty (30) days after such determination,
then such advance shall, to the extent of such denial, be forgiven and
shall not be required to be repaid and the amount of forgiven advance
shall offset, to the extent thereof, the amount of Gross-Up Payment
required to be paid.
9. Notices. Any notice required or desired to be given under this
Agreement shall be in writing and shall be delivered personally, transmitted by
facsimile or mailed by registered mail, return receipt requested, or delivered
by overnight courier service and shall be deemed to have been given on the date
of its delivery, if delivered, and on the third (3rd) full business day
following the date of the mailing, if mailed, to each of the parties thereto at
the following respective addresses or such other address as may be specified in
any notice delivered or mailed as above provided:
(i) If to the Executive, to:
Xxxxxxx X. Xxxxxx
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(ii) If to the Company, to:
Corrections Corporation of America
00 Xxxxxx Xxxxx Xxxxxxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxx X. Xxxxxxxx, Chief Executive
Officer and President
Facsimile: (000) 000-0000
10. Waiver of Breach. The waiver by either party of any provision of
this Agreement shall not operate or be construed as a waiver of any subsequent
breach by the other party.
11. Assignment. The rights and obligations of the Company under this
Agreement shall inure to the benefit of and shall be binding upon the successors
and assigns of the Company. The Executive acknowledges that the services to be
rendered by him are unique and personal, and the Executive may not assign any of
his rights or delegate any of his duties or obligations under this Agreement.
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12. Entire Agreement. This instrument contains the entire agreement of
the parties. It may not be changed orally but only by an agreement in writing
signed by the party against whom enforcement of any waiver, change,
modification, extension or discharge is sought.
13. Controlling Law. This Agreement shall be governed and interpreted
under the laws of the State of Tennessee.
14. Headings. The sections, subjects and headings in this Agreement are
inserted for convenience only and shall not affect in any way the meaning or
interpretation of this Agreement.
15. Enforcement. If the Executive is the prevailing party in any
dispute among the parties hereto regarding the enforcement of one or more of the
provisions of this Agreement, then the Company shall reimburse the Executive for
any reasonable attorneys' fees and other expenses incurred by him in connection
with such dispute.
[signature page to follow]
11
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
day and year first written.
EXECUTIVE:
XXXXXXX X. XXXXXX
/s/ XXXXXXX X. XXXXXX
-------------------------------------------------
COMPANY:
CORRECTIONS CORPORATION OF AMERICA
By: /s/ XXXX X. XXXXXXXX
--------------------------------------------
Name: Xxxx X. Xxxxxxxx
Title: Chief Executive Officer and President
