INDEMNIFICATION
AGREEMENT
This
INDEMNIFICATION AGREEMENT (this “Agreement”) is made
and entered into as of this ___ day of
, 20___, by and between Corrections Corporation of America, a
Maryland corporation (the “Company”), and
(“Indemnitee”).
WHEREAS, the
Company desires to attract and retain the services of highly
qualified individuals, such as Indemnitee, to serve as officers and
directors of the Company;
WHEREAS, highly
qualified individuals have become more reluctant to serve
corporations as directors or officers unless they are provided
adequate protection through insurance and indemnification against
the risks of claims and actions against them arising out of their
service to and activities on behalf of such
corporations;
WHEREAS, the Board
of Directors of the Company (the “Board”) has
determined that the increased difficulty in attracting and
retaining such individuals is detrimental to the best interests of
the Company’s stockholders and the Company should act to
assure such individuals that there will be increased certainty of
such protection in the future;
WHEREAS, it is
reasonable, prudent and necessary for the Company to contractually
obligate itself to indemnify, and to advance expenses on behalf of,
such individuals to the fullest extent permitted by applicable law
so that they will serve or continue to serve the Company free from
undue concern that they will not be so indemnified;
WHEREAS, at the
request of the Company, Indemnitee currently serves as [a member
of the Company’s Board of Directors] [and] [an officer of the
Company] and may, therefore, be subjected to claims, suits or
proceedings arising as a result of [his][her]
service;
WHEREAS, as an
inducement to Indemnitee to continue to serve as such [director]
[and] [officer] , the Company has agreed to enter into this
Agreement to indemnify and advance expenses and costs incurred by
Indemnitee in connection with any claims, suits or proceedings
arising as a result of [his][her] service, to the maximum
extent permitted by law;
WHEREAS,
Indemnitee is willing to serve, continue to serve and to take on
additional service for or on behalf of the Company on the condition
that Indemnitee be indemnified on the terms set forth in this
Agreement; and
WHEREAS, this
Agreement is a supplement to and in furtherance of the provisions
of the Company’s Bylaws regarding indemnification and
advancement of expenses and shall not be deemed a substitute
therefor, nor to diminish or abrogate any rights of the Indemnitee
thereunder.
NOW, THEREFORE, in
consideration of the premises and the covenants contained herein,
the Company and Indemnitee do hereby covenant and agree as
follows:
SECTION 1.
Definitions . For the purposes of this Agreement:
(a)
“ Change in Control ” shall have the meaning set
forth in the Company’s 2008 Stock Incentive Plan, as amended
from time to time.
(b)
“ Corporate Status ” means the status of a
person as a present or former director, officer, employee or agent
of the Company or as a director, trustee, officer, partner,
manager, managing
member,
fiduciary, employee or agent of any other foreign or domestic
corporation, partnership, limited liability company, joint venture,
trust, employee benefit plan or other enterprise that such person
is or was serving in such capacity at the request of the Company.
As a clarification and without limiting the circumstances in which
Indemnitee may be serving at the request of the Company, service by
Indemnitee shall be deemed to be at the request of the Company if
Indemnitee serves or served as a director, trustee, officer,
partner, manager, managing member, fiduciary, employee or agent of
any corporation, partnership, limited liability company, joint
venture, trust, employee benefit plan or other enterprise of which
(i) a majority of the voting power or equity interest is owned
directly or indirectly by the Company or (ii) the management
is controlled directly or indirectly by the Company.
(c)
“ Disinterested Director ” means a director of
the Company who is not a party to the Proceeding in respect of
which indemnification is sought by Indemnitee.
(d)
“ Expenses ” shall include all reasonable and
out-of-pocket attorneys’ fees and costs, retainers, court
costs, transcript costs, fees of experts, witness fees, travel
expenses, duplicating costs, printing and binding costs, telephone
charges, postage, delivery service fees, federal, state, local or
foreign taxes imposed on Indemnitee as a result of the actual or
deemed receipt of any payments under this Agreement, ERISA excise
taxes and penalties and all other disbursements or expenses of the
types customarily incurred in connection with prosecuting,
defending, preparing to prosecute or defend, investigating, or
being or preparing to be a witness in or otherwise participating in
a Proceeding. Expenses shall also include Expenses incurred in
connection with asserting compulsory counterclaims that negate a
plaintiff’s claims and Expenses incurred in connection with
any appeal resulting from any Proceeding including, without
limitation, the premium, security for and other costs relating to
any cost bond supersedes bond or other appeal bond or its
equivalent.
(e)
“ Independent Counsel ” means a law firm, or
member of a law firm, that is experienced in matters of corporation
law as applicable to Maryland and neither is, nor in the past five
years has been, retained to represent: (i) the Company or
Indemnitee in any matter material to either such party, or
(ii) any other party to or participant or witness in the
Proceeding giving rise to a claim for indemnification hereunder.
Notwithstanding the foregoing, the term “Independent
Counsel” shall not include any person who, under the
applicable standards of professional conduct then prevailing, would
have a conflict of interest in representing either the Company or
Indemnitee in an action to determine Indemnitee’s rights
under this Agreement.
(f)
“ Proceeding ” includes any threatened, pending
or completed action, suit, arbitration, alternate dispute
resolution mechanism, investigation, inquiry, administrative
hearing or any other proceeding (whether civil, criminal,
administrative or investigative), including any appeal therefrom.
If Indemnitee reasonably believes that a particular situation may
lead to or culminate in the institution of a Proceeding, such
situation may also be considered a
“Proceeding”.
SECTION 2.
Indemnification — General . The Company shall
indemnify and advance Expenses to Indemnitee as provided in this
Agreement and otherwise to the fullest extent permitted by Maryland
law in effect on the date hereof or to such extent as Maryland law
thereafter from time to time may permit; provided, however, that no
change in Maryland law shall have the effect of reducing the
benefits available to Indemnitee hereunder based on Maryland law as
in effect on the date hereof. The rights of Indemnitee provided in
this Section 2 shall include, without limitation, the rights
set forth in the other sections of this Agreement, including any
additional indemnification permitted by Section 2-418(g) of
the Maryland General Corporation Law (hereafter, the
“MGCL”).
SECTION 3.
Rights to Indemnification . Except as otherwise provided by
Section 12, if, by reason of Indemnitee’s Corporate
Status, Indemnitee was, is, or is threatened to be made, a party to
any
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Proceeding,
Indemnitee shall be indemnified against all judgments, penalties,
fines and amounts paid in settlement and all Expenses actually and
reasonably incurred by Indemnitee or on Indemnitee’s behalf
in connection with such Proceeding, unless it is established that
(i) the act or omission of Indemnitee was material to the
matter(s) giving rise to the Proceeding and (A) was committed
in bad faith or (B) was the result of active and deliberate
dishonesty; (ii) Indemnitee actually received an improper
personal benefit in money, property or services; or (iii) in
the case of any criminal Proceeding, Indemnitee had reasonable
cause to believe that the act or omission was unlawful.
SECTION 4.
Court-Ordered Indemnification . Notwithstanding any other
provision of this Agreement to the contrary, a court of appropriate
jurisdiction, upon application of Indemnitee and such notice as the
court shall require, may order indemnification in the following
circumstances:
(a) if
it determines Indemnitee is entitled to reimbursement under
Section 2-418(d)(1) of the MGCL, the court shall order
indemnification, in which case Indemnitee shall be entitled to
recover the expenses of securing such reimbursement; or
(b) if
it determines that Indemnitee is fairly and reasonably entitled to
indemnification in view of all the relevant circumstances, whether
or not Indemnitee (i) has met the standard of conduct set
forth in Section 2-418(b) of the MGCL or (ii) has been
adjudged liable for receipt of an improper personal benefit under
Section 2-418(c) of the MGCL, in which case the court may
order such indemnification as the court shall deem proper. However,
indemnification with respect to any Proceeding by or in the right
of the Company or in which liability shall have been adjudged in
the circumstances described in Section 2-418(c) of the MGCL
shall be limited to Expenses.
SECTION 5.
Indemnification for Expenses of a Party Who is Successful .
Notwithstanding any other provision of this Agreement, to the
extent that Indemnitee is successful, on the merits or otherwise,
in the defense of any Proceeding to which he or she is made a party
(or otherwise becomes a participant) by reason of his or her
Corporate Status, or in the defense of any claim, issue or matter
in the Proceeding, Indemnitee shall be indemnified against all
Expenses (including any fees and expenses of plaintiff’s
counsel) actually and reasonably incurred by Indemnitee or on
Indemnitee’s behalf in connection with the Proceeding, claim,
issue or matter in which he or she has been successful. For
purposes of this Section 5, the term “successful on the
merits or otherwise” shall include, but not be limited to,
the termination of any claim, issue or matter in a Proceeding by
withdrawal or dismissal, with or without prejudice.
SECTION 6.
Indemnification of Expenses of a Witness . Notwithstanding
any other provision of this Agreement, if Indemnitee is or may be,
by reason of Indemnitee’s Corporate Status, made a witness or
otherwise asked to participate in any Proceeding to which
Indemnitee is not a party, Indemnitee shall be paid or reimbursed
all Expenses actually and reasonably incurred by Indemnitee or on
Indemnitee’s behalf in connection therewith.
SECTION 7.
Contribution . If the indemnity contained in Section 2,
3 or 5 of this Agreement is unavailable or insufficient to hold
Indemnitee harmless in a Proceeding described therein, then in
accordance with applicable law and separate from and in addition to
the indemnity provided elsewhere herein, the Company shall
contribute to the amount paid or payable by Indemnitee as a result
of such Expenses, judgments, penalties, fines and amounts paid in
settlement actually and reasonably incurred by or on behalf of
Indemnitee in connection with such Proceeding or any claim, issue
or matter therein, (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company and
Indemnitee, or (ii) if the allocation provided by clause (i)
above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to
in clause (i) above but also the relative fault of the Company
and Indemnitee in connection with the action or inaction which
resulted in such Expenses, judgments, penalties, fines or amounts
paid in settlement, as well as any other relevant
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equitable
considerations. In connection with the registration of the
Company’s securities, the relative benefits received by the
Company and Indemnitee shall be deemed to be in the same respective
proportions that the net proceeds from the offering (before
deducting expenses) received by the Company and Indemnitee, in each
case as set forth in the table on the cover page of the applicable
prospectus, bear to the aggregate public offering price of the
securities so offered. The relative fault of the Company and
Indemnitee shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact
relates to information supplied by the Company or Indemnitee and
the parties’ relative intent, knowledge, access to
information and opportunity to correct or prevent such statement or
omission. The Company and Indemnitee agree that it would not be
just and equitable if contribution pursuant to this Section 7
were determined by pro rata or per capita allocation or by any
other method of allocation which does not take account of the
equitable considerations referred to above in this Section. In
connection with any registration of the Company’s securities,
in no event and notwithstanding the other provisions of this
Section 7 shall Indemnitee be required to contribute any
amount hereunder in excess of the lesser of (i) that
proportion of the total of such Expenses, judgments, penalties,
fines or amounts paid in settlement indemnified against equal to
the proportion of the total securities sold under such registration
statement that is being sold by Indemnitee or (ii) the
proceeds received by Indemnitee from his or her sale of securities
under such registration statement. No person found guilty of
fraudulent misrepresentation (within the meaning of Section 11(f)
of the Securities Act of 1933, as amended) shall be entitled to
contribution from any person who was not found guilty of such
fraudulent misrepresentation.
SECTION 8.
Advancement of Expenses . Except as otherwise provided in
Section 12, the Company shall pay or reimburse all Expenses
reasonably incurred by or on behalf of Indemnitee in connection
with any Proceeding to which Indemnitee is, or is threatened to be
made, a party by reason of Indemnitee’s Corporate Status, in
advance of the final disposition of such Proceeding, from time to
time and as incurred, within ten (10) days after the receipt
by the Company of a statement or statements from Indemnitee
requesting such advance or advances. Such statement or statements
shall include satisfactory evidence and documentation as to the
amount of such Expenses and shall be preceded or accompanied by
(i) a written affirmation by Indemnitee of Indemnitee’s
good faith belief that he or she has met the standard of conduct
necessary for indemnification by the Company, as authorized by the
MGCL and this Agreement and (ii) a written undertaking, in the
form attached hereto as Exhibit A or in such form as
may be required under applicable law as in effect at the time of
the execution thereof, by or on behalf of Indemnitee to repay the
portion of any Expenses advanced relating to claims, issues or
matters in the Proceeding as to which it shall ultimately be
determined that Indemnitee has not met the standard of conduct and
is therefore not entitled to be indemnified against such Expenses.
Indemnitee’s written certification together with a copy of
the statement paid or to be paid by Indemnitee shall constitute
satisfactory evidence as to the amount of such Expenses. To the
extent that Expenses advanced to Indemnitee do not relate to a
specific claim, issue or matter in the Proceeding, such Expenses
shall be allocated on a reasonable and proportionate basis. The
undertaking required by this Section 8 shall be an unlimited
general obligation by or on behalf of Indemnitee and shall be
accepted without reference to Indemnitee’s financial ability
to repay such advanced Expenses and without any requirement to post
security therefor. Advances shall be unsecured and interest free.
Such advances are deemed to be an obligation of the Company to
Indemnitee hereunder, and shall in no event be deemed a personal
loan.
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SECTION 9.
Procedure for Determination of Entitlement to
Indemnification .
(a) To
obtain indemnification under this Agreement, Indemnitee shall
submit to the Company a written request, including therein or
therewith such documentation and information as is reasonably
available to Indemnitee and is reasonably necessary to determine
whether and to what extent Indemnitee is entitled to
indemnification. The officer of the Company receiving such a
request shall, promptly upon its receipt, advise the Board in
writing that Indemnitee has requested indemnification.
(b) Upon
written request by Indemnitee for indemnification pursuant to the
first sentence of Section 9(a) (or, if indemnification is
unavailable, contribution pursuant to Section 7 hereof), a
determination, if required by applicable law, with respect to
Indemnitee’s entitlement thereto shall promptly be made in
the specific case: (i) if a Change in Control shall have
occurred, by Independent Counsel, in a written opinion to the
Board, a copy of which shall be delivered to Indemnitee, which
Independent Counsel shall be selected by Indemnitee and approved by
the Board (or a duly authorized committee thereof) in accordance
with Section 2-418(e)(2)(ii) of the MGCL, which approval will
not be unreasonably withheld; or (ii) if a Change in Control
shall not have occurred, (A) by the Board, by a majority vote
of a quorum consisting of Disinterested Directors or, if such a
quorum cannot be obtained, then by a majority vote of a duly
authorized committee of the Board consisting solely of one or more
Disinterested Directors, or (B) if there are no Disinterested
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