Exhibit 10.4

AMENDMENT

to

SEVERANCE AGREEMENT

This Amendment (“Amendment”), made March 14, 2007, is to amend the Severance
Agreement (“Agreement”) originally entered into on December 22, 1999, by and
between Cornell Corrections, Inc. (the “Company”), and Patrick N. Perrin
(“Officer”).

WITNESSETH

WHEREAS, the Company and Officer previously entered into the Agreement; and

WHEREAS, the Board of Directors of the Company has authorized certain amendments
to such Agreement relating to Officer’s entitlement to certain payments and
benefits following a change in control, to be effective as of March 9, 2007;

NOW, THEREFORE, the parties hereto agree to this Amendment as follows:

1.                                       Section 2 of the Agreement is amended,
effective as of March 9, 2007, to add a new subsection (c) to read in its
entirety as follows:

“(c)         Notwithstanding the foregoing provisions of this Section 2, if,
within 180 days after a Change in Control, the Officer’s employment with the
Company is terminated involuntarily by the Company, with or without cause, then
in lieu of the payments and other benefits provided to Officer in  paragraphs
(a) and (b) of this Section 2, the Company shall be required to provide the
following payments and other benefits to the Officer:

(i)            Officer will be paid (A) any Incentive Compensation award that
has been earned but that has not yet been paid; (B) the unpaid amount of
Officer’s Annual Base Salary earned through the effective date of such
termination; and (C) a payment equal to a pro rata portion of the target award
under the Company’s Incentive Compensation Plan, for the period from the
beginning of the period to which such target award pertains through the date of
termination.

(ii)           Officer shall also be entitled to continuation of his
then-current Annual Base Salary for a period of 18 months following the date of
termination (“Severance Period”), subject to all applicable tax withholdings,
such payments to be made in equal installments according to the normal payroll
practices of the Company during the Severance Period..

(iii)          Officer will also be entitled to extended health care benefits
(COBRA) at Officer’s expense and to the extent Officer is qualified for such
benefits as provided by law; provided, however, that the Company shall pay to
Officer an amount equal to the Company’s portion of employee health care costs
under the Company’s group health care plan as if Officer were an active employee
of the Company, such payments to be made concurrently with the salary
continuation payments made during the Severance Period for so long as such
coverage remains in effect as provided by law.”

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2.                                       Section 2 of the Agreement is amended,
effective as of March 9, 2007, to add a new subsection (d) to read in its
entirety as follows:

“(d)         To the extent any amount payable under paragraphs (a) or (c) of
this Section 2 shall be subject to Section 409A of the Internal Revenue Code,
and Officer shall be a “specified employee” as defined therein, payment of any
amounts hereunder shall be delayed for six (6) months following Officer’s
termination of employment, to the extent required by Section 409A.  Following
any such delay, the first payment shall include any amounts that would have
otherwise become payable during the period of such delay, but for the operation
of this Section 2(d).”

3.                                       Section 6 of the Agreement is amended,
effective as of March 9, 2007, to read in its entirety as follows:

“6.           Taxes.

(a)           The Company may withhold or cause to be withheld from any benefits
payable under this Agreement all federal, state, city or other taxes that are
required by any law or governmental regulation or ruling.

(b)           In the event it shall be determined that any payment or
distribution by the Company to or for the benefit of the Officer (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 (or a successor provision of like import) (“Excise Tax”), then
the total payments to the Officer hereunder shall be reduced to one dollar less
than the dollar amount at which the Excise Tax applies to such payments;
provided, however, that such reduction shall only apply to the extent such
reduced payment would exceed the total amount otherwise payable to Officer
hereunder minus the applicable Excise Tax.  Any such determination regarding the
applicability of any Excise Tax, as well as any decision regarding the extent of
any reduction of the Payment under the provisions of this paragraph, shall be
made by tax professionals who are selected by the Officer, and who are
reasonably acceptable to the Company.”

4.                                       Unless otherwise defined herein, the
capitalized terms used herein shall have the meanings given to them in the
Agreement.

5.                                       Except as amended hereby, the Agreement
shall be and remain in full force and effect.

IN WITNESS WHEREOF, the parties have signed this Amendment, to be effective as
of the date first set forth above.

 

Cornell Companies, Inc.

 

 

 

 

 

 

 

 

By:

 

Patrick N. Perrin

 

 

James Hyman
Chief Executive Officer

 

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