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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