Document:

Ex-10.2

 

Exhibit 10.2

AMENDED AND RESTATED

CORRECTIONS CORPORATION OF AMERICA

EXECUTIVE DEFERRED COMPENSATION PLAN

RECITALS:

     A. Corrections Corporation of America (the “Company”) has established and currently maintains
the Corrections Corporation of America Executive Deferred Compensation Plan (the “Plan”). The Plan
is administered by the Committee (as herein defined), which has the right, subject to certain
limitations, to amend the Plan. The Committee desires to amend and restate the Plan on the terms
and conditions hereinafter set forth.

     B. The Plan is designed primarily for purposes of providing benefits for a select group of
management and highly compensated employees of the Company and its Subsidiaries that adopt the
Plan. It is intended to qualify as a “top hat” plan under Sections 201(2), 301(a)(3) and 401(a)(1)
of the Employee Retirement Income Security Act of 1974, as amended.

ARTICLE I

GENERAL

     Section 1.1 Purpose of the Plan. The purpose of this Plan is to reward certain management and
highly compensated employees of the Company and its Subsidiaries who have contributed to the
Company’s success and are expected to continue to contribute to such success in the future. The
Plan generally provides such employees with the opportunity to defer a portion of their
compensation on the terms and conditions set forth herein.

     Section 1.2 Effective Date. The effective date of the Plan was originally April 1, 2002.
Except as set forth herein or as otherwise required by the context, the effective date of this
amendment and restatement of the Plan is January 1, 2005.

     Section 1.3 Gender and Number. For purposes of interpreting the provisions of this Plan, the
masculine gender shall be deemed to include the feminine, the feminine gender shall be deemed to
include the masculine, and the singular shall include the plural unless otherwise clearly required
by the context.

ARTICLE II

DEFINITIONS

     Section 2.1 Account. Account means, with respect to each Participant, such Participant’s
Deferral Account and Matching Contributions Account.

     Section 2.2 Base Salary. Base Salary means, with respect to each Plan Year, the base salary
of each Participant for such year, including for this purpose salary reduction contributions

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pursuant to this Plan and any Employer-sponsored plan governed by Code Section 125, but excluding
Bonuses, if any.

     Section 2.3 Beneficiary. Beneficiary means the person or persons designated by a Participant
as his or her beneficiary hereunder in accordance with the provisions of Article IV.

     Section 2.4 Board. Board means the Board of Directors of the Company.

     Section 2.5 Bonus. Bonus means any cash bonus earned by an Executive, whether pursuant to a
bonus plan or otherwise.

     Section 2.6 CCA 401(k) Plan. CCA 401(k) Plan means the Corrections Corporation of America
401(k) Savings and Retirement Plan, as the same may from time to time be amended, and any successor
plan thereto.

     Section 2.7 Change in Control. Change in Control means the happening of any of the following:

     (a) any person or entity, including a “group” as defined in Section 13(d)(3) of the Securities
Exchange Act of 1934, other than the Company or a wholly-owned subsidiary thereof or any employee
benefit plan of the Company or any of its Subsidiaries, becomes the beneficial owner of the
Company’s securities having 50% or more of the combined voting power of the then outstanding
securities of the Company that may be cast for the election of directors of the Company (other than
as a result of an issuance of securities initiated by the Company in the ordinary course of
business); or

     (b) as the result of, or in connection with, any cash tender or exchange offer, merger or
other business combination, sale of assets or contested election, or any combination of the
foregoing transactions less than a majority of the combined voting power of the then outstanding
securities of the Company or any successor corporation or entity entitled to vote generally in the
election of the directors of the Company or such other corporation or entity after such transaction
are held in the aggregate by the holders of the Company’s securities entitled to vote generally in
the election of directors of the Company immediately prior to such transaction; or

     (c) during any period of two consecutive years, individuals who at the beginning of any such
period constitute the Board cease for any reason to constitute at least a majority thereof, unless
the election, or the nomination for election by the Company’s stockholders, of each director of the
Company first elected during such period was approved by a vote of at least two-thirds (2/3) of the
directors of the Company then still in office who were directors of the Company at the beginning of
any such period.

     Section 2.8 Code. Code means the Internal Revenue Code of 1986, as the same may from time to
time be amended.

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     Section 2.9 Committee. Committee means the Compensation Committee of the Board or, if none,
the Board or another committee designated by the Board to discharge the duties of the Committee
hereunder.

     Section 2.10 Company. Company means Corrections Corporation of America, a Maryland
corporation, or any successor thereto.

     Section 2.11 Deferral Account. Deferral Account means the Account maintained by each Employer
for each Participant in accordance with Article III hereof.

     Section 2.12 Deferrals. Deferrals has the meaning ascribed to it in Section 3.1(a) hereof.

     Section 2.13 Deferred Compensation Benefit. Deferred Compensation Benefit means, with respect
to each Participant as of any date, such Participant’s vested benefit as determined pursuant to
Article III hereof.

     Section 2.14 Disability. Disability means (i) a Participant’s inability to engage in any
substantial gainful activity by reason of any medically determinable physical or mental impairment
that can be expected to result in death or that has lasted or can be expected to last for a
continuous period of not less that twelve (12) months or (ii) by reason of any medically
determinable physical or mental impairment that can be expected to result in death or can be
expected to last for a continuous period of not less than twelve (12) months, the Participant is
receiving income replacement benefits for a period of not less than three (3) months under an
accident and health plan covering the Company’s employees.

     Section 2.15 Earnings. Earnings means the earnings credited to each Participant’s Account in
accordance with Section 3.1(c) hereof.

     Section 2.16 Employer. Employer means the Company and any Subsidiary of the Company which,
with the written consent of the Company, adopts the Plan.

     Section 2.17 Executive. Executive means a management or highly compensated employee of an
Employer designated by the Committee as eligible to participate in the Plan. The Committee also
may from time to time, in its sole discretion with or without cause, revoke an Executive’s
eligibility to participate in the Plan upon ninety (90) days’ written notice. Any such revocation
shall not, however, reduce any Deferred Compensation Benefits to which the Executive may be
entitled at the time of such revocation. In addition, any such revocation shall not be effective
until the first day of the Plan Year following the Plan Year in which such revocation occurs.

     Section 2.18 Matching Contributions. Matching Contributions has the meaning ascribed to it in
Section 3.1(b) hereof.

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     Section 2.19 Matching Contributions Account. Matching Contributions Account means the Account
maintained by each Employer for each Participant in accordance with Article III hereof.

     Section 2.20 Participant. Participant means any Executive who elects to participate in the
Plan by making Deferrals hereunder.

     Section 2.21 Payment Date(s). Payment Date(s) means, with respect to each Participant, the
commencement date(s) of the payment of such Participant’s Deferred Compensation Benefits as elected
in accordance with Section 3.2(a), as the same may be modified pursuant to Section 3.3(c)(iii).

     Section 2.22 Plan. Plan means the Corrections Corporation of America Executive Deferred
Compensation Plan, as amended herein and as may from time to time be amended hereafter.

     Section 2.23 Plan Year. Plan Year means the calendar year, except that the first Plan Year
shall commence April 1, 2002 and end December 31, 2002.

     Section 2.24 Retirement. Retirement means a Participant’s Separation from Service for any
reason on or after the date such Participant attains age sixty-two (62).

     Section 2.25 Separation from Service. Separation from Service shall mean a Participant’s
“separation from service” as such term is defined under Section 1.409A-1(h) of the U.S. Treasury
Regulations.

     Section 2.26 Specified Employee. Specified Employee has the meaning ascribed to it in Section
1.409A-1(i)(1) of the U.S. Treasury Regulations.

     Section 2.27 Subsidiary. Subsidiary means any corporation (other than the Company) in an
unbroken chain of corporations beginning with the Company if each of the corporations (other than
the last corporation in the unbroken chain) owns stock possessing more than 50% of the total
combined voting power of all classes of stock in one of the other corporations in the chain.

     Section 2.28 Trust Agreement. Trust Agreement means any trust agreement entered into in
connection with the Plan, as the same may from time to time be amended.

     Section 2.29 Trust Fund. Trust Fund means the amounts contributed from time to time by the
Company to the Trustee in accordance with Section 6.3 hereof, plus any earnings thereon. The Trust
Fund shall be held, administered and distributed by the Trustee pursuant to the Trust Agreement.

     Section 2.30
Trustee. Trustee means the persons or person designated as trustee under the
Trust Agreement.

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     Section 2.31 Unforeseeable Emergency. Unforeseeable Emergency means an event which results
(or will result) in severe financial hardship to the Participant as a consequence of an illness or
accident of the Participant, the Participant’s spouse, the Participant’s Beneficiary or the
Participant’s dependent (as determined under Section 152 of the Code, without regard to Sections
152(b)(1), (b)(2) and (d)(1)(B)) or loss of the Participant’s property due to casualty or other
similar extraordinary and unforeseen circumstances beyond the control of the Participant. Examples
of what is not considered to be an Unforeseeable Emergency include the need to send a Participant’s
child to college and the desire to purchase a house.

     Section 2.32 Year(s) of Service. Year of Service means, with respect to each Participant, any
Plan Year throughout which the Participant is employed by an Employer on a full-time basis, as
determined by the Committee in its discretion. In determining Years of Service hereunder, the
Committee may (but need not) give service credit to any Participant who takes an authorized leave
of absence from his employment.

ARTICLE III

DEFERRED COMPENSATION BENEFITS

     Section 3.1 Deferred Compensation Benefits.

     (a) Deferrals. From time to time, each Participant shall file a written election with
the Committee directing his Employer to reduce his Salary and/or Bonuses and to credit the amount
of any such reduction (the “Deferrals”) to the Deferral Account established and maintained for such
Participant pursuant to Section 3.6. Written elections hereunder shall be made in accordance with
rules established by the Committee, subject to the limitations set forth in Section 3.3, and shall
include the information described in Section 3.2. Deferrals shall be credited to each
Participant’s Deferral Account as of such time or times determined by the Committee; provided,
however, that Deferrals of Base Salary shall be credited to each Participant’s Deferral Account not
less often than monthly, and Deferrals of Bonuses shall be credited to each Participant’s Deferral
Account not later than thirty (30) days after the date on which such Bonuses otherwise would have
been paid.

     (b) Employer Matching Contributions. From time to time, there shall be credited to
the Matching Contributions Account established and maintained for each Participant pursuant to
Section 3.6 an amount equal to a percentage of such Participant’s Deferrals, such percentage (which
may be zero) to be determined by the Committee in its discretion (the “Matching Contributions”).
Until such time as the Committee determines otherwise, the amount of Matching Contributions for
each Plan Year shall equal 100% of each Participant’s Deferrals for such Plan Year, up to a maximum
of 5% of Base Salary and Bonuses earned by the Participant during the Plan Year. Matching
Contributions shall be credited to each Participant’s Matching Contributions Account as of such
time or times determined by the Committee, but not later than the date on which the related
Deferrals are credited to the Participant’s Deferral Account. Notwithstanding any other provision
of this Section 3.1(b), any Matching Contributions credited to a Participant’s Matching
Contributions Account under this Section 3.1(b) for a Plan Year shall be reduced by any “matching
contributions” (as such term is defined under the CCA 401(k) Plan) credited to the Participant
under the CCA 401(k) Plan for such Plan Year.

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     (c) Earnings. From time to time, there shall be credited to the Deferral Account and
the Matching Contributions Account established and maintained for each Participant pursuant to
Section 3.6 Earnings with respect to Deferrals, Matching Contributions and Earnings previously
credited to such Accounts in accordance herewith. The rate of Earnings shall be determined from
time to time by the Committee and may be commensurate with the rate of return (positive or
negative) on securities (including Company stock) selected by the Committee; provided, however,
that after the occurrence of a Change in Control, the rate of Earnings shall not be less than 8%
per annum. Until such time as the Committee determines otherwise, the rate of
Earnings for any Plan Year shall equal the actual rate of return earned on any investments
held as part of the Trust Fund and designated by the Committee as a funding mechanism for meeting
each Employer’s obligations under this Plan. Earnings shall be credited to each Participant’s
Deferral Account and Matching Contributions Account as of such time or times determined by the
Committee.

     (d) Vesting.

     (i) Each Participant shall at all times be 100% vested in Deferrals and Earnings
credited to his Deferral Account.

     (ii) As to Matching Contributions with respect to each Plan Year ending on or before
December 31, 2004 and any Earnings on such contributions, each Participant shall become
vested based upon the Participant’s Years of Service with his Employer following completion
of such Plan Year. Such vesting shall be determined in accordance with the following table:

	 	 	 
	Years of Service	 	 
	after Plan Year to which Matching	 	Percentage Vested in such Matching
	Contributions Relate	 	Contributions and Earnings thereon
	1
	 	33 1/3%
	2
	 	66 2/3%
	3
	 	100%

     (iii) As to Matching Contributions with respect to each Plan Year beginning on or after
January 1, 2005 and any Earnings on such contributions, each Participant shall become vested
based upon the Participant’s total “years of service” (as determined under the CCA 401(k)
Plan) in accordance with the vesting schedule set forth in the CCA 401(k) Plan.

     (iv) Notwithstanding anything herein to the contrary, each Participant shall become
100% vested in amounts credited to his Matching Contributions Account upon termination of
such Participant’s employment with the Employer by reason of death, Disability or Retirement
or upon the occurrence of a Change in Control; provided,

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however, that the Participant shall not become vested upon the occurrence of a Change in Control to the extent such vesting
would cause any portion of his Deferred Compensation Benefits to constitute an “excess
parachute payment” under Code Section 280G. The Committee in its discretion shall determine
whether and to what extent any Deferred Compensation Benefits constitute “excess parachute
payments” hereunder.

     3.2 Payment of Deferred Compensation Benefits.

     (a) Payment Dates Generally. Each deferral election described in Section 3.1(a) shall
also contain the Participant’s election regarding the Payment Date for the portion of his Deferred
Compensation Benefits to which such election relates. The Payment Date may be any date or time
specified by the Participant and permitted by the Committee, subject to the following limitations:

     (i) Except as otherwise set forth in Section 3.4, a Participant shall not be entitled
to receive payment of any portion of his Deferred Compensation
Benefits earlier than the first
to occur of (A) sixty (60) days after the Participant’s Separation from Service; (B) the
date of the Participant’s Disability; (C) the date of the Participant’s death; or (D) the
first day of the sixth (6th) Plan Year following the Plan Year in which such Participant
first began participating in the Plan.

     (ii) Payment of a Participant’s Deferred Compensation Benefits must commence on or
before the later of (A) sixty (60) days after the Participant’s Separation from Service, or
(B) the fifteenth (15th) day of the month next following the month in which such Participant
attains age sixty-five (65).

     (iii) Payment of a Participant’s Deferred Compensation Benefits may begin on as many
as, but not more than, three (3) different Payment Dates.

     (iv) The form of payment of any Deferred Compensation Benefits (as determined under
subparagraph (b) below) that begin on a particular Payment Date must be the same.

     (b) Form of Payment. Each deferral election described in Section 3.1(a) shall also
contain the Participant’s election regarding the form of payment of the portion of his Account to
which such election applies. In each election form, the Participant may elect to receive payment
of the portion of his Deferred Compensation Benefits to which such election relates in one (but not
more than one) of the following forms:

     (i) a lump sum payment; or

     (ii) to the extent permitted by the Committee in its discretion, in equal monthly
installments over a period not exceeding sixty (60) months.

Deferred Compensation Benefits shall be paid in cash, unless the Participant or Beneficiary
consents to payment in the form of other property.

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     3.3 Deferral Elections; Modifications.

     (a) Deferral Elections Generally. Each written election described in Section 3.1(a)
shall be made at such time and in such manner as determined by the Committee, but in no event later
than December 31 of the year prior to the beginning of the Plan Year for which it is to be
effective; provided, however, that in the year in which a Participant first becomes eligible to
participate in the Plan, such election may be made within thirty (30) days after the
Participant becomes eligible to participate, but such election shall be effective only with respect
to compensation for services performed after the date the election is made. Except as otherwise
provided in subparagraph (c) or on an election form, any elections as to Payment Dates or form of
benefit made pursuant to Section 3.2 shall be irrevocable as to any Deferred Compensation Benefits
that accrue while such elections are in effect.

     (b) Certain Limitations on Deferrals. For any Plan Year, a Participant may defer an
amount up to 50% of the Base Salary and 100% of the Bonuses earned by the Participant during the
Plan Year, provided that for the initial Plan Year, Base Salary and Bonuses earned prior to the
effective date of the Plan shall be taken into account in determining these limitations. Except as
otherwise provided in subparagraph (a), a Participant may defer hereunder only Base Salary and
Bonuses that are earned on or after the date the election is filed with the Committee.

     (c) Termination or Modification of Elections. Notwithstanding the last sentence of
subparagraph (a):

     (i) no revocation of a written election described in Section 3.1(a) shall take effect
until the first day of the Plan Year following the Plan Year in which the Committee receives
such revocation;

     (ii) a written election described in Section 3.1(a) shall automatically terminate on
the earliest to occur of (A) the termination of a Participant’s employment by his Employer
for any reason or (B) the termination of the Plan; and

     (iii) if permitted by the Committee in its sole discretion, a Participant may change
any Payment Date (but not the form of benefit) previously designated by the Participant
pursuant to Section 3.2, provided, however, that: (A) the Participant must make an election
designating the new Payment Date at least twelve (12) months prior to the Payment Date
previously designated; (B) such election shall not take effect until at least twelve (12)
months after the date on which it is made; (C) the new Payment Date must be at least five
(5) years later in time than the Payment Date previously designated; (D) all payments that
otherwise would have begun on the Payment Date previously designated must, after such
change, begin on the new Payment Date; and (E) the new Payment Date designated by the
Participant must otherwise comply with the requirements of Section 3.2.

     Section 3.4 Special Rules Related to Distributions.

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     (a) Unforeseeable Emergency Distributions. The Committee may at any time, upon
written request of the Participant, cause to be paid to such Participant an amount equal to all or
any part of such Participant’s Deferred Compensation Benefits if the Committee determines, in its
absolute discretion based on such reasonable evidence that it shall require, that such a payment or
payments is necessary for the purpose of alleviating the consequences of an Unforeseeable Emergency
occurring with respect to the Participant. This decision will be determined based upon the
relevant facts and circumstances of each case. Payments of amounts because of an Unforeseeable
Emergency shall be permitted only to the extent reasonably
necessary to satisfy the emergency need (including amounts necessary to pay any Federal,
state, local or foreign income taxes or penalties reasonably anticipated to result from the
distribution) and shall not be permitted to the extent such need may be relieved through
reimbursement or compensation from insurance or otherwise, by liquidation of the Participant’s
assets (to the extent liquidation would not itself cause severe financial hardship), or by the
cessation of deferrals under the Plan.

     (b) Small Accounts. If a Participant’s Account is $15,500 (this amount shall be
adjusted for cost-of-living increases pursuant to Section 402(g)(4) of the Code) or less at the
time of the Participant’s Separation from Service, such Participant’s Deferred Compensation
Benefits shall automatically be paid to him in a single lump sum payment as soon as practicable
following his Separation from Service.

     Section 3.5 Withholding. Each Employer shall withhold from a Participant’s Base Salary or
Bonus such amounts as are necessary to satisfy its withholding obligations thereunder as to any
Deferrals by the Participant. In addition, each Employer shall deduct from any distributions
hereunder any taxes or other amounts required by law to be withheld therefrom.

     Section 3.6 Participants’ Accounts. Each Employer shall establish and maintain a Deferral
Account and a Matching Contributions Account for each Participant and such sub-accounts as the
Committee deems necessary or appropriate. Each Deferral Account so established shall be credited
as appropriate for Deferrals and Earnings with respect to such Deferrals and debited for any
distributions from such Account. Each Matching Contributions Account so established shall be
credited as appropriate for Matching Contributions and Earnings with respect to such Matching
Contributions and debited for any distributions from such Account.

     Section 3.7 Delay of Payment for Specified Employees. Notwithstanding anything to the
contrary in this Plan, if the Committee determines that upon a Participant’s Separation from
Service from the Company (or at such other time that the Committee determines to be relevant) the
Participant is a Specified Employee of the Company and that any payments to be provided to the
Participant pursuant to this Plan upon the Participant’s Separation from Service are or may become
subject to the additional tax under Section 409A(a)(1)(B) of the Code or any other taxes or
penalties imposed under Section 409A of the Code (“Section 409A Taxes”) if provided at the time
otherwise required under this Plan, then such payments shall be delayed until the date that is six
months after the date of the Participant’s Separation from Service from the Company, or such
shorter period that, as determined by the Committee, is sufficient to avoid the imposition of
Section 409A Taxes (the “Payment Delay Period”). Any payments delayed

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pursuant to this Section 3.7
shall be made in a lump sum on the first day of the seventh month following the Participant’s
Separation from Service, or such earlier date that, as determined by the Committee, is sufficient
to avoid the imposition of any Section 409A Taxes.

ARTICLE IV

BENEFICIARIES

     Section 4.1 Beneficiary Designations. A designation of a Beneficiary hereunder may be made
only by an instrument (in form acceptable to the Committee) signed by the Participant and filed
with the Committee prior to the Participant’s death. In the absence of such a designation and at
any other time when there is no existing Beneficiary designated hereunder, the Beneficiary of a
Participant shall be his estate. A person designated by a Participant as his Beneficiary who dies
or which ceases to exist shall not be entitled to any part of any payment thereafter to be made to
the Participant’s Beneficiary unless the Participant’s designation specifically provides to the
contrary. If two or more persons designated as a Participant’s Beneficiary are in existence with
respect to a single Deferred Compensation Benefit, the amount of any payment to the Beneficiary
under this Plan shall be divided equally among such persons, unless the Participant’s designation
specifically provided to the contrary.

     Section 4.2 Change in Beneficiary. A Participant may, at any time and from time to time,
change a Beneficiary designation hereunder without the consent of any existing Beneficiary or any
other person. Any change in Beneficiary shall be made by giving written notice thereof to the
Committee and any change shall be effective only if received by the Committee prior to the death of
the Participant.

     Section 4.3 Distributions to Beneficiaries. The Beneficiary or Beneficiaries of a Participant
shall be entitled to receive the unpaid Deferred Compensation Benefits to which the Participant was
entitled at his death payable in a lump sum as soon as practicable following the date of the
Participant’s death.

ARTICLE V

MISCELLANEOUS

     Section 5.1 Liability of Employer. Nothing in this Plan shall constitute the creation of a
trust or other fiduciary relationship between an Employer and any Participant, Beneficiary or any
other person.

     Section 5.2 Ownership of Assets; Relationship with Company. Notwithstanding anything herein
to the contrary, Participants shall have no right, title or interest whatsoever in or to the
Accounts or the Deferred Compensation Benefits. Nothing contained in the Plan, and no action taken
pursuant to its provisions, shall create or be construed to create a trust of any kind or a
fiduciary relationship between the Company and any Participant or any other person. To the extent
that any person acquires a right to receive payments from the Company under this Plan, such right
shall be no greater than the right of an unsecured general creditor of the Company.

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     Section 5.3 No Guarantee of Employment. Nothing in this Plan shall be construed as
guaranteeing future employment to any Participant. Without limiting the generality of the
preceding sentence, except as otherwise set forth in a written agreement, an Executive who elects
to become a Participant continues to be an employee of an Employer solely at the will of such
Employer subject to discharge at any time, with or without cause.

     Section 5.4 Payment to Guardian. If a benefit payable hereunder is payable to a minor, to a
person declared incompetent or to a person incapable of handling the disposition of his property,
the Committee may direct payment of such benefit to the guardian, legal representative or person
having the care and custody of such minor, incompetent or person. The Committee may require such
proof of incompetency, minority, incapacity or guardianship as it may deem appropriate prior to
distribution of the benefit. Such distribution shall completely discharge the Employers from all
liability with respect to such benefit.

     Section 5.5 Assignment. No right or interest under this Plan of any Participant or
Beneficiary shall be assignable or transferable in any manner or be subject to alienation,
anticipation, sale, pledge, encumbrance or other legal process or in any manner be liable for or
subject to the debts or liabilities of the Participant or Beneficiary.

     Section 5.6 Severability. If any provision of this Plan or the application thereof to any
circumstance(s) or person(s) is held to be invalid by a court of competent jurisdiction, the
remainder of the Plan and the application of such provision to other circumstances or persons shall
not be affected thereby.

     Section 5.7 Expenses; Liability for Benefits. Each Employer shall be liable for the payment
of the Deferred Compensation Benefits which are payable hereunder to its employees and for its pro
rata portion of the expenses of administering the Plan, as determined by the Committee.

     Section 5.8 Top Hat Plan. The Plan is designed primarily for purposes of providing benefits
for a select group of management and highly compensated employees of the Company and its
Subsidiaries that adopt the Plan. It is intended to qualify as a “top hat” plan under Sections
201(2), 301(a)(3) and 401(a)(1) of the Employee Retirement Income Security Act of 1974, as amended.

ARTICLE VI

ADMINISTRATION OF PLAN

     Section 6.1 Administration.

     (a) General. The Plan shall be administered by the Committee. The Committee shall
have sole and absolute discretion to interpret where necessary all provisions of the Plan
(including, without limitation, by supplying omissions from, correcting deficiencies in, or
resolving inconsistencies or ambiguities in, the language of the Plan), to determine the rights and
status under the Plan of Participants or other persons, to resolve questions or disputes arising
under the Plan and to make any determinations with respect to the benefits payable under the

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Plan and the persons entitled thereto as may be necessary for the purposes of the Plan. The Committee’s
determination of the rights of any employee or former employee hereunder shall be final and binding
on all persons, subject only to the appeal provisions outlined in Section 6.4 hereof.

     (b) Compliance with Tax Provisions. The Plan is intended to comply with the
provisions of Section 409A of the Code (including the U.S. Treasury Regulations and other
guidance issued thereunder), and the Committee shall interpret the Plan in a manner consistent
therewith.

     (c) Delegation of Duties. The Committee may delegate any of its administrative
duties, including, without limitation, duties with respect to the processing, review,
investigation, approval and payment of Deferred Compensation Benefits, to a named administrator or
administrators.

     Section 6.2 Regulations. The Committee may promulgate any rules and regulations it deems
necessary in order to carry out the purposes of the Plan or to interpret the provisions of the
Plan; provided, however, that no rule, regulation or interpretation shall be contrary to the
provisions of the Plan. The rules, regulations and interpretations made by the Committee shall,
subject only to the appeal provisions outlined in Section 6.4 hereof, be final and binding on all
persons.

     Section 6.3 Trust Fund. The Company shall, from time to time, contribute to the Trustee such
amounts as the Company deems necessary or appropriate to fund the full amount of Deferred
Compensation Benefits accrued hereunder. The Trustee shall invest and reinvest the Trust Fund in
accordance with the terms of this Plan and the Trust Agreement. At the option of the Company, the
Company may pay from its funds, or may direct the Trustee to pay from the Trust Fund, all expenses
of administering the Trust Fund, including Trustee’s fees and expenses, and all taxes and other
expenses attributable to the Trust Fund, all as determined by the Company.

     Section 6.4 Appeal Provisions. The Committee shall determine the rights of any employee or
former employee to any Deferred Compensation Benefits hereunder. Any employee or former employee
who believes that he has not received the Deferred Compensation Benefits to which he is entitled
under the Plan may file a claim in writing with the Committee. The Committee shall, no later than
90 days after the receipt of a claim (unless special circumstances require an extension of up to 90
additional days, provided that written notice of the extension of time is given to the claimant
within the first 90 day period), either allow or deny the claim in writing. If a claimant does not
receive written notice of the Committee’s decision on his claim within the above-mentioned period,
the claim shall be deemed to have been denied in full.

     A denial of a claim by the Committee, wholly or partially, shall be written in a manner
calculated to be understood by the claimant and shall include:

     (a) the specific reasons for the denial;

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     (b) specific reference to pertinent Plan provisions on which the denial is based;

     (c) a description of any additional material or information necessary for the claimant to
perfect the claim and an explanation of why such material or information is necessary; and

     (d) an explanation of the claim review procedure.

     A claimant whose claim is denied (or his duly authorized representative) may within 60 days
after receipt of denial of a claim file with the Committee a written request for a review of such
claim. If the claimant does not file a request for review of his claim within such 60-day period,
the claimant shall be deemed to have acquiesced in the original decision of the Committee on his
claim. If such an appeal is so filed within such 60-day period, the Company (or its delegate)
shall conduct a full and fair review of such claim. During such review, the claimant shall be
given the opportunity to review documents that are pertinent to his claim and to submit issues and
comments in writing.

     The Company shall mail or deliver to the claimant a written decision on the matter based on
the facts and the pertinent provisions of the Plan within 60 days after the receipt of the request
for review (unless special circumstances require an extension of up to 60 additional days, in which
case written notice of such extension shall be given to the claimant prior to the commencement of
such extension). Such decision shall be written in a manner calculated to be understood by the
claimant, shall state the specific reasons for the decision and the specific Plan provisions on
which the decision was based and shall, to the extent permitted by law, be final and binding on all
interested persons. If the decision on review is not furnished to the claimant within the
above-mentioned time period, the claim shall be deemed to have been denied on review.

     Section 6.5 Revocability of Committee/Company Action. Any action taken by the Committee with
respect to the rights or benefits under the Plan of any employee or former employee shall be
revocable by the Committee as to payments not yet made to such person, and acceptance of any
Deferred Compensation Benefits under the Plan constitutes acceptance of and agreement to the
Committee’s or the Company’s making any appropriate adjustments in future payments to such person
(or to recover from such person) any excess payment or underpayment previously made to him.

     Section 6.6 Amendment. The Committee may at any time (without the consent of any Subsidiary
which adopts the Plan) amend any or all of the provisions of this Plan, except that no such
amendment may (a) reduce the balance of any Participant’s Account as of the date of such amendment,
(b) change the time or form of distribution from a Participant’s Account or (c) change the
provisions of the Plan applicable to a Participant’s Account upon a Change in Control, without the
prior written consent of such Participant. Any amendment shall be in the form of a written
instrument executed by an officer of the Company pursuant to a resolution adopted by the Committee.
Subject to the foregoing provisions of this Section 6.6, such amendment shall become effective as
of the date specified in such instrument or, if no such date is specified, on the date of its
execution.

13

 

     Section 6.7 Termination. The Committee, in its discretion (without the consent of any
Subsidiary which adopts the Plan), may terminate this Plan and pay amounts due hereunder to the
full extent permitted by and in accordance with Section 409A of the Code (including, but not
limited to, Section 1.409A-3(j)(4)(ix) of the U.S. Treasury Regulations), except that no such
termination may (a) reduce the balance of any Participant’s Account as of the date of such
termination or (b) materially change the provisions of the Plan applicable to a Participant’s
Account upon a Change in Control, without the prior written consent of such Participant. Any such
termination shall be expressed in the form of a written instrument executed by an officer of
the Company pursuant to a resolution adopted by the Committee. Subject to the foregoing
provisions of this Section 6.7, such termination shall become effective as of the date specified in
such instrument or, if no such date is specified, on the date of its execution. Written notice of
any termination shall be given to the Participants as soon as practicable after the instrument is
executed.

[Signature Page to Follow]

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     Executed
this 15th day of August, 2007.

	 	 	 	 	 	 	 
	 	 	CORRECTIONS CORPORATION OF AMERICA	 	 
	 
	 

	 	By:	 	/s/ David M. Garfinkle	 	 
	 

	 	 	 	 	 	 
	 

	 	Its:	 	Vice President, Finance and
Controller	 	 
	 

	 	 	 	 	 	 
	 

15Ex-10.3

 

Exhibit
10.3

SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT

     This
SECOND AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the
“Agreement”), dated as of this 15th day of August, 2007, is by and between Corrections Corporation of America, a Maryland
corporation formerly known as Prison Realty Trust, Inc. and having a principal place of business at
10 Burton Hills Boulevard, Nashville, Tennessee (the “Company”), and John D. Ferguson, a resident
of Nashville, Tennessee (the “Executive”) and amends and replaces in its entirety that certain
Employment Agreement, dated as of August 4, 2000, and that certain First Amended and Restated
Employment Agreement, dated as of February 27, 2007 between the Company the Executive, as amended.

W I T N E S S E T H:

     WHEREAS, the Board of Directors of the Company has resolved that it is in the best interest of
the Company that the Executive be 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.

     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 Executive Officer and President
of the Company and such other office or offices to which Executive may be appointed or elected by
the Board of Directors, with the Executive’s consent, including, but not limited to, Vice Chairman
of the Board of Directors. Subject to the provisions of Section 7 hereof, the Company shall use its
best efforts to have the Executive elected to the Board of Directors of the Company, and the
Executive shall serve in such capacity if elected. 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 offices of Chief Executive Officer and President, 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. 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 provisions of termination as hereinafter provided, the initial
term of the Executive’s employment under this Agreement shall terminate on December 31, 2002 (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 additional one (l) year periods on the same terms and conditions as set forth herein
(individually, and collectively, the “Renewal Term”).

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     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. If the Company or the Executive does
not elect to extend the Executive’s employment under this Agreement, the Executive shall be
considered to have been terminated without Cause upon the expiration of his employment, and the
Executive will receive the payments and benefits set forth in this Agreement. The Executive’s date
of termination, for the purposes of this Agreement, shall be the date of the Company’s last payment
to the Executive.

     4. Compensation.

     4.1. Base Salary. The Company shall pay the Executive an annual salary (“Base Salary”)
with respect to the Initial Term as follows: (i) for the period beginning on the date of this
agreement and ending on December 31, 2000, the Company shall pay the Executive a pro-rated salary
based on an annual salary of $350,000; (ii) for the period beginning on January 1, 2001 and ending
on December 31, 2001, the Company shall pay the Executive a salary equal to $350,000; and (iii) for
the period beginning on January 1, 2002 and ending on December 31, 2002, the Company shall pay the
Executive a salary equal to $400,000. The salary payable to the Executive hereunder shall be paid
in accordance with the Company’s normal payroll practices, but in no event less often than monthly.
The annual salary to be paid to the Executive during the Renewal Term shall be equal to a minimum
of $540,000. During each year of this Agreement, the Executive’s compensation will be reviewed by
the Board of Directors of the Company, or such committee or subcommittee to which compensation
review has 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, may increase the Executive’s compensation to any amount it may deem
appropriate.

     4.2. Bonus. The Company shall pay to the Executive a cash bonus with respect to the
Company’s 2000 fiscal year equal to $75,000, payable on or before January 31, 2001. The Company
shall pay to the Executive a cash bonus with respect to the Company’s 2001 fiscal year equal to
$175,000, payable on or before January 31, 2002. In the event the Company achieves certain
financial performance targets as established by the Board of Directors of the Company after
consultation with the Executive for the Company’s 2001 fiscal year or such other period as the
parties mutually agree, the Company shall also pay the Executive a cash bonus equal to $175,000,
payable at the earlier of March 31, 2002 and ten (10) days following the confirmation by the Board
of Directors of the Company that such targets have been met. The Company shall pay to the Executive
a cash bonus hereunder with respect to the Company’s 2002 fiscal year equal to $200,000, payable on
or before January 31, 2003. In the event the Company achieves certain financial performance
targets as established by the Board of Directors of the Company after consultation with the
Executive for the Company’s 2002 fiscal year or such other period as the parties mutually agree,
the Company shall pay to the Executive a cash bonus equal to $200,000, payable at the earlier of
March 31, 2003 and ten (10) days following the confirmation by the Board of Directors of the
Company that such targets have been met.

     During any Renewal Term hereof, the Executive shall not be guaranteed to receive any annual
cash bonus. The Executive shall, however, be eligible to participate in and receive any

2

 

cash bonuses due under the Company’s Management Cash Bonus Incentive Plan (or such other plan) that
may be adopted by the Company’s Board of Directors, or such committee or subcommittee to which
compensation matters have been delegated, and in effect during the applicable year of any Renewal
Term. Any bonus to which the Executive may be entitled during the Renewal Period shall be paid to
the Executive by March 15 of the year following the year to which the bonus relates; provided,
however, that if the Company is unable to determine the amount of such bonus prior to such date,
then such bonus shall be paid no later than December 31 of such year.

     4.3. Benefits.

     4.3.1 General. The Executive shall be entitled to an annual paid vacation as
established by the Board of Directors of the Company. 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. Except as may be
provided for in Section 4.3.2. herein, 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.

     4.3.2 Life, Health and Disability Insurance. Notwithstanding the benefit provisions
of Section 4.3.1. herein, and in addition to the benefit provisions contained therein, the Company
agrees to the following:

               (i) To provide and maintain, during the period of the Executive’s employment with the
Company, and for a period of two (2) years thereafter, health insurance on the Executive and
his spouse in such amounts as are customary for or available to executives of the Company
with the costs of such benefits (including the Company’s portion of any premiums) paid by
the Company on the Executive’s behalf following Executive’s termination of employment
included in the Executive’s gross income; and

               (ii) To provide and maintain, through insurance or on its own account, coverage for the
Executive, relating to illness or incapacity resulting in the Executive being unable to
perform his services, that will provide payment of the Executive full salary and benefits
for one (1) year. To the extent that payments are received from any worker’s compensation or
other Company paid plans, the Company’s obligations will be reduced by amounts so received.

With respect to the Company’s obligations under this Section 4.3.2, the Company agrees to waive any
and all provisions relating to any pre-existing conditions of the Executive and any

3

 

waiting period that may be required under the terms of the Company’s health insurance plan or
policy with respect to the coverage of the Executive thereunder.

     4.4. 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. Notwithstanding any
other provision of this Section 4.4, the Executive shall be reimbursed for such expenses no later
than December 31 of the year following the year in which such expenses were incurred

     4.5. 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.

     4.6. Options to Purchase Stock/SARs. The provisions of the first two paragraphs of
this Section 4.6 were applicable only with respect to the Initial Term. Upon execution of this
Agreement at the commencement of the Initial Term, the Company shall grant to the Executive an
option to purchase up to 1,000,000 shares of common stock, $.0l par value per share, of the
Company, having an exercise price equal to $2.38 per share. The option to purchase 500,000 of the
shares shall vest immediately upon the execution of this Agreement, with the option to purchase
500,000 shares vesting upon the first anniversary hereof. Executive shall also be entitled to
receive upon execution of this Agreement an option to purchase: (i) 500,000 shares of common stock
of the Company, having an exercise price equal to $5.00 per share, with such option vesting upon
the second anniversary hereof; and (ii) 500,000 shares of the Company’s common stock having an
exercise price of $7.50 per share, with such option vesting on the third anniversary hereof. The
terms and conditions of the options shall be set forth in an option agreement in form substantially
similar to that attached hereto as Exhibit A (the “Option Agreement”).

     In the event the stockholders of the Company shall fail to approve the grant of options or
warrants or any amendment to the stock option plan authorizing such grant thereunder (the “Plan”)
as described above on or before December 31, 2000, the Company shall, on or before December 31,
2000, in lieu of the grant of options, in the event such grant has not occurred, or in
consideration for the cancellation thereof if such grant has occurred, grant the Executive
2,000,000 stock appreciation rights (each, a “SAR” and, collectively, the “SARs”). The SARs shall
vest twenty-five percent (25%) upon the execution of this Agreement, twenty-five percent (25%) upon
the first anniversary hereof, twenty-five percent (25%) upon the second anniversary hereof and
twenty-five percent (25%) upon the third anniversary hereof and shall be exercisable for a period
often (10) years after the date hereof. The exercise price shall be $2.38 per share for the first
and second tranche of SARs that vests, $5.00 per share for the third tranche of SARs that vests and
$7.50 per share for the fourth tranche of SARs that vests. The SARs shall otherwise have the same
terms and conditions, including acceleration of vesting in certain events, as applies to the
options.

     Thereafter during the term, the Executive shall be eligible to participate in the Plan or, to
the extent more favorable to the Executive, other equity plan or plans established by the Board of
Directors of the Company for the Company’s senior executive officers, as the same may be

4

 

amended from time to time (provided that no such amendment shall materially diminish the
benefits to Executive thereunder), as and to the extent other senior executive officers participate
in the same.

     5. Termination of Agreement.

     5.1. Termination of Agreement Upon Death of Executive.

     5.1.1 General. The Company may terminate this Agreement without any further obligation
(except as provided in this Section 5.1) to the Executive on the death of the Executive. In the
event of the Executive’s death while this Agreement is in effect, the Executive’s Base Salary shall
continue to be paid to the Executive’s estate or the Executive’s beneficiaries for a period of one
(1) year from the date of death. Nothing in this Section 5.1.1. is intended to effect the
entitlement of the Executive or his estate to any payments or benefits to which he or it would
otherwise be entitled under any other Company plan or program.

     5.1.2 Salary, Bonus and Options. If the Executive’s employment shall be terminated
because of the Executive’s death, the Executive’s estate or designated beneficiaries shall receive,
as soon as practicable: (A) the actual bonus, if any, he would have received in respect of the
fiscal year in which his employment terminates, prorated by a fraction, the numerator of which is
the number of days of the fiscal year until his termination of employment and the denominator of
which is 365, payable at the same time as such bonus would be paid to him under the term of this
Agreement and (B) accrued but unpaid Base Salary through the date of Executive’s termination of
employment and any additional payments under applicable plans or programs to which the Executive,
Executive’s estate or designated beneficiaries are entitled pursuant to the terms of such plans or
programs (collectively, the “Accrued Rights”). In addition, the Executive’s estate or designated
beneficiaries shall, in accordance with any agreement relating to such options, have the right to
exercise any vested, but unexercised, options to purchase shares of the Company’s common stock or
other equity securities of the Company for the duration of such options’ terms. Any unexercised and
any non-vested options to purchase shares of common stock or other equity securities of the Company
previously granted to Executive shall be forfeited by the Executive.

     5.2. Termination of Agreement Upon Disability of Executive.

     5.2.1 General. The Company may terminate this Agreement without any further
obligation (except as provided in this Section 5.2) to the Executive on the Disability of the
Executive. In the event of the Executive’s Disability during the course of his employment
hereunder, the Executive’s Base Salary shall continue to be paid to the Executive for a period of
one (1) year from the date of Disability. Nothing in this Section 5.2.1. is intended to affect the
entitlement of the Executive or his estate to any payments or benefits to which he or it would
otherwise be entitled under any other Company plan or program.

     5.2.2 Salary, Bonus and Options. If the Executive’s employment shall be terminated
because of the Executive’s Disability, the Company shall pay to the Executive, as soon as
practicable his Accrued Rights. In addition, the Executive shall, in accordance with any agreement
relating to such options, have the right to exercise any vested, but unexercised,

5

 

options to purchase shares of the Company’s common stock or other equity securities of the
Company for the duration of such options’ terms. Any unexercised and any non-vested options to
purchase shares of common stock or other equity securities of the Company previously granted to
Executive shall be forfeited by the Executive.

     5.2.3 Definition of Disability. For purposes of this Agreement, “Disability” shall
mean either (i) the Executive’s inability to engage in any substantial gainful activity by reason
of any medically determinable physical or mental impairment that can be expected to result in death
or that has lasted or can be expected to last for a continuous period of not less that twelve (12)
months or (ii) by reason of any medically determinable physical or mental impairment that can be
expected to result in death or can be expected to last for a continuous period of not less than
twelve (12) months, the Executive is receiving income replacement benefits for a period of not less
than three (3) months under an accident and health plan covering the Company’s employees.

     5.3. Termination for Cause.

     5.3.1 General. During the term of this Agreement, the Company may, at any time and in
its sole discretion, terminate this Agreement for Cause (as hereinafter defined), effective as of
the date of provision of written notice to the Executive thereof. Notwithstanding the foregoing,
the Executive shall not be deemed to have been terminated for Cause unless and until there shall
have been delivered to him a copy of a resolution duly adopted by the affirmative vote of not less
than a majority of the entire membership of the Board of Directors of the Company at a meeting of
the Board called and held for that purpose (after reasonable notice to the Executive, and an
opportunity for the Executive, together with counsel of his choice, to be heard before the Board of
Directors of the Company), finding that the Executive was, in the good faith opinion of the Board
of Directors of the Company, guilty of conduct set forth in Section 5.3.3. hereof and specifying
the particulars thereof in reasonable detail.

     5.3.2 Salary, Bonus and Options. If the Executive’s employment shall be terminated
for 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”); (ii) the
Company shall not have any further obligations to the Executive under this Agreement except those
required to be provided by law; and (iii) any unexercised and any non-vested options to purchase
shares of common stock or other equity securities of the Company previously granted to Executive
shall be forfeited by the Executive.

     5.3.3 Definition of “Cause”. For purposes of this Agreement, “Cause” shall mean: (i)
conviction of a felony or of a crime involving misappropriation or embezzlement; (ii) willful and
material wrongdoing by the Executive, including, but not limited to, acts of dishonesty or fraud,
which have a material adverse effect on the Company or any of its subsidiaries; (iii) repeated
material failure of the Executive to follow the direction of the Company and its Board of Directors
regarding the material duties of employment; or (iv) material breach by the Executive of a material
obligation under this Agreement and failure to cure such breach within thirty (30) days after being
given written notice of such breach by the Company.

     5.4. Termination Without Cause or Resignation for Good Reason.

6

 

     5.4.1 General. The Company has the right to terminate the Executive’s employment,
without Cause, effective as of the date of provision of written notice to the Executive thereof. In
addition, the Executive may resign for Good Reason, as defined herein, effective as of the date of
provision of written notice to the Company thereof.

     5.4.2 Effect of Termination Without Cause or Resignation for Good Reason. In the event
the Executive is terminated without Cause by the Company or in the event the Executive resigns for
Good Reason, the Company shall pay to the Executive, as soon as practicable, his Accrued Rights.
The Company shall also pay the Executive an amount equal to two (2) times the Executive’s Base
Salary, based upon the annual rate payable as of the date of termination, without any cost of
living adjustments, payable on a monthly basis for a period of two (2) years from the date of
termination or resignation. In lieu of the foregoing, if such termination or resignation occurs
within the two (2) year period following a Change of Control (as defined in Section 5.5.3. herein),
the Company instead shall pay to the Executive (i) his Accrued Rights as soon as is practicable
following the termination of employment and (ii) the Change of Control Severance (as defined in
Section 5.5.2. herein) within sixty (60) days of the termination of Executive’s employment. The
Company’s obligation to make the payments set forth in this Section 5.4.2. shall be unconditional,
and the Executive shall not be required to mitigate the amount of any payment provided for in this
Section 5.4.2. In addition:

               (i) the Executive shall continue to be covered, for the two (2) year period, under
medical, health, life and disability insurance plans of the Company, with the costs of such
benefits (including the Company’s portion of any premiums) paid by the Company on the
Executive’s behalf included in the Executive’s gross income.

               (ii) the Executive shall, in accordance with any agreement relating to such options,
have the right to exercise any vested, but unexercised, options to purchase shares of the
Company’s common stock or other equity securities of the Company for the duration of such
options’ terms. Any unexercised and any non-vested options to purchase shares of common
stock or other equity securities of the Company previously granted to Executive shall be
forfeited by the Executive.

     5.4.3 Definition of “Good Reason”. For the purposes of this Agreement, “Good Reason”
shall mean: (i) removal from the offices which Executive holds, (ii) the assignment to Executive of
any duties inconsistent with Executive’s position, authority, duties or responsibilities as
contemplated by Section 1. hereof, any adverse change in Executive’s reporting responsibilities, or
any action by Company that results in a diminution in such position, authority, duties or
responsibilities, but excluding for these purposes an isolated and insubstantial action not taken
in bad faith and which is remedied by Company promptly after receipt of notice thereof given by
Executive, (iii) any diminution in Executive’s compensation in violation of this Agreement, (iv)
the relocation, without the consent of Executive, of Company’s principal executive offices or the
offices of Executive to a location more than forty (40) miles from Nashville, Tennessee, or (v) the
Company or its affiliates materially breach this Agreement or materially breach any other agreement
between Executive and Company or its Affiliates, including the Option Agreement and fails to cure
such breach within thirty (30) days of its receipt of written notice from Executive specifying the
breach.

7

 

     5.5. Resignation by Executive in the Event of a Change of Control.

     5.5.1 General. The Executive shall be entitled to resign his employment with the
Company in the event of a Change of Control of the Company pursuant to this Section 5.5 at any time
within six (6) months following the occurrence of a Change of Control. The fact that the Executive
may choose not to resign his employment in the event of a Change of Control shall in no way affect
the Executive’s right to do so upon the occurrence of a subsequent transaction or event which
constitutes a Change of Control of the Company.

     5.5.2 Effect of Resignation in the Event of a Change of Control. In the event the
Executive resigns in connection with a Change of Control of the Company, the Company shall pay to
the Executive his Accrued Rights. The Company shall also pay the Executive, a one-time payment to
be paid within sixty (60) days of Executive’s resignation, 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 (such amount, the “Change of Control Severance”). The Company’s
obligation to make the payments set forth in this Section 5.5.2. shall be unconditional, and the
Executive shall not be required to mitigate the amount of any payment provided for in this Section
5.5.2. In addition:

               (i) the Executive shall continue to be covered, for the two (2) year period, under
medical, health, life and disability insurance plans of the Company with the costs of such
benefits (including the Company’s portion of any premiums) paid by the Company on the
Executive’s behalf included in the Executive’s gross income.

               (ii) all options (whether vested or un-vested) to purchase shares of common stock or
other equity securities of the Company previously granted by the Company to the Executive
shall become immediately exercisable for the duration of such options’ terms.

     5.5.3 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

8

 

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;

provided, however, that, notwithstanding the foregoing, the merger of the Company and/or its
subsidiaries with CCA, and the completion of the transactions contemplated thereby, including the
restructuring of the Company’s board of directors, all as described in the Company’s proxy
statement dated July 31, 2000, as filed with the U.S. Securities and Exchange Commission on such
date, as may be supplemented from time to time, regarding the restructuring of the Company, shall
not constitute a Change in Control for the purpose of this Agreement.

     5.6. Resignation by Executive Other than in the Event of a Change of Control or for Good
Reason.

     5.6.1 General. The Executive shall be entitled to resign his employment with the
Company other than in the event of a Change of Control and for Good Reason and for any reason at
any time pursuant to this Section 5.6.

     5.6.2 Effect of Resignation Other than in the Event of a Change of Control or for Good
Reason. If the Executive resigns from his employment for any reason other than in the event of
a Change of Control or for Good Reason: (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”); (ii) the Company shall not have any further obligations to the Executive under
this Agreement except those required to be provided by law; and (iii) any unexercised options and
any non-vested options to purchase shares of common stock or other equity securities of the Company
previously granted to Executive shall be forfeited by the Executive.

     5.7. Section 409A. It is intended that (1) each installment of the payments provided
under this Agreement is a separate “payment” for purposes of Section 409A of the United States
Internal Revenue Code of 1986 (the “Code”) and (2) that the payments satisfy, to the greatest
extent possible, the exemptions from the application of Section 409A of the Code provided under
Treasury Regulations 1.409A-1(b)(4), 1.409A-1(b)(9)(iii), and 1.409A-1(b)(9)(v). Notwithstanding
anything to the contrary in this Agreement, if the Company determines (i) that on the date
Executive’s employment with the Company terminates or at such other time that the Company
determines to be relevant, the Executive is a “specified employee” (as such term is defined under
Treasury Regulation 1.409A-1(i)(1)) of the Company and (ii) that any payments to

9

 

be provided to the Executive pursuant to this Agreement are or may become subject to the
additional tax under Section 409A(a)(1)(B) of the Code or any other taxes or penalties imposed
under Section 409A of the Code (“Section 409A Taxes”) if provided at the time otherwise required
under this Agreement then (A) such payments shall be delayed until the date that is six months
after the date of Executive’s “separation from service” (as such term is defined under Treasury
Regulation 1.409A-1(h)) with the Company, or such shorter period that, as determined by the
Company, is sufficient to avoid the imposition of Section 409A Taxes (the “Payment Delay Period”)
and (B) such payments shall be increased by an amount equal to interest on such payments for the
Payment Delay Period at a rate equal to the prime rate in effect as of the date the payment was
first due (for this purpose, the prime rate will be based on the rate published from time to time
in The Wall Street Journal). Any payments delayed pursuant to this Section 5.7 shall be made in a
lump sum on the first day of the seventh month following the Executive’s “separation from service”
(as such term is defined under Treasury Regulation 1.409A-1(h)), or such earlier date that, as
determined by the Committee, is sufficient to avoid the imposition of any Section 409A Taxes.

     6. Non-Competition, Non-Solicitation and Confidentiality and Non-Disclosure.

     6.1. Non-Competition, Non-Solicitation. Executive hereby covenants and agrees that
during 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 is then engaged; (ii)
solicit any customer or client of the Company with respect to any business in which the Company is
then engaged (other than on behalf of the Company); or (iii) induce or encourage any employee of
the Company to leave the employ of the Company; provided, that 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
Executive are referred to herein as the “Restrictive Covenant.” 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. Executive further
acknowledges that the Company would not have entered into this Agreement or agreed to grant
Executive the options to purchase shares of the Company stock under Section 4.6. herein 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 beheld 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

10

 

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 one (1) year thereafter to hold in confidence all information concerning the Company or
its business, including, but not limited to contract terms, financial information, 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. Attendance at Board Meeting; Election to Board. For so long as the Executive shall
serve as the Chief Executive Officer of the Company, Executive shall have the right to attend and
to be heard at all meetings of the Board of Directors (or meetings of any committees of the Board
of Directors) of the Company in a nonvoting capacity, to receive notice of such meetings, and to
receive the information provided by the Company to the Board of Directors. Pursuant to the
obligations of the Company under Section 1 hereof, the Company shall use its reasonable best
efforts to have the Board of Directors nominate Executive for election to the Board of Directors by
the stockholders of the Company on an annual basis, or at such other time as appropriate given the
term of the Executive’s election to the Board, during the term 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 in Section 280G of the
Internal Revenue Code (the “Code”), (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 utilized in arriving at such
determination, shall be made by a nationally

11

 

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 Internal Revenue
Service, pay such claim prior to the

12

 

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 and 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 sue 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 sue 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.

               (iv) If, after the receipt by the Executive of an amount advanced by the

13

 

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.

               (v) Notwithstanding any other provision of this Section 8, any Gross-Up payment due
under this Section 8 shall be paid to the Executive no later than December 31 of the year
following the year (A) any Excise Tax is paid to the Internal Revenue Service regarding this
Section 8 or (B) any tax audit or litigation brought by the Internal Revenue Service or
other relevant taxing authority related to this Section 8 is completed or resolved.

     9. 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 a director, 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 of the Company.

     10. Expenses Incurred in Negotiation and Preparation of Agreement. The Company shall
reimburse Executive for one half (50%) of his reasonable and documented legal fees and expenses
incurred by Executive in connection with the negotiation of the terms of his employment with the
Company and the preparation of all agreements in connection therewith. Notwithstanding any other
provision of this Section 10, the Executive shall be reimbursed for such expenses no later than
December 31 of the year following the year in which such expenses were incurred.

14

 

     11. 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:	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	 

	 	 
	 

	 	 	 	 

	 	 
	 

	 	 	 	 

	 	 

	 	 	 	 	 	 	 
	 

	 	(ii)
	 	If to the Company, to:	 	 
	 
	 	 	 	 	 	 
	 

	 	 	 	Corrections Corporation of America

10 Burton Hills Boulevard

Nashville, Tennessee 37215

Attention: Chairman of the Board of Directors

Facsimile: (615) 263-3010

	 	 

     12. 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.

     13. 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.

     14. 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.

     15. Controlling Law. This Agreement shall be governed and interpreted under the laws
of the State of Tennessee.

     16. 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.

[signature page to follow]

15

 

     IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first
written.

	 	 	 	 	 	 	 
	 	 	EXECUTIVE:	 	 
	 
	 	 	 	 	 	 
	 	 	JOHN D. FERGUSON	 	 
	 
	 	 	 	 	 	 
	 
	 	/s/ John D.
Ferguson	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	THE COMPANY:	 	 
	 
	 	 	 	 	 	 
	 	 	CORRECTIONS CORPORATION OF AMERICA	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Todd J. Mullenger	 	 
	 

	 	 	 	 

	 	 
	 

	 	Title:	 	Executive Vice President and Chief
Financial Officer	 	 
	 

	 	 	 	 

	 	 

16

 

EXHIBIT A

Form of Option Agreement

17

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