Stockholders' Equity

6 Months Ended

Jun. 30, 2011

Stockholders' Equity

Stockholders' Equity

7. STOCKHOLDERS' EQUITY

Stock Repurchase Program

In February 2010, CCA's Board of Directors approved a stock repurchase program to purchase up to $250.0 million of CCA's common stock through June 30, 2011. In May 2011, the Board of Directors approved an increase in the aggregate amount under its previously announced share repurchase program from $250.0 million to $350.0 million. CCA's Board also authorized the extension of the share repurchase program through December 31, 2012. From February, 2010 through June 30, 2011, CCA completed the purchase of 10.0 million shares at a cost of $215.8 million. CCA has utilized cash on hand, net cash provided by operations, and borrowings available under the Revolving Credit Facility to fund the repurchases.

Restricted Stock

During the first six months of 2011, CCA issued 264,000 shares of restricted common stock and common stock units to certain of its employees and non-employee directors, with an aggregate fair value of $6.5 million, including 226,000 restricted shares or units to employees and non-employee directors whose compensation is charged to general and administrative expense and 38,000 restricted shares to employees whose compensation is charged to operating expense. During 2010, CCA issued 446,000 shares of restricted common stock and common stock units to certain of its employees, with an aggregate fair value of $9.7 million, including 335,000 restricted shares or units to employees whose compensation is charged to general and administrative expense and 111,000 restricted shares to employees whose compensation is charged to operating expense.

CCA established performance-based vesting conditions on the shares of restricted common stock and common stock units awarded to its officers and executive officers. Unless earlier vested under the terms of the agreements, shares or units issued to officers and executive officers are subject to vesting over a three-year period based upon the satisfaction of certain performance criteria. No more than one-third of such shares or units may vest in the first performance period; however, the performance criteria are cumulative for the three-year period. Unless earlier vested under the terms of the agreements, the shares of restricted stock issued to the other employees vest after three years of continuous service. Shares of restricted stock issued to non-employee directors vest on the one-year anniversary of the grant date.

During the three months ended June 30, 2011, CCA expensed $1.5 million, net of forfeitures, relating to restricted common stock and common stock units ($0.3 million of which was recorded in operating expenses and $1.2 million of which was recorded in general and administrative expenses). During the three months ended June 30, 2010, CCA expensed $1.5 million, net of forfeitures, relating to restricted common stock and common stock units ($0.3 million of which was recorded in operating expenses and $1.2 million of which was recorded in general and administrative expenses).

During the six months ended June 30, 2011, CCA expensed $3.0 million, net of forfeitures, relating to restricted common stock and common stock units ($0.6 million of which was recorded in operating expenses and $2.4 million of which was recorded in general and administrative expenses). During the six months ended June 30, 2010, CCA expensed $2.8 million, net of forfeitures, relating to restricted common stock and common stock units ($0.5 million of which was recorded in operating expenses and $2.3 million of which was recorded in general and administrative expenses). As of June 30, 2011, approximately 778,000 shares of restricted common stock and common stock units remained outstanding and subject to vesting.

Stock Options

During the six months ended June 30, 2011, CCA issued to its non-employee directors, officers, and executive officers options to purchase 573,000 shares of common stock with an aggregate fair value of $5.5 million, with a weighted average exercise price of $24.47 per share. During 2010, CCA issued to its officers, executive officers, and non-employee directors options to purchase 712,000 shares of common stock with an aggregate fair value of $5.5 million, with a weighted average exercise price of $20.68 per share. CCA estimates the fair value of stock options using the Black-Scholes option pricing model. Unless earlier vested under their terms, one third of the stock options issued to CCA's executive officers vest on the anniversary of the grant date over a three-year period while one fourth of the stock options issued to CCA's other officers vest on the anniversary of the grant date over a four-year period. Options granted to non-employee directors vest on the one-year anniversary of the grant date.

During the three months ended June 30, 2011 and 2010, CCA expensed $1.0 million and $1.1 million, respectively, net of forfeitures, relating to its outstanding stock options. During the six months ended June 30, 2011 and 2010, CCA expensed $2.2 million and $2.0 million, respectively, net of forfeitures, relating to its outstanding stock options. As of June 30, 2011, options to purchase 3.8 million shares of common stock were outstanding with a weighted average exercise price of $18.67.