STOCKHOLDERS' EQUITY

3 Months Ended

Mar. 31, 2013

STOCKHOLDERS' EQUITY

7. STOCKHOLDERS’ EQUITY

Dividends on Common Stock

During 2012 and the first quarter of 2013, CCA’s Board of Directors declared the following quarterly dividends on its common stock:

Declaration Date	Record Date	Payable Date	Per Share
May 11, 2012	June 8, 2012	June 22, 2012	$	0.20
August 20, 2012	September 14, 2012	September 28, 2012	$	0.20
November 6, 2012	November 30, 2012	December 14, 2012	$	0.20
February 22, 2013	April 3, 2013	April 15, 2013	$	0.53

On April 8, 2013, CCA’s Board of Directors declared a special dividend to shareholders of $675 million, or approximately $6.63 per share of common stock, in connection with CCA’s previously announced plan to qualify as a REIT for federal income tax purposes effective as of January 1, 2013. The special dividend will be paid in satisfaction of requirements that CCA distribute its previously undistributed accumulated earnings and profits attributable to tax periods ending prior to January 1, 2013. CCA expects to pay the special dividend on May 20, 2013 to shareholders of record as of April 19, 2013.

Each CCA shareholder may elect to receive payment of the special dividend either in all cash, all shares of CCA common stock or a combination of cash and CCA common stock, with the total amount of cash payable to shareholders limited to a maximum of 20% of the total value of the special dividend, or $135 million. If the total amount of cash elected by shareholders exceeds 20% of the total value of the special dividend, the available cash will be prorated among those shareholders who elect to receive cash, and the remaining portion of the special dividend will be paid in shares of CCA common stock. Shareholders who do not make a timely election will be deemed to have made an election to receive payment of the special dividend in shares of CCA common stock. The total number of shares of CCA common stock to be distributed pursuant to the special dividend will be determined based on shareholder elections and the average closing price per share of CCA common stock on the New York Stock Exchange for the three trading days after May 9, 2013, the date that election forms are due.

Restricted Stock and Restricted Stock Units

During the first quarter of 2013, CCA issued 407,000 shares of restricted common stock and common stock units to certain of its employees and non-employee directors, with an aggregate fair value of $15.0 million, including 361,000 restricted shares or units to employees and non-employee directors whose compensation is charged to general and administrative expense and 46,000 restricted shares to employees whose compensation is charged to operating expense. During 2012, CCA issued 349,000 shares of restricted common stock and common stock units to certain of its employees and non-employee directors, with an aggregate fair value of $9.2 million, including 290,000 restricted shares or units to employees and non-employee directors whose compensation is charged to general and administrative expense and 59,000 restricted shares to employees whose compensation is charged to operating expense.

With respect to the shares and units issued in 2013, unless earlier vested under the terms of the restricted stock unit agreement, the restricted stock units issued to officers and executive officers vest evenly over a three-year period, while the shares issued to other employees “cliff” vest on the third anniversary of the award. Shares of restricted common stock units issued to non-employee directors vest on the first anniversary of the award. With respect to shares issued prior to 2013, 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.

During the three months ended March 31, 2013, CCA expensed $2.2 million, net of forfeitures, relating to restricted common stock and common stock units ($0.3 million of which was recorded in operating expenses and $1.9 million of which was recorded in general and administrative expenses). During the three months ended March 31, 2012, CCA expensed $1.6 million, net of forfeitures, relating to restricted common stock and common stock units ($0.2 million of which was recorded in operating expenses and $1.4 million of which was recorded in general and administrative expenses). As of March 31, 2013, approximately 885,000 shares of restricted common stock and common stock units remained outstanding and subject to vesting.

Stock Options

In February 2013, CCA elected to no longer issue stock options to its non-employee directors, officers, and executive officers as it had in the past and instead elected to issue all of its equity compensation in the form of restricted common stock and common stock units as described above. During the three months ended March 31, 2013 and 2012, CCA expensed $1.0 million and $1.1 million, respectively, net of forfeitures, relating to its outstanding stock options. As of March 31, 2013, options to purchase 3.2 million shares of common stock were outstanding with a weighted average exercise price of $21.29.