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AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 7, 1999
REGISTRATION NO. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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PRISON REALTY CORPORATION
(Exact Name of Registrant as Specified in its Charter)
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<S> <C>
MARYLAND 62-1763875
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation) Identification Number)
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10 BURTON HILLS BOULEVARD, SUITE 100
NASHVILLE, TENNESSEE 37215
(615) 263-0200
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Registrant's Principal Executive Offices)
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DOCTOR R. CRANTS
CHIEF EXECUTIVE OFFICER
PRISON REALTY CORPORATION
10 BURTON HILLS BOULEVARD, SUITE 100
NASHVILLE, TENNESSEE 37215
PHONE: (615) 263-0200
FACSIMILE: (615) 263-0212
(Name, Address, Including Zip Code, and Telephone and Facsimile Numbers,
Including Area Codes, of Agent for Service)
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COPIES TO:
ELIZABETH E. MOORE, ESQ.
ALBERT J. BART, ESQ.
STOKES & BARTHOLOMEW, P.A.
424 CHURCH STREET, SUITE 2800
NASHVILLE, TENNESSEE 37215
PHONE: (615) 259-1450
FACSIMILE: (615) 259-1470
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APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
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CALCULATION OF REGISTRATION FEE
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PROPOSED PROPOSED
AMOUNT MAXIMUM MAXIMUM AMOUNT OF
TITLE OF EACH CLASS OF SECURITIES TO BE OFFERING PRICE AGGREGATE REGISTRATION
TO BE REGISTERED REGISTERED PER UNIT OFFERING PRICE FEE
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Common Stock, $0.01 par value...... 10,000,000 $19.69(1) $196,900,000 $54,738.20
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(1) Calculated pursuant to Rule 457(c) promulgated under the Securities Act of
1933, as amended, as permitted by Rule 457(h)(1), based upon the average of
the high and low prices of the Common Stock on the New York Stock Exchange
on May 3, 1999.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933, AS AMENDED, OR UNTIL THIS REGISTRATION STATEMENT
SHALL BECOME EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION,
ACTING PURSUANT TO SAID SECTION 8(A), MAY DETERMINE.
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SUBJECT TO COMPLETION, DATED MAY , 1999
PROSPECTUS
PRISON REALTY CORPORATION
DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
[LOGO]
10,000,000 SHARES OF COMMON STOCK
The Prison Realty Corporation Dividend Reinvestment and Stock Purchase Plan
(the "Plan") provides stockholders with a simple and convenient way to invest
quarterly and other cash dividends received in additional shares of the
company's common stock at a discount, as determined by the company, ranging
between 0% to 5% of market prices. Current stockholders and interested new
investors may also make optional purchases of common stock once each month at
the market price of the common stock, less the applicable discount, if any,
determined by the company.
You can enroll in the Plan by completing the enclosed Enrollment and
Authorization Form and returning it in the envelope provided. If you currently
own shares of common stock of the company you may participate in the Plan
regardless of whether you are the holder of record or beneficial owner of these
shares. A broker, bank or other nominee may reinvest quarterly and other
dividends and make optional monthly purchases of the company's common stock on
behalf of beneficial owners.
Enrollment in the Plan is entirely voluntary, and you may end your
participation at any time. Stockholders of the company who do not participate in
the Plan will receive quarterly cash dividends, as declared, in the usual
manner.
If you participate in the Plan, you may obtain additional shares of common
stock by:
- reinvesting all or a portion of dividends received by you;
- making optional cash purchases of not less than $50 or more than $5,000
(subject to a $1,000 minimum investment requirement for first time
investors in the company's common stock) once each month, whether or not
you choose to reinvest your quarterly dividends; or
- making optional cash purchases of greater than $5,000 once each month,
with the permission of the company, whether or not you choose to reinvest
your quarterly dividends.
The company's common stock is listed on the New York Stock Exchange under
the ticker symbol "PZN." The common stock sold pursuant to this prospectus will
be listed on the New York Stock Exchange, subject to official notice of
issuance. The last reported sales price of the common stock on the New York
Stock Exchange on Monday, May 3, 1999 was $19.81 per share.
INVESTING IN THE COMMON STOCK INVOLVES CERTAIN RISKS. SEE "RISK FACTORS"
BEGINNING ON PAGE 18 OF THIS PROSPECTUS FOR INFORMATION THAT YOU SHOULD
CONSIDER.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
THE DATE OF THIS PROSPECTUS IS MAY , 1999
THE INFORMATION CONTAINED IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED.
THE SECURITIES DESCRIBED IN THIS PROSPECTUS MAY NOT BE SOLD UNTIL THE
REGISTRATION STATEMENT FILED WITH THE SECURITIES AND EXCHANGE COMMISSION IS
EFFECTIVE. THE PROSPECTUS IS NOT AN OFFER TO SELL THESE SECURITIES AND IS NOT
SOLICITING AN OFFER TO BUY THESE SECURITIES IN ANY STATE WHERE THE OFFER OR SALE
IS NOT PERMITTED.
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TABLE OF CONTENTS
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Where You Can Find More Information......................... 1
Incorporation of Certain Documents by Reference............. 1
The Company............................................... 1
Old CCA................................................... 2
Prison Realty............................................. 2
Cautionary Statement Concerning Forward-Looking
Information............................................... 3
Information About the Company............................... 3
General................................................... 3
History and Operations.................................... 4
Plan Features............................................... 5
Benefits to You............................................. 5
The Plan.................................................... 6
Plan Summary.............................................. 6
Details About the Plan.................................... 9
Eligible Participants.................................. 9
How to Enroll.......................................... 9
Investment Options..................................... 9
Optional Monthly Cash Purchases in Excess of $5,000.... 10
The Plan Purchase Price................................ 11
The Investment Date and the Pricing Period............. 11
Payment for Optional Monthly Cash Purchases............ 12
Source of Plan Shares.................................. 12
Authorization Due Date for Dividend Reinvestment....... 13
Payment Due Date for Optional Cash Purchases........... 13
Tracking Your Investment in the Plan................... 13
Optional Cash Purchase Delay Notification.............. 13
Safekeeping Your Stock Certificates.................... 14
Obtaining Stock Certificates........................... 14
Selling Shares in Your Plan Account.................... 14
Closing Your Plan Account.............................. 14
Changes/Termination of the Plan........................ 15
Suspension/Termination of Your Participation........... 15
Plan Service Fees...................................... 15
Miscellaneous Information.............................. 16
Income Tax Information................................. 16
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Risk Factors................................................ 18
Ownership of the Common Stock Involves Risks Associated
with Debt Financing.................................... 18
A Fluctuation in Market Interest Rates May Affect the
Value of the Common Stock.............................. 18
The Company Primarily Depends Upon CCA for its Revenues
and Ability to Make Distributions to its
Stockholders........................................... 18
Existing Conflicts of Interest May Have an Effect on the
Company................................................ 19
Ownership of the Common Stock Involves Risks Associated
with the Corrections and Detention Industry............ 19
Ownership of the Common Stock Involves Risks Inherent in
Investment in Real Estate Properties................... 20
The Company's Failure to Qualify as a REIT Could Adversely
Affect Stockholders of the Company..................... 20
Use of Proceeds............................................. 21
Plan of Distribution........................................ 21
Legal Matters............................................... 22
Experts..................................................... 23
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ii
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WHERE YOU CAN FIND MORE INFORMATION
Prison Realty Corporation, a Maryland corporation (the "Company"), is
subject to the informational requirements of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and, in accordance therewith, files
reports, proxy statements and other information with the Securities and Exchange
Commission (the "Commission"). You may read and copy any of these materials at
the Commission's Public Reference Room at 450 Fifth Street, N.W., Washington,
D.C. 20549. You can request copies of these documents, upon payment of a
duplicating fee, by writing to the Commission. Please call the SEC at
1-800-SEC-0330 for further information on the operation of the Public Reference
Room. You may also access our filings with the Commission at its Internet
address (http://www.sec.gov). In addition, the Company's common stock, $0.01 par
value per share (the "Common Stock"), is listed on the New York Stock Exchange
(the "NYSE"), and similar information concerning the Company can be inspected at
the offices of the NYSE, 20 Broad Street, New York, New York 10005.
This prospectus (the "Prospectus") is part of a Registration Statement on
Form S-3 (the "Registration Statement") filed by the Company with the Commission
to register the shares of Common Stock offered under the Plan. It does not
repeat important information that you can find in the Registration Statement.
Furthermore, the Commission allows the Company to "incorporate by reference"
certain information into this Prospectus. This means that the Company can
disclose important information to you by referring you to another document filed
separately with the Commission. The information incorporated by reference is
considered to be a part of this Prospectus, except for any information that is
updated and superseded by other information that is set forth directly in this
document.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company is the successor to each of Corrections Corporation of America,
a Tennessee corporation ("Old CCA"), and CCA Prison Realty Trust, a Maryland
real estate investment trust ("Prison Realty"). Old CCA merged with and into the
Company on December 31, 1998, and Prison Realty merged with and into the Company
on January 1, 1999 (the mergers of Old CCA and Prison Realty with and into the
Company are, collectively, referred to herein as the "Merger").
The following documents that the Company, Old CCA and Prison Realty have
previously filed with the Commission pursuant to the Exchange Act are hereby
incorporated by reference into the Prospectus:
THE COMPANY
- The Company's Registration Statement on Form S-3, filed with the
Commission on May 7, 1999 (Reg. no. 333-77997).
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- The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1998, as filed with the Commission on March 30, 1999 (File
no. 0-2524).
- The Company's definitive Proxy Statement filed with the Commission on
March 30, 1999 pursuant to Regulation 14A of the Exchange Act, in
connection with the Company's Annual Meeting of Stockholders to be held
on May 11, 1999 (File no. 0-25245).
- The Company's Registration Statement on Form S-3, filed with the
Commission on January 11, 1999, as supplemented from time to time by the
Company (Reg no. 333-70419).
- The Company's Current Report on Form 8-K, filed with the Commission on
January 6, 1999 (File no. 0-25245).
- The Company's Prospectus filed with the Commission on October 30, 1998
pursuant to Rule 424(b)(4) promulgated under the Securities Act of 1933,
as amended (the "Securities Act"), as supplemented on November 20, 1998,
included in its Registration Statement on Form S-4, filed with the
Commission on September 30, 1998, as subsequently amended (Reg. no.
333-65017).
OLD CCA
- Old CCA's Quarterly Reports on Form 10-Q/A for the period ended March 31,
1998, as filed with the Commission on May 15, 1998 and amended on June 5,
1998 and September 28, 1998; for the period ended June 30, 1998, as filed
with the Commission on August 14, 1998 and amended on September 28, 1998;
and Form 10-Q for the period ended September 30, 1998, as filed with the
Commission on November 16, 1998 (File no. 1-13560).
PRISON REALTY
- Prison Realty's Annual Report on Form 10-K for the fiscal year ended
December 31, 1998, as filed with the Commission on March 30, 1999 (File
no. 1-13049).
- Prison Realty's Quarterly Reports on Form 10-Q for the period ended March
31, 1998, as filed with the Commission on May 15, 1998; for the period
ended June 30, 1998, as filed with the Commission on August 14, 1998; and
for the period ended September 30, 1998, as filed with the Commission on
November 17, 1998 (File no. 1-13049).
All other documents and reports filed with the Commission by the Company,
Old CCA and Prison Realty pursuant to Sections 13(a), 13(c), 14 or 15(d) of the
Exchange Act from the date of this Prospectus and prior to the termination of
this offering.
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CAUTIONARY STATEMENT CONCERNING
FORWARD-LOOKING INFORMATION
This Prospectus contains or incorporates by reference certain
"forward-looking statements" within the meaning of Section 27A of the Securities
Act and Section 21E of the Exchange Act which are intended to be covered by the
"safe harbors" created thereby. Those statements include, but may not be limited
to, the discussions of the Company's expectations concerning its future
profitability, operating performance, growth strategy, and its assumptions
regarding other matters. Also, when any of the words "believes," "expects,"
"anticipates," "intends," "estimates," "plans," or similar terms or expressions
are used in this Prospectus, forward-looking statements are being made.
You should be aware that, while the Company believes that the expectations
reflected in such forward-looking statements are reasonable, they are inherently
subject to risks and uncertainties which could cause the Company's future
results and stockholder values to differ materially from the Company's
expectations. These factors are disclosed under "Risk Factors" in this
Prospectus and in other documents incorporated by reference in this document.
Because of these factors, there can be no assurance that the forward-looking
statements included or incorporated by reference in this Prospectus and any
applicable supplement to this prospectus (a "Prospectus Supplement") will prove
to be accurate. In light of the significant uncertainties inherent in the
forward-looking statements included or incorporated by reference herein, you
should not regard the inclusion of such information as a representation by the
Company or any other person that the objectives and plans of the Company will be
achieved. In addition, the Company does not intend to, and is not obligated to,
update these forward-looking statements after it distributes this Prospectus and
any applicable Prospectus Supplement, even if new information, future events or
other circumstances have made them incorrect or misleading as of any future
date.
INFORMATION ABOUT THE COMPANY
GENERAL
The Company is the largest real estate investment trust, or REIT,
specializing in acquiring, developing and owning correctional and detention
facilities. As of April 30, 1999, the Company owned 50 correctional and
detention facilities, of which 11 new facilities were under construction, in 17
states, the District of Columbia and the United Kingdom with a total design
capacity in excess of 49,000 beds. The Company's principal business strategy is
to design, build, finance and/or acquire and develop such facilities from and
for both government entities and private prison managers, to expand the design
capacity of its existing facilities, and to lease these facilities under
long-term "triple-net" leases. The Company intends to be taxed as a REIT under
the Internal Revenue Code of 1986, as amended, which generally requires that
substantially all of the Company's income be derived from rent payments from
leases of its correctional and detention facilities.
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HISTORY AND OPERATIONS
The Company is the successor to each of Old CCA and Prison Realty as the
result of the Merger. Corrections Corporation of America ("CCA" or "Operating
Company"), a privately-held Tennessee corporation formed in connection with the
Merger (formerly Correctional Management Services Corporation), leases a
substantial majority of the Company's correctional and detention facilities and
provides private prison management services to government entities not having
owned-bed capacity. The Company owns approximately 9.5% of the outstanding
capital stock of CCA, representing 9.5% of the economic value of CCA.
Additionally, as a result of the Merger, the Company owns all of the non-voting
common stock of two privately-held service companies, Prison Management
Services, Inc. and Juvenile and Jail Facility Management Services, Inc., both
Tennessee corporations (collectively, the "Service Companies"), which provide
private correctional management services to government entities in
government-owned facilities under the "Corrections Corporation of America" name.
The Service Companies are obligated to distribute 95% of their net income to the
Company.
The Company is the world's largest private owner of correctional and
detention facilities, and the prison management services provided under the
Corrections Corporation of America name comprise more than half of the
world-wide private prison management industry. As of April 30, 1999, the Company
leased approximately 32,000 beds under 39 operating leases. The Company is
currently developing approximately 17,000 beds through the construction of 11
new facilities and the expansion of six currently operating facilities. The
Company currently leases 31 of its facilities to CCA and expects to lease 10 of
the 11 Company facilities currently under development to CCA. Three of the
Company's facilities are currently leased to other private operators and five of
its facilities are being leased directly to government entities. As of April 30,
1999, CCA, the Company's primary tenant, and the Service Companies operating
under the Corrections Corporation of America name met the correctional and
detention facility management needs of government entities under contracts for
81 correctional and detention facilities with a total design capacity of 71,851
beds, of which 67 facilities with a total design capacity of 50,005 beds are in
operation.
The Company was incorporated as a Maryland corporation in September 1998
and is self-administered and self-managed. The Company's principal executive
offices are located at 10 Burton Hills Boulevard, Suite 100, Nashville,
Tennessee, and its telephone number is (615) 263-0200. For information or copies
of the documents incorporated by reference in this Prospectus, please contact
the Company at this address.
For unaudited pro forma financial information of the Company, please refer
to the pro-forma financial information contained in the Company's Registration
Statement on Form S-3 filed with the Commission on May 7, 1999 (Reg. no.
333-77997). For historical financial information and management discussion and
analysis for the Company and Old CCA, and for historical financial information
for CCA, the Company's primary tenant, please refer to the financial information
contained in the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1998 (File no. 0-25245) and
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incorporated herein by reference. For historical information and management
discussion and analysis for Prison Realty, please refer to the financial
information contained in Prison Realty's Annual Report on Form 10-K for the
fiscal year ended December 31, 1998 (File no. 1-13049) and incorporated herein
by reference.
PLAN FEATURES
- You may purchase shares of Common Stock by completing an Enrollment and
Authorization Form and sending a check or money order, or you may arrange
for the administrator of the Plan to automatically withdraw funds from
your bank account.
- If you own shares of Common Stock in an account with a broker, you may
either request the broker to enroll you in the Plan by completing a
Broker and Nominee Enrollment Form or request a certificate for your
shares.
- You may make optional cash purchases on a monthly basis for a minimum of
$50 (or a minimum of $1,000 for first time investors in the Common Stock)
up to a maximum of $5,000. The purchase price for these shares will
generally be the prevailing market price less a discount, if any,
determined by the Company. You may make larger optional cash purchases
with the prior approval of the Company.
- You may automatically reinvest all or a portion of your quarterly or
other dividends in shares of Common Stock. The shares of Common Stock you
purchase with reinvested dividends are generally purchased at the
prevailing market price less a discount, if any, determined by the
Company.
- You may purchase both full and fractional shares and receive dividends on
both full and fractional shares.
- You will receive a statement detailing your account activity each time
you invest.
- You may authorize the administrator of the Plan to sell your shares of
Common Stock in the Plan for a nominal fee without requesting a specific
sale date or price. If you prefer to decide the time and price of the
sale, you may withdraw your shares of Common Stock in certificate form or
move your shares to your own brokerage account.
BENEFITS TO YOU
- You purchase shares of Common Stock at a potential discount directly from
the Company without a broker, even if you are not currently a stockholder
of the Company. The Enrollment and Authorization Form is designed to
guide you in setting up your Plan account.
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- You may begin with a relatively small amount invested, which may help you
diversify your financial assets.
- You conveniently add to your investment over time.
- Your investment continues to build until you decide to stop. Then, your
dividends will be mailed to you or deposited directly in your bank
account.
- You enjoy the option of full or partial reinvestment of your dividends.
- You monitor your investment and make new transactions efficiently by
using the detachable form at the bottom of your Plan statement.
For additional information concerning the Plan, including information on how to
enroll, please see "The Plan -- Details About the Plan" on page 9 of this
Prospectus.
THE PLAN
PLAN SUMMARY
The Plan provides you with a convenient and attractive method of investing
cash dividends in, and making optional monthly cash purchases of, additional
shares of the Company's Common Stock, at prices reflecting a discount of between
0% and 5% (the "Discount") from market prices of the Common Stock on the NYSE.
The Discount may change (but will not vary from the range of between 0% and 5%)
from time to time or may be discontinued at the Company's discretion after a
review of current market conditions, the level of participation in the Plan and
the Company's current and projected capital needs. The Discount, if any, shall
apply only to shares newly issued by the Company and sold under the Plan and not
to shares purchased by the administrator of the Plan on the open market and
subsequently sold under the Plan. For information regarding the Company's option
under the Plan to issue new shares of its Common Stock or to have shares of its
Common Stock purchased on the NYSE in open trading, please refer to the
discussion under "Details About the Plan -- Source of Plan Shares." For a
complete description of the Common Stock, please refer to the discussion under
the heading "New Prison Realty Capital Stock" included in the Company's
Prospectus filed with the Commission on October 30, 1998 pursuant to Rule
424(b)(4) under the Securities Act, as supplemented on November 20, 1998,
included in its Registration Statement on Form S-4 filed with the Commission on
September 30, 1998, as subsequently amended (Reg. no. 333-65017) and under the
heading "Description of Capital Stock -- Common Stock" included in the Company's
Registration Statement on Form S-3 filed with the Commission on January 11,
1999, as supplemented from time to time by the Company (Reg. no. 333-70419).
Subject to the availability of shares of Common Stock registered for
issuance under the Plan, and subject to certain limitations on the ownership of
the Common Stock as described herein under "Plan of Distribution," there is no
minimum or maximum
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limitation on the amount of quarterly dividends that a participant in the Plan
(a "Participant") may reinvest under the Plan.
Participants who make optional cash purchases of additional shares of
Common Stock are subject to a minimum monthly purchase limit of $50 and are
subject to a maximum monthly purchase limit of $5,000, unless this maximum
purchase limit is waived by the Company (a "Waiver"); provided, however, that
the initial minimum monthly purchase limit for Participants who are not
stockholders of the Company is $1,000. Optional cash purchase amounts of less
than $50, and any optional cash purchase amounts greater than $5,000 not waived
by the Company, will be returned to Participants without interest after the
conclusion of the applicable Pricing Period (as defined herein under "-- Details
About the Plan -- The Investment Period and the Pricing Period").
Participants who wish to make an optional cash purchase in an amount
greater than $5,000 must submit a request for a Waiver to the Company (a
"Request for Waiver"). The Company may grant a Waiver in its sole and absolute
discretion. The Company's decision to grant a Waiver is based on a variety of
factors, which may include:
- the Company's current and projected capital needs and the alternatives
available to the Company to meet those needs;
- prevailing market prices for the Common Stock;
- general economic and market conditions;
- expected aberrations in the price or trading volume of the Common Stock;
- the number of shares of Common Stock held by the Participant making the
Request for Waiver;
- the aggregate amount of optional cash purchases for which such Requests
for Waiver have been submitted; and
- the administrative constraints associated with granting Waivers.
If such Requests for Waiver are granted, the Company may establish a
Threshold Price (as defined herein under "-- Details About the Plan -- Optional
Monthly Purchases in Excess of $5,000") at least three (3) business days prior
to each applicable Investment Date (as defined herein under "-- Details About
the Plan -- The Investment Date and the Pricing Period") applicable to optional
cash payments exceeding $5,000. For each Investment Date of the related Pricing
Period (as defined herein under "-- Details About the Plan -- The Investment
Date and the Pricing Period") on which the Threshold Price is not satisfied, a
portion of each Participant's optional cash payment in excess of $5,000 will be
returned without interest.
A portion of the Common Stock available for issuance under the Plan may be
purchased pursuant to Waivers by Participants (including brokers or dealers)
who, in connection with any resales of such Common Stock, may be deemed to be
underwriters
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with the meaning of the Securities Act. To the extent that Requests for Waiver
are granted, the Company expects that a greater number of shares of the Common
Stock will be issued under the optional cash purchase feature of the Plan than
under the dividend reinvestment feature of the Plan.
Financial intermediaries may purchase a significant portion of the Common
Stock issued pursuant to the optional cash payment feature of the Plan. The
Company does not have any formal or informal understanding with any such
organizations and, therefore, the extent of such financial intermediaries'
participation under the Plan cannot be estimated at this time. Financial
intermediaries that acquire Common Stock under the Plan with a view to
distribution of such Common Stock or that offer or sell Common Stock for the
Company in connection with the Plan may be deemed to be underwriters within the
meaning of the Securities Act.
From time to time, financial intermediaries, including brokers and dealers,
may engage in positioning transactions in order to benefit from the Discount
from the Market Price (as defined herein under "-- Details About the Plan -- The
Plan Purchase Price") of the shares of Common Stock acquired through the Plan.
Such transactions may cause fluctuations in the price or trading volume of the
Common Stock. Financial intermediaries which engage in positioning transactions
may be deemed to be underwriters within the meaning of the Securities Act. The
Plan is intended for the benefit of investors in the Company and not for
individuals or investors who engage in transactions which may cause aberrations
in the price or trading volume of the Common Stock.
As of the date hereof, 10,000,000 shares of Common Stock have been
registered and are available for sale under the Plan. However, you may not own
more than 9.8% of the outstanding Common Stock of the Company at any time. For
more information regarding certain limitations on the ownership of Common Stock,
please refer to the discussion under "Plan of Distribution" contained herein.
Bank Boston, N.A. is the named transfer agent. Boston EquiServe, Limited
Partnership ("Boston EquiServe, L.P."), the service provider for Bank Boston,
N.A., is the plan administrator (the "Plan Administrator"). The Plan
Administrator will purchase and hold shares of Common Stock for Participants,
keep records, mail statements and perform other duties required by the Plan. All
correspondence and questions regarding the Plan and/or your account may be
directed to:
Bank Boston, N.A.
c/o EquiServe, L.P.
[address]
Telephone: ________________________
or such other address as to which notice is given to Participants in writing.
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DETAILS ABOUT THE PLAN
ELIGIBLE PARTICIPANTS
All U.S. citizens are eligible to participate in the Plan, whether or not
they are currently stockholders of the Company. Foreign citizens are eligible to
participate as long as their participation does not violate any laws in their
home countries.
HOW TO ENROLL
You may enroll in the Plan at any time by completing an Enrollment and
Authorization Form and returning it to the Plan Administrator in the courtesy
envelope. If you are a holder of record of shares of the Company's Common Stock,
complete and return the Enrollment and Authorization Form to the Plan
Administrator to reinvest all or a portion of your dividends and/or to purchase
shares of Common Stock with optional cash payments. If you own shares of the
Company's Common Stock in a brokerage account, you may ask your broker to enroll
you or request a certificate for your shares of the Company's stock from your
broker and complete and return the Enrollment and Authorization Form. If you do
not currently own Common Stock, you may enroll in the Plan by completing an
Enrollment and Authorization Form and returning it to the Plan Administrator
with your optional cash payment of at least $1,000. Be sure to select one of the
investment options discussed herein when enrolling.
INVESTMENT OPTIONS
Full Dividend Reinvestment
If you select this option, all dividends payable on your registered shares
of Common Stock, or on your shares of Common Stock acquired under the Plan, will
be applied toward the purchase of additional shares of Common Stock at the
Market Price (as defined herein under "-- The Plan Purchase Price") less any
applicable Discount. Your reinvested dividends will purchase whole and
fractional shares of Common Stock, on the dividend payment date declared by the
Company. You may also send in optional cash payments to purchase additional
shares of Common Stock if you so choose.
Partial Dividend Reinvestment
If you select this option, the portion of dividends payable on your
registered shares of Common Stock, or on your shares of Common Stock acquired
under the Plan, that you specify will be applied toward the purchase of
additional shares of Common Stock at the Market Price (as defined herein under
"-- The Plan Purchase Price") less any applicable Discount. Your reinvested
dividends will purchase whole and fractional shares of Common Stock, on the
dividend payment date declared by the Company. You may also send in optional
cash payments to purchase additional shares of Common Stock if you so choose.
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Optional Cash Purchases Only
If you select this option, you may purchase shares of Common Stock once a
month (although this period is subject to change by the Company) at the Market
Price (as defined herein under "-- The Plan Purchase Price") less any applicable
Discount for a minimum investment of $50 (a minimum of $1,000 for new investors)
up to a maximum investment of $5,000. Your purchases will be of whole and
fractional shares of Common Stock. You will not receive interest on optional
cash amounts held by the Plan Administrator pending a purchase. Any and all
dividends earned will be paid out to you.
You may select either full dividend reinvestment, partial dividend
reinvestment, or optional cash purchases only, as your options for your
participation in the Plan.
Important: According to Internal Revenue Service ("IRS") regulations regarding
discounts on optional cash purchases in the Plan, the actual discount you
receive on shares of Common Stock which you purchase may not exceed 5% of the
one-day NYSE trading average for the shares of Common Stock on the optional cash
purchase Investment Date. The Plan Administrator will calculate the discounted
aggregate purchase price of all purchases of Common Stock made during the
Pricing Period and test for the 5% rule. The actual price of the Common Stock
will be the higher of the two amounts for that purchase date.
OPTIONAL MONTHLY CASH PURCHASES IN EXCESS OF $5,000
If you select the optional cash purchase option and would like to purchase
more than $5,000 of the Company's Common Stock during any one month:
1. Contact the Investor Relations Department of the Company at (615)
263-0200 with your request. Ask for the current Threshold Price (as defined
herein) and for a Request for Waiver Form.
2. Submit a signed Request for Waiver Form to the Company before the
beginning of the applicable Pricing Period (as defined herein under "-- The
Investment Date and the Pricing Period") stating that you are not engaging
in underwriting activities as defined under applicable law.
3. Send your optional cash purchase amount to the Plan Administrator
at least two (2) business days before the applicable Pricing Period (as
defined herein under "-- The Investment Date and the Pricing Period").
The Company will consider requests for optional cash purchases greater than
$5,000 on a case-by-case basis, and the Company may grant Waivers based on
various corporate factors and market conditions. Requests for optional monthly
cash purchases greater than $5,000 may be denied by the Company for any reason.
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Monthly cash purchases greater than $5,000 made pursuant to a Waiver may
receive a Discount from the Plan purchase price only for purchases of newly
issued shares. The Company reserves the right to review and adjust the Discount
each month.
Monthly optional cash purchases greater than $5,000 made pursuant to a
Waiver are also subject to a discretionary "Threshold Price" set each month by
the Company, which is a stated dollar amount that the closing price of the
Company's Common Stock must meet or exceed for each respective Investment Date
(as defined herein under "-- The Investment Date and the Pricing Period"). If
the closing price of the Common Stock on the NYSE does not meet or exceed the
Threshold Price for a particular Investment Date (as defined herein under
"-- The Investment Date and the Pricing Period"), optional cash payments to be
applied on such Investment Date will be returned to you in full without interest
at the end of the Pricing Period (as defined herein under "-- The Investment
Date and the Pricing Period").
THE PLAN PURCHASE PRICE
The Plan purchase price, or "Market Price," is calculated differently
depending upon whether the Company issues new shares of Common Stock or whether
the shares of Common Stock issued under the Plan are purchased by the Plan
Administrator in open trading on the NYSE.
Newly Issued Shares
The "Market Price" of shares of Common Stock issued by the Company will be
the average of the daily high and low trading prices of the Common Stock
reported on the NYSE for the applicable Investment Date (as defined herein under
"-- The Investment Date and the Pricing Period"). You are not charged a fee for
newly issued shares.
Open Market Purchases
The "Market Price" of shares of Common Stock purchased by the Plan
Administrator in open market trading on the NYSE will be the weighted average
price for all shares of Common Stock purchased by the Plan Administrator for the
Plan on the applicable Investment Date (as defined herein under "-- The
Investment Date and the Pricing Period"). You are charged a brokerage commission
for open market purchases.
THE INVESTMENT DATE AND THE PRICING PERIOD
- The "Investment Date" for optional monthly cash purchases is a date,
determined by the Company in its sole discretion, on which the NYSE is
open for business.
- The "Investment Date" for the reinvestment of dividends is the Company's
declared quarterly dividend payment date.
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- The "Pricing Period" for optional monthly cash purchases is a period
encompassing ten consecutive Investment Dates, with the beginning and
ending dates of such period set by the Company.
PAYMENT FOR OPTIONAL MONTHLY CASH PURCHASES
You may make an optional cash purchase on a monthly basis by sending a
check or money order to the Plan Administrator or authorizing the Plan
Administrator to automatically withdraw funds from your bank account. Do not
send cash to the Plan Administrator. If you pay by check or money order, please
use the transaction stub located on the bottom of your Plan statement, make your
check or money order payable to the Plan Administrator and mail your payment to
the Plan Administrator's address. Always include our NYSE ticker symbol, PZN, on
your check or money order. Checks should be made payable to "Bank Boston, N.A."
and should be made out in U.S. funds drawn on a U.S. bank.
You may also authorize monthly automatic deductions from an account at a
financial institution that is a member of the National Automated Clearing House
Association. To initiate this service, you must complete the appropriate section
of an Enrollment and Authorization Form and return it to the Plan Administrator.
To change any aspect of this service, you must send a revised Enrollment and
Authorization Form to the Plan Administrator. Funds will be withdrawn from your
bank account two (2) business days before the beginning of the Pricing Period.
Initial set-up, changes and terminations to the automatic deduction instructions
will be made as soon as practicable. You must notify the Plan Administrator in
writing to terminate automatic withdrawals from your bank account.
In the event that any deposit is returned unpaid for any reason, the agent
will consider the request for investment of such money null and void and shall
immediately remove from the Participant's account shares, if any, purchased upon
prior credit of such money. The Plan Administrator shall thereupon be entitled
to sell these shares to satisfy any uncollected amounts. If the net proceeds of
the sale of such shares are insufficient to satisfy the balance of such
uncollected amounts, the Plan Administrator shall be entitled to sell such
additional shares from the participant's account to satisfy the uncollected
balance. A $25.00 fee will be charged for any deposit returned unpaid.
SOURCE OF PLAN SHARES
Shares of Common Stock purchased by Participants under the Plan will either
be issued directly by the Company from its authorized but unissued shares of
Common Stock or will be purchased by the Plan Administrator on the NYSE in open
trading. No Discount will be available to Participants for shares of Common
Stock purchased by the Plan Administrator in the public market and subsequently
sold under the Plan. The Company will designate the source of the shares of
Common Stock for the Plan, but the Company cannot change its designation more
than once during any three month period
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<PAGE> 17
and may only do so if required by law or if another valid reason exists. The
Company expects that it will issue new shares of Common Stock pursuant to the
Plan.
AUTHORIZATION DUE DATE FOR DIVIDEND REINVESTMENT
If you wish to have your dividends reinvested in shares of the Company's
Common stock, you must select either the Full Dividend Reinvestment or Partial
Dividend Reinvestment option on your Enrollment and Authorization Form and
return it to the Plan Administrator at least five (5) days before the
approaching dividend record date; otherwise your authorization will not be
effective until the next dividend record date. The Company, and prior to the
Merger Prison Realty, has historically declared and paid dividends on a
quarterly basis and expects to make a special one-time dividend in 1999 in order
to comply with certain rules and regulations affecting the Company's
qualification as a REIT.
PAYMENT DUE DATE FOR OPTIONAL CASH PURCHASES
Your optional monthly cash purchase payment must be received by the Plan
Administrator at least two (2) business days before the Pricing Period begins.
You will not earn any interest on your payment, and you will bear the risk
associated with price changes in the Common Stock during the Pricing Period.
TRACKING YOUR INVESTMENT IN THE PLAN
As soon as practicable after the purchases of shares of Common Stock have
been completed for any Investment Date, the Plan Administrator will send you a
statement of account confirming the transaction and itemizing any previous
investment or reinvestment activity for the calendar year.
You should notify the Plan Administrator if the address on your account
changes.
You should save your account statements, along with this Prospectus and
other pertinent tax information related to the Plan, to establish the cost basis
of your shares of Common Stock purchased under the Plan.
OPTIONAL CASH PURCHASE DELAY NOTIFICATION
The Company will notify you of any delays under the optional monthly cash
purchase program if the maximum number of shares available for this Plan under
our Registration Statement with the Commission needs to be increased. If you are
notified, then you may elect to have the Plan Administrator hold your money
until additional shares for the Plan are available. Alternatively, you may have
the Plan Administrator return your money without interest. If you choose to have
the Plan Administrator retain your money, the Plan purchase price will be
recalculated and you will receive the lower of the original or deferred purchase
price, less the Discount, if any.
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SAFEKEEPING YOUR STOCK CERTIFICATES
Shares of the Company's Common Stock you purchase through the Plan are
maintained in your plan account for safekeeping in book-entry form. You do not
receive a certificate for those shares unless you request one in writing. You
will receive an account statement detailing the status of your holdings in
connection with any purchase of shares under the Plan. Any stockholder may use
the Plan's safekeeping services for Common Stock certificates. Safekeeping is
beneficial since you do not bear the risk and costs associated with the loss,
theft or destruction of stock certificates. With safekeeping, you retain the
option to receive cash dividends or reinvest your dividends. To deposit Company
shares in the Plan's safekeeping service, send the stock certificates to the
Plan administrator by registered mail with written instructions to deposit them
in safekeeping. Do not endorse or sign your certificates.
OBTAINING STOCK CERTIFICATES
You may withdraw shares of Common Stock in certificate form from your Plan
account without charge by writing to the Plan Administrator. The Plan
Administrator will issue certificates in the name registered on the account,
unless you instruct the Plan Administrator to issue them in another person's
name or deliver a stock power to the Plan Administrator with your instructions.
In order for certificates to be issued to another person, the signature on the
stock power must be "Medallion Guaranteed" by a financial institution. Most
banks and brokers participate in the Medallion Guarantee program. The Medallion
Guarantee program ensures that the individual signing is in fact the owner of
the Participant's account. Contact your bank or broker for more information
regarding this guarantee.
The Plan Administrator will issue certificates for whole shares of Common
Stock only. The Plan Administrator will mail a check for the value of the
fractional shares of Common Stock to you or your designee as soon as practicable
after the sale.
SELLING SHARES IN YOUR PLAN ACCOUNT
You may sell any number of shares of Common Stock held in your Plan account
by contacting the Plan Administrator. The Plan Administrator will sell shares of
Common Stock daily. The sales price for the shares of Common Stock sold by the
Plan Administrator on your behalf will be the price received in open trading by
the Plan Administrator, less a small service fee per share and any required tax
withholdings.
CLOSING YOUR PLAN ACCOUNT
You may stop participating in the Plan at any time by notifying the Plan
Administrator in writing or by completing and returning the transaction stub of
your most recent Plan account statement. To stop automatic optional monthly cash
payments that are
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withdrawn from your bank account, contact the Plan Administrator at least one
week before the last business day of the period.
When you close your account, you may receive:
- certificates for full shares in your account and cash for remaining
fractional shares;
- certificates for any portion of full shares and cash for remaining full
and fractional shares; and/or
- cash for all full and fractional shares.
CHANGES/TERMINATION OF THE PLAN
The Company reserves the right to amend or discontinue the Plan at any
time. The Plan Administrator will send you written notice of any significant
changes to the Plan. If the Company discontinues the Plan, the Plan
Administrator will return any unused optional cash purchase amounts in your
account, issue a certificate for whole shares of Common Stock in your account,
and pay you in cash for any fractional shares of Common Stock in your account.
SUSPENSION/TERMINATION OF YOUR PARTICIPATION
The Company also reserves the right to deny, suspend or terminate your
participation in the Plan if, in its sole discretion, you use the Plan in a
manner inconsistent with its intended purpose, such as excessive activity
through multiple accounts. The Company may also deny, suspend or terminate your
participation in the Plan if your participation, or any increase in the number
of shares of Common Stock which you own, would, in the opinion of the Company,
jeopardize its status as a REIT. If the Company exercises this right, the Plan
Administrator will notify you in writing and retain your shares of Common Stock.
The Plan Administrator will not, however, accept optional cash payments from you
or reinvest your dividends. The Plan Administrator can issue a certificate to
you only upon your written request.
PLAN SERVICE FEES
Enrollment Fee for New Investors.......................................No Charge
Purchase of Shares
Direct Issue from Company............................................No Charge
Open Market Purchase Fee.......................................$0.05 per share
Sale of Shares
Open Market Sale Fee...............................$15.00 plus $0.12 per share
Reinvestment of Dividends..............................................No Charge
Optional Cash Purchase.................................................No Charge
Certificate Issuance...................................................No Charge
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<PAGE> 20
Returned Checks or Rejected Auto Withdrawals.....................$25.00 per item
The Plan Administrator will charge the applicable fee to your Plan account.
MISCELLANEOUS INFORMATION
Voting of Shares of Common Stock
In advance of each meeting of the Company's stockholders, you will receive
proxy materials and a proxy card representing shares of Common Stock you own in
certificate form and/or for whole and fractional shares of Common Stock owned in
your Plan account. These proxies allow you to indicate how you want your shares
of Common Stock to be voted. Your shares of Common Stock will be voted only as
you indicate. However, you must sign your proxy card or your shares of Common
Stock will not be voted. You may wait to vote or revote your shares of Common
Stock in person at the Company's stockholder meeting.
Handling of Stock Splits, Stock Dividends And Other Distributions
If the Company declares a stock split or stock dividend, the Plan
Administrator will credit your Plan account with the appropriate number of
shares of Common Stock on the payment date.
In the event of a stock subscription or other offering of rights to
stockholders, you will be entitled to these rights based on the number of shares
of Common Stock in your account on the record date for these transactions.
INCOME TAX INFORMATION
Dividends And Trading Fees
Your dividends, whether or not they are reinvested, will be considered
taxable income in the year you receive them to the extent that such dividends
are paid out of the earnings and profits of the Company. To the extent that such
dividends are not paid out of the earnings and profits of the Company, they will
be considered return of capital to the extent the amount of such dividends does
not exceed your adjusted basis in the Common Stock and are treated as a capital
gain to the extent that they exceed your adjusted basis, assuming your Common
Stock is held by you as a capital asset. You will receive an annual statement
from the Plan Administrator indicating the amount of dividends reported as
taxable dividend income to the IRS on Form 1099.
If you participate in the Plan, either (i) through both the dividend
reinvestment option and the optional cash purchase option, or (ii) solely
through the dividend reinvestment option, the amount of the Discount on any
shares of Common Stock you purchase through the Plan will be reported to the IRS
as taxable income. Consequently, your initial tax basis for those shares of
Common Stock will be the full purchase price before the Discount. This
information is also reported to the IRS on your annual Form 1099.
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<PAGE> 21
Transfer of Shares of Common Stock
You will not realize a gain or loss for U.S. federal income tax purposes
when you transfer shares of Common Stock into the Plan or when you withdraw
whole shares of Common Stock from the Plan. You will realize a gain or loss when
you sell shares of Common Stock held in the Plan, including cash received for
fractional shares of Common Stock. You will be required to report this gain or
loss on your federal income tax return.
Withholding Taxes
If you are a non-resident alien or a non-U.S. corporation, partnership, or
other entity, you will be subject to a withholding tax on dividends earned on
shares of Common Stock held in the Plan. The Plan Administrator will withhold
the required amount determined according to U.S. Treasury Department
regulations. This withholding amount will be reflected in your Plan account.
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<PAGE> 22
RISK FACTORS
An investment in the Common Stock and, therefore, your participation in the
Plan, involves various risks. You should carefully consider the following risk
factors in addition to the other information contained in this Prospectus and
contained in other documents filed by the Company with the Commission which are
incorporated by reference in this Prospectus in connection with your decision to
participate in the Plan, including, but not limited to, the more detailed
information contained under the heading "Risk Factors" included in the Company's
Registration Statement on Form S-3 filed with the Commission on January 11,
1999, as supplemented from time to time by the Company, (Reg. no. 333-70419),
and in the Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1998, filed with the Commission on March 30, 1999 (File no.
0-25425).
OWNERSHIP OF THE COMMON STOCK INVOLVES RISKS ASSOCIATED WITH DEBT FINANCING
The Company is subject to the customary risks associated with debt
financing, including the potential inability to repay or refinance existing
indebtedness when it becomes due. The Board of Directors of the Company has
adopted a policy of limiting the Company's indebtedness to approximately 50% of
its market capitalization, although the Company's organizational documents do
not limit the amount of debt which can be incurred by the Company. If the Board
of Directors of the Company changes its position, the Company could increase its
debt level.
A FLUCTUATION IN MARKET INTEREST RATES MAY AFFECT THE VALUE OF THE COMMON STOCK
One of the factors that may affect the value of the Common Stock is the
amount of its distributions to stockholders in comparison to yields on other
financial instruments. An increase in the market interest rate would provide
higher yields on other financial instruments, which could adversely affect the
value of the Common Stock.
THE COMPANY PRIMARILY DEPENDS UPON CCA FOR ITS REVENUES AND ABILITY TO MAKE
DISTRIBUTIONS TO ITS STOCKHOLDERS
CCA is the lessee of a substantial majority of the Company's facilities.
Therefore, the Company's revenues depend upon CCA's ability to make the lease
payments required under the leases for such facilities (the "Leases"). If CCA
fails to make its required lease payments, the Company could terminate all of
the Leases. If this were to happen, or if the Company's tenants do not elect to
renew their leases upon the expiration of their current terms, the Company would
be required to find other suitable lessees. In either circumstance, the amounts
to be received by the Company under its lease agreements would be reduced, which
would in turn reduce amounts available for distribution to the Company's
stockholders and would jeopardize the Company's ability to maintain REIT status.
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EXISTING CONFLICTS OF INTEREST MAY HAVE AN EFFECT ON THE COMPANY
Some directors, officers and stockholders of the Company have relationships
with the Company, CCA and the Service Companies which may create a conflict of
interest with respect to business decisions affecting the Company. Some
directors, officers and stockholders of the Company also have ownership
interests in CCA which may create a conflict of interest with respect to
business decisions affecting the Company. In addition, the significant
contractual and other ongoing relationships between the Company, CCA and the
Service Companies may present conflicts of interest. These conflicts impose a
risk that these persons will favor their own interests over the interests of the
Company in connection with the operations of the Company and CCA and their
ongoing relationship. The Company has adopted policies and procedures to address
these conflicts of interest.
OWNERSHIP OF THE COMMON STOCK INVOLVES RISKS ASSOCIATED WITH THE CORRECTIONS AND
DETENTION INDUSTRY
The Company owns correctional and detention facilities as well as interests
in CCA and the Service Companies, companies whose sole business is the operation
and management of these types of facilities. Its revenues and, therefore, its
ability to make distributions to its stockholders, are dependent on the ability
of its tenants to make rental payments and upon the ability of CCA and the
Service Companies to make certain payments to the Company. Accordingly, the
Company and its stockholders are subject to certain operating risks inherent in
the corrections and detention industry. Private prison managers typically enter
into facility management contracts with government entities for terms of up to
five years, with one or more renewal options that may be exercised only by the
contracting government agency. Accordingly, a private prison manager's contract
with a government entity to operate a Company facility may be terminated, or
otherwise not renewed. A private prison manager's cash flow is subject to the
receipt of sufficient funding of and timely payment by contracting government
entities. If a government entity does not receive sufficient appropriations to
cover its contractual obligations, a contract may be terminated or the
management fee may be deferred or reduced. Private prison managers are dependent
on government agencies to supply their facilities with a sufficient number of
inmates to meet the facility's design capacity. A private prison manager may not
be able to obtain contracts sufficient to fully occupy its facilities. The
private corrections industry is subject to public scrutiny. Negative publicity
about an escape, riot or other disturbance at a privately managed facility may
result in publicity adverse to the Company and the private corrections industry
in general. In addition, organized labor unions in many states have increasingly
opposed the awarding of contracts to private prison managers. Any of these
occurrences could adversely affect the ability of private prison managers which
operate facilities owned by the Company, including CCA, to make rental payments
to the Company.
Furthermore, the Company's ownership of correctional and detention
facilities and its ownership interest in companies which operate and manage such
facilities could expose it
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to potential third party claims or litigation by prisoners or other persons
which, if resolved in a manner adverse to the Company, could adversely affect
the financial position of the Company.
OWNERSHIP OF THE COMMON STOCK INVOLVES RISKS INHERENT IN INVESTMENT IN REAL
ESTATE PROPERTIES
Investments in correctional and detention facilities and any additional
properties in which the Company may invest in the future are subject to risks
typically associated with investments in real estate. Such risks include the
possibility that correctional and detention facilities, and any additional
investment properties, will generate total rental rates lower than those
anticipated or will yield returns lower than those available through investment
in comparable real estate or other investments. Furthermore, equity investments
in real estate are relatively illiquid and, therefore, the ability of the
Company to vary its portfolio promptly in response to changed conditions will be
limited. Additionally, eleven of the facilities currently owned or under
development by the Company are or will be subject to an option to purchase by
certain government agencies. If any of these options are exercised, there exists
the risk that the Company will not recoup its full investment from the
applicable facility.
Investments in correctional and detention facilities subject the Company to
risks involving potential exposure to environmental liability and uninsured
loss. The operating costs of the Company may be adversely affected by the
obligation to pay for the cost of complying with existing environmental laws,
ordinances and regulations, as well as the cost of complying with future
legislation. Additionally, although the Leases require CCA to maintain insurance
with respect to each of the Company's facilities leased to CCA, there are
certain types of losses, such as losses from earthquakes, which may be either
uninsurable or for which it may not be economically feasible to obtain insurance
coverage, in light of the substantial costs associated with such insurance.
Should an uninsured loss occur, the Company could lose both its capital invested
in, and anticipated profits from, one or more of the facilities owned by the
Company.
THE COMPANY'S FAILURE TO QUALIFY AS A REIT COULD ADVERSELY AFFECT STOCKHOLDERS
OF THE COMPANY
The Company operates so as to qualify as a REIT for federal income tax
purposes. However, no assurance can be made that the Company will qualify as a
REIT. Qualification as a REIT involves the application of highly technical and
complex provisions of the Code, for which there are only limited judicial or
administrative interpretations. Application of these provisions to the Company
is even more difficult because of certain aspects of the Company's
organizational structure, including its ownership of non-voting common stock of
CCA, its ownership interest in, and receipt of dividends from, the Service
Companies, its receipt of license fees relating to use of the name "Corrections
Corporation of America" from CCA and any derivatives thereof and its
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distribution of earnings and profits accumulated by Old CCA prior to the Merger.
Qualification as a REIT also involves the determination of various factual
matters and circumstances not entirely within the Company's control.
If the Company fails to qualify as a REIT, it will be subject to federal
income tax, including any applicable alternative minimum tax, on its taxable
income at corporate rates. In addition, unless entitled to relief under certain
statutory provisions, the Company also would be disqualified from re-electing
REIT status for the four taxable years following the year during which
qualification is lost. Failure to qualify as a REIT would reduce the net
earnings of the Company available for distribution to its stockholders because
of the additional tax liability to the Company for the year or years involved.
To the extent that distributions to its stockholders would have been made in
reliance upon the Company's qualifying as a REIT, the Company might be required
to borrow funds or to liquidate certain of its investments to pay the applicable
tax. The failure to qualify as a REIT would also constitute a default under the
Company's current, and potentially its future, debt obligations.
USE OF PROCEEDS
The Company does not know either the number of shares of Common Stock that
will be ultimately sold pursuant to the Plan or the prices at which such shares
of Common Stock will be sold. However, unless otherwise specified in an
applicable Prospectus Supplement, the Company intends to use the net proceeds
from the sale of the Common Stock for the general corporate purposes of the
Company. These general corporate purposes may include, without limitation,
repayment of maturing obligations, redemption of outstanding indebtedness,
financing (in whole or part) for future acquisitions (including acquisitions of
companies and/or other real estate properties in accordance with the Company's
business objectives and strategy), capital expenditures and working capital.
Pending any such uses, the Company may invest the net proceeds from the sale of
any of the Common Stock in short-term investment grade instruments, interest
bearing bank accounts, certificates of deposit, money market securities, U.S.
Government securities or mortgage-backed securities guaranteed by federal
agencies or may use them to reduce short-term indebtedness.
PLAN OF DISTRIBUTION
Except to the extent the Plan Administrator purchases shares of Common
Stock in open market transactions, the Common Stock acquired under the Plan will
be sold directly by the Company through the Plan. The Company may sell shares of
Common Stock to owners of shares (including brokers or dealers) who, in
connection with any resales of such shares, may be deemed to be underwriters. In
connection with any such transaction, compliance with Regulation M under the
Exchange Act would be required. Such shares, including shares acquired pursuant
to Waivers granted with respect to the optional cash
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purchase feature of the Plan, may be resold in market transactions (including
coverage of short positions) on any national securities exchange on which shares
of Common Stock trade or in privately negotiated transactions. The Common Stock
is currently listed on the NYSE. Under certain circumstances, it is expected
that a portion of the Common Stock available for issuance under the Plan will be
issued pursuant to such Waivers. The difference between the price such owners
pay to the Company for shares of Common Stock acquired under the Plan, after
deduction of the applicable Discount from the Market Price, and the price at
which such shares are resold, may be deemed to constitute underwriting
commissions received by such owners in connection with such transactions. Any
such underwriter involved in the offer and sale of the Common Stock will be
named in an applicable Prospectus Supplement. Any underwriting compensation paid
by the Company to underwriters or Plan Administrator in connection with the
offering of the Common Stock, and any discounts, concessions or commissions
allowed by underwriters to participating dealers, will be set forth in an
applicable Prospectus Supplement.
A maximum of 10,000,000 shares of Common Stock is available for issuance
under the Plan. Additionally, a Participant may not own more than 9.8% of the
outstanding shares of Common Stock at any time. Subject to these limitations,
there is no total maximum number of shares of Common Stock that can be issued
pursuant to the reinvestment of dividends. For a more detailed discussion of the
restrictions on ownership of the Common Stock, please refer to the heading
"Description of Capital Stock -- Restrictions on Ownership of Capital Stock"
included in the Company's Registration Statement on Form S-3 filed with the
Commission on January 11, 1999, as supplemented from time to time by the Company
(Reg. no. 333-70419).
Upon withdrawal by a Participant from the Plan by the sale of shares of
Common Stock held under the Plan, the Participant will receive the proceeds of
such sale less a nominal fee per transaction paid to the Plan Administrator (if
such resale is made by the Plan Administrator at the request of a participant),
any related brokerage commissions and any applicable transfer taxes.
Common Stock may not be available under the Plan in all states. This
Prospectus does not constitute an offer to sell, or a solicitation of an offer
to buy, any Common Stock or other securities in any state or any other
jurisdiction to any person to whom it is unlawful to make such offer in such
jurisdiction.
LEGAL MATTERS
The legality of the Common Stock offered hereby will be passed upon by
Stokes & Bartholomew, P.A. As to matters of Maryland law contained in its
opinion, Stokes & Bartholomew, P.A. will rely on the opinion of Miles &
Stockbridge P.C.
22
<PAGE> 27
EXPERTS
The financial statements included or incorporated by reference in this
Prospectus or elsewhere in this Registration Statement, to the extent and for
the periods indicated in their reports, have been audited by Arthur Andersen
LLP, independent public accountants, as indicated in their reports thereto, and
are included or incorporated by reference in reliance upon the authority of said
firm as experts in giving said reports.
23
<PAGE> 28
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The following table itemizes the expenses incurred, or to be incurred, by
the Company in connection with the registration and issuance of the Common Stock
being registered hereunder. As indicated below, all amounts shown are estimates
except for the Commission registration fee.
<TABLE>
<S> <C>
Registration Fee -- Securities and Exchange Commission...... $ 54,738.20
Printing and Engraving Expenses............................. 25,000.00*
Accounting Fees and Expenses................................ 10,000.00*
Legal Fees and Expenses..................................... 40,000.00*
Blue Sky Fees and Expenses.................................. 7,500.00*
Miscellaneous (including listing fees)...................... 6,000.00*
Total..................................................... $143,238.20
</TABLE>
- -------------------------
* Estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
The Charter of the Company provides for indemnification of directors and
executive officers to the full extent permitted by the laws of the State of
Maryland.
Section 2-418 of the Maryland General Corporation Law (the "MGCL")
generally permits indemnification of any director made a party to any
proceedings by reason of service as a director unless it is established that:
(i) the act or omission of such person was material to the matter giving rise to
the proceedings and was committed in bad faith or was the result of active and
deliberate dishonesty; (ii) such person actually received an improper personal
benefit in money, property or services; or (iii) in the case of any criminal
proceedings, such person had reasonable cause to believe that the act or
omission was unlawful. The indemnity may include judgments, penalties, fines,
settlements and reasonable expenses (including attorneys' fees) actually
incurred by the director in connection with the proceeding; but, if the
proceeding is one by, or in the right of, the corporation, indemnification is
not permitted with respect to any proceeding in which the director has been
adjudged to be liable to the corporation, or if the proceeding is one charging
improper personal benefit to the director, whether or not involving action in
the director's official capacity, indemnification of the director is not
permitted if the director was adjudged to be liable on the basis that personal
benefit was improperly received. The termination of any proceeding by conviction
or upon a plea of nolo contendere or its equivalent, or any entry of an order of
probation prior to judgment, creates a rebuttable presumption that the director
did not meet the requisite standard of conduct required for permitted
indemnification. The termination of any proceeding by judgment, order or
settlement, however, does not create a presumption that the director failed to
meet the requisite standard of conduct for permitted indemnification.
Indemnification under the provisions of the MGCL is not deemed exclusive of
any other rights, by indemnification or otherwise, to which a director may be
entitled under the
II-1
<PAGE> 29
Charter of the Company, Bylaws of the Company, any resolution of stockholders or
directors, any agreement or otherwise.
The Company's Charter provides for indemnification of its officers,
employees or agents to the fullest extent permitted by law. The Company has also
entered into indemnification agreements ("the Indemnification Agreements") with
its directors and certain of its executive officers. The Indemnification
Agreements are intended to provide indemnification to the maximum extent
allowable by or not in violation of any law of the State of Maryland. Each
Indemnification Agreement provides that the Company shall indemnify a director
or officer who is a party to the agreement (the "Indemnitee") if he or she was
or is a party to or otherwise involved in any proceeding (other than a
derivative proceeding) by reason of the fact that he or she was or is a director
or officer of the Company, against losses incurred in connection with the
defense or settlement of such proceeding. The indemnification provided under
each Indemnification Agreement is limited to instances where the act or omission
giving rise to the claim for which indemnification is sought was not otherwise
indemnified by the Company or insurance maintained by the Company, was not
established to have been committed in bad faith or the result of active and
deliberate dishonesty, did not involve receipt of improper personal benefit, did
not result in a judgment of liability to the Company in a proceeding by or in
the right of the Company, did not involve an accounting of profits pursuant to
Section 16(b) of the Exchange, and, with respect to any criminal proceeding, the
Indemnitee had no reasonable cause to believe his or her conduct was unlawful.
The Company has obtained directors and officers liability insurance.
The Company may enter into underwriting agreements or other sales
agreements which contain provisions pursuant to which certain officers and
directors may be entitled to indemnification.
ITEM 16. EXHIBITS
<TABLE>
<CAPTION>
NUMBER DESCRIPTION
- ------ -----------
<C> <C> <S>
4.1 -- Specimen of certificate representing shares of Common Stock
of the Company (previously filed as Exhibit 4.2 to the
Company's Registration Statement on Form S-4 filed with the
Commission on September 30, 1998, as subsequently amended
(Reg. no. 333-65017) and incorporated herein by reference)
4.2* -- Prison Realty Corporation Dividend Reinvestment and Stock
Purchase Plan
5.1* -- Opinion of Stokes & Bartholomew, P.A. regarding the validity
of the Common Stock being registered
5.2* -- Opinion of Miles & Stockbridge P.C. regarding the validity
of the Common Stock being registered
23.1 -- Consent of Stokes & Bartholomew, P.A. (included as part of
Exhibit 5.1)
23.2 -- Consent of Miles & Stockbridge P.C. (included as part of
Exhibit 5.2)
23.3* -- Consent of Arthur Andersen LLP (with respect to the Company)
</TABLE>
II-2
<PAGE> 30
<TABLE>
<CAPTION>
NUMBER DESCRIPTION
- ------ -----------
<C> <C> <S>
23.4* -- Consent of Arthur Andersen LLP (with respect to Prison
Realty)
23.5* -- Consent of Arthur Andersen LLP (with respect to CCA)
25 -- Power of Attorney (included on signature page)
99.1* -- Form of Initial Purchase Form
99.2* -- Form of Broker Nominee Form
99.3* -- Form of Request for Waiver
99.4* -- Form of Notice of Waiver Acceptance
99.5* -- Form of Enrollment and Authorization Form
</TABLE>
- -------------------------
* Included with this filing.
ITEM 17. UNDERTAKINGS
Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the Company,
as Registrant, pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
The undersigned Registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities
Act, the information omitted from the form of prospectus filed as part of
this Registration Statement in reliance upon Rule 430A and contained in a
form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or
(4) or 497(h) under the Securities Act shall be deemed to be part of this
Registration Statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities
Act, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) For purposes of determining any liability under the Securities
Act, each filing of the Registrant's annual report pursuant to Section
13(a) or Section 15(d) of the Exchange Act (and, where applicable, each
filing of an employee benefit plan's annual report pursuant to Section
15(d) of the Exchange Act) that is incorporated by reference in the
registration statement shall be deemed to be a new registration
II-3
<PAGE> 31
statement relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial bona fide
offering thereof.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made
of the securities offered hereby, a post-effective amendment to this
Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act;
(ii) to reflect in the prospectus any facts or events arising after
the effective date of this Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in this Registration Statement; and
(iii) to include any material information with respect to the plan
of distribution not previously disclosed in this Registration Statement
or any material change to such information in this Registration
Statement;
provided, however, that the undertakings in paragraphs (i) and (ii) above do not
apply if the information required to be included in a post-effective amendment
by those paragraphs is contained in periodic reports filed by the Registrant
pursuant to Section 13 or Section 15(d) of the Exchange Act that are
incorporated by reference in this Registration Statement;
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein, and
the offering of such securities at that time shall be deemed to be the
initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
II-4
<PAGE> 32
SIGNATURES
Pursuant to the requirements of the Securities Act, the Registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the city of Nashville, Tennessee, on the 7th day of May, 1999.
PRISON REALTY CORPORATION
Registrant
By: /s/ DOCTOR R. CRANTS
-----------------------------------
Doctor R. Crants
Chief Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below hereby constitutes and appoints
Doctor R. Crants, D. Robert Crants, III and Vida H. Carroll, and each of them,
the true and lawful attorneys-in-fact and agents of the undersigned, with full
power of substitution and resubstitution, for and in the name, place and stead
of the undersigned, in any and all capacities, to sign any and all amendments
(including post-effective amendments) to this Registration Statement and any
registration statement relating to the same offering as the Registration
Statement that is to be effective upon filing pursuant to Rule 462(b) under the
Securities Act, and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Commission, and hereby grants to
such attorneys-in-fact and agents, and each of them, full power and authority to
do and perform each and every act and thing requisite and necessary to be done,
as fully to all intents and purposes as the undersigned might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or any of them, or their or his or her substitute or substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed by the following persons in the capacities and on the
dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ DOCTOR R. CRANTS Chief Executive Officer May 7, 1999
- ------------------------------------------ (Principal Executive
Doctor R. Crants Officer), Chairman and
Director
/s/ J. MICHAEL QUINLAN Vice-Chairman and Director May 7, 1999
- ------------------------------------------
J. Michael Quinlan
/s/ D. ROBERT CRANTS, III President and Director May 7, 1999
- ------------------------------------------
D. Robert Crants, III
/s/ MICHAEL W. DEVLIN Chief Operating Officer May 7, 1999
- ------------------------------------------ and Director
Michael W. Devlin
</TABLE>
II-5
<PAGE> 33
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<S> <C> <C>
/s/ VIDA H. CARROLL Chief Financial Officer May 7, 1999
- ------------------------------------------ (Principal Financial and
Vida H. Carroll Accounting Officer),
Secretary and Treasurer
/s/ C. RAY BELL Director May 7, 1999
- ------------------------------------------
C. Ray Bell
/s/ RICHARD W. CARDIN Director May 7, 1999
- ------------------------------------------
Richard W. Cardin
Director May , 1999
- ------------------------------------------
Monroe J. Carell, Jr.
/s/ JEAN-PIERRE CUNY Director May 7, 1999
- ------------------------------------------
Jean-Pierre Cuny
/s/ JOHN W. EAKIN, JR. Director May 7, 1999
- ------------------------------------------
John W. Eakin, Jr.
/s/ TED FELDMAN Director May 7, 1999
- ------------------------------------------
Ted Feldman
/s/ JACKSON W. MOORE Director May 7, 1999
- ------------------------------------------
Jackson W. Moore
Director May , 1999
- ------------------------------------------
Rusty L. Moore
/s/ JOSEPH V. RUSSELL Director May 7, 1999
- ------------------------------------------
Joseph V. Russell
/s/ CHARLES W. THOMAS Director May 7, 1999
- ------------------------------------------
Charles W. Thomas, Ph.D.
</TABLE>
II-6
<PAGE> 34
EXHIBIT INDEX
REGISTRATION STATEMENT ON FORM S-3
<TABLE>
<CAPTION>
NUMBER DESCRIPTION
- ------ -----------
<C> <C> <S>
4.1 -- Specimen of certificate representing shares of Common Stock
of the Company (previously filed as Exhibit 4.2 to the
Company's Registration Statement on Form S-4 filed with the
Commission on September 30, 1998, as subsequently amended
(Reg. no. 333-65017) and incorporated herein by reference)
4.2* -- Prison Realty Corporation Dividend Reinvestment and Stock
Purchase Plan
5.1* -- Opinion of Stokes & Bartholomew, P.A. regarding the validity
of the Common Stock being registered
5.2* -- Opinion of Miles & Stockbridge P.C. regarding the validity
of the Common Stock being registered
23.1 -- Consent of Stokes & Bartholomew, P.A. (included as part of
Exhibit 5.1)
23.2 -- Consent of Miles & Stockbridge P.C. (included as part of
Exhibit 5.2)
23.3* -- Consent of Arthur Andersen LLP (with respect to the Company)
23.4* -- Consent of Arthur Andersen LLP (with respect to Prison
Realty)
23.5* -- Consent of Arthur Andersen LLP (with respect to CCA)
25 -- Power of Attorney (included on signature page)
99.1* -- Form of Initial Purchase Form
99.2* -- Form of Broker Nominee Form
99.3* -- Form of Request for Waiver
99.4* -- Form of Notice of Waiver Acceptance
99.5* -- Form of Enrollment and Authorization Form
</TABLE>
- -------------------------
* Included with this filing.
<PAGE> 1
EXHIBIT 4.2
PRISON REALTY CORPORATION
DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
SECTION I - PURPOSE AND ADMINISTRATION
The Board of Directors of Prison Realty Corporation (the "Company") has
adopted this Dividend Reinvestment and Stock Purchase Plan (the "Plan"), which
provides stockholders of the Company an opportunity to automatically invest
their cash dividends in shares of the Company's common stock, par value $0.01
per share ("Common Stock"), as well as an opportunity to make periodic voluntary
cash investments in Common Stock. Persons who are not already stockholders of
the Company may also purchase Common Stock under the Plan through voluntary cash
payments. A maximum of 10,000,000 shares of Common Stock is available for
purchase under the Plan. The initial Plan Administrator shall be Boston
EquiServe, L.P., the transfer agent for the Company. Boston EquiServe, L.P. or
any successor Plan Administrator may also be referred to as "Agent."
SECTION II - DEFINITIONS
As used herein with their initial letters capitalized, the following
terms shall have the indicated meanings. Other terms are defined in the
Sections of this Plan.
(a) "Investment Date" shall mean any day, as designated in the
sole discretion of the Company, on which the New York Stock Exchange is open
for business and on which a purchase is to be made of the Common Stock of the
Company pursuant to the terms and provisions of the Plan.
(b) "Participant" shall mean any holder of shares of Common Stock
or any other person or entity that purchases Common Stock pursuant to the terms
and provisions of the Plan.
(c) "Plan Administrator" shall mean the person or entity
responsible for the administration and management of the Plan.
(d) "Purchase Price" shall mean the amount payable by a
Participant for each share of Common Stock purchased by such Participant
pursuant to the terms and provisions of the Plan. The Purchase Price shall be
determined according to the provisions of this Plan.
SECTION III - PURCHASE OF SHARES OF COMMON STOCK
(a) Purchases of Common Stock of the Company by the Agent may be
made, at the Company's option, either (i) from the Company from its authorized
but non-outstanding shares, or (ii) in the open market (on the New York Stock
Exchange or any securities exchange where the Common Stock is then traded, in
the over-the-counter market or in negotiated transactions). A
<PAGE> 2
Participant's account in the Plan will be credited with the number of shares,
including fractional shares, equal to the total amount to be invested on behalf
of such Participant divided by the Purchase Price calculated pursuant to the
provisions of either Section IV or Section V of this Plan, whichever is
applicable. For purposes of calculating the applicable Purchase Price: (a)
"Market Price" shall mean, with respect to shares of Common Stock purchased
from the Company, the average of the daily high and low sale prices of the
Common Stock on the New York Stock Exchange on the applicable Investment Date
or if no trading occurs on the Investment Date, the average of the high and low
sale prices for the first trading day immediately preceding such Investment
Date for which trades are reported, and (b) with respect to Common Stock
purchased on the open market or in negotiated transactions, "Market Price"
shall mean the weighted average of the actual prices paid, computed to four
decimal places, for all of the shares of Common Stock purchased by the Plan
Administrator on the applicable Investment Date. Participants will have to pay
brokerage fees relating to any open market purchase. The Company may not change
its designation as to whether shares of Common Stock will be purchased from the
Company or on the open market more than once in any three-month period, and
such change of designation may be made only: (i) to the extent required by
applicable law, rules or regulations, (ii) if the Company's needs to raise
additional capital have changed, or (iii) another valid reason exists for the
change.
(b) Neither the Company nor any Participant shall have any
authorization or power to direct the time or price at which shares will be
purchased or the selection of the broker or dealer through or from whom
purchases are to be made by the Plan Administrator. However, when open market
purchases are made by the Plan Administrator, the Plan Administrator shall use
its best efforts to purchase shares at the lowest possible price. In making
purchases for the Participant's account, the Plan Administrator may commingle
the Participant's funds with those of other Participants in the Plan. The Plan
Administrator may purchase Common Stock in advance of a dividend payment date
or Investment Date for settlement on or after such date. No interest will be
paid to participants on funds held by the Plan Administrator pending
investment. It is understood that for a number of reasons, including observance
of the Rules and Regulations of the Securities and Exchange Commission
requiring temporary curtailment or suspension of purchases, it is possible that
the whole amount of funds available in the Participant's account for the
purchase of Common Stock might not be applied to the purchase of shares on or
before the next ensuing Investment Date. Additionally, as further explained in
Section VI of this Agreement, for optional cash payments made pursuant to a
Waiver (as hereinafter defined), if the Market Price does not equal or exceed
the Threshold Price (as hereinafter defined) on the applicable Investment Date,
the portion of the optional cash payment which was to be invested on that
Investment Date shall be returned to the Participant without interest. Neither
the Plan Administrator nor the Company shall be liable when conditions prevent
the purchase of shares or interfere with the timing of such purchases,
provided, however, such funds shall be returned to Participants if not used to
purchase Common Stock: (i) within 35 days of receipt of optional cash payments,
or (ii) within 30 days of the dividend date for dividend reinvestment.
(c) The Company may, at its sole discretion from time-to-time,
elect to establish a discount from Market Price applicable to the purchase of
shares newly issued by the Company for Participants' accounts during any
2
<PAGE> 3
month (a "Discount"). Such Discount may be between 0% and 5% of the Market
Price and may vary each month. The Discount will be established in the
Company's sole discretion after a review of current market conditions, the
level of participation in the Plan, the Company's current and projected capital
needs, and any other factors which the Company deems appropriate. No Discount
will be established for or applicable to shares of Common Stock purchased in the
open market and subsequently sold under the Plan. Setting a Discount for any
month shall not affect the setting of a Discount for any subsequent month.
Neither the Company nor the Plan Administrator shall be required to provide any
written notice to Participants as to the Discount, but current information may
be obtained by contacting the Plan Administrator.
SECTION IV - DIVIDEND REINVESTMENT
As each Participant's Agent, the Plan Administrator will receive on or
before each dividend payment date, cash from the Company equal to the
corresponding amount of dividends elected to be reinvested on the shares of the
Common Stock held by each stockholder participating in the Plan who has selected
either the full or partial dividend reinvestment option, including those full
and fractional shares acquired under the Plan. Participants who select one of
the dividend reinvestment options will have such amount of their dividends
reinvested as selected by them. Agent will apply such funds towards the purchase
of shares of Common Stock for the Participant's account. The Investment Date
with respect to all funds received by the Agent as cash dividends from the
Company shall be the dividend payment date as declared by the Company from time
to time. The Purchase Price of shares of Common Stock purchased for the Plan
with reinvested dividends shall be the Market Price for the applicable
Investment Date, subject to any Discount as determined by the Company. Cash
dividends on shares credited to the Participant's account will be automatically
re-invested to purchase additional shares.
SECTION V - STOCK PURCHASE PLAN
As each Participant's Agent, the Plan Administrator may receive
optional cash payments from a Participant. Unless determined otherwise by the
Company, the Plan Administrator will apply such funds to the purchase of shares
of Common Stock for the Participant's account on a monthly basis. Shares will be
purchased under this option for a Participant's account only in those months for
which such Participant elects to make an optional cash payment. A person or
entity who is not a holder of Common Stock and who wishes to participate in the
Plan must make an initial optional cash payment of at least $1,000. Subsequent
optional cash payments by such persons or entities will be subject only to the
limits set forth below. The Purchase Price for such shares shall be the Market
Price on the applicable Investment Date, subject to any Discount established by
the Company. Optional cash payments must be received by the Agent at least two
(2) business days prior to the applicable Investment Date in order to be
invested on the applicable Investment Date. Optional cash payments which are
less than $50, and any optional cash purchase amounts greater than $5000, will
be returned to the Participant without interest after the end of the Pricing
Period. The Investment Date for optional cash payments which do not exceed
$5,000 shall be the last day of the Pricing Period. The "Pricing Period" is a
period encompassing ten consecutive Investment Dates in each month, with the
commencement date and conclusion date of the Pricing Period being determined by
the Company.
3
<PAGE> 4
SECTION VI - PERMITTED PAYMENTS IN EXCESS OF LIMITS
Optional cash payments in excess of $5,000 may be made by a
Participant only upon approval by the Company of a written request for
permission to make cash investments in excess of $5,000 (a "Request for
Waiver") from such Participant. After considering the Request for Waiver, the
Company, in its sole and absolute discretion, may grant permission to make such
a purchase (a "Waiver"). No pre-established maximum limit applies to optional
cash payments that may be made pursuant to a Request for Waiver.
Notwithstanding the above, Participants shall be subject to the ownership
limitations contained in the Articles of Incorporation of the Company.
A Request for Waiver will be considered on the basis of a variety of
factors, which may include (i) the Company's current and projected capital
requirements, (ii) available alternatives to meet those requirements, (iii)
prevailing market prices for the Common Stock and other Company securities,
(iv) general economic and market conditions, (v) expected aberrations in the
price or trading volume of the Company's securities, (vi) the number of shares
held by the Participant submitting the Request for Waiver, (vii) the aggregate
amount of optional cash payments for which such Requests for Waiver have been
submitted and (viii) the administrative constraints associated with granting a
Waiver. Grants of Waivers will be made in the absolute discretion of the
Company.
For optional cash payments made pursuant to a Waiver, one-tenth (1/10)
of a Participant's optional cash payment will be invested on each of the ten
Investment Dates during the designated Pricing Period. Unless it waives its
right to do so, the Company may establish for each Investment Date a minimum
price (the "Threshold Price") which applies to the investment of optional cash
payments made pursuant to a Waiver. The Threshold Price will be a stated dollar
amount that the closing price of the Common Stock on the New York Stock
Exchange for the respective Investment Date must equal or exceed. The Threshold
Price will initially be established by the Company at least three (3) business
days prior to the applicable Investment Date; however, the Company reserves the
right to change the Threshold Price at any time. The Threshold Price will be
determined in the Company's sole discretion after a review of current market
conditions and other relevant factors. In the event that the Threshold Price is
not satisfied on the respective Investment Date, the amount of a Participant's
optional cash payment which was to be invested on that Investment Date will be
returned to the Participant without interest.
For any Investment Date, the Company may waive its right to set a
Threshold Price for optional cash payments made pursuant to a Waiver. Setting a
Threshold Price for any Investment Date shall not affect the setting of a
Threshold Price for any subsequent Investment Date.
SECTION VII - ACCOUNTS
As soon as practicable after the purchases of shares of Common Stock
have been completed for any Investment Date, the Plan Administrator will send
to each Participant a statement of account confirming the transaction and
itemizing any previous investment or reinvestment activity for the calendar
year.
4
<PAGE> 5
Shares of Common Stock credited to a Participant's account may not be
pledged or assigned, and any attempted pledge or assignment is void. A
Participant who wishes to pledge or assign shares of Common Stock credited to
the Participant's account must first withdraw such shares from the account.
SECTION VIII - AUTHORIZATION
Stockholder authorization for dividend reinvestment must be received
by the Plan Administrator at least five (5) days prior to the dividend record
date for the Company's Common Stock; otherwise, such authorization shall not be
effective until the next dividend record date.
SECTION IX - INCOME TAX
The reinvestment of dividends does not relieve the Participant of any
income tax which may be payable on such dividends. In the case of both (i)
foreign participants who elect to have their dividends reinvested and whose
dividends are subject to United States income tax withholding and (ii) other
participants who elect to have their dividends reinvested and who are subject
to "backup" withholding under Section 3406(a)(1) of the Internal Revenue Code
of 1986, as amended, the Plan Administrator shall invest in shares of Common
Stock an amount equal to the dividends of such Participants less the amount of
tax required to be withheld.
SECTION X - VOTING
All shares of Common Stock credited to a Participant's account under
the Plan may be voted by the Participant. If on the record date for a meeting
of the Company's stockholders there are shares of Common Stock credited to the
account of a Participant, that Participant will be sent the proxy material for
the meeting and a proxy covering all of the Participant's shares of Common
Stock, including shares of Common Stock credited to the Participant's account.
If the Participant returns an executed proxy, it will be voted with respect to
all of Participant's shares of Common Stock (including any fractional shares),
or the Participant may vote all of such shares in person at the meeting.
SECTION XI - CERTIFICATES
Shares of Common Stock purchased under the Plan are registered in the
name of a nominee and shown on each Participant's account. However, a
Participant may withdraw shares of Common Stock from his account by requesting
a certificate for any of the whole shares which have accumulated in such
Participant's account by written request to the Plan Administrator. Each
certificate issued is registered in the name or names in which the account is
maintained, unless otherwise instructed in writing. If the certificate is to be
issued in a name other than the name of the Plan account, the Participant or
Participants must have his or her signature(s) guaranteed by a commercial bank
or broker. Certificates will not be issued for fractional shares of Common
Stock
5
<PAGE> 6
in any case. Dividends will be continued to be paid on the cumulative holdings
of both full and fractional shares of Common Stock remaining in the
Participant's account and will automatically be reinvested.
SECTION XII - TERMINATION OF PARTICIPATION
A Participant (or Participant's estate) may terminate his account at
any time by notifying the Plan Administrator in writing. Unless the termination
notice is received by the Plan Administrator at least five (5) days prior to
any dividend record date, it cannot be processed until after purchases made
from the dividends paid have been completed and credited to Participant's
accounts. All dividends with a record date which follows the timely receipt of
notice for termination will be sent directly to the Participant. The Plan
Administrator may terminate the account by notice in writing mailed to the
Participant, effective when mailed by the Plan Administrator. Once termination
has been effected, the Plan Administrator shall, as soon as practicable after
receipt of such notice, issue to the Participant without charge, certificates
for the full shares held in Participant's account, or, if the Participant so
requests, sell the full shares held under the Plan, deduct brokerage fees and
commissions, transfer taxes (if any) and applicable withholding taxes, and a
service charge and deliver the proceeds to Participant. The Participant's
interest in any fractional shares of Common Stock held in Participant's account
at termination will be paid in cash at the then current market value of shares
of Common Stock. A Participant will also be entitled to the uninvested portion
of any voluntary investment if notice of the termination is received at least
five (5) business days prior to the date when the Plan Administrator becomes
obligated to pay for shares of Common Stock purchased pursuant to the terms and
provisions of Section III(a) of this Plan. If a Participant disposes of all of
the shares represented by certificates registered in Participant's own name on
the books of the Company but does not give notice of termination under the
Plan, the Plan Administrator may continue to reinvest the dividends on his or
her Common Stock held under the Plan until otherwise directed by the
Participant.
SECTION XIII - STOCK DIVIDENDS
It is understood that any stock dividends or stock splits distributed
by the Company on shares of Common Stock held by the Plan Administrator for the
Participant will be credited to the Participant's account. In the event the
Company makes available to its stockholders rights to purchase additional
shares of Common Stock or other securities, the Participant will receive
appropriate instructions in connection with all such rights directly from the
Plan Administrator in order to permit a Participant to determine what action
Participant desires to take.
SECTION XIV - RESPONSIBILITY OF THE PLAN ADMINISTRATOR
Agent shall not be liable hereunder for any act done in good faith, or
for any good faith omission to act, including, without limitation, any claims
of liability: (1) arising out of failure to terminate any Participant's account
upon such Participant's death prior to receipt of notice in writing
6
<PAGE> 7
of such death; and (2) with respect to the prices at which shares of Common
Stock are purchased or sold for the Participant's account and the times such
purchases or sales are made.
SECTION XV - AMENDMENT OF PLAN
The Plan may be amended or supplemented by the Company at any time or
times, and, (i) except when necessary or appropriate to comply with any
applicable law, rule or regulation, including but not limited to the rules or
policies of the Securities and Exchange Commission, the Internal Revenue
Service or other regulatory authority, or (ii) except with respect to any
modifications or amendments which do not materially affect the rights of
Participants, such amendment or supplement shall only be effective upon mailing
written notice at least 30 days prior to the effective date thereof to each
Participant. The amendment or supplement shall be deemed to be accepted by the
Participants unless prior to the effective date thereof, the Plan Administrator
receives written notice of the termination of Participant's account. Any such
amendment may include an appointment by the Plan Administrator in its place and
stead of a successor bank or Plan Administrator under these terms and
conditions, in which event the Company is authorized to pay such successor bank
or Plan Administrator for the account of the Participants, all dividends and
distributions payable on the Company's shares of Common Stock held by the
Participant for application by such successor bank or Plan Administrator as
provided in these terms and conditions.
SECTION XVI - TERMINATION OF PLAN
The Company reserves the right to suspend or terminate the Plan at any
time and from time to time, and in particular, reserves the right to refuse
optional cash payments from any person who, in the sole and absolute discretion
of the Company, is attempting to circumvent the interests of the Plan by making
excessive optional cash payments through multiple stockholder accounts or by
engaging in arbitrage activities. The Company may also suspend, terminate or
refuse participation in the Plan to any person if participation or any increase
in the number of shares of Common Stock held by such person, would, in the
opinion of the Board of Directors of the Company, jeopardize the status of the
Company as a real estate investment trust for federal income tax purposes.
SECTION XVII - COMPLIANCE WITH APPLICABLE LAW AND REGULATIONS
(a) The Company's obligation to offer, issue or sell newly issued
shares of Common Stock hereunder shall be subject to the Company's obtaining any
necessary approval, authorization and consent from any regulatory authorities
having jurisdiction over the issuance and sale of the shares of Common Stock.
The Company may elect not to offer or sell its shares of Common Stock hereunder
to persons residing in any jurisdiction where, in the sole discretion of the
Company, the burden or expense of compliance with applicable blue sky,
securities, or other laws make that offer or sale impracticable or inadvisable.
(b) To the extent required to comply with law or the rules or
policies of the Securities and Exchange Commission, if shares of Common Stock
are purchased directly from the Company
7
<PAGE> 8
by the Plan Administrator under the Plan, neither the Company nor any
"affiliated purchaser," as that term is defined under the Securities Exchange
Act of 1934, as amended, shall purchase any Common Stock on any day on which
the market price of the Common Stock will be a factor in determining the Market
Price as provided in Section III(a) of the Plan.
SECTION XVIII - APPLICABLE LAW
The terms and conditions of this Plan shall be governed by the laws of
the State of Maryland.
SECTION XIX - EFFECTIVE DATE
The Plan shall become effective upon the date which a Registration
Statement under the Securities Act of 1933, as amended, and the rules and
regulations promulgated thereby, has been declared effective by the Securities
and Exchange Commission thereby registering the shares of Common Stock offered
under the Plan.
SECTION XX - ADMINISTRATION
All correspondence and questions regarding the Plan and/or
any Participant's account should be directed to:
Bank Boston, N.A.
c/o EquiServe, L.P.
[address]
Telephone: _______________
or such other address as to which notice is given to Participants in
writing.
8
<PAGE> 1
EXHIBIT 5.1
[STOKES & BARTHOLOMEW, P.A. LETTERHEAD]
May 7, 1999
Prison Realty Corporation
10 Burton Hills Boulevard, Suite 100
Nashville, Tennessee 37215
Ladies and Gentlemen:
We have acted as counsel to Prison Realty Corporation, a Maryland
corporation (the "Company"), in connection with the Registration Statement on
Form S-3, filed on May 7, 1999 (the "Registration Statement"), by the Company
with the Securities and Exchange Commission under the Securities Act of 1933,
as amended, relating to the offer and sale of up to 10,000,000 shares of its
common stock, $0.01 par value per share (the "Common Stock"), which may be
offered and sold by the Company from time to time as set forth in the
prospectus which forms a part of the Registration Statement (the "Prospectus")
in connection with the Company's Dividend Reinvestment and Stock Purchase Plan
(the "Plan"). This opinion is being provided to you in connection with the
filing of the Registration Statement.
We have examined the originals or copies, certified or otherwise
identified to our satisfaction, of all such records of the Company and all such
agreements, certificates of public officials, certificates of officers or other
representatives of the Company, and such other documents, certificates and
other records as we have deemed necessary or appropriate as a basis for the
opinions set forth herein, including (i) the Charter of the Company (the
"Charter"), (ii) the Amended and Restated Bylaws of the Company (the "Bylaws"),
and (iii) certified copies of certain resolutions duly adopted by the Board of
Directors of the Company. As to factual matters material to the opinions set
forth below we have relied, without investigation, upon the representations and
statements of the Company in the Registration Statement and in such
certificates of government officials and officers of the Company as we have
deemed necessary for the purpose of the opinions expressed herein.
We have assumed that: (i) prior to the issuance of any Common Stock
pursuant to the Plan, the Company will have a sufficient number of authorized
but unissued shares of Common Stock authorized under its Charter and will
comply with all other applicable requirements of Maryland law; and (ii) the
issuance of the Common Stock pursuant to the Plan from time to time will be
authorized by action of the Board of Directors of the Company (the
"Resolutions") and in accordance with its Charter, Bylaws and applicable
Maryland law.
The opinions stated herein are limited to the federal laws of the
United States, the laws of the State of Tennessee and the General Corporation
Law of the State of Maryland. With respect to the opinions below that relate to
the laws of the State of Maryland, we have relied upon that certain opinion of
Miles & Stockbridge P.C., special Maryland counsel to the Company.
<PAGE> 2
Prison Realty Corporation
May 7, 1999
Page 2
Based upon and subject to the conditions and limitation set forth
herein, we are of the opinion that when the Registration Statement has become
effective under the Act and following issuance and delivery of any such shares
of Common Stock in the manner and on the terms described in the Registration
Statement and the Plan, such shares of Common Stock will be validly issued,
fully paid and non-assessable by the Company.
We hereby consent to the filing of this opinion as an exhibit to the
above-referenced Registration Statement and to the use of our name as it
appears under the caption "Legal Matters" in the Prospectus contained in such
Registration Statement.
Very truly yours,
Stokes & Bartholomew, P.A.
<PAGE> 1
EXHIBIT 5.2
[MILES & STOCKBRIDGE P.C. LETTERHEAD]
May 7, 1999
Prison Realty Corporation
10 Burton Hills Boulevard, Suite 100
Nashville, Tennessee 37215
Ladies and Gentlemen:
We have acted as counsel to Prison Realty Corporation, a Maryland
corporation (the "Company"), in connection with the Registration Statement on
Form S-3, filed on May 7, 1999 (the "Registration Statement"), by the Company
with the Securities and Exchange Commission under the Securities Act of 1933, as
amended, relating to the offer and sale of up to 10,000,000 shares of its common
stock, $0.01 par value per share (the "Common Stock"), which may be offered and
sold by the Company from time to time as set forth in the prospectus which forms
a part of the Registration Statement (the "Prospectus") in connection with the
Company's Dividend Reinvestment and Stock Purchase Plan (the "Plan"). We have
examined the originals or copies, certified or otherwise identified to our
satisfaction, of all such records of the Company and all such agreements,
certificates of public officials, certificates of officers or other
representatives of the Company, and such other documents, certificates and other
records as we have deemed necessary or appropriate as a basis for the opinions
set forth herein. Based on that examination, we advise you that in our opinion
the Common Stock has been duly and validly authorized and, when issued in the
manner and on the terms described in the Prospectus and the Plan, will be
legally issued, fully paid and non-assessable.
<PAGE> 2
We hereby consent to the filing of this opinion as an exhibit to the
Registration Statement. In giving our consent we do not thereby admit that we
are in the category of persons whose consent is required under Section 7 of the
Act or the rules and regulations of the Securities and Exchange Commission
thereunder. Additionally we understand that Stokes & Bartholomew, P.A. will rely
on our opinion in giving its opinion letter to you on the date hereof and we
consent to that reliance. The opinion expressed herein is limited to the matters
set forth in this letter and no other opinion should be inferred beyond the
matters expressly stated.
Very truly yours,
Miles & Stockbridge P.C.
<PAGE> 1
EXHIBIT 23.3
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this registration statement on Form S-3 of Prison
Realty Corporation of our report dated March 15, 1999 relating to the
consolidated financial statements of Prison Realty Corporation and Subsidiaries
included in Prison Realty Corporation's Form 10-K for the year ended December
31, 1998 and to all references to our Firm included in this registration
statement.
ARTHUR ANDERSEN LLP
Nashville, Tennessee
May 3, 1999
<PAGE> 1
EXHIBIT 23.4
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this registration statement on Form S-3 of Prison
Realty Corporation of our reports dated January 22, 1999 and March 25, 1999
relating to the consolidated financial statements and financial statement
schedules of CCA Prison Realty Trust and subsidiaries included in CCA Prison
Realty Trust's Form 10-K for the year ended December 31, 1998 and to all
references to our Firm included in this registration statement.
ARTHUR ANDERSEN LLP
Nashville, Tennessee
May 3, 1999
<PAGE> 1
EXHIBIT 23.5
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this registration statement on Form S-3 of Prison
Realty Corporation of our report dated March 15, 1999 relating to the
consolidated financial statements of Correctional Management Services
Corporation and Subsidiaries included in Prison Realty Corporation's Form 10-K
for the year ended December 31, 1998 and to all references to our Firm included
in this registration statement.
ARTHUR ANDERSEN LLP
Nashville, Tennessee
May 3, 1999
<PAGE> 1
EXHIBIT 99.1
FORM OF INITIAL PURCHASE FORM
PRISON REALTY CORPORATION
BankBoston, N.A.
c/o Equiserve, Limited Partnership
[Address]
Any questions, please call toll free:_______________ (Please use enclosed
envelope).
Enrolling in the Plan. I wish to enroll in the Prison Realty Corporation
Dividend Reinvestment and Stock Purchase Plan (the "Plan") available to
interested investors of Prison Realty Corporation, (the "Company") by making an
initial investment. Enclosed is a check or money order for $_______ ($1,000
minimum/$5,000 maximum per month) payable to "BankBoston, N.A." Check must
be received by the "Optional Cash Payment Due Date" as defined in the Plan
Prospectus.
Please note any address corrections directly on this form to the left.
Please provide your day and evening phone numbers to assist us in
processing your enrollment:
Daytime Phone: (___) - ___-____ Evening Phone: (___) - ___-____
Account Registration. Please check one box and provide all requested
information. Please print clearly.
[ ] Check here if registration desired matches mailing information above.
Social Security Number: ________________.
[ ] INDIVIDUAL OR JOINT. Joint accounts will be presumed to be joint tenants
unless restricted by applicable state law or otherwise indicated. Only one
Social Security Number is required for tax reporting.
Owner's First Name:
Middle Initial:
Last Name:
Owner's Social Security Number:
Joint Owner's First Name:
Middle Initial:
Last Name:
[ ] CUSTODIAL. A minor is the beneficial owner of the account with an adult
Custodian managing the account until the minor becomes of age, as specified in
the Uniform Gifts/Transfers to Minor Act in the minor's state of residence.
Custodian's First Name:
Middle Initial:
Last Name:
Minor's First Name:
Middle Initial:
Last Name:
<PAGE> 2
Minor's Social Security Number:
Minor's State of Residence:
[ ] TRUST. Account is established in accordance with provisions of a trust
agreement.
Trustee Name:
Name of Trust:
Trust Date:
Tax ID Number:
Beneficiary:
Dividend Election. Please check one box and provide the requested information.
You may choose to reinvest all, a portion or none of the dividends paid on
Company stock registered in your name and held by you under the Program. If you
do not indicate a choice, you automatically will default into the full dividend
reinvestment election with all dividends reinvested.
[ ] Full Dividend Reinvestment. I wish to reinvest all of my Common Stock
dividends in additional shares of Common Stock. I may also make optional
payments to the program. (You will not receive a dividend check.)
[ ] Partial Dividend Reinvestment. I wish to have cash dividends on _______
whole shares of Common Stock sent to me in cash, and dividends on the rest of my
shares of Common Stock reinvested in additional shares of Common Stock. I may
also make optional payments to the Program.
[ ] Optional Cash Only. I wish to make only optional cash payments to the
Program. (You will receive a dividend check for all shares.)
Signatures. By signing this form, I request enrollment, certify that I have
received and read the prospectus describing the Plan and agree to abide by the
terms and conditions of the Plan. I hereby appoint Boston Equiserve, L.P. as my
agent to apply dividends and any investment I may make to the purchase of shares
under the Plan. I understand that I may revoke this authorization at any time by
written notice to BankBoston, N.A.
All joint owners must sign.
Under penalties of perjury, I also certify that: A. The number shown on
this form is my/our correct Social Security Number or Taxpayer ID
Number, B. I am not subject to backup withholding either because (1) I
have not been notified by the Internal Revenue Service (IRS) that I am
subject to backup withholding as a result of a failure to report all
interest or dividends, or (2) the IRS has notified me that I am no
longer subject to backup withholding. (Check here ___ if you have been
notified by the IRS that you are subject to backup withholding because
of under reporting of interest or dividends on your tax returns.)
Signature Date
Signature Date
[ ] Automatic Investment. You may authorize monthly deductions from your
personal bank account. BankBoston, N.A. will invest these deductions in
Company stock and credit the account you designate above. To initiate these
deductions, please complete the reverse side of this form and check this box.
Your authorized monthly deduction from your back account must be for at least
$1,000 and cannot exceed $5,000 in a month.
<PAGE> 3
Please complete the information below to commence automatic withdrawals from
your Bank account to purchase additional shares. Deductions and Investments will
continue until you notify BankBoston, N.A. to change or discontinue them. You
must notify the Bank by telephone or written request at least five (5) business
days prior to the Optional Cash Payment Due Date as defined in the Plan
Prospectus for any change to be effective. Should your Bank account contain
insufficient funds to cover the authorized deduction, no investment will occur.
In such event, you will be charged a $25.00 fee by BankBoston, N.A. and you may
be charged an additional fee by your bank for insufficient funds.
Please see sample below illustrating where these numbers can be found.
ABA Routing Number Checking or Money Market Savings
[ ][ ][ ][ ][ ][ ][ ][ ][ ] [ ] [ ]
Bank Account Number
[ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ][ ]
Amount to be Withdrawn
[ ][ ], [ ][ ][ ].[ ][ ] ($1,000 minimum, 5,000 maximum per month)
I hereby authorize BankBoston, N.A. to make monthly automatic transfers of funds
from my savings/checking account in the amount indicated on this form. These
funds will be used to purchase shares of Common Stock for my account. Note: If
Joint Account, both holders must sign.
Name on Account (Please Print)
Name of Financial Institution
Mailing Address of Financial Institution
City State Zip
Signature Date Signature Date
[diagram of a check]
<PAGE> 1
EXHIBIT 99.2
FORM OF BROKER NOMINEE FORM
PRISON REALTY CORPORATION
Dividend Reinvestment and Stock Purchase Plan
Broker and Nominee Form
By Mail:
To: BankBoston, N.A.
c/o EquiServe, Limited Partnership
[Address]
Telephone:_______________
Instructions Dated: ____________
As provided in the Prospectus dated May __, 1999 (the "Prospectus") relating to
the Prison Realty Corporation (the "Company") Dividend Reinvestment and Stock
Purchase Plan (the "Plan"), this form is to be used only by a broker, bank, or
other nominee directing the reinvestment of all or a portion of the dividends
payable to, or making an optional cash purchase under the plan on behalf of, one
or more, a Beneficial Owner(s) whose shares are held in the name of a securities
depository.
The broker, bank, or other nominee submitting this form hereby certifies that
(a) the information contained herein is true and correct as of the date of this
form; (b) a current copy of the Prospectus has been delivered to each Beneficial
Owner on whose behalf the optional cash purchase or initial cash purchase listed
below is being transmitted; and (c) the amount of the optional cash purchase or
initial cash purchase listed below, together with any other optional cash
purchases this month, does not exceed $5,000 for each Beneficial Owner
represented (unless accompanied by a Company-approved request for waiver form.
BankBoston, N.A. is hereby appointed as agent to apply any optional cash
purchases or initial cash purchases toward the purchase of shares under the
Plan.
A new Broker and Nominee Form must be completed and submitted each month that an
optional cash purchase or initial cash purchase is submitted. This form will not
be accepted unless it is completed in its entirety and accompanies the full
amount of the optional cash purchase or initial cash purchase.
For further information about the Plan please call ______________.
Total Initial Cash Purchase or Optional Cash Purchase Amount to be Credited
Name of Depository Participant Submitting Payment
Participant Number with Depository
Contact
Name of Depository
Name of Beneficial Owner Represented
Address
City State Zip
Tax I. D. Number
Telephone Fax
Date
<PAGE> 2
Method of Payment:
[ ] Check [ ] Money Order [ ] Other (Specify)
*If Investment amount exceeds $5,000 for any Beneficial Owner a completed
"Request for Waiver Form" must accompany this form.
Please enroll my account in the Plan as indicated below:
<TABLE>
<S> <C> <C>
[ ] Full Dividend Reinvestment [ ] Partial Dividend Reinvestment* [ ] Optional Cash Only
</TABLE>
If you do not indicate a choice, you automatically will default into the full
reinvestment election with all dividends reinvested.
Name of Broker, Bank or Nominee By:
Title:
Name:
*I wish to receive cash dividends on _______ shares and to reinvest my cash
dividends on the remainder of any shares for this account. I may also make
optional cash payments.
<PAGE> 1
EXHIBIT 99.3
FORM OF REQUEST FOR WAIVER
PRISON REALTY CORPORATION
DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN
To: INVESTOR RELATIONS Prison Realty Corporation, 10 Burton Hills
Boulevard, Suite 100, Nashville, TN 37215
Telephone: (615) 263-0200 Fax Number: (615)263-0212
This form is to be used only by Participants in the Prison Realty
Corporation Dividend Reinvestment and Stock Purchase Plan (the "Plan") who are
requesting authorization from Prison Realty Corporation to make an optional cash
payment under the Plan in excess of the $5,000 monthly maximum limit.
A new form must be completed each month the Participant wishes to make an
optional cash payment in excess of the $5,000 monthly maximum limit. This form
will not be accepted by Prison Realty Corporation unless it is completed in its
entirety.
The Participant submitting this form hereby certifies that (i) the information
contained herein is true and correct as of the date of this form; (ii) the
Participant has received a current copy of the Prospectus relating to the Plan;
(iii) the optional cash payment is being made by and on behalf of the
Participant for its own account; (iv) the Participant shall submit a copy of
this Request for Waiver (approved by Prison Realty Corporation) to Boston
Equiserve, L.P. via facsimile number _______, at the same time an Authorization
Form or B&N Form and the optional cash payments are submitted by the
Participant; and (v) immediately after the purchase of the shares to be acquired
pursuant to this Request for Waiver the Participant will not own shares in
excess of 9.8% (by number of value) of any class or series of the Company's
outstanding capital stock.
Shares of common stock acquired through the Plan will be held in account with
Boston Equiserve, L.P. as Plan Administrator. Participants wishing delivery
of certificates representing the shares should contact, Boston Equiserve, L.P.
at ___________________.
THE COMPANY RESERVES THE RIGHT TO MODIFY, SUSPEND OR TERMINATE PARTICIPATION IN
THE PLAN BY OTHERWISE ELIGIBLE HOLDERS OF COMMON STOCK IN ORDER TO ELIMINATE
PRACTICES WHICH ARE NOT CONSISTENT WITH THE PURPOSES OF THE PLAN.
Social Security Number(s) Date
- ----------------------------------------------
Participant's Signature Address
- ---------------------------------------------- City State Zip
Participant's Signature
- ---------------------------------------------- Phone Fax
Print name as it appears on stock certificates
- ----------------------------------------------
Optional Cash Investment Amount Requested
<PAGE> 1
EXHIBIT 99.4
NOTICE OF WAIVER ACCEPTANCE
PRISON REALTY CORPORATION
Dividend Reinvestment and Stock Purchase Plan
DATE:
TO:
FIRM:
VIA FAX #
We are pleased to inform you that your waiver for participation in the Prison
Realty Corporation Dividend Reinvestment and Stock Purchase Plan has been
granted for the __________ investment period in the amount of _____________.
Please be advised that for this pricing period the discount rate is _____ and
the threshold price is ___________. The ten days of this pricing period are
____________________.
All monies must be wired to BankBoston, N.A. by 4 p.m. Central Time on
___________ (the "Optional Cash Payment Due Date"). Please find the wiring
instructions below:
Send funds to: BankBoston N.A.
[address]
[ABA]
For Credit to: Prison Realty Corporation
[Account __]
Please be advised that any uninvested monies will be returned after the
conclusion of the pricing period. Thank you for your participation. Please call
me at (615) 263-0200 with any questions.
Sincerely,
Prison Realty Corporation Investor Relations
<PAGE> 1
EXHIBIT 99.5
FORM OF DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN ENROLLMENT
AND AUTHORIZATION FORM
PRISON REALTY CORPORATION
NOTE: This is not a Proxy
Please mark [X] the appropriate box to enroll or change your current Plan
option. DO NOT RETURN THIS CARD UNLESS YOU HAVE SELECTED ONE OF THE FOLLOWING
OPTIONS.
[ ] Full Dividend Reinvestment - I wish to reinvest all dividends for
the account. I may also make optional cash payments of a minimum of $50
to a maximum of $5,000 per month.
[ ] Partial Dividend Reinvestment - I wish to receive cash dividends on
_________ shares and to reinvest my cash dividends on the remainder of
any shares for this account. I may also make optional cash payments.
[ ] Optional Cash Only - I wish to make only optional cash payments to
the Plan. I will receive a dividend check for all shares so purchased.
If you have an address change, please mark the box to the right and indicate the
change on the reverse side of this form [ ]
PLEASE READ CAREFULLY BEFORE SIGNING. TEAR ALONG PERFORATION AND RETURN THE TOP
PORTION TO BOSTON EQUISERVE, L.P. IN THE ENVELOPE PROVIDED. KEEP THE BOTTOM
PORTION FOR YOUR RECORDS.
Shareholder
Date
Shareholder
Date
Detach card here.
<PAGE> 2
INVESTMENT OPTIONS FOR THE PRISON REALTY CORPORATION DIVIDEND REINVESTMENT AND
STOCK PURCHASE PLAN
Full Dividend Reinvestment - The dividends on all Prison Realty Corporation
shares for this account as well as dividends on shares credited to your account
under the Plan will be invested to purchase additional shares. You may also
invest by making optional cash payments of at least $50 up to a maximum of
$5,000 per month.
Partial Dividend Reinvestment - The dividends on less than all Prison Realty
Corporation shares that you own may be reinvested in the Plan. For example, if
you own 300 shares and want to receive cash dividends on 100 shares, check off
the "Partial Dividend Reinvestment" box and fill in 100 on the blank line. (The
cash dividends you wish to receive must be on full shares.) Dividends on the
remaining 200 shares will be reinvested to purchase additional shares. You may
also invest by making optional cash payments of at least $50 to a maximum of
$5,000 per month.
Optional Cash Only - You may make optional payments of at least $50 to a
maximum of $5,000 per month without the reinvestment of dividends. Any shares
purchased through optional payments will be credited to your account under the
Plan. Dividends on all Prison Realty Corporation shares credited to your account
under the Plan will be paid to you in cash automatically. Optional Payments must
be received by the Agent one business day prior to the commencement of the
related 'Pricing Period' as defined in the Plan Prospectus.
Your participation in the Plan is subject to the terms set forth in the
accompanying Prospectus. You may terminate participation in the Plan at any time
by written notice to BankBoston, N.A. _____________.
Do not return this form unless you intend to participate in the Plan since this
form authorized BankBoston, N.A. to enroll your account in the Plan. If
this form is signed but no box checked, you will be enrolled in the Plan under
the Full Dividend Reinvestment option.
