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EXHIBIT 99.1
Contact:
Media Contact - Susan Hart (615) 263-3104
Investor Contact - Karin Demler (615) 263-3005
CORRECTIONS CORPORATION OF AMERICA
ENTERS INTO MEMORANDUM OF UNDERSTANDING REGARDING REVISED TERMS OF
STOCKHOLDER LITIGATION SETTLEMENT
NASHVILLE, Tenn.--(BUSINESS WIRE)--December 15, 2000--Corrections
Corporation of America (formerly Prison Realty Trust, Inc.) (NYSE: CXW - news)
announced today that it has entered into a Memorandum of Understanding with the
plaintiffs in the Company's outstanding stockholder litigation providing for an
amendment to the terms of the previously announced settlements.
Pursuant to the revised terms of the settlements as set forth in the
Memorandum of Understanding, the Company has agreed to issue the plaintiffs:
- an aggregate of 51,500,000 shares of the Company's common
stock; and
- a subordinated promissory note in the aggregate principal
amount of $29.0 million.
All of the shares of common stock to be issued by the Company will be
issued after final court approval of the settlements. The promissory note, which
will be issued on the date the settlements become effective, will be due January
3, 2005 and accrue interest at a rate of 6.0% per annum. All principal and
interest due under the note will be payable in one lump sum at maturity;
provided, however, that should the average trading price of the Company's common
stock meet or exceed a "termination price" (generally expected to be between
$1.06 - $1.25 per share as determined based on the average trading price of the
Company's common stock for the three trading days prior to the final approval of
the settlements) for 15 consecutive trading days at any time prior to the
maturity date of the note, all amounts outstanding under the promissory note
will be deemed fully satisfied without further action by the Company. To the
extent the highest average trading price of the common stock does not reach
"termination price" during the period, the amount to be paid under the note will
be reduced by the amount the shares of stock issued to the plaintiffs appreciate
in value pursuant to a calculation to be made at the time of the maturity of the
note.
The issuance of the shares of common stock and promissory note
described above by the Company will be in lieu of the requirement of the
previously announced settlement agreements that the Company issue the plaintiffs
17,235,715 shares of its common stock at an agreed value of $4.375 per share.
Under the terms of the settlement agreements, these shares were subject to a
stock price guarantee of $4.375 per share, which would have required the Company
to pay or issue, at its option, cash or additional shares of common stock to the
plaintiffs if the trading price of the Company's common stock did not reach
$4.375 per share for a specified number of trading days during the period from
the completion of the settlement through August 31, 2001. As a result, the
Company, which expected to satisfy the stock price guarantee in additional
shares of common stock rather than
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in cash, would have been required to issue an indeterminate number of shares of
its common stock based on the continued trading price of the Company's common
stock through August 31, 2001.
No other terms of the previously announced settlement agreements have
been altered by the terms of the agreement set forth in the Memorandum of
Understanding.
The Memorandum of Understanding is subject to the execution of a
definitive amendment to the previously agreed to stipulations of settlement and
subsequent court approval. In addition, the issuance of the shares of common
stock is subject to the Company meeting certain requirements under the rules of
the New York Stock Exchange and the issuance and terms of the promissory note
are subject to the approval and consent of the Company's lenders.
"The revised terms of the settlement provide clarity to our existing
stockholders and the investment community regarding the number of shares of
common stock to be issued by the Company in connection with the resolution of
the litigation," stated John D. Ferguson, chief executive officer and president
of the Company. "We feel that this is important as we are evaluated in the
marketplace and will ultimately provide increased value to our current and
future stockholders."
ABOUT THE COMPANY
The Company is the nation's largest provider of detention and
corrections services to governmental agencies. The Company is the industry
leader in private sector corrections with approximately 61,000 beds in 68
facilities under contract for management in the United States and Puerto Rico.
The Company's full range of services includes design, construction, ownership,
renovation and management of new or existing jails and prisons, as well as long
distance inmate transportation services.
FORWARD-LOOKING STATEMENTS
This press release contains statements that are forward-looking
statements as defined within the Private Securities Litigation Reform Act of
1995. These forward-looking statements are subject to risks and uncertainties
that could cause actual results to differ materially from the statements made.
Factors that could cause operating and financial results to differ are described
in the Company's Form 10-K, as well as in other documents filed with the
Securities and Exchange Commission, and these factors include, but are not
limited to, the growth of the private corrections and detention industry, the
Company's ability to obtain and maintain facility management contracts and
general market conditions. The Company does not undertake any obligation to
publicly release the result of any revisions to forward-looking statements that
may be made to reflect events or circumstances after the date hereof or to
reflect the occurrence of unanticipated events.
