CORRECTIONS CORPORATION OF AMERICA, S-3/A, 1996-05-10

CORRECTIONS CORPORATION OF AMERICA
S-3/A, 1996-05-10
FACILITIES SUPPORT MANAGEMENT SERVICES

Previous: TORO CO, S-8, 1996-05-10

Next: MAY DRILLING PARTNERSHIP 1984-1, 10-Q, 1996-05-10

<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 10, 1996

REGISTRATION NO. 333-03009

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------

AMENDMENT NO. 1

FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------

CORRECTIONS CORPORATION OF AMERICA
(Exact Name of Registrant as Specified in its Charter)

<TABLE>
<S> <C>
DELAWARE 62-1156308
(State of Incorporation) (I.R.S. Employer Identification Number)
</TABLE>

102 WOODMONT BOULEVARD, SUITE 800, NASHVILLE, TENNESSEE 37205
(615) 292-3100
(Address, Including Zip Code, and Telephone Number, Including Area Code, of
Registrant's Principal Executive Offices)

DARRELL K. MASSENGALE
CHIEF FINANCIAL OFFICER
102 WOODMONT BOULEVARD, SUITE 800, NASHVILLE, TENNESSEE 37205
(615) 292-3100
(Name, Address, Including Zip Code, and Telephone Number, Including Area Code,
of Agent for Service)
---------------------

COPIES TO:

<TABLE>
<S> <C>
CARTER R. TODD F. MITCHELL WALKER, JR.
ELIZABETH E. MOORE J. PAGE DAVIDSON
STOKES & BARTHOLOMEW, P.A. BASS, BERRY & SIMS PLC
SUNTRUST CENTER FIRST AMERICAN CENTER
NASHVILLE, TENNESSEE 37219 NASHVILLE, TENNESSEE 37238
(615) 259-1450 (615) 742-6200
</TABLE>

---------------------

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon as
practicable after the effective date of this Registration Statement.

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. / /

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. / /

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 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(A), MAY
DETERMINE.

- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR
MAY OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT
BECOMES EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR
THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE
SECURITIES IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE
UNLAWFUL PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS
OF ANY SUCH STATE.

SUBJECT TO COMPLETION, DATED MAY 9, 1996

PROSPECTUS

2,500,000 SHARES

[CORRECTIONS CORPORATION OF AMERICA LOGO]

COMMON STOCK

Of the 2,500,000 shares of Common Stock offered hereby, 1,500,000 shares
are being sold by Corrections Corporation of America (the "Company") and
1,000,000 shares are being sold by certain stockholders of the Company (the
"Selling Stockholders"). See "Principal and Selling Stockholders." The Company
will not receive any of the proceeds from the sale of Common Stock by the
Selling Stockholders.

The Common Stock is traded on the New York Stock Exchange (the "NYSE")
under the symbol "CXC." On May 8, 1996, the last reported sale price of the
Common Stock was $64.875 per share. See "Price Range of Common Stock and
Dividend Policy."

SEE "RISK FACTORS" BEGINNING ON PAGE 7 OF THIS PROSPECTUS FOR A DISCUSSION
OF CERTAIN FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE PURCHASERS OF THE
COMMON STOCK OFFERED HEREBY.
---------------------

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------
PROCEEDS TO
PRICE TO UNDERWRITING PROCEEDS TO SELLING
PUBLIC DISCOUNT(1) COMPANY(2) STOCKHOLDERS
- ------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Per Share............... $ $ $ $
- ------------------------------------------------------------------------------------------------
Total(3)................ $ $ $ $
- ------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------
</TABLE>

(1) The Company and the Selling Stockholders have agreed to indemnify the
Underwriters against certain liabilities, including liabilities under the
Securities Act of 1933, as amended. See "Underwriting."
(2) Before deducting expenses estimated at $550,000 payable by the Company.
(3) The Company has granted to the Underwriters a 30-day over-allotment option
to purchase up to 375,000 additional shares of Common Stock on the same
terms and conditions as set forth above. If all such shares are purchased by
the Underwriters, the total Price to Public will be $ , the total
Underwriting Discount will be $ and the total Proceeds to Company will
be $ . See "Underwriting."
---------------------

The shares of Common Stock are offered subject to receipt and acceptance by
the several Underwriters, to prior sale, and to the several Underwriters' right
to reject any order in whole or in part and to withdraw, cancel or modify the
offer without notice. It is expected that certificates for the shares of Common
Stock will be available for delivery on or about , 1996.

---------------------

J.C. Bradford & Co. Stephens Inc.

, 1996
<PAGE> 3

(photo of outside view of Company's

Central Arizona Detention Center Facility)

<TABLE>
<S> <C>
CCA's state-of-the-art facilities and
comprehensive training ensure the
security of its communities,
employees and inmate population (photo of Company
(caption) corrections officers and inmates)
</TABLE>

<TABLE>
<S> <C>
(photo of a Company corrections (photo of interior of a
officer monitoring security systems) Company facility)
</TABLE>

IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR EFFECT
TRANSACTIONS THAT STABILIZE OR MAINTAIN THE MARKET PRICE OF THE COMMON STOCK AND
THE COMPANY'S WARRANTS TO PURCHASE COMMON STOCK AT A LEVEL ABOVE THAT WHICH
MIGHT OTHERWISE PREVAIL IN THE OPEN MARKET. SUCH TRANSACTIONS MAY BE EFFECTED ON
THE NEW YORK STOCK EXCHANGE OR OTHERWISE. SUCH STABILIZING, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.

2
<PAGE> 4

(Map indicating location, number of beds,
first year of Company operation,
ACA accreditation and ownership of the
Company's operations under contract)

<PAGE> 5

PROSPECTUS SUMMARY

The following summary is qualified in its entirety by the more detailed
information appearing elsewhere or incorporated by reference in this Prospectus.
Unless the context otherwise indicates, (i) all references to the "Company"
include Corrections Corporation of America and its subsidiaries, (ii) the
information contained in this Prospectus assumes no exercise of the
Underwriters' over-allotment option and (iii) the information contained in this
Prospectus has been adjusted to reflect a two-for-one split of the Common Stock
effected in the form of a 100% stock dividend on October 31, 1995.

THE COMPANY

Corrections Corporation of America (the "Company") is the largest developer
and manager of privatized correctional and detention facilities worldwide. The
Company's facilities are located in 11 states of the United States, Puerto Rico,
Australia and the United Kingdom. As of May 9, 1996, the Company had contracts
to manage 47 correctional and detention facilities with an aggregate design
capacity of 31,253 beds of which 37 facilities representing 20,994 beds are in
operation. The Company is currently developing ten facilities and expanding four
facilities representing an aggregate of 10,259 beds. The Company expects that
all of the beds under development and expansion will be in operation by the end
of 1997. The Company owns 12 of the 37 facilities it currently operates and
leases the remaining 25 facilities from governmental agencies and non-profit
corporations.

The services provided by the Company to governmental agencies include the
integrated design, construction and management of new correctional and detention
facilities and the redesign, renovation and management of older facilities. In
addition to providing the fundamental residential services relating to adult and
juvenile inmates, the Company's facilities offer a large variety of
rehabilitation and education programs including basic education, life skills and
employment training and substance abuse treatment. The Company also provides
health care (including medical, dental and psychiatric services), institutional
food services, transportation requirements, and work and recreational programs.
By providing a secure, clean facility, with reasonable occupancy levels and the
opportunity for inmates to participate in educational and rehabilitational
programs, the Company believes that there will be fewer disturbances among the
prison population. Management believes that this atmosphere results in less
stress for members of the work force, fewer workers' compensation claims, fewer
sick days, reduced overtime costs and lower overall operating costs. The Company
believes that its quality of personnel, efficient application of financial
resources and adherence to proven policies and procedures enable it to design,
develop and manage correctional and detention facilities at costs lower than
governmental agencies that are responsible for performing such services. See
"Business -- Business Strategy."

The Company's operating philosophy is to provide quality corrections, at
less cost to taxpayers, in partnership with government agencies. The Company's
growth strategy is to develop and operate secure institutions with an emphasis
on medium and maximum security operations. As of May 9, 1996, the Company was
pursuing 28 facility prospects for a total of approximately 17,500 beds. See
"Business -- Business Proposals."

3
<PAGE> 6

In the last two years, the Company has expanded its service capabilities
and broadened its geographic presence in the United States through a series of
strategic acquisitions that complement the Company's development activities. In
December 1994, the Company acquired TransCor America, Inc. ("TransCor"), a
nationwide provider of inmate transportation services. In April 1995, the
Company acquired Concept Incorporated ("Concept"), a prison management company
with eight facilities and 4,400 beds under contract at the time of acquisition.
In August 1995, the Company acquired Corrections Partners, Inc. ("CPI"), a
prison management company with seven facilities and 2,900 beds under contract at
the time of acquisition. The Company intends to consider additional strategic
acquisitions of prison management and related companies in the future.

In addition to its domestic operations, the Company has obtained and is
pursuing development and management contracts for correctional and detention
facilities outside the United States. The Company presently contracts to operate
one facility in the United Kingdom, two facilities in Australia, and also has
contracts to provide inmate transportation services in Australia. In June 1994,
the Company entered into an international strategic alliance with Sodexho S.A.
("Sodexho"), a French conglomerate, for the purpose of pursuing prison
management business outside the United States and the United Kingdom. In
connection with the alliance, Sodexho purchased a significant ownership interest
in the Company and entered into certain agreements with the Company relating to
future financings by the Company and corporate governance and control matters.
See "Principal and Selling Stockholders" and "Description of
Securities -- Relationship with Sodexho."

RECENT DEVELOPMENTS

1996 First Quarter Results

The Company recently announced its preliminary results for the quarter
ended March 31, 1996. For the first quarter of 1996, revenues were $63.3
million, a 43.3% increase over revenues of $44.1 million in the first quarter of
1995. Net income was $5.7 million in the first quarter of 1996, a 138% increase
over net income of $2.4 million in the first quarter of 1995. Net income per
fully diluted share was $0.14 in the first quarter of 1996 compared to $0.06 in
the first quarter of 1995. These increases were due to the 44.4% increase in
compensated mandays reflective of the new facilities opened and expansions of
existing facilities in 1995 and the first quarter of 1996.

Recently Announced Development Projects

Taylor, Texas. In April 1996, the Company entered into an agreement with
the Taylor Correctional Development Authority pursuant to which the Company will
design, construct and manage a 512-bed, medium security prison in Taylor, Texas
to house inmates for the State of Oregon and other governmental agencies. This
facility is currently under construction and scheduled for completion by January
1997. This contract is an expansion of the Company's relationship with the State
of Oregon which includes a contract for the housing of more than 500 Oregon
inmates at the Company's Central Arizona Detention Center in Florence, Arizona.

Cushing, Oklahoma. In April 1996, the Company reached an agreement with
the Cushing Municipal Authority pursuant to which the Company will design,
construct and manage a 960-bed, medium security prison in Cushing, Oklahoma to
house inmates for the State of Oklahoma. This facility is currently under
construction and scheduled for completion by July 1997.

Washington, D.C. In April 1996, the Company entered into negotiations to
purchase an 868-bed, medium security correctional treatment facility from the
District of Columbia and to contract with the District to manage the facility
for locally convicted inmates.

4
<PAGE> 7

THE OFFERING

<TABLE>
<S> <C>
Common Stock offered by the Company.............. 1,500,000 shares
Common Stock offered by the Selling
Stockholders................................... 1,000,000 shares
Common Stock to be outstanding after the
offering....................................... 36,560,932 shares(1)
Use of proceeds by the Company................... To finance capital investments in the
development, acquisition or expansion of
prison facilities. See "Use of Proceeds."
NYSE Common Stock symbol......................... CXC
</TABLE>

- ---------------

(1) Excludes (a) 2,200,317 shares of Common Stock reserved for issuance upon
grants of deferred shares or exercise of options granted pursuant to the
Company's existing stock incentive plans; (b) 4,227,256 shares of Common
Stock issuable upon the exercise of outstanding warrants; and (c) 4,062,391
shares of Common Stock reserved for issuance upon the conversion of
outstanding convertible notes, and assumes that Sodexho does not exercise
its preemptive right to purchase shares of Common Stock as a result of this
offering. See "Description of Securities."

5
<PAGE> 8
SUMMARY CONSOLIDATED FINANCIAL DATA
(IN THOUSANDS, EXCEPT PER SHARE AND OPERATING DATA)

The summary consolidated financial data set forth below for the three years
ended December 31, 1995 have been derived from the Company's audited financial
statements and include financial data reflecting the acquisitions of TransCor in
December 1994, Concept in April 1995 and CPI in August 1995, all of which were
accounted for as pooling-of-interests.

<TABLE>
<CAPTION>
YEARS ENDED DECEMBER 31,
----------------------------------------
1993 1994 1995
---------- ---------- ----------
<S> <C> <C> <C>
STATEMENTS OF OPERATIONS DATA:
Revenues............................................. $ 132,534 $ 152,375 $ 207,241
Expenses:
Operating......................................... 108,026 123,540 158,814
General and administrative........................ 7,885 9,413 14,288
Depreciation and amortization..................... 5,759 5,753 6,524
---------- ---------- ----------
121,670 138,706 179,626
---------- ---------- ----------
Contribution from operations......................... 10,864 13,669 27,615
Interest expense, net................................ 4,424 3,439 3,952
---------- ---------- ----------
Income before income taxes........................... 6,440 10,230 23,663
Provision for income taxes........................... 832 2,312 9,330
---------- ---------- ----------
Net income........................................... 5,608 7,918 14,333
Preferred stock dividends............................ 425 204 --
---------- ---------- ----------
Net income allocable to common stockholders.......... $ 5,183 $ 7,714 $ 14,333
========== ========== ==========
Net income per common share:
Primary........................................... $ 0.20 $ 0.25 $ 0.38
Fully diluted..................................... $ 0.20 $ 0.25 $ 0.36
Weighted average common shares outstanding........... 25,881 30,954 37,555

OPERATING DATA:
Beds under contract (year end)....................... 12,254 19,735 28,607
Beds in operation (year end)......................... 10,368 13,404 20,252
Average occupancy.................................... 92.0% 93.9% 93.5%
Compensated mandays.................................. 3,338,411 3,768,095 4,799,562
</TABLE>

<TABLE>
<CAPTION>
AS OF DECEMBER 31, 1995
------------------------------
PRO FORMA
ACTUAL AS ADJUSTED(1)(2)
-------- -----------------
<S> <C> <C>
BALANCE SHEET DATA:
Working capital................................................ $ 11,093 $ 127,251
Property and equipment, net.................................... 137,019 137,019
Total assets................................................... 213,478 328,276
Total debt..................................................... 85,885 108,805
Stockholders' equity........................................... 96,704 188,582
</TABLE>

- ---------------
(1) Gives effect to (a) the issuance in 1996 of $50 million of 7.5% convertible
subordinated notes (the "1996 Convertible Notes") and (b) the repayment with
a portion of the proceeds therefrom of the outstanding principal balances
under the Company's bank loan and line of credit ($12,580,000 and
$14,500,000, respectively, at December 31, 1995). See "Description of
Securities -- Convertible Notes."

(2) Adjusted to reflect the sale by the Company of 1,500,000 shares of Common
Stock offered hereby at an assumed offering price of $64.875 per share and
the proposed application of the estimated net proceeds therefrom. See "Use
of Proceeds."

6
<PAGE> 9

RISK FACTORS

In addition to the other information contained or incorporated by reference
in this Prospectus, the following risk factors should be considered carefully in
evaluating an investment in the Common Stock offered hereby.

Revenue and Profit Growth Dependent on Expansion. The Company's growth is
dependent upon its ability to obtain contracts to manage new correctional and
detention facilities and to retain existing management contracts. The rate of
construction of new facilities and the Company's potential for growth will
depend on a number of factors, including crime rates and sentencing patterns in
the United States and other countries in which the Company operates,
governmental and public acceptance of the concept of privatization, the number
of facilities available for privatization, and the Company's ability to obtain
awards for contracts and to integrate new facilities into its management
structure on a profitable basis. In addition, certain jurisdictions have
recently required the successful bidder to make a significant capital investment
in connection with the financing of a particular project. The Company's ability
to secure awards under such circumstances will therefore also depend on the
Company having significant capital resources. There can be no assurance that the
Company will be able to obtain additional contracts to develop or manage new
facilities on favorable terms.

Risks Associated with Acquisitions. The Company intends to grow internally
through the opening of additional facilities, as well as through strategic
acquisitions. There can be no assurance that the Company will be able to
identify, acquire or profitably manage acquired companies or successfully
integrate such operations into the Company without substantial costs, delays or
other problems. In addition, there can be no assurance that companies acquired
in the future will be profitable at the time of their acquisition or will
achieve levels of profitability that justify the investment therein.
Acquisitions may involve a number of special risks, including adverse short-term
effects on the Company's reported operating results, diversion of management's
attention, dependence on retaining, hiring and training key personnel, and risks
associated with unanticipated problems or legal liabilities, some or all of
which could have a material adverse effect on the Company's financial condition
and results of operation.

Acceptance of Privatized Correctional and Detention Facilities. Management
of correctional and detention facilities by private entities is a relatively new
concept and has not achieved complete acceptance by either governments or the
public. Some sectors of the federal government and some state and local
governments are legally unable to delegate their traditional management
responsibilities for correctional and detention facilities to private companies.
The operation of correctional and detention facilities by private entities is
not widely understood by the public and the industry has encountered resistance
from certain groups, such as labor unions, local sheriff's departments, and
groups that believe that correctional and detention facility operations should
only be conducted by governmental agencies. Such resistance may cause a change
in public and government acceptance of privatized correctional facilities. In
addition, changes in dominant political parties in any of the markets in which
the Company operates could result in significant changes to previously
established views of privatization in such market.

Opposition to Facility Location and Adverse Publicity. The Company's
success in obtaining new awards and contracts may depend, in part, upon its
ability to locate land that can be leased or acquired, on favorable terms, by
the Company or other entities working with the Company in conjunction with the
Company's proposal to develop and/or manage a facility. Some locations may be in
or near populous areas and, therefore, may generate legal action or other forms
of opposition from residents in areas surrounding a proposed site. The Company's
business also is subject to public scrutiny. In addition to possible negative
publicity about privatization in general, an escape, riot or other disturbance
at a Company-managed facility or another privately managed facility may result
in publicity adverse to the Company and the industry in which it operates.

7
<PAGE> 10

Dependence on Governmental Agencies. The Company's cash flow is subject to
the receipt of sufficient funding and timely payment by applicable governmental
entities. If the appropriate governmental agency does not receive sufficient
appropriations to cover its contractual obligations, a contract may be
terminated or the management fee may be deferred or reduced. Any delays in
payment could have an adverse effect on the Company's cash flow. In addition,
the Company is dependent on government agencies supplying Company facilities
with a sufficient number of inmates to meet the facilities design capacities. A
failure to do so may have a material adverse effect on the Company's financial
condition and results of operation.

Economic Risks Associated with Development Activities. When the Company is
engaged to perform construction and design services for a facility, the Company
typically acts as the primary contractor and subcontracts with other parties who
act as the general contractors. As primary contractor, the Company is subject to
the various risks of construction including, without limitation, shortages of
labor and materials, work stoppages, labor disputes and weather interference.
The Company also is subject to the risk that the general contractor will be
unable to complete construction at the budgeted costs or be unable to fund any
excess construction costs. Under such contracts, the Company is ultimately
liable for all late delivery penalties and cost overruns.

Contract Duration. The Company's facility management contracts typically
have terms ranging from one to five years, with one or more renewal options
which may be exercised only by the contracting governmental agencies. No
assurance can be given that any agency will exercise a renewal option in the
future. Additionally, the contracting governmental agency typically may
terminate a facility contract without cause by giving the Company written
notice. See "Business -- Facility Management Contracts."

Potential Legal Liability. The Company's management of correctional and
detention facilities exposes it to potential third-party claims or litigation by
prisoners or other persons for personal injury or other damages resulting from
contact with Company-managed facilities, programs, personnel or prisoners,
including damages arising from a prisoner's escape or from a disturbance or riot
at a Company-managed facility. In addition, the Company's management contracts
generally require the Company to indemnify the governmental agency against any
damages to which the governmental agency may be subject in connection with such
claims or litigation. The Company maintains an insurance program that provides
coverage for certain liability risks faced by the Company, including personal
injury, bodily injury, death or property damage to a third party where the
Company is found to be negligent. There can be no assurance, however, that the
Company's insurance will be adequate to cover potential third-party claims. See
"Business -- Insurance."

Regulations. The industry in which the Company operates is subject to
national, federal, state and local regulations which are administered by various
regulatory authorities. Prospective providers of correctional and detention
services must comply with a variety of applicable state and local regulations
including education, health care and safety regulations. The Company's contracts
typically include extensive reporting requirements and require supervision and
on-site monitoring by representatives of contracting governmental agencies.
State law also typically requires corrections officers to meet certain training
standards. Certain states such as Florida and Texas deem prison guards to be
peace officers and require Company personnel to be licensed and may make them
subject to background investigation. In addition, many state and local
governments are required to enter into a competitive bidding procedure before
awarding contracts for products or services. The laws of certain jurisdictions
may also require the Company to award subcontracts on a competitive basis or to
subcontract with businesses owned by members of minority groups. The failure to
comply with any applicable laws, rules or regulations and the loss of any
required license could have a material adverse effect on the Company's financial
condition and results of operation. Furthermore, the current and future
operations of the Company may be subject to additional regulations as a result
of, among other factors, new statutes and regulations and changes in the manner
in which existing statutes and regulations are or may be interpreted or applied.
Any such additional regulations could have a material adverse effect on the
Company's financial condition and results of operation.

8
<PAGE> 11

Competition. The Company competes primarily on the basis of the quality
and range of services offered, its experience in managing facilities, the
reputation of its personnel and its ability to design, finance and construct new
facilities. The business in which the Company engages is one that other entities
may easily enter without substantial capital investment or experience in
management of correctional or detention facilities. Some of the Company's
competitors may have greater resources than the Company. The Company also
competes in some markets with smaller local companies that may have a better
understanding of the local conditions and may be better able to gain political
and public acceptance. In addition, the Company competes with governmental
agencies that are responsible for correctional facilities.

Dependence on Senior Management. The success of the Company's operations
has been and will continue to be highly dependent upon the continued services of
its senior management. The loss of one or more of the Company's senior
management could have a material adverse effect on the Company's business. The
Company's loan agreement provides that Doctor R. Crants, the Company's Chairman
of the Board and Chief Executive Officer, or a successor reasonably acceptable
to the Company's lenders must be employed as Chief Executive Officer. See
"Management."

Relationship with Sodexho. Following completion of this offering, Sodexho
will beneficially own 16.8% of the Common Stock (16.7% assuming exercise of the
Underwriters' over-allotment option). See "Principal and Selling Stockholders."
Accordingly, Sodexho may have significant influence over the affairs of the
Company. Sodexho has agreed to limit its ownership interest in the Company to
25% (or 30% in certain limited circumstances) through June 23, 1999, subject to
earlier termination upon the occurrence of certain events, and has agreed to
certain restrictions on the voting of its Common Stock. Sodexho has a preemptive
right to purchase additional shares of Common Stock or securities convertible or
exchangeable for Common Stock in any issuance of securities by the Company in an
amount necessary to enable Sodexho to maintain a percentage ownership in the
Company equal to 20% of the Common Stock on a fully diluted basis. See
"Description of Securities -- Relationship with Sodexho."

Volatility of Market Price. From time to time after this offering, there
may be significant volatility in the market price of the Common Stock. The
Company believes that the current market price of the Common Stock reflects
expectations that the Company will be able to continue to operate its facilities
profitably and to develop new facilities at a significant rate and operate them
profitably. If the Company is unable to operate its facilities profitably or
develop facilities at a pace that reflects the expectations of the market,
investors could sell shares of the Common Stock at or after the time that it
becomes apparent that such expectations may not be realized, resulting in a
decrease in the market price of the Common Stock. In addition to the operating
results of the Company, changes in earnings estimated by analysts, changes in
general conditions in the economy or the financial markets or other developments
affecting the Company or the private corrections industry could cause the market
price of the Common Stock to fluctuate substantially. In recent years, the stock
market has experienced extreme price and volume fluctuations. This volatility
has had a significant effect on the market prices of securities issued by many
companies for reasons unrelated to their operating performance.

9
<PAGE> 12
USE OF PROCEEDS

The net proceeds to the Company from the sale of the Common Stock offered
hereby are estimated to be approximately $91.9 million ($115.0 million if the
Underwriters' over-allotment option is exercised in full), after deduction of
the underwriting discount and the estimated offering expenses payable by the
Company and based on an assumed offering price of $64.875 per share. The Company
will not receive any proceeds from the sale of Common Stock by the Selling
Stockholders. Set forth below is a discussion of the Company's anticipated
capital needs as well as a discussion of the Company's sources of funds
(including the net proceeds of this offering) to meet those needs. Until
utilized for the purposes described herein, the Company intends to invest the
net proceeds of this offering in high quality, short-term, interest-bearing
securities.

ANTICIPATED CAPITAL NEEDS

The Company's principal anticipated capital needs arise in connection with
the development, acquisition or expansion of correctional and detention
facilities. Set forth below are currently identifiable capital needs for
specific projects the Company expects to complete by the end of 1997:

ANTICIPATED
PROJECT EXPENDITURE
- -------------------------------------------------------------------------- ----------------------
(DOLLARS IN THOUSANDS)
<S> <C>
512-bed expansion of the Central Arizona Detention Center................. $ 15,000
500-bed expansion of the Eloy Detention Center............................ 15,000
Construction costs for the 752-bed Huerfano County Correctional
Facility................................................................ 27,000
Construction costs for the 1,504-bed Hardeman County Correctional
Center(1)............................................................... 47,000
160-bed expansion of the West Tennessee Detention Facility................ 5,500
Acquisition and/or renovation costs for other projects anticipated to be
completed by the end of 1997............................................ 50,000
--------
Total........................................................... $159,500
========
</TABLE>

- ---------------
(1) The Company will provide financing for the construction costs of the
Hardeman County Correctional Center. It is anticipated that following
completion of construction of the facility, a local governmental authority
will issue tax-exempt bonds to fund the permanent financing for the facility
and the Company's loan to finance construction of the facility will be
repaid. The local governmental authority will be the obligor on the
permanent financing.

ANTICIPATED SOURCES OF FUNDING FOR CAPITAL EXPENDITURES

In addition to the anticipated net proceeds of this offering, the Company's
principal sources of funding for its anticipated capital expenditures will
include cash flow from operations, borrowings under the Company's bank lines of
credit and proceeds from the sale of the 1996 Convertible Notes. The currently
estimated sources of funds are as follows:

<TABLE>
<CAPTION>
SOURCES OF FUNDING ANTICIPATED AMOUNT
- --------------------------------------------------------------------------- ----------------------
(DOLLARS IN THOUSANDS)
<S> <C>
Net proceeds of this offering.............................................. $ 91,900
Cash flow from operations and borrowings under the Company's bank lines
of credit................................................................ 47,600
Proceeds from sale of 1996 Convertible Notes, after debt repayment......... 20,000
--------
Total............................................................ $159,500
========
</TABLE>

The Company currently has a $25 million working capital revolving credit
facility (the "Credit Facility"). As of May 9, 1996, there was $21.3 million
available to be borrowed under the Credit Facility. The Company has received a
proposal from its primary bank lender for an increase in the Credit Facility to
$125 million. There can be no assurance that the Company will enter into an
agreement for an increased Credit Facility.

10
<PAGE> 13

CAPITALIZATION

The following table sets forth the current indebtedness and capitalization
of the Company as of December 31, 1995, and on a pro forma and as adjusted basis
giving effect to the issuance of the 1996 Convertible Notes, the sale by the
Company of the 1,500,000 shares of Common Stock offered hereby at an assumed
offering price of $64.875 per share and the proposed application of the
estimated net proceeds received by the Company therefrom as described under "Use
of Proceeds."

<TABLE>
<CAPTION>
PRO FORMA
ACTUAL AS ADJUSTED
-------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Current portion of long-term debt..................................... $ 11,020 $ 9,660
======== ========
Long-term debt, net of current portion:
Bank loan and credit facilities..................................... 25,916 196
Other long term debt................................................ 34,449 34,449
Convertible subordinated notes(1)................................... 14,500 64,500
-------- --------
Total long-term debt, net of current portion................ 74,865 99,145
-------- --------
Stockholders' equity:
Preferred Stock, $1.00 par value, 1,000,000 shares authorized, no
shares outstanding............................................... -- --
Common Stock, $1.00 par value, 50,000,000 shares authorized,
32,270,000 shares issued and outstanding; 150,000,000 shares
authorized, 33,770,000 shares issued and outstanding, pro forma
as adjusted(2)(3)................................................ 32,270 33,770
Additional paid-in capital.......................................... 48,830 139,208
Retained earnings................................................... 15,641 15,641
Treasury stock, at cost............................................. (37) (37)
-------- --------
Total stockholders' equity.................................. 96,704 188,582
-------- --------
Total capitalization................................... $171,569 $ 287,727
======== ========
</TABLE>

- ---------------
(1) The Company currently has outstanding an aggregate of $64,500,000 principal
amount of convertible subordinated notes (the "Convertible Notes") which is
comprised of $7,500,000 of 8.5% convertible subordinated notes due September
30, 1998 (the "1992 Convertible Notes"), $7,000,000 of 8.5% convertible
subordinated notes due November 7, 1999 (the "1994 Convertible Notes") and
the 1996 Convertible Notes. See "Description of Securities -- Convertible
Notes."

(2) Upon receipt of stockholder approval at the Company's annual meeting of
stockholders to be held May 14, 1996 (the "Annual Meeting"), the Company
will amend its Certificate of Incorporation to increase the number of
authorized shares of Common Stock to 150,000,000.

(3) Excludes (a) 2,200,317 shares of Common Stock reserved for issuance upon
grants of deferred shares or exercise of options granted pursuant to the
Company's existing stock incentive plans; (b) 4,227,256 shares of Common
Stock reserved for issuance upon the exercise of outstanding warrants; and
(c) 4,062,391 shares of Common Stock reserved for issuance upon the
conversion of the Convertible Notes. See "Description of Securities."

11
<PAGE> 14

PRICE RANGE OF COMMON STOCK AND DIVIDEND POLICY

The Common Stock is traded on the NYSE under the symbol "CXC." Until
December 30, 1994, the Common Stock was quoted on the Nasdaq National Market
under the symbol "CCAX." The following table sets forth, for the periods
indicated, the high and low closing sales prices for each of the quarters
indicated as reported on (i) the Nasdaq National Market through December 29,
1994 and (ii) the NYSE composite tape from December 30, 1994.

<TABLE>
<CAPTION>
1994 HIGH LOW
------------------------------------------------------------------- ------ ------
<S> <C> <C>
First Quarter...................................................... $ 8.19 $ 4.63
Second Quarter..................................................... 8.38 6.25
Third Quarter...................................................... 8.75 7.69
Fourth Quarter..................................................... 8.75 6.44
1995
First Quarter...................................................... $15.31 $ 8.25
Second Quarter..................................................... 18.81 14.69
Third Quarter...................................................... 24.31 17.69
Fourth Quarter..................................................... 38.38 23.44
1996
First Quarter...................................................... $57.00 $34.75
Second Quarter (through May 8, 1996)............................... 66.25 53.63
</TABLE>

The Company also has warrants to purchase Common Stock at an exercise price of
$8.50 per share (the "Warrants"), which are listed for trading on the NYSE under
the symbol "CXCWS." See "Description of Securities -- Warrants."

On May 8, 1996, the last sale prices of the Common Stock and the Warrants
on the NYSE composite tape were $64.875 and $123.125, respectively. As of May 8,
1996, there were 931 and 353 record holders of the Common Stock and the
Warrants, respectively.

The Company has never declared or paid a cash dividend on its Common Stock.
It is the present policy of the Company's Board of Directors to retain all
earnings to support operations; therefore, the Company does not anticipate
declaring or paying cash dividends on its Common Stock for the foreseeable
future. The declaration and payment of cash dividends in the future will be
determined based on a number of factors, including the Company's earnings,
financial condition, liquidity requirements, restrictions on financing
agreements and other factors deemed relevant by the Board of Directors. Certain
of the Company's credit agreements prohibit the Company from paying any cash
dividends on its Common Stock without the lender's consent.

12
<PAGE> 15

BUSINESS

The Company is the largest developer and manager of privatized correctional
and detention facilities worldwide. The Company's facilities are located in 11
states of the United States, Puerto Rico, Australia and the United Kingdom. As
of May 9, 1996, the Company had contracts to manage 47 correctional and
detention facilities with an aggregate design capacity of 31,253 beds of which
37 facilities representing 20,994 beds are in operation. The Company is
currently developing ten facilities and expanding four facilities representing
an aggregate of 10,259 beds. The Company expects that all of the beds under
development and expansion will be in operation by the end of 1997. The Company
owns 12 of the 37 facilities it currently operates and leases the remaining 25
facilities from governmental agencies and non-profit corporations.

THE MARKET FOR THE COMPANY'S SERVICES

Throughout the world, there is a growing trend toward privatization of
government services and functions, including corrections and detention, as
governments of all types face continuing pressure to control costs and improve
the quality of services. As a result of increased costs, some governments have
been forced to limit public services and to seek more cost-effective means of
providing the remaining services. Since correctional and detention facilities
are viewed as an essential service, fiscal pressures have caused governments to
seek to deliver these services more cost effectively. Further, as a result of
the number of crimes committed each year and the corresponding number of
arrests, incarceration costs generally grow faster than any other part of a
government's budget. In an attempt to address these pressures, governmental
agencies responsible for correctional and detention facilities are increasingly
privatizing facilities. According to the 1995 Census, the design capacity of
privately managed adult correctional and detention facilities worldwide has
increased dramatically since the first privatized facility was opened by the
Company in 1984. The majority of this growth has occurred since 1989 as the
number of privately managed adult correctional and detention facilities
worldwide increased from 26 facilities with a design capacity of 10,973 beds in
1989 to 104 facilities with a design capacity of 63,595 beds in 1995. To date,
numerous counties, 22 states, Puerto Rico and the federal government have
incorporated the private sector into their criminal justice systems and 15
states are currently considering privatization. Notwithstanding such growth,
less than four percent of all adult prison beds in the United States are
privately managed.

Management believes that the increase in the demand for privatized
correctional and detention facilities also is a result, in large part, of the
general shortage of beds available in United States correctional and detention
facilities. According to reports issued by the United States Department of
Justice, Bureau of Justice Statistics ("BJS"), the number of inmates housed in
United States federal and state prison facilities increased from 487,593 at
December 31, 1985 to 1,104,074 at December 31, 1995, an increase of more than
126%. Local jail populations in the United States increased from 254,986 inmates
at December 31, 1985 to 490,442 at December 31, 1994, an increase of 92%. At
December 31, 1994, the BJS reports that the federal prison system in the United
States was operating at approximately 125% of its rated capacity.

Industry reports also indicate that inmates convicted of violent crimes
generally serve only one-third of their sentence, with the majority of them
being repeat offenders. Accordingly, there is a perceived public demand for,
among other things, longer prison sentences, as well as prison terms for
juvenile offenders, resulting in even more overcrowding in United States
correctional and detention facilities. Finally, numerous courts and other
governmental entities in the United States have mandated that additional
services offered to inmates be expanded and living conditions be improved. Many
governments do not have the readily-available resources to make the changes
necessary to meet such mandates.

At December 31, 1995, the Company managed 38 of the 91 privatized United
States adult facilities and 27,960 of the 56,109 private United States adult
beds. These facilities include (i) Immigration and Naturalization Service
detention facilities and United States Marshals Service detention facilities
privatized by federal agencies, (ii) state prisons, community corrections
facilities, intermediate sanction facilities, pre-release centers, work program
facilities and state jail facilities privatized by state agencies and (iii) city
jail facilities and transfer facilities privatized by local agencies. There are
also numerous privatized juvenile

13
<PAGE> 16

offender facilities of which the Company currently has contracts to operate
facilities with an aggregate design capacity of 647 beds.

The demand for privately managed correctional and detention centers is also
increasing internationally. Management believes that many countries are faced
with the same fiscal pressures as the United States and, as a result, are
seeking more cost-effective means of providing prison management services. At
December 31, 1995, there were a total of 11 privatized facilities in the United
Kingdom and Australia, with an aggregate design capacity of 6,302 beds. The
Company, through joint ventures, had contracts to manage three of these
facilities with an aggregate design capacity of 1,479 beds.

For similar economic reasons, the demand for privatized prisoner transport
services is also increasing domestically and internationally. The Company
believes that more and more government agencies will look for more
cost-effective means of providing these and other ancillary services.

BUSINESS STRATEGY

The Company intends to enhance its position as the largest developer and
manager of privatized correctional and detention facilities worldwide through
the following business strategies.

Efficient Development and Management of Facilities. The Company will
continue to provide low cost, high quality management of its facilities. The
Company believes that its quality of personnel, efficient application of
financial resources and adherence to proven policies and procedures enables it
to design, develop and manage correctional and detention facilities at costs
lower than governmental agencies that are responsible for performing such
services. The Company believes that its reputation as an innovative and
effective manager of facilities enhances its ability to market its services and
capitalize on a larger scope of opportunities with a variety of governmental
agencies.

The Company also recognizes the importance of the facility administrator
and the facility's management team in the successful financial performance of
its facilities. Management believes that the Company's reputation as the largest
developer and manager of privatized correctional and detention facilities
enables it to attract highly-qualified facility administrators. Each facility
management team operates in accordance with a Company-wide policy and procedure
regimen, derived from industry standards, designed to ensure the delivery of
consistent, high quality services in each of its facilities. See " -- Operating
Procedures." The Company seeks to minimize operating expenses by designing its
facilities to optimize correctional officer staffing consistent with facility
security requirements. The Company further controls operating expenses through
the use of electronic surveillance systems and other technologies.

Development of Domestic Business Opportunities. As a result of the growth
in the demand for privatized correctional and detention facilities, the Company
is selective in the projects it pursues. The Company pursues projects based on
probability of success, geographic location, size, potential profitability, and
political and community acceptability. This approach allows the Company to
enhance its market share and optimize resource allocation, profitability and
financial return. The Company intends to continue its focus on institutions with
an emphasis on medium to maximum security that are 500 to 1,000 beds or larger.
Management believes that the Company's experience and reputation in managing
large secure facilities will enable it to maintain its industry position and
capitalize on the trend of governments to privatize larger facilities.

Strategic Acquisitions. The Company believes that its recent acquisitions
have significantly enhanced its position as the largest developer and manager of
privatized correctional and detention facilities, while increasing operating
efficiencies. Accordingly, the Company intends to continue to pursue strategic
acquisitions of other managers of privatized correctional and detention
facilities.

Expanded Scope of Services. The Company intends to continue to implement a
wide variety of specialized services that address the unique needs of various
segments of the inmate population. Because the facilities operated by the
Company differ with respect to security levels, ages, genders and cultures of
inmates, the Company focuses on the particular needs of an inmate population and
tailors its services based on local conditions and the Company's ability to
provide such services on a cost-effective basis. In addition to core

14
<PAGE> 17

residential services, the Company offers rehabilitative and education services
such as counseling, basic education, job skill training and life
skills/transition planning services, all aimed at reducing recidivism. Further,
because management believes alcohol and drug abuse are directly or indirectly
responsible for the majority of criminal offenses in the United States, the
Company has created and offers to its inmates its Lifeline program, a
comprehensive long-term substance abuse treatment program. The Company believes
that its success in delivering these specialized services will enable it to
address the changing needs of its customers. By offering a broad range of
specialized services, the Company seeks to provide a solution to reduce
recidivism and ultimately the cost of crime.

Expansion into International Markets. The Company believes the majority of
its new business will come from within the United States. However, the Company
and its international strategic partner, Sodexho, believe that interest in
private-sector corrections is developing in other nations. While management will
not detract from its domestic business to pursue international activities, the
Company will participate in selected international projects it finds attractive.
The Company also believes that in order to compete effectively in international
markets it must enter into alliances with strategic local partners with access
to local opportunities and familiarity with local business practices.

In June 1994, the Company entered into an international strategic alliance
with Sodexho. Among other business ventures, Sodexho provides contract services
to French prisons and has business operations in 60 countries. Pursuant to the
terms of the joint venture agreement between the Company and Sodexho, only the
Company will develop and manage prison management business in the United States
and its territories. In the rest of the world, except in the United Kingdom, the
Company and Sodexho will pursue prison management business opportunities through
local joint venture entities to be established, generally on a 50/50 basis.
Management believes that, with the formation of the Sodexho alliance, the
Company is well positioned to participate in international markets. See
"Description of Securities -- Relationship with Sodexho."

Cost Reduction Programs. An important component of the Company's strategy
is to position itself as a low cost, high quality provider of prison management
services in all of its markets. As cost containment pressures increase, the
Company will continue to focus on improving operating performance and efficiency
through the following key operating initiatives: (i) standardization of supply
and service purchasing practices and usage; (ii) improvement of inmate
management, resource consumption and reporting procedures; and (iii) improvement
in salary and wage expenses by reducing overtime, monitoring staff levels and
developing productivity standards. The Company intends to continue to apply
these operating cost initiatives throughout its existing facilities and in new
facilities.

FACILITY MANAGEMENT CONTRACTS

The Company is compensated on the basis of the number of inmates held in
each of its facilities. Contracts may vary to provide fixed per diem rates or
monthly fixed rates. Of the Company's 37 facilities in operation, 34 of the
Company's facility management contracts provide that the Company will be
compensated at an inmate per diem rate based upon actual or minimum guaranteed
occupancy levels and three of the management contracts are based on monthly
fixed rates. In either case, the compensation is invoiced in accordance with
applicable law and is paid on a monthly basis. Occupancy rates for a particular
facility will be low when first opened or when expansions are first available.
However, after a facility gets beyond the start-up period, typically ranging
from 30 to 90 days, the occupancy rate tends to stabilize. For 1995, the average
occupancy, based on rated capacity, was 93.5% for all facilities operated by the
Company.

In addition, the Company's contracts generally require the Company to
operate each facility in accordance with all applicable laws and regulations.
The Company is required by its contracts to maintain certain levels of insurance
coverage for general liability, workers' compensation, vehicle liability and
property loss or damage. The Company also is required to indemnify the
contracting agencies for claims and costs arising out of the Company's
operations and, in certain cases, to maintain performance bonds.

The Company's facility contracts are short term in nature. Terms of federal
contracts generally range from one to five years, and contain multiple renewal
options. The terms of local and state contracts may be for

15
<PAGE> 18

longer periods with additional renewal options. Most facility contracts also
generally contain clauses which allow the governmental agency to terminate a
contract without cause. The Company's facility contracts are generally subject
to annual or bi-annual legislative appropriation of funds. A failure by a
governmental agency to receive appropriations could result in termination of the
contract by such agency or a reduction in the management fee payable to the
Company. To date, none of the Company's contracts have been terminated by a
governmental agency and all renewal options under the Company's management
contracts have been exercised by the governmental agencies. No assurance can be
given that a governmental agency will not terminate or fail to renew a contract
with the Company in the future. For 1995, contracts for facilities with the
United States Marshals Service accounted for 11% of the Company's revenues and
contracts with the State of Texas accounted for 18% of the Company's revenues.

OPERATING PROCEDURES

Pursuant to the terms of its management contracts, the Company is
responsible for the overall operation of its facilities, including staff
recruitment, general administration of the facilities, security and supervision
of the offenders and facility maintenance. The Company also provides a variety
of rehabilitative and educational programs at its facilities. Inmates at most
facilities managed by the Company may receive basic education through academic
programs designed to improve inmate literary levels and the opportunity to
acquire General Education Development certificates. The Company also offers
vocational training to inmates who lack marketable job skills. In addition, the
Company offers life skills transition planning programs that provide inmates job
search training and employment skills, health education, financial
responsibility training, parenting and other skills associated with becoming
productive citizens. At several of its facilities, the Company also offers
counseling, education and/or treatment to inmates with alcohol and drug abuse
problems through its Lifeline program.

The Company operates each facility in accordance with the Company-wide
policies and procedures and the standards and guidelines established by the
American Correctional Association ("ACA") Commission on Accreditation. The ACA
is an independent organization comprised of professionals in the corrections
industry which establishes guidelines and standards by which a correctional
institution may gain accreditation. The ACA standards, which the ACA believes
safeguard the life, health and safety of offenders and personnel, are the basis
of the accreditation process and define policies and procedures for operating
programs. The ACA standards, which are the industry's most widely accepted
correctional standards, describe specific objectives to be accomplished and
cover such areas as administration, personnel and staff training, security,
medical and health care, food service, inmate supervision and physical plant
requirements. The Company has sought and received ACA accreditation for 16 of
the facilities it currently manages, and intends to apply for ACA accreditation
for all of its facilities once they are eligible. The accreditation process is
usually completed in 18 to 24 months after a facility is opened.

FACILITY DESIGN, CONSTRUCTION AND FINANCE

In addition to its facility management services, the Company also provides
consultation to various governmental agencies with respect to the design and
construction of new correctional and detention facilities, and the redesign and
renovation of older facilities. Since its inception in January 1983, the Company
has designed and constructed 21 of its 37 operating corrections facilities for
various federal, state, and local governmental agencies. The Company manages all
of the facilities it has designed and constructed or redesigned and renovated.

Pursuant to the Company's design, build and manage contracts, the Company
is responsible for overall project development and completion. Typically, the
Company develops the conceptual design for a project, then hires architects,
engineers and construction companies to complete the development. When designing
a particular facility, the Company utilizes, with appropriate modifications,
prototype designs the Company has used in developing other projects. Management
of the Company believes that the use of such prototype designs allows it to
reduce cost overruns and construction delays. The Company's facilities are
designed to maximize staffing efficiencies by increasing the area of vision
under surveillance by corrections officers and utilizing additional electronic
surveillance systems.

16
<PAGE> 19

Various methods of construction financing may be used by a contracting
governmental agency, including, but not limited to the following: (i) one-time
general revenue appropriation by the government agency for the cost of the new
facility; (ii) general obligation bonds that are secured by either a limited or
unlimited tax levied by the issuing governmental entity; or (iii) lease revenue
bonds or certificates of participation secured by an annual lease payment that
is subject to annual or bi-annual legislative appropriation of funds. When the
project is financed using direct governmental appropriations or proceeds from
the sale of bonds or other obligations issued prior to the award of the project,
or by the Company directly, the financing is in place when the construction or
renovation contract is executed. If the project is financed using
project-specific tax-exempt bonds or other obligations, the construction
contract is generally subject to the sale of such bonds or obligations.
Substantial expenditures for construction will not be made on such a project
until the tax-exempt bonds or other obligations are sold. If such bonds or
obligations are not sold, construction and management of the facility may either
be delayed until alternate financing is procured or development of the project
will be entirely suspended. When the Company is awarded a facility management
contract, appropriations for the first annual or bi-annual period of the
contract's term have generally already been approved, and the contract is
subject to governmental appropriations for subsequent annual or bi-annual
periods. Of the domestic facilities currently managed by the Company, 25 were
funded by the government using one of the above-described financing vehicles.

MARKETING

The Company engages in extensive marketing efforts. The Company believes
that it is the industry leader in promoting the benefits of privatization of
prisons and other correctional and detention facilities. Marketing efforts are
conducted and coordinated by the Company's business development department and
senior management with the aid, where appropriate, of certain independent
consultants.

The Company views governmental agencies responsible for federal, state and
local correctional facilities in the United States and governmental agencies
responsible for correctional facilities in Puerto Rico, the United Kingdom and
Australia as its primary target markets.

The Company generally receives inquiries from or on behalf of governmental
agencies that are considering privatization of certain facilities or that have
already decided to contract with private enterprise. When it receives such an
inquiry, the Company determines whether there is an existing need for the
Company's services and whether the legal and political climate in which the
inquiring party operates is conducive to serious consideration of privatization
and then conducts an initial cost analysis to further determine project
feasibility.

The Company pursues its domestic business opportunities on two primary
courses. In the first course, the Company follows the traditional competitive
route where a Request for Proposals ("RFP") or Request for Qualification ("RFQ")
is issued by a government agency and a number of companies respond. Management
believes that this competitive approach will produce the majority of new
contract awards to the Company. The second course involves the development of
new facilities in locations where there is a clearly defined, long-term need for
beds, but where a competitive bidding procedure is not required.

Generally, governmental agencies responsible for correctional and detention
services procure goods and services through RFPs or RFQs. Most of the Company's
activities in the area of securing new business are in the form of responding to
RFPs. As part of the Company's process of responding to RFPs, management meets
with appropriate personnel from the agency making the request to best determine
the agency's distinct needs. If the project fits within the Company's strategy,
the Company will then submit a written response to the RFP. A typical RFP
requires bidders to provide detailed information, including, but not limited to,
the service to be provided by the bidder, its experience and qualification, and
the price at which the bidder is willing to provide the services (which services
may include the renovation, improvement or expansion of an existing facility or
the planning, design and construction of a new facility). The Company has and
intends to in the future, engage independent consultants to assist it in
responding to RFPs. Based on the proposals received in response to an RFP, the
agency will award a contract to the successful bidder. In addition to issuing
formal RFPs, local jurisdictions may issue an RFQ. In the RFQ process, the
requesting agency selects a firm believed to be most

17
<PAGE> 20

qualified to provide the requested services and then negotiates the terms of the
contract with that firm, including the price at which its services are to be
provided.

The marketing process for facility management consists of several critical
events. These include issuance of an RFP or RFQ by a governmental agency,
submission of a response to the RFP or RFQ by the Company, the award of the
contract by a governmental agency and the commencement of construction or
management of the facility. The Company's experience has been that a substantial
period of time may elapse from the initial inquiry to receipt of a new contract.
As the concept of privatization has gained wider acceptance, however, the length
of time from inquiry to the award of a contract has shortened. The length of
time required to award a contract is also affected, in some cases, by the need
to introduce enabling legislation. Generally, if the facility for which an award
has been made must be constructed, the Company's experience has been that
management of a newly-constructed facility typically commences between 12 and 24
months after the governmental agency's award.

While the Company focuses primarily on the traditional competitive
marketing approach described above, it also pursues the development of new
facilities in those areas where a competitive bid process is not required.
Management believes this approach, which has proven successful to the Company to
date, is effective because of the Company's strong client relationships and
reputation for quality corrections.

In addition to marketing its services to federal, state and local
authorities, the Company markets its services internationally, primarily through
the international strategic alliance formed with Sodexho. The Company is
currently marketing its management services in Australia, Germany, Hungary,
Canada, Panama, and Mexico.

The marketing efforts of TransCor for inmate transportation services vary
from those of the rest of the Company. TransCor's marketing approach generally
consists of mass mailings, phone calls, and personal visits to hundreds of state
and local governmental agencies as well as attendance at local, state and
national trade shows.

BUSINESS PROPOSALS

As of May 9, 1996, the Company was pursuing nine prospects with a total of
approximately 7,700 beds for which written responses to RFPs have been
submitted. The Company is also pursuing 19 prospects with a total of
approximately 9,800 beds for which it has not submitted proposals. The domestic
projects that the Company is pursuing are located in 10 states, including nine
states in which the Company is not currently operating. Additionally, the
Company is pursuing business in Australia and Great Britain through joint
ventures in those countries. The Company is also pursuing other foreign facility
prospects through its alliance with Sodexho.

When a contract requires construction of a new facility, the Company's
success depends, in part, upon its ability to acquire real property for its
facilities on desirable terms and at satisfactory locations. Management expects
that many such locations will be in or near populous areas and therefore
anticipates legal action and other forms of opposition from residents in areas
surrounding each proposal site. The Company may incur significant expenses in
responding to such opposition and there can be no assurance of success.

EMPLOYEES

At April 19, 1996, the Company employed 5,653 full-time employees and 138
part-time employees. Of the full-time employees, 97 were employed at the
Company's headquarters and 5,566 were employed at the Company's facilities and
TransCor. The Company employs personnel in the following areas: clerical and
administrative, including facility administrators/wardens, security, food
service, medical, transportation and scheduling, maintenance, teachers,
counselors and other support services.

Each of the Company's facilities is managed as a separate operational
facility by the facility administrator or warden. All facilities follow a
standardized code of policies and procedures. The Company has never experienced
a strike or work stoppage. Beginning in 1992, six facilities were approached by
one particular

18
<PAGE> 21

union to organize the work force. The union was defeated or withdrew in five
facilities. In March 1993, the Company reached an agreement with the union to
represent 73 correctional officers at the Silverdale facility and this contract
was decertified in March 1994. In January 1996, the Company reached an agreement
with a union to represent 38 non-security personnel at its Shelby Training
Center. In the opinion of management, employee relations are good.

EMPLOYEE TRAINING

Under the laws applicable to the Company's operations, as well as the
Company's internal training policy, the Company's corrections officers are
required to complete a minimum amount of training prior to independent
assignment. In most cases, officers must undergo at least 160 hours of training
by the Company before being allowed to work alone in a position that will bring
them in contact with inmates or detainees. Additional training is required in
certain jurisdictions where necessary to comply with applicable law in order to
enable such officers to work in positions that will bring them into contact with
inmates. All non-security staff receive 80 hours of initial training.
Accordingly, the Company's training programs meet or exceed all applicable
requirements.

The Company's training is comprised of approximately 40 hours of
instruction concerning the Company's policies, operational procedures and
management philosophy. An additional 120 hours concerning legal issues, rights
of inmates and detainees, techniques of communication and supervision,
improvement of interpersonal skills and job training relating to the particular
position to be filled are provided. Employees of facilities acquired or taken
over by the Company who are offered continued employment undergo at least 40
hours of training by the Company before reporting to work for the Company. Each
of the Company's employees who has contact with inmates receives a minimum of 40
hours of additional training each year, and each facility management employee of
the Company receives at least 40 hours of training each year.

TransCor also has training requirements for its employees. Each new
employee must undergo 40 hours of training, prior to job performance, including
driver training and safety, correctional training and policy and procedures
guidelines. Each employee then performs four weeks of on-the-job training with
an experienced transportation agent. TransCor maintains continuing training for
all employees of 16 to 32 hours per year.

INSURANCE

The Company maintains a $30,000,000 general liability insurance policy for
all of its operations. To date, no payments have been made under the Company's
general liability insurance policies because of any action brought as a result
of the operation of any of its facilities. The Company also maintains insurance
in amounts it deems adequate to cover property and casualty risks, workers'
compensation and directors and officers liability. There can be no assurance
that the aggregate amount and kinds of the Company's insurance are adequate to
cover all risks it may incur or that insurance will be available in the future.

Each of the Company's facility management contracts and the statutes of
certain states require the maintenance of insurance by the Company. The
Company's contracts provide that in the event that the Company does not maintain
such insurance, the contracting agency may terminate its agreement with the
Company. The Company believes it is in compliance in all material respects with
respect to these requirements.

LITIGATION

The Company is currently, and from time to time, subject to claims and
suits arising in the ordinary course of business, including claims for damages
for personal injuries or for wrongful restriction of, or interference with,
inmate privileges. In the opinion of management, the outcome of the proceedings
to which it is currently a party will not have a material adverse effect upon
its operations or financial condition.

19
<PAGE> 22

MANAGEMENT

The following table sets forth certain information concerning the directors
and executive officers of the Company as of the date of this Prospectus.

<TABLE>
<CAPTION>
NAME AGE POSITION
- ----------------------------- --- -----------------------------------------------------------------
<S> <C> <C>
Doctor R. Crants............. 51 Chairman of the Board; Chief Executive Officer; Director
Thomas W. Beasley............ 53 Director; Chairman Emeritus
T. Don Hutto(1).............. 60 Director; Vice Chairman; Senior Managing Director of
International Operations
William F. Andrews........... 64 Director
Samuel W. Bartholomew, Jr.... 51 Director
Jean-Pierre Cuny............. 41 Director
Richard H. Fulton(1)......... 69 Director
Joseph F. Johnson(1)......... 45 Director Nominee
R. Clayton McWhorter(1)...... 62 Director Nominee
David L. Myers............... 52 President
Darrell K. Massengale........ 35 Chief Financial Officer; Secretary and Treasurer;
Vice President, Finance
Dennis E. Bradby............. 46 Vice President, Education Services
Robert G. Britton............ 55 Vice President, Operations
Linda G. Cooper.............. 45 Vice President, Legal Affairs
Peggy W. Lawrence............ 40 Vice President, Investor Relations
John D. Rees................. 49 Vice President, Business Development
Linda A. Staley.............. 51 Vice President, Project Development
Gay E. Vick, III............. 48 Vice President and Managing Director of International Operations
</TABLE>

- ---------------
(1) Messrs. Hutto and Fulton are currently directors of the Company but are not
standing for re-election at the Annual Meeting. The Board of Directors has
nominated the other five existing directors and Messrs. McWhorter and
Johnson for election as directors at the Annual Meeting.

Doctor R. Crants, a founder of the Company, was elected Chief Executive
Officer and Chairman of the Board of the Company in June 1994. From June 1987 to
June 1994, he served as President, Chief Executive Officer and Vice Chairman of
the Board of Directors of the Company. He has served as a director of the
Company since 1983.

Thomas W. Beasley, a founder of the Company, was elected Chairman Emeritus
of the Board of Directors of the Company in June 1994. From June 1987 to June
1994, he served as Chairman of the Board. Mr. Beasley served as President of the
Company from January 1983 to June 1987. He has served as a director of the
Company since 1983.

T. Don Hutto, a founder of the Company, was elected Vice Chairman of the
Board of Directors and Senior Managing Director of International Operations of
the Company in June 1994. He will no longer serve as a director following the
Annual Meeting. From July 1988 to June 1994, he was engaged by the Company as
International Projects Manager. Mr. Hutto served as Commissioner, Department of
Corrections of Virginia, from 1976 through December 1981 and Commissioner of
Corrections of Arkansas from 1971 to 1976, and is a past president of the ACA.

William F. Andrews has served as a director of the Company since 1986. Mr.
Andrews currently serves as the Chairman of Schrader, Inc., a manufacturing
company, and Chairman of Scovill Fasteners. From January 1992 through December
1994 he was Chairman, President and Chief Executive Officer of Amdura
Corporation, a manufacturing company, and Chairman of Utica Corp., also a
manufacturing company. Mr. Andrews serves as a director of Navistar
International Corporation, Southern New England Telephone Company, Johnson
Control Corporation, Harley Davidson Company, Katy Industries, Northwestern
Steel and Wire Company, Black Box Corporation and Process Technology Holdings.

20
<PAGE> 23

Samuel W. Bartholomew, Jr. has served as a director of the Company since
June 1991. Mr. Bartholomew is a founder and Chairman of the Nashville law firm
of Stokes & Bartholomew, P.A., which serves as general counsel to the Company.

Jean-Pierre Cuny has served as a director of the Company since July 1994.
Mr. Cuny serves as Senior Vice President of The Sodexho Group, a leading
supplier of catering and related services to institutions based in Paris,
France. Mr. Cuny was elected to the Board of Directors in connection with the
international strategic alliance with Sodexho. See "Description of
Securities -- Relationship with Sodexho."

Richard H. Fulton has served as a director of the Company since 1988. He
will no longer serve as a director following the Annual Meeting. Mr. Fulton
presently serves as Chairman Emeritus of the Board of The Bank of Nashville, and
as Chairman of The Fulton Group, Inc., a consulting firm. Mr. Fulton previously
served as Mayor of Nashville, Tennessee.

Joseph F. Johnson is a director nominee for election at the Annual Meeting.
He serves as Chairman and CEO of The Johnson Companies, a group of closely held
companies involved in government relations and corrections. In 1994, Mr. Johnson
founded National Corrections & Rehabilitation Corporation, a correctional
services company which specializes in providing education, vocational training,
substance abuse treatment and medical care programs to inmates.

R. Clayton McWhorter is a director nominee for election at the Annual
Meeting. Mr. McWhorter became the Chairman of Columbia/HCA Healthcare
Corporation effective April 1995. He will resign from this position on May 9,
1996, but will remain a director of Columbia/HCA. Prior to such time, Mr.
McWhorter participated in the formation of HealthTrust, Inc. and served as its
Chairman, President and Chief Executive Officer until its merger with
Columbia/HCA in April 1995.

David L. Myers became President of the Company in June 1994. From December
1986 to June 1994, he served as Vice President, Facility Operations of the
Company.

Darrell K. Massengale joined the Company in February 1986 and in March 1991
became its Vice President, Finance, Secretary, and Treasurer. In June 1994, he
was also elected Chief Financial Officer of the Company. Mr. Massengale is a
certified public accountant.

Dennis E. Bradby has served as Vice President, Education Services for the
Company since June 1991. From April 1986 through June 1991, Mr. Bradby served as
the Company's Vice President, Operational Support Systems.

Robert G. Britton was elected Vice President, Operations for the Company in
June 1994. From January 1986 to June 1994, he served as Vice President, Business
Development for the Company.

Linda G. Cooper joined the Company in April 1987 as Senior Legal Counsel.
In May 1988, she was elected Assistant Secretary for the Company and in January
1989 became its Vice President, Legal Affairs.

Peggy W. Lawrence became Vice President, Investor Relations in January
1995. From June 1985 to January 1995, she served as Vice President,
Communications for the Company.

John D. Rees was elected Vice President, Business Development for the
Company in June 1994. From 1967 until 1986 when he joined the Company, Mr. Rees
served as warden of the Kentucky State Reformatory.

Linda A. Staley was elected Vice President, Project Development for the
Company in June 1994. She joined the Company in 1985 as Director, Project
Development.

Gay E. Vick, III was elected Vice President and Managing Director for the
Company's International Operations in June 1994. From January 1987 to June 1994,
he served as Vice President, Project Development for the Company.

21
<PAGE> 24

PRINCIPAL AND SELLING STOCKHOLDERS

The table below sets forth certain information regarding the beneficial
ownership of Common Stock, as of May 9, 1996, and as adjusted to reflect the
sale of the Common Stock offered hereby of (i) each person who is known by the
Company to be the beneficial owner of more than 5% of the Common Stock, (ii)
each director of the Company, (iii) the Company's Chief Executive Officer and
the four other most highly compensated executive officers, (iv) all directors
and executive officers as a group and (v) the Selling Stockholders.

<TABLE>
<CAPTION>
SHARES BENEFICIALLY SHARES BENEFICIALLY
OWNED PRIOR TO THE SHARES TO OWNED AFTER THE
OFFERING(1) BE SOLD IN OFFERING(1)
------------------- THE -------------------
NUMBER PERCENT OFFERING NUMBER PERCENT
---------- ------- ---------- ---------- -------
<S> <C> <C> <C> <C> <C>
DIRECTORS, EXECUTIVE OFFICERS AND 5%
STOCKHOLDERS:
Sodexho, S.A.(2).............................. 6,992,406 17.4% -- 6,992,406 16.8%
Thomas W. Beasley(3).......................... 1,889,217 5.3% 223,384 1,665,833 4.5%
Doctor R. Crants(4)........................... 999,586 2.8% -- 999,586 2.7%
T. Don Hutto(5)............................... 251,519 * -- 251,519 *
William F. Andrews(6)......................... 139,666 * -- 139,666 *
Samuel W. Bartholomew, Jr.(7)................. 126,300 * -- 126,300 *
Jean-Pierre Cuny(8)........................... 30,000 * -- 30,000 *
Richard H. Fulton(9).......................... 77,950 * -- 77,950 *
David L. Myers(10)............................ 106,082 * -- 106,082 *
Darrell K. Massengale(11)..................... 83,569 * -- 83,569 *
All directors and executive officers as a
group
(16 persons)(12)........................... 4,115,637 11.3% 223,384 3,892,253 10.2%
FORMER TRANSCOR STOCKHOLDERS:
Thomas Loventhal.............................. 515,252 1.5% 75,000 440,252 1.2%
American Corrections Transport, Inc........... 444,312 1.3% 44,430 399,882 1.1%
Ted Feldman................................... 6,924 * 1,000 5,924 *
Louis Ratchford............................... 2,886 * 1,500 1,386 *
Scott L. Moskovitz............................ 11,274 * 1,000 10,274 *
Alma Wells.................................... 2,886 * 1,500 1,386 *
Elizabeth Smith............................... 2,886 * 1,500 1,386 *
FORMER CONCEPT STOCKHOLDERS:
D. Paul and Joyce Alagia...................... 695,741 2.0% 12,200 683,541 1.9%
Harold S. Nelson.............................. 193,002 * 171,562 21,440 *
Ben F. Morgan, Jr............................. 155,853 * 30,000 125,853 *
A. W. Sandbach................................ 140,120 * 40,000 100,120 *
William H. Cull............................... 363,968 1.0% 35,000 328,968 *
Thomas F. Buetow.............................. 216,816 * 74,000 142,816 *
Dorothy Watkins............................... 106,930 * 2,500 104,430 *
David Watkins................................. 22,184 * 2,000 20,184 *
John Watkins, Jr.............................. 22,314 * 2,000 20,314 *
John L. Smith................................. 80,526 * 21,000 59,526 *
Patrick H. Molloy............................. 90,434 * 2,500 87,934 *
Charles O. Hundley............................ 17,748 * 15,974 1,774 *
Starletta Schirmer............................ 750 * 750 0 *
FORMER CPI STOCKHOLDERS:
Michael D. Shmerling.......................... 309,200 * 38,400 270,800 *
Lisa A. Shmerling............................. 74,800 * 74,800 0 *
Alan Wernick.................................. 30,000 * 8,000 22,000 *
David Obolensky............................... 32,000 * 10,000 22,000 *
Cindie Unger.................................. 280,000 * 110,000 170,000 *
</TABLE>

- ---------------
* Represents beneficial ownership of less than 1% of the Common Stock

22
<PAGE> 25

(1) The persons named in the table, to the Company's knowledge, have sole
voting and investment power with respect to all shares of Common Stock
shown as beneficially owned by them, except as otherwise indicated. Shares
of Common Stock underlying options and warrants to purchase Common Stock
are deemed to be outstanding for the purpose of computing the outstanding
Common Stock owned by the particular person and by the group, but are not
deemed outstanding for any other purpose.

(2) Sodexho's address is 3 avenue Newton, 78180 Montigny-le-Bretonneux, France.
Includes 1,352,205 shares of Common Stock issuable upon conversion of
certain Convertible Notes; 2,200,000 shares issuable upon conversion of
certain warrants, 30,000 shares issuable upon the exercise of certain
options issued to Mr. Cuny and approximately 1,465,200 shares issuable upon
conversion of certain convertible subordinated notes which Sodexho will
purchase pursuant to a forward contract with the Company. Information
contained herein is based solely on the Schedule 13D filed with the
Securities and Exchange Commission (the "Commission") in April 1996. See
"Description of Securities -- Relationship with Sodexho."

(3) Mr. Beasley's address is Route 2, Box 305, Burns, Tennessee 37029. Includes
30,000 shares issuable upon the exercise of options, 2,000 shares owned by
Mr. Beasley's wife, 14,649 shares held in the Company's Amended and
Restated Employee Stock Ownership Plan (the "ESOP"), 358,770 shares
issuable upon the exercise of Warrants and 200 shares issuable upon the
exercise of Warrants owned by Mr. Beasley's wife. Such information is
derived in part from the Schedule 13G, dated February 12, 1996, filed by
Mr. Beasley.

(4) Includes 200,000 shares issuable upon the exercise of options, 24,175
shares held in the Company's ESOP and 99,940 shares issuable upon the
exercise of Warrants (does not include 3,200 shares held in trust for Mr.
Crants' children and 6,640 shares issuable upon the exercise of Warrants
held in trust for Mr. Crants' children beneficial ownership of which is
disclaimed).

(5) Includes 45,000 shares issuable upon the exercise of options, 8,589 shares
held in the ESOP and 64,666 shares owned by Mr. Hutto's wife.

(6) Includes 89,000 shares issuable upon exercise of options and 4,000 shares
owned of record by minor children of Mr. Andrews.

(7) Includes 86,500 shares issuable upon the exercise of options, 6,000 shares
owned by minor children of Mr. Bartholomew, 800 shares issuable upon the
exercise of Warrants and 800 shares issuable upon the exercise of Warrants
owned by minor children of Mr. Bartholomew.

(8) Mr. Cuny serves as the Senior Vice President of The Sodexho Group, an
affiliate of Sodexho, and was elected to the Board of Directors in
connection with the international strategic alliance between the Company
and Sodexho. As an outside director, Mr. Cuny has received options to
purchase 30,000 shares of Common Stock. Mr. Cuny disclaims beneficial
ownership of all shares held by Sodexho.

(9) Includes 45,000 shares issuable upon the exercise of options and 3,400
shares issuable upon the exercise of Warrants.

(10) Includes 96,200 shares issuable upon the exercise of options, 400 shares
owned by children of Mr. Myers, 40 shares issuable upon the exercise of
Warrants, 80 shares issuable upon the exercise of Warrants owned by
children of Mr. Myers and 9,162 shares held in the ESOP.

(11) Includes 70,800 shares issuable upon the exercise of options, 700 shares
owned jointly by Mr. Massengale and his wife, 140 shares issuable upon the
exercise of Warrants owned jointly by Mr. Massengale and his wife and 7,129
shares held in the ESOP.

(12) Includes an aggregate of 1,418,398 shares issuable upon exercise of options
and warrants and 114,788 shares held in the ESOP.

23
<PAGE> 26

DESCRIPTION OF SECURITIES

As of May 9, 1996, the Company's authorized capital stock consists of (i)
50,000,000 shares of Common Stock, $1.00 par value per share, and (ii) 1,000,000
shares of Preferred Stock, $1.00 par value per share ("Preferred Stock"). Upon
receipt of stockholder approval at the Annual Meeting, the Company will amend
its Certificate of Incorporation to increase the number of authorized shares of
Common Stock to 150,000,000. Upon the completion of this offering, 36,560,932
shares of Common Stock and no shares of Preferred Stock will be outstanding. The
following summary description is qualified in its entirety by reference to the
Company's Certificate of Incorporation and By-laws and the other contracts,
agreements and documents describing the terms of the Company's securities.

COMMON STOCK

The holders of Common Stock are entitled to one vote per share on all
matters submitted to a vote of the stockholders. Cumulative voting of shares of
Common Stock is prohibited. The holders of Common Stock are entitled to receive
ratably such dividends, if any, as may be declared from time to time by the
Board of Directors out of funds legally available therefor, subject to the
payment of any preferential dividends with respect to any Preferred Stock that
from time to time may be outstanding. In the event of the liquidation,
dissolution or winding up of the Company, the holders of Common Stock are
entitled to share ratably in all assets remaining after payment of liabilities,
subject to prior distribution rights of the holders of any outstanding Preferred
Stock. Other than the contractual rights granted to Sodexho described below, the
holders of Common Stock have no preemptive or conversion rights or other
subscription rights, and there are no redemption or sinking fund provisions
applicable to the Common Stock. All of the outstanding shares of Common Stock
are fully paid and nonassessable, and all of the shares of Common Stock offered
hereby, when issued and paid for, will be fully paid and nonassessable.

PREFERRED STOCK

The Board of Directors, without further action by the stockholders, is
authorized to issue up to 1,000,000 shares of Preferred Stock in one or more
series and to fix and determine as to any such series any and all of the
relative rights and preferences of shares in such series, including, without
limitation, preferences, limitations or relative rights with respect to
redemption rights, conversion rights, voting rights, dividend rights and
preferences on liquidation. The Company has no present intention to issue any
Preferred Stock, but may determine to do so in the future.

CONVERTIBLE NOTES

The Company currently has outstanding an aggregate of $64,500,000 principal
amount of convertible subordinated notes. The Convertible Notes, which are
currently convertible into an aggregate of 4,062,391 shares of Common Stock, are
comprised of the 1992 Convertible Notes, 1994 Convertible Notes and the 1996
Convertible Notes. The 1992 Convertible Notes were issued in three tranches,
with the first tranche ($2,500,000 aggregate principal amount) having a current
conversion price of $3.388 and the remaining two tranches ($5,000,000 aggregate
principal amount) having a conversion price of $3.548. The 1994 Convertible
Notes and the 1996 Convertible Notes are convertible into Common Stock at $7.165
and $53.30, respectively. These conversion prices are subject to adjustments,
including in the event of the issuance of equity securities at a price which is
less than the current conversion price. The Company may prepay the 1992
Convertible Notes at any time on or after July 1, 1997, and may force conversion
of the 1992 Convertible Notes beginning on July 1, 1997, if the Common Stock
price remains above $5.32. The Company may prepay the 1994 Convertible Notes at
any time on or after June 23, 1997, and may force conversion of the 1994
Convertible Notes beginning on June 23, 1997, if the Common Stock price remains
above $10.75. The Company may force conversion of the 1996 Convertible Notes
beginning in the year 2000 in the event that the Common Stock has traded for at
least 45 consecutive trading days in the public market at a price above 150% of
the conversion price of such 1996 Convertible Notes. All of the 1994 Convertible
Notes and $20,000,000 of the 1996 Convertible Notes are owned by Sodexho. See
" -- Relationship with Sodexho."

24
<PAGE> 27

WARRANTS

In September 1992, the Company issued a warrant dividend to holders of
Common Stock by distributing one Warrant for every five outstanding shares of
Common Stock. The Warrants expire on September 14, 1997, and are convertible
into two shares of Common Stock at an exercise price of $8.50. An aggregate of
2,027,256 shares of Common Stock currently are issuable upon exercise of the
Warrants.

OPTIONS AND DEFERRED SHARES

As of May 9, 1996, options to purchase a total of 2,031,805 shares of
Common Stock were outstanding pursuant to the Company's various stock option
plans for employees and directors, and an additional 1,568,720 shares of Common
Stock are available for future grants under such plans. In 1995, the Company
awarded an aggregate of 168,512 shares of deferred stock to certain key
employees pursuant to the Company's Stock Bonus Plan (the "Stock Bonus Plan").
Deferred shares granted under the Stock Bonus Plan do not vest until ten years
from the date of the grant and carry no voting rights or dividend rights until
such time as the stock is actually issued. As of May 9, 1996, no other deferred
shares are outstanding and an additional 31,488 shares are available for
issuance pursuant to the Stock Bonus Plan.

RELATIONSHIP WITH SODEXHO

In connection with the 1994 formation of the strategic alliance between the
Company and Sodexho, Sodexho purchased the 1994 Convertible Notes and 1,400,000
shares of Common Stock. In consideration of Sodexho's agreement to enter into
the international strategic alliance with the Company, the Company, among other
things, (i) entered into a forward contract pursuant to which Sodexho will
purchase at any time on or before December 31, 1997, up to $20,000,000 aggregate
principal amount of the Company's floating rate convertible subordinated notes
with a conversion price, as adjusted, of $13.65 per share, and (ii) granted
Sodexho a presently exercisable warrant expiring on December 31, 1998, covering
2,200,000 shares of Common Stock with an exercise price, as adjusted, of $7.90
per share. Sodexho also agreed to limit its ownership interest in the Company to
25% (or 30% in certain limited circumstances) through June 23, 1999, subject to
earlier termination upon the occurrence of a change in control (the "Standstill
Period"). A change in control is defined as: (i) a party acquiring more than 20%
of the Common Stock; (ii) a 10% stockholder publicly announcing an intent to
commence a tender offer for the Company; (iii) the termination of Doctor R.
Crants as the Company's chief executive officer or the failure by Doctor R.
Crants to own at least 2% of the Common Stock; (iv) if the Company's Board of
Directors shall no longer consist of a majority of Continuing Directors; or (v)
an acquirer shall publicly announce an intent to commence a tender offer and the
Company's Board publicly recommending that the stockholders accept such tender
offer. "Continuing Directors" means the directors of the Company as of June 23,
1994 and each other director, if such other director's nomination for election
to the Board of Directors of the Company is recommended by a majority of the
then Continuing Directors.

During the Standstill Period, Sodexho has agreed to vote its Common Stock
in the same fashion as either the Company's public stockholders or the Company's
Board of Directors, at Sodexho's option, on the election of directors and
certain other matters. Sodexho has also agreed that during the Standstill
Period, it will not solicit proxies under any circumstances, or become a
participant in any election contest, or make an offer for the acquisition of
substantially all of the assets or capital stock of the Company or induce or
assist any other person to make such an offer. Until Sodexho's ownership in the
Company is reduced to below 400,000 shares of Common Stock, Sodexho has the
right to nominate one member to the Company's Board of Directors and, without
Sodexho's consent, the Company may not increase the number of directors on the
Company's Board of Directors to eight or more. In addition, Sodexho has a
preemptive right to purchase additional shares of Common Stock or securities
convertible into or exchangeable for Common Stock in any issuance of securities
by the Company in an amount necessary to enable Sodexho to maintain a percentage
ownership in the Company equal to 20% of the Common Stock on a fully diluted
basis.

25
<PAGE> 28

DELAWARE ANTI-TAKEOVER LAW AND CERTAIN BYLAW PROVISIONS

The Company is a Delaware corporation and consequently is subject to
certain anti-takeover provisions of the Delaware General Corporation Law. The
business combination provision contained in Section 203 of the Delaware General
Corporation Law ("Section 203") defines an interested stockholder of a
corporation as any person that (i) owns, directly or indirectly, or has the
right to acquire, 15% or more of the outstanding voting stock of the corporation
or (ii) is an affiliate or associate of the corporation and was the owner of 15%
or more of the outstanding voting stock of the corporation at any time within
the three-year period immediately prior to the date on which it is sought to be
determined whether such person is an interested stockholder; and the affiliates
and the associates of such person. Under Section 203, a Delaware corporation may
not engage in any business combination with any interested stockholder for a
period of three years following the time such stockholder became an interested
stockholder, unless (i) prior to such time the board of directors of the
corporation approved either the business combination or the transaction which
resulted in the stockholder becoming an interested stockholder, or (ii) upon
consummation of the transaction which resulted in the stockholder becoming an
interested stockholder, the interested stockholder owned at least 85% of the
voting stock of the corporation outstanding at the time the transaction
commenced (excluding, for determining the number of shares outstanding, (a)
shares owned by persons who are directors and officers and (b) employee stock
plans, in certain instances), or (iii) at or subsequent to such time the
business combination is approved by the board of directors and authorized at an
annual or special meeting of stockholders by at least 66 2/3% of the outstanding
voting stock that is not owned by the interested stockholder. The restrictions
imposed by Section 203 will not apply to a corporation if (i) the corporation's
original certificate of incorporation contains a provision expressly electing
not to be governed by this section or (ii) the corporation, by the action of its
stockholders holding a majority of outstanding stock, adopts an amendment to its
certificate of incorporation or by-laws expressly electing not to be governed by
Section 203 (such amendment will not be effective until 12 months after adoption
and shall not apply to any business combination between such corporation and any
person who became an interested stockholder of such corporation on or prior to
such adoption).

The Company has not elected out of Section 203, and the restrictions
imposed by Section 203 apply to transactions between the Company and interested
stockholders. Section 203 could, under certain circumstances, make it more
difficult for a third party to gain control of the Company.

The Company's By-Laws include several provisions which may deter an
unsolicited acquisition of control of the Company. These provisions require: (a)
special meetings of stockholders to be called by the Chairman of the Board or
the Board of Directors; and (b) approval of By-Law amendments by the Board of
Directors or a majority vote of the stockholders.

REGISTRATION RIGHTS

Beneficial holders of an aggregate of 12,146,212 shares of Common Stock
have contractual rights with respect to the registration of shares of Common
Stock ("Registrable Shares") under the Securities Act. The Company has granted
two demand registration rights which may be exercised by Sodexho with respect to
securities acquired in June 1994 and by the holders of the 1992 Convertible
Notes. Sodexho and the other holder of the 1996 Convertible Notes also have
three demand shelf registration rights which may be exercised beginning June 22,
1997. In addition, Sodexho, the other holders of Convertible Notes and certain
other holders of Registrable Shares have incidental registration rights which
provide that, in the event that the Company proposes to register any of its
securities under the Securities Act for is own account, holders of Registrable
Shares may require the Company to include all or a portion of the Registrable
Shares in the registration, provided, among other conditions, that the managing
underwriter (if any) of any such offering has the right, subject to certain
conditions, to limit the number of Registrable Shares included in the
registration. In general, all fees, costs and expenses of such registrations
(other than underwriting commissions, dealers' fees, brokers' fees and
concessions applicable to Common Stock) will be borne by the Company.

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for the Common Stock and Warrants is First
Union National Bank of North Carolina.

26
<PAGE> 29

UNDERWRITING

Pursuant to the Underwriting Agreement and subject to the terms and
conditions thereof, the Underwriters named below, acting through J.C. Bradford &
Co. and Stephens Inc. as representatives of the several Underwriters (the
"Representatives"), have agreed, severally, to purchase from the Company and the
Selling Stockholders the number of shares of Common Stock set forth below
opposite their respective names:

<TABLE>
<CAPTION>
NUMBER OF
NAME OF UNDERWRITER SHARES
-------------------------------------------------------------------------- ---------
<S> <C>
J.C. Bradford & Co. ......................................................
Stephens Inc. ............................................................

---------
Total........................................................... 2,500,000
=========
</TABLE>

In the Underwriting Agreement, the Underwriters have agreed, subject to the
terms and conditions therein set forth, to purchase all shares of Common Stock
offered hereby if any of such shares are purchased.

The Company and the Selling Stockholders have been advised by the
Representatives that the Underwriters propose initially to offer the shares of
Common Stock to the public at the public offering price set forth on the cover
page of this Prospectus and to certain dealers at such price less a concession
not in excess of $ per share. The Underwriters may allow, and such
dealers may reallow, a concession not in excess of $ per share to
certain other dealers. After the initial public offering, the public offering
price and such concessions may be changed.

The offering of the shares of Common Stock is made for delivery when, as
and if accepted by the Underwriters and subject to prior sale and to withdrawal,
cancellation or modification of the offer without notice. The Underwriters
reserve the right to reject any order for the purchase of the shares.

The Company has granted to the Underwriters an option, exercisable not
later than 30 days after the date of the effectiveness of the Offering, to
purchase up to 375,000 shares of Common Stock to cover over-allotments, if any.
To the extent the Underwriters exercise this option, each of the Underwriters
will have a firm commitment to purchase approximately the same percentage
thereof which the number of shares of Common Stock to be purchased by it shown
in the table above bears to the total number of shares in such table, and the
Company will be obligated, pursuant to the option, to sell such shares to the
Underwriters. The Underwriters may exercise such option only to cover
over-allotments made in connection with the sale of the shares of Common Stock
offered hereby. If purchased, the Underwriters may sell these additional shares
on the same terms as those on which the 2,500,000 shares are being offered.

The Company, its directors and executive officers and the Selling
Stockholders have agreed not to offer, sell, or otherwise dispose of any shares
of the Common Stock owned by them prior to the expiration of 120 days from the
date of this Prospectus without the prior written consent of the
Representatives.

The Underwriting Agreement provides that the Company and the Selling
Stockholders will indemnify the Underwriters and controlling persons, if any,
against certain liabilities, including liabilities under the Securities Act, or
will contribute to payments that the Underwriters or any such controlling
persons may be required to make in respect thereof.

27
<PAGE> 30

EXPERTS

The audited consolidated financial statements of the Company incorporated
by reference herein and elsewhere in the Registration Statement, to the extent
and for the periods indicated in their report, have been audited by Arthur
Andersen LLP, independent public accountants, and are incorporated herein, in
reliance upon the authority of such firm as experts in giving said report.

LEGAL MATTERS

The validity of the Common Stock offered hereby will be passed upon for the
Company by Stokes & Bartholomew, P.A., Nashville, Tennessee. Certain legal
matters related to this offering hereby will be passed upon for the Underwriters
by Bass, Berry & Sims PLC, Nashville, Tennessee. Samuel W. Bartholomew, Jr., a
shareholder of Stokes & Bartholomew, P.A., is a director of the Company.

AVAILABLE INFORMATION

The Company has filed with the Commission a Registration Statement on Form
S-3 (together, with all amendments and exhibits thereto, the "Registration
Statement") under the Securities Act with respect to the Common Stock offered
hereby. This Prospectus constitutes a part of the Registration Statement and
does not contain all of the information set forth in the Registration Statement
and the exhibits and schedules thereto, certain portions of which have been
omitted in accordance with the rules and regulations of the Commission.
Statements contained in the Prospectus as to any contracts, agreements or other
documents filed as an exhibit to or incorporated by reference in the
Registration Statement are qualified in all respects to the copy of such
contract, agreement or other document filed as an exhibit to the Registration
Statement. Each statement is qualified in its entirety by such reference. For
further information with respect to the Company and the Common Stock offered
hereby, reference is made to the Registration Statement, including the exhibits
and schedules thereto.

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
Commission. Copies of the Registration Statement (with exhibits), as well as
such reports, proxy statements and other information filed by the Company with
the Commission, may be inspected and copied at public reference facilities
maintained by the Commission at Judiciary Plaza, Room 1024, 450 Fifth Street,
N.W., Washington, D.C. 20549, and at the following regional offices of the
Commission: 500 West Madison Street, Suite 1400, Chicago, Illinois 60661; and
Seven World Trade Center, New York, New York 10048. Copies of such material may
be obtained at prescribed rates from the Public Reference Section of the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549.

The Common Stock and the Warrants are listed on the NYSE and the
aforementioned material concerning the Company also may be inspected at the
offices of the NYSE, 20 Broad Street, New York, New York 10005. The Company's
principal offices are located at 102 Woodmont Blvd., Suite 800, Nashville,
Tennessee 37205, and its telephone number is (615) 292-3100.

28
<PAGE> 31

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The following documents previously filed by the Company with the Commission
pursuant to the Exchange Act are incorporated and made a part of this Prospectus
by reference, except as superseded or modified herein:

(1) The Company's Annual Report on Form 10-K for the year ended
December 31, 1995; and

(2) The description of the Common Stock and the Warrants contained in
the Registration Statement on Form 8-A dated December 15, 1994; and

All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the offering contemplated hereby shall be deemed to be
incorporated by reference into this Prospectus and to be a part hereof from the
date of filing of such documents. Any statement contained herein or in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any subsequently filed documents
which also is or is deemed to be incorporated by reference herein modifies or
supersedes such earlier statement. Any statement so modified or superseded shall
not be deemed, except as so modified or superseded, to constitute a part of this
Prospectus.

The Company undertakes to provide without charge to each person, including
any beneficial owner, to whom a copy of this Prospectus has been delivered, on
the written or oral request of any such person, a copy of any or all of the
documents referred to above which have been or may be incorporated by reference
in the Prospectus, other than exhibits to such documents (unless such exhibits
are specifically incorporated by reference in such documents). Requests for such
copies should be directed to Darrell K. Massengale, Corrections Corporation of
America, 102 Woodmont Boulevard, Suite 800, Nashville, Tennessee 37205,
telephone number (615) 292-3100.

29
<PAGE> 32

[THIS PAGE INTENTIONALLY LEFT BLANK]

<PAGE> 33

(photo of Company (photo of Company
counselor and inmate) counselor and inmate)

Education, life skills training
and substance abuse counseling
are integral components of
CCA facility programs
(caption)

Company ownership by employees
is a benefit and an incentive
(photo of several to keep quality and efficiency
Company corrections officers) in CCA's operations
(caption)

(photo of outside view
of a Company facility)

<PAGE> 34

------------------------------------------------------
------------------------------------------------------

NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS IN
CONNECTION WITH THE OFFER CONTAINED HEREIN, AND, IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED
BY THE COMPANY, THE SELLING STOCKHOLDERS OR ANY UNDERWRITER. THIS PROSPECTUS
DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO BUY THE
SHARES OF COMMON STOCK OFFERED HEREBY BY ANYONE IN ANY JURISDICTION IN WHICH
SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED, OR IN WHICH THE PERSON MAKING SUCH
OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO, OR TO ANY PERSON TO WHOM IT IS
UNLAWFUL TO MAKE SUCH SOLICITATION OR OFFER. NEITHER THE DELIVERY OF THIS
PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE
ANY IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF THE COMPANY
SINCE THE DATE HEREOF OR THAT THE INFORMATION CONTAINED HEREIN IS CORRECT AS OF
ANY TIME SUBSEQUENT TO THE DATE HEREOF.

------------------------

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Prospectus Summary.................... 3
Risk Factors.......................... 7
Use of Proceeds....................... 10
Capitalization........................ 11
Price Range of Common Stock and
Dividend Policy..................... 12
Business.............................. 13
Management............................ 20
Principal and Selling Stockholders.... 22
Description of Securities............. 24
Underwriting.......................... 27
Experts............................... 28
Legal Matters......................... 28
Available Information................. 28
Incorporation of Certain Documents by
Reference........................... 29
</TABLE>

2,500,000 SHARES

[CORRECTIONS CORPORATION OF AMERICA LOGO]

COMMON STOCK
--------------------
PROSPECTUS
--------------------
J.C. Bradford & Co.

Stephens Inc.
, 1996

------------------------------------------------------
------------------------------------------------------
<PAGE> 35

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.

<TABLE>
<S> <C>
SEC Registration Fee...................................................... $ 58,120
NASD Fee.................................................................. 17,355
NYSE Listing Fee.......................................................... 6,563
Accounting Fees and Expenses.............................................. 50,000*
Legal Fees and Expenses................................................... 175,000*
Printing and Engraving Expenses........................................... 200,000*
Blue Sky Fees and Expenses................................................ 10,000*
Miscellaneous Expenses.................................................... 32,962*
----------
--
Total........................................................... $550,000*
============
</TABLE>

- ---------------
* Estimated.

ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.

Under Section 145 of the Delaware General Corporation Law, a corporation
may indemnify any of its directors and officers against expenses (including
attorneys' fees), judgments, fines and amounts paid in settlement actually and
reasonably incurred by such person in connection with a threatened, pending or
completed action, suit or proceeding brought against him by reason of the fact
that he is or was a director or officer (i) if any such person acted in good
faith and in a manner reasonably believed to be in or not opposed to the best
interests of the corporation and (ii) in connection with any criminal action or
proceeding if such person had no reasonable cause to believe such conduct was
unlawful. In actions brought by or in the right of the corporation, however,
Section 145 provides that no indemnification may be made in respect of any
claim, issue or matter as to which such person shall have been adjudged to be
liable for negligence or misconduct in the performance of such person's duty to
the corporation unless, and only to the extent that, the Court of Chancery of
the State of Delaware or the court in which such action or suit was brought
shall determine upon application that, despite the adjudication of liability but
in review of all the circumstances of the case, such person is fairly and
reasonably entitled to indemnity for such expenses which the Court of Chancery
or such other court shall deem proper.

Article VIII of the Company's Certificate of Incorporation relieves its
directors from monetary damages to the Company or to stockholders for breach of
any such director's fiduciary duty as a director to the fullest extent permitted
by the Delaware General Corporation Law. Under Section 102(b)(7) of the Delaware
General Corporation Law, a corporation may relieve its directors from personal
liability to such corporation or its stockholders for monetary damages for any
breach of their fiduciary duty as directors except (i) for a breach of the duty
of loyalty, (ii) for failure to act in good faith, (iii) for intentional
misconduct or knowing violation of law, (iv) for willful or negligent violations
of certain provisions of the Delaware General Corporation Law imposing certain
requirements with respect to stock repurchases, redemptions and dividends or (v)
for any transaction from which the director derived an improper personal
benefit.

Reference is also made to Section 9 of the Underwriting Agreement contained
in Exhibit 1 hereto, which provides for indemnification of the Company and
officers, directors and certain controlling persons of the Company by the
Underwriters against certain liabilities.

The Company currently has in effect an executive liability insurance policy
which provides coverage for its directors and officers in amounts of $10 million
per claim and $10 million for annual aggregate claims. The policy covers any
error, misstatement, act or omission, or breach of duty committed by a director
or officer, subject to certain specified exclusions.

II-1
<PAGE> 36

ITEM 16. EXHIBITS.

The following exhibits are filed as part of the Registration Statement:

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------ ------------------------------------------------------------------------------------
<C> <S>
1 Form of Underwriting Agreement.
4.1 Certificate of Incorporation of Registrant (incorporated by reference to Exhibit 3.1
to the Registration Statement on Form S-1 (Registration No. 33-8052)).
4.2 Amendment to Certificate of Incorporation dated May 26, 1995 (incorporated by
reference to Exhibit 3(d) to the Company's Annual Report on Form 10-K with respect
to the year ended December 31, 1995).
4.3 Amended and Restated Bylaws of Registrant (incorporated by reference to Exhibit 3.2
to the Registration Statement on Form S-8 (Registration No. 33-12503)).
4.4 Specimen Common Stock certificate (incorporated by reference to Exhibit 4.1 to the
Registration Statement on Form S-1 (Registration No. 33-8052)).
5 Opinion of Stokes & Bartholomew, P.A.*
23.1 Consent of Arthur Andersen LLP.*
23.2 Consent of Counsel (included in opinion filed as Exhibit 5).
24 Power of Attorney (included on page II-3).
99.1 Consent of R. Clayton McWhorter, Director Nominee.*
99.2 Consent of Joseph F. Johnson, Director Nominee.*
</TABLE>

- ---------------

* Previously Filed

ITEM 17. UNDERTAKINGS.

The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or 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
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.

Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions described under Item 15 above, 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 hereunder, 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.

II-2
<PAGE> 37

SIGNATURES

Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements of 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 Nashville, Tennessee on May 9, 1996.

CORRECTIONS CORPORATION OF AMERICA

By: /s/ DOCTOR R. CRANTS
------------------------------------
Doctor R. Crants
Chairman of the Board and
Chief Executive Officer

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------------------ ----------------------------------- ---------------
<C> <S> <C>
/s/ DOCTOR R. CRANTS Chairman of the Board and Chief May 9, 1996
- ------------------------------------------ Executive Officer, Director
Doctor R. Crants (Principal Executive Officer)

/s/ DARRELL K. MASSENGALE Vice President, Finance, Chief May 9, 1996
- ------------------------------------------ Financial Officer, Secretary and
Darrell K. Massengale Treasurer (Principal Financial and
Accounting Officer)

* Chairman Emeritus and Director May 9, 1996
- ------------------------------------------
Thomas W. Beasley

* Vice-Chairman of the Board and May 9, 1996
- ------------------------------------------ Director
T. Don Hutto

* Director May 9, 1996
- ------------------------------------------
William F. Andrews

* Director May 9, 1996
- ------------------------------------------
Richard H. Fulton

* Director May 9, 1996
- ------------------------------------------
Samuel W. Bartholomew, Jr.

* Director May 9, 1996
- ------------------------------------------
Jean-Pierre Cuny

*By: /s/ DARRELL K. MASSENGALE
- ------------------------------------------
Darrell K. Massengale
Attorney-in-fact
</TABLE>

II-3
<PAGE> 38

INDEX TO EXHIBITS

- ---------------

* Previously Filed

<PAGE> 1

CORRECTIONS CORPORATION OF AMERICA

2,500,000 SHARES
OF
COMMON STOCK

UNDERWRITING AGREEMENT

__________________, 1996

J.C. BRADFORD & CO.
STEPHENS INC.
As Representatives of the Several Underwriters
c/o J.C. Bradford & Co.
J.C. Bradford Financial Center
330 Commerce Street
Nashville, Tennessee 37201

Ladies and Gentlemen:

Corrections Corporation of America, a Delaware corporation (the
"Company"), and certain stockholders of the Company as set forth on Schedule II
hereto (the "Selling Stockholders") propose to sell to the underwriters named
in Schedule I hereto (the "Underwriters") for whom you are acting as the
representatives (the "Representatives") 1,500,000 and 1,000,000 shares,
respectively (collectively the "Firm Shares"), of common stock, $1.00 par value
(the "Common Stock"), of the Company. Such shares of Common Stock are to be
sold to the Underwriters, acting severally and not jointly, in such amounts as
are set forth in Schedule I hereto opposite the name of such Underwriter. The
Company proposes to grant to the Underwriters an option to purchase up to
375,000 additional shares of Common Stock as provided for in Section 3 of this
Agreement for the purpose of covering over-allotments (the "Option Shares").
The Firm Shares and the Option Shares purchased pursuant to this Agreement are
herein called the "Shares."

1. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company
represents and warrants to, and agrees with, each of the Underwriters that:

(a) The Company meets the requirements for use of, and has
filed with the Securities and Exchange Commission (the "Commission") under
the Securities Act of

<PAGE> 2

1933, as amended (the "Securities Act"), a registration statement on Form
S-3 (Registration No. 333-______), including the related preliminary
prospectus relating to the Shares, and has filed one or more amendments
thereto. Copies of such registration statement and any amendments,
including any post-effective amendments, and all forms of the related
prospectuses contained therein and any supplements thereto, have been
delivered to you. Such registration statement, including the prospectus,
Part II, the information incorporated by reference, all financial
schedules and exhibits thereto, and all information deemed to be a part of
such Registration Statement pursuant to Rule 430A under the Securities
Act, as amended at the time when it shall become effective, is herein
referred to as the "Registration Statement," and the prospectus included
as part of the Registration Statement on file with the Commission that
discloses all the information that was omitted from the prospectus on the
effective date pursuant to Rule 430A of the Rules and Regulations (as
defined below) and in the form filed pursuant to Rule 424(b) under the
Securities Act is herein referred to as the "Final Prospectus." The
prospectus included as part of the Registration Statement on the date when
the Registration Statement became effective is referred to herein as the
"Effective Prospectus." Any prospectus included in the Registration
Statement and in any amendment thereto prior to the effective date of the
Registration Statement is referred to herein as a "Preliminary
Prospectus." For purposes of this Agreement, "Rules and Regulations" mean
the rules and regulations promulgated by the Commission under either the
Securities Act or the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), as applicable.

(b) The Commission has not issued any order preventing or
suspending the use of any Preliminary Prospectus, and each Preliminary
Prospectus, at the time of filing thereof, complied with the requirements
of the Securities Act and the Rules and Regulations, and did not include
any untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading; except that the foregoing does not apply to statements or
omissions made in reliance upon and in conformity with written information
furnished to the Company by any Underwriter specifically for use therein
(it being understood that the only information so provided is the
information included in the last paragraph on the cover page and in the
first and third paragraphs under the caption "Underwriting" in the
Preliminary, Effective and Final Prospectus). When the Registration
Statement becomes effective and at all times subsequent thereto up to and
including the First Closing Date (as hereinafter defined), (i) the
Registration Statement, the Effective Prospectus and Final Prospectus and
any amendments or supplements thereto will contain all statements which
are required to be stated therein in accordance with the Securities Act
and the Rules and Regulations and will comply with the requirements of the
Securities Act and the Rules and Regulations, and (ii) neither the
Registration Statement, the Effective Prospectus nor the Final Prospectus
nor any amendment or supplement thereto will include any untrue statement
of a material fact or omit to state any material fact required to be
stated therein or necessary to make the statements therein, in light of
the circumstances in which they are made, not misleading;

<PAGE> 3
except that the foregoing does not apply to statements or omissions made
in reliance upon and in conformity with written information furnished to
the Company by any Underwriter specifically for use therein (it being
understood that the only information so provided is the information
included in the last paragraph on the cover page and in the first and
third paragraphs under the caption "Underwriting" in the Final
Prospectus).

(c) The documents which are incorporated by reference in any
Preliminary, Effective and Final Prospectus or from which information is
so incorporated by reference, when they become effective or were filed
with the Commission, as the case may be, complied in all material respects
with the requirements of the Securities Act or the Exchange Act, as
applicable, and the Rules and Regulations, and any documents so filed
prior to the termination of this offering and incorporated by reference
subsequent to the effective date of the Registration Statement shall, when
they are filed with the Commission, conform in all material respects with
the requirements of the Securities Act and the Exchange Act, as
applicable, and the Rules and Regulations.

(d) Each of the Company and each subsidiary of the Company
(as used herein, the term "subsidiary" includes any corporation, joint
venture or partnership in which the Company or any subsidiary of the
Company has a direct or indirect ownership interest) is duly incorporated
and validly existing and in good standing under the laws of the
jurisdiction of its incorporation or organization with full power and
authority to own its properties and conduct business as now conducted and
is duly qualified or authorized to do business and is in good standing in
all jurisdictions wherein the nature of its business or the character of
property owned or leased may require it to be qualified or authorized to
do business. Each of the Company and its subsidiaries hold all licenses,
consents and approvals, and has satisfied all eligibility and other
similar requirements imposed by federal and state regulatory bodies,
administrative agencies or other governmental bodies, agencies or
officials, in each case as required for the conduct of the business in
which it is engaged and is contemplated to be engaged in the Effective
Prospectus and the Final Prospectus.

(e) The outstanding capital stock of each of the Company's
corporate subsidiaries has been duly authorized and validly issued and is
fully paid and nonassessable. Except as set forth on Exhibit 1(e) hereto,
(i) the Company owns all of the outstanding shares of capital stock of the
Company's corporate subsidiaries, free and clear of all liens, claims,
encumbrances, security interests, restrictions, stockholder agreements,
voting trusts or other claims of third parties, (ii) the Company has no
other subsidiaries and is not a partner or joint venturer in any
partnership or joint venture, (iii) the Company's subsidiaries do not have
outstanding any option to purchase, or any rights or warrants to subscribe
for, or any securities or obligations convertible into, or any contracts
or commitments to issue or sell any shares of capital stock or an
ownership interest of such subsidiary, and (iv) there are no preemptive
rights or other rights to subscribe for or

<PAGE> 4

purchase any shares of the capital stock or an ownership interest of the
Company's subsidiaries.

(f) The capitalization of the Company as of December 31, 1995
is as set forth under the caption "Capitalization" in the Effective
Prospectus and the Final Prospectus, and the Company's capital stock
conforms to the description thereof contained under the caption
"Description of Securities" in the Effective Prospectus and the Final
Prospectus. All the issued shares of capital stock of the Company have
been duly authorized and validly issued, are fully paid and nonassessable.
None of the issued shares of capital stock of the Company have been issued
in violation of any preemptive or similar rights. The Shares to be sold
by the Company hereunder have been duly and validly authorized and, upon
issuance and delivery and payment therefor in the manner herein described,
will be validly issued, fully paid and nonassessable. Except as set forth
in the Effective Prospectus and the Final Prospectus, (i) the Company does
not have outstanding any options to purchase, or any rights or warrants to
subscribe for, or any securities or obligations convertible into, or any
contracts or commitments to issue or sell, any shares of Common Stock and
(ii) there are no preemptive rights or other rights to subscribe for or to
purchase, or any restriction upon the transfer of, any shares of Common
Stock pursuant to the Company's certificate of incorporation, bylaws or
any agreement or other instrument to which the Company is a party or by
which it may be bound. Neither the filing of the Registration Statement
nor the offer or sale of the Shares as contemplated by this Agreement
gives rise to any rights, other than those which have been waived or
satisfied, for or relating to the registration of any shares of Common
Stock or any other securities of the Company. The Underwriters will
receive good and marketable title to the Shares to be issued and delivered
hereunder, free and clear of all liens, encumbrances, claims, security
interests, restrictions, stockholders' agreements and voting trusts
whatsoever.

(g) All offers and sales by the Company of the Company's
securities prior to the date hereof were at all relevant times duly
registered or the subject of an available exemption from the registration
requirements of the Securities Act, and were duly registered or the
subject of an available exemption from the registration requirements of
the applicable state securities or Blue Sky laws.

(h) The Company has full legal right, power and authority to
enter into this Agreement and to sell and deliver the Shares to be sold by
it to the Underwriters as provided herein, and this Agreement has been
duly authorized, executed and delivered by the Company and constitutes a
valid and binding agreement of the Company enforceable against the Company
in accordance with its terms. No consent, approval, authorization or
order of any court or governmental agency or body or third party is
required for the performance of this Agreement by the Company or the
consummation by the Company of the transactions contemplated hereby,
except such as have been obtained and such as may be required by the
National Association of Securities Dealers, Inc. ("NASD") or under the

4
<PAGE> 5
Securities Act or state securities or Blue Sky laws in connection with the
purchase and distribution of the Shares by the Underwriters. The issue
and sale of the Shares by the Company, the Company's performance of this
Agreement and the consummation of the transactions contemplated hereby
will not result in a breach or violation of, or conflict with, any of the
terms and provisions of, or constitute a default by the Company or any of
its subsidiaries under, any indenture, mortgage, deed of trust, loan
agreement, lease or other agreement or instrument to which the Company or
any of its subsidiaries is a party or to which the Company or any of its
subsidiaries or any of their respective properties is subject, the
certificate of incorporation, bylaws or other governing instruments of the
Company or any of its subsidiaries or any statute or any judgment, decree,
order, rule or regulation of any court or governmental agency or body
applicable to the Company or any of its subsidiaries or any of their
respective properties. Neither the Company nor any of its subsidiaries is
in violation of its certificate of incorporation, bylaws or other
governing instruments or any law, administrative rule or regulation or
arbitrators' or administrative or court decree, judgment or order or in
violation or default (there being no existing state of facts which with
notice or lapse of time or both would constitute a default) in the
performance or observance of any material obligation, agreement, covenant
or condition contained in any contract, indenture, deed of trust,
mortgage, loan agreement, note, lease, agreement or other instrument or
permit to which it is a party or by which it or any of its properties is
or may be bound.

(i) The consolidated financial statements and the related
notes of the Company, included or incorporated by reference in the
Registration Statement, the Effective Prospectus and the Final Prospectus
present fairly the financial position, results of operations and changes
in financial position and cash flow of the Company at the dates and for
the periods to which they relate and have been prepared in accordance with
generally accepted accounting principles applied on a consistent basis
throughout the periods indicated, except as otherwise set forth in such
financial statements or the related notes. The other financial statements
and schedules included or incorporated by reference in the Registration
Statement conform to the requirements of the Securities Act and the Rules
and Regulations and present fairly the information presented therein for
the periods shown. The financial and statistical data set forth in the
Effective Prospectus and the Final Prospectus under the captions
"Prospectus Summary," "Use of Proceeds," "Capitalization," "Business" and
"Principal and Selling Stockholders" fairly presents the information set
forth therein on the basis stated in the Effective Prospectus and the
Final Prospectus. Arthur Andersen LLP, whose reports are incorporated by
reference in the Effective Prospectus and the Final Prospectus, are
independent accountants as required by the Securities Act and the Rules
and Regulations.

(j) Subsequent to December 31, 1995, neither the Company nor
any of its subsidiaries has sustained any material loss or interference
with its business or properties from fire, flood, hurricane, accident or
other calamity, whether or not covered by insurance, or from any labor
dispute or court or governmental action, order or decree,

5
<PAGE> 6

which is not disclosed in the Effective Prospectus and the Final
Prospectus; and subsequent to the respective dates as of which information
is given in the Registration Statement, the Effective Prospectus and the
Final Prospectus, (i) neither the Company nor any of its subsidiaries has
incurred any material liabilities or obligations, direct or contingent, or
entered into any transactions not in the ordinary course of business, and
(ii) there has not been any change in the capital stock, long-term debt,
obligations under capital leases or short-term borrowings of the Company
and its subsidiaries, or any issuance of options, warrants or rights to
purchase interests or the capital stock of the Company or its
subsidiaries, or any adverse change, or any development involving a
prospective adverse change, in the general affairs, management, business,
prospects, financial position, net worth or results of operations of the
Company or any of its subsidiaries, except in each case as described in
the Effective Prospectus and the Final Prospectus.

(k) Except as described in the Effective Prospectus and the
Final Prospectus, there is not pending, or to the knowledge of the Company
threatened, any legal or governmental action, suit, proceeding, inquiry or
investigation, to which the Company, any of its subsidiaries or any of
their officers or directors is a party, or to which the property of the
Company or any of its subsidiaries is subject, before or brought by any
court or governmental agency or body, wherein an unfavorable decision,
ruling or finding could prevent or materially hinder the consummation of
this Agreement or result in a material adverse change in the business
condition (financial or other), prospects, financial position, net worth
or results of operations of the Company or any of its subsidiaries.

(l) There are no contracts or other documents required by the
Securities Act or by the Rules and Regulations to be described in the
Registration Statement, the Effective Prospectus or the Final Prospectus
or to be filed as exhibits to the Registration Statement which have not
been described, incorporated by reference or filed as required. All such
contracts to which the Company or any of its subsidiaries is a party have
been duly authorized, executed and delivered by the Company or such
subsidiary, constitute valid and binding agreements of the Company or such
subsidiary and are enforceable against the Company or such subsidiary in
accordance with the terms thereof. The Company or such subsidiary has
performed all its obligations required to be performed by it, and is
neither in default nor has it received notice of any default or dispute
under, any such contract or other material instrument to which it is a
party or by which its property is bound or affected. To the best
knowledge of the Company, no other party under any such contract or other
material instrument to which it is a party is in default in any material
respect thereunder.

(m) Except as described in the Effective Prospectus and the
Final Prospectus, the Company and each of its subsidiaries has good and
marketable title to all real and material personal property owned by it,
free and clear of all liens, charges, encumbrances or defects, except
those reflected in the financial statements hereinabove described. The
real and personal property and buildings referred to in the Effective
Prospectus and the

6
<PAGE> 7

Final Prospectus which are leased from others by the Company or its
subsidiaries are held under valid, subsisting enforceable leases. The
Company or its subsidiaries owns or leases all such properties as are
necessary to their respective operations as now conducted.

(n) The Company's system of internal accounting controls is
sufficient to meet the broad objectives of internal accounting control
insofar as those objectives pertain to the prevention or detection of
errors or irregularities in amounts that would be material in relation to
the Company's financial statements.

(o) The Company and each of its subsidiaries has filed all
foreign, federal, state and local income and franchise tax returns
required to be filed through the date hereof and has paid all taxes shown
as due therefrom to the extent such taxes have become due and are not
being contested in good faith; and there is no tax deficiency that has
been, nor does the Company have knowledge of any tax deficiency which is
likely to be, asserted against the Company or any of its subsidiaries,
which if determined adversely could materially and adversely affect the
earnings, assets, affairs, business prospects or condition (financial or
other) of the Company or any of its subsidiaries.

(p) The Company and each of its subsidiaries operates its
business in conformity with all applicable statutes, common laws,
ordinances, decrees, orders, rules and regulations of governmental bodies.
The Company and each of its subsidiaries has all licenses, approvals or
consents to operate its businesses in all locations in which such
businesses are currently being operated, and the Company is not aware of
any existing or imminent matter which may materially adversely impact its
or any of its subsidiaries' operations or business prospects other than as
specifically disclosed in the Effective Prospectus and the Final
Prospectus.

(q) Neither the Company nor any of its subsidiaries has
failed to file with the applicable regulatory authorities any statements,
reports, information or forms required by all applicable laws, regulations
or orders; all such filings or submissions were in compliance with
applicable laws when filed, and no deficiencies have been asserted by any
regulatory commission, agency or authority with respect to such filings or
submissions. Neither the Company nor any of its subsidiaries has failed
to maintain in full force and effect any licenses, registrations or
permits necessary or proper for the conduct of its respective businesses,
or received any notification that any revocation or limitation thereof is
threatened or pending, and there is not to the knowledge of the Company
pending any change under any law, regulation, license or permit which
could materially adversely affect the business, operations, property or
business prospects of the Company. Neither the Company nor any of its
subsidiaries has received any notice of violation of or been threatened
with a charge of violating and is not under investigation with respect to
a possible violation of any provision of any law, regulation or order.

7
<PAGE> 8

(r) No labor dispute exists or is imminent with any of the
employees of the Company or any of its subsidiaries or otherwise which
could materially adversely affect the Company or any of its subsidiaries.
The Company is not aware of any existing or imminent labor disturbance by
employees of the Company or any of its subsidiaries which could be
expected to materially adversely effect the condition (financial or
otherwise), results of operations, properties, affairs, management,
business affairs or business prospects of the Company or any of its
subsidiaries.

(s) The Company and each of its subsidiaries owns the
licenses, copyrights, trademarks, service marks and trade names presently
employed by it in connection with the businesses now operated by it, and
neither the Company nor any of its subsidiaries has received any notice of
infringement of or conflict with asserted rights of others with respect to
any of the foregoing which, alone or in the aggregate, if the subject of
an unfavorable decision, ruling or finding, could result in any material
adverse change in the condition, financial or otherwise, or in the
earnings, business affairs or business prospects of the Company or any of
its subsidiaries.

(t) The Company and each of its subsidiaries is insured by
insurers of recognized financial responsibility against such losses and
risks and in such amounts as are prudent and customary in the businesses
in which it is engaged; and neither the Company nor any of its
subsidiaries has any reason to believe that it will not be able to renew
its existing insurance coverage as and when such coverage expires or to
obtain similar coverage from similar insurers as may be necessary to
continue its business at a comparable cost.

(u) Neither the Company nor any of its subsidiaries is in
violation of any federal, state, local or foreign law or regulation
relating to occupational safety and health or to the storage, handling or
transportation of hazardous or toxic materials and the Company and each of
its subsidiaries has received all permits, licenses or other approvals
required of it under applicable federal, state and foreign occupational
safety and health and environmental laws and regulations to conduct its
respective businesses, and the Company and each of its subsidiaries is in
compliance with all terms and conditions of any such permit, license or
approval, except any such violation of law or regulation, failure to
receive required permits, licenses or other approvals or failure to comply
with the terms and conditions of such permits, licenses or approvals which
would not result in a material adverse change in the condition, financial
or otherwise, or in the earnings, business affairs or prospects of the
Company or any of its subsidiaries.

(v) Neither the Company or any of its subsidiaries nor, to
the knowledge of the Company, any director, officer, agent, employee or
other person acting on behalf of the Company or any of its subsidiaries
has (i) used, or authorized the use of, any corporate or other funds for
unlawful payments, contributions, gifts or entertainment (ii) made
unlawful expenditures relating to political activity to government
officials or others, or (iii)

8
<PAGE> 9

established or maintained any unlawful or unrecorded funds in violation of
any federal, state, local or foreign law or regulation, including Section
30A of the Exchange Act. Neither the Company or any of its subsidiaries
nor, to the knowledge of the Company, any director, officer, agent,
employee or other person acting on behalf of the Company or any of its
subsidiaries has accepted or received any unlawful contributions,
payments, gifts or expenditures.

(w) Except where such failures to comply or violations would
not in the aggregate have a material adverse effect on the Company or any
of its subsidiaries, the Company and each of its subsidiaries has complied
with the Immigration Reform and Control Act of 1986 and all regulations
promulgated thereunder ("IRCA") with respect to (i) the completion and
maintenance of Forms 1-9, Employment Eligibility Verification Forms, for
all of its current employees and reverification of the employment status
of any and all employees whose employment authorization documents
indicated a limited period of employment authorization; (ii) with respect
to all former employees who left the Company's or any of its subsidiaries'
employment within three years prior to the date hereof, the Company and
each of its subsidiaries has complied with IRCA with respect to the
maintenance of Forms 1-9 for at least three years or for one year beyond
the date of termination, whichever is later; (iii) the Company and each of
its subsidiaries has had no immigration violations and has employed only
individuals authorized to work in the United States and has never been the
subject of any inspection or investigation relating to its compliance with
or violation of IRCA; and (iv) it has not been warned, fined or otherwise
penalized by reason or any failure to comply with IRCA, and no such
proceeding is pending or threatened.

(x) The Company is not, will not become as a result of the
transactions contemplated hereby, and does not intend to conduct its
business in a manner that would cause it or any of its subsidiaries to
become, an "investment company" or a company "controlled" by an
"investment company" within the meaning of the Investment Company Act of
1940.

(y) Neither the Company or any of its subsidiaries nor any of
the directors, officers, employees or agents of the Company or any of its
subsidiaries have taken and will not take, directly or indirectly, any
action designed to cause or result in, or which has constituted or which
might be expected to constitute, stabilization or manipulation of the
price of the Common Stock.

(z) The Shares have been approved for listing on the New York
Stock Exchange (the "NYSE") upon notice of issuance.

2. REPRESENTATIONS AND WARRANTIES OF THE SELLING STOCKHOLDERS. Each
of the Selling Stockholders, severally and not jointly, represents and warrants
to, and agrees with, each of the Underwriters that:

9
<PAGE> 10

(a) Such Selling Stockholder at the First Closing Date or at
the Option Closing Date (as defined herein), as the case may be, will have
valid and marketable title to the Shares set forth in Schedule II to be
sold by such Selling Stockholder, free and clear of any liens,
encumbrances, equities and claims (other than as imposed by the Securities
Act or this Agreement), and full right, power and authority to effect the
sale and delivery of such Shares; and upon the delivery of and payment for
the Shares to be sold by such Selling Stockholder pursuant to this
Agreement, valid and marketable title thereto, free and clear of any
liens, encumbrances, equities and claims, will be transferred to the
Underwriters.

(b) Such Selling Stockholder has duly executed and delivered
the Custody Agreement and Power of Attorney in the form previously
delivered to the Representatives, appointing the persons named therein,
and each of them as each Selling Stockholder's attorney-in-fact (the
"Attorney-in-Fact") and as custodian (the "Custodian"). The
Attorney-in-Fact is authorized to execute, deliver and perform this
Agreement on behalf of such Selling Stockholder, to deliver the Shares to
be sold by such Selling Stockholder hereunder, to accept payment therefor
and otherwise to act on behalf of such Selling Stockholder in connection
with this Agreement. Certificates, in suitable form for transfer by
delivery or accompanied by duly executed instruments of transfer or
assignment in blank, representing the Shares to be sold by such Selling
Stockholder hereunder have been deposited with the Custodian pursuant to
the Custody Agreement and Power of Attorney for the purpose of delivery
pursuant to this Agreement. Such Selling Stockholder agrees that the
shares of Common Stock represented by the certificates on deposit with the
Custodian are subject to the interest of the Underwriters hereunder, that
the arrangements made for such custody and the appointment of the
Attorney-in-Fact are to that extent irrevocable, and that the obligations
of such Selling Stockholder hereunder shall not be terminated except as
provided in this Agreement and the Custody Agreement. If such Selling
Stockholder should die or become incapacitated or if any other event
should occur, before the delivery of the Shares of such Selling
Stockholder hereunder, the certificates for such Shares deposited with the
Custodian shall be delivered by the Custodian in accordance with the terms
and conditions of this Agreement as if such death, incapacity or other
event had not occurred, regardless of whether or not the Custodian or the
Attorney-in-Fact shall have received notice thereof.

(c) Such Selling Stockholder, acting through his duly
authorized Attorney-in-Fact, has duly executed and delivered this
Agreement and the Custody Agreement and Power of Attorney; this Agreement
constitutes a legal, valid and binding obligation of such Selling
Stockholder, all authorizations and consents necessary for the execution
and delivery of this Agreement and the Custody Agreement and Power of
Attorney on behalf of such Selling Stockholder and for the sale and
delivery of the Shares to be sold by such Selling Stockholder hereunder
has been given, except as may be required by the Securities Act or state
securities laws; and such Selling Stockholder has the legal capacity and
full right, power and authority to execute this Agreement and the Custody
Agreement and Power of Attorney.

<PAGE> 11

(d) The performance of this Agreement and the Custody
Agreement and Power of Attorney and the consummation of the transactions
contemplated hereby and thereby by each of the Selling Stockholders will
not result in a breach or violation of, or conflict with, any of the terms
or provisions of, or constitute a default by such Selling Stockholder
under, any indenture, mortgage, deed of trust, trust (constructive or
other), loan agreement, lease, franchise, license or other agreement or
instrument to which such Selling Stockholder or any of his or its
properties is bound, any statute, or any judgment, decree, order, rule or
regulation or any court or governmental agency or body applicable to such
Selling Stockholder or any of his or its properties.

(e) Such Selling Stockholder has not distributed nor will
distribute any prospectus or other offering material in connection with
the offer and sale of the Shares other than any Preliminary Prospectus
filed with the Commission or the Final Prospectus or other material
permitted by the Securities Act.

(f) To the knowledge of such Selling Stockholder, the
representations and warranties of the Company contained in Section 1 of
this Agreement are true and correct; such Selling Stockholder has reviewed
and is familiar with the Registration Statement as originally filed with
the Commission and the Preliminary Prospectus contained therein. To the
knowledge of such Selling Stockholder, the Preliminary Prospectus does not
include an untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading; such Selling
Stockholder is not prompted to sell the Shares to be sold by such Selling
Stockholder by any information concerning the Company that is not set
forth in the Preliminary Prospectus, the Effective Prospectus or the Final
Prospectus.

(g) At the time the Registration Statement becomes effective
(i) such parts of the Registration Statement and any amendments and
supplements thereto as specifically refer to such Selling Stockholder will
not contain an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the
statements therein not misleading and (ii) such parts of the Effective
Prospectus and Final Prospectus as specifically refer to such Selling
Stockholder will not include an untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
therein, in light of the circumstances under which they were made, not
misleading.

(h) No approval, consent, order, authorization, designation,
declaration or filing by or with any regulatory body, administrative or
other governmental body is necessary in connection with the execution and
delivery of this Agreement by such Selling Stockholder, and the
consummation by him of the transactions herein contemplated (other than as
required by the Securities Act, state securities laws and the NASD).

<PAGE> 12

(i) Any certificates signed by or on behalf of such Selling
Stockholder as such and delivered to the Representatives or to counsel for
the Representatives shall be deemed a representation and warranty by such
Selling Stockholder to each Underwriter as to the matters covered thereby.

(j) In order to document the Underwriters' compliance with
the reporting and withholding provisions of the Tax Equity and Fiscal
Responsibility Act of 1982 with respect to the transactions herein
contemplated, such Selling Stockholder agrees to deliver to you prior to
or at the First Closing Date (as hereinafter defined) a properly completed
and executed United States Treasury Department Form W-9 (or other
applicable form or statement specified by Treasury Department regulations
in lieu thereof).

(k) Such Selling Stockholder has not taken, and will not
take, directly or indirectly, any action designed to cause or result in,
or which might constitute or be expected to constitute, stabilization or
manipulation of the price of the Common Stock.

3. PURCHASE, SALE AND DELIVERY OF THE SHARES.

(a) On the basis of the representations, warranties,
agreements and covenants herein contained and subject to the terms and
conditions herein set forth, the Company and the Selling Stockholders, as
set forth on Schedule II hereto, agree to sell to the several
Underwriters, and each of the Underwriters, severally and not jointly,
agrees to purchase at a purchase price of $______ per share, the number of
Firm Shares set forth opposite such Underwriter's name in Schedule I
hereto.

(b) The Company hereby grants to the Underwriters an option
to purchase 375,000 additional shares of Common Stock, solely for the
purpose of covering over-allotments in the sale of Firm Shares, all or any
portion of the Option Shares at the purchase price per share set forth
above. The option granted hereby may be exercised as to all or any part of
the Option Shares at any time within 30 days after the date of the Final
Prospectus. The Underwriters shall not be under any obligation to
purchase any Option Shares prior to the exercise of such option. The
option granted hereby may be exercised by the Underwriters by J.C.
Bradford & Co. ("Bradford") giving written notice to the Company setting
forth the number of Option Shares to be purchased and the date and time
for delivery of and payment for such Option Shares and stating that the
Option Shares referred to therein are to be used for the purpose of
covering over-allotments in connection with the distribution and sale of
the Firm Shares. If such notice is given prior to the First Closing Date
(as defined herein), the date set forth therein for such delivery and
payment shall not be earlier than two full business days thereafter or the
First Closing Date, whichever occurs later. If such notice is given on or
after the First Closing Date, the date set forth therein for such delivery
and payment shall not be earlier than three full business days thereafter.
In either event, the date so set forth shall not be more than four full
business days after the date of such notice. The date and time set forth
in such notice is herein called the "Option

12
<PAGE> 13

Closing Date." Upon exercise of the option, the Company shall become
obligated to sell to the Underwriters, and, subject to the terms and
conditions herein set forth, the Underwriters shall become obligated to
purchase, for the account of each Underwriter, from the Company, severally
and not jointly, the number of Option Shares specified in such notice.
Option Shares shall be purchased for the accounts of the Underwriters in
proportion to the number of Firm Shares set forth opposite such
Underwriter's name in Schedule I hereto, except that the respective
purchase obligations of each Underwriter shall be adjusted so that no
Underwriter shall be obligated to purchase fractional Option Shares.

(c) Certificates in definitive form for the Firm Shares
which each Underwriter has agreed to purchase hereunder shall be delivered
by or on behalf of the Company and the Selling Stockholders to the
Underwriters for the account of such Underwriter against payment by such
Underwriter or on its behalf of the purchase price therefor by certified
or official bank check or checks in next day funds to the order of the
Company and the custodian for the Selling Stockholders, at the offices of
Bradford, 330 Commerce Street, Nashville, Tennessee 37201, or at such
other place as may be agreed upon by Bradford and the Company, at 10:00
A.M., Nashville time, on the third full business day after this Agreement
becomes effective, or, at the election of the Representatives, on the
fourth full business day after this Agreement becomes effective, if it
becomes effective after 4:30 P.M. Eastern time, or at such other time not
later than the seventh full business day thereafter as the Representatives
and the Company may determine, such time of delivery against payment being
herein referred to as the "First Closing Date." The First Closing Date and
the Option Closing Date are herein individually referred to as the
"Closing Date" and collectively referred to as the "Closing Dates."
Certificates in definitive form for the Option Shares which each
Underwriter shall have agreed to purchase hereunder shall be similarly
delivered by or on behalf of the Company on the Option Closing Date. The
certificates in definitive form for the Shares to be delivered will be in
good delivery form and in such denominations and registered in such names
as Bradford may request not less than 48 hours prior to the First Closing
Date or the Option Closing Date, as the case may be. Such certificates
will be made available for checking and packaging at a location in New
York, New York as may be designated by Bradford, at least 24 hours prior
to the First Closing Date or the Option Closing Date, as the case may be.
It is understood that Bradford may (but shall not be obligated to) make
payment on behalf of any Underwriter or Underwriters for the Shares to be
purchased by such Underwriter or Underwriters. No such payment shall
relieve such Underwriter or Underwriters from any of its or their
obligations hereunder.

4. OFFERING BY THE UNDERWRITERS. After the Registration Statement
becomes effective, the several Underwriters propose to offer for sale to
the public the Firm Shares and any Option Shares which may be sold at the
price and upon the terms set forth in the Final Prospectus.

5. COVENANTS OF THE COMPANY AND THE SELLING STOCKHOLDERS.

13
<PAGE> 14

(a) The Company covenants and agrees with each of the
Underwriters that:

(i) The Company shall comply with the provisions of
and make all requisite filings with the Commission pursuant to Rules 424
and 430A of the Rules and Regulations and shall notify the Representatives
promptly (in writing, if requested) of all such filings. The Company
shall notify the Representatives promptly of any request by the Commission
for any amendment of or supplement to the Registration Statement, the
Effective Prospectus or the Final Prospectus or for additional
information; the Company shall prepare and file with the Commission,
promptly upon the Representatives' request, any amendments of or
supplements to the Registration Statement, the Effective Prospectus or the
Final Prospectus which, in the Representatives' opinion, may be necessary
or advisable in connection with the distribution of the Shares; and the
Company shall not file any amendment of or supplement to the Registration
Statement, the Effective Prospectus or the Final Prospectus which is not
approved by the Representatives after reasonable notice thereof. The
Company shall advise the Representatives promptly of the issuance by the
Commission or any jurisdiction or other regulatory body of any stop order
or other order suspending the effectiveness of the Registration Statement,
suspending or preventing the use of any Preliminary Prospectus, the
Effective Prospectus or the Final Prospectus or suspending the
qualification of the Shares for offering or sale in any jurisdiction, or
of the institution of any proceedings for any such purpose; and the
Company shall use its best efforts to prevent the issuance of any stop
order or other such order and, should a stop order or other such order be
issued, to obtain as soon as possible the lifting thereof.

(ii) The Company will take or cause to be taken all
necessary action and furnish to whomever the Representatives direct such
information as may be reasonably required in qualifying the Shares for
offer and sale under the securities or Blue Sky laws of such jurisdictions
as the Underwriters may designate and will continue such qualifications in
effect for as long as may be reasonably necessary to complete the
distribution of the Shares.

(iii) Within the time during which a Final Prospectus
relating to the Shares is required to be delivered under the Securities
Act, the Company shall comply with all requirements imposed upon it by the
Securities Act, as now and hereafter amended, and by the Rules and
Regulations, as from time to time in force, so far as is necessary to
permit the continuance of sales of or dealings in the Shares as
contemplated by the provisions hereof and the Final Prospectus. If during
such period any event occurs as a result of which the Final Prospectus as
then amended or supplemented would include an untrue statement of a
material fact or omit to state a material fact necessary to make the
statements therein, in the light of the circumstances then existing, not
misleading, or if during such period it is necessary to amend the
Registration Statement or supplement the Final Prospectus to comply with
the Securities Act, the Company shall promptly notify the Representatives
and shall amend the Registration Statement or supplement the Final

14
<PAGE> 15

Prospectus (at the expense of the Company) so as to correct such
statement or omission or effect such compliance.

(iv) The Company will furnish without charge to the
Representatives and make available to the Underwriters copies of the
Registration Statement (four of which shall be signed and shall be
accompanied by all exhibits, including any which are incorporated by
reference, which have not previously been furnished), each Preliminary
Prospectus, the Effective Prospectus and the Final Prospectus, and all
amendments and supplements thereto, including any prospectus or
supplement prepared after the effective date of the Registration
Statement, in each case as soon as available and in such quantities as
the Underwriters may reasonably request.

(v) The Company will (A) deliver to the
Representatives at such office or offices as the Representatives may
designate as many copies of the Preliminary Prospectus and Final
Prospectus as the Representatives may reasonably request, and (B) for a
period of not more than nine months after the Registration Statement
becomes effective, send to the Underwriters as many additional copies of
the Final Prospectus and any supplement thereto as the Representatives may
reasonably request.

(vi) The Company shall make generally available to
its security holders, in the manner contemplated by Rule 158(b) under the
Securities Act as promptly as practicable and in any event no later than
45 days after the end of its fiscal quarter in which the first anniversary
of the effective date of the Registration Statement occurs, an earnings
statement satisfying the provisions of Section 11(a) of the Securities Act
covering a period of at least 12 consecutive months beginning after the
effective date of the Registration Statement.

(vii) The Company will apply the net proceeds from the
sale of the Shares to be sold by it as set forth under the caption "Use of
Proceeds" in the Final Prospectus.

(viii) During a period of five years from the effective
date of the Registration Statement or such longer period as the
Representatives may reasonably request, the Company will furnish to the
Representatives copies of all reports and other communications (financial
or other) furnished by the Company to its stockholders and, as soon as
available, copies of any reports or financial statements furnished or
filed by the Company to or with the Commission or any national securities
exchange on which any class of securities of the Company may be listed.

(ix) The Company will, from time to time, after the
effective date of the Registration Statement file with the Commission such
reports as are required by the Securities Act, the Exchange Act and the
Rules and Regulations, and shall also file with foreign, state and other
governmental securities commissions in jurisdictions where the

<PAGE> 16

Shares have been sold by the Underwriters (as the Representatives shall
have advised the Company in writing) such reports as are required to be
filed by the securities acts and the regulations of those states.

(x) Except pursuant to this Agreement or with the
Representatives' written consent, for a period of 120 days from the
effective date of the Registration Statement, the Company will not, and
the Company has provided agreements executed by each of its executive
officers, directors and the Selling Stockholders providing that for a
period of 120 days from the effective date of the Registration Statement,
such person or entity will not, offer for sale, sell (other than the
issuance by the Company of Common Stock pursuant to the exercise of
options granted pursuant to existing employee benefit plans and
agreements, other existing compensation agreements and existing stock
options or outstanding warrants or securities convertible into Common
Stock), grant any options (other than pursuant to existing employee
benefit plans and agreements), rights or warrants with respect to any
shares of Common Stock, securities convertible into Common Stock or any
other capital stock of the Company, or otherwise dispose of, directly or
indirectly, any shares of Common Stock or such other securities or capital
stock.

(xi) Neither the Company or any of its subsidiaries
nor any of their officers, directors or affiliates will take, directly or
indirectly, any action designed to cause or result in, or which might
constitute or be expected to constitute, stabilization or manipulation of
the price of the Common Stock.

(xii) The Company and each of its subsidiaries will
either conduct its business and operations as described in the Final
Prospectus or, if the Company or any of its subsidiaries makes any
material change to its business or operations as so conducted, promptly
disclose such change generally to the Company's securityholders.

(b) Each of the Selling Stockholders, severally and not
jointly, covenants and agrees with the Underwriters that:

(i) Such Selling Stockholder will not take, directly
or indirectly, any action designed to cause or result in, or which might
constitute or be expected to constitute, stabilization or manipulation of
the price of the Common Stock.

6. EXPENSES. The Company and each of the Selling Stockholders
agree with the Underwriters that (a) whether or not the transactions
contemplated by this Agreement are consummated or this agreement becomes
effective or is terminated, the Company will pay all fees and expenses incident
to the performance of the obligations of the Company and the Selling
Stockholders hereunder, including, but not limited to, (i) the Commission's
registration fee, (ii) the expenses of pringing (or reproduction) and
distributing the Registration Statement (including the Financial statements
therein and all amendments and exhibits thereto), each Preliminary Prospectus,
the Effective Prospectus, the Final Prospectus, any amendments or supplements

16
<PAGE> 17

thereto, any Marketing Marerials (as defined herein) and this Agreement and
other underwriting documents, including Underwriter's Questionnaires,
Underwriter's Powers of Attorney, Blue Sky Memoranda, Agreements Among
Underwriters and Selected Dealer Agreements, (iii) fees and expenses of
accountants and counsel for the Company, (iv) expenses of registration or
qualification of the Shares under state Blue Sky and securities laws, including
the fees and disbursements of counsel to the Underwrtiers in connection
therewith, (v) filing fees paid or incurred by the Underwriters in connection
with filings with the NASD, (vi) expenses of listing the Shares on the NYSE,
(vii) all travel, lodging and reasonable living expenses incurred by the Company
in connection with marketing, dealer and other meedings attended by the Company
and the Underwriters in marketing the Shares, (viii) the costs and charges of
the Company's transfer agent and resigtrar and the cost of preparing the
certificates for the Shares, and (ix) all other costs and expenses incident to
the performance of theri obligations hereunder not otherwise provided for in
this section; and (b) all out-of-pocket expenses, incluidng counsel fees,
disbursements and expenses, incurred by the Underwriters in conneciton with
investigating, preparing to market and marketing the Shares and proposing to
purchase and purchasing the Shares under this agreement, will be borne and paid
by the Company if the sale of the Shares provided for herein is not consummated
(i) by reason of the termination of this Agreement by the Company pursuant to
Section 14(a)(i) or (ii) by reason of the termination of this Agreement by the
Representatives pursuant to Section 14(b)(ii), (iii), (iv) or (v) of this
Agreement.

The provisions of this section shall not affect any agreement that
the Company and the Selling Stockholders may have for the sharing of such costs
and expenses; provided, however, the Underwriters may deem the Company to be the
primary obligor with respect to all costs, fees, and expenses to be paid by the
Company and the Selling Stockholders.

7. CONDITIONS OF THE UNDERWRITERS' OBLIGATIONS. The respective
obligations of the Underwriters to purchase and pay for the Firm Shares shall
be subject, in their discretion, to the accuracy of the representations and
warranties of the Company and the Selling Stockholders herein as of the date
hereof and as of the Closing Date as if made on and as of the Closing Date, to
the accuracy of the statements of the Company's Officers made pursuant to the
provisions hereof, to the performance by the Company and the Selling
Stockholders of all of their covenants and agreements hereunder and to the
following additional conditions:

(a) The Registration Statement and all post-effective
amendments thereto shall have become effective not later than 5:30 P.M.,
Washington, D.C. time, on the day following the date of this Agreement, or
such later time and date as shall have been consented to by the
Representatives and all filings required by Rule 424 and Rule 430A of the
Rules and Regulations shall have been made; no stop order suspending the
effectiveness of the Registration Statement shall have been issued and no
proceedings for that purpose shall have been instituted or threatened or,
to the knowledge of the Company or the Underwriters, shall be contemplated
by the Commission; any request of the Commission for additional
information (to be included in the Registration Statement or the Final
Prospectus or otherwise) shall have been complied with to the
Representative's

<PAGE> 18

satisfaction; and the NASD, upon review of the terms of the public
offering of the Shares, shall not have objected to such offering, such
terms or the Underwriters' participation in the same.

(b) No Underwriter shall have advised the Company that the
Registration Statement, Preliminary Prospectus, the Effective Prospectus
or Final Prospectus, or any amendment or any supplement thereto, contains
an untrue statement of fact which, in the Representatives' reasonable
judgment, is material, or omits to state a fact which, in the
Representatives' reasonable judgment, is material and is required to be
stated therein or necessary to make the statements therein not misleading
and the Company shall not have cured such untrue statement of fact or
stated a statement of fact required to be stated therein.

(c) The Representatives shall have received an opinion, dated
the Closing Date, from Stokes & Bartholomew, P.A., counsel for the
Company, to the effect that:

(i) The Company has been duly incorporated and is
validly existing as a corporation under the laws of the State of
Delaware, with corporate power and authority to own its properties
and conduct its business as now conducted, and is duly qualified to
do business as a foreign corporation in good standing in all other
jurisdictions where the failure to so qualify would have a material
adverse effect upon the Company and its subsidiaries. The Company
holds all licenses, certificates, permits, franchises and
authorizations from governmental authorities necessary for the
conduct of its business.

(ii) Each of the Company's subsidiaries is validly
existing and in good standing under the laws of the state or
jurisdiction of its incorporation or organization, as the case may
be, with power and authority to own its properties and conduct it
business as now conducted, and is duly qualified or authorized to
do business and is in good standing in all other jurisdictions
where the failure to so qualify would have a material adverse
effect upon the business of the Company and its subsidiaries. The
outstanding stock of each of the Company's corporate subsidiaries
is duly authorized, validly issued, fully paid and nonassessable.
Except as set forth in Exhibit 1(e) hereto, the Company owns all of
the outstanding stock of each of the Company's corporate
subsidiaries, free and clear of all liens, encumbrances, equities
and claims. The partnership and joint venture interests of each of
the partnerships and joint ventures in which the Company or any
subsidiary is a partner or joint venturer are duly authorized,
validly issued, fully paid and nonassessable and the partnership
and joint venture interests owned by the Company or a subsidiary
thereof are owned clear of any lien, encumbrance, pledge, equity or
claim of any kind. Except as set forth on Exhibit 1(e) hereto, the
Company's subsidiaries do not have outstanding any options to
purchase, or any rights or warrants to subscribe for, or any
securities or obligations convertible into,

<PAGE> 19

or any contracts or commitments to issue or sell any shares of
capital stock or an ownership interest of such subsidiary and there
are no preemptive rights or other rights to subscribe for or
purchase any shares of the capital stock or any ownership interest
of the Company's subsidiaries. Each of the Company's subsidiaries
holds all licenses, certificates, permits, franchises and
authorizations from governmental authorities necessary for the
conduct of its business.

(iii) As of the dates specified therein, the Company
had authorized and issued capital stock as set forth under the
caption "Capitalization" in the Final Prospectus. All of the
outstanding shares of Common Stock (including the shares to be sold
by the Selling Stockholders) have been duly authorized and are
validly issued, fully paid and nonassessable, and the Shares to be
sold by the Company have been duly authorized, and upon issuance
thereof and payment therefor as provided herein, will be validly
issued, fully paid and nonassessable; none of the issued shares have
been issued in violation of or subject to any preemptive rights
provided for by law, agreement or the Company's certificate of
incorporation. The Company does not have outstanding any options to
purchase, or any rights or warrants to subscribe for, or any
securities or obligations convertible into, or any contracts or
commitments to issue or sell any shares of capital stock, and there
are no preemptive rights or other rights to subscribe for or
purchase any shares of the capital stock of the Company, or any
restriction upon the transfer of, the Shares pursuant to the
Company's certificate of incorporation or bylaws or any agreement or
other instrument to which the Company is a party or by which it may
be bound, except as described in the Effective Prospectus and Final
Prospectus. Neither the filing of the Registration Statement nor the
offer or sale of the Shares as contemplated by this Agreement gives
rise to any rights, other than those which have been waived or
satisfied, for or relating to the registration of any shares of
Common Stock or any other securities of the Company. The
Underwriters will receive good and marketable title to the Shares to
be issued and delivered by the Company pursuant to this Agreement,
free and clear of all liens, encumbrances, claims, security
interests, restrictions, stockholders agreements and voting trusts
whatsoever. The capital stock of the Company and the Shares conform
to the description thereof contained in the Final Prospectus. All
offers and sales of the Company's interests and securities prior to
the date hereof were at all relevant times duly registered or exempt
from the registration requirements of the Securities Act and were
duly registered or the subject of an exemption from the registration
requirements of applicable state securities or Blue Sky laws.

(iv) No consent, approval, authorization or order of
any court or governmental agency or body or third party is required
for the performance of this Agreement by the Company or the
consummation by the Company of the transactions contemplated hereby,
except such as have been obtained under the Securities Act and such
as may be required by the NASD and under state securities

<PAGE> 20

or Blue Sky laws in connection with the purchase and distribution of
the Shares by the several Underwriters, as to which such counsel
need not express an opinion. The performance of this Agreement by
the Company and the consummation by the Company of the transactions
contemplated hereby will not conflict with or result in a breach or
violation by the Company of any of the terms or provisions of, or
constitute a default by the Company under, any material indenture,
mortgage, deed of trust, loan agreement, lease or other agreement or
instrument known to such counsel to which the Company or any of its
subsidiaries is a party or to which the Company or any of its
subsidiaries or their properties is subject, the certificate of
incorporation or bylaws of the Company or any of its subsidiaries,
any statute, or any judgment, decree, order, rule or regulation of
any court or governmental agency or body known to such counsel to be
applicable to the Company or any of their subsidiaries or their
properties.

(v) The Company has full legal right, power and
authority to enter into this Agreement and to issue, sell and
deliver the Shares to be sold by it to the Underwriters as provided
herein, and this Agreement has been duly authorized, executed and
delivered by the Company and constitutes the valid and legally
binding obligation of the Company enforceable against the Company in
accordance with its terms.

(vi) Except as described in the Final Prospectus,
there is not pending or, to the best knowledge of such counsel,
threatened any action, suit, proceeding, inquiry or investigation,
to which the Company or any of its subsidiaries is a party, or to
which the property of the Company or any of its subsidiaries is
subject, before or brought by any court or governmental agency or
body, which, if determined adversely to the Company or any of its
subsidiaries, could result in any material adverse change in the
business, financial position, net worth or results of operations, or
could materially adversely affect the properties or assets, of the
Company or any of its subsidiaries.

(vii) No default exists, and no event has occurred
which with notice or after the lapse of time to cure or both, would
constitute a default, in the due performance and observance of any
term, covenant or condition of any material indenture, mortgage,
deed of trust, loan agreement, lease or other agreement or
instrument known to such counsel to which the Company or any of its
subsidiaries is a party or to which its properties are subject, or
of the certificate of incorporation or bylaws of the Company or any
of its subsidiaries.

(viii) Neither the Company nor any of its subsidiaries
is in violation of any law, ordinance, administrative or
governmental rule or regulation applicable to the Company or any
decree of any court or governmental agency or body having

<PAGE> 21

jurisdiction over the Company or any of its subsidiaries which would
have a material adverse effect on the Company or any of its
subsidiaries.

(ix) The Registration Statement and all
post-effective amendments thereto have become effective under the
Securities Act, and, to the knowledge of such counsel, no stop order
suspending the effectiveness of the Registration Statement has been
issued and no proceedings for that purpose have been instituted or
are threatened, pending or contemplated by the Commission. All
filings required by Rule 424 and Rule 430A of the Rules and
Regulations have been made; the Registration Statement, the
Effective Prospectus and Final Prospectus, and any amendments or
supplements thereto, as of their respective effective or issue
dates, complied as to form in all material respects with the
requirements of the Securities Act and the Rules and Regulations;
the descriptions in the Registration Statement, the Effective
Prospectus and the Final Prospectus of statutes, regulations, legal
and governmental proceedings, and contracts and other documents are
accurate in all material respects and present fairly in all material
respects the information required to be stated; and such counsel
does not know of any pending or threatened legal or governmental
proceedings, statutes or regulations required to be described in the
Final Prospectus which are not described as required nor of any
contracts or documents of a character required to be described in
the Registration Statement or the Final Prospectus or to be filed as
exhibits to the Registration Statement which are not described and
filed as required.

In addition to the matters set forth above, such opinion shall also
include a statement to the effect that nothing has come to the attention of
such counsel which leads them to believe that the Registration Statement, the
Effective Prospectus and the Final Prospectus or any amendment or supplement
thereto contains an untrue statement of a material fact or omits to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in light of the circumstances under which they were made
(except that such counsel need express no view as to financial statements,
schedules and other financial or statistical information included, or
incorporated by reference therein).

(d) The Representatives shall have received an opinion, dated
the Closing Date, of counsel for the Selling Stockholders, reasonably
acceptable to the Representatives, to the effect that:

(i) This Agreement and the Custody Agreement and
Power of Attorney have been duly executed and delivered by or on
behalf of each of the Selling Stockholders and constitute valid and
binding agreements of such Selling Stockholders in accordance with
their terms.

<PAGE> 22

(ii) The sale of the Shares to be sold by each
Selling Stockholder hereunder and the compliance by such Selling
Stockholder with all of the provisions of this Agreement, the
Custody Agreement and the Power of Attorney and the consummation
of the transactions herein and therein contemplated will not
conflict with or result in a breach or violation of any terms or
provisions of, or constitute a default under any indenture,
mortgage, deed of trust, loan agreement or other agreement or
instrument to which such Selling Stockholder is a party or by which
such Selling Stockholder is bound or to which any of the property
or assets of such Selling Stockholder is subject, or any statute,
order, rule or regulation of any court or governmental agency or
body applicable to such Selling Stockholder or the property of such
Selling Stockholder.

(iii) No consent, approval, authorization or order
of any court or governmental agency or body is required for the
consummation of the transactions contemplated by this Agreement in
connection with the Shares to be sold by each Selling Stockholder
hereunder, except which have been duly obtained and in full force
and effect, such as have been obtained under the Securities Act and
such as may be required under state securities or Blue Sky laws in
connection with the purchase and distribution of such Shares by the
Underwriters, as to which such counsel need express no opinion.

(iv) Each of the Selling Stockholders has full
right, power and authority to sell, transfer and deliver such
Shares pursuant to this Agreement. By delivery of a certificate or
certificates therefor, the Selling Stockholders will transfer to
the Underwriters valid and marketable title to such shares, free
and clear of any pledge, lien, security interest, charge, claim,
equity, or encumbrance of any kind.

The opinions to be rendered pursuant to paragraphs (c) and (d) may be
limited to federal law, and as to foreign and state law matters, to the laws of
the states or jurisdictions in which such counsel is admitted to practice.
Such counsel may rely upon opinions of other counsel in rendering such opinions
provided that such counsel shall state that they believe that both the
Representatives and they are justified in relying upon such opinions and that
such counsel is reasonably satisfactory to you.

(e) The Underwriters shall have received an opinion or opinions,
dated the Closing Date, of Bass, Berry & Sims PLC, counsel for the
Underwriters, with respect to the Registration Statement and the Final
Prospectus, and such other related matters as the Underwriters may
require, and the Company shall have furnished to such counsel such
documents as they may reasonably request for the purpose of enabling them
to pass upon such matters.

22
<PAGE> 23

(f) The Representatives shall have received from Arthur
Andersen LLP, a letter dated the date hereof and, at the Closing Date,
a second letter dated the Closing Date, in form and substance
satisfactory to the Representatives, stating that they are independent
public accountants with respect to the Company within the meaning of the
Securities Act and the applicable Rules and Regulations, and to the
effect that:

(i) In their opinion, the consolidated financial
statements and schedules examined by them and included
or incorporated by reference in the Registration Statement comply
as to form in all material respects with the applicable accounting
requirements of the Securities Act and the published Rules and
Regulations and are presented in accordance with generally accepted
accounting principles; and they have made a review in accordance
with standards established by the American Institute of Certified
Public Accountants of the interim consolidated financial
statements, selected financial data and/or condensed financial
statements derived from audited financial statements of the
Company;

(ii) The unaudited selected consolidated financial
information included in the Preliminary Prospectus and the
Final Prospectus under the caption "PROSPECTUS SUMMARY" for the
three years ended December 31, 1995, agrees with the corresponding
amounts in the audited consolidated financial statements included
or incorporated by reference in the Final Prospectus or previously
reported on by them;

(iii) On the basis of a reading of the latest available
interim financial statements (unaudited) of the Company and its
subsidiaries, a reading of the minute books of the Company and its
subsidiaries, inquiries of officials of the Company and its
subsidiaries responsible for financial and accounting matters and
other specified procedures, all of which have been agreed to by the
Representatives, nothing came to their attention that caused them
to believe that:

(A) The amounts included in the Preliminary
Prospectus and the Final Prospectus under the caption
"PROSPECTUS SUMMARY" for the three years ended December 31,
1995 do not agree with the corresponding amounts in the
audited consolidated financial statements included or
incorporated by reference in the Final Prospectus or
previously reported on by them;

(B) The unaudited consolidated financial
statements included or incorporated by reference in the
Registration Statement, including the amounts included under
the caption "PROSPECTUS SUMMARY -- RECENT DEVELOPMENTS," do
not comply as to form in all material respects with the
accounting requirements of the federal securities laws and
the related published rules and regulations thereunder or are
not in

23
<PAGE> 24

conformity with generally accepted accounting principles
applied on a basis substantially consistent with the basis
for the audited financial statements contained or
incorporated by reference in the Registration Statement;

(C) Any other unaudited consolidated financial
statement data included in the Final Prospectus do not
agree with the corresponding items in the audited
consolidated financial statements from which data was derived
and any such unaudited data were not determined on a basis
substantially consistent with the basis for the corresponding
amounts in the audited financial statements contained or
incorporated by reference in the Final Prospectus;

(D) at a specified date not more than five days
prior to the date of delivery of such respective
letter, there was any change in the capital stock, decline in
total assets or stockholders' equity or increase in long-term
debt of the Company and its subsidiaries, in each case as
compared with amounts shown in the latest balance sheets
included in the Final Prospectus, except in each case for
changes, decreases or increases which are described in such
letters; and

(E) for the period from the closing date of
the latest statements of earnings included in the Effective
Prospectus and the Final Prospectus to a specified date not
more than five days prior to the date of delivery of such
respective letter, there were any decreases in revenues,
net income and net income per share of the Company, in each
case as compared with the corresponding period of the
preceding year, except in each case for decreases which are
described in such letter.

(iv) They have carried out certain specified procedures,
not constituting an audit, with respect to certain amounts,
percentages and financial information specified by you which are
derived from the general accounting records of the Company and its
subsidiaries, which appear in the Effective Prospectus and the
Final Prospectus and have compared and agreed such amounts,
percentages and financial information with the accounting records
of the Company and its subsidiaries or to analyses and schedules
prepared by the Company and its subsidiaries from its detailed
accounting records.

In the event that the letters to be delivered referred to above set forth
any such changes, decreases or increases, it shall be a further condition
to the obligations of the Underwriters that the Underwriters shall have
determined, after discussions with officers of the Company responsible
for financial and accounting matters and with Arthur Andersen LLP, that
such changes, decreases or increases as are set forth in such letters do
not reflect a material adverse change in the total assets, stockholders'
equity or long-term debt of the

24
<PAGE> 25

Company as compared with the amounts shown in the latest balance sheets
of the Company included in the Final Prospectus, or a material adverse
change in revenues or net income of the Company, in each case as compared
with the corresponding period of the prior year.

(g) There shall have been furnished to the Representatives a
certificate, dated the Closing Date and addressed to you, signed by the
Chief Executive Officer and by the Chief Financial Officer of the Company
to the effect that:

(i) the representations and warranties of the Company in
Section 1 of this Agreement are true and correct, as if made at
and as of the Closing Date, and the Company has complied with all
the agreements and satisfied all the conditions on its part to be
performed or satisfied at or prior to the Closing Date;

(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued, and no proceedings for
that purpose have been initiated or are pending, or to their
knowledge, threatened under the Securities Act;

(iii) all filings required by Rule 424 and Rule 430A of the
Rules and Regulations have been made;

(iv) they have carefully examined the Registration
Statement, the Effective Prospectus and the Final Prospectus,
and any amendments or supplements thereto, and such documents do
not include any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary
to make the statements therein not misleading in light of the
circumstances under which they were made; and

(v) since the effective date of the Registration Statement,
there has occurred no event required to be set forth in an
amendment or supplement to the Registration Statement, the
Effective Prospectus or the Final Prospectus which has not been so
set forth.

(h) The representations and warranties of each Selling
Stockholder shall be true and correct as of the Closing Date, and each
such Selling Stockholder shall deliver to the Representatives a
certificate to that effect, dated the Closing Date, signed by each such
Selling Stockholder or his duly appointed Attorney-in-Fact.

(i) Subsequent to the respective dates as of which information is
given in the Registration Statement and the Final Prospectus, and
except as stated therein, the Company has not sustained any material loss
or interference with its business or properties from fire, flood,
hurricane, accident or other calamity, whether or not covered by
insurance, or from any labor dispute or any court or governmental action,
order or decree, or become a party to or the subject of any litigation
which is material to the Company, nor shall there have

25
<PAGE> 26

been any material adverse change, or any development involving a
prospective material adverse change, in the business, properties, key
personnel, capitalization, prospects, net worth, results of operations or
condition (financial or other) of the Company, which loss, interference,
litigation or change, in the Representatives' reasonable judgment shall
render it unadvisable to commence or continue the offering of the Shares
at the offering price to the public set forth on the cover page of the
Prospectus or to proceed with the delivery of the Shares.

(j) The shares shall be listed on the NYSE.

All such opinions, certificates, letters and documents delivered pursuant
to this Agreement will comply with the provisions hereof only if they are
reasonably satisfactory to the Representatives and their counsel. The Company
shall furnish to the Representatives such conformed copies of such opinions,
certificates, letters and documents in such quantities as the Representatives
shall reasonably request.

The respective obligations of the Underwriters to purchase and pay for the
Option Shares shall be subject, in their discretion, to each of the foregoing
conditions to purchase the Firm Shares, except that all references to the
"Closing Date" shall be deemed to refer to the Option Closing Date, if it shall
be a date other than the Closing Date.

8. CONDITION OF THE COMPANY'S AND THE SELLING STOCKHOLDERS'
OBLIGATIONS. The obligations hereunder of the Company and the Selling
Stockholders are subject to the condition set forth in Section 7(a) hereof.

9. INDEMNIFICATION AND CONTRIBUTION.

(a) The Company and the Selling Stockholders, jointly and
severally, agree to indemnify and hold harmless each Underwriter, and
each person, if any, who controls any Underwriter within the meaning of
the Securities Act, against any losses, claims, damages or liabilities to
which such Underwriter or controlling person may become subject under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based in
whole or in part upon: (i) any inaccuracy in the representations and
warranties of the Company or the Selling Stockholders contained herein;
(ii) any failure of the Company or the Selling Stockholders to perform
their obligations hereunder or under law; (iii) any untrue statement or
alleged untrue statement of any material fact contained in (A) the
Registration Statement, any Preliminary Prospectus, the Effective
Prospectus or Final Prospectus, or any amendment or supplement thereto,
(B) any audio or visual materials supplied by the Company expressly for
use in connection with the marketing of the Shares, including without
limitation, slides, videos, films and tape recordings (the "Marketing
Materials") or (C) in any Blue Sky application or other written
information furnished by the Company or the Selling Stockholders filed in
any state or other jurisdiction in order to qualify any or all

26
<PAGE> 27

of the Shares under the securities laws thereof (a "Blue Sky
Application"); or (iv) the omission or alleged omission to state in the
Registration Statement, any Preliminary Prospectus, the Effective
Prospectus or Final Prospectus or any amendment or supplement thereto,
any Marketing Materials or Blue Sky Application a material fact required
to be stated therein or necessary to make the statements therein not
misleading; and will reimburse each Underwriter and each such controlling
person for any legal or other expenses reasonably incurred by such
Underwriter or such controlling person in connection with investigating
or defending any such loss, claim, damage, liability or action as such
expenses are incurred; provided, however, that neither the Company nor
the Selling Stockholders will be liable in any such case to the extent
that any such loss, claim, damage, or liability arises out of or is based
upon any untrue statement or alleged untrue statement or omission or
alleged omission made in the Registration Statement, the Preliminary
Prospectus, the Effective Prospectus or Final Prospectus, or any
amendment or supplement thereto, or any Marketing Materials or Blue Sky
Application in reliance upon and in conformity with written information
furnished to the Company by any Underwriter specifically for use therein
(it being understood that the only information so provided is the
information included in the last paragraph on the cover page and in the
first and third paragraphs under the caption "Underwriting" in any
Preliminary Prospectus and the Final Prospectus and the Effective
Prospectus). Notwithstanding the foregoing provisions of this Section 9,
the parties agree that the indemnification obligations of each Selling
Stockholder under this Section 9, with respect to any matter that such
Selling Stockholder and the Company are both required to indemnify the
Underwriters hereunder, shall be subject to the determination by the
Representatives, on behalf of the Underwriters, that, in the
Representatives' reasonable commercial judgment, the Company is or may be
unable to discharge fully its obligations to the Underwriters hereunder;
provided, however, that such Selling Stockholder shall be liable in any
such case only to the extent of the total net proceeds (before deducting
expenses) received from the Underwriters by such Selling Stockholder in
connection with the sale of the Shares hereunder. To the extent the
Company is or may be able, in the Representatives' reasonable commercial
judgment, to discharge the Company's obligations to the Underwriters with
respect to any matter that the Company is required to indemnify the
Underwriters hereunder, the Underwriters shall to such extent, first seek
indemnification from the Company.

(b) Each Underwriter will indemnify and hold harmless the Selling
Stockholders and the Company, each of its directors, each of its officers
who signed the Registration Statement and each person, if any, who
controls the Company within the meaning of the Securities Act against any
losses, claims, damages or liabilities to which the Company or any such
director, officer or controlling person may become subject, under the
Securities Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based
upon any untrue statement or alleged untrue statement of any material
fact contained in the Registration Statement, any Preliminary Prospectus,
the Effective Prospectus or Final Prospectus, or any amendment or
supplement thereto, any Marketing Materials or any Blue Sky Application,
or arise out

27
<PAGE> 28

of or are based upon the omission or the alleged omission to state in
the Registration Statement, any Preliminary Prospectus, the Effective
Prospectus or Final Prospectus, or any amendment or supplement
thereto, any Marketing Materials or any Blue Sky Application a material
fact required to be stated therein or necessary to make the statements
therein not misleading, in each case to the extent, but only to the
extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity
with written information furnished to the Company by any Underwriter
specifically for use therein (it being understood that the only
information so provided is the information included in the last paragraph
on the cover page and in the first and third paragraphs under the caption
"Underwriting" in any Preliminary Prospectus and in the Effective
Prospectus and the Final Prospectus);

(c) Promptly after receipt by an indemnified party under this
Section 9 of notice of the commencement of any action, including
governmental proceedings, such indemnified party will, if a claim in
respect thereof is to be made against the indemnifying party under this
Section 9 notify the indemnifying party of the commencement thereof; but
the omission so to notify the indemnifying party will not relieve it from
any liability which it may have to any indemnified party otherwise than
under this Section 9. In case any such action is brought against any
indemnified party, and it notifies the indemnifying party of the
commencement thereof, the indemnifying party will be entitled to
participate therein, and to the extent that it may wish, jointly with any
other indemnifying party similarly notified, to assume the defense
thereof, with counsel satisfactory to such indemnified party; and after
notice from the indemnifying party to such indemnified party of its
election so to assume the defense thereof, the indemnifying party will
not be liable to such indemnified party under this Section 9 for any
legal or other expenses subsequently incurred by such indemnified party
in connection with the defense thereof other than reasonable costs of
investigation except that the indemnified party shall have the right to
employ separate counsel if, in the indemnified party's reasonable
judgment, it is advisable for the indemnified party to be represented by
separate counsel, and in that event the fees and expenses of
separate counsel shall be paid by the indemnifying party.

(d) In order to provide for just and equitable contribution in
circumstances in which the indemnity agreement provided for in the
preceding part of this Section 9 is for any reason held to be unavailable
to the Underwriters, the Company or the Selling Stockholders or is
insufficient to hold harmless an indemnified party, then the Company and
the Selling Stockholders shall contribute to the damages paid by the
Underwriters, and the Underwriters shall contribute to the damages paid
by the Company and the Selling Stockholders; provided, however, that no
person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation.
In determining the amount of contribution to which the respective parties
are entitled, there shall be considered the relative benefits received by
each party from the offering of the Shares (taking into account the
portion of the proceeds of the offering realized by each), the

28
<PAGE> 29

parties' relative knowledge and access to information concerning the
matter with respect to which the claim was asserted, the opportunity to
correct and prevent any statement or omission, and any other equitable
considerations appropriate under the circumstances. The Company, the
Selling Stockholders and the Underwriters agree that it would not be
equitable if the amount of such contribution were determined by pro rata
or per capita allocation (even if the Underwriters were treated as one
entity for such purpose). No Underwriter or person controlling such
Underwriter shall be obligated to make contribution hereunder which in
the aggregate exceeds the underwriting discount applicable to the Shares
purchased by such Underwriter under this Agreement, less the aggregate
amount of any damages which such Underwriter and its controlling persons
have otherwise been required to pay in respect of the same or any similar
claim. The Underwriters' obligations to contribute hereunder are several
in proportion to their respective underwriting obligations and not joint.
For purposes of this Section, each person, if any, who controls an
Underwriter within the meaning of Section 15 of the Securities Act shall
have the same rights to contribution as such Underwriter, and each
director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company
within the meaning of Section 15 of the Securities Act, shall have the
same rights to contribution as the Company.

(e) No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending
or threatened action, suit or proceeding in respect of which any
indemnified party is a party or is (or would be, if a claim were to be
made against such indemnified party) entitled to indemnity hereunder,
unless such settlement includes an unconditional release of such
indemnified party from all liability on claims that are the subject
matter of such action, suit or proceeding.

10. DEFAULT OF UNDERWRITERS. If any underwriter defaults in its
obligation to purchase Shares hereunder and if the total number of Shares which
such defaulting Underwriter agreed but failed to purchase is ten percent or
less of the total number of Shares to be sold hereunder, the non-defaulting
Underwriters shall be obligated severally to purchase (in the respective
proportions which the number of Shares set forth opposite the name of each
non-defaulting Underwriter in Schedule I hereto bears to the total number of
Shares set forth opposite the names of all the non-defaulting Underwriters),
the Shares which such defaulting Underwriter or Underwriters agreed but failed
to purchase. If any Underwriter so defaults and the total number of Shares
with respect to which such default or defaults occur is more than ten percent
of the total number of Shares to be sold hereunder, and arrangements
satisfactory to the other Underwriters, the Company and the Selling
Stockholders for the purchase of such Shares by other persons (who may include
the non-defaulting Underwriters) are not made within 36 hours after such
default, this agreement, insofar as it relates to the sale of the Shares, will
terminate without liability on the part of the non-defaulting Underwriters or
the Company except for (i) the provisions of Section 9 hereof, and (ii) the
expenses to be paid or reimbursed by the Company and the Selling Stockholders
pursuant to Section 6. As used in this Agreement, the term "Underwriter"
includes any person substituted

29
<PAGE> 30

for an Underwriter under this Section 10. Nothing herein shall relieve a
defaulting Underwriter from liability for its default.

11. DEFAULT BY THE SELLING STOCKHOLDERS. if the selling stockholders
shall fail to sell and deliver the number of firm shares that the selling
stockholders are obligated to sell, the representatives may, at their option,
by notice to the company, either (a) require the company to sell and deliver
such number of shares of common stock as to which the selling stockholders have
defaulted, or (b) elect to purchase the firm shares and the option shares that
the company and the non-defaulting selling stockholders have agreed to sell
pursuant to this agreement.

In the event of a default under this Section that does not result in the
termination of this Agreement, either the Representatives or the Company shall
have the right to postpone the First Closing Date or Option Closing Date for a
period not exceeding seven days in order to effect any required changes in the
Registration Statement or Prospectus or in any other documents or arrangements.
No action taken pursuant to this Section shall relieve the Company or the
Selling Stockholder so defaulting from liability, if any, in respect of such
default.

12. SURVIVAL CLAUSE. The respective representations, warranties,
agreements, covenants, indemnities and other statements of the Selling
Stockholders, the Company, its officers and the Underwriters set forth in this
Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement shall remain in full force and effect, regardless of (a) any
investigation made by or on behalf of the Company, any of its officers or
directors, any Underwriter or any controlling person, (b) any termination of
this Agreement and (c) delivery of and payment for the Shares.

13. EFFECTIVE DATE. This agreement shall become effective at whichever
of the following times shall first occur: (i) at 11:30 A.M., Washington, D.C.
time, on the next full business day following the date on which the
Registration Statement becomes effective or (ii) at such time after the
Registration Statement has become effective as the Representatives shall
release the Firm Shares for sale to the public; provided, however, that the
provisions of Sections 6, 9, 12 and 13 hereof shall at all times be effective.
For purposes of this Section 13, the Firm Shares shall be deemed to have been
so released upon the release by the Representatives for publication, at any
time after the Registration Statement has become effective, of any newspaper
advertisement relating to the Firm Shares or upon the release by the
Representatives of telegrams offering the Firm Shares for sale to securities
dealers, whichever may occur first.

14. TERMINATION.

(a) The Company's obligations under this Agreement may be
terminated by the Company by notice to the Representatives (i) at any
time before it becomes effective in accordance with Section 13 hereof, or
(ii) in the event that the condition set forth in Section 8 shall not
have been satisfied at or prior to the First Closing Date.

30
<PAGE> 31

(b) This Agreement may be terminated by the Representatives by
notice to the Company (i) at any time before it becomes effective in
accordance with Section 13 hereof; (ii) in the event that at or prior to
the First Closing Date the Company or any Selling Stockholder shall have
failed, refused or been unable to perform any agreement on the part of
the Company or such Selling Stockholder to be performed hereunder or any
other condition to the obligations of the Underwriters hereunder is not
fulfilled; (iii) if at or prior to the Closing Date trading in securities
on the NYSE, the American Stock Exchange or the over-the-counter market
shall have been suspended or materially limited or minimum or maximum
prices shall have been established on either of such exchanges or such
market, or a banking moratorium shall have been declared by Federal or
state authorities; (iv) if at or prior to the Closing Date trading in
securities of the Company shall have been suspended; or (v) if there
shall have been such a material adverse change in general economic,
political or financial conditions or if the effect of international
conditions on the financial markets in the United States shall be such
as, in your reasonable judgment, makes it inadvisable to commence or
continue the offering of the Shares at the offering price to the public
set forth on the cover page of the Prospectus or to proceed with the
delivery of the Shares.

(c) Termination of this Agreement pursuant to this Section 14
shall be without liability of any party to any other party other than
as provided in Sections 6 and 9 hereof.

15. NOTICES. All communications hereunder shall be in writing and, if
sent to any of the Underwriters, shall be mailed or delivered or telegraphed
and confirmed in writing to the Representatives in care of J. C. Bradford &
Co., J. C. Bradford Financial Center, 330 Commerce Street, Nashville, Tennessee
37201, Attention: Catherine Gemmato-Smith, or if sent to the Company shall be
mailed, delivered or telegraphed and confirmed in writing to the Company at 102
Woodmont Boulevard, Suite 800, Nashville, Tennessee 37205, Attention: Doctor
R. Crants.

16. MISCELLANEOUS. This Agreement shall inure to the benefit of and be
binding upon the several Underwriters, the Company and the Selling Stockholders
and their respective successors and legal representatives. Nothing expressed
or mentioned in this Agreement is intended or shall be construed to give any
other person any legal or equitable right, remedy or claim under or in respect
of this Agreement. This Agreement and all conditions and provisions hereof are
intended to be for the sole and exclusive benefit of the Company and the
Selling Stockholders and the several Underwriters and for the benefit of no
other person except that (a) the representations and warranties of the Company
and the Selling Stockholders contained in this Agreement shall also be for the
benefit of any person or persons who control any Underwriter within the meaning
of Section 15 of the Securities Act, and (b) the indemnities by the
Underwriters shall also be for the benefit of the directors of the Company,
officers of the Company who have signed the Registration Statement and any
person or persons who control the Company within the meaning of Section 15 of
the Securities Act. No purchaser of Shares from any Underwriter will be deemed
a successor because of such purchase. The validity and interpretation of this
Agreement shall be governed by the laws of the State of Tennessee. This

<PAGE> 32

Agreement may be executed in two or more counterparts, each of which shall be
deemed an original, but all of which together shall constitute one and the same
instrument. The Representatives hereby represent and warrant to the Company
that the Representatives have authority to act hereunder on behalf of the
several Underwriters, and any action hereunder taken by the Representatives
will be binding upon all the Underwriters.

If the foregoing is in accordance with your understanding of our
agreement, please indicate your acceptance thereof in the space provided below
for that purpose, whereupon this letter shall constitute a binding agreement
among the Company, the Selling Stockholders and each of the several
Underwriters.

Very truly yours,

CORRECTIONS CORPORATION OF AMERICA

By:
------------------------------------
Title:
---------------------------------

Confirmed and accepted as of the
date first above written.

J.C. BRADFORD & CO.
STEPHENS INC.
For themselves and as
Representatives of the Several
Underwriters

By:
----------------------------
Partner

SELLING STOCKHOLDERS

By:
------------------------------------
Attorney-in-Fact for each
of the Selling Stockholders
listed in Schedule II hereto.

<PAGE> 33

SCHEDULE I

UNDERWRITERS

<TABLE>
<CAPTION>
Number of
Firm Shares to
Underwriter Be Purchased
- ----------- --------------
<S> <C> <C>
J.C. Bradford & Co. . . . . . . .
Stephens Inc. . . . . . . . . . .

--------------
TOTAL 2,500,000
==============

</TABLE>

<PAGE> 34

SCHEDULE II
SELLING STOCKHOLDERS

<TABLE>
<CAPTION>
Number of
Firm Shares
Name To Be Sold
- ---- -----------
<S> <C>
Thomas W. Beasley . . . . . . . . . . . . . . . . . . . . . 223,384
Thomas Loventhal. . . . . . . . . . . . . . . . . . . . . . 75,000
American Corrections Transport, Inc.. . . . . . . . . . . . 44,430
Ted Feldman . . . . . . . . . . . . . . . . . . . . . . . . 1,000
Louis Ratchford . . . . . . . . . . . . . . . . . . . . . . 1,500
Scott L. Moskovitz . . . . . . . . . . . . . . . . . . . . 1,000
Alma Wells. . . . . . . . . . . . . . . . . . . . . . . . . 1,500
Elizabeth Smith . . . . . . . . . . . . . . . . . . . . . . 1,500
D. Paul Alagia. . . . . . . . . . . . . . . . . . . . . . . 12,200
Harold S. Nelson. . . . . . . . . . . . . . . . . . . . . . 171,562
Ben F. Morgan, Jr. . . . . . . . . . . . . . . . . . . . . 30,000
A. W. Sandbach. . . . . . . . . . . . . . . . . . . . . . . 40,000
William H. Cull . . . . . . . . . . . . . . . . . . . . . . 35,000
Thomas F. Buetow. . . . . . . . . . . . . . . . . . . . . . 74,000
Dorothy Watkins . . . . . . . . . . . . . . . . . . . . . . 2,500
David Watkins . . . . . . . . . . . . . . . . . . . . . . . 2,000
John Watkins, Jr. . . . . . . . . . . . . . . . . . . . . . 2,000
John L. Smith . . . . . . . . . . . . . . . . . . . . . . . 21,000
Patrick H. Molloy . . . . . . . . . . . . . . . . . . . . . 2,500
Charles O. Hundley. . . . . . . . . . . . . . . . . . . . . 15,974
Starletta Schirmer. . . . . . . . . . . . . . . . . . . . . 750
Michael D. Shmerling. . . . . . . . . . . . . . . . . . . . 38,400
Lisa A. Shmerling . . . . . . . . . . . . . . . . . . . . . 74,800
Alan Wernick. . . . . . . . . . . . . . . . . . . . . . . . 8,000
David Obolensky . . . . . . . . . . . . . . . . . . . . . . 10,000
Cindie Unger. . . . . . . . . . . . . . . . . . . . . . . . 110,000
---------
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000,000
=========
</TABLE>