Exhibit 10.7
AMENDED AND RESTATED
THE GEO GROUP, INC.
SENIOR MANAGEMENT PERFORMANCE AWARD PLAN

1.   PURPOSE       The purpose of this Plan is to attract, retain, and motivate
designated key employees of the Company by providing performance-based cash
awards. The Company believes such awards create a strong incentive for the key
employees participating in the Plan to expend maximum effort for the growth and
success of the Company.   2.   DEFINITIONS       Unless the context otherwise
requires, for purposes of this Plan, the terms below shall have the following
meanings:

  (a)   “Board” shall mean the Board of Directors of the Company.     (b)  
“Code” shall mean the Internal Revenue Code of 1986, as amended and any
successor thereto.     (c)   “Code Section 162(m) Exception” shall mean the
exception for performance-based compensation under Section 162(m) of the Code or
any successor section and the Treasury regulations promulgated thereunder.    
(d)   “Code Section 409A” shall mean Section 409A of the Code, and its
implementing regulations and guidance.     (e)   “Company” shall mean The GEO
Group, Inc. and any successor by merger, consolidation or otherwise.     (f)  
“Committee” shall mean the Compensation Committee of the Board or such other
Committee of the Board that is appointed by the Board to administer this Plan;
it is intended that all of the members of any such Committee shall satisfy the
requirements to be outside directors, as defined under Code Section 162(m).    
(g)   “Discretionary Adjustment” shall have the meaning set forth in
Section 5.3.     (h)   “Net-Income-After-Tax” means net income of the Company,
after all federal, state and local taxes. For purposes of determining
Net-Income-After-Tax, extraordinary items and changes in accounting principles,
as defined by United States generally accepted accounting principles, shall be
disregarded. Extraordinary items shall include, but are not limited to, items of
unusual and infrequent nature (i.e., loss incurred in the early extinguishment
of debt). Changes in accounting principles shall include, but are not limited
to, those that occur as a result of new pronouncements or requirements issued by
accounting authorities including, but not limited to, the Securities Exchange
Commission and the Financial Accounting Standards Board. Non-recurring and
unusual items not included or planned for in the Company’s annual budget may be
excluded from Net-Income-After-Tax in the sole and absolute discretion of the
Committee.

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  (i)   “Participant” shall mean an executive employee of the Company eligible
to receive a Performance Award in accordance with this Plan. The executive
employees of the Company eligible to participate in the Plan are listed in
Section 4 hereof.     (j)   “Performance Award” shall mean the amount paid or
payable under Section 5.2 hereof.     (k)   “Performance Goals” shall mean the
objective performance goals, formulas and standards described in Section 5.1
hereof.     (l)   “Plan” shall mean this Amended and Restated Senior Management
Performance Award Plan of the Company.     (m)   “Plan Year” shall mean a fiscal
year of the Company.     (n)   “Pro Rata” shall mean a portion of a Performance
Award based on the number of days worked during a Plan Year as compared to the
total number of days in the Plan Year.     (o)   “Revenue” shall mean gross
revenues of the Company.     (p)   “Target Performance Award” shall mean the
targeted Performance Award, expressed as a percentage of base salary in effect
on December 31 of the Plan Year as set forth in Section 4 hereof.

3.   GOVERNANCE       The Plan shall be governed by the Committee. The Committee
shall have the exclusive authority and responsibility to: (a) interpret the
Plan; (b) determine amounts to be paid out under the Plan and the conditions for
payment thereof; (c) certify attainment of Performance Goals and other material
terms; (d) adjust Performance Awards as provided herein; (e) authorize the
payment of all benefits and expenses of the Plan as they become payable under
the Plan; (f) adopt, amend and rescind rules and regulations relating to the
Plan; and (g) make all other determinations and take all other actions necessary
or desirable for the Plan’s administration, including, without limitation,
correcting any defect, supplying any omission or reconciling any inconsistency
in this Plan in the manner and to the extent it shall deem necessary to carry
this Plan into effect. Notwithstanding anything to the contrary, the Plan shall
be administered on a day-to-day basis by the Chief Executive Officer and the
Vice President of Human Resources of the Company.       Decisions of the
Committee shall be made by a majority of its members. All decisions of the
Committee on any question concerning the interpretation and administration of
the Plan shall be final, conclusive, and binding upon all parties. The Committee
may rely on information and consider recommendations provided by the Board or
the executive officers of the Company.

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4.   ELIGIBLE PARTICIPANTS; TARGET PERFORMANCE AWARD       The eligible
Participants and the Target Performance Awards for such Participants are as
follows:

                          Target Performance     Positions     Awards (% of
Salary)    
Chief Executive Officer
      150 %    
President
      120 %    
Chief Financial Officer
      50 %    
Sr. Vice Presidents
      45 %    

5.   PERFORMANCE GOALS AND PERFORMANCE AWARDS

  5.1   PERFORMANCE GOALS. The Performance Goals shall be the budgeted Revenue
and Net-Income-After-Tax for the subject Plan Year, which shall be weighted as
follows (collectively, the “Target Weighting of Revenue and
Net-Income-After-Tax”):

                 
Revenue
      35 %    
Net-Income-After-Tax
      65 %    

  5.2   PERFORMANCE AWARDS. Subject to compliance with Section 5.4 herein, each
Participant shall be eligible to receive a Performance Award based on the
Company’s financial performance for Revenue and Net-Income-After-Tax during the
Plan Year.

    Participants’ Annual Performance Awards will be calculated by applying the
following percentage adjustment methodology separately to the respective Target
Weighting of Revenue and Net-Income-After-Tax results in accordance with the
following chart:

                Percentage of Budgeted           Fiscal Year Targets Achieved  
        for Revenue and for     Percentage by which the Target Weighting of
Revenue and     Net-Income-After-Tax     Net-Income-After-Tax is
Reduced/Increased    
Less than 80%
    No Performance Award    
80% — 100%
    2.5 times the percentage (negative) difference between the actual achieved
percentages of budgeted Revenue and Net-Income-After-Tax targets and 100% of the
Revenue and Net-Income-After-Tax targets    
100%
    No Adjustment to Target Weighting    
101% — 120% (Amounts over 120% shall not be considered for purposes of this
calculation)
    2.5 times the percentage (positive) difference between the actual achieved
percentages of budgeted Revenue (up to 120%) and Net-Income-After-Tax targets
and 100% of the Revenue and Net-Income-After-Tax targets    

Example A — Budget Performance (100% Target Payout)

                                                                               
                          Percentage                                            
                      Difference                 Percentage                    
                            between                 Adjustment                  
    Performance                         Actual and                 to Target    
  Target       Actual       Goals     Budget       Actual       Budget      
Factor       Weighting       Weighting       Weighting      
Revenue
    $ 100.00       $ 100.00         0 %       n/a         0 %       35 %      
35 %    
Net Income
    $ 10.00       $ 10.00         0 %       n/a         0 %       65 %       65
%     Total percentage applied to individual target performance awards       100
%    

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Example B — 105% Target Payout

                                                                               
                          Percentage                                            
                      Difference                 Percentage                    
                            between                 Adjustment                  
    Performance                         Actual and                 to Target    
  Target       Actual       Goals     Budget       Actual       Budget      
Factor       Weighting       Weighting       Weighting      
Revenue
    $ 100.0         0 $102.         00 +2 %       2.5         +5 %       35 %  
    36.75 %    
Net Income
    $ 10.0         0 $10.         20 +2 %       2.5         +5 %       65 %    
  68.25 %     Total percentage applied to individual target performance awards  
    105 %    

Example C — 95% Target Payout

                                                                               
                          Percentage                                            
                      Difference                 Percentage                    
                            between                 Adjustment                  
    Performance                         Actual and                 to Target    
  Target       Actual       Goals     Budget       Actual       Budget      
Factor       Weighting       Weighting       Weighting      
Revenue
    $ 100.00       $ 98.00         -2 %       2.5         -5 %       35 %      
33.25 %    
Net Income
    $ 10.00       $ 9.80         -2 %       2.5         -5 %       65 %      
61.75 %     Total percentage applied to individual target performance awards    
  95 %    

Example D — 98.5% Target Payout

                                                                               
                          Percentage                                            
                      Difference                 Percentage                    
                            between                 Adjustment                  
    Performance                         Actual and                 to Target    
  Target       Actual       Goals     Budget       Actual       Budget      
Factor       Weighting       Weighting       Weighting      
Revenue $1
      00.00 $1         02.00         +2 %       2.5         +5 %       35 %    
  36.75 %    
Net Income $
      10.00 $         9.80         -2 %       2.5         -5 %       65 %      
61.75 %     Total percentage applied to individual target performance awards    
  98.5 %    

    Following final calculations of the Company’s financial performance during
the relevant Plan Year, data shall be presented to the Chief Executive Officer
which shall set forth the Participants’ Performance Awards calculated in
accordance with the Plan. The Chief Executive Officer shall review the data for
all Participants, apply any Discretionary Adjustments applicable pursuant to
Section 5.3, and then prepare final recommendations for the Committee.

  5.3   DISCRETIONARY ADJUSTMENT. For Participants other than the Chief
Executive Officer and the President, the Chief Executive Officer may recommend a
discretionary increase (the “Discretionary Adjustment”) to a Participant’s
Performance Award of up to 50% of the Participant’s Target Performance Award
calculated in accordance with the provisions of Sections 5.1 and 5.2, subject to
review and approval by the Committee. The Chief Executive Officer and the
President shall not be eligible to receive a discretionary Performance Award
adjustment pursuant to this Section 5.3.

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  5.4   FORM AND TIMING OF PAYMENT; COMMITTEE CERTIFICATION. The Performance
Awards will be paid in cash to the Participants who are to receive such payments
as soon as practicable after the award amounts are approved and certified in
writing by the Committee; provided, however, that the Performance Awards shall
be paid no later than March 15th following the end of the performance period to
which such Performance Awards relate.

6.   CHANGE IN STATUS       In the event that a Participant remains employed
with the Company but is no longer eligible to receive a Performance Award during
the Plan Year, whether due to a promotion, demotion or lateral move, the
Participant shall be entitled to a Pro Rata portion of the Performance Award for
which he/she was eligible under this Plan, subject to the terms of Section 5.4,
based upon the length of time the Participant served in the eligible position,
in which case such Performance Award (a) shall be determined after the end of
the Plan Year during which the change in eligibility status occurs based solely
on the actual results of the Company for such full Plan Year, and (b) shall not
exceed a Pro Rata portion of the actual Performance Award which the Participant
would otherwise have been eligible to receive under this Plan with respect to
the Plan Year in which the change in eligibility status occurs had the
Participant remained eligible to receive a Performance Award for the full Plan
Year.   7.   TERMINATION OF EMPLOYMENT. Notwithstanding anything herein to the
contrary, subject to Sections 5.4 and 14 of this Plan, the provisions of this
Section 7 shall apply in the event of the termination of employment of a
Participant.

  7.1   TERMINATION BY THE COMPANY FOR CAUSE. In the event that a Participant’s
employment is terminated by the Company for Cause (as such term is defined under
such Participant’s employment agreement with the Company), any Performance Award
for the Plan Year in which the termination occurs will be automatically
forfeited by the Participant.     7.2   RESIGNATION OR VOLUNTARY TERMINATION BY
THE PARTICIPANT OTHER THAN FOR GOOD REASON. In the event that a Participant
resigns or otherwise voluntarily terminates employment with the Company for any
reason (other than by reason of retirement from the Company in accordance with
Company policy and/or any agreement between the Company and the Participant,
which is addressed in paragraph 7.4 below, or as a result of the Chief Executive
Officer, President or Chief Financial Officer terminating his/her employment for
Good Reason (as such term is defined in their employment agreements with the
Company)), any Performance Award for the Plan Year in which the termination
occurs will be automatically forfeited by the Participant unless the Chief
Executive Officer, in his sole and absolute discretion, decides to grant a
Performance Award for such Plan Year to such Participant, in which case such
Performance Award (a) shall be determined after the end of the Plan Year during
which the termination occurs based solely on the actual results of the Company
for such full Plan Year, and

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      (b) shall not exceed a Pro Rata portion of the actual Performance Award
which the Participant would otherwise have been eligible to receive under this
Plan with respect to the Plan Year in which the termination occurs had the
Participant remained employed with the Company for the full Plan Year.     7.3  
TERMINATION BY THE COMPANY WITHOUT CAUSE, BY THE PARTICIPANT FOR GOOD REASON, OR
AS A RESULT OF THE DEATH OR DISABILITY OF THE PARTICIPANT. In the event that a
Participant’s employment is terminated (a) by the Company without Cause (as such
term is defined under such Participant’s employment agreement with the Company),
(b) by the Participant, but only in the case of the Chief Executive Officer,
President or Chief Financial Officer, for Good Reason (as such term is defined
in their employment agreements with the Company)), or (c) as a result of the
death or disability (as such term is defined under such Participant’s employment
agreement with the Company) of the Participant, then such Participant (or such
Participant’s estate, as applicable), shall be entitled to receive a Pro Rata
portion of the actual Performance Award which the Participant would otherwise
have been eligible to receive under this Plan with respect to the Plan Year in
which the termination occurs had the Participant remained employed with the
Company for the full Plan Year; provided, however, that such Performance Award
shall not be determined until after the end of the Plan Year during which the
termination occurs and shall be based solely on the actual results of the
Company for such full Plan Year.     7.4   TERMINATION AS A RESULT OF THE
RETIREMENT OF THE PARTICIPANT. In the event that a Participant’s employment is
terminated as a result of the retirement of the Participant in accordance with
Company policy on a date following the 90th day of then current Company fiscal
year, the Participant shall be entitled to receive a Pro Rata portion of the
actual Performance Award which the Participant would otherwise have been
eligible to receive under this Plan with respect to the Plan Year in which the
termination occurs had the Participant remained employed with the Company for
the full Plan Year; provided, however, that such Performance Award shall not be
determined until after the end of the Plan Year during which the termination
occurs and shall be based solely on the actual the results of the Company for
such full Plan Year. No Performance Award or Pro Rata portion thereof shall be
due or payable to a Participant whose employment is terminated as a result of a
retirement that is effective prior to the 90th day of the then current Company
fiscal year.

8.   NON-ASSIGNABILITY       No Performance Award under this Plan or payment
thereof, nor any right or benefit under this Plan, shall be subject to
anticipation, alienation, sale, assignment, pledge, encumbrance, garnishment,
execution or levy of any kind or charge, and any attempt to anticipate,
alienate, sell, assign, pledge, encumber and to the extent permitted by
applicable law, charge, garnish, execute upon or levy upon the same shall be
void and shall not be recognized or given effect by the Company.

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9.   NO RIGHT TO EMPLOYMENT       Nothing in the Plan or in any notice of award
pursuant to the Plan shall confer upon any person the right to continue in the
employment of the Company or one of its subsidiaries or affiliates nor affect
the right of the Company or any of its subsidiaries or affiliates to terminate
the employment of any Participant.   10.   AMENDMENT OR TERMINATION       The
Board reserves the right, in its sole discretion, to amend, modify, suspend,
discontinue, or terminate the Plan or to adopt a new plan in place of this Plan
at any time; provided, however, that:

  i.   no such amendment shall, without the prior approval of the stockholders
of the Company in accordance with applicable law to the extent required under
Code Section 162(m),

  •   alter the Performance Goals as set forth in Section 5.1;     •   increase
the maximum amounts set forth in Section 5.2 and Section 5.3;     •   change the
class of eligible employees or the Target Performance Awards (% of Salary) set
forth in Section 4; or     •   implement any change to a provision of the Plan
requiring stockholder approval in order for the Plan to continue to comply with
the requirements of the Code Section 162(m) Exception;

  ii.   no amendment, suspension, or termination shall, without the consent of
the Participant, alter or impair a Participant’s right to receive payment of a
Performance Award for a Plan Year otherwise payable hereunder; and     iii.   in
the event of any conflict between the terms of this Plan and the terms of any
employment, compensation or similar agreement between the Company and a
Participant, the terms of the employment, compensation or similar agreement
between the Company and the Participant shall prevail.

11.   SEVERABILITY       In the event that any one or more of the provisions
contained in the Plan shall, for any reason, be held to be invalid, illegal or
unenforceable, in any respect, such invalidity, illegality or unenforceability
shall not affect any other provision of the Plan and the Plan shall be construed
as if such invalid, illegal or unenforceable provisions had never been contained
therein.   12.   WITHHOLDING       The Company shall have the right to make such
provisions as it deems necessary or appropriate to satisfy any obligations it
may have to withhold federal, state, or local income or other taxes incurred by
reason of payments pursuant to the Plan.

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13.   GOVERNING LAW       This Plan and any amendments thereto shall be
construed, administered, and governed in all respects in accordance with the
laws of the State of Florida (regardless of the law that might otherwise govern
under applicable principles of conflict of laws).   14.   REGULATORY PROVISIONS
      This Plan is not intended to provide for deferral of compensation for
purposes of Code Section 409A, by means of complying with Section 1.409A-1(b)(4)
of the final Treasury regulations issued under Code Section 409A. The provisions
of this Plan shall be interpreted in a manner that satisfies the requirements of
Section 1.409A-1(b)(4) of the final Treasury regulations issued under Code
Section 409A and the Plan shall be operated accordingly. If any provision of
this Plan or any term or condition of any Performance Award would otherwise
frustrate or conflict with this intent, the provision, term or condition will be
interpreted and deemed amended so as to avoid this conflict.       In the event
that following the application of the immediately preceding paragraph, any
Performance Award is subject to Code Section 409A, the provisions of Code
Section 409A are hereby incorporated herein by reference to the extent necessary
for any Performance Award that is subject to Code Section 409A to comply
therewith. In such event, the provisions of this Plan shall be interpreted in a
manner that satisfies the requirements of Code Section 409A and the Plan shall
be operated accordingly. If any provision of this Plan or any term or condition
of any Performance Award would otherwise frustrate or conflict with this intent,
the provision, term or condition will be interpreted and deemed amended so as to
avoid this conflict.       Solely for purposes of determining the amount of any
Performance Award under this Plan, the term “Salary” shall mean the
Participant’s base salary in effect during the performance period not taking
into account any deferrals of salary that such Participant may make to a 401(k)
plan, a Section 125 plan or any other deferred compensation plan; provided,
however, that the term “Salary” shall not, in any event, with respect to any
Participant, exceed the maximum deductible amount described in Section 162(m)(1)
of the Code.       Notwithstanding any other provision of this Plan, if a
Participant is not employed by the Company on the last day of the performance
period to which a Performance Award relates, the maximum Performance Award
payable to such Participant shall not exceed the “Pro-Rata Performance Award.”
For this purpose, the term “Pro-Rata Performance Award” shall mean the
Performance Award, if any, that would have been payable by the Company to such
Participant for the performance period if and to the extent that the performance
goals for such performance period have been met, if the Participant had been
employed by the Company throughout the entire performance period, multiplied by
a fraction, the numerator of which shall be the number of days from the first
day of the bonus period through and including the date of termination of
employment and the denominator of which shall be the total number of days in the
performance period.

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