Document:

EX-10.7

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.

-8-EX-10.8

Exhibit 10.8

 

 

 

 

 

 

AMENDED AND RESTATED

The GEO Group, Inc.

SENIOR OFFICER RETIREMENT PLAN

(effective December 31, 2008 )

 

 

 

 

 

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 
	 	 	Page	 
	 
	 	 	 	 
	INTRODUCTION
	 	 	1	 
	 
	 	 	 	 
	ARTICLE I DEFINITIONS
	 	 	2	 
	 
	 	 	 	 
	ARTICLE II PARTICIPANT ELIGIBILITY
	 	 	3	 
	 
	 	 	 	 
	ARTICLE III BENEFITS
	 	 	4	 
	 
	 	 	 	 
	ARTICLE IV WHEN BENEFITS ARE PAYABLE
	 	 	5	 
	 
	 	 	 	 
	ARTICLE V FORM OF ANNUITY
	 	 	8	 
	 
	 	 	 	 
	ARTICLE VI ADMINISTRATION
	 	 	9	 
	 
	 	 	 	 
	ARTICLE VII AMENDMENT, TERMINATION AND EXCEPTIONS
	 	 	10	 
	 
	 	 	 	 
	ARTICLE VIII MISCELLANEOUS
	 	 	10	 

 

 

INTRODUCTION

The GEO Group, Inc. (“GEO”) hereby amends and restates The GEO Group, Inc. Senior Officer
Retirement Plan, hereinafter referred to as the “Plan.”

The purpose and objective of the Plan is to provide retirement benefits to selected key
executives of an Employer and to provide pre-retirement benefits in the event of the death
or disability of a Participant.

The Plan has been reviewed and approved by the Compensation Committee of the Board of
Directors of GEO, and upon the recommendation of that Committee, by the Board of Directors
of GEO.

Nothing contained in this Plan shall be deemed to constitute an employment agreement between
any Participant and the Employer and nothing contained herein shall be deemed to give any
Participant any right to be retained in the employ of the Employer.

This plan is effective from March 31, 1995, as amended in May 2005 and subsequently amended
and restated effective on December 31, 2008.

1

 

ARTICLE I

DEFINITIONS

	1.0	 	Definitions. The following terms when used in this Plan shall have the following
meanings unless a different meaning is clearly required by the context.
	 
	1.1	 	Annual Benefit. The annual benefit to which a Participant is entitled under the Plan
in the absence of a Form of Annuity Election.
	 
	1.2	 	Beneficiary. The beneficiary or beneficiaries of a Participant in accordance with
Section 4.8.
	 
	1.3	 	Code Section 409A. Section 409A of the Internal Revenue Code of 1986, as amended from
time to time, and its implementing regulations and guidance.
	 
	1.4	 	Committee. The GEO Corporate Retirement Committee comprised of the Chairman of the
Board of Directors, the President, the Chief Financial Officer, the Vice President, Human
Resources and the General Counsel of GEO.
	 
	1.5	 	Disability. A situation where a Participant, by reason of a physical or mental
impairment that can be expected to result in death or be expected to last for a continuous
period of not less than 12 months: (a) is unable to engage in any substantial gainful
activity, or (b) is receiving income replacement benefits for a period of not less than 3
months under an accident or health plan sponsored by the Employer. Notwithstanding the
foregoing, disability shall not be deemed to occur unless it constitutes a “disability,” as
such term is defined in Code Section 409A.
	 
	1.6	 	Early Retirement Election. An election by a Participant to receive benefits under
this Plan before such Participant attains Normal Retirement Age, as described in, and subject
to the limitations and requirements of, Section 4.3.
	 
	1.7	 	Employee. An Employee of an Employer.
	 
	1.8	 	Employer. GEO and/or any affiliate or subsidiary thereof.
	 
	1.9	 	FAS. The average salary of a Participant earned during his or her last five (5)
years of employment with an Employer, including the year in which the event or occurrence
requiring a determination of a Participant’s FAS occurs (or, in the case of a Participant who
Separates from Service after attaining Normal Retirement Age, if greater, the average salary
of such Participant earned during his or her last five (5) years prior to and including the
year the Participant attains Normal Retirement Age). For purposes of calculating a
Participant’s FAS, “salary” does not include any bonuses, but does include any deferred salary
in the year in which it is earned (regardless of when paid).

2

 

	1.10	 	Form of Annuity Election. An election described in Section 5.2 to receive benefits
under this Plan in the amounts, and for the duration, described in either Section 5.2.1 or
Section 5.2.2.
	 
	1.11	 	GEO. The GEO Group, Inc., a Florida corporation.
	 
	1.12	 	Normal Retirement Age. Age 65.
	 
	1.13	 	Participant. Any Employee who participates in this Plan in accordance with Article
II.
	 
	1.14	 	Plan. The GEO Group, Inc. Senior Officer Retirement Plan as it may from time to time
be amended.
	 
	1.15	 	Qualifying Age. The later of (a) the earliest age at which the Participant could
begin receiving Social Security benefits or (b) the Participant’s age on the date his or her
benefits commence pursuant to the terms of this Plan; provided, however, Qualifying Age shall
never be greater than Normal Retirement Age.
	 
	1.16	 	Retire. To Separate from Service after attaining Normal Retirement Age.
	 
	1.17	 	Retirement. The date on which the Participant Separates from Service after attaining
Normal Retirement Age.
	 
	1.18	 	Separation from Service or, as the context requires, Separate from Service.
A “separation from service” as described in Code Section 409A.
	 
	1.19	 	Social Security Benefits. The annual amount of Social Security benefits for which a
Participant is eligible upon reaching his or her Qualifying Age.
	 
	1.20	 	Years of Service. The number of full years during which an Employee is continuously
employed by an Employer, including years prior to participation in the Plan.

ARTICLE II

PARTICIPANT ELIGIBILITY

	2.1	 	Initial Eligible Employees. The attached list of individuals are those Employees who
have been approved for participation at the inception of the Plan. See Exhibit A.
Participants shown on Exhibit A who are age 55 or over at inception of the Plan shall not be
eligible to make an Early Retirement Election.

	2.2	 	Other Eligible Employees. In addition to those initially eligible, other key
executives may be suggested for participation in the Plan by the Committee, subject to the
final approval of the Compensation Committee of the Board of Directors of GEO.

	2.3	 	Excluded Employees. No Employee shall be eligible for participation in the Plan if
such Employee participates in The GEO Group, Inc. Executive Retirement Plan or is a party to
an individual Executive Retirement Agreement with GEO.

3

 

ARTICLE III

BENEFITS

	3.1	 	Vesting in Benefits. A Participant shall become vested in benefits under this Plan
when such Participant has at least ten (10) Years of Service, provided such Participant
remains continuously employed with an Employer until at least age 55. No benefits shall be
paid under this Plan until after a Participant Separates from Service.
	 
	3.2	 	Benefit Computations.

	 	3.2.1	 	Twenty-Five or More Years of Service. For a Participant with
twenty-five (25) or more Years of Service, the Annual Benefit shall be forty-five
percent (45%) of the FAS of such Participant, reduced by one hundred percent (100%) of
any Social Security Benefits. The amount determined under this Section 3.2.1 shall be
reduced in accordance with Section 3.2.3, if applicable.
	 
	 	3.2.2	 	Between Ten and Twenty-Five Years of Service. For a Participant with
at least ten (10) Years of Service, but fewer than twenty-five (25) Years of Service,
the Annual Benefit shall be 1.8% times the Participant’s Years of Service times the
Participant’s FAS, reduced by one hundred percent (100%) of any Social Security
Benefits. Thus, for example, a Participant who had twenty (20) Years of Service at the
time of his or her entitlement to benefits under this Plan would have an Annual Benefit
of thirty-six percent (36%) (which is 1.8% times 20) of FAS reduced by one hundred
percent (100%) of any Social Security Benefits. The amount determined under this
Section 3.2.2 shall be reduced in accordance with Section 3.2.3, if applicable.
	 
	 	3.2.3	 	Reduction for Benefits Commencing Before Normal Retirement Age. In
the event a Participant has made a timely and valid Early Retirement Election, the
Annual Benefit otherwise payable to the Participant under this Plan shall be reduced by
a factor of 4% for each year (or fraction thereof) that the Participant is under Normal
Retirement Age at the time benefits under the Plan commence. The computation of Annual
Benefits provided in Sections 3.2.1 or 3.2.2, as applicable, would be made using an
estimated amount of Social Security Benefits, as determined pursuant to the principles
established by the Social Security Administration, which would be payable to the
Participant upon reaching his or her Qualifying Age. The following is an example of
the calculation of Annual Benefits described in this Section 3.2.3.
	 
	 	 	 	Example

An Executive with a valid Early Retirement Election in effect Separates from
Service at age sixty-two (62) with twenty-two (22) Years of Service. His FAS
is $200,000 and his estimated Social Security Benefit is $14,400 annually.

	 	 	 	 	 
	1.8% x 22 x $200,000 =
	 	$	79,200	 
	 
	 	 	 	 
	Less estimated Social Security Benefit
	 	 	-14,400	 
	 
	 	 	 	 
	Benefit that would have been payable upon Retirement at age 65
	 	$	64,800	 
	 
	 	 	 	 
	Early benefit factor 100% — (3 x 4%) =
	 	 	x 88	%
	 
	 	 	 	 
	Annual Benefit payable at age 62
	 	$	57,024	 
	 
	 	 	 
	 
	 	 	 	 
	Monthly payment for life
	 	$	4,752	 
	 
	 	 	 

4

 

	 	3.2.4	 	Years of Service Counted. All Years of Service are includible for
purposes of the calculation of benefits in this Article III. Years of Service in
excess of twenty-five (25) years are not considered for purposes of calculating Annual
Benefits. No benefits will be payable under this Plan to any Participant with fewer
than ten (10) Years of Service. Years of Service after a Participant reaches age 65
will be counted to allow a Participant to reach the maximum of 25 Years of Service.

ARTICLE IV

WHEN BENEFITS ARE PAYABLE

	4.1	 	Separation from Service After Attaining Normal Retirement Age. Upon Retiring after
attaining Normal Retirement Age, a Participant shall be paid monthly 1/12th of the
Annual Benefit provided in either Section 3.2.1 or 3.2.2. The following is an example of the
calculation of Annual Benefits described in this Section 4.1.

	 	 	 	Example

An Executive Retires at age sixty-five (65) with twenty-five (25) Years of
Service. The FAS is $200,000 and the Social Security Benefit is $14,400
annually at the time of his or her Retirement.

	 	 	 	 	 
	45% x $200,000 =
	 	$	90,000	 
	 
	 	 	 	 
	Less Annual Social Security Benefit
	 	 	-14,400	 
	 
	 	 	 
	 
	 	 	 	 
	Plan pays annually for life
	 	$	75,600	 
	 
	 	 	 
	 
	 	 	 	 
	Monthly payment for life
	 	$	6,300	 

	4.2	 	Separation from Service Between Ages 55 and 65 — No Early Retirement Election.
Unless the Participant has made an Early Retirement Election pursuant to Section 4.3 below, if
a Participant (a) has at least ten (10) Years of Service, (b) is at least age 55 at the time
of his or her Separation from Service and (c) Separates from Service before attaining Normal
Retirement Age, then such Participant shall commence receiving benefits under the Plan at
Normal Retirement Age. The Annual Benefits of such a Participant shall be determined based on
his or her Years of Service at the time of his or her Separation from Service, and shall be
calculated as provided in Section 3.2.

5

 

	4.3	 	Separation from Service Between Ages 55 and 65 — Early Retirement Election. If a
Participant (a) has at least twenty (20) Years of Service, (b) is at least age 55 at the time
of his or her Separation from Service, (c) Separates from Service before attaining Normal
Retirement Age, and (d) made a valid and timely Early Retirement Election in accordance with
the requirements set forth in this Section 4.3, then such Participant shall commence receiving
benefits under the Plan on the date specified in the Early Retirement Election. The Annual
Benefits of such a Participant shall be determined based on his or her Years of Service at the
time of his or her Separation from Service and shall be calculated under Section 3.2.3.

	 	4.3.1	 	Early Retirement Election. An Early Retirement Election shall set
forth the date a Participant elects to commence receiving benefits under this Plan.
Such date may be either (a) the date of Separation from Service or (b) a specified date
no later than the date the Participant attains Normal Retirement Age. In the event a
Participant elects a specified date that is before the Participant’s Separation from
Service, then benefits under this Plan shall commence upon the Participant’s Separation
from Service.
	 
	 	4.3.2	 	Timing of Valid Initial Early Retirement Election. In order to be
valid, an Early Retirement Election must be made (a) on or before December 31, 2008 or
(b) no more than thirty (30) days after an Employee becomes a Participant in the Plan.
	 
	 	4.3.3	 	Amendments to or Revocations of Early Retirement Elections. A
Participant may amend or revoke an executed Early Retirement Election only if the
following conditions are met:

	 	(a)	 	such amendment or revocation does not take
effect until at least twelve (12) months after the date on which such
amendment or revocation is made;
	 
	 	(b)	 	the payment or benefit with respect to which
such amendment or revocation is made is deferred for at least five (5)
years from the date such payment or benefit would otherwise have been
made in the absence of such amendment or revocation; and
	 
	 	(c)	 	in the case of a Participant that elected to
commence receiving benefits on a specified date, as described in
Section 4.3.1, such amendment or revocation is made at least twelve
(12) months before such specified date.

	4.4	 	Pre-Retirement Death Benefit. In the event of the death of a Participant prior to
his or her Separation from Service, a benefit shall be payable to his or her designated
Beneficiary for a period of ten (10) years beginning on the first day of the month following
the Participant’s death. The Annual Benefit under this Section 4.4 shall be calculated under
Section 3.2.1 or 3.2.2, as applicable, based upon the Participant’s Years of Service at the
time of his or her death (and without any reduction under Section 3.2.3),

6

 

	 	 	reduced by fifty percent (50%), but without any reduction for Social Security Benefits.
Distributions under this Section 4.4 shall be made as soon as administratively practicable
following the date on which the Committee receives written notification of the Participant’s
death in the manner prescribed by the Committee, but in no event later than 90 days
following such death.
	 
	4.5	 	Disability Benefit. In the event of the Disability of a Participant prior to his or
her Separation from Service, a benefit shall be payable to such Participant commencing on the
later of the date the Participant attains Normal Retirement Age or the date of the Disability.
The Annual Benefit under this Section 4.5 shall be calculated under Section 3.2.1 or 3.2.2,
as applicable, based upon the Participant’s Years of Service and compensation of the
Participant prior to his or her Disability (and without any reduction under Section 3.2.3).

	4.6	 	Timing of Payment. Except as provided in this Section 4.6, all payments of benefits
under this Plan shall begin on the first day of the month following the date or event that
triggered commencement of benefits hereunder. Notwithstanding any other provision of this
Plan, no benefits under this Plan shall be paid to a Participant earlier than (a) the date
that is six months after the Participant’s Separation from Service or (b) the date of
Participant’s death. In the event that the payment of any benefits is delayed by reason of
the prior sentence, then any delayed payments shall be paid to the Participant in lump sum at
the end of such required delay in order to catch up to the original payment schedule. If
calculation of the amount of any payment under the Plan is not administratively practicable
due to events beyond the control of the Participant (or Participant’s Beneficiary), the
payment shall be made no later than six (6) months following the date on which the calculation
of the amount of the payment is administratively practicable. For purposes of this Section
4.6, the inability of the Employer to calculate the amount or timing of a payment due to a
failure of the Participant (or Participant’s Beneficiary) to provide reasonably available
information necessary to make such calculation does not constitute an event beyond the control
of the Participant (or Participant’s Beneficiary).

	4.7	 	Proof of Death. The Committee may require such proof of death and such evidence of
the right of any person to receive all or part of the death benefit of a deceased Participant
as the Committee may deem desirable.

	4.8	 	Beneficiaries. Every Participant shall be furnished with a form on which he may
designate one or more Beneficiaries to receive the benefits due him under the Plan in the
event of his death during employment or before all payments due are made.

	 	4.8.1	 	A Participant may change any such designation by signing and filing with the
Committee a new Designation of Beneficiary.
	 
	 	4.8.2	 	If no Beneficiary is designated, or if the designated Beneficiary has not
survived the Participant, and if no alternative designation of Beneficiary shall be
effective, the Participant’s Beneficiary shall be his surviving spouse, or if no spouse
survives the Participant, the estate of the deceased Participant.

7

 

	 	4.8.3	 	If more than one Beneficiary survives the Participant, payments shall be made
equally to the surviving Beneficiaries unless the Participant specifically designated
one Beneficiary as the primary Beneficiary and the other Beneficiaries as contingent
Beneficiaries.
	 
	 	4.8.4	 	In the event a Participant dies following his or her Separation from Service
but prior to the commencement of any benefits under this Plan, any benefits payable to
a Beneficiary shall be paid at the same time and in the same form as such benefits
would have been paid had the Participant died the day following the date he or she was
to commence benefits under this Plan.
	 
	 	4.8.5	 	If the Beneficiary cannot be located for a period of one year following the
Participant’s death despite mailing to the Beneficiary’s last known address, and if the
Beneficiary has not made a written claim within such period to the Committee, such
Beneficiary shall be treated as having predeceased the Participant.

	4.9	 	Participant’s Rights Unsecured. The right of the Participant or his Beneficiary to
receive a distribution hereunder shall be an unsecured claim against the general assets of the
Employer, and neither the Participant nor his Beneficiary shall have any rights in or against
any specific assets of the Employer. Benefits under the Plan may not be encumbered or
assigned by a Participant or any Beneficiary.

	4.10	 	Forfeiture of Benefits. Notwithstanding any other provision of this Plan, all
benefits otherwise payable to a Participant may be forfeited if the Committee determines that
such Participant has become employed by a competitor of the Employer either as an employee or
a consultant.

ARTICLE V

FORM OF ANNUITY

	5.1	 	Absence of Form of Annuity Election. If the Participant does not make a timely Form
of Annuity Election in accordance with Section 5.2, the Annual Benefits payable under this
Plan shall be paid monthly from the time of the commencement of benefits hereunder until the
death of the Participant.

	5.2	 	Form of Annuity Election. A Participant may make a Form of Annuity Election at any
time during his or her lifetime provided that such election must be made no later than thirty
(30) days before the date benefits commence under this Plan. Any Form of Annuity Election
made after this date shall be null and void. A Form of Annuity Election shall specify whether
the Participant elects to receive benefits under the Plan in the amounts, and for the
duration, described in either Section 5.2.1 or Section 5.2.2 below. A Participant may make,
revoke, or change a Form of Annuity Election at any time during his or her lifetime provided
that such revocation or change shall be effective only if made no later than thirty (30) days
before benefits commence under this Plan.

	 	5.2.1	 	Life with Ten Years Certain. A Participant may elect to receive the
actuarially determined equivalent of the Annual Benefit that would be paid under
Section

8

 

	 	 	 	5.1, but instead to be paid monthly until the later of (a) the death of the
Participant or (b) ten (10) years after the commencement of benefits under the Plan,
whichever is longer. Amounts paid after the death of the Participant shall be paid
monthly to the Participant’s designated Beneficiary.
	 
	 	5.2.2	 	Joint and Survivor Options. A Participant may elect to receive the
actuarially determined equivalent of the Annual Benefit that would be paid under
Section 5.1, but instead to be paid monthly until the later of (a) the death of the
Participant or (b) the death of another person (which person shall be specified in the
Form of Annuity Election).

ARTICLE VI

ADMINISTRATION

	6.1	 	The Committee. The Plan will be administered by the Committee.

	6.2	 	Powers and Authority of Committee. Except as otherwise expressly provided in the
Plan, the Committee will have all powers necessary or helpful for the carrying out of its
duties and responsibilities under the Plan, and its decisions or actions in good faith in
respect of any matter hereunder will be final, conclusive and binding upon all parties
concerned.

	6.3	 	Liability Limited. Except as otherwise provided by law, neither the Employer nor any
person who is a member of the Committee or who is an employee, officer and/or director of the
Employer will incur any liability whatsoever on account of any matter connected with or
related to the Plan, unless such person has acted in bad faith, or has willfully neglected his
duties, in respect of the Plan.

	6.4	 	Reliance on Information. The members of the Committee, the Employer, and its
respective officers, directors and employees will be entitled to rely upon all tables,
valuations, certificates, opinions and reports furnished by any actuary, accountant, insurance
company, counsel, physician or other expert who is engaged by the Committee. The members of
the Committee, the Employer, and its respective officers, directors, and employees will be
fully protected in respect of any action taken or suffered by them in good faith in reliance
thereon, and all action so taken or suffered shall be conclusive upon all persons affected
thereby.

	6.5	 	Genuineness of Documents. The Committee, the Employer, and its respective officers,
directors and employees, will be entitled to rely upon any notice, request, consent letter,
telegram or other paper or document believed by them or any of them, in good faith, to be
genuine and to have been signed or sent by the proper person.

	6.6	 	Proper Proof. In any case in which the Committee or the Employer is required under
the Plan to take action upon the occurrence of any event, it will be under no obligation to
take such action unless and until proper and satisfactory evidence of such occurrence has been
received by it.

9

 

ARTICLE VII

AMENDMENT, TERMINATION AND EXCEPTIONS

	7.1	 	Modification or Amendment. The Board of Directors of GEO may at any time amend this
Plan; provided, however, that such amendment shall not affect the rights of the Participants
or their Beneficiaries with respect to any benefits accrued or payable before the date of any
such amendment.

	7.2	 	Termination of Plan. The Board of Directors of GEO may, in its sole discretion,
terminate the Plan at any time; provided, however, such termination shall not affect the
rights of Participants or their Beneficiaries with respect to any benefits accrued or payable
before the date of such termination of this Plan.

	7.3	 	Exceptions. Subject to Sections 8.7 and 8.8, the Compensation Committee of the Board
of Directors of GEO may make individual exceptions to the Plan from time to time to broaden
the provisions of the Plan to be more favorable to a Participant than the provisions of the
Plan. No exception may be made by such Committee to narrow the coverage of the Plan or to
make exceptions which are less favorable to a Participant.

ARTICLE VIII

MISCELLANEOUS

	8.1	 	No Implied Rights. Neither the establishment of the Plan nor any modification
thereof, shall be construed as giving any Participant, Employee, Beneficiary or other person
any legal or equitable right unless such right shall be specifically provided in the Plan or
conferred by affirmative action of the Committee or the Compensation Committee of the Board of
Directors of GEO in accordance with the terms and provisions of the Plan.
	 
	8.2	 	Status of Employment Relations. Nothing in this Plan shall be deemed to:

	 	8.2.1	 	Give to any employee the right to be retained in the employ of an Employer;
	 
	 	8.2.2	 	Affect the right of an Employer to discipline or discharge any employee at any
time;
	 
	 	8.2.3	 	Give an Employer the right to require any employee to remain in its employ; or
	 
	 	8.2.4	 	Affect any employee’s right to terminate his employment at any time.

	8.3	 	Binding Effect. The provisions of the Plan shall be binding on the Employer, the
Committee and their successors, and on all persons entitled to benefits under the Plan and
their respective heirs, legal representatives and successors in interest.

	8.4	 	Governing Laws. The Plan shall be construed and administered according to the laws
of the State of Florida to the extent that such laws are not preempted by the laws of the
United States of America.

	8.5	 	Usage. Whenever applicable, the masculine gender, when used in the Plan, shall
include the feminine and neuter genders, and the singular shall include the plural.

10

 

	8.6	 	Captions. The captions contained herein are inserted as a matter of convenience and
for reference only, and in no way define, limit, enlarge or describe the scope or intent of
the Plan nor in any way shall affect the Plan or the constructions of any provisions thereof.

	8.7	 	Section 409A. The provisions of this Plan shall be interpreted, applied,
administered and operated in such manner as will meet the requirements of Code Section 409A so
that no amount is included in the gross income of the Participant, his/her estate or
Beneficiary pursuant to such Code Section in connection with this Plan.

11

 

Exhibit A

John J. Bulfin

John M. Hurley

Jorge A. Dominicis

Thomas M. Wierdsma

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