Executive Retirement Agreement - Wackenhut Corrections Corp. and George C. Zoley
AMENDED EXECUTIVE RETIREMENT AGREEMENT
THIS AMENDED RETIREMENT AGREEMENT (this "Agreement") is entered into effective
the 17th day of January 2003 by and between Wackenhut Corrections Corporation
("Company") and George C. Zoley ("Executive"), or collectively, "the Parties",
and supersedes and replaces any prior written retirement agreement between the
Parties.
WHEREAS, Executive and Company previously entered into an Executive Retirement
Agreement dated March 7, 2002 (the "March 7 Retirement Agreement"), whereby,
INTER ALIA, the Executive is to receive certain payments and benefits upon a
Change in Control (as defined by incorporated reference in the March 7
Retirement Agreement); and
WHEREAS, the Wackenhut Corporation (TWC), a company listed on the New York Stock
Exchange and majority owner of Company, and Group 4 Falck, a Danish company
registered on the Copenhagen Exchange, completed a merger of TWC with a
subsidiary of Group 4 Falck, which merger constituted a Change of Control under
the terms of the March 7 Retirement Agreement; and
WHEREAS, the Executive and Company wish to amend the March 7 Retirement
Agreement and replace the March 7 Retirement Agreement with this Agreement in
order to facilitate the continued employment of Executive under restructured
terms and conditions that will benefit the Company by, INTER ALIA, requiring
Executive to actually retire from employment with the Company prior to receiving
any retirement benefits hereunder, and by amending the retirement benefits
provided hereunder to conform to those provided to TWC executives under their
retirement agreements; and
WHEREAS, Executive and Company have previously entered into an Executive
Employment Agreement (the "Employment Agreement") effective March 7, 2002; and
WHEREAS, the basic terms and conditions of this Agreement were reviewed and
approved by the Board of Directors of WCC and the Compensation Committee members
of the Board of Directors of WCC at a meeting held on the 20th day of December
2002;
NOW THEREFORE, in consideration of the mutual covenants and agreements contained
herein, and for other valuable consideration the receipt and adequacy of which
is hereby acknowledged, the Parties hereby agree as follows:
1. EMPLOYMENT. Company currently employs Executive as Chairman & Chief Executive
Officer. Executive will devote his full energy, skill and best efforts to the
affairs of Company on a full-time basis.
2. RETIREMENT DATE. Executive is first eligible to retire upon Executive's 55th
birthday, which is February 7, 2005.
3. TERMINATION. Either Company or Executive may terminate Executive's employment
at any time and for any reason upon ten (10) days written notice to the other in
accordance with the terms and conditions set forth in the Employment Agreement.
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4. RETIREMENT RIGHTS FULLY VESTED. Notwithstanding the termination of
Executive's employment with the Company for any reason whatsoever, Executive's
rights hereunder are fully vested.
5. RETIREMENT PAYMENTS.
(a) ANNUITY FUNDING AMOUNT. Upon the later of (i) the date Executive
actually retires from employment with the Company, or (ii) the Executive's 55th
birthday, Company will pay to Executive an amount of money equal to the amount
set forth in the following Retirement Payment Table which corresponds to the
Executive's age on the date he retires. If the Executive should die after his
55th birthday but before he actually retires from the Company, the Company shall
immediately pay to the Executive's Beneficiar(ies) or Estate the amount the
Company would have paid to Executive had he retired immediately prior to his
death. In the event of Executive's death before the Executive's 55th birthday,
the Company will immediately pay to Executive's Beneficiar(ies) or Estate
one-half the amount that would otherwise be paid to Executive were Executive to
have retired on his 55th birthday. The amount payable under this Section 5(a) is
referred to as the "Annuity Funding Amount."
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RETIREMENT PAYMENT TABLE
--------------------------------------------
ANNUITY
RETIREMENT FUNDING
AGE AMOUNT
----------------------- --------------------
55 2,917,000
----------------------- --------------------
56 3,031,000
----------------------- --------------------
57 3,149,000
----------------------- --------------------
58 3,272,000
----------------------- --------------------
59 3,400,000
----------------------- --------------------
60 3,532,000
----------------------- --------------------
61 3,670,000
----------------------- --------------------
62 3,814,000
----------------------- --------------------
63 3,963,000
----------------------- --------------------
64 4,117,000
----------------------- --------------------
65 4,278,000
----------------------- --------------------
66 4,445,000
----------------------- --------------------
67 4,619,000
----------------------- --------------------
68 4,799,000
----------------------- --------------------
69 4,986,000
----------------------- --------------------
70 5,181,000
----------------------- --------------------
71 or older 5,383,000
----------------------- --------------------
(b) TAX GROSS-UP PAYMENT. In addition to the Annuity Funding Amount
provided for in Section 5(a) above, the Company shall also pay to the Executive
or Executive's Beneficiary(ies) or Estate, as the case may be, an amount equal
to the "Tax Gross-up Payment" simultaneously with the payment of the Annuity
Funding Amount. The "Tax Gross-up Payment" is an amount which will cause the
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remainder of (i) the sum of the Annuity Funding Amount plus the Tax Gross-up
Payment, minus (ii) all Applicable Taxes (defined below) for which the Executive
or other recipient of the payment becomes liable as a result of payment of the
Annuity Funding Amount and the Tax Gross-up Payment, to be equal to the Annuity
Funding Amount prior to deduction of any Applicable Taxes imposed with respect
to the Annuity Funding Amount. "Applicable Taxes" means all federal, state,
local and other taxes assuming that the Executive is subject to taxation at the
highest marginal rates, including income taxes, payroll taxes, excise taxes
(including taxes pursuant to Internal Revenue Code Section 4999) and any other
taxes, but not including any estate or gift taxes. The Tax Gross-up Payment is
intended to place the Executive in the same economic position with respect to
the Annuity Funding Amount that the Executive would have been in if the
Applicable Taxes did not apply. For example, if the Annuity Funding Amount is
$2,917,000, and the Executive is subject only to federal income tax at the rate
of 35% and employment tax at the rate of 1.45%, the Tax Gross-up Amount is equal
to $1,673,086.55.
6. BENEFICIARY. The Beneficiary (or Beneficiaries) of any payments to be made
after Executive's death shall be as designated by Executive and shown on Exhibit
A attached hereto or such other person or persons as Executive shall designate
in writing to the Company. If Executive has made no effective designation of
Beneficiaries, any such payments shall be made to Executive's Estate.
7. RESTRICTION AND NON-COMPETITION. Executive shall not for a period of two
years following Executive's employment with the Company, either directly or
indirectly, accept employment with, render service, assistance or advice to,
own, manage, operate, control or participate in the ownership, or allow his name
to be used by any competitor of the Company unless approved by the Board of
Directors of the Company. Determination by the Board of Directors of the Company
that Executive has engaged in any such activity shall be binding and conclusive
on all parties, and in addition to all other rights and remedies which Company
shall have, neither Executive nor Beneficiary shall be entitle to any payments
hereunder.
8. INSURANCE. If Company shall elect to purchase a life insurance contract to
provide Company with funds to make payments hereunder, Company shall at all
times be the sole and complete owner and beneficiary of such contract, and shall
have the unrestricted right to use all amounts and exercise all options and
privileges there under without knowledge or consent of Executive or Beneficiary
or any other person, it being expressly agreed that neither Executive nor
Beneficiary nor any other person shall have any right, title or interest
whatsoever in or to any such contract.
9. SOURCE OF PAYMENTS. Executive, Beneficiary and any other person or persons
having or claiming a right to payments hereunder or to any interest in this
Agreement shall rely solely on the unsecured promise of Company set forth
herein, and nothing in this Agreement shall be construed to give Executive,
Beneficiary or any other person or persons any right, title, interest or claim
in or to any specific asset, fund, reserve, account or property of any kind
whatsoever owned by Company or in which it may have any right, title or interest
now or in the future, but Executive shall have the right to enforce his claim
against Company in the same manner as any unsecured creditor.
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10. AMENDMENT. This Agreement may be amended at any time or from time to time by
written agreement of the parties.
11. ASSIGNMENT. Neither Executive, nor Beneficiary, nor any other person
entitled to payments hereunder shall have power to transfer, assign, anticipate,
mortgage or otherwise encumber in advance any of such payments, nor shall such
payments be subject to seizure for the payment of public or private debts,
judgments, alimony or separate maintenance, or be transferable by operation of
law in event of bankruptcy, insolvency or otherwise.
12. BINDING EFFECT. This Agreement shall be binding upon the parties hereto,
their heirs, executors, administrators, successors and assigns. The Company
agrees it will not be a party to any merger, consolidation or reorganization,
unless and until its obligations hereunder shall be expressly assumed by its
successors.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the
date first above written.
WACKENHUT CORRECTIONS CORPORATION
/s/ Wayne H. Calabrese
---------------------------------
Wayne H. Calabrese
Vice Chairman & President
EXECUTIVE
/s/ George C. Zoley
---------------------------------
George C. Zoley
Chairman & Chief Executive Officer
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