EXHIBIT 10.20
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 Xxxx X. X'Xxxxxx ("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 Xxxxx, a Danish
company registered on the Copenhagen Exchange, completed a merger of TWC with a
subsidiary of Group 4 Xxxxx, 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 Senior Vice
President, Chief Financial Officer & Treasurer. 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 August 1, 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.
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."
RETIREMENT PAYMENT TABLE
----------------------------------------------
Retirement Annuity Funding
Age Amount
------------------------ ---------------------
55 1,750,000
------------------------ ---------------------
56 1,818,000
------------------------ ---------------------
57 1,889,000
------------------------ ---------------------
58 1,963,000
------------------------ ---------------------
59 2,040,000
------------------------ ---------------------
60 2,119,000
------------------------ ---------------------
61 2,202,000
------------------------ ---------------------
62 2,288,000
------------------------ ---------------------
63 2,378,000
------------------------ ---------------------
64 2,470,000
------------------------ ---------------------
65 2,567,000
------------------------ ---------------------
66 2,667,000
------------------------ ---------------------
67 2,771,000
------------------------ ---------------------
68 2,879,000
------------------------ ---------------------
69 2,992,000
------------------------ ---------------------
70 3,109,000
------------------------ ---------------------
71 or older 3,230,000
------------------------ ---------------------
(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 remainder of (i) the sum of the Annuity Funding Amount plus the Tax
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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 $1,750,000, 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 $1,003,737.21.
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/ Xxxxxx X. Xxxxx
----------------------------------
Xxxxxx X. Xxxxx
Chairman & Chief Executive Officer
EXECUTIVE
/s/ Xxxx X. X'Xxxxxx
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Xxxx X. X'Xxxxxx
Senior Vice President, Chief
Financial Officer & Treasurer
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