Exhibit 10.1
AMENDED AND RESTATED
EXECUTIVE EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EXECUTIVE EMPLOYMENT AGREEMENT (this
"Agreement") is entered into effective the 4th day of November 2004 by and
between The GEO Group, Inc. (the "Company") and Xxxxxx X. Xxxxx (the "Executive"
and, together with the Company, the "Parties").
WHEREAS, the Executive and the Company have previously entered into an
Executive Employment Agreement, dated March 7, 2002 (the "Prior Employment
Agreement"), and an Executive Retirement Agreement, dated March 7, 2002 (as
amended by the Amended Executive Retirement Agreement, dated January 17, 2003,
the "Amended Retirement Agreement"), which set forth the Parties' rights and
obligations with respect to the Executive's employment with the Company and
retirement benefits, respectively;
WHEREAS, the Executive is scheduled to turn age 55 on February 7, 2005,
upon which date he is eligible to retire from the Company and receive the
benefits provided for under the terms of the Amended Retirement Agreement;
WHEREAS, the Executive and the Company wish to amend and restate the
Prior Employment Agreement to facilitate the continued employment of the
Executive as Chairman & CEO of the Company under restructured terms and
conditions that will provide the Executive with additional incentive to remain
in the employ of the Company by, among other things, increasing the amount of
the Annual Incentive Bonus (as defined below) which the Executive is eligible to
receive during the term of his employment with the Company; and
WHEREAS, the terms of this Agreement have been reviewed and approved by
the members of the Compensation Committee of the Board of Directors of the
Company (the "Board") and the independent directors of the Board, respectively,
with the assistance of their own separate legal, financial and other advisers;
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. POSITION AND DUTIES. The Company hereby agrees to continue to employ
the Executive and the Executive hereby accepts continued employment and
agrees to continue to serve as Chairman & CEO of the Company. The
Executive will perform all duties and responsibilities and will have
all authority inherent in the position of Chairman & CEO.
2. TERM OF AGREEMENT AND EMPLOYMENT. The term of the Executive's
employment under this Agreement will be for an initial period of three
(3) years, beginning on the effective date of this Agreement, and
terminating three years thereafter. The term of employment under this
Agreement will be automatically extended by one day every day such that
it has a continuous "rolling" three-year term, unless otherwise
terminated pursuant to Section 7 of this Agreement.
3. DEFINITIONS.
A. CAUSE. For purposes of this Agreement, "Cause" for the
termination of the Executive's employment hereunder shall be
deemed to exist if, in the reasonable judgment of the
Company's Board of Directors: (i) the Employee commits fraud,
theft or embezzlement against the Company; (ii) the Employee
commits a felony or a crime involving moral turpitude; (iii)
the Employee breaches any non-competition, confidentiality or
non-solicitation agreement with the Company or any subsidiary
or affiliate thereof; (iv) the Employee breaches any of the
terms of this Agreement and fails to cure such breach within
30 days after the receipt of written notice of such breach
from the Company; or (v) the Employee engages in gross
negligence or willful misconduct that causes harm to the
business and operations of the Company or a subsidiary or
affiliate thereof.
B. GOOD REASON. Termination by the Executive of his employment
for "Good Reason" shall mean a termination by the Executive
upon:
(i) A material reduction in the Executive's title or
responsibilities;
(ii) Any reduction in the Executive's Annual Base Salary (as
defined below) or Annual Incentive Bonus;
(iii) A diminution in the Executive's eligibility to
participate in bonus, stock options, incentive awards and
other compensation plans or a diminution in the Executive's
Benefits (as defined below); or
(iv) A change in the location of the Executive's principal
place of employment by the Company of more than 50 miles from
the location at which he was principally employed.
4. COMPENSATION.
A. ANNUAL BASE SALARY. Executive shall be paid his current annual
base salary of $750,000.00 for the remainder of calendar year
2004 (as such may be amended from time to time, the "Annual
Base Salary"). The Company shall increase the Annual Base
Salary paid to the Executive by applying a cost of living
increase to be determined by the Board of Directors, such
increase to be made effective the 1st day of January of each
year of the employment term. However, under no circumstances
shall the cost of living increase be less than 5% per annum.
The Annual Base Salary shall be payable at such regular times
and intervals as the Company customarily pays its Executives
from time to time.
B. ANNUAL INCENTIVE BONUS. For each fiscal year of employment
during which the Company employs the Executive, the Executive
shall be entitled to receive a target annual incentive bonus
in accordance with the Senior Management Incentive Plan
established by the Board of Directors for determining the
Executive's annual bonus (the "Annual Incentive Bonus"), such
Annual Incentive Bonus to be paid effective the 1st day of
January of each year of the employment term with respect to
the immediately preceding year.
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5. EXECUTIVE BENEFITS. The Executive will be entitled to four weeks of
vacation per fiscal year. The Executive, the Executive's spouse, and
qualifying members of the Executive's family will be eligible for and
will participate in, without action by the Board of Directors of the
Company or any committee thereof, any benefits and perquisites
available to executive officers of the Company, including any group
health, dental, life insurance, disability, or other form of Executive
benefit plan or program of the Company now existing or that may be
later adopted by the Company (collectively, the "Executive Benefits").
6. DEATH OR DISABILITY. The Executive's employment will terminate
immediately upon the Executive's death. If the Executive becomes
physically or mentally disabled so as to become unable for a period of
more than five consecutive months or for shorter periods aggregating at
least five months during any twelve month period to perform the
Executive's duties hereunder on a substantially full-time basis, the
Executive's employment will terminate as of the end of such five-month
or twelve-month period and this shall be considered a "disability"
under this Agreement. Such termination shall not affect the Executive's
benefits under the Company's disability insurance program, if any, then
in effect.
7. TERMINATION. Either the Executive or the Company may terminate the
Executive's employment under this Agreement for any reason upon not
less than thirty (30) days written notice.
A. TERMINATION OF EMPLOYMENT OTHER THAN BY RESIGNATION OF
EXECUTIVE OR TERMINATION FOR CAUSE. Upon the termination of
the Executive's employment under this Agreement for any reason
(including termination of employment by the Executive for Good
Reason, termination of employment by the Company without
Cause, or the death or disability of the Executive) other than
by the resignation of Executive without Good Reason or a
termination by the Company for Cause, the following shall
apply:
(i) TERMINATION PAYMENT. The Executive shall be entitled to
and paid a termination payment (the "Termination Payment")
equal to two years' Annual Base Salary and target level Annual
Incentive Bonus as set forth in Section 4 based upon the then
current salary level, together with any Equalization Payment
required to be paid in accordance with Section 7(A)(iv). The
Termination Payment and the Equalization Payment shall be made
within 10 days of any termination pursuant to this Section
7(A).
(ii) TERMINATION BENEFITS. The Company shall continue to
provide the Executive (and if applicable, his beneficiaries)
with the Executive Benefits (as described in Section 5), at no
cost to the Executive in no less than the same amount and, on
the same terms and conditions as in effect on the date on
which the termination of employment occurs for a period of 10
years after the date of termination of the Executive's
employment with the Company, or, alternatively, if the
Executive (or his estate) elects at any time in a written
notice delivered to the Company to waive any particular
Executive Benefits, the Company shall make a
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cash payment to the Executive within 10 days after receipt of
such election in an amount equal to the present value of the
Company's cost of providing such Executive Benefits from the
date of such election to the end of the foregoing 10 year
period, and such present value shall be determined by
reference to the Company's then-current cost levels and a
discount rate equal to 120 percent of the short-term
applicable Federal rate provided for in Section 1274(d) of the
Internal Revenue Code (the "Code") for the month in which the
Termination occurs. In addition, the Company shall pay to the
Executive, within 10 days after said termination, an amount
equal to the sum of (a) the dollar value of vacation time that
would have been credited to the Executive pursuant to the
Company's Vacation Policy (the "Vacation Policy") if the
Executive had remained employed by the Company through the
"Anniversary Date" (as defined in the Vacation Policy)
immediately following his termination of employment,
multiplied by a fraction, the numerator of which is the number
of days which elapsed from the Executive's Anniversary Date
immediately preceding the date of termination through the date
of such termination, and the denominator of which is 365, plus
(b) the dollar value of vacation time which the Executive was
entitled to have taken immediately prior to the Executive's
termination, which was not in fact taken by the Executive; the
dollar value of vacation time referred to above shall be equal
to the amount which would have been paid to the Executive by
the Company during such vacation time had the vacation time in
fact been taken by the Executive immediately prior to the
Executive's termination. If the Executive dies during the
10-year period following the termination of this Agreement for
any reason (including termination of employment by the
Executive for Good Reason, or the death or disability of
Executive) other than by the resignation of Executive without
Good Reason or a termination by the Company for Cause, the
Company shall provide the Executive Benefits, to the extent
applicable, to the Executive's estate, or make any applicable
cash payments in lieu thereof to said estate. The Executive
shall be deemed to be employed by the Company if the Executive
is employed by the Company or any subsidiary of the Company in
which the Company owns a majority of the subsidiary's voting
securities;
(iii) TERMINATION AUTOMOBILE. The Company shall transfer all
of its interest in any automobile used by the Executive
pursuant to the Company's Executive Automobile Policy (the
"Executive Automobile Policy") and shall pay the balance of
any outstanding loans or leases on such automobile (whether
such obligations are those of the Executive or the Company) so
that the Executive owns the automobile outright (in the event
such automobile is leased, the Company shall pay the residual
cost of such lease).
(iv) EQUALIZATION PAYMENTS. If any of the Termination Payment
will be subject to the tax (the "Excise Tax") imposed by
Section 4999 of the Internal Revenue Code of 1986, as amended
(the "Code") (or any similar tax that may hereafter be
imposed), the Company shall pay to the Executive in cash
additional amounts (the "Gross-Up Payments") such that the net
amount retained by the Executive after deduction from the
Termination Payment and the Gross-Up Payments of any Excise
Tax imposed upon the Termination Payment and any federal,
state and
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local income tax and Excise Tax and any other tax imposed upon
the Gross-Up Payments shall be equal to the original amount of
the Termination Payment, prior to deduction of any Excise Tax
imposed with respect to the Termination Payment. The Gross-Up
Payments are intended to place the Executive in the same
economic position he would have been in if the Excise Tax did
not apply. The Gross-Up Payments shall be paid to the
Executive at the earlier of the time that the Termination
Payment is paid to the Executive, or the time when any Excise
Tax relating to said Termination Payment becomes due and
payable. For purposes of determining the Gross-Up Payments
pursuant to this Section 3.B.(i), the Termination Payment
shall also include any other amounts which would be considered
"Parachute Payments" (within the meaning of Section 280G(b)(2)
of the Code) to the Executive, including, but not limited to,
the value of any Executive Benefits and Retirement Payments
made pursuant to the terms of the Amended Retirement Agreement
to the extent provided for by Code Section 280G and final,
temporary or proposed regulations thereunder, and Gross-Up
Payments relating to said amounts shall be paid to the
Executive at the earlier of the time that said amounts are
paid to the Executive, or the time when any Excise Tax
relating to said amounts becomes due and payable.
(v) TAX RATES. For purposes of determining the amount of the
Gross-Up Payment, the Executive shall be deemed to pay Federal
income taxes at the highest marginal rate of Federal income
taxation in the calendar year in which the Gross-Up Payment is
to be made, and state and local income taxes at the highest
marginal rate of taxation in the state and locality of the
Executive's residence on the date of termination, net of the
maximum reduction in Federal income taxes which could be
obtained from deduction of such state and local taxes.
(vi) TAX CALCULATION. Simultaneously with the Company's
payment of the Termination Payment, the Company shall deliver
to the Executive a written statement specifying the total
amount of the Termination Payment and the Gross-Up Payment,
together with all supporting calculations. If the Executive
disagrees with the Company's calculation of either of said
payments, the Executive shall submit to the Company, no later
than 30 days after receipt of the Company's calculations, a
written notice advising the Company of the disagreement and
setting forth his calculation of said payments. The
Executive's failure to submit such notice within such period
shall be conclusively deemed to be an agreement by the
Executive as to the amount of the Termination Payment and the
Gross-Up Payment. If the Company agrees with the Executive's
calculations, it shall pay any shortfall to the Executive
within 20 days after receipt of such a notice form the
Executive, together with interest thereon accruing at the rate
of 18 percent per annum, compounded monthly, from the original
due date of the Termination Payment through the actual date of
payment of said shortfall. If the Company does not agree with
the Executive's calculations, it shall provide the Executive
with a written notice within 20 days after the receipt of the
Executive's calculations advising the Executive that the
disagreement is to be referred to an independent accounting
firm for resolution. Such disagreement shall be referred to an
independent "Big 4" accounting firm which is not the regular
accounting
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firm of the Company and which is agreed to by the Company and
the Executive within 10 days after issuance of the Company's
notice of disagreement (if the Parties cannot agree on the
identity of the accounting firm which is to resolve the
dispute, the accounting firm shall be selected by means of a
coin toss conducted in Palm Beach County, Florida by counsel
to the Executive on the first business day after such 10 day
period in such a manner as such counsel may specify). The
accounting firm shall review all information provided to it by
the Parties and submit a written report setting forth its
calculation of the Termination Payment and the Gross-Up
Payment within 15 days after submission of the matter to it,
and such decision shall be final and binding on all of the
Parties. The fees and expenses charged by said accounting firm
shall be paid by the Company. If the amount of the Termination
Payment or Gross-Up Payment actually paid by the Company was
less than the amount calculated by the accounting firm, the
Company shall pay the shortfall to the Executive within 5 days
after the accounting firm submits its written report, together
with interest thereon accruing at the rate of 18 percent per
annum, compounded monthly, from the original due date of the
Termination Payment through the actual date of payment of said
shortfall.
(vii) SUBSEQUENT RECALCULATION. In the event the Internal
Revenue Service imposes an Excise Tax with respect to the
Termination Payment that is greater than the Excise Tax
calculated hereunder, the Company shall reimburse the
Executive for the full amount necessary to made the Executive
whole in accordance with the principles set forth above,
including any interest and penalties which may be imposed.
(viii) INTEREST ON UNPAID TERMINATION PAYMENT. In the event
that the Company does not pay the Termination Payment by the
due dates specified in this Agreement, then any unpaid amount
shall bear interest at the rate of 18 percent per annum,
compounded monthly, until it is paid.
B. TERMINATION OF EMPLOYMENT BY RESIGNATION OF EXECUTIVE OR BY
THE COMPANY WITH CAUSE. Upon the termination of the
Executive's employment by the resignation of the Executive
without Good Reason or by the Company with Cause, the
Executive shall be due no further compensation under this
Agreement related to Annual Base Salary, Annual Incentive
Bonus, Executive Benefits, or Termination Payment than what is
due and owing through the effective date of Executive's
resignation. Termination of the Executive's employment under
this Agreement for any reason (whether by the resignation of
the Executive with or without Good Reason or by the
termination of the Company with or without Cause) shall not
affect Executive's rights under the Amended Retirement
Agreement.
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8. RESTRICTIVE COVENANTS.
A. GENERAL. The Company and the Executive hereby acknowledge and
agree that (i) the Executive is in possession of trade secrets
(as defined in Section 688.002(4) of the Florida Statutes) of
the Company (the "Trade Secrets"), (ii) the restrictive
covenants contained in this Section 8 are justified by
legitimate business interests of the Company, including, but
not limited to, the protection of the Trade Secrets, in
accordance with Section 542.335(1)(e) of the Florida Statutes,
and (iii) the restrictive covenants contained in this Section
8 are reasonably necessary to protect such legitimate business
interests of the Company.
B. NON-COMPETITION. During the period of the Executive's
employment with the Company and until three years after the
termination of the Executive's employment with the Company,
the Executive will not, directly or indirectly, on the
Executive's own behalf or as a partner, officer, director,
trustee, executive, agent, consultant or member of any person,
firm or corporation, or otherwise, enter into the employ of,
render any service to, or engage in any business or activity
which is the same as or competitive with any business or
activity conducted by Company or any of its majority-owned
subsidiaries; provided, however, that the foregoing shall not
be deemed to prevent the Executive from investing in
securities of any company having a class of securities which
is publicly traded, so long as through such investment
holdings in the aggregate, the Executive is not deemed to be
the beneficial owner of more than 5% of the class of
securities that are so publicly traded. During the period of
the Executive's employment and until three years after the
termination of the Executive's employment, the Executive will
not, directly or indirectly, on the Executive's own behalf or
as a partner, shareholder, officer, executive, director,
trustee, agent, consultant or member of any person, firm or
corporation or otherwise, seek to employ or otherwise seek the
services of any executive of Company or any of its majority
owned subsidiaries.
C. CONFIDENTIALITY. During and following the period of the
Executive's employment with the Company, the Executive will
not use for the Executive's own benefit or for the benefit of
others, or divulge to others, any information, Trade Secrets,
knowledge or data of a secret or confidential nature and
otherwise not available to members of the general public that
concerns the business or affairs of the Company or its
affiliates and which was acquired by the Executive at any time
prior to or during the term of the Executive's employment with
the Company, except with the specific prior written consent of
the Company.
D. WORK PRODUCT. The Executive agrees that all programs,
inventions, innovations, improvements, developments, methods,
designs, analyses, reports and all similar or related
information which relate to the business of the Company and
its affiliates, actual or anticipated, or to any actual or
anticipated research and development conducted in connection
with the business of the Company and its affiliates, and all
existing or future products or services, which are conceived,
developed or made by the Executive (alone or with others)
during the term of this
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Agreement ("Work Product") belong to the Company. The
Executive will cooperate fully in the establishment and
maintenance of all rights of the Company and its affiliates in
such Work Product. The provisions of this Section 8(C) will
survive termination of this Agreement indefinitely to the
extent necessary to require actions to be taken by the
Executive after the termination of the Agreement with respect
to Work Product created during the term of this Agreement.
E. ENFORCEMENT. The parties agree and acknowledge that the
restrictions contained in this Section 8 are reasonable in
scope and duration and are necessary to protect the Company or
any of its subsidiaries or affiliates. If any covenant or
agreement contained in this Section 8 is found by a court
having jurisdiction to be unreasonable in duration,
geographical scope or character of restriction, the covenant
or agreement will not be rendered unenforceable thereby but
rather the duration, geographical scope or character of
restriction of such covenant or agreement will be reduced or
modified with retroactive effect to make such covenant or
agreement reasonable, and such covenant or agreement will be
enforced as so modified. The Employee agrees and acknowledges
that the breach of this Section 8 will cause irreparable
injury to the Company or any of its subsidiaries or affiliates
and upon the breach of any provision of this Section 8, the
Company or any of its subsidiaries or affiliates shall be
entitled to injunctive relief, specific performance or other
equitable relief, without being required to post a bond;
PROVIDED, HOWEVER, that, this shall in no way limit any other
remedies which the Company or any of its subsidiaries or
affiliates may have (including, without limitation, the right
to seek monetary damages). In the event of any conflict
between the provisions of this Section 8 and Section 7 of the
Amended Retirement Agreement, the provisions of this Section 8
shall prevail.
9. REPRESENTATIONS. Executive hereby represents and warrants to the
Company that (i) the execution, delivery and full performance of this
Agreement by the Executive does not and will not conflict with, breach,
violate or cause a default under any agreement, contract or instrument
to which the Executive is a party or any judgment, order or decree to
which the Executive is subject; (ii) the Executive is not a party or
bound by any employment agreement, consulting agreement, agreement not
to compete, confidentiality agreement or similar agreement with any
other person or entity; and (iii) upon the execution and delivery of
this Agreement by the Company, this Agreement will be the Executive's
valid and binding obligation, enforceable in accordance with its terms.
10. ARBITRATION. In the event of any dispute between the Company and the
Executive with respect to this Agreement (other than a dispute with
respect to the calculation of the Executive's Termination Payment and
Gross-Up Payment under sub-Paragraph 7(A)(vi) Tax Calculation, which
dispute shall be resolved in accordance with the provisions set forth
in such sub-Paragraph), either party may, in its sole discretion by
notice to the other, require such dispute to be submitted to
arbitration. The arbitrator will be selected by agreement of the
Parties or, if they cannot agree on arbitrator or arbitrators within 30
days after the giving of such notice, the arbitrator will be selected
by the American Arbitration Association. The determination reached in
such arbitration will be final and binding on
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both Parties without any right of appeal. Execution of the
determination by such arbitrator may be sought in any court having
jurisdiction. Unless otherwise agreed by the Parties, any such
arbitration will take place in West Palm Beach, Florida and will be
conducted in accordance with the rules of the American Arbitration
Association. If the Executive is the prevailing party in any such
arbitration, he will be entitled to reimbursement by the Company of all
reasonable costs and expenses (including attorneys' fees incurred in
such arbitration).
11. ASSIGNMENT. The Executive may not assign, transfer, convey, mortgage,
hypothecate, pledge or in any way encumber the compensation or other
benefits payable to the Executive or any rights which the Executive may
have under this Agreement. Neither the Executive nor the Executive's
beneficiary or beneficiaries will have any right to receive any
compensation or other benefits under this Agreement, except at the
time, in the amounts and in the manner provided in this Agreement. This
Agreement will inure to the benefit of and will be binding upon any
successor to the Company and any successor to the Company shall be
authorized to enforce the terms and conditions of this Agreement,
including the terms and conditions of the restrictive covenants
contained in Section 8 hereof. As used in this Agreement, the term
"successor" means any person, firm, corporation or other business
entity which at any time, whether by merger, purchase or otherwise,
acquires all or substantially all of the capital stock or assets of the
Company. This Agreement may not otherwise be assigned by the Company.
12. GOVERNING LAW. This Agreement shall be governed by the laws of Florida
without regard to the application of conflicts of laws.
13. ENTIRE AGREEMENT. This Agreement and the Retirement Agreement
constitute the only agreements between Company and the Executive
regarding the Executive's employment by the Company. This Agreement and
the Retirement Agreement supersede any and all other agreements and
understandings, written or oral, between the Company and the Executive
regarding the subject matter hereof and thereof. A waiver by either
party of any provision of this Agreement or any breach of such
provision in an instance will not be deemed or construed to be a waiver
of such provision for the future, or of any subsequent breach of such
provision. This Agreement may be amended, modified or changed only by
further written agreement between the Company and the Executive, duly
executed by both Parties.
14. SEVERABILITY; SURVIVAL. In the event that any provision of this
Agreement is found to be void and unenforceable by a court of competent
jurisdiction, then such unenforceable provision shall be deemed
modified so as to be enforceable (or if not subject to modification
then eliminated herefrom) to the extent necessary to permit the
remaining provisions to be enforced in accordance with the parties
intention. The provisions of Section 8 (and the restrictive covenants
contained therein) shall survive the termination for any reason of this
Agreement and/or the Employee's relationship with the Company.
15. NOTICES. Any and all notices required or permitted to be given
hereunder will be in writing and will be deemed to have been given when
deposited in United States mail, certified or registered mail, postage
prepaid. Any notice to be given by the Executive
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hereunder will be addressed to the Company to the attention of its
General Counsel at its main offices, Xxx Xxxx Xxxxx, Xxxxx 000, 000
Xxxxxxxxx 00xx Xxxxxx, Xxxx Xxxxx, Xxxxxxx 00000. Any notice to be
given to the Executive will be addressed to the Executive at the
Executive's residence address last provided by the Executive to
Company. Either party may change the address to which notices are to be
addressed by notice in writing to the other party given in accordance
with the terms of this Section.
16. HEADINGS. Section headings are for convenience of reference only and
shall not limit or otherwise affect the meaning or interpretation of
this Agreement or any of its terms and conditions.
17. CANCELLATION OF EXECUTIVE EMPLOYMENT AGREEMENT DATED MARCH 7, 2002. The
Executive Employment Agreement entered into by and between the
Executive and the Company on March 7, 2002, is hereby cancelled and
terminated as of the effective date of this Agreement.
IN WITNESS WHEREOF, the Parties hereto have executed and delivered this
Agreement under seal as of the date first above written.
THE GEO GROUP, INC.
By: /s/ Xxxx X. Xxxxxx
----------------------------------------
Name: Xxxx X. Xxxxxx
Title: Sr. Vice President & General Counsel
EXECUTIVE
By: /s/ Xxxxxx X. Xxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Chairman & CEO
The GEO Group, Inc.
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