<PAGE> 1
SCHEDULE 14A
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )
Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]
Check the appropriate box:
<TABLE>
<S> <C>
[ ] Preliminary Proxy Statement [ ] Confidential, for Use of the Commission
Only (as permitted by Rule 14a-6(e)(2))
[X] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14a-12
</TABLE>
The Wackenhut Corporation
- --------------------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
- --------------------------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
[X] No fee required.
[ ] Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
(1) Title of each class of securities to which transaction applies:
(2) Aggregate number of securities to which transaction applies:
(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
(4) Proposed maximum aggregate value of transaction:
(5) Total fee paid:
[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
(2) Form, Schedule or Registration Statement No.:
(3) Filing Party:
(4) Date Filed:
<PAGE> 2
WACKENHUT
EXECUTIVE OFFICES [LOGO]
4200 Wackenhut Drive #100
Palm Beach Gardens, Florida 33410-4243
Telephone: (561) 622-5656
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS ON MAY 5, 2000
To the Shareholders:
The Annual Meeting of the Shareholders of The Wackenhut Corporation will be held
on Friday, May 5, 2000, at 9:00 A.M. at the Ritz-Carlton, Palm Beach, 100 South
Ocean Blvd., Manalapan, Florida, for the purpose of considering and acting on
the matters following:
(1) the election of twelve directors for the ensuing year;
(2) ratification of the action of the Board of Directors in
appointing the firm of Arthur Andersen LLP to be the
independent certified public accountants of the Corporation
for the fiscal year 2000, and to perform such other services
as may be requested;
(3) approval of a proposal setting aside a total of 550,000 shares
of Series B Common Stock of the Corporation to be utilized for
future issuance under the Key Employee Long-Term Incentive
Stock Plan (the "Plan"); and
(4) the transaction of any other business as may properly come
before the meeting, or any adjournment or adjournments
thereof.
Only shareholders of Series A Common Stock of record at the close of business
March 17, 2000, the record date and time fixed by the Board of Directors, are
entitled to notice and to vote at said meeting.
ALL SERIES A COMMON STOCK SHAREHOLDERS ARE URGED EITHER TO ATTEND THE MEETING IN
PERSON OR TO VOTE BY PROXY.
If you are a registered shareholder, you can ensure that your shares are
represented at the Annual Meeting in one of two ways:
1) by completing, signing, dating and mailing the enclosed proxy
card in the enclosed postage-paid envelope;
2) by calling the toll-free number indicated on the enclosed
proxy card to vote by phone.
If you attend the meeting in person, you may, if you wish, revoke your proxy and
vote in person.
If your shares are held in the name of a broker, bank or other holder of record,
you may attend the Annual Meeting, but may not vote at the meeting unless you
have first obtained a proxy, executed in your favor, from the owner of record.
By order of the Board of Directors.
Timothy J. Howard
Senior Vice President, General Counsel,
and Assistant Secretary
March 31, 2000
<PAGE> 3
PROXY STATEMENT
March 31, 2000
The Wackenhut Corporation
Executive Offices
4200 Wackenhut Drive #100
Palm Beach Gardens, Florida 33410-4243
Telephone: (561) 622-5656
General Information
This Proxy Statement is furnished in connection with the solicitation of proxies
by the Board of Directors of The Wackenhut Corporation (the "Company" or the
"Corporation") for the Annual Meeting of the Shareholders of the Corporation to
be held at the Ritz-Carlton, Palm Beach, 100 South Ocean Blvd., Manalapan,
Florida, May 5, 2000, and all adjournments thereof. Please note the Proxy Card
provides a means to withhold authority to vote for any individual
director-nominee. Also note the format of the Proxy Card which provides an
opportunity to specify your choice between approval, disapproval or abstention
with respect to the proposal to ratify the appointment of Arthur Andersen LLP as
independent certified public accountants of the Corporation and the proposal to
set aside 550,000 shares of Series B Common Stock of the Corporation to be
utilized for future issuance under the Key Employee Long-Term Incentive Stock
Plan. If the enclosed Proxy Card is executed properly and returned, the shares
represented will be voted in accordance with those instructions.
A Proxy Card which is properly executed, returned and not revoked will be voted
in accordance with the instructions indicated. A proxy voted by telephone and
not revoked will be voted in accordance with the shareholder's instructions. If
no instructions are given, proxies which are signed and returned or voted by
telephone will be voted as follows:
FOR - the slate of Directors proposed by the Board of Directors;
FOR - the proposal to ratify the appointment of Arthur Andersen
LLP as the independent certified public accountants of the
Corporation; and
FOR - the proposal to set aside 550,000 shares of Series B Common
Stock of the Corporation to be utilized for future issuance
under the Key Employee Long-Term Incentive Stock Plan.
The enclosed proxy gives discretionary authority as to any matters not
specifically referred to therein. Management is not aware of any other matters
to be presented for action by shareholders before the Annual Meeting. If any
such matter or matters properly come before the Annual Meeting, it is understood
that the designated proxy holders have discretionary authority to vote thereon.
Holders of shares of the Series A Common Stock of the Corporation of record as
of the close of business on March 17, 2000, will be entitled to one vote for
each share of stock standing in their name on the books of The Wackenhut
Corporation.
On March 17, 2000, 3,855,582 shares of Series A Common Stock were outstanding.
The Series A Common Stock will vote as a single class for the election of
Directors, to ratify the appointment of Arthur Andersen LLP, to set aside
550,000 shares of Series B Common Stock to be utilized for future issuance under
the Key Employee Long-Term Incentive Stock Plan and on any other matter which
may properly come before the meeting.
Any person giving a proxy has the power to revoke it any time before it is voted
by written notice to the Corporation or attending the meeting and voting the
shares.
The cost of preparation, assembly and mailing this Proxy Statement
material will be borne by the Corporation. It is contemplated that the
solicitation of proxies will be entirely by mail. This Proxy Statement and the
accompanying form of proxy are being mailed to shareholders of the Corporation
on or about March 31, 2000.
<PAGE> 4
THE ELECTION OF DIRECTORS
The Board of Directors will be comprised of twelve (12) members. Unless
instructed otherwise, the persons named on the accompanying Proxy Card will vote
for the election of the nominees named below to serve for the ensuing year and
until their successors are elected and have qualified. Twelve (12) of the
nominees are presently directors of the Corporation who were elected by the
shareholders at their last annual meeting.
If any nominee for director shall become unavailable (which management has no
reason to believe will be the case), it is intended that the shares represented
by the enclosed Proxy Card will be voted for any such replacement or substitute
nominee as may be nominated by the Board of Directors. A brief biographical
statement for each nominee follows:
NOMINEE AND YEAR PRESENT AND PAST POSITIONS
FIRST BECAME DIRECTOR AND OTHER INFORMATION
- --------------------------------------------------------------------------------
JULIUS W. BECTON, JR. General Becton's most recent position was Chief
1994 Executive Officer/Superintendent of the Washington,
Age 73 D.C. Public School System. He is also a former
President of Prairie View A & M University. He
[PHOTO] entered the Army as a Private in 1944 and rose to the
rank of Lieutenant General. While in the Army, he
commanded the lst Cavalry Division and the VII Corps,
and was the Deputy Commanding General of the U.S.
Army Training and Doctrine Command. He is a veteran
of three wars, World War II, the Korean War and
Vietnam. After departing the service in 1983, he
served as Director of the Office of U.S. Foreign
Disaster Assistance, and from 1985 to 1989 was the
Director, Federal Emergency Management Agency. He was
later chief operating officer for American Coastal
Industries, Inc. He is on the Boards of Directors of
General Dynamics Corporation, NSC Discovery Center,
Inc., and the Marine Spill Response Corporation. He
is a member of the Defense Science Board Readiness
Task Force. He is a trustee of the George C. Marshall
Foundation, and serves on the boards of several civic
public service organizations. He received numerous
U.S. Army service and valor awards, including the
Distinguished Service Medal; and the Distinguished
Service Award for his service as Director, Federal
Emergency Management Agency. He has a B.S. from
Prairie View A & M University; an M.A. in Economics
from the University of Maryland, and has been awarded
honorary Doctor of Laws degrees by four universities.
(d)(e)(f)
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3
<PAGE> 5
NOMINEE AND YEAR PRESENT AND PAST POSITIONS
FIRST BECAME DIRECTOR AND OTHER INFORMATION
- --------------------------------------------------------------------------------
ALAN B. BERNSTEIN Mr. Bernstein is Chief Operating Officer since March,
1998 2000 and has been Executive Vice President of the
Age 52 Corporation since 1991, and is also President of the
Corporation's Global Security Group. Mr. Bernstein
[PHOTO] has been with the Corporation since 1976, except for
a period in 1982 when he was a partner in a
family-owned security alarm business in New York
State. He was appointed President, Wackenhut Systems
Corporation in 1983, and subsequently was named Vice
President, Corporate Business Development in 1984;
Vice President, Domestic Operations in 1985; and was
Senior Vice President, Domestic Operations from
1986-91. He also serves on the Board of Directors of
Ranger Security Detectors, Inc., El Paso, Texas; and
several subsidiaries of the Corporation. He is a
member of the American Society for Industrial
Security. He has a B.S.E.E. degree from the
University of Rochester, and an M.B.A. degree from
Cornell University. (d)(f)
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CARROLL A. CAMPBELL, JR. Governor Campbell served two terms as the Governor of
1997 South Carolina (1987-95), and four terms representing
Age 59 South Carolina's fourth district in the U.S. House
of Representatives (1979-86). He also served in the
[PHOTO] South Carolina House of Representatives (1970-74) and
was elected to the South Carolina Senate in 1976.
While serving as Governor, he was also Chairman of
the National Governors Association (1993-94) and
co-chair of the National Governors Association Task
Force on Education. He is recognized as a leader in
promoting initiatives for excellence in education at
the state and national levels, and has served as
chairman of the National Education Goals Panel and
co-chair of the National Council on Education
Standards and Testing. Gov. Campbell is currently the
President and Chief Executive Officer of the American
Council of Life Insurers. His business career began
at age 19, when he co-founded a business which
eventually developed a chain of 13 restaurants. He
remains active today in several small business
enterprises and serves on the boards of directors for
the Fluor Corporation, AVX Corporation, Norfolk
Southern Corporation, and the Boy Scouts of America.
Heis ex officio board chairman for the Huntington
Society, an arts foundation. He has an M.A. degree
from American University, is a member of three
national honor societies, and holds nine honorary
doctorate degrees. (b)(e)
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BENJAMIN R. CIVILETTI Mr. Civiletti has been Chairman of the law firm
1998 Venable, Baetjer and Howard since 1993 and was
Age 64 Managing Partner of the firm from 1987 to 1993.
From 1979 to 1980, Mr. Civiletti served as the
Attorney General of the United States. Mr. Civiletti
[PHOTO] is Chairman of the Board of Greater Baltimore Medical
Center and the Founding Chairman of the Maryland
Legal Services Corporation; a Director of Bethlehem
Steel Corporation, and a Director of MBNA Corporation
and MBNA International. Mr. Civiletti has served as a
Director of Wackenhut Corrections Corporation since
April 1994. Mr. Civiletti is a Fellow of the American
Bar Foundation, the American Law Institute, and the
American College of Trial Lawyers. Mr. Civiletti was
Chairman of the Maryland Governor's Commission on
Welfare Policy in 1993, and a member of the Maryland
Governor's Task Force on Alternatives to
Incarceration in 1991. (b)(c)
4
<PAGE> 6
NOMINEE AND YEAR PRESENT AND PAST POSITIONS
FIRST BECAME DIRECTOR AND OTHER INFORMATION
- --------------------------------------------------------------------------------
ANNE NEWMAN FOREMAN Mrs. Foreman served as Under Secretary of the United
1993 States Air Force from September 1989 until January
Age 52 1993. Prior to her tenure as Under Secretary, she
was General Counsel of the Department of the Air
[PHOTO] Force and a member of the Departments Intelligence
Oversight Board. Mrs. Foreman served in the White
House as Associate Director of Presidential Personnel
for National Security (1985-1987) and practiced law
with the Washington office of the Houston-based law
firm of Bracewell and Patterson, and with the British
solicitors Boodle Hatfield, Co., in London, England
(1979-1985). Mrs. Foreman is a former member of the
career Foreign Service, having served in Beirut,
Lebanon; Tunis, Tunisia, and the U.S. Mission to the
United Nations in New York. She was a U.S. Delegate
to the 3lst Session of the U.N. General Assembly and
to the 62nd Session of the U.N. Economic and Social
Council. Mrs. Foreman received a B.A. degree, Magna
Cum Laude, from the University of Southern California
and a M.A. (History) from the same institution. She
also holds a J.D. from American University and was
awarded an Honorary Doctorate of Laws from Troy State
University. Mrs. Foreman is a member of Phi Beta
Kappa, has been a member of numerous Presidential
delegations, and was twice awarded the Air Force
Medal for Distinguished Civilian Service. Mrs.
Foreman is a member of the Board of Directors of
Ultra Electronics Defense, Inc. She also serves as a
trustee of The National Gypsum Company
Settlement Trust and as Director and Treasurer of the
Asbestos Claims Management Corporation. (d)(e)
- --------------------------------------------------------------------------------
EDWARD L. HENNESSY, JR. Mr. Hennessy, Jr. served as Chairman of the Board
1993 and Chief Executive Officer of Allied-Signal Inc.
Age 72 from 1979 to 1991. He was previously Executive Vice
President and member of the Board of Directors and
[PHOTO] Executive Committee of United Technologies
Corporation, Senior Vice President for Administration
and Finance for Heublein, Inc. and Controller with
IT&T Corporation. He is a member of the Board of
Directors of Avanir Pharmaceuticals Corp.. He is a
Trustee of The Catholic University of America, a
Director of The Coast Guard Academy Foundation, Inc.,
founding President of the Tri-County Scholarship Fund
and Vice-Chairman of the March of Dimes. He was a
member of The Presidents Private Sector Survey on
Cost Control, The (New Jersey) Governors Management
Improvement Plan, Inc., and the Tender Offer Advisory
Committee of the Securities & Exchange Commission. He
also is a member of The Conference Board, Inc. and
the Economic Club of New York. He has numerous
honorary degrees and is a graduate of Fairleigh
Dickinson University in New Jersey, where he is a
former Trustee and Chairman of the University's
Board. (a)(c)
5
<PAGE> 7
NOMINEE AND YEAR PRESENT AND PAST POSITIONS
FIRST BECAME DIRECTOR AND OTHER INFORMATION
- --------------------------------------------------------------------------------
PAUL X. KELLEY General Kelley is a Partner with J.F. Lehman, Inc.,
1988 a New York private investment firm. He served as
Age 71 Vice Chairman, Cassidy & Associates, Inc., a
government relations firm from 1989 to 1998. Prior to
[PHOTO] that, he was Commandant of the Marine Corps and
Member of the Joint Chiefs of Staff from 1983 until
his retirement in 1987. He currently serves on the
Boards of Directors of Extant, Inc., a
telecomunications company; London Life Reinsurance
Company, a reinsurance company; Park Place
Entertainment Corporation, a gaming company; Saul
Centers, Inc., a real estate investment trust; Sturm,
Ruger & Company, Inc., a firearms company; and UST,
Inc., a smokeless tobaco, cigar and wine company. He
is the recipient of numerous awards for valor and
distiguished service during thirty-seven years of
active military service. General Kelley has a B.S. in
Economics from Villanova University and is a
Distiguished Graduate of the Air War College. He is
the recipient of five honorary doctorate degrees from
major universities. (b)(c)(e)
- --------------------------------------------------------------------------------
NANCY CLARK REYNOLDS Ms. Reynolds is Senior Consultant of The Wexler
1986 Group, a governmental relations and public affairs
Age 72 consulting firm in Washington, D.C.. She is a member
of the Board of the National Park Foundation and a
[PHOTO] trustee of the Smithsonian Museum of the American
Indian. She is a past President of the Business and
Government Relations Council. Ms. Reynolds is also
currently Chairman of Crow Canyon Archaeological
Center in Cortez, Colorado. She was formerly a
Director of the Chicago Mercantile Exchange, G.D.
Searle & Co., Sears, Roebuck & Co., Allstate
Insurance Company and Viacom International. From
1977-82, she was a Vice President of the Bendix
Corporation. She received her B.A. degree in English
from Goucher College and an Honorary Degree of Law
from Gonzaga University. (b)(f)
- --------------------------------------------------------------------------------
JOHN F. RUFFLE Mr. Ruffle is a retired Vice Chairman and Director
1998 of J.P. Morgan & Co., Inc. and Morgan Guaranty Trust
Age 62 Company of New York since June 1, 1993. He joined
J.P. Morgan in 1970 as Controller and was named CFO
[PHOTO] in 1980, and elected Vice Chairman in 1985. Earlier,
he was Assistant Treasurer and Director of Accounting
for International Paper Company. Mr. Ruffle also
serves as a Director of Bethlehem Steel Corporation,
American Shared Hospital Services and Trident
Corporation, and Wackenhut Corrections Corporation.
He is a Trustee of the Johns Hopkins University and
of JPM Series Trust II (mutual funds). He is a past
President of the Board of Trustees of the Financial
Accounting Foundation and a past Chairman of the
Financial Executives Institute, and in 1991 received
the Financial Executive Institute's National Award
for Distinguished Service. Mr. Ruffle is a graduate
of the Johns Hopkins University and earned an M.B.A.
in Finance from Rutgers University. He is also a CPA.
(c)(d)
6
<PAGE> 8
NOMINEE AND YEAR PRESENT AND PAST POSITIONS
FIRST BECAME DIRECTOR AND OTHER INFORMATION
- --------------------------------------------------------------------------------
THOMAS P. STAFFORD General Stafford is a Consultant for the firm of
1991 General Technical Services, Inc., which he joined in
Age 69 1984. He is also Vice Chairman and co-founder of
Stafford, Burke and Hecker, Inc., a Washington-based
[PHOTO] consulting firm. After serving as an astronaut for a
number of years, he retired in 1979 from the Air
Force as Deputy Chief of Staff for Research,
Development and Acquisition and served as Vice
Chairman of Gibraltar Exploration Limited until 1984.
Gen. Stafford is also Chairman of the Board of Omega
Watch Corporation of America and is a Director of CMI
Corporation; Cycomm International, Inc.; Seagate
Technology, Inc.; Timet, Inc.; and Tremont
Corporation. General Stafford served as a Director of
the Corporation from 1991 to 1996.
- --------------------------------------------------------------------------------
GEORGE R. WACKENHUT Mr. Wackenhut is Chairman of the Board and was Chief
1958 Executive Officer of the Corporation until February
Age 80 17, 2000. He was President of the Corporation from
the time it was founded until April 26, 1986. He
[PHOTO] formerly was a Special Agent of the Federal Bureau of
Investigation. Mr. Wackenhut is Chairman of the Board
of Directors of Wackenhut Corrections Corporation, a
member of the Board of Trustees of Correctional
Properties Trust, a former member of the Board of
Directors of SSJ Medical Development, Inc., Miami,
Florida, and is on the Deans Advisory Board of the
University of Miami School of Business. He is on the
National Council of Trustees, Freedoms Foundation at
Valley Forge, the Presidents Advisory Council for the
Small Business Administration, Region IV, and a
member of the National Board of the National Soccer
Hall of Fame. He is a past participant in the Florida
Governors War on Crime and a past member of the Law
Enforcement Council, National Council on Crime and
Delinquency, and the Board of Visitors of the U.S.
Army Military Police School. He is also a member of
the American Society for Industrial Security. Mr.
Wackenhut was a recipient in 1990 of the Labor Order
of Merit, First Class, from the government of
Venezuela; and, in 1999 was awarded the distinguished
Ellis Island Medal of Honor by the National Ethnic
Coalition of Organizations. Also in 1999, he was
inducted into the West Chester University Hall of
Fame and the Athlete's Hall of Fame in his home
county, Delaware County, PA. He received his B.S.
degree from the University of Hawaii and his M.Ed.
degree from Johns Hopkins University. Mr. Wackenhut
is married to Ruth J. Wackenhut, Secretary of the
Corporation. His son Richard R. Wackenhut, is the
Vice Chairman, President, Chief Executive Officer and
Director of the Corporation. (a)(f)
7
<PAGE> 9
NOMINEE AND YEAR PRESENT AND PAST POSITIONS
FIRST BECAME DIRECTOR AND OTHER INFORMATION
- --------------------------------------------------------------------------------
RICHARD R. WACKENHUT Mr. Wackenhut is Vice Chairman of the Board since
1986 November 5, 1999, and President and Chief Executive
Age 52 Officer since February 17, 2000. He was President
and Chief Operating Officer of the Corporation from
[PHOTO] April, 1986 to April, 2000. He was formerly Senior
Vice President, Operations from 1983-1986. He was
Manager of Physical Security from 1973-74. He also
served as Manager, Development at the Corporations
Headquarters from 1974-76; Area Manager, Columbia, SC
from 1976-77; District Manager, Columbia, SC from
1977-79; Director, Physical Security Division at
Corporate Headquarters 1979-80; Vice President,
Operations from 1981-82; and Senior Vice President,
Domestic Operations from 1982-83. Mr. Wackenhut is a
member of the Board of Directors of Wackenhut
Corrections Corporation, a Director of Wackenhut del
Ecuador, S.A.; Wackenhut UK, Limited; Wackenhut
Dominicana, S.A.; Wackenhut Resources, Inc.; the
Board of Trustees of Correctional Properties Trust;
and a Director of several domestic subsidiaries of
the Corporation. He is Vice Chairman of Associated
Industries of Florida. He is also a member of the
American Society for Industrial Security, a member of
The Citadel Advisory Council, a member of the
International Security Management Association, and
the International Association of Chiefs of Police. He
received his B.A. degree from The Citadel in 1969,
and completed the Advanced Management Program of the
Harvard University School of Business Administration
in 1987. Mr. Wackenhut is the son of George R.
Wackenhut, a Director-Nominee, and Ruth J. Wackenhut,
Secretary of the Corporation. (a)(d)
(a) Member of Executive Committee
(b) Member of Nominating and Compensation Committee
(c) Member of Audit and Finance Committee
(d) Member of Corporate Planning Committee
(e) Member of Operations and Oversight Committee
(f) Member of Fair Employment Practices Committee
The election of the directors listed on the previous pages will require the
affirmative vote of the holders of a plurality of the shares present or
represented at the shareholders meeting. Abstentions will be treated as shares
represented at the meeting and therefore will be the equivalent of a negative
vote, and broker non-votes will not be considered as shares represented at the
meeting.
8
<PAGE> 10
COMPOSITION AND FUNCTIONS OF SPECIFIC COMMITTEES OF THE BOARD OF DIRECTORS
The Wackenhut Corporation has an Audit and Finance Committee whose members are
as follows:
Edward L. Hennessy, Jr., Chairman Benjamin R. Civiletti
John F. Ruffle, Vice Chairman Paul X. Kelley
The Audit and Finance Committee met four times during the past fiscal year.
The Audit and Finance Committees principal functions and responsibilities are as
follows:
1. Recommend the selection, retention, or termination of the
Corporations independent auditors.
2. Review the proposed scope of the audit and fees.
3. Review the quarterly and annual financial statements and the
results of the audit with management, the internal auditors,
and the independent auditors with emphasis on the quality of
earnings in terms of accounting policies selected; this
activity would also entail assisting in the resolution of
problems that might arise in connection with an audit if and
when this becomes necessary.
4. Review with management and independent auditors the
recommendations made by the auditors with respect to changes
in accounting procedures and internal accounting controls as
well as other matters of concern to the independent auditors
resulting from their audit activity.
5. Review with management and members of the internal audit team
the activities of and recommendations made by this group.
6. Inquire about and be aware of all work (audit, tax,
consulting) that the independent auditors perform for the
Corporation.
7. Recommend policies to avoid unethical, questionable, or
illegal activities by Corporation personnel.
8. Make periodic reports to the full Board on its activities.
The Wackenhut Corporation also has a Nominating and Compensation Committee
which, in addition to its role in recommending compensation for the Chief
Executive Officer and the other executive officers, evaluates possible Director
nominees and makes recommendations concerning such nominees to the Board of
Directors, and recommends to the Chairman and the Board itself the composition
of Board Committees and nominees for officers of the Corporation. See the Report
of the Compensation Committee later in this Proxy Statement.
Shareholders desiring to suggest qualified nominees for director should advise
the Assistant Secretary of the Corporation in writing and include sufficient
biographical material to permit an appropriate evaluation.
A total number of five meetings of the Board of Directors was held during the
1999 fiscal year.
SECURITY OWNERSHIP
The following table shows the number of shares of the Corporations Series A and
Series B Common Stock, each with a par value of $.10 per share, that was
beneficially owned as of March 7, 2000, by each Director-Nominee for election as
director at the 2000 Annual Meeting of Shareholders, by each named executive
officer, by all Director-Nominees and executive officers as a group, and by each
person or group who was known by the Corporation to beneficially own more than
5% of the Corporations outstanding Series A or Series B Common Stock.
9
<PAGE> 11
<TABLE>
<CAPTION>
COMMON STOCK
SERIES A-(VOTING) SERIES B-(NON-VOTING)
BENEFICIAL OWNER (1) AMOUNT & NATURE PERCENT AMOUNT & NATURE PERCENT
OF BENEFICIAL OF OF BENEFICIAL OF
OWNERSHIP (2) CLASS OWNERSHIP (2)(6) CLASS
==============================================================================================
<S> <C> <C> <C> <C>
DIRECTOR NOMINEES
Julius W. Becton, Jr. 0 * 10,656 *
Alan B. Bernstein 500 * 109,988 *
Carroll A. Campbell, Jr. 0 -- 4,000 *
Benjamin R. Civiletti 0 -- 4,000 *
Anne Newman Foreman 200 * 10,550 *
Edward L. Hennessy, Jr. 200 * 10,862(3) *
Paul X. Kelley 1,000(3) * 12,937(3) *
Nancy Clark Reynolds 1,400 * 11,912 *
John F. Ruffle 500 * 5,000 *
Thomas P. Stafford 0 -- 6,500 *
George R. Wackenhut 1,929,606 50.05% 2,310,490(4) 20.36%
Richard R. Wackenhut 65 * 839,901(5) 7.40%
EXECUTIVE OFFICERS
George C. Zoley 0 -- 0 --
Philip L. Maslowe 0 -- 55,633 *
ALL NOMINEES AND EXECUTIVE 1,933,471 50.15% 3,687,316 32.05%
OFFICERS AS A GROUP
OTHER
Dimensional Fund Advisor, Inc. (7) 225,600 5.85 -- --
Fleet Boston Corporation (8) 194,283 5.04 -- --
Eagle Asset Management, Inc. (9) -- -- 958,431 8.44%
Neuberger Berman, Inc. (10) -- -- 823,749 7.26%
</TABLE>
*Beneficially owns less than 1%
(1) Unless stated otherwise, the address of the beneficial owners
is 4200 Wackenhut Drive #100, Palm Beach Gardens, Florida
33410.
(2) Information concerning beneficial ownership was furnished by
the persons named in the table or derived from documents filed
with the Securities and Exchange Commission. Except as
otherwise indicated below, each person named in the table has
sole voting and investment power with respect to the shares
beneficially owned. Each person reported as the beneficial
owner of stock owned of record by, or in joint tenancy with
another person, has only shared voting and investment power
over the stock.
(3) All shares held jointly with his wife.
(4) George R. Wackenhut and Ruth J. Wackenhut, his wife and
Secretary of the Corporation, through trusts over which they
have sole dispositive and voting power, control 50.05% of the
issued and outstanding voting common stock of The Wackenhut
Corporation.
(5) 65 shares of Series A and 137 shares of Series B held in trust
for daughter, Jennifer A. Wackenhut, under Florida Gifts to
Minors Act and 698,155 Series B shares held in an irrevocable
family trust for the benefit of Richard R. Wackenhut and the
balance held directly by him.
10
<PAGE> 12
(6) Includes Series B shares over which the Executive Officers and
Director Nominees have options. Also includes options to be
granted under the Key Employee Long-Term Incentive Stock Plan.
On February 17, 2000, that the Board of Directors authorized
the grant of options on May 6, 2000 (the strike price for each
such grant to be set at the closing price for the day
immediately prior to the grant date) to the following
Executive Officers in the following amounts:
George R. Wackenhut 10,000 Richard R. Wackenhut 10,000
Alan B. Bernstein 7,500 Philip L. Maslowe 5,000
(7) The principal business address of Dimensional Fund Advisors,
Inc. is 1299 Ocean Avenue, 1st Floor, Santa Monica, CA 90401
(8) The principal business address of Fleet Boston Corporation is
One Federal Street, Boston, MA 02110
(9) The principal business address of Eagle Asset Management, Inc.
is 880 Carillon Pkwy, St. Petersburg, FL 33716.
10) Persons Filing: Neuberger Berman, Inc. and Newberger Berman,
LLC both with principal business addresses of 605 Third
Avenue, New York, NY 10158-3698
EXECUTIVE COMPENSATION
The following table shows remuneration paid or accrued by the Corporation during
the fiscal year ended January 2, 2000, and each of the two preceding fiscal
years, to the Chief Executive Officer and to each of the four most highly
compensated executive officers of the Corporation other than the Chief Executive
Officer for services in all capacities while they were employees of the Company,
and the capacities in which the services were rendered.
<TABLE>
<CAPTION>
SUMMARY COMPENSATION TABLE
LONG-TERM COMPENSATION
------------------------------------------------
AWARDS
------------------------ PAYOUTS
RESTRICTED SECURITIES ------- ALL OTHER
ANNUAL COMPENSATION STOCK UNDERLYING LTIP COMPEN-
-------------------------- AWARDS OPTIONS/ PAYOUTS SATION
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($) ($)(1)(2) SARS(#)(3) ($) ($)(4)(5)&(6)
- --------------------------- ---- ---------- --------- --------- ---------- ------- --------------
<S> <C> <C> <C> <C> <C> <C> <C>
George R. Wackenhut, 1999 1,316,000 620,000 231,000 30,000 152,830 16,543
Chairman of the Board 1998 1,154,000 537,000 -- 30,000 344,363 16,543
1997 1,006,000 250,000 -- 22,000 -- 16,543
Richard R. Wackenhut, 1999 872,000 411,000 58,328 25,000 58,820 95,000
Vice Chairman of the Board 1998 772,000 410,000 46,662 25,000 135,069 517,664
and Chief Executive Officer 1997 643,000 200,000 42,329 20,000 -- 78,500
Alan B. Bernstein, 1999 500,000 235,000 29,997 20,000 31,260 82,000
Chief Operating Officer and 1998 456,000 260,000 25,497 20,000 68,519 297,040
Executive Vice President 1997 382,000 165,000 22,498 15,000 -- 67,000
George C. Zoley, Senior Vice 1999 500,000 195,500 -- 33,000 -- --
President, and President, CEO 1998 436,000 227,000 -- 30,000 -- --
and Director of Wackenhut 1997 366,000 122,500 -- 20,000 -- --
Corrections Corporation
Philip L. Maslowe, Senior 1999 325,000 145,000 17,598 15,000 6,330 48,000
Vice President, Finance, Chief 1998 316,000 176,000 15,998 10,000 -- 141,842
Financial Officer and Treasurer 1997 95,000 50,000 5,719 30,000 -- 65,000
</TABLE>
11
<PAGE> 13
(1) The aggregate number and value of restricted stock holdings (including
restricted stock units and performance shares) based upon the Series B
Common Stock fair market value at January 2, 2000 is as follows:
<TABLE>
<CAPTION>
RESTRICTED
STOCK PERFORMANCE TOTAL FAIR
UNITS SHARES UNITS/SHARES MARKET VALUE
================================================================================================================
<S> <C> <C> <C> <C>
G.R. Wackenhut 13,295 25,339 38,634 $398,413
R.R. Wackenhut 20,136 11,360 31,496 324,803
A.B. Bernstein 10,291 5,991 16,282 167,908
P.L. Maslowe 2,110 3,619 5,729 59,080
G.C. Zoley -- -- -- --
</TABLE>
Restricted stock units do not vest until after 7 years continuous employment
from the date of grant.
(2) Dividend equivalents were paid in cash on all restricted stock units
in 1999.
(3) The following securities underlying options were granted under stock
option plans of Wackenhut Corrections Corporation:
<TABLE>
<CAPTION>
SECURITIES UNDERLYING OPTIONS(#)
NAME 1999 1998 1997
==========================================================
<S> <C> <C> <C>
George R. Wackenhut -- -- --
Richard R. Wackenhut -- -- --
Alan B. Bernstein -- -- --
Philip L. Maslowe -- -- --
George C. Zoley 33,000 30,000 20,000
</TABLE>
(4) This column represents (for the Chairman of the Board) the cost of a
split-dollar life insurance policy covering George R. Wackenhut and
Ruth J. Wackenhut.
(5) This column represents (except for the Chairman of the Board) the cost
of providing for future liabilities under the Senior Officer
Retirement Plan except for Mr. Zoley who is provided for under the
Corrections Subsidiary Senior Officer Retirement Plan.
(6) This column includes early distributions in 1998 of deferred
compensation for R. R. Wackenhut and A. B. Bernstein of $244,664 and
$63,040, respectively, and relocation expense allowance of $92,842 in
1998 for P. L. Maslowe.
12
<PAGE> 14
LONG-TERM INCENTIVE PLAN - AWARDS IN THE LAST FISCAL YEAR
The following table sets forth certain information concerning awards made under
the Company's Key Employee Long-Term Incentive Stock Plan to the named
executives during fiscal 1999. The Plan is a series of successive overlapping
three-year periods commencing the first day of each fiscal year. Awards are
earned only if certain predetermined criteria are met. Adjustments may be made
in performance share awards to consider aspects of performance that may not be
reflected in the Company's financial results.
<TABLE>
<CAPTION>
ESTIMATED FUTURE PAYOUTS
NUMBER OF PERFORMANCE UNDER NON-STOCK PRICE-BASED PLAN
SHARES, OR OTHER
UNITS, OR PERIOD UNTIL THRESHOLD TARGET MAXIMUM
OTHER RIGHTS MATURATION OR PAYOUT PAYOUT PAYOUT
NAME (#) (1) PAYOUT (2) ($) ($) ($)
==================================================================================================================
<S> <C> <C> <C> <C> <C>
George R. Wackenhut 13,295 1999-2001 115,500 231,000 346,500
Richard R. Wackenhut 6,715 1999-2001 58,337 116,673 175,010
Alan B. Bernstein 3,453 1999-2001 30,002 60,003 90,005
George C. Zoley -- 1999-2001 -- -- --
Philip L. Maslowe 2,026 1999-2001 17,601 35,202 52,803
</TABLE>
(1) Performance shares and restricted stock units are awarded under the
Plan, however, only performance shares are reflected above since
restricted stock units are not contingent upon performance and are
reported separately in the Summary Compensation Table, Long-Term
Compensation Restricted Stock Awards column.
(2) Earnings per share performance goals are set by the Nominating and
Compensation Committee for all of the three-year performance cycles.
OPTIONS/SAR GRANTS IN THE LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
---------------------------- POTENTIAL REALIZABLE
NUMBER OF % OF TOTAL VALUE AT ASSUMED
SECURITIES OPTIONS/SARS ANNUAL RATES OF STOCK
UNDERLYING GRANTED TO EXERCISE OR PRICE APPRECIATION
OPTIONS/SARS EMPLOYEES IN BASE PRICE EXPIRATION FOR OPTION TERM(3)
NAME GRANTED FISCAL YEAR ($/SHARE) DATE5 5% ($) 10%($)
==========================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
George R. Wackenhut(1) 30,000 13.0% 16.69 17-Feb-09 314,840 797,867
Richard R. Wackenhut(1) 25,000 10.9% 16.69 17-Feb-09 262,367 664,889
Alan B. Bernstein(1) 20,000 8.7% 16.69 17-Feb-09 209,894 531,912
George C. Zoley(2) 33,000 12.3% 18.63 17-Feb-09 386,534 979,554
Philip L. Maslowe(1) 15,000 6.5% 16.69 17-Feb-09 157,420 398,934
</TABLE>
(1) Options granted under the Key Employee Long-Term Incentive Stock Plan
of the Corporation (the "Incentive Stock Plan").
(2) Options granted under Wackenhut Corrections Corporation's Stock Option
Plan - 1999.
(3) The full option term was used in the 5% and 10% annual growth
projections for the price of the underlying stock.
13
<PAGE> 15
AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
AND FISCAL YEAR-END OPTION/SAR VALUES
<TABLE>
<CAPTION>
NUMBER OF
SECURITIES VALUE OF
UNDERLYING UNEXERCISED
UNEXERCISED IN-THE MONEY
OPTIONS/SARS OPTIONS/SARS
AT FISCAL AT FISCAL
SHARES YEAR-END (#) YEAR-END ($)
ACQUIRED VALUE ---------------------------------------------------
ON EXERCISE REALIZED EXERCISABLE (E)/ EXERCISABLE (E)/
(#) ($) UNEXERCISABLE (U) UNEXERCISABLE (U)
==================================================================================================================
<S> <C> <C> <C> <C>
George R. Wackenhut (A) NONE NA 159,375 E 142,742 E
(B) NONE NA 32,864 E 344,661 E
(C) NONE NA 74,666 E 592,661 E
Richard R. Wackenhut (A) 25,250 387,335 114,500 E 24,915 E
(C) NONE NA 74,666 E 592,661 E
Alan B. Bernstein (A) 900 13,694 92,788 E 93,589 E
(C) 10,000 245,000 46,000 E 365,125 E
George C. Zoley (C) NONE NA 116,000 E 198,438 E
12,000 U 0 U
Philip L. Maslowe (A) NONE NA 55,000 E 0 E
</TABLE>
(A) The Key Employee Long-Term Incentive Stock Plan of the
Corporation (the "Incentive Stock Plan")
(B) Wackenhut Corrections Corporation Stock Option Plan - 1994
(C) Wackenhut Corrections Corporation Stock Option Plan - 1999
14
<PAGE> 16
EMPLOYMENT AND SERVICE AGREEMENTS
EMPLOYMENT AGREEMENT WITH GEORGE R. WACKENHUT
The Corporation entered into a three year employment agreement with
George R. Wackenhut who is the Chairman of the Board of Directors, effective as
of March 17, 2000. The employment agreement provides that George Wackenhut will
receive an initial annual base salary of $1,584,000, subject to possible
increases from time to time in the sole discretion of the Board of Directors or
the Compensation Committee. In addition, George Wackenhut will be eligible for
an annual bonus of a minimum of 35% of his base salary, based on the achievement
of certain targets and incentives. The employment agreement also provides for
certain benefits to George Wackenhut including life and health insurance, an
automobile allowance, and other benefits generally available to executive
officers.
The Corporation or George Wackenhut may terminate the employment
agreement for any reason. Upon such termination of employment, George Wackenhut
will be entitled to receive the following: (1) the unpaid portion of his salary
payable through the date of termination of employment; (2) all vested accrued
benefits as of the date of termination of employment that he is entitled to
under the Corporation's benefit plans; (3) all of the Corporation's interest in
any automobile used by George Wackenhut and the payment of the balance of any
outstanding loan or lease on such automobile; and (4) the Retirement Benefit
described below.
In the event of termination of George Wackenhut's employment for any
reason, he and his spouse will be entitled to receive, on an annual basis, for
the remainder of George Wackenhut's life, and upon his death, for the remainder
of his spouse's life, any benefits or perquisites requested by him (or in the
event of his death, his spouse), not to exceed $250,000 per year (the
"Retirement Benefit").
The employment agreement provides that if any payment to George
Wackenhut thereunder would be subject to federal excise taxes imposed on certain
severance payments, the Corporation will make an additional payment to him to
cover any such tax payable by him and the taxes on such gross-up payment.
EMPLOYMENT AGREEMENT WITH RICHARD R. WACKENHUT
The Corporation entered into a ten year employment agreement with Richard
R. Wackenhut to act as the Chief Executive Officer of the Corporation, effective
as of March 17, 2000. The employment agreement provides that Richard Wackenhut
will receive an initial annual base salary of $1,050,000, subject to possible
increases from time to time in the sole discretion of the Board of Directors or
the Compensation Committee. In addition, Richard Wackenhut will be eligible for
an annual bonus of a minimum of 35% of his base salary, based on the achievement
of certain targets and incentives. The employment agreement also provides for
certain benefits to Richard Wackenhut including life and health insurance, an
automobile allowance and other benefits generally available to executive
officers.
If the Corporation terminates Richard Wackenhut's employment for any
reason other than death, or if he elects to terminate his employment for "good
reason", as defined in his employment agreement, he will be entitled to the
following: (1) a lump sum payment equal to the number of years remaining under
the employment agreement multiplied by the sum of his annual salary and the
greater of his most recent target or actual annual bonus payment (the "Special
Termination Payment"); (2) the continuation of his employee benefits for the
remainder of the term of the employment agreement; (3) immediate vesting of
awards granted pursuant to the Corporation's Employee Long-Term Incentive Stock
Plan and other stock options, without regard to restrictions on restricted stock
and performance targets with respect to performance units or shares; (4) all of
the Corporation's interest in any automobile used by Richard Wackenhut and the
payment of the balance of any outstanding loan or lease on such automobile; (5)
the present value of all cash payments pursuant to the amended Retirement
Agreement (as described in the "Senior Officer Retirement Plan") as if he had
remained employed until the Retirement Date defined therein; and (6) the dollar
value of the sum of vacation time had he remained employed and accrued vacation
time.
If Richard Wackenhut's employment is terminated due to his death, his
estate will be entitled to the following: (1) earned and unpaid base salary; and
(2) the Special Termination Payment.
15
<PAGE> 17
If, more than 18 months after a Change in Control (as defined below),
Richard Wackenhut terminates his employment, he would be entitled to receive the
benefits described in the previous paragraph regarding termination for good
reason. A Change in Control for purposes of Richard Wackenhut's employment
agreement generally includes the occurrence of any of the following: (1) any
person, other than exempt persons (including the Controlling Shareholder Group
[as defined below], becomes a beneficial owner of 30% or more of the combined
voting power of the Corporation's outstanding securities; (2) the approval by
shareholders of a merger or consolidation, except a merger or consolidation
where existing shareholders would own more than 80% of the combined voting power
of the voting securities of the Corporation or the surviving company; (3) the
approval by shareholders of a liquidation or the sale or disposition of all or
substantially all of the Corporation's assets; or (4) the Controlling
Shareholder Group (as defined below) owns 30% or less of the combined voting
stock of the Corporation. A Change in Control will not be deemed to occur if
Richard Wackenhut is part of the purchasing group which consummates a
transaction causing a Change in Control. The Controlling Shareholder Group
includes George Wackenhut, his spouse and lineal descendants, trusts formed for
the benefit of such persons, and affiliates of such persons.
The employment agreement provides that if any payment to Richard
Wackenhut thereunder would be subject to federal excise taxes imposed on certain
severance payments, the Corporation will make an additional payment to him to
cover any such tax payable by him and the taxes on such gross-up payment.
SEVERANCE AGREEMENTS
The Corporation entered into severance agreements with Alan Bernstein,
Philip Maslowe and certain other officers. The severance agreements provide that
if an officer's employment ceases for any reason during the 12 month period
following a Change in Control (as defined above in the employment agreement for
Richard Wackenhut), he or she will be entitled to the following: (1) a lump sum
payment equal to three times the sum of his or her annual salary and the greater
of his or her most recent target or actual annual bonus payment; (2) the
continuation of his or her employee benefits for three years, or at the election
of the officer, an amount equal to the present value of the cost of providing
such benefits; (3) immediate vesting of awards granted pursuant to the
Corporation's Employee Long-Term Incentive Stock Plan and other stock options,
without regard to restrictions on restricted stock and performance targets with
respect to performance units or shares; (4) all of the Corporation's interest in
any automobile used by the officer and the payment of the balance of any
outstanding loan or lease on such automobile; (5) the present value of all cash
payments pursuant to the Retirement Agreements (as described in the "Senior
Officer Retirement Plan") as if he or she had remained employed until the
retirement date defined therein; and (6) the dollar value of the sum of vacation
time had he or she remained employed and accrued vacation time.
The severance agreements include a non-competition agreement for a
period of 12 months after the termination of the officer's employment.
The severance agreements provide that if any payment to the officer
thereunder would be subject to federal excise taxes imposed on certain severance
payments, the Corporation will make an additional payment to him or her to cover
any such tax payable by him or her and the taxes on such gross-up payment.
16
<PAGE> 18
SENIOR OFFICER RETIREMENT PLAN
The following table sets forth the estimated annual benefits payable under the
Retirement Plan for senior officers.
<TABLE>
<CAPTION>
RETIREMENT PLAN TABLE
ANNUAL BENEFITS
-------------------------------------------------------------
OFFICER BENEFICIARIES
-------------------------------------------------------------
<S> <C> <C> <C> <C>
R.R. Wackenhut $175,000 25 years $100,000 12.5 years
A.B. Bernstein 250,000 25 years 100,000 12.5 years
P. L. Maslowe 200,000 25 years 50,000 12.5 years
</TABLE>
The retirement benefits for senior officers are contained in deferred
compensation agreements and senior officer retirement agreements between the
Corporation, Richard Wackenhut, Alan Bernstein, Philip Maslowe, and certain
other senior officers (the "Retirement Agreements"). The Retirement Agreements
provide that the Corporation will pay certain sums to the senior officers or
their beneficiaries for twenty five (25) years beginning on the date of their
death or retirement after age 60, or to their beneficiaries for twelve and one
half (12.5) years if they die before age 60.
On March 17, 2000, the Corporation amended the Retirement Agreements as follows:
(1) upon a Change of Control (as defined under "Employment Agreement with
Richard R. Wackenhut"), the senior officers will be entitled to receive the
payments disclosed in the Retirement Plan Table at the age of 55, rather than 60
years (the "Retirement Date"); (2) upon a Change of Control, they will be
entitled to receive the present value of such payments as if they had been
employed through the Retirement Date; and (3) the amounts payable to the senior
officers and the duration of payments, other than payments to Richard Wackenhut,
were increased.
With respect to the five most highly compensated executive officers of the
Corporation, George Wackenhut is not a party to a Retirement Agreement, and
George Zoley participates in an Executive Officer Retirement Plan established by
Wackenhut Corrections Corporation. Philip Maslowe, Richard Wackenhut and Alan
Bernstein are parties to Retirement Agreements and are vested in all benefits
contained therein.
The following table sets forth the estimated annual benefits payable under the
Executive Officer Retirement Plan to Dr. George Zoley:
<TABLE>
<CAPTION>
PENSION PLAN TABLE
REMUNERATION(1) ESTIMATED ANNUAL RETIREMENT BENEFITS (2)(3)
ASSUMED AVERAGE --------------------------------------------
ANNUAL SALARY
FOR FIVE-YEAR PERIOD YEARS OF SERVICE
PRECEDING ----------------
RETIREMENT 10 15 20 25 30 35
==========================================================================================
<S> <C> <C> <C> <C> <C> <C>
400,000 54,552 88,355 121,882 155,097 151,962 148,432
500,000 72,552 115,355 157,882 200,097 196,962 193,432
600,000 90,552 142,355 193,882 245,097 241,962 238,432
</TABLE>
(1) The estimated annual payments under the plan would be based upon an
average compensation of $500,000 for Dr. Zoley.
(2) Dr. Zoley has been credited with 18 years of service at the end of
1999.
(3) The Retirement plan is a defined benefit plan which bases benefits upon
the participant's final average annual salary earned during the last
five years of credited service. Benefits under the Retirement Plan are
offset by social security benefits. Dr. Zoley is fully vested in the
Retirement Plan.
17
<PAGE> 19
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Nominating and Compensation Committee of the Board of Directors (the
Compensation Committee) met two times in fiscal 1999. The Compensation Committee
is composed exclusively of independent, non-employee directors who are not
eligible to participate in any of the executive compensation programs. Among its
duties, the Compensation Committee is responsible for recommending to the full
Board the annual remuneration for all executive officers, including the Chief
Executive Officer and the other officers named in the Summary Compensation Table
set forth above, and to oversee the Company's compensation plans for key
employees. The Compensation Committee seeks to provide, through its
administration of the Company's compensation program, salaries that are
competitive and incentives that are primarily related to corporate performance.
The components of the compensation program are base salary, annual incentive
bonuses, retirement plans (as noted earlier in this section of the Proxy), and
long-term incentive awards.
Base salary is the fixed amount of total annual compensation paid to executives
on a regular basis during the course of the fiscal year. Management of the
Company determines a salary for each senior executive position (exclusive of the
CEO and COO) that it believes is appropriate to attract and retain talented and
experienced executives, and that is generally competitive with salaries for
executives holding similar positions at comparable companies. The starting point
for this analysis is each officers base salary for the immediately preceding
fiscal year. From time to time, management obtains reports from independent
organizations concerning compensation levels for reasonably comparable
companies. This information is used as a market check on the reasonableness of
the salaries proposed by management. The comparator companies are composed of a
diversified group of service companies whose revenue, performance, and position
matches were deemed relevant and appropriate by the outside firm. Management
recommends executive salaries to the Compensation Committee.
The Compensation Committee reviews and adjusts the salaries suggested by
management as it deems appropriate, and generally asks management to justify its
recommendations, particularly if there is substantial deviation between the
recommended salary and an officers compensation for the prior fiscal year. In
establishing the base salary for each officer (including that of the CEO and
COO), the Compensation Committee evaluates numerous factors, including the
Company's operating results, net income trends, and stock market performance, as
well as comparisons with financial and stock performance of other companies,
including those that are in competition with the Company. In addition, data
developed as a part of the strategic planning process, but which may not
directly relate to corporate profitability, is utilized as appropriate. For
example, the Compensation Committee may take into consideration an officers
efforts in positioning the Company for future growth.
The Summary Compensation Table set forth elsewhere in this Proxy Statement shows
the salaries of the CEO and the other named executive officers for the last
three years. The increase in the CEO's salary for 1999 was attributable to the
overall financial performance of the Company, strategic objectives and the
quality of his leadership. In 1999, the Compensation Committee formally
evaluated the performance of the CEO.
The Company has an incentive compensation plan (the Bonus Plan) for officers and
key employees. The aggregate amount of incentive compensation payable under the
Bonus Plan is based on the Company's consolidated revenue and income and
Business Unit revenues and service profits. The Company exceeded target on both
revenues and profits. The Bonus Plan is intended as an incentive for executives
to increase both revenue and profit and uses these as factors in calculating the
individual bonuses. The Bonus Plan formula weights these factors depending upon
the position of the executive. For example, the President of a Business Unit is
measured on factors of 60% Corporate results (30% corporate revenue and 30%
corporate income) and 40% Business Unit service profit. All other positions are
measured on weighted factors of 30% corporate revenue and 70% corporate income
before taxes. An adjustment to the individual incentive award (up to 20% upward
or 80% downward) may be applied to reflect individual performance. The
Compensation Committees decisions regarding the amount of incentive compensation
payable in a given year and the allocation of same among the participants, are
based on these factors, the contribution of a particular employee during the
fiscal year and compliance with previously agreed upon goals and objectives as
outlined in the Corporations strategic plan for 1999. The Company has elected to
comply with Section 162(m) of the Internal Revenue Code to the extent it deems
appropriate and has a bonus plan for the CEO and the COO that is based upon the
Company's consolidated revenue (30%) and consolidated service profits (70%).
Accordingly, there was no discretionary adjustment upward to the award.
18
<PAGE> 20
The Company also maintains a Key Employee Long-Term Incentive Stock Plan (the
Incentive Plan) for all executive officers, including the CEO and the other
named officers. Participants in the Incentive Plan are assigned a target
incentive award, stated as a percentage of such participants base salary
depending upon the participants position with the Company. The target incentive
award for fiscal 1999 for the CEO, the Chief Operating Officer, Executive Vice
Presidents, and Senior Vice Presidents of the Company were 35%, 20%, 18% and
16%, respectively, of base salary.
Participants in the Incentive Plan may be granted one or more types of long-term
incentive vehicles as awards. Initially, awards have been limited to grants of
restricted stock units and/or performance shares. The Compensation Committee
determines the percentage of the target incentive award that will be allocated
to restricted stock units and the percentage that will be allocated to
performance shares. Awards in each category are earned only if certain
predetermined criteria are met. In general, restricted stock unit awards are
currently earned based on an employees continued employment with the Company for
a period of seven years from the date of grant, although the Compensation
Committee can increase or decrease the time period for future grants and may
also include performance criteria. Performance shares are earned only if certain
three-year earnings per share performance goals established by the Compensation
Committee are attained. In setting these goals for each three-year period, the
Compensation Committee considers prior years performance, industry trends, the
performance of major financial indicators and the prevailing economic
circumstances. In its discretion, the Compensation Committee may make
adjustments to performance share awards to consider aspects of performance that
may not be reflected in the Company's financial results. The Company also
maintains a Stock Option Plan (the Plan) for executive officers, including the
CEO and other key employees. Participants receive stock option grants based upon
their overall contribution to the Corporation. Such options are granted at
market value at the time of grant.
The purpose of the Incentive Plan is to reward superior corporate performance
with a variable component of pay that can only be earned if performance criteria
are met. The Incentive Plan is intended to encourage stock ownership by senior
executives; to balance the short-term emphasis of the Bonus Plan with a
longer-term perspective; to reinforce strategic goals by linking them to
compensation; and to provide retention incentives for employees considered key
to the future success of the Company.
By the Nominating and Compensation Committee
Paul X. Kelley, Chairman Carroll A. Campbell Thomas P. Stafford
Benjamin R. Civiletti, Nancy Reynolds
Vice Chairman
19
<PAGE> 21
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN*
THE WACKENHUT CORPORATION, WILSHIRE 5000 EQUITY,
AND S&P SERVICES (COMMERCIAL AND CONSUMER) INDEXES
(Performance through December 31, 1999)
Assumes $100 invested on December 31, 1994, in The Wackenhut Corporation Series
A Common Stock and the Index companies.
Total return assumes reinvestment of dividends.
[GRAPH]
<TABLE>
<CAPTION>
THE S & P SERVICES
WACKENHUT WILSHIRE 5000 (COMMERCIAL AND
DATE CORPORATION EQUITY CONSUMER)
----------------------------------------------------------------------
<S> <C> <C> <C>
December 1994 $100.00 $100.00 $100.00
December 1995 $137.70 $136.46 $135.03
December 1996 $200.45 $165.41 $139.43
December 1997 $275.73 $217.16 $191.23
December 1998 $300.97 $268.05 $155.11
December 1999 $165.82 $331.40 $136.01
</TABLE>
The above graph compares the performance of The Wackenhut Corporation with that
of the Wilshire 5000 Equity, and the S&P Services Indexes, which is a published
industry index. An outside consulting firm was retained to evaluate the
feasibility of constructing a custom peer group or the selection of a comparable
peer group. The consultants conclusion was that there is no appropriate
five-year index of large labor-intensive security and protective service
companies presently available and the construction of a custom peer group would
not be appropriate because of the lack of sufficient data on the other large
security companies. The selection of the S&P Services Indexes was the closest
index the consultants believed appropriate. If there is a published index of
large security companies or when sufficient data is available, the Company may
consider, in future years, changing to a different index or custom peer group in
place of the S&P Services Indexes.
20
<PAGE> 22
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
The Corporation has a joint life policy on George R. Wackenhut and Ruth J.
Wackenhut in the amount of $800,000. The cost of the policy is $16,543 per year
and substantially all of the premium is paid by the Corporation. In this
connection, an agreement provides that $760,000 of the proceeds from the policy
will be paid to the Corporation as reimbursement of the costs.
SERVICES AGREEMENT. The Company and its consolidated subsidiary, Wackenhut
Corrections Corporation ("WCC"), entered into a services agreement (the
"Services Agreement") on December 20, 1995, which became effective January 1,
1996, pursuant to which the Company agreed to continue to provide certain of
these services to WCC through January 2, 2000.
In accordance with the terms of the Services Agreement, WCC paid the Company a
fixed annual fee for services (the "Annual Services Fee") equal to $1,200,342 in
fiscal 1997, $1,718,100 in fiscal 1998 and $2,944,000 in fiscal 1999. Management
of WCC believes that the Annual Services Fees under the Services Agreement are
on terms no less favorable to the Company and WCC than could be obtained from
unaffiliated third parties. If WCC determines that it can obtain any of the
services to which the Annual Services Fees relate at a cost less than that
specified in the Services Agreement, WCC may obtain such services from another
party and terminate the provision of such services by the Company with a
corresponding reduction in the Annual Services Fee.
Under the Services Agreement, the services to be provided by the Company to WCC
for the Annual Services Fee include the following:
LEGAL SERVICES. Under the Services Agreement, the Company provides legal
advice on all matters affecting WCC, including, among other things, assistance
in the preparation of Securities and Exchange Commission ("SEC") and other
regulatory filings, review and negotiation of joint venture and other
contractual arrangements, and provision of day-to-day legal advice in the
operation of WCC's business, including employee related matters.
FINANCIAL, ACCOUNTING, TAX AND GOVERNMENT CONTRACT MANAGEMENT SERVICES.
Under the Services Agreement, the Company provides WCC with (i) treasury
operations, (ii) support in the processing of accounts payable, tax returns
and payroll, (iii) conducting periodic internal field audits, and (iv)
purchasing assistance on an as needed basis. Under the Services Agreement, the
Company also provided WCC with assistance in (i) deployment of new software
for accounting and inmate management, (ii) management and administration of
its government contracts, pricing proposals and responding to government
inquiries and audits and (iii) the preparation of accounting reports,
financial projections, budgets, periodic SEC filings and tax returns.
HUMAN RESOURCES SERVICES. Under the Services Agreement, the Company
provides WCC assistance in the identification and selection of employees and
compliance by WCC with various equal employment opportunity and other
employment related requirements. The Company also assists WCC in implementing
and administering employee benefit plans which comply with applicable laws and
regulations.
Any services provided by the Company to WCC beyond the services covered by the
Annual Services Fees are billed to WCC at cost or on a cost plus basis as
described in the Services Agreement or on such other basis as WCC and the
Company agree.
21
<PAGE> 23
The following table sets forth certain amounts billed to WCC during fiscal 1997,
fiscal 1998, and fiscal 1999,for services not covered by the Annual Services Fee
paid under the 1996 Services Agreement.
<TABLE>
<CAPTION>
FISCAL 1997 FISCAL 1998 FISCAL 1999
-------------------------------------------------
<S> <C> <C> <C>
Food Services $ 461,000 $ 839,000 $ 0
Casualty Insurance Premiums (1) 4,957,000 7,423,000 9,454,000
Interest Charges (Income) (2) 10,000 (122,000) (492,000)
Office Rental (3) 285,000 361,000 286,000
TOTAL $5,713,000 $8,501,000 $ 9,248,000
</TABLE>
(1) Casualty insurance premiums relate to workers' compensation, general
liability and automobile insurance coverage obtained through the
Company's Insurance Program. Substantially, all of the casualty insurance
premiums represented premiums to a captive reinsurance company that is
wholly owned by the Company. Under the terms of each of the Services
Agreement, WCC also has the option to continue to participate in certain
other insurance policies maintained by the Company for which WCC
reimburses the Company for direct and indirect costs associated in
providing such services.
(2) WCC charged interest on intercompany indebtedness and charges interest on
intercompany loans at rates that reflect the Company's average interest
costs on long-term debt, exclusive of mortgage financing.
(3) Effective February 15, 1996, WCC entered into a 15-year agreement with
the Company providing for the rental of approximately 14,672 square feet
of office space at its corporate headquarters in Palm Beach Gardens,
Florida, at an annual rate of $285,519 ($19.50 per square foot) on terms
which WCC believes will be no less favorable to WCC and the Company than
could have been obtained from unaffiliated third parties. In 1998, WCC
increased the amount of space it rents by approximately 1600 square feet
and paid common area maintenance charges related to 1997 and 1998.
Management of the Company believes that the services provided for the Annual
Services Fees and the other services that will or may be provided under the
Services Agreement are, or will be, on terms no less favorable to the Company
and WCC than could have been obtained from unaffiliated third parties.
Under the terms of the Services Agreement, the Company has further agreed that
for so long as it provides WCC with any services (including those provided under
the Services Agreement) and for a period of two years thereafter, the Company
and its affiliates will not directly or indirectly compete with WCC or any of
its affiliates in the design, construction, development or management of
correctional or detention institutions or facilities in the United States.
Additionally, during the period described above, the Company will not (and will
use its best efforts to cause its affiliates not to) directly or indirectly
compete with WCC or any of its affiliates in the design, construction,
development or management of correctional or detention institutions or
facilities outside the United States.
Nevertheless, in the United States, the Company's North American Operations
Group may continue to bid for and perform any of the services that it currently
performs. These services include prisoner transit, court security services and
food services. WCC has also agreed that it will provide the Company with the
first opportunity to participate on a competitive basis as a joint venture in
the development of facilities outside the United States.
From time to time, the Company has guaranteed certain obligations of WCC and its
affiliates. These guarantees remained in place following WCC's IPO and may be
called upon should there be a default with respect to such obligations.
The Company anticipates that it may, from time to time, use the services of the
law firm of Venable, Baetjer and Howard, of which Mr. Benjamin R. Civiletti, a
Director Nominee of The Wackenhut Corporation is a partner.
22
<PAGE> 24
George C. Zoley, Vice Chairman of the Board and Chief Executive Officer of WCC,
also serves as Senior Vice President of the Corporation, and a Director of each
of Wackenhut Corrections (U.K.) Limited, Premier Custodial Group Limited,
Premier Prison Services Limited, Premier Training Services Limited, Lowdham
Grange Prison Services Limited, Kilmarnock Prison Services Limited, Kilmarnock
Prison (Holdings) Limited, Pucklechurch Custodial Services Limited, Pucklechurch
Custodial (Holdings) Limited, Medomsley Training Services Limited, Medomsley
Holdings Limited, Premier Geografix Limited, Premier Monitoring Services
Limited, Moreton Prison Services Limited, Moreton Prison (Holdings) Limited,
Wackenhut Corrections Corporation Australia Pty Limited, Australasian
Correctional Services Pty Limited, Australasian Correctional Management Pty
Limited, Wackenhut Corrections Canada, Inc., WCC RE Holdings, Inc., Atlantic
Shores Healthcare and Wackenhut Corrections Corporation, N.V., affiliates of the
Company. George R. Wackenhut, Chairman of the Board of the Company, also serves
as Chairman of the Board of WCC and, together with his wife, Ruth J. Wackenhut,
through trusts over which they have sole dispositive and voting power, control
approximately 50.05% of the issued and outstanding voting common stock of the
Company. Richard R. Wackenhut, the President and Chief Executive Officer of the
Company, is also a Director of WCC. He is the son of George R. and Ruth J.
Wackenhut.
DIRECTORS' COMPENSATION
Directors of the Corporation who are not Officers were paid during the fiscal
year 1999 an annual retainer fee at the rate of $20,000 per year plus $1,500 or
75 shares of Series B Common Stock for each Board meeting attended; $1,000 or 50
shares for each committee meeting attended as committee members; and $1,500 or
75 shares for each committee meeting attended as committee chairperson for
committees. Each Non-Employee Director also receives from the Corporation upon
each election or re-election to the Board of Directors, an option to purchase
2,000 shares of Series B Common Stock of the Corporation. For the fiscal year
2000 election only, the number of option shares has been increased to 10,000
shares of Series B Common Stock. Each Non-Employee Director is also eligible for
stock option grants in subsidiaries when such grants are made to Company
management. However, commencing August 5, 1999, the Fees for attendance at
meetings of the Operations and oversight Committee became $2,000 for attendance
as a committee member and $3,000 for attendance as committee chairperson.
No Directors or their affiliates were compensated for services rendered to the
Corporation during fiscal 1999 other than the compensation described above.
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
All SEC Forms 3, 4 and 5 filings appear to have been made when due. Those
Directors and Officers not required to file a Form 5 for fiscal 1999 have
furnished the Corporation with a statement that no filing is due.
PROPOSAL NO. 2
APPOINTMENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Although not required by the By-Laws, the Board of Directors, in the interest of
accepted corporate practices, asks shareholders to ratify the action of the
Board of Directors in appointing the firm of Arthur Andersen LLP to be the
independent certified public accountants of the Corporation for the fiscal year
2000, and to perform such other services as may be requested. If the
shareholders do not ratify this appointment, the Corporation's Board of
Directors will reconsider its action. Arthur Andersen LLP has advised the
Corporation that no partner or employee of Arthur Andersen LLP has any direct
financial interest or any material indirect interest in the Corporation other
than receiving payment for its services as independent certified public
accountants.
A representative of Arthur Andersen LLP, the principal independent certified
public accountants of the Corporation for the most recently completed fiscal
year, is expected to be present at the shareholders meeting and shall have an
opportunity to make a statement if he or she so desires. This representative
will also be available to respond to appropriate questions raised orally at the
meeting.
23
<PAGE> 25
PROPOSAL NO. 3
PROPOSAL TO SET ASIDE A TOTAL OF 550,000 SHARES OF SERIES B
COMMON STOCK OF THE CORPORATION TO BE UTILIZED FOR FUTURE
ISSUANCE UNDER THE KEY EMPLOYEE LONG-TERM INCENTIVE STOCK
PLAN (THE "PLAN").
The Plan was previously approved by the shareholders of the Corporation at the
1992 Annual Meeting. The Nominating and Compensation Committee of the Board of
Directors of the Corporation (the "Committee") is responsible for the
administration and governance of the Plan. Actions requiring Committee approval
include final determination of plan eligibility and participation,
identification of performance goals, and final award determination. The
decisions of the Committee are conclusive and binding on all participants.
The purpose of the Plan is to reward superior performance with a variable
component of pay which can only be earned if predetermined performance criteria
are met. The Plan is intended to encourage stock ownership by senior executives;
to balance the short-term emphasis of the annual incentive plan with a
longer-term perspective; to reinforce strategic goals by linking them to
compensation; and to provide retention incentives for employees considered key
to the future success of the Corporation. Initially, participants were limited
to the senior officers, but beginning in 1994, stock options were awarded to a
much broader segment of management employees.
Participants may be granted one or more types of long-term incentive vehicles as
awards. Initially, awards to participants were limited to Restricted Stock Units
(RSU's) and/or performance shares. The Plan also provides for the granting of
stock options and/or performance units.
Participants "earn" the RSU and performance share awards based on (1) continued
employment and/or (2) Company performance measured over a three-year performance
category. The Target Incentive Award is allocated among the possible types of
long-term incentive vehicles as determined by the Committee. For any Performance
Shares awarded, a greater or lesser amount, based on a preset schedule, may be
earned at the end of the plan year based on the attainment of predetermined
goals. Annual grants have been made for each type of long-term incentive.
Vesting periods and/or performance measurement periods vary according to the
type of long-term incentive awarded. The CEO will nominate participants to be
approved by the Committee. Participation is reevaluated and determined on an
annual basis. Total awards to be granted are calculated by multiplying the
appropriate percentage by the participant's base salary at the time of grant.
The appropriate number of units or shares is determined by dividing the amount
of the award by the stock price at the date of grant, calculated as the average
closing price of the stock for the last ten business days preceding the date of
grant.
Stock Options and Restricted Stock vest based upon continued employment. Vesting
periods are as follows:
<TABLE>
<CAPTION>
Type of Award Vesting Period
------------- --------------
<S> <C>
Stock Options As set by the Committee
Restricted Stock 7 years
</TABLE>
Based on performance achieved during the year, an individual's Performance Share
award payout will be a function of performance against pre-established
objectives. Threshold, Target, and Outstanding performance levels are defined at
the beginning of each year for each performance measure.
The Plan's initial performance measure for Performance Share awards was Return
on Equity (ROE). The Committee subsequently adopted growth in Earnings Per Share
(EPS) as the performance measure in 1996. Compounded growth rate in EPS for each
three-year measurement period is compared with preset goals, as described above,
to determine award payouts.
24
<PAGE> 26
The Committee may, in its discretion, make an adjustment to Performance Share
awards to consider aspects of performance that may not be reflected in the
financial results of the Corporation.
Payments of Performance Share awards are made in stock, cash or a combination of
both as soon as practicable after the end of the three-year measurement period,
and after approval by the Committee. Thus far, the only payout of performance
shares was for the period 1991 - 1993, 1996 - 1998 and 1997 - 1999. No awards
were earned for the 1992 - 1994, 1993 - 1995, 1994 - 1996 or 1995 - 1997
periods. In the event that a participant changes positions between award grant
dates, whether due to promotion, demotion or lateral move, at the discretion of
the Committee, awards are granted or modified as appropriate. An employee hired
into an eligible position during the year may participate in the Plan for the
balance of the year on a pro rata basis at the discretion of the Committee.
In the event a participant voluntarily terminated employment or is terminated
involuntarily before Stock Option or Restricted Stock awards have been vested,
or before Performance Share awards have been earned for a performance period,
any award will be forfeited. In the event of death, permanent disability, or
normal retirement, or upon the occurrence of a defined "change in control" of
the Corporation, all Stock Option and Restricted Stock awards will vest
immediately.
Annual grants of Restricted Stock Units (RSU's) have been made to participants
since Plan inception. At the time of grant, a vesting schedule is established
for each RSU award, which need not be the same for each participant, and which
may be based upon the passage of time, the achievement of preestablised
performance goals or a combination thereof. The RSU's may not be sold, pledged
or transferred until fully vested and until any other applicable restrictions
have lapsed. During the vesting period, participants are paid dividend
equivalents on the RSU's granted to them. When vested, payment for RSU's is made
in shares of the Common Stock of the Corporation on a one for one basis. The
Plan is intended to remain in effect for ten years, unless terminated earlier by
the Board of Directors of the Corporation.
On February 17, 2000, the Board of Directors authorized the granting of a total
58,800 options to 18 participants on May 6, 2000 (the strike price for each such
grant to be set at the closing price for the day immediately prior to the grant)
contingent upon shareholder approval of this proposal.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" THE PROPOSAL TO SET ASIDE A TOTAL
OF 550,000 SHARES OF SERIES B COMMON STOCK OF THE CORPORATION FOR FUTURE
ISSUANCE UNDER THE KEY EMPLOYEE LONG-TERM INCENTIVE STOCK PLAN FOR KEY EMPLOYEES
OF THE CORPORATION.
25
<PAGE> 27
SHAREHOLDERS PROPOSAL DEADLINE
Shareholder proposals intended to be presented at the 2001 Annual Meeting of
Shareholders must be received by the Corporation for inclusion in the
Corporation's proxy statement and form of proxy relating to that meeting by
December 1, 2000.
OTHER MATTERS
The Board of Directors knows of no other matters to come before the
shareholders' meeting. However, if any other matters properly come before the
meeting or any of its adjournments, the person or persons voting the proxies
will vote them in accordance with their best judgment on such matters.
By order of the Board of Directors
Timothy J. Howard
Senior Vice President, General Counsel
and Assistant Secretary
March 31, 2000
================================================================================
A copy of the Corporation's Annual Report on Form 10-K for the fiscal year ended
January 2, 2000, including the financial statements and the schedules thereto,
required to be filed with the Securities and Exchange Commission, will be made
available without charge to interested shareholders upon written request to
Patrick F. Cannan, Director, Corporate Relations, The Wackenhut Corporation,
4200 Wackenhut Drive #100, Palm Beach Gardens, Florida, 33410-4243.
26
<PAGE> 28
THE WACKENHUT CORPORATION
4200 Wackenhut Drive #100
Palm Beach Gardens, Florida 33410
This Proxy is Solicited on Behalf of the Board of Directors
The undersigned hereby appoints George R. Wackenhut and Richard R.
Wackenhut as Proxies, each with the power to appoint his or her substitute, and
hereby authorizes them to represent and to vote, as designated on the reverse
side, all the shares of Series A Common Stock of The Wackenhut Corporation held
of record by the undersigned on March 17, 2000, at the Annual Meeting of
Shareholders to be held at the Ritz-Carlton, Palm Beach, 100 South Ocean Blvd.,
Manalapan, Florida, at 9:00 A.M., May 5, 2000, or at any adjournment thereof.
THIS PROXY IS SOLICITED BY THE BOARD OF DIRECTORS AND WILL BE VOTED IN
ACCORDANCE WITH THE ABOVE INSTRUCTIONS. IF NO INSTRUCTIONS ARE SPECIFIED, THIS
PROXY WILL BE VOTED FOR PROPOSALS 1, 2, 3 AND 4. ON ANY OTHER BUSINESS WHICH MAY
PROPERLY COME BEFORE THE MEETING, THE SHARES WILL BE VOTED IN ACCORDANCE WITH
THE JUDGEMENT OF THE PERSONS NAMED AS PROXIES.
(Continued, and to be signed, on other side.)
- --------------------------------------------------------------------------------
* FOLD AND DETACH HERE *
<PAGE> 29
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1, 2, 3 AND 4.
Please mark
your votes as
indicated in
this sample [X]
<TABLE>
<S> <C> <C> <C>
1. ELECTION OF DIRECTORS: Nominees:
01 Julius W. Beclon, Jr. 07 Paul X. Kelley
VOTE FOR all nominees VOTE WITHHELD 02 Alan B. Bernstein 08 Nancy Clark Reynolds
listed to the right (except as as to all nominees. 03 Carroll A. Campbell, Jr. 09 John F. Ruffle
marked to the contrary). 04 Benjamin R. Civietti 10 Thomas P. Stafford
[ ] [ ] 05 Anne Newman Foreman 11 George R. Wackenhut
06 Edward L. Hennessey, Jr. 12 Richard R. Wackenhut
INSTRUCTION: To withhold authority to vote for any
individual nominee, strike a line through the nominee's
name in the list above.
2. Proposal to approve for the fiscal year 2000
the Appointment of ARTHUR ANDERSEN LLP
as the independent certified public accountants
of the Corporation.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
3. Proposal to approve the setting aside a total of
550,000 Series B shares for the Key Employee
Long-Term Incentive Plan.
[ ] FOR [ ] AGAINST [ ] ABSTAIN
4. In their discretion, the Proxies are authorized to vote upon such
other business as may properly come before the meeting.
Please date and sign exactly as name appears below. Joint owners
should each sign. Attorneys-in-fact, Executors, Administrators,
Trustees, Guardians, or corporate officers should give full title.
Dated: , 2000
-----------------------------
--------------------------------------------------------------
Signature
--------------------------------------------------------------
Signature if held jointly
</TABLE>
PLEASE SIGN AND RETURN THIS PROXY IN THE ACCOMPANYING ADDRESSED ENVELOPE.
- --------------------------------------------------------------------------------
