<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>
Wackenhut Corrections 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 CORRECTIONS LOGO]
EXECUTIVE OFFICES
4200 Wackenhut Drive #100
Palm Beach Gardens, Florida 33410-4243
Telephone: (561) 622-5656
NOTICE OF ANNUAL MEETING OF SHAREHOLDERS ON APRIL 23, 1998
To the Shareholders:
The Annual Meeting of the Shareholders of Wackenhut Corrections Corporation will
be held on Thursday, April 23, 1998, at 9:00 A.M. at PGA National Resort, 400
Avenue of the Champions, Palm Beach Gardens, Florida, for the purpose of
considering and acting on the matters following:
(1) the election of nine 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 1998, and to perform such other services
as may be requested;
(3) the transaction of any other business as may properly come
before the meeting or any adjournment or adjournments thereof.
Only shareholders of Common Stock of record at the close of business March 2,
1998, the record date and time fixed by the Board of Directors, are entitled to
notice and to vote at said meeting.
ALL COMMON STOCK SHAREHOLDERS ARE URGED EITHER TO ATTEND THE MEETING IN PERSON
OR TO VOTE BY PROXY.
You are requested to promptly sign and mail the enclosed proxy, which is being
solicited on behalf of the Board of Directors, regardless of whether you expect
to be present at this meeting. A return envelope which requires no postage is
enclosed for that purpose. If you attend the meeting in person, you may, if you
wish, revoke your proxy and vote in person.
By order of the Board of Directors.
James P. Rowan
Vice President, General Counsel
and Secretary
March 18, 1998
<PAGE> 3
PROXY STATEMENT
March 18, 1998
Wackenhut Corrections 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 Wackenhut Corrections Corporation for the Annual
Meeting of Shareholders of the Corporation to be held at PGA National Resort,
400 Avenue of the Champions, Palm Beach Gardens, Florida, April 23, 1998, 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. If the enclosed Proxy Card is executed properly
and returned, the shares represented will be voted in accordance with those
instructions. If no instructions are given the Proxy Card will be voted as
follows:
FOR - The election of the Directors nominated by the Board of Directors
FOR - Proposal to ratify the appointment of Arthur Andersen LLP as the
independent certified public accountants of the Corporation
Holders of shares of the Common Stock of the Corporation of record as of the
close of business on March 2, 1998, will be entitled to one vote for each share
of stock standing in their name on the books of Wackenhut Corrections
Corporation.
On December 28, 1998, 22,168,542 shares of Common Stock were outstanding. The
Common Stock will vote as a single class for the election of Directors, to
ratify the appointment of Arthur Andersen LLP, 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 18,
1998.
2
<PAGE> 4
THE ELECTION OF DIRECTORS
The Board of Directors will be comprised of nine (9) 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. Seven (7) of the nominees are
presently directors of the Corporation who were elected by the shareholders at
their last annual meeting. Two (2) of the nominees, Wayne H. Calabrese and
Richard H. Glanton, are to be elected to the Board of Directors of the
Corporation by the shareholders for the first time at the April 23, 1998 annual
meeting of shareholders.
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
- --------------------------------------------------------------------------------
WAYNE H. CALABRESE WAYNE H. CALABRESE IS THE PRESIDENT AND CHIEF
OPERATING OFFICER OF THE COMPANY, AND PRESIDENT OF
--- THE SUBSIDIARIES WCC DEVELOPMENT, INC. AND WACKENHUT
DESIGN SERVICES, INC.. HE SERVED AS EXECUTIVE VICE
AGE 47 PRESIDENT OF THE COMPANY FROM 1994 TO 1996 AND WAS
NAMED CHIEF OPERATING OFFICER AND PRESIDENT IN 1997.
[PHOTO] HE JOINED WACKENHUT CORRECTIONS AS VICE PRESIDENT,
BUSINESS DEVELOPMENT IN 1989; AND FROM 1992 TO 1994
SERVED AS CHIEF EXECUTIVE OFFICER OF AUSTRALASIAN
CORRECTIONAL MANAGEMENT, PTY LTD., A SUBSIDIARY OF
THE COMPANY BASED IN SYDNEY, AUSTRALIA. PRIOR TO
JOINING WACKENHUT, MR. CALABRESE WAS A PARTNER IN THE
AKRON (OH) LAW FIRM OF CALABRESE, DOBBINS AND KEPPLE.
HIS PRIOR EXPERIENCE INCLUDES POSITIONS AS ASSISTANT
CITY LAW DIRECTOR IN AKRON AND ASSISTANT COUNTY
PROSECUTOR AND CHIEF OF THE COUNTY BUREAU OF SUPPORT
FOR SUMMIT COUNTY (OH). HE IS A GRADUATE OF THE
UNIVERSITY OF AKRON AND HAS A JURIS DOCTOR FROM THE
UNIVERSITY OF AKRON LAW SCHOOL.
- --------------------------------------------------------------------------------
NORMAN A. CARLSON MR. CARLSON HAS SERVED AS A DIRECTOR OF THE
1994 CORPORATION SINCE APRIL 1994, AND HAD PREVIOUSLY
AGE 64 SERVED AS A DIRECTOR OF THE WACKENHUT CORPORATION
SINCE APRIL 1993. MR. CARLSON IS ADJUNCT PROFESSOR IN
[PHOTO] THE DEPARTMENT OF SOCIOLOGY, UNIVERSITY OF MINNESOTA
AND RETIRED FROM THE DEPARTMENT OF JUSTICE IN 1987
AFTER SERVING FOR 17 YEARS AS DIRECTOR OF THE FEDERAL
BUREAU OF PRISONS. DURING HIS CAREER, MR. CARLSON
WORKED AT THE UNITED STATES PENITENTIARY,
LEAVENWORTH, KANSAS, AND THE FEDERAL CORRECTIONAL
INSTITUTION, ASHLAND, KENTUCKY. MR. CARLSON WAS
PRESIDENT OF THE AMERICAN CORRECTIONAL ASSOCIATION
FROM 1978 TO 1980, AND IS A FELLOW IN THE NATIONAL
ACADEMY OF PUBLIC ADMINISTRATION. MR. CARLSON WAS A
MEMBER OF THE UNITED NATIONS COMMITTEE ON CRIME
PREVENTION AND TREATMENT OF OFFENDERS AND ALSO SERVED
AS CO-CHAIR OF THE UNITED STATES DELEGATION TO THE
COMMITTEE. (C)
3
<PAGE> 5
NOMINEE AND YEAR PRESENT AND PAST POSITIONS
FIRST BECAME DIRECTOR AND OTHER INFORMATION
- --------------------------------------------------------------------------------
BENJAMIN R. CIVILETTI MR. CIVILETTI HAS SERVED AS A DIRECTOR OF THE
1994 CORPORATION SINCE APRIL 1994. MR. CIVILETTI HAS BEEN
Age 62 CHAIRMAN OF THE LAW FIRM VENABLE, BAETJER AND HOWARD
SINCE 1993 AND WAS MANAGING PARTNER OF THE FIRM FROM
[PHOTO] 1987 TO 1993. FROM 1979 TO 1980, MR. CIVILETTI SERVED
AS THE ATTORNEY GENERAL OF THE UNITED STATES. MR.
CIVILETTI 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, AND IS A
DIRECTOR NOMINEE FOR THE WACKENHUT CORPORATION. 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)
- --------------------------------------------------------------------------------
RICHARD H. GLANTON MR. GLANTON IS A PARTNER, CORPORATE AND FINANCE
-- GROUP, IN THE LAW FIRM OF REED SMITH SHAW & MCCLAY,
Age 51 PHILADELPHIA, PA AND HAS BEEN WITH THE FIRM SINCE
1987. FROM 1979 TO 1983, HE WAS DEPUTY COUNSEL TO
[PHOTO] RICHARD L. THORNBURGH, FORMER GOVERNOR OF
PENNSYLVANIA. MR. GLANTON PRESENTLY SERVES ON THE
BOARDS OF GENERAL ACCIDENT INSURANCE COMPANY OF NORTH
AMERICA; PECO ENERGY COMPANY; AND PHILADELPHIA
SUBURBAN CORPORATION, A WATER UTILITY COMPANY. HE
ALSO SERVES ON THE BOARDS OF THE BARNES FOUNDATION,
AN ART EDUCATION INSTITUTION LOCATED JUST OUTSIDE OF
PHILADELPHIA; THE PHILADELPHIA INDUSTRIAL DEVELOPMENT
CORPORATION; THE GREATER PHILADELPHIA CHAMBER OF
COMMERCE; AND THE PHILADELPHIA CONVENTION & VISITORS
BUREAU. HE IS CO-CHAIR OF THE GIRARD INDEPENDENT
COMMITTEE WHICH WAS ESTABLISHED IN DECEMBER, 1997 FOR
THE PURPOSE OF INVESTIGATING THE MANAGEMENT OF A
LARGE TRUST FUND IN PHILADELPHIA, TO CONCLUDE THEIR
MISSION BY ABOUT JUNE, 1998. HE IS A GRADUATE OF WEST
GEORGIA COLLEGE, AND EARNED A J.D. DEGREE FROM THE
UNIVERSITY OF VIRGINIA SCHOOL OF LAW.
- --------------------------------------------------------------------------------
MANUEL J. JUSTIZ DR. JUSTIZ HAS BEEN A DIRECTOR OF THE CORPORATION
1994 SINCE JUNE 1994. ON JANUARY 1, 1990, DR. JUSTIZ WAS
Age 49 APPOINTED DEAN OF THE COLLEGE OF EDUCATION AT THE
UNIVERSITY OF TEXAS AT AUSTIN, WHERE HE HOLDS THE
[PHOTO] A.M. AIKIN REGENTS CHAIR IN EDUCATIONAL LEADERSHIP
AND THE LEE HAGE JAMAIL REGENTS CHAIR IN EDUCATION.
FROM 1985 TO 1989, DR. JUSTIZ WAS A CHAIRED PROFESSOR
OF EDUCATIONAL LEADERSHIP AND PUBLIC POLICIES AT THE
UNIVERSITY OF SOUTH CAROLINA, AND IN THE ACADEMIC
YEAR 1988-89 WAS THE MARTIN LUTHER KING-ROSA PARKS
DISTINGUISHED SCHOLAR-IN-RESIDENCE AT THE UNIVERSITY
OF MICHIGAN IN ANN ARBOR. FROM 1982 TO 1985, DR.
JUSTIZ SERVED AS THE DIRECTOR OF THE NATIONAL
INSTITUTE OF EDUCATION AFTER BEING APPOINTED BY
PRESIDENT REAGAN AND CONFIRMED BY THE U.S. SENATE. IN
THIS POSITION, DR. JUSTIZ SERVED AS PRINCIPAL
SPOKESPERSON FOR EDUCATIONAL POLICY AND RESEARCH TO
THE PRESIDENT, SECRETARY OF EDUCATION, CONGRESS AND
EDUCATION ASSOCIATIONS. DR. JUSTIZ SERVES AS
STRATEGIC ADVISOR TO VOYAGER EXPANDED LEARNING. DR.
JUSTIZ EARNED A PHD IN HIGHER EDUCATION
ADMINISTRATION FROM SOUTHERN ILLINOIS UNIVERSITY IN
1976. HE RECEIVED A BACHELOR OF ARTS DEGREE IN
POLITICAL SCIENCE IN 1970 AND A MASTERS OF SCIENCE
DEGREE IN EDUCATION IN 1972. HE ALSO HOLDS THREE
HONORARY DOCTORATE DEGREES FROM OTHER COLLEGES AND
UNIVERSITIES. (C)(D)
4
<PAGE> 6
NOMINEE AND YEAR PRESENT AND PAST POSITIONS
FIRST BECAME DIRECTOR AND OTHER INFORMATION
- --------------------------------------------------------------------------------
JOHN F. RUFFLE MR. RUFFLE RETIRED IN JUNE, 1993 AS VICE CHAIRMAN AND
1997 DIRECTOR OF J.P. MORGAN & CO., INC., AND MORGAN
Age 60 GUARANTY TRUST COMPANY OF NEW YORK. HE JOINED J.P.
MORGAN IN 1970 AS CONTROLLER AND WAS NAMED CFO IN
[PHOTO] 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, POLYMER GROUP,
INC., AND TRIDENT CORPORATION, AND IS A NOMINEE FOR
ELECTION AS A DIRECTOR OF THE WACKENHUT 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)
- --------------------------------------------------------------------------------
GEORGE R. WACKENHUT MR. WACKENHUT IS CHAIRMAN OF THE BOARD. HE IS ALSO
1988 THE CHIEF EXECUTIVE OFFICER OF THE WACKENHUT
Age 78 CORPORATION (TWC OR PARENT). HE WAS PRESIDENT OF TWC
FROM THE TIME IT WAS FOUNDED UNTIL APRIL 26, 1986. HE
[PHOTO] FORMERLY WAS A SPECIAL AGENT OF THE FEDERAL BUREAU OF
INVESTIGATION. HE IS A FORMER MEMBER OF THE BOARD OF
DIRECTORS OF SSJ MEDICAL DEVELOPMENT, INC., MIAMI,
FLORIDA, AND IS ON THE DEAN'S ADVISORY BOARD OF THE
UNIVERSITY OF MIAMI SCHOOL OF BUSINESS. HE IS ON THE
NATIONAL COUNCIL OF TRUSTEES, FREEDOMS FOUNDATION AT
VALLEY FORGE, THE PRESIDENT'S 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
GOVERNOR'S 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. HE WAS
A RECIPIENT IN 1990 OF THE LABOR ORDER OF MERIT,
FIRST CLASS, FROM THE GOVERNMENT OF VENEZUELA. MR.
WACKENHUT RECEIVED HIS B.S. DEGREE FROM THE
UNIVERSITY OF HAWAII AND HIS M.ED. DEGREE FROM JOHNS
HOPKINS UNIVERSITY. MR. WACKENHUT IS THE FATHER OF
RICHARD R. WACKENHUT, A DIRECTOR NOMINEE. (A)(B)
5
<PAGE> 7
NOMINEE AND YEAR PRESENT AND PAST POSITIONS
FIRST BECAME DIRECTOR AND OTHER INFORMATION
- --------------------------------------------------------------------------------
RICHARD R. WACKENHUT MR. WACKENHUT, PRESIDENT AND CHIEF OPERATING OFFICER
1988 OF THE WACKENHUT CORPORATION (TWC OR PARENT) SINCE
Age 50 APRIL 26, 1986, WAS FORMERLY SENIOR VICE PRESIDENT,
OPERATIONS FROM 1983-1986. HE WAS MANAGER OF PHYSICAL
[PHOTO] SECURITY FROM 1973-74. HE ALSO SERVED AS MANAGER,
DEVELOPMENT AT TWC HEADQUARTERS FROM 1974-76; AREA
MANAGER, COLUMBIA, SC FROM 1976-77; DISTRICT MANAGER,
COLUMBIA, SC FROM 1977-79; DIRECTOR, PHYSICAL
SECURITY DIVISION AT TWC 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
THE WACKENHUT CORPORATION, A DIRECTOR OF WACKENHUT
DEL ECUADOR, S.A.; WACKENHUT UK, LIMITED; WACKENHUT
DOMINICANA, S.A.; CHAIRMAN OF THE BOARD OF DIRECTORS
OF WACKENHUT RESOURCES, INC.; 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 INTERNATIONAL
SECURITY MANAGEMENT ASSOCIATION, AND A MEMBER OF 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. (A)
- --------------------------------------------------------------------------------
GEORGE C. ZOLEY DR. ZOLEY IS VICE CHAIRMAN AND CHIEF EXECUTIVE
1988 OFFICER. HE HAD SERVED AS PRESIDENT AND A DIRECTOR OF
Age 48 THE CORPORATION SINCE IT WAS INCORPORATED IN 1988,
AND CHIEF EXECUTIVE OFFICER SINCE APRIL 1994. DR.
[PHOTO] ZOLEY ESTABLISHED THE CORPORATION AS A DIVISION OF
THE WACKENHUT CORPORATION IN 1984, AND CONTINUES TO
BE A MAJOR FACTOR IN THE COMPANY'S DEVELOPMENT OF ITS
PRIVATIZED CORRECTIONAL AND DETENTION FACILITY
BUSINESS. DR. ZOLEY IS ALSO A DIRECTOR OF EACH OF THE
ENTITIES THROUGH WHICH THE CORPORATION CONDUCTS ITS
INTERNATIONAL OPERATIONS. FROM 1981 THROUGH 1988, AS
MANAGER, DIRECTOR, AND THEN VICE PRESIDENT OF
GOVERNMENT SERVICES OF WACKENHUT SERVICES, INC.
(WSI), DR. ZOLEY WAS RESPONSIBLE FOR THE DEVELOPMENT
OF OPPORTUNITIES IN THE PRIVATIZATION OF GOVERNMENT
SERVICES BY WSI. PRIOR TO JOINING WSI, DR. ZOLEY HELD
VARIOUS ADMINISTRATIVE AND MANAGEMENT POSITIONS FOR
CITY AND COUNTY GOVERNMENTS IN SOUTH FLORIDA. DR.
ZOLEY HAS A MASTERS AND DOCTORATE DEGREE IN PUBLIC
ADMINISTRATION. (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
The election of the directors listed above 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.
6
<PAGE> 8
COMPOSITION AND FUNCTIONS OF SPECIFIC COMMITTEES
OF THE BOARD OF DIRECTORS
Wackenhut Corrections Corporation has an Audit and Finance Committee whose
members were as follows:
John F. Ruffle, Chairman Benjamin R. Civiletti
Manuel J. Justiz Norman A. Carlson
The Audit and Finance Committee met five times during the past fiscal year.
The Audit and Finance Committee's principal functions and responsibilities are
as follows:
1. Recommend the selection, retention, or termination of the
Corporation's 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.
Wackenhut Corrections 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 Secretary of the Corporation in writing and include sufficient biographical
material to permit an appropriate evaluation.
A total number of four meetings of the Board of Directors was held during the
1997 fiscal year. Floretta Dukes McKenzie attended less than 75% of Board and
assigned Committee meetings, having missed one Board meeting and one Committee
meeting due to scheduling conflicts with other duties. As a result of those
scheduling conflicts, Ms. McKenzie has chosen not to stand for re-election to
the Board.
7
<PAGE> 9
SECURITY OWNERSHIP
The following table shows the number of shares of the Corporation's Common
Stock, each with a par value of $.01 per share, that was beneficially owned as
of March 2, 1998, by each director nominee for election as director at the 1998
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 Corporation's
outstanding Common Stock.
<TABLE>
<CAPTION>
COMMON STOCK
BENEFICIAL OWNER (1) AMOUNT & NATURE PERCENT
OF BENEFICIAL OF
OWNERSHIP (2)(4) CLASS
- --------------------------------------------------------------------------------
<S> <C> <C>
DIRECTOR NOMINEES
Wayne H. Calabrese 77,334 *
Norman A. Carlson 5,000 *
Benjamin R. Civiletti 4,000 *
Richard H. Glanton 0 --
Manuel J. Justiz 5,000 *
John F. Ruffle 3,500 *
George R. Wackenhut (beneficially
with wife, Ruth J. Wackenhut) 12,107,530 (5) 54.58
Richard R. Wackenhut 74,666 *
George C. Zoley 120,000 *
EXECUTIVE OFFICERS
Charles Jones 28,500 *
Robert W. Mianowski 12,000 *
John G. O'Rourke 30,000 *
Carol M. Brown 39,774 *
Patricia M. Persante 38,032 *
ALL NOMINEES AND EXECUTIVE 12,552,336 56.58
OFFICERS AS A GROUP
OTHER
The Wackenhut Corporation (3) 12,000,000 54.09
</TABLE>
* Beneficially owns less than 1%
8
<PAGE> 10
NOTES
(1) Unless stated otherwise, the address of the beneficial owners
is 4200 Wackenhut Drive #100, Palm Beach Gardens, Florida.
(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. Each person named
in the table has sole voting and investment power with respect
to the shares beneficially owned.
(3) Whose address is 4200 Wackenhut Drive #100, Palm Beach
Gardens, Florida. These shares are indirectly held through a
wholly owned subsidiary of The Wackenhut Corporation,
Tuhnekcaw, Inc., a Delaware Corporation.
(4) Total shares include options which are immediately
exercisable. All shares shown for Executive Officers are
subject to such options.
(5) George R. Wackenhut and Ruth J. Wackenhut, 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. The Wackenhut Corporation, through
a wholly owned subsidiary, Tuhnekcaw, Inc., controls the
Corporation. By virtue of their control of The Wackenhut
Corporation, George R. Wackenhut and Ruth J. Wackenhut are
deemed beneficial owners of the Corporation stock owned by The
Wackenhut Corporation.
9
<PAGE> 11
EXECUTIVE COMPENSATION
The following table shows remuneration paid or accrued by the Corporation during
the fiscal year ended December 28, 1997, and each of the two preceding fiscal
years, to the Chief Executive Officer and to each of the six 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
Corporation, and the capacities in which the services were rendered.
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
ANNUAL COMPENSATION LONG-TERM COMPENSATION
----------------------------------- ---------------------------------------
AWARDS
OTHER SECURITIES ALL OTHER
---------------------------------------
ANNUAL UNDERLYING COMPEN-
COMPENSATION OPTIONS/ SATION
NAME AND PRINCIPAL POSITION YEAR SALARY ($) BONUS ($)(1) ($) SARS(#) ($)
- ----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
George C. Zoley 1997 348,000 122,500 -- 32,000(2)
Vice Chairman of the Board, 1996 288,000 101,500 20,000 25,906(2)
Chief Executive Officer 1995 249,000 70,000 7,500(3) 11,755(2)
and Director
Wayne H. Calabrese 1997 223,000 67,500 10,000
President and 1996 175,000 52,500 10,000 --
Chief Operating Officer 1995 149,000 36,000 -- --
Charles Jones 1997 148,000 37,500 22,500
Senior Vice President - 1996 53,462 27,500
Business Development 1995 N/A (4) N/A (4)
Robert W. Mianowski 1997 130,000 33,750 5,000
Senior Vice President - 1996 110,000 27,500 5,000 --
Operations 1995 100,000 20,000 --
John G. O'Rourke 1997 128,000 32,500 5,000
Senior Vice President - 1996 115,000 28,750 5,000 --
Finance 1995 105,000 21,000 -- --
Chief Financial Officer
and Treasurer
Carol M. Brown 1997 123,000 31,250 5,000
Senior Vice President - 1996 103,000 25,750 5,000 --
Health Services 1995 94,000 19,000 -- --
Patricia Persante 1997 112,000 27,950 5,000
Senior Vice-President 1996 104,000 26,000 5,000 --
Contract Compliance 1995 94,000 19,000 40,000 --
</TABLE>
10
<PAGE> 12
NOTES
(1) Includes amounts paid pursuant to the Corporation's Senior
Incentive Plan.
(2) In Fiscal 1994 George C. Zoley, President and Chief Executive
Officer of the Corporation participated in the Executive
Retirement Plan of Parent (the "Parent Retirement Plan").
Parent contributed $9,067 to the Parent Retirement Plan for
fiscal 1994 on behalf of Dr. Zoley. These amounts represent
the cost to parent of providing its future liability under the
Parent Retirement Plan. For the period of time that Dr. Zoley
participated in the Parent Retirement Plan, the Corporation
reimbursed parent for all contributions to the Parent
Retirement together with the expenses incurred in connection
therewith. Neither Dr. Zoley nor any other employee of the
Corporation currently participates in the Parent Retirement
Plan. Commencing on March 31, 1995, Dr. Zoley and the other
Named Executive Officers began participating in the
Corporation's Senior Officer Retirement Plan (the "Corporation
Retirement Plan"). WCC contributed $11,755, $25,906 and
$32,000 in 1995, 1996 and 1997 respectively, to the
Corporation Retirement Plan on behalf of Dr. Zoley.
(3) Options granted under TWC Key Employee Long-Term Incentive
Stock Plan
(4) Mr. Jones joined the Company in June, 1996.
11
<PAGE> 13
OPTIONS / SAR GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATES OF STOCK
PRICE APPRECIATION
INDIVIDUAL GRANTS FOR OPTION TERM (3)
----------------------------------------------------------- ----------------------
NUMBER OF % OF TOTAL
SECURITIES OPTIONS/SARS
UNDERLYING GRANTED TO EXERCISE OR
OPTIONS/SARS EMPLOYEES IN BASE PRICE EXPIRATION
-------------------------------------------------------------------------------------
NAME GRANTED FISCAL YEAR ($/SHARE) DATE 5% ($) 10% ($)
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
George C. Zoley 20,000 13% 21.50 1/23/07 $ 270,425 $ 685,309
Wayne H. Calabrese 10,000 7% 21.50 1/23/07 $ 135,212 $ 342,655
Charles Jones 22,500 15% 21.50 1/23/07 $ 304,228 $ 770,973
Robert W. Mianowski 5,000 3% 21.50 1/23/07 $ 67,606 $ 171,327
John G. O'Rourke 5,000 3% 21.50 1/23/07 $ 67,606 $ 171,327
Carol M. Brown 5,000 3% 21.50 1/23/07 $ 67,606 $ 171,327
Patricia M. Persante 5,000 3% 21.50 1/23/07 $ 67,606 $ 171,327
</TABLE>
12
<PAGE> 14
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> <C> <C>
George C. Zoley 7,500(3) 61,500(3) - E - U - E - U
24,666(2) 641,963(2) 62,000 E(2) 28,000 U(2) 904,825 E(2) 5,000 U
Wayne H. Calabrese 12,666(1) 345,993(1) - E(1) - U(1) E(1) - U(1)
43,334 E(2) 14,000 U(2) 674,970 E(2) 2,500 U
Charles Jones -- -- - E - U - E -
4,500 E(2) 18,000 U(2) 1,406 E(2) 5,625 U(2)
Robert W. Mianowski 8,216(1) 279,537(1) - E - U - E - U
21,666(2) 626,714(2) - E 7,000 U(2) - E 1,250 U(2)
John G. O'Rourke 4,216(1) 89,085(1) - E - U - E - U
3,666(2) 87,651(2) 18,000 E(2) 7,000 U(2) 271,250 E(2) 1,250 U(2)
Patricia Persante -- -- 1,232 E(1) - U 25,395 E(1 - U
16,000(2) 363,103(2) 13,800 E(2) 23,000 U(2) 130,388 E(2) 160,250 U(2)
Carol M. Brown 10,000(1) 315,437(1) 6,108 E(1) - U 125,901 E(1) - U
21,666 E(2) 7,000 U(2) 337,467 E(2) 1,250 U(2)
</TABLE>
(1) Options under the WCC 1994 Stock Option Plan ("First Plan")
(2) Options under the WCC Second Stock Option Plan ("Second Plan")
(3) Options under the Key Employee Long-Term Incentive Stock Plan
of The Wackenhut Corporation ("Incentive Stock Plan")
13
<PAGE> 15
The following table sets forth the estimated annual benefits payable under the
Executive Officer Retirement Plan ("Retirement Plan") to an employee upon
retirement at age 65 and reflects an offset by social security benefits.
PENSION PLAN TABLE
<TABLE>
<CAPTION>
REMUNERATION YEARS OF SERVICE
- --------------------------- ---------------------------------------------------------------------------
(ESTIMATED ANNUAL RETIREMENT BENEFITS)
ASSUMED AVERAGE ANNUAL FOR
SALARY FOR FIVE-YEAR YEARS OF CREDITED SERVICE SHOWN BELOW
PERIOD PRECEDING ---------------------------------------------------------------------------
RETIREMENT 10 15 20 25 30 35
==================================================================================================================
<S> <C> <C> <C> <C> <C> <C>
$125,000 $4,002 $12,306 $20,141 $27,431 $22,841 $ 17,520
150,000 8,502 19,056 29,141 38,681 34,091 28,770
175,000 13,002 25,806 38,141 49,931 45,341 40,020
200,000 17,502 32,556 47,141 61,181 56,591 51,270
225,000 22,002 39,306 56,141 72,431 67,841 62,520
250,000 26,502 46,056 65,141 83,681 79,091 73,770
300,000 35,502 59,556 83,141 106,181 101,591 96,270
400,000 53,502 86,556 119,141 151,181 146,591 141,270
450,000 62,502 100,056 137,141 173,681 169,091 163,770
500,000 71,502 113,556 155,141 196,181 191,591 186,270
</TABLE>
Dr. Zoley, the Chief Executive Officer of the Corporation, participated in the
Parent Retirement Plan in fiscal 1994, until the effective date of the
Corporation Retirement Plan on March 31, 1995. No other Named Executive Officers
were participants in the Parent Retirement Plan. Commencing on March 31, 1995,
all of the Named Executive Officers (including Dr. Zoley) began participating in
the Corporation Retirement Plan. Dr. Zoley has 15 years of credited service. Mr.
Calabrese has seven years of credited service, each of Ms. Brown, Ms. Persante
and Mr. Mianowski have six years of credited service, and Mr. O'Rourke has five
years of credited service under the Corporation Retirement Plan.
The Corporation Retirement Plan is a defined benefit plan and, subject to
certain maximum and minimum provisions, bases pension benefits on a percentage
of the employee's final average annual salary, not including bonus (earned
during the employee's last five years of credited service) times the employee's
years of credited service. Benefits under the Corporation Retirement Plan are
offset by social security benefits. Generally, a participant will vest in his or
her benefits upon the completion of ten years of service. The amount of benefit
increases for each full year beyond ten years of service except that there are
no further increases after twenty five years of service.
CORPORATION INCENTIVE PLAN
In March 1995, the Corporation adopted the Wackenhut Corrections Corporation
Senior Officer Incentive Plan (the "Corporation Incentive Plan") for certain of
its senior officers including all of the Named Executive Officers. Participants
in the Corporation Incentive Plan are assigned a target incentive award, stated
as a percentage of the participant's base salary depending upon the
participant's position with the Corporation. The target incentive award for 1997
for the Chief Executive Officer, President, Senior Vice President-Business
Development and Senior Vice Presidents of the Corporation were 35%, 30%, 27.5%
and 25% respectively, of base salary. The Compensation Committee's decisions
regarding the amount of incentive compensation payable in a given year and the
allocation among the participants, is based on several factors, including the
Corporation's profitability, the contribution of a particular employee during
the fiscal year and compliance with previously agreed upon goals and objectives
as outlined in the Corporation's strategic plan.
14
<PAGE> 16
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
During fiscal 1997, Benjamin R. Civiletti (Chairman), George R. Wackenhut and
Anthony P. Travisono served on the Nominating and Compensation Committee of the
Board of Directors. George R. Wackenhut also serves as an officer and director
of Parent and certain of its affiliates.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The Nominating and Compensation Committee of the Board of Directors (the
"Compensation Committee") met three times during 1997. The Compensation
Committee is composed of the Chairman and CEO of TWC and three independent,
non-employee directors who are not eligible to participate in any of the
executive compensation programs. Among its other 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 Corporation's compensation plans for key employees. The
Compensation Committee seeks to provide, through its administration of the
Corporation'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 and annual incentive bonuses.
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
Corporation determines a salary for each senior executive position 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 officer's base salary for the immediately preceding fiscal
year. From time to time, management will obtain reports from independent
organizations concerning compensation levels for reasonably comparable
companies. This information will be used as a market check on the reasonableness
of the salaries proposed by management. The comparator companies will include a
group of competitor companies whose revenue, performance, and position matches
are deemed relevant and appropriate. Management will then recommend 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 a substantial difference between the
recommended salary and an officer's compensation for the prior fiscal year. In
establishing the base salary for each officer (including that of the CEO), the
Compensation Committee will evaluate numerous factors, including the
Corporation'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 Corporation.
In addition, data developed as a part of the strategic planning process, but
which may not directly relate to corporate profitability, will be utilized as
appropriate.
The Summary Compensation Table set forth elsewhere in this Proxy Statement shows
the salaries of the CEO and the other named executive officers. Beginning in
fiscal 1997, the Compensation Committee formally evaluates the performance of
the CEO.
The Corporation has an incentive compensation plan (the "Bonus Plan") for
officers and key employees. The aggregate amount of incentive compensation
payable under the Bonus Plan will be based on the Corporation's consolidated
revenue and income before provision for income taxes. 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 weighing for these
factors are 65% service profit and 35% revenue. An adjustment to the incentive
award (up to 20% upward or 80% downward) may be applied to reflect individual
performance. The Compensation Committee's decisions regarding the amount of
incentive compensation payable in a given year and the allocation among the
participants, will be 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 Corporation's strategic plan. 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 and have variable vesting periods in order to
encourage retention.
15
<PAGE> 17
The base salary and Bonus Plan components of compensation, will be implemented
by the above described policies, and will result in a compensation program that
the Compensation Committee believes is fair, competitive, and in the best
interests of the shareholders.
By the Nominating and Compensation Committee
Benjamin R. Civiletti
Anthony P. Travisono
George R. Wackenhut
COMPARISON OF CUMULATIVE TOTAL RETURN*
WACKENHUT CORRECTIONS CORPORATION, WILSHIRE 5000 EQUITY,
AND S&P SERVICES (COMMERCIAL AND CONSUMER ) INDEXES**
(Performance through December 31, 1997)
Assumes $100 invested on July 24,
1994, in Wackenhut Corrections
Common Stock and the Index
companies.
* Total return assumes reinvestment
* Formerly called "S&P Specialized
Services." Underlying companies did
not change
<TABLE>
<CAPTION>
-----------------------------------------------------------------
Jul-94 Dec-94 Dec-95 Dec-96 Dec-97
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
- --- Wackenhut Corrections Corp. 100 185 277 438 589
- -----------------------------------------------------------------------------------------------------------
- - - - - Wilshire 5000 Equity 100 102 139 168 221
- -----------------------------------------------------------------------------------------------------------
- ---- S&P Services (Commercial and 100 97 131 135 185
Consumer)**
- -----------------------------------------------------------------------------------------------------------
</TABLE>
The above graph compares the performance of Wackenhut Corrections Corporation
with that of the Wilshire 5000 Equity, and the S&P Services Index, which is a
published industry index.
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS
SERVICE AGREEMENTS. The Corporation and Parent entered into a services agreement
(the "1994 Services Agreement") effective January 3, 1994 pursuant to which
Parent agreed to provide certain services to the Corporation through December
31, 1995. The Corporation and Parent entered into a new services agreement (the
"1996 Services Agreement", and together with the 1994 Services Agreement, the
"Services Agreements") on December 20, 1995 which became effective January 1,
1996, pursuant to which Parent agreed to continue to provide certain of these
services to the Corporation through December 31, 1997.
16
<PAGE> 18
In accordance with the terms of the Services Agreements, the Corporation paid
Parent a fixed annual fee for services (the "Annual Services Fee") equal to
$1,093,000 in fiscal 1995, $1,100,342 in fiscal 1996 and $1,200,342 in fiscal
1997. Under the 1996 Services Agreement as amended, the Corporation has paid
Parent an Annual Services Fee equal to $1,100,342 in fiscal 1996, and $1,200,342
in fiscal 1997. Management of the Corporation believes that the Annual Services
Fees under the Services Agreements are on terms no less favorable to the
Corporation than could be obtained from unaffiliated third parties. If the
Corporation 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
Agreements, the Corporation may obtain such services from another party and
terminate the provision of such services by the Parent with a corresponding
reduction in the Annual Services Fee.
Under each of the Services Agreements, the services to be provided by Parent to
the Corporation for the Annual Services Fee include the following:
LEGAL SERVICES. Under each of the Services Agreements, Parent
provides legal advice on all matters affecting the Corporation,
including, among other things, assistance in the preparation of the
Corporation's 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 the Corporation's business, including employee related
matters.
FINANCIAL, ACCOUNTING, TAX AND GOVERNMENT CONTRACT
MANAGEMENT SERVICES. Under each of the Services Agreements, Parent
provides the Corporation with (i) cash management, (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 Agreements, Parent
also provided the Corporation 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 Each of the Services Agreements,
Parent provides the Corporation assistance in the identification and
selection of employees and compliance by the Corporation with various
equal employment opportunity and other employment related requirements.
Parent also assists the Corporation in implementing and administering
employee benefit plans which comply with applicable laws and
regulations.
Any services provided by Parent to the Corporation beyond the services covered
by the Annual Services Fees are billed to the Corporation at cost or on a cost
plus basis as described in each of the Services Agreements or on such other
basis as the Corporation and Parent agree. The Services Agreements provided the
Corporation the option to utilize the Parent's Domestic Operations Group Food
Services Division (the "Food Services Division") to (i) provide the Corporation
with technical assistance in the areas of equipment specifications, kitchen
layout and design, menu development, nutritional analysis and field support and
training (for services the Corporation has reimbursed Parent for direct and
indirect costs associated with providing such services), and (ii) manage and
operate the food services at certain of the Corporation's facilities (for which
the Corporation agreed to pay Parent a price established on a negotiated basis
which is no less favorable than the charges for comparable services from
unaffiliated third parties). Commencing in October 1995, the Corporation ceased
contracting with the Food Services Division of Parent to obtain meals for
inmates at all but two of the facilities it managed. Since October 1995, the
Corporation has provided meals for inmates at the facilities it operates in
accordance with regulatory, client and nutritional requirements.
17
<PAGE> 19
The following table sets forth certain amounts billed to the Corporation during
fiscal 1995, fiscal 1996 and fiscal 1997 for services not covered by the Annual
Services Fee paid under the 1994 and 1996 Services Agreement.
<TABLE>
<CAPTION>
FISCAL 1995 FISCAL 1996 FISCAL 1997
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Food Services $3,903,000 $ 450,000 $ 461,000
Casualty Insurance Premiums (1) 2,169,000 3,306,000 4,957,000
Interest Charges (Income) (2) (172,000) 40,000 10,000
Office Rental (3) 106,000 269,000 285,000
TOTAL $6,006,000 $4,065,000 $5,713,000
</TABLE>
(1) Casualty insurance premiums relate to workers' compensation, general
liability and automobile insurance coverage obtained through Parent's
Insurance Program. Substantially, all of the casualty insurance
premiums represented premiums paid to a captive reinsurance company
that is wholly owned by Parent. Under the terms of each of the Services
Agreements, the Corporation also has the option to continue to
participate in certain other insurance policies maintained by Parent
for which the Corporation reimburses Parent for direct and indirect
costs associated in providing such services.
(2) The Corporation is charged interest on intercompany indebtedness and
charges interest on intercompany loans at rates that reflect Parent's
average interest costs on long-term debt, exclusive of mortgage
financing. Prior to the IPO, for purposes of computing interest
expense, it was assumed that debt represented 50% of the Corporation's
total capital.
(3) Effective January 3, 1994, the Corporation entered into a two-year
lease agreement with Parent providing for the rental of approximately
5,361 square feet of office space at its corporate headquarters in
Coral Gables, Florida at an annual rate of $106,400 ($19.84 per square
foot) plus certain common area maintenance charges (on terms which the
Corporation believes to be no less favorable to the Corporation than
could have been obtained from unaffiliated third parties). In 1995, the
Parent sold the office building and relocated its headquarters to Palm
Beach Gardens, Florida, in March 1996. The Corporation has relocated
its corporate offices to Parent's new headquarters. Effective February
15, 1996, the Corporation entered into a 15-year agreement with Parent
providing for the rental of approximately 14,672 square feet of office
space at its new corporate headquarters in Palm Beach Gardens, Florida,
at an annual rate of $285,519 ($19.50 per square foot) (on terms which
the Corporation believes to be no less favorable to the Corporation
than could have been obtained from unaffiliated third parties).
Management of the Corporation believes that the services provided for the Annual
Services Fees and the other services that will or may be provided under each of
the Services Agreements are, or will be, on terms no less favorable to the
Corporation than could have been obtained from unaffiliated third parties.
Under the terms of each Services Agreements, Parent has further agreed that for
so long as it provides the Corporation with any services (including those
provided under the Services Agreement) and for a period of two years thereafter,
Parent and its affiliates will not directly or indirectly compete with the
Corporation 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, Parent will not (and
will use its best efforts to cause its affiliates not to) directly or indirectly
compete with the Corporation 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, Parent'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. The
Corporation has also agreed that it will provide Parent with the first
opportunity to participate on a competitive basis as a joint venture in the
development of facilities outside the United States.
18
<PAGE> 20
OTHER TRANSACTIONS AND RELATIONSHIPS. Prior to its IPO, the Corporation borrowed
money from time to time from the Parent for working capital and general
corporate purposes and was charged interest on the basis described above. Upon
consummation of its IPO, all outstanding indebtedness of the Corporation to
Parent was repaid.
From time to time, Parent has guaranteed certain obligations of the Corporation
and its affiliates. These guarantees remained in place following the IPO and may
be called upon should there be a default with respect to such obligations.
The Corporation anticipates that it may from time to time use the services of
the law firm of Venable, Baetjer & Howard, of which Mr. Benjamin R. Civiletti, a
Director of the Corporation, is a partner.
George C. Zoley, Vice Chairman of the Board and Chief Executive Officer of the
Corporation, also serves as Senior Vice President of TWC and a Director of each
of Wackenhut Corrections (U.K.) Limited, Wackenhut Corrections Corporation
Australia Pty Limited, Premier Prison Services, Ltd., Premier Custodial
Development, Ltd., Australasian Correctional Services Pty Limited, Australasian
Correctional Management Pty Limited, Wackenhut Corrections Canada, Inc., and WCC
RE Holdings, Inc., affiliates of the Company. James P. Rowan, Vice President,
General Counsel and Secretary of the Corporation, also serves as Senior Vice
President and General Counsel of the Parent. George R. Wackenhut is Chairman of
the Board of the Corporation, is Chairman of the Board and Chief Executive
Officer of Parent 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 Parent. Parent owns
all of the outstanding shares of Tuhnekcaw, Inc., a Delaware corporation which
in turn owns approximately 54.69% of issued and outstanding shares of Common
Stock of the Corporation. Richard R. Wackenhut, Chairman of the Board of
Directors of the Corporation, also serves as President and Chief Operating
Officer and a Director of Parent. He is the son of George R. and Ruth J.
Wackenhut.
DIRECTORS' COMPENSATION
Directors of the Corporation who are not Officers were paid during fiscal year
1997 an annual retainer fee at the rate of $20,000 per year plus $1,250 for each
Board Meeting attended, $500 for each committee meeting attended as committee
members, and $750 for each committee meeting attended as committee chairmen.
Each Director also receives from the Corporation an option to purchase up to one
thousand (1,000) shares of the Common Stock of the Corporation.
No other compensation was paid to Directors or their affiliates by the
Corporation during 1997.
SECTION 16 FILING VIOLATIONS
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 1997 have furnished the
Corporation with a statement that no filing is due.
19
<PAGE> 21
PROPOSAL NUMBER 2 APPOINTMENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
Although not required by the By-Laws, the Board of Directors, in the interest of
accepted corporate practice, 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 1997, 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.
SHAREHOLDER PROPOSAL DEADLINE
Shareholder proposals intended to be presented at the April 22, 1999, 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, 1998.
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.
James P. Rowan
Vice President, General Counsel
and Secretary
March 18, 1998
- --------------------------------------------------------------------------------
A COPY OF THE CORPORATION'S ANNUAL REPORT ON FORM 10-K FOR THE FISCAL YEAR ENDED
DECEMBER 28, 1997, INCLUDING THE FINANCIAL STATEMENTS AND THE SCHEDULES THERETO,
BUT EXCLUDING EXHIBITS THERETO, REQUIRED TO BE FILED WITH THE SECURITIES AND
EXCHANGE COMMISSION, WILL BE MADE AVAILABLE WITHOUT CHARGE TO INTERESTED
SHAREHOLDERS UPON WRITTEN REQUEST TO ROBERT P. HARWOOD, VICE PRESIDENT,
INVESTOR/PUBLIC RELATIONS, THE WACKENHUT CORPORATION, 4200 WACKENHUT DRIVE
#100, PALM BEACH GARDENS, FLORIDA, 33410-4243.
20
<PAGE> 22
APPENDIX A
WACKENHUT CORRECTIONS 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 H. Wackenhut and George C. Zoley 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 Common Stock of Wackenhut Corrections Corporation held of
record by the undersigned on March 2, 1998, at the Annual Meeting of
Shareholders to be held at the PGA National Resort, 400 Avenue of the
Champions, Palm Beach Gardens, Florida, at 9:00 A.M., April 23, 1998, or at any
adjournment thereof.
THE 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 AND 3. 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> 23
<TABLE>
<CAPTION>
THE BOARD OF DIRECTORS RECOMMENDS A VOTE FOR PROPOSALS 1, 2 AND 3. Please mark [ X ]
your vote as
indicated in
this example
<S> <C> <C> <C>
1. ELECTION OF DIRECTORS NOMINEES;
Wayne H. Calabrese John F. Ruffle
VOTE FOR all nominees VOTE WITHHELD Norman A. Carlson George R. Wackenhut
listed to the right (except as as to all nominees Benjamin R. Civiletti Richard R. Wackenhut
to the contrary). Richard H. Glanton George C. Zoley
[ ] [ ] Manuel J. Justiz
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 1998 FOR AGAINST ABSTAIN
the Appointment of ARTHUR ANDERSEN LLP [ ] [ ] [ ]
as the independent certified public accountants
of the Corporation.
3. 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
Date: 1998
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Signature
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Signature if held jointly
</TABLE>
PLEASE SIGN AND RETURN THIS PROXY IN THE ACCOMPANYING ADDRESSED ENVELOPE.
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FOLD AND DETACH HERE
