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EXHIBIT 10.3
[WACKENHUT LOGO]
THE WACKENHUT CORPORATION
EXECUTIVE RETIREMENT PLAN
(EFFECTIVE MARCH 1, 1989)
As Amended and Revised December 27, 1989
and As Further Amended and Revised April 24, 1993
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TABLE OF CONTENTS
PAGE
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INTRODUCTION ii
ARTICLE I DEFINITIONS 1
ARTICLE II PARTICIPANT ELIGIBILITY 2
ARTICLE III BENEFITS 3
ARTICLE IV WHEN BENEFITS ARE PAYABLE 3
ARTICLE V ADMINISTRATION 6
ARTICLE VI AMENDMENT, TERMINATION AND EXCEPTIONS 7
ARTICLE VII MISCELLANEOUS 7
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ARTICLE I
DEFINITIONS
1.0 DEFINITIONS. The following terms when used in this Plan shall have the
following meanings unless a different meaning is clearly required by the
context.
1.1 TWC. The Wackenhut Corporation.
1.2 EMPLOYER. TWC and any of its subsidiary corporations.
1.3 BENEFICIARY. The beneficiary or beneficiaries of a Participant in
accordance with Section 4.7. If more than one beneficiary survives the
Participant, payments shall be made equally to the surviving beneficiaries,
unless otherwise provided. Nothing herein shall prevent the Participant from
designating primary and contingent beneficiaries.
1.4 COMMITTEE. The Administrative Committee appointed to administer the Plan
pursuant to Article V.
1.5 DISABILITY. A Participant's inability to engage in any substantial gainful
activity by reason of any medically determinable physical or mental impairment
that can be expected to result in death or be of long continued and indefinite
duration. Disability is determined and approved by the Committee based on
medical evidence submitted by the Participant's physician or a physician
approved by the Committee. A determination by the United States Social
Security Administration that a Participant is disabled for Social Security
purposes shall be conclusive and binding upon the Committee.
1.6 EMPLOYEE. An Employee of an Employer.
1.7 PARTICIPANT. Any Employee who participates in this Plan in accordance with
Article II.
1.8 PERIOD OF SERVICE. The period of time during which an Employee is employed
by an Employer.
1.9 PLAN. The Wackenhut Corporation Executive Retirement Plan as it may from
time to time be amended.
1.10 RETIREMENT. The first date upon which the Participant shall separate from
service and attain Normal Retirement Age.
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1.11 SEPARATION FROM SERVICE. Severance of the Participant's employment with
the Employer. A Participant shall be deemed to have severed his employment
with the Employer for purposes of this Plan when, in accordance with the
established practices of the Employer, the employment relationship is
considered to have actually terminated.
1.12 NORMAL RETIREMENT AGE. Age 65.
1.13 FAS. The average salary of a Participant earned during his or her last
five (5) years of employment with an Employer. Such salary does not include
any bonuses, but does include any deferred salary which is included in the year
in which it is earned, not in the year of payment.
1.14 LONG TERM DISABILITY (LTD) BENEFITS. LTD benefits are those payable by The
Wackenhut Corporation Long Term Disability plan in effect from time to time and
normally offered to Employees under the TWC "005" plan.
ARTICLE II
PARTICIPANT ELIGIBILITY
2.1 INITIAL ELIGIBLE EMPLOYEES. The attached list of individuals are those
Employees who have been approved for participation at the inception of the
Plan. See Exhibit A. Participants shown on Exhibit A who are age 55 or over
at inception of the Plan shall not be eligible for Early Retirement pursuant to
Section 4.2 of the Plan.
2.2 OTHER ELIGIBLE EMPLOYEES. (as amended April 24, 1993). In addition to those
initially eligible, employees holding the following positions with applicable
time periods may be selected to participate in the Plan.
Position Time Period
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Any Officer of TWC After having been an Officer of TWC for
two years
President of a major After two years of service
Business Unit of Employer
(excluding WATCI, WMSI
and WASI)
Sr. Vice President at After having been in position for two years
Group Level
Sr. Vice President at After ten years of service and having been
Division Level in position for two years
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Vice President at After ten years of service and having been
Division Level in position for two years
Such key executives shall be suggested by the Corporate Retirement Committee,
and be finally approved for participation in the Plan by the Nominating and
Compensation Committee of the Board of Directors of TWC.
2.3 EXCLUDED EMPLOYEES. No Senior Vice President, Executive Vice President,
President, or Chairman of the Board of TWC shall be selected for participation
in the Plan if such officer has elected coverage under an individual Deferred
Compensation Agreement (the Senior Plan) between himself and TWC. Any such
officer may elect to be included under this Plan and not the Senior Plan at the
time he or she becomes eligible for the Senior Plan.
ARTICLE III
BENEFITS
3.1 BENEFIT COMPUTATION. The basic Benefit Formula is a product of forty-five
percent (45%) of the FAS of a Participant at Normal Retirement Age after
twenty-five (25) years of service, reduced by one hundred percent (100%) of any
social security benefits for which the Participant is eligible at the time of
his or her retirement.
3.2 YEARS OF SERVICE COUNTED. All years of service with the Employer, including
years of service prior to participation in the Plan, are includible for
purposes of the Benefit Computation in Section 3.1 above. Years of service in
excess of twenty-five (25) years are not considered for purposes of the Benefit
Computation. No benefits will be payable to any participant with less than ten
(10) years of service with TWC or its subsidiaries. Years of service after a
Participant reaches age 65 will be counted to allow a Participant to reach the
maximum of 25 years of service.
3.3 BENEFITS WITH LESS THAN 25 YEARS OF SERVICE. For years of service with TWC
and its subsidiaries in excess of ten (10) years, but less than twenty-five
(25) years, the Benefit Computation in Section 3.1 above shall be 1.8% times
the number of years of service to arrive at the Benefit Formula to be applied.
Thus, a Participant who had twenty (20) years of service at the time of his or
her entitlement to Benefits under this Plan would have a Benefit Formula of
thirty-six percent (36%) of FAS reduced by one hundred percent (100%) of any
social security benefits for which the Participant is eligible at the time of
his or her retirement.
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ARTICLE IV
WHEN BENEFITS ARE PAYABLE
4.1 RETIREMENT. Upon retiring at Normal Retirement Age, a Participant shall be
paid monthly 1/12th of the annual amount determined under the applicable
Benefit Formula provided in either Section 3.1 or 3.3 either for the rest of
his or her life or under the two optional forms of payment indicated in 4.1.1
and 4.1.2 below. Such payments shall begin the first day of the month
following such retirement. The following is an example of the Benefit
Computation.
An Executive retires at age 65 with twenty-five (25) years of service.
The FAS is $80,000 and the social security entitlement is $10,700 annually at
the time of his or her retirement.
45% x $80,000 = $36,000
Less Annual Social Security -10,700
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Plan pays annually for life $25,300
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Monthly payment for life $2,109
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4.1.1 LIFE WITH TEN YEARS CERTAIN. A Participant may elect the
actuarially determined equivalent of the payments for life to be paid for his
or her life with ten (10) years of such determined payment to be made in any
event either to the retired Participant or to his designated Beneficiary.
4.1.2 JOINT AND SURVIVOR OPTIONS. A Participant may elect the actuarially
determined equivalent of the payments for life to be paid for the lives of the
Participant and another person.
4.2 EARLY RETIREMENT. If a Participant is at least age 55 and has at least
twenty (20) years of service with the Employer, he or she may elect to retire
at any time before age 65, but the amount of the Benefits otherwise payable to
the Participant shall be reduced by a factor of 4% for each year (or fraction
thereof) that the Participant is under Normal Retirement Age. The Benefit
Calculation provided in Sections 3.1 or 3.3 would be made using an estimated
amount of social security which would be payable to the Participant at age 65.
The following is an example of the Benefit Computation.
An Executive retires early at age 62 with twenty-two (22) years of
service. His FAS is $80,000 and his estimated social security entitlement at
age 65 is $10,700 annually.
1.8% x 22 x $80,000 = $31,680
Less estimated Social Security -10,700
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Benefit that is payable at age 65 $20,980
Early retirement factor 100% - 3(4%) = x 88%
Annual Benefit payable at age 62 $18,462
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Monthly payment for life $ 1,538
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4.3 PRE-RETIREMENT DEATH BENEFIT. In the event of the death of a Participant
prior to his or her retirement, a benefit shall be payable to his or her
designated Beneficiary for a period of ten (10) years. This death benefit
shall be computed by using the applicable Benefit Formula in either Section 3.1
or 3.3 as if the Participant had attained Normal Retirement Age, reduced by
fifty percent (50%), but without any reduction for social security benefits.
4.3.1 TIME OF DISTRIBUTION. Distribution shall commence to be made as
soon as administratively practicable following the date on which the Committee
receives written notification of the Participant's death in the manner
prescribed by the Committee.
4.4 DISABILITY BENEFIT. In the event of the Disability of a Participant prior
to his or her retirement, a benefit shall be payable to such Participant
commencing at the time LTD benefits as defined in Section 1.14 cease. This
disability benefit shall be computed by using the applicable Benefit Formula in
either Section 3.1 or 3.3 based upon the years of service and compensation of
the Participant prior to his or her Disability. The benefit is computed as if
the Participant had attained Normal Retirement Age, and is payable as selected
by the Participant under Section 4.1 of this Plan. Any benefit payable under
this Section shall be computed as if the Participant were eligible to receive
LTD benefits for the period described in the LTD plan defined in Section 1.14,
whether the Participant is actually covered by such LTD plan or not.
4.5 DELAY IN PAYMENT. Notwithstanding any other provision of the Plan, if the
amount of a payment otherwise required to be made on any date under the Plan
cannot be ascertained by such date, or if the Participant (or Beneficiary, if
applicable) fails to provide proper written notification of his claim for a
benefit to the Committee, or if it is not possible to make such payment on such
date because the Committee cannot locate the Participant (or Beneficiary) after
making reasonable efforts to do so, such payment may be made no later than 60
days after the earliest date on which such payment can be ascertained or proper
notification is received or the Participant is located (whichever is
applicable).
4.6 PROOF OF DEATH. The Committee may require such proof of death and such
evidence of the right of any person to receive all or part of the death benefit
of a deceased Participant as the Committee may deem desirable.
4.7 DESIGNATION OF BENEFICIARY. Every Participant shall be furnished with a
form on which he may designate a Beneficiary to receive the benefits due him
under the Plan in the event of his death during employment, or before all
payments due are made.
4.7.1 A Participant may change any such designation by signing and filing
with the Committee a new Designation of Beneficiary.
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4.7.2 If no Beneficiary is designated, or if the designated Beneficiary
has not survived the Participant, and if no alternative designation of
Beneficiary shall be effective, the Participant's Beneficiary shall be his
surviving spouse, or if no spouse survives the Participant, the estate of the
deceased Participant.
4.7.3 If the Beneficiary cannot be located for a period of one year
following the Participant's death despite mailing to the Beneficiary's last
known address and if the Beneficiary has not made a written claim within such
period to the Committee, such Beneficiary shall be treated as having
predeceased the Participant.
4.8 PARTICIPANT'S RIGHTS UNSECURED. The right of the Participant or his
Beneficiary to receive a distribution hereunder shall be an unsecured claim
against the general assets of the Employer, and neither the Participant nor his
Beneficiary shall have any rights in or against any specific assets of the
Employer. Benefits may not be encumbered or assigned by a Participant or any
Beneficiary.
4.9 FORFEITURE OF BENEFITS. Notwithstanding any other provision of this Plan,
all benefits otherwise payable to a Participant may be forfeited if the
Committee determines that such Participant has become employed by a competitor
of the Employer either as an employee or a consultant.
ARTICLE V
ADMINISTRATION
5.1 THE COMMITTEE. The Plan will be administered by the Corporate Retirement
Committee (the Committee) comprised of the President, the Chief Financial
Officer, the Chief Legal Officer, and the Vice President, Human Resources of
TWC.
5.2 POWERS AND AUTHORITY OF COMMITTEE. Except as otherwise expressly provided
in the Plan, the Committee will have all powers necessary or helpful for the
carrying out of its duties and responsibilities under the Plan, and its
decisions or actions in good faith in respect of any matter hereunder will be
final, conclusive and binding upon all parties concerned.
5.3 LIABILITY LIMITED. Except as otherwise provided by law, no person who
is a member of the Committee or who is an employee, officer and/or director of
the Employer will incur any liability whatsoever on account of any matter
connected with or related to the Plan, unless such person has acted in bad
faith, or has willfully neglected his duties, in respect of the Plan.
5.4 RELIANCE ON INFORMATION. The members of the Committee, the Employer, and
its respective officers, directors and employees will be entitled to
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rely upon all tables, valuations, certificates, opinions and reports
furnished by any actuary, accountant, insurance company, counsel, physician or
other expert who is engaged by the Committee. The members of the Committee,
the Employer, and its respective officers, directors, and employees will be
fully protected in respect of any action taken or suffered by them in good
faith in reliance thereon, and all action so taken or suffered shall be
conclusive upon all persons affected thereby.
5.5 GENUINENESS OF DOCUMENTS. The Committee, the Employer, and its respective
officers, directors and employees, will be entitled to rely upon any notice,
request, consent letter, telegram or other paper or document believed by them
or any of them, in good faith, to be genuine and to have been signed or sent by
the proper person.
5.6 PROPER PROOF. In any case in which the Committee or the Employer is
required under the Plan to take action upon the occurrence of any event, they
will be under no obligation to take such action unless and until proper and
satisfactory evidence of such occurrence has been received by them.
ARTICLE VI
AMENDMENT, TERMINATION AND EXCEPTIONS
6.1 MODIFICATION OR AMENDMENT. The Board of Directors of TWC may at any time
amend this Plan; provided, however, that such amendment shall not affect the
rights of the Participants or their Beneficiaries with respect to any benefits
accrued or payable before the date of any such amendment.
6.2 TERMINATION OF PLAN. The Board of Directors of TWC may, in its sole
discretion, terminate the Plan at any time; provided, however, such termination
shall not affect the rights of Participants or their Beneficiaries with respect
to any benefits accrued or payable before the date of such termination of this
Plan.
6.3 EXCEPTIONS. The Nominating and Compensation Committee of the Board of
Directors of TWC may make individual exceptions to the Plan from time to time
to broaden the provisions of the Plan to be more favorable to a Participant
than the provisions of the Plan. No exceptions may be made by such Committee
to narrow the coverage of the Plan or to make exceptions which are less
favorable to a Participant.
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ARTICLE VII
MISCELLANEOUS
7.1 NO IMPLIED RIGHTS. Neither the establishment of the Plan nor any
modification thereof, shall be construed as giving any Participant, Employee,
Beneficiary or other person any legal or equitable right unless such right
shall be specifically provided in the Plan or conferred by affirmative action
of the Committee or the Nominating and Compensation Committee of the Board of
Directors of TWC in accordance with the terms and provisions of the Plan.
7.2 STATUS OF EMPLOYMENT RELATIONS. Nothing in this Plan shall be deemed to:
7.2.1 Give to any employee the right to be retained in the employ of
TWC;
7.2.2 Affect the right of TWC to discipline or discharge any
employee at any time;
7.2.3 Give TWC the right to require any employee to remain
in its employ; or
7.2.4 Affect any employee's right to terminate his
employment at any time.
7.3 BINDING EFFECT. The provisions of the Plan shall be binding on the
Employer, the Committee and their successors and on all persons entitled to
benefits under the Plan and their respective heirs, legal representatives and
successors in interest.
7.4 GOVERNING LAWS. The Plan shall be construed and administered according to
the laws of the State of Florida to the extent that such laws are not preempted
by the laws of the United States of America.
7.5 USAGE. Whenever applicable, the masculine gender, when used in the Plan,
shall include the feminine and neuter genders, and the singular shall include
the plural.
7.6 CAPTIONS. The captions contained herein are inserted as a matter of
convenience and for reference only, and in no way define, limit, enlarge or
describe the scope or intent of the Plan nor in any way shall affect the Plan
or the construction of any provisions thereof.
7.7 RABBI TRUST. This Plan shall be complemented by a "Rabbi" or "Springing
Trust" which shall make reference to this Plan and which shall provide some
measure of security for the otherwise unfunded benefits contemplated by this
Plan.
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