Table of Contents

SECURITIES AND EXCHANGE COMMISSION

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Form 10-K

þ		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the fiscal year ended December 29, 2002
or
o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
		For the transition period from           to

Commission file number: 1-14260

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Wackenhut Corrections Corporation

Florida		65-0043078
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
4200 Wackenhut Drive #100, Palm Beach Gardens, Florida (Address of principal executive offices)		33410-4243 (Zip Code)

Registrant’s telephone number (including area code):

Securities registered pursuant to Section 12(b) of the Act:

Title of each class		Name of each exchange on which registered
Common Stock, $0.01 Par Value		New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:

Title of each class		Name of each exchange on which registered
None		None

      Indicate by a check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.     Yes þ          No o

      Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.     þ

      Indicate by a check mark whether the registrant is an accelerated filer (as defined in Exchange Act Rule 12b-2).     Yes þ          No o

      At June 30, 2002, the aggregate market value of the 9,236,620 shares of Common Stock held by non-affiliates of the registrant was $131,714,201. At March 10, 2003, there were outstanding 21,245,620 shares of Common Stock.

DOCUMENTS INCORPORATED BY REFERENCE

      Parts of the Registrant’s Proxy Statement for its 2003 Annual Meeting of Shareholders are incorporated by reference in Part III of this report.

EXHIBIT INDEX IS LOCATED ON PAGE 73

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PART I
	Item 1. Business
	Item 7. Management’s Discussion and Analysis of Financial Condition and results of Operations
	Item 7A. Quantitative and Qualitative Disclosures About Market Risk
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED STATEMENTS OF CASH FLOWS Fiscal Years Ended December 29, 2002, December 30, 2001, and December 31, 2000
	10. Income Taxes
	11. Earnings Per Share
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
MANAGEMENT’S RESPONSIBILITY FOR FINANCIAL STATEMENTS
	Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure
PART III
PART IV
	Item 14. Controls and Procedures
	Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K
SIGNATURES
CERTIFICATIONS
CERTIFICATIONS
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
SCHEDULE II
EXHIBIT INDEX
First Amendment to Credit Agreement
Nonemployee Director Stock Option
Amended Executive Retirement Agreement/Zoley
Amended Executive Retirement Agreement/Calabrese
Amended Executive Retirement Agreement/O'Rourke
Office Lease dated September 12, 2002
Services Agreement
SUBSIDIARIES OF THE COMPANY
Consent of Ernst & Young LLP
Powers of Attorney
Certificate of CEO
CFO Certification

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Table of Contents

PART I

Item 1.     Business

The Company

      Wackenhut Corrections Corporation (“the Company”), a 56% owned subsidiary of Group 4 Falck A/ S (“Group 4 Falck”), is an industry leader in the privatization of correctional facilities throughout the world. The Company was founded in 1984 as a division of The Wackenhut Corporation (“TWC”), a leading provider of professional security services. In 1986, the Company received its first contract, from the United States Immigration and Naturalization Service (the “INS”), to design, construct and manage a detention facility with a design capacity of 150 beds.

      On May 8, 2002, TWC consummated a merger (the “Merger”) with a wholly owned subsidiary of Group 4 Falck A/ S, a Danish multinational security and correctional services company. As a result of the Merger, Group 4 Falck has become the indirect beneficial owner of TWC’s 12 million shares in the Company. The Company’s common stock continues to trade on the New York Stock Exchange.

      As of December 29, 2002, the Company had 59 correctional, detention and healthcare facilities either under contract or award with an aggregate design capacity of 39,216 beds. At December 29, 2002, all 59 facilities were in operation. At December 29, 2002, the Company had outstanding written responses to Requests for Proposal (“RFPs”) for seven projects with an aggregate design capacity of 2,548 beds.

      The Company offers a comprehensive range of correctional and related institutional services to federal, state, local and overseas government agencies. Correctional services include the management of a broad spectrum of facilities, including male and female adult facilities; juvenile facilities; community corrections; work programs; prison industries; substance abuse treatment facilities; and mental health, geriatric and other special needs institutions. Other management contracts include psychiatric health care, electronic home monitoring, prisoner transportation, correctional health services, and facility maintenance. The Company has an in-house capability for the design of new facilities, and offers a full privatization package to government agencies, including financing of new projects. The Company believes that its experience in delivering governmental agencies high quality, cost-effective correctional and related services provides such agencies strong incentive to select the Company when renewing and awarding contracts.

      On November 1, 1998, the Company began management of the 325-bed South Florida State Hospital, representing a historic milestone for public sector mental health services and a significant diversification of the Company’s service offerings. In December 2000, the Company completed construction at the site of the new South Florida State Hospital and successfully moved all operations to the new facility. In January 2003, the Company’s initial five-year contract was extended for an additional five years.

      The Company has obtained and is pursuing development and management contracts for correctional and detention facilities outside the United States including facilities in Europe, Australia, New Zealand and South Africa.

      Through its wholly-owned subsidiary in Australia, Wackenhut Corrections Corporation Australia Pty Limited (“WCCA”), the Company manages four correctional centres, six immigration detention centres, two temporary detention centres and one correctional Health Care Services entity in Australia and one correctional center in New Zealand.

      In the United Kingdom, the Company formed two joint ventures to pursue construction and management contracts for privatized correctional and detention facilities. Premier Custodial Group Limited (“PCG”), a joint venture with Serco Limited, currently manages six correctional facilities, one immigration detention centre, two court escort contracts and two electronic monitoring services contracts. Under court escort contracts, a private company, on behalf of a governmental agency, transports prisoners between police stations, prisons and courts and is responsible for the custody of such prisoners during

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      In South Africa, the Company formed a joint venture to pursue construction and management contracts for privatized correctional and detention centers. South African Custodial Management (“SACM”), a joint venture with Kensani Holdings Pty Ltd and Fidelity Services Group Pty Ltd, currently manages a 3,024-bed correctional facility located in the Northern Province of South Africa.

      In the majority of contracts, the Company manages facilities owned or leased by a governmental agency. The agency may finance the construction of such facilities through various methods including, but not limited to, the following: (i) a one time general revenue appropriation by the governmental agency for the cost of the new facility; (ii) general obligation bonds that are secured by either a limited or unlimited tax levy by the issuing entity; or (iii) lease revenue bonds or certificates of participation secured by an annual lease payment that is subject to annual or bi-annual legislative appropriations. In some instances, the Company may be required to own and/or finance the facility. The construction of these facilities may be financed through various methods including, but not limited to the following: (i) funds from equity offerings of the Company’s stock; (ii) cash flows from operations; (iii) borrowings from banks or other institutions (which may or may not be subject to government guarantees in the event of contract termination); or (iv) lease arrangements with third parties.

      The Company was incorporated in Florida in April, 1988. The Company’s principal executive offices are located at 4200 Wackenhut Drive #100, Palm Beach Gardens, Florida 33410-4243, and its telephone number is (561) 622-5656.

      See the Company’s Consolidated Financial Statements and Notes to Consolidated Financial Statements included herein for financial information regarding domestic and international operations.

Certain Factors That May Affect Future Results

      Prospective investors should carefully consider the following factors that may affect future results, together with the other information contained in this Annual Report on Form 10-K, in evaluating the Company and its business before purchasing its securities. In particular, prospective investors should note that this Annual Report on Form 10-K contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and that actual results could differ materially from those contemplated by such statements. See “Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995” below. The factors listed below represent certain important factors the Company believes could cause such results to differ. These factors are not intended to represent a complete list of the general or specific risks that may affect the Company. It should be recognized that other risks may be significant, presently or in the future, and the risks set forth below may affect the Company to a greater extent than indicated.

      Revenue and Profit Growth Dependent on Expansion. The Company’s growth will depend to a significant degree upon its ability to obtain additional construction and management contracts and to retain existing management contracts. The Company’s growth is generally dependent on the construction and management of new correctional and detention facilities, since contracts to manage existing public facilities are not typically offered to private operators. The rate of construction of new facilities and, therefore, the Company’s potential for growth will depend on a number of factors, including crime rates and sentencing patterns in jurisdictions in which the Company operates, governmental and public acceptance of the concept of privatization, the number of facilities available for privatization, and the Company’s ability to

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      Contracts Subject to Renewal. Thirty-three contracts are subject to renewal in 2003. These contracts represented 54% of the Company’s 2002 revenue. Management believes the Company will be successful in the renegotiation of these contracts; however, there can be no assurance that the Company will be able to renew these contracts.

      Possible Fluctuations in Occupancy Levels. A substantial portion of the Company’s revenues are generated under facility management contracts that specify per diem payments based upon occupancy rates (some of which provide guaranteed minimum occupancy levels), while a substantial portion of the Company’s cost structure is fixed. Under a per diem rate structure, a decrease in occupancy rates could cause a decrease in revenue and profitability. Average facility occupancy rates were approximately 97% in Fiscal 2002 and Fiscal 2001; however, there can be no assurance that occupancy rates will not decrease below these percentages in the future. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations” included herein.

      Reliance Upon Government Appropriations for Payment Under Awarded Contracts. The Company’s facility management contracts are subject to either annual or bi-annual legislative appropriations. A failure by a governmental agency to receive such appropriations could result in termination of the contract by such agency or a reduction of the management fee payable to the Company. In addition, even if funds are appropriated, delays in payments may occur which could negatively affect the Company’s cash flow. In addition, in certain cases the development and construction of facilities to be managed by the Company are also subject to obtaining construction financing. Such financing may be obtained through a variety of means, including without limitation, sale of tax-exempt or taxable bonds or other obligations or direct governmental appropriation. The sale of tax-exempt or taxable bonds or other obligations may be adversely affected by changes in applicable tax laws or adverse changes in the market for tax-exempt or taxable bonds or other obligations. See “Business — Facility Overview.”

      Governmental Regulation. The Company’s business is highly regulated by a variety of governmental agencies with oversight authority. For example, a contracting agency may assign full-time, on-site personnel to a facility to monitor the Company’s compliance with contract terms and applicable regulations. Failure by the Company to comply with such contract terms or regulations could expose it to substantial penalties or contract termination. In addition, changes in existing regulations could require the Company to substantially modify the manner in which it conducts business and, therefore, could have a material adverse effect on the Company. See “Business — Business Regulations and Legal Considerations.”

      Limited Acceptance of Private Prison Operation. Management of correctional and detention facilities by private entities has not achieved complete acceptance by either governments or the public. Some governmental agencies have limitations on their right to delegate their traditional management responsibilities for correctional and detention facilities to private companies and further legislative changes or prohibitions could occur that further impact these limits. The operation of correctional and detention facilities by private entities is a relatively new concept and is not widely accepted by the public and has encountered resistance from certain groups, such as labor unions, local sheriffs’ departments, and groups that believe that correctional and detention facility operations should only be conducted by governmental agencies. Moreover, changes in dominant political parties in any of the markets in which the Company operates could result in significant changes to previously established views of privatization in such markets. See “Business — Marketing.”

      Community Opposition to Facility Location. The Company’s success in obtaining new awards and contracts sometimes depends, in part, upon its ability to locate land that can be leased or acquired, on

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      Potential Legal Liability. The Company’s management of correctional and detention facilities exposes it to potential third-party claims or litigation by prisoners or other persons for personal injury or other damage resulting from contact with Company-managed facilities, programs, personnel or prisoners, including damages arising from a prisoner’s escape or from a disturbance or riot at a Company-managed facility. In addition, the Company’s management contracts generally require the Company to indemnify the governmental agency against any damages to which the governmental agency may be subject in connection with such claims or litigation. The Company has an insurance program that provides coverage for certain liability risks faced by the Company, including accident and personal injury and bodily injury or property damage to a third party where the Company is found to be negligent. There can be no assurance, however, that the Company’s insurance will be adequate to cover all potential third-party claims. See “Business — Insurance.” In addition, the Company may from time to time be subjected to employment related litigation and medical malpractice claims that are not covered by insurance.

      Adverse Publicity. The Company’s business is subject to public scrutiny. An escape or disturbance at a Company-managed facility or another privately-managed facility may result in publicity adverse to the Company and the industry in which it operates, which could materially adversely affect the Company’s business.

      Reliance of Company on TWC for Certain Services. The Company has historically been reliant upon TWC for various services including payroll, tax, data processing, auditing, treasury, cash management, insurance, information technology and human resource services. During the year the Company developed the internal support structure to internally perform all functions with the exception of information technology support services. The Company and TWC have an agreement under which TWC has agreed to continue to provide information technology support services, as deemed necessary, to the Company in return for payment by the Company of a fixed annual fee.

      Inflation. The Company’s largest facility management expense is personnel costs. Most of the Company’s facility management contracts provide for payments to the Company of either fixed management fees or fees that increase by only small amounts during their terms. If, due to inflation or other causes, the Company must increase the wages and salaries of its employees at rates faster than increases, if any, in management fees, then the Company’s profitability would be adversely affected. See “Management’s Discussion and Analysis of Financial Condition and Results of Operations — Inflation” included herein.

      Economic Risks Associated With Development Activities. When the Company is engaged to perform construction and design services for a facility, the Company typically acts as the primary contractor and subcontracts with other companies who act as the general contractors. As primary contractor, the Company is subject to the various risks of construction (including, without limitation, shortages of labor and materials, work stoppages, labor disputes and weather interference) which could cause construction delays, and the Company is subject to the risk that the general contractor will be unable to complete construction at the budgeted costs or be unable to fund any excess construction costs, despite the fact that the Company requires its general contractor to post construction bonds and insurance. Under such contracts, the Company is ultimately liable for all late delivery penalties and cost overruns. See

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      Facility Lease Liability. The Company currently leases fifteen of the facilities that it manages. The leases for fourteen of these facilities do not terminate upon the completion of the management contracts. If a management contract for such a facility is completed and not renewed, or is terminated, the Company would be obligated to continue to make lease payments until expiration of the facility lease, even though it no longer would receive management fees under such contract and may be unable to obtain an additional contract for the use of the facility.

      Control of Company. As a result of the Merger, Group 4 Falck is the indirect beneficial owner of 12 million shares, or approximately 56%, of the issued and outstanding voting common stock of the Company.

      Due to certain provisions of Florida law, as part of the Merger, Group 4 Falck and TWC requested that the Company’s Board of Directors approve the Merger. In response to this request, the Company’s Board of Directors formed a Special Independent Committee to investigate and evaluate the Merger. The Special Independent Committee determined that, as a prerequisite to recommending that the Company’s Board of Directors approve the Merger, it was advisable for the Company to enter into an agreement with Group 4 Falck and TWC to govern the relationship between the Company, Group 4 Falck and TWC following the consummation of the Merger (the “Agreement”). After negotiations between the Company’s Special Independent Committee and Group 4 Falck and TWC, the Agreement was entered into by the Company, Group 4 Falck and TWC on March 8, 2002.

      The Agreement provides, among other things, that (1) for a period of three years following the Merger, the Board of Directors of the Company will consist of nine members, five of which will be independent directors, two of which will be Company officers and two of which will be Group 4 Falck representatives, (2) during the one year period following the Merger, the Nominating and Compensation Committee of the Company’s Board of Directors will consist of three members, two of which will be independent directors and one of which will be a Company director nominated by Group 4 Falck, (modified in February 2003 to provide that all three members in the newly named Nominating and Governance Committee are to be independent directors) and (3) until such time as Group 4 Falck directly or indirectly owns less than 49% of the Company’s outstanding common stock, (i) neither Group 4 Falck nor TWC will engage in the business of managing or operating prison, detention facility or mental health facility management businesses anywhere in the United States, and (ii) representatives of Group 4 Falck and TWC who serve on the Company’s Board of Directors will not have access to certain proprietary, confidential information of the Company, its subsidiaries or affiliates. The Agreement also requires that any purchases of the Company’s common stock by either Group 4 Falck or TWC during the three-year period following the Merger be made only at a price approved by a majority of the independent directors of the Company.

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995

      This report and the documents incorporated by referenced herein contain “forward-looking” statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. “Forward-looking” statements are any statements that are not based on historical information. Words such as “expects”, “anticipates”, “intends”, “plans”, “believes”, “seeks”, “estimates”, and variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions (“Future Factors”), which are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. The Company undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise. Future Factors include, but are not limited to, (1) the Company’s ability to timely build and/or open facilities as planned, profitably manage such facilities and successfully integrate such facilities into the Company

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Facilities

      The following table summarizes certain information with respect to facilities currently under management contract or award for management by the Company (or a subsidiary or joint venture of the Company) at December 29, 2002.

Facility Name

Company

Design

Facility

Security

Commencement

Renewal

Location

Role

Capacity

Type

Level

of Current Contract

Term

Option

Correctional Facilities

Federal Government Contracts:

Aurora INS Processing

Design/

340

INS Detention

Minimum/

October 2002

1 year

None

Center, Aurora, Colorado(6)

Construction/ Management

Facility

Medium

Queens Private

Design/

200

INS Detention

Minimum/

April 2002

1 year

Four,

Correctional Facility,

Construction/

Facility

Medium

One-year

Queens, New York(6)

Management

Rivers Correctional

Design/

1,200

Federal Prison

Low/

March 2001

3 years

Seven,

Institution, Winton, North

Construction/

Minimum

One-year

Carolina(2)

Management

Taft Correctional

Management

2,048

Federal Prison

Low/

August 2002

1 year

Four,

Institution

Minimum

One-year

Taft, California

State Government Contracts:

Allen Correctional Center

Management

1,538

State Prison

Medium/

December 2000

3 years

Two,

Kinder, Louisiana

Maximum

One-Year

Bridgeport Correctional

Construction/

520

Pre-Release Center

Minimum

September 2000

3 years

Two,

Center

Management

One-Year

Bridgeport, Texas

Central Texas Parole

Renovation/

623

Parole Violator

All levels

September 2001

Varies(1)

Varies(1)

Violator Facility

Management

Facility/ U.S. Marshal

San Antonio, Texas

and INS Detention

Facility

Central Valley Community

Design/

550

State Community

Medium

December 1997

10 years

None

Correctional Facility

Construction/

Correctional Facility

McFarland, California(6)

Management

Cleveland Correctional

Management

520

State Prison

Medium

April 2001

3 years

None

Center

Cleveland, Texas

Coke County Juvenile

Design/

200

Juvenile Offender

Medium/

March 2001

2 years

Unlimited,

Justice Facility

Construction/

Facility

Maximum

Two-year

Coke County, Texas

Management

Desert View Modified Community

Design/

568

State Community

Medium

December 1997

10 years

None

Correctional Facility

Construction/

Correctional Facility

Adelanto, California(6)

Management

East Mississippi

Design/

750

State Prison

Mental Health

April 1999

5 years

One,

Correctional Facility

Construction/

Two-year

Meridian, Mississippi

Management

Golden State Community

Design/

550

State Community

Medium

December 1997

10 years

None

Correctional Facility

Construction/

Correctional Facility

McFarland, California(6)

Management

Guadalupe County

Design/

600

State Prison

Medium

June 2002

1 year

Annual

Correctional Facility

Construction/

Santa Rosa, New Mexico(2)(9)

Management

John R. Lindsey

Design/

1,031

State Jail Facility

Minimum/

September 2002

2 year

One,

Correctional Facility

Consultation/

Medium

Two-year

Jack County, Texas

Management

Karnes County

Management

579

County Jail

All levels

January 1998

Varies(1)

Varies(1)

Correctional Center

Karnes City, Texas(6)

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Facility Name

Company

Design

Facility

Security

Commencement

Renewal

Location

Role

Capacity

Type

Level

of Current Contract

Term

Option

Kyle Correctional

Construction/

520

State Prison/

Minimum

September 2000

3 years

Two,

Facility (New Vision)

Management/

In-Prison Chemical

One-Year

Kyle, Texas(3)

Chemical

Dependency

Dependency

Treatment Center

Treatment

Lawton Correctional

Design/

1,800

State Prison

Medium

December 2002

6 months

None

Facility

Construction/

Lawton, Oklahoma(6)

Management

Lea County Correctional

Design/

1,200

County Jail

All levels

May 2002

1 year

Annual

Facility

Construction/

Hobbs, New Mexico(6)

Management

Lockhart Renaissance

Design/

500

Work Program

Minimum

January 1999

4 years,

Unlimited,

Facility

Construction/

Facility

8 months

Two-year

Lockhart, Texas

Management

Lockhart Secure Work

Design/

500

Work Program

Minimum

January 1999

4 years,

Unlimited,

Program Facility

Construction/

Facility

8 months

Two-year

Lockhart, Texas

Management

Marshall County

Design/

1,000

State Prison

Medium

August 2001

2 years

Unlimited,

Correctional Facility

Construction/

Two-year

Holly Springs, Mississippi

Management

McFarland Community

Construction/

224

State Community

Minimum

July 2002

1 year

None

Correctional Facility

Management

Correctional Facility

McFarland, California(6)

Michigan Youth

Design/

480

State Prison

Maximum

July 1999

4 years

Unlimited,

Correctional Facility

Construction/

Four-year

Baldwin, Michigan(2)

Management

Moore Haven

Design/

750

State Prison

Medium

July 2002

2 years

Unlimited,

Correctional Facility

Construction/

Two-year

Moore Haven, Florida

Management

North Texas Intermediate

Renovation/

400

Intermediate Sanction

Minimum

September 2001

2 years

Unlimited,

Sanction Facility

Management

Facility

Two-year

Fort Worth, Texas

South Bay

Design/

1,318

State Prison

Medium/

June 2001

2 years

Unlimited,

Correctional Facility

Construction/

Close Custody

Two-year

South Bay, Florida

Management

Willacy County Unit

Design/

1,000

State Jail Facility

Minimum

September 2002

1 year

None

Raymondville, Texas

Consultation/

Management

Local Government Contracts:

Broward County Work

Design/

300

Community Work

Non-secure

February 1998

5 years

Unlimited,

Release Center

Construction/

Release Center

Two-year

Broward County, Florida(6)

Management

George W. Hill

Design/

1,812

County Jail

All levels

September 2000

5 years

Unlimited,

Correctional Facility

Construction/

Two-year

Thornton, Pennsylvania

Management

Val Verde Correctional

Design/

784

Local Detention

All levels

January 2001

20 years

One,

Facility

Construction/

Facility/ County Jail

Five-year

Del Rio, Texas(2)(10)

Management

Western Region Detention

Renovation/

616

Local Detention

Maximum

July 2002

1 year

Two,

Facility at San Diego

Management

Facility

One-year

San Diego, California

International Contracts:

Arthur Gorrie Correctional

Management

710

Reception and

All levels

December 2002

5 years

One,

Centre

Remand Centre

Five-year

Wacol, Australia

H.M. Prison and Youth

Design/

400

National Prison

Medium

November 1999

25 years

None

Offender Institution Ashfield

Construction/

Pucklechurch, UK

Management

Auckland Central

Management

383

National Prison

Medium/

July 2000

5 years

None

Remand Prison

Maximum

Auckland, New Zealand

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Facility Name

Company

Design

Facility

Security

Commencement

Renewal

Location

Role

Capacity

Type

Level

of Current Contract

Term

Option

Baxter Immigration

Management

1,200

Immigration

All levels

September 2002

1 year

None

Detention Centre

Detention

Baxter, Australia

Christmas Island Immigration

Management

300

Immigration Detention

All levels

(7)

(7)

None

Detention Centre

Temporary Facility

CoCos Island Immigration

Management

150

Immigration Detention

All levels

(7)

(7)

None

Detention Centre

Temporary Facility

Court Escort & Custody

Management

N/ A

Court Custody/

All levels

May 1996

6 1/2

None

Service

Transport-Escort

years

South East Area,

England

Dungavel House

Management

150

Immigration Detention

Low

August 2001

5 Years

None

Immigration Detention

Centre

South

Lanarkshire, Scotland

Hassockfield Secure

Design/

40

National Prison

Medium

September 1999

15 years

None

Training Centre

Construction/

Medomsley, England

Management

H.M. Prison and Youth

Management

1,111

National Prison

All levels

October 2000

10 years

None

Offender Institution Doncaster

Doncaster, England

Fulham Correctional Centre

Design/

725

State Prison

Minimum/

May 2000

3 years

Five,

Victoria, Australia

Consultation/

Medium

Three-year

Management

Junee Correctional Centre

Construction/

750

State Prison

Minimum/

April 2001

5 years

Three,

Junee, Australia

Management

Medium

One-year

H.M. Prison Kilmarnock

Design/

548

National Prison

All levels

March 1999

25 years

None

Kilmarnock, Scotland

Construction/

Management

H.M. Prison Lowdham

Management

524

National Prison

All levels

February 1998

25 years

None

Grange

Nottinghamshire, England

Kutama-Sinthumule

Design/

3,024

National Prison

Maximum

July 1999

25 years

None

Maximum Security Prison

Construction/

Northern Province,

Management

Republic of South Africa

Maribyrnong Immigration

Management

80

Immigration

All levels

March 1999

3 years

None

Detention Centre

Detention

Melbourne, Australia

Melbourne Custody Centre,

Management

80

City Jail

All levels

March 2002

1 year

One,

Melbourne, Australia

One-year

H.M. Prison Dovegate

Design/

800

National Prison and

Medium

July 2001

25 years

None

Marchington, England

Construction/

Therapeutic

Management

Community

New Brunswick Youth

Design/

N/ A

Province Juvenile

All levels

October 1997

25 years

None

Centre(4)

Consultation/

Facility

New Brunswick, Canada

Maintenance

Pacific Shores Healthcare

Management

N/ A

Health Care Services

N/ A

December 2001

4 years

One,

Victoria, Australia(8)

Two-year

Perth Immigration

Management

66

Immigration

All levels

December 2000

3 years

None

Detention

Detention

Centre Perth, Australia

Port Hedland Immigration

Management

700

Immigration

All levels

December 2000

3 years

None

Reception & Processing

Detention

Centre

Port Hedland, Australia

Premier Monitoring

Management

N/ A

Home Detention

Non-secure

January 1999

5 years

None

Services Limited

Services

Norfolk, England

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Facility Name

Company

Design

Facility

Security

Commencement

Renewal

Location

Role

Capacity

Type

Level

of Current Contract

Term

Option

Villawood Immigration

Management

700

Immigration

All levels

November 2000

3 Years

None

Detention Centre

Detention

Sydney, Australia

Woomera Immigration

Management

1,200

Immigration

All levels

November 2000

3 years

None

Detention Centre

Detention

Woomera, Australia

Other Facilities

South Florida State

Design/

325

State Psychiatric

N/ A

November 1998

5 years

Three,

Hospital

Construction/

Hospital

Five-year

Pembroke Pines, Florida

Management

Atlantic Shores Hospital

Management

72

Private Psychiatric

N/ A

(5)

(5)

(5)

Fort Lauderdale, Florida

Hospital

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(1)	This facility is occupied by inmates under several contracts with varying terms and renewal options. The terms of these contracts range from two weeks to an indefinite period and the renewal option features range from no option to unlimited renewals.
(2)	The Company owns these facilities.
(3)	The Company operates a chemical dependency treatment center located in this facility under a separate contract. This contract is for a three-year term expiring August 31, 2003.
(4)	The Company holds a contract for maintenance only of this facility.
(5)	The Company purchased this facility and provides services on an individual patient basis, therefore, there are no contracts with government agencies subject to terms and/or renewals.
(6)	The Company leases these facilities from CPV. In April 1998, the Company sold three facilities owned by it and the rights to acquire four other facilities to CPV which CPV subsequently exercised. CPV purchased an eighth facility directly from a government entity. In October 1998 the Company sold the completed portion of a ninth facility to CPV. During Fiscal 1999, CPV acquired a 600-bed expansion of the ninth facility and the right to acquire a tenth facility which it subsequently exercised. During Fiscal 2000, CPV purchased an eleventh facility that the Company had the right to acquire. The facilities were then leased to the Company under operating leases. There were no purchase and sale transactions between the Company and CPV in 2001 or 2002. See Item 2 — “Properties.”
(7)	This facility represents additional services under the current detention services contractual agreement with the Department of Immigration, Multicultural and Indigenous Affairs (“DIMIA”), and is subject to a six-week termination clause depending on client needs.
(8)	The Company provides comprehensive healthcare services to 11 government-operated prisons under this contract.
(9)	The Company has a five-year contract with five one-year options to operate the facility on behalf of the county. The county, in turn, has a one-year contract, subject to annual renewal, with the state to house state prisoners at the facility.

(10)	The Company has a twenty-year contract with one five-year option to operate the facility on behalf of the county. The county, in turn, has a one-year contract, subject to annual renewal, with the U.S. Marshal Service to house federal prisoners at the facility.

Facility Overview

      The Company offers services that go beyond simply housing offenders in a safe and secure manner. The Company offers a wide array of in-facility rehabilitative and educational programs. Inmates at most facilities managed by the Company can also receive basic education through academic programs designed to improve inmates’ literacy levels and to offer the opportunity to acquire General Education Development (“GED”) certificates. Most Company-managed facilities also offer vocational training for in-demand occupations to inmates who lack marketable job skills. In addition, most Company-managed facilities offer

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      The Company operates each facility in accordance with the Company-wide policies and procedures and with the standards and guidelines required under the relevant contract. For many facilities, the standards and guidelines include those established by the American Correctional Association (“ACA”). The ACA, an independent organization of corrections professionals, establishes correctional facility standards and guidelines that are generally acknowledged as a benchmark by governmental agencies responsible for correctional facilities. Many of the Company’s contracts for facilities in the United States require the Company to seek and maintain ACA accreditation of the facility. The Company has sought and received ACA accreditation for twenty-two of the facilities it manages.

      Contracts to design and construct or to redesign and renovate facilities may be financed in a variety of ways. See also “Business — Facility Design, Construction and Finance.” If the project is financed using direct governmental appropriations, using proceeds of the sale of bonds or other obligations issued prior to the award of the project or by the Company directly, then financing is in place when the contract relating to the construction or renovation project is executed. If the project is financed using project-specific tax-exempt bonds or other obligations, the construction contract is generally subject to the sale of such bonds or obligations. Generally, substantial expenditures for construction will not be made on such a project until the tax-exempt bonds or other obligations are sold; and, if such bonds or obligations are not sold, construction and, therefore, management of the facility may either be delayed until alternative financing is procured or development of the project will be entirely suspended. If the project is self-financed by the Company, then financing is in place prior to the commencement of construction.

      When the Company is awarded a facility management contract, appropriations for the first annual or bi-annual period of the contract’s term have generally already been approved, and the contract is subject to governmental appropriations for subsequent annual or bi-annual periods.

Facility Management Contracts

      Other than listed in the following table, no other single customer accounted for 10% or more of the Company’s total revenues for Fiscal 2002, 2001, and 2000.

Customer		2002				2001				2000
Various agencies of the U.S. Federal Government			19	%			18	%			11	%
Various agencies of the State of Texas			17	%			16	%			15	%
Various agencies of the State of Florida			14	%			14	%			19	%
Department of Immigration, Multicultural and Indigenous Affairs (Australia)			10	%			11	%			11	%

      Except for its contracts for the Taft Correctional Institution, George W. Hill Correctional Facility, Rivers Correctional Institution, South Florida State Hospital, and the facilities in the United Kingdom, Australia, South Africa and New Zealand, all of which provide for fixed monthly rates, the Company’s facility management contracts provide that the Company is compensated at an inmate or patient per diem rate based upon actual or guaranteed occupancy levels. Such compensation is invoiced in accordance with

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      The following table summarizes the number of the Company’s contracts under consideration for renewal:

Year			Number of Contracts
	2003			31
	2004			5
	2005			3
	2006			0
	2007			7
Thereafter				11
				57

      Refer to the table in “Business — Facilities” for detail of the renewal options for these contracts. The remainder of the Company’s contracts are either in negotiation currently or have varied renewal options that are dependent upon the agency contracted with, the type of inmate, and other factors. Management believes the Company will be successful in renegotiating these contracts but can provide no assurance of future renewals. Except as described below, to date, all renewal options under the Company’s management contracts have been exercised. However, in connection with the exercise of the renewal option, the contracting government agency or the Company typically has requested changes or adjustments to the contract terms.

      In Australia, the Department of Immigration, Multicultural and Indigenous Affairs (“DIMIA”) announced its intention to enter into contract negotiations with a competitor of the Company’s Australian subsidiary for the management and operation of Australia’s immigration centers. DIMIA has further stated that if it is unable to reach agreement with the announced preferred bidder, it will enter into negotiations with the Company’s Australian subsidiary.

      The Company’s contracts typically allow a contracting governmental agency to terminate a contract for cause by giving the Company written notice ranging from 30 to 180 days. Three contracts have been terminated prior to the end of the contract term. On June 30, 2000, the cooperative agreement for the management of the Jena Juvenile Justice Center between the Company and the LaSalle Hospital District No. 1 was terminated. Additionally, the contract for the management of the Travis County Community Justice Center was terminated in 1999 based on the mutual agreement of the Company, the Texas Department of Criminal Justice State Jail Division and Travis County, Texas. The Company’s contract for the management of the Monroe County, Florida jail was terminated in 1990 on an amicable basis by mutual agreement of the Company and the Monroe County Board of Commissioners.

      In addition, in connection with the Company’s management of such facilities, the Company is required to comply with all applicable local, state and federal laws and related rules and regulations. The Company’s contracts typically require it to maintain certain levels of insurance coverage for general liability, workers’ compensation, vehicle liability, and property loss or damage. If the Company does not maintain the required categories and levels of coverage, the contracting governmental agency may be permitted to terminate the contract. Presently, the Company is insured under a liability insurance program which includes comprehensive general liability, automobile liability and workers’ compensation coverage. The Company is self-insured for employment claims and for medical malpractice claims at Atlantic Shores Hospital and South Florida State Hospital. There can be no assurance that the Company will be able to obtain or maintain insurance levels as required by its contracts. See “Business — Insurance.” In addition, the Company is required under its contracts to indemnify the contracting governmental agency for all

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Facility Design, Construction and Finance

      The Company provides governmental agencies consultation and management services relating to the design and construction of new correctional and detention facilities and the redesign and renovation of older facilities. As of December 29, 2002, the Company has provided service for the design and construction of thirty-three facilities and for the redesign and renovation of three facilities. See table in “Business — Facilities.”

      Under its construction and design management contracts, the Company agrees to be responsible for overall project development and completion. The Company makes use of an in-house staff of architects and operational experts from various corrections disciplines (e.g. security, medical service, food service, inmate programs and facility maintenance) as part of the team that participates from conceptual design through final construction of the project. When designing a facility, the Company’s architects seek to utilize, with appropriate modifications, prototype designs the Company has used in developing prior projects. The Company believes that the use of such proven designs allows it to reduce cost overruns and construction delays and to reduce the number of officers required to provide security at a facility, thus controlling costs both to construct and to manage the facility. Security is maintained because the Company’s facility designs increase the area under direct surveillance by correctional officers and make use of additional electronic surveillance.

      The Company typically acts as the primary developer on construction contracts for facilities and subcontracts with national general contractors. Where possible, the Company subcontracts with construction companies with which it has previously worked. The Company has an in-house team of correctional design and operations experts that coordinate all aspects of the development with subcontractors and provide site-specific services. It has been the Company’s experience that it typically takes 9 to 24 months to construct a facility after the contract is executed and financing approved. The Company may also propose that governmental agencies consider various financing structures for construction finance. The governmental agency may finance the construction of such facilities through various methods including, but not limited to, the following: (i) a one time general revenue appropriation by the government agency for the cost of the new facility; (ii) general obligation bonds that are secured by either a limited or unlimited tax levy by the issuing governmental entity; or (iii) lease revenue bonds or certificates of participation secured by an annual lease payment that is subject to annual or bi-annual legislative appropriations. The Company may also act as a source of financing or as a facilitator with respect to any financing. In these cases, the construction of such facilities may be financed through various methods including, but not limited to, the following: (i) funds from equity offerings of the Company’s stock; (ii) cash flows from operations; (iii) borrowing from banks or other institutions (which may or may not be subject to government guarantees in the event of contract termination); or (iv) lease arrangements with third parties.

Marketing

      Currently, the Company views governmental agencies responsible for state and federal correctional facilities in the United States and governmental agencies responsible for correctional facilities in the United Kingdom, Australia, and South Africa as its primary potential customers. The Company’s secondary customers include local agencies in the United States and other foreign governmental agencies.

      Governmental agencies responsible for correctional and detention facilities generally procure goods and services through Requests for Proposals (“RFPs”). A typical RFP requires bidders to provide detailed information, including, but not limited to, descriptions of the following: the services to be provided by the bidder, its experience and qualifications, and the price at which the bidder is willing to provide the services

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      If the project meets the Company’s profile for new projects, the Company then will submit a written response to the RFP. The Company estimates that it typically spends between $50,000 and $150,000 when responding to an RFP. The Company has engaged and intends in the future to engage independent consultants to assist the Company in developing privatization opportunities and in responding to RFPs, monitoring the legislative and business climate, and maintaining relationships with existing clients.

      There are several critical events in the marketing process, including the issuance of an RFP by a governmental agency, submission of a response to the RFP by the Company, the award of a contract by a governmental agency and the commencement of construction or management of a facility. The Company’s experience has been that a period of approximately five to ten weeks is generally required from the issuance of an RFP to the submission of the Company’s response to the RFP; that between one and four months elapse between the submission of the Company’s response and the agency’s award for a contract; and that between one and four months elapse between the award of a contract and the commencement of construction or management of the facility. If the facility for which an award has been made must be constructed, the Company’s experience is that construction usually takes between 9 and 24 months; therefore, management of a newly constructed facility typically commences between 10 and 28 months after the governmental agency’s award.

Business Proposals

      The Company pursues both domestic and international projects. At December 29, 2002, the Company had outstanding written responses to RFPs for seven projects with a total of 2,548 beds. The Company also is pursuing prospects for other projects for which it has not yet submitted, and may not submit, a response to an RFP. No assurance can be given that the Company will be successful in its efforts to receive additional awards with respect to any proposals submitted.

Insurance

      Casualty insurance related to workers’ compensation, general liability and automobile insurance coverage is provided through an independent insurer. Prior to October 2, 2002, the first $1 million of coverage was reinsured by an insurance subsidiary of TWC. Effective October 2, 2002, the Company established a new insurance program with a $1 million deductible per occurrence with an independent insurer. The insurance program consists of primary and excess insurance coverage. The primary general liability coverage has a $5 million limit per occurrence with a $20 million general aggregate limit and $1 million deductible. The primary automobile coverage has a $5 million limit per occurrence with a $1 million deductible and the primary worker’s compensation limits are based on state statutes and contain a $1 million deductible. The excess coverage has a $50 million limit per occurrence and in the aggregate. The Company believes such limits are adequate to insure against the various liability risks of its business. The Company is self-insured for employment claims and for medical malpractice claims at Atlantic Shores Hospital and South Florida State Hospital. There can be no assurance that the Company will be able to obtain or maintain insurance levels as required by its contracts.

Employees and Employee Training

      At December 29, 2002, the Company had 11,412 full-time employees. Of such full-time employees, 67 were employed at the Company’s headquarters and 11,345 were employed at facilities and regional offices. The Company employs management, administrative and clerical, security, educational services, health services and general maintenance personnel. The Company’s correctional officer employees at George W. Hill Correctional Facility (Pennsylvania), Queens Private Correctional Facility (New York), Michigan Youth Correctional Facility (Michigan) and Desert View Modified Community Correctional Facility (California) are members of unions. The Company will renegotiate union contracts at the Queens Private Correctional Facility (New York) and George W. Hill Correctional Facility (Pennsylvania) during

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      Under the laws applicable to most of the Company’s operations, and internal Company policy, the Company’s corrections officers are required to complete a minimum amount of training. At least 160 hours of pre-service training by the Company is required under most state laws before an employee is allowed to work in a position that will bring him or her in contact with inmates. In addition to a minimum of 160 hours of pre-service training most states require 40 or 80 hours of on the job training. Florida law requires that correction officers receive 520 hours of training and Michigan law requires that correction officers receive 640 hours of training. The Company’s training programs meet or exceed all applicable requirements.

      The Company’s training begins with approximately 40 hours of instruction regarding Company policies, operational procedures and management philosophy. Training continues with an additional 120 hours of instruction covering legal issues, rights of inmates, techniques of communication and supervision, interpersonal skills and job training relating to the particular position to be held. Each Company employee who has contact with inmates receives a minimum of 40 hours of additional training each year, and each manager receives at least 24 hours of training each year.

      At least 222 hours of training is required for United Kingdom employees as 240 hours of training is required for Australian employees and 160 hours of training is required for South African employees before such employees are allowed to work in positions that will bring them into contact with inmates. Company employees in the United Kingdom, Australia and South Africa receive a minimum of 40 hours of additional training each year.

Competition

      The Company competes primarily on the basis of the quality and range of services offered, its experience (both domestically and internationally) in the design, construction and management of privatized correctional and detention facilities, its reputation and its pricing. The Company competes with a number of companies, including, but not limited to: Corrections Corporation of America; Correctional Services Corporation; Group 4 Falck Global Solutions Ltd; U.K. Detention Services, Ltd.; Cornell Companies, Inc.; Securicor PLC; Sodexho Alliance; and Management and Training Corporation. Some of the Company’s competitors are larger and have greater resources than the Company. The Company also competes in some markets with small local companies that may have a better knowledge of the local conditions and may be better able to gain political and public acceptance. In addition, in some markets, the Company may compete with governmental agencies that are responsible for correctional facilities.

Non-U.S. Operations

      Although most of the operations of the Company are within the United States, its international operations make a significant contribution to income. Wholly-owned Company subsidiaries provide correctional and detention facilities management in Australia and New Zealand.

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      A summary of domestic and international operations is presented below:

				2002				2001				2000
				(000’s)
Revenues
	Domestic operations			$	451,465			$	454,053			$	426,510
	International operations				117,147				108,020				109,047
		Total revenues		$	568,612			$	562,073			$	535,557
Operating Income
	Domestic operations			$	26,066			$	19,559			$	9,620
	International operations				1,810				4,625				9,292
		Total operating income		$	27,876			$	24,184			$	18,912
Long-Lived Assets
	Domestic operations			$	200,258			$	47,639			$	48,274
	International operations				6,208				6,119				6,346
		Total long-lived assets		$	206,466			$	53,758			$	54,620

      The Company has affiliates (50%owned) that provide correctional and detention facilities management in the United Kingdom and South Africa. The following table summarizes certain financial information pertaining to the United Kingdom unconsolidated foreign affiliates, on a combined basis, for the last three fiscal years.

		2002				2001				2000
		(000’s)
Statement of Operations Data
Revenues		$	195,961			$	153,744			$	139,137
Operating income			20,078				15,277				14,950
Net income			12,921				9,881				8,980
Balance Sheet Data
Current assets			91,220				99,294				66,382
Noncurrent assets			304,659				272,777				286,049
Current liabilities			41,245				53,082				39,451
Noncurrent liabilities			317,407				293,403				286,526
Shareholders’ equity			37,227				25,586				26,454

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      The following table summarizes certain financial information pertaining to the South Africa unconsolidated foreign affiliates, on a combined basis, for the last three fiscal years.

		2002				2001				2000
		(000’s)
Statement of Operations Data
Revenues		$	15,928			$	—			$	—
Operating income (loss)			1,016				(1,749	)			—
Net loss			(2,481	)			(1,441	)			—
Balance Sheet Data
Current assets			6,426				5,112				6,561
Noncurrent assets			47,125				31,924				14,357
Current liabilities			1,808				913				32
Noncurrent liabilities			52,170				32,746				13,969
Shareholders’ (deficit) equity			(427	)			3,377				6,917

Business Regulations and Legal Considerations

      The industry in which the Company operates is subject to national, federal, state, and local regulations in the United States, United Kingdom, Australia, South Africa, New Zealand, and Canada that are administered by a variety of regulatory authorities. Generally, prospective providers of corrections services must be able to detail their readiness to comply with, and must comply with, a variety of applicable federal, state and local regulations, including education, health care and safety regulations. The Company’s contracts frequently include extensive reporting requirements and require supervision and monitoring of Company-managed facilities by representatives of contracting governmental agencies. The Company’s Kyle New Vision Chemical Dependency Treatment Center is licensed by the Texas Commission on Alcohol and Drug Abuse to provide substance abuse treatment. Certain states, such as Florida and Texas, deem correctional officers to be peace officers and require Company personnel to be licensed and subject to background investigation. State law also typically requires corrections officers to meet certain training standards.

      In addition, many government agencies are required to enter into a competitive bidding procedure before awarding contracts for products or services. The laws of certain jurisdictions may also require the Company to award subcontracts on a competitive basis or to subcontract with businesses owned by women or members of minority groups.

      The failure to comply with any applicable laws, rules or regulations or the loss of any required license could have a material adverse effect on the Company’s business, financial condition and results of operations. Furthermore, the current and future operations of the Company may be subject to additional regulations as a result of, among other factors, new statutes and regulations and changes in the manner in which existing statutes and regulations are or may be interpreted or applied. Any such additional regulations could have a material adverse effect on the Company’s business, financial condition and results of operations.

Commitments and Contingencies

  FACILITIES

      The Company has been notified by the Texas Youth Commission of a declining need for beds in the Coke County Texas Facility. The Company has an operating and management contract that is due to expire March 31, 2003 upon the termination of the contract by the Texas Youth Commission. An unrelated third party owns the facility. The Company believes that it has no continuing obligation with respect to the facility in the event the Company’s operating contract is terminated or expires. There can be

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      The Company leases the 300-bed Broward County Work Release Center in Broward County, Florida (the “Broward Facility”), from CPV under the terms of a non-cancelable lease, which expires on April 28, 2008. The Company operates the Broward Facility for the Broward County Board of County Commissioners and the Broward County Sheriff’s Department under the terms of a correctional services contract that was renewed effective February 17, 2003 for an additional eight-month term. The Broward County Sheriff’s Department previously advised the Company of the County’s declining need for the usage of the Broward Facility, and accordingly, the renewed contract reduced the number of beds in the facility reserved for use by the County. Therefore, the Company initiated discussions with the Immigration and Naturalization Service (the “INS”), which has expressed an interest in utilizing some or all of the Broward Facility, depending on availability and INS need. The INS executed a correctional services management contract with the Company for 72 beds in the Broward Facility, effective from August 1, 2002 through September 30, 2003. Effective January 2003, the INS increased the scope of the contract to house up to 150 detainees. The Company’s remaining obligation under the lease with CPV is approximately $8.5 million.

      During 2000, the Company’s management contract at the 276-bed Jena Juvenile Justice Center in Jena, Louisiana (the “Facility”) was terminated. The Company has incurred operating charges of $3 million and $3.8 million during fiscal 2001 and 2000, respectively, related to the Company’s lease of the inactive Facility that represented the expected costs to be incurred under the lease until a sublease or alternative use could be initiated. In May 2002, the State of Louisiana and CPV entered into a tentative purchase and sale agreement for the Facility, subject to certain contingencies. Additionally, the Company entered into a lease termination agreement subject to the sale of the Facility that resulted in an additional operating charge of approximately $1.1 million during 2002. The State of Louisiana did not exercise its option to purchase the Facility and the agreements expired during October 2002. The Company is actively pursuing various sublease alternatives with several agencies of the federal and state governments. The Company is continuing its efforts to find an alternative correctional use or sublease for the Facility and believes that it will be successful prior to early 2004. The Company has reserved for the lease payments through early 2004 and management believes the reserve balance currently established for anticipated future losses under the lease with CPV is sufficient to cover costs under the lease until a sublease is in place or an alternative future use is established. If the Company is unable to sublease or find an alternative correctional use for the Facility by that time, an additional operating charge will be required. The remaining obligation, exclusive of the reserve for losses through early 2004, on the Jena lease through the contractual term of 2009 is approximately $11 million.

      The Company, through Premier Custodial Group Limited (“PCG”), a 50 percent owned joint venture in the United Kingdom, operates the 400-bed Youthful Offender Institution at Ashfield (the “Ashfield Facility”). On May 23, 2002, the UK Prison Service assumed operational control of the Ashfield Facility based upon the Prison Service’s concern over safety and control. Control of the Ashfield Facility was restored to PCG on October 14, 2002. Under the terms of PCG’s contract, PCG is paid for operational services on the basis of “Available Prisoner Places.” Prior to assuming operational control, the Prison Service paid PCG based upon 400 Available Prisoner Places. From May 23, 2002 through October 23, 2002, the Prison Service paid PCG only for the number of beds actually occupied, which averaged approximately 200 during this period. As a result, PCG’s revenues for the Ashfield Facility were reduced by approximately half during this period. In addition, PCG incurred costs in additional resources and staff brought in to address the operational issues at Ashfield. PCG provided the Prison Service with a comprehensive plan for addressing all operational issues at the Ashfield Facility, which was approved by the Authority and implemented by PCG. Effective October 23, 2002, the Prison Service restored payment to PCG for 400 Available Prisoner Places in accordance with the payment provisions set forth in the operating agreement. Subsequently, on January 8, 2003, the Prison Services notified PCG that due to operational issues it was again reducing payment to only pay for the number of beds actually occupied effective December 2, 2002 resulting in a reduction of facility revenues by approximately one-half. PCG

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      In Australia, the Department of Immigration, Multicultural and Indigenous Affairs (“DIMIA”) announced its intention to enter into contract negotiations with a competitor of the Company’s Australian subsidiary for the management and operation of Australia’s immigration centers. DIMIA has further stated that if it is unable to reach agreement with the announced preferred bidder, it will enter into negotiations with the Company’s Australian subsidiary. The Company is continuing to operate the centers under its current contract, which is due to expire on or before June 23, 2003 but may be extended by the government if negotiations are not completed with the successful tenderer. If negotiations are not successful, WCC’s Australian subsidiary is the only other qualified tenderer for consideration. In 2002, the contract with DIMIA represented approximately 10% of the Company’s revenue (exclusive revenue of 50-50 joint ventures). In both 2001 and 2000, DIMIA represented approximately 11% of the Company’s revenue.

  TWC MERGER WITH GROUP 4 FALCK

      On May 8, 2002, TWC consummated a merger (the “Merger”) with a wholly owned subsidiary of Group 4 Falck A/ S (“Group 4 Falck”), a Danish multinational security and correctional services company. As a result of the Merger, Group 4 Falck has become the indirect beneficial owner of 12 million shares in the Company. The Company’s common stock continues to trade on the New York Stock Exchange.

      Subsequent to the Merger, Group 4 Falck indicated that it intends to divest its interest in the Company. As a result, the Independent Committee of the Board of Directors has hired legal and financial advisors to advise the Company with respect to Group 4 Falck’s stated intentions.

      In the United Kingdom, the Merger has been reviewed by the Office of Fair Trade and was referred to the Competition Commission for further investigation. The Company conducts most of its business in the United Kingdom through PCG, a 50/50 joint venture with Serco Investments Limited (“Serco”). PCG currently manages six correctional facilities, one immigration detention center, two court escort contracts and two electronic monitoring services contracts. Many of PCG’s contracts include a provision that makes the failure to obtain United Kingdom Home Office approval of a change in control an event of default. The Competition Commission completed its investigation and in a report published on October 22, 2002 approved the Merger without conditions. The Youth Justice Board and the Scottish Prison Service have approved the merger. We are waiting for approval from The Home Office Prison Service, The Home Office Monitoring Service and The Immigration Service.

      The Merger may affect the Company’s interests in PCG. The Company’s United Kingdom joint venture partner, Serco, has indicated that it believes the Merger provides Serco with a right to acquire the Company’s 50 percent interest in PCG in the absence of Serco’s consent to the Merger. The Company disputes the validity of this claim. Group 4 Falck has agreed that in the event the Company is ordered by a court of competent jurisdiction to sell its interest in PCG to Serco at a price below fair market value, Group 4 Falck will reimburse the Company for the amount by which the sale is below fair market value, up to a maximum of 10 percent of the fair market value of the interest. The Company has filed a declaratory judgment suit in the United Kingdom to determine its rights under the joint venture agreement with Serco. The case is scheduled to be heard in May 2003.

      The Company has taken steps to safeguard its interest in PCG, as well as PCG’s contract interests, but there can be no assurance that these steps will be sufficient to avoid a material adverse effect on the Company’s business interests in the United Kingdom.

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Availability of Reports and Other Information

      The Company’s corporate website is located at http://www.wcc-corrections.com. The Company is in the process of making available on this website, free of charge, access to the Company’s Annual Report on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, Proxy Statement on Schedule 14A and amendments to those materials filed or furnished pursuant to Section 13(a) or 15(d) of the Securities and Exchange Act of 1934 as soon as reasonably practicable after the Company electronically submits such material to the Securities and Exchange Commission. In addition, the Commission’s website is located at http://www.sec.gov. The Commission makes available on its website, free of charge, reports, proxy and information statements, and other information regarding issuers, such as the Company, that file electronically with the Commission. Information provided on the Company’s website or on the Commission’s website is not part of this Annual Report on Form 10-K.

Item 2.     Properties

      The Company leases its corporate headquarters office space in Palm Beach Gardens, Florida, from TWC. Beginning in April 2003, the Company entered into a new lease for its corporate offices in Boca Raton, Florida. In addition, the Company leases office space for its regional offices in New Braunfels, Texas; Carlsbad, California; Palm Beach Gardens, Florida; and Sydney, Australia, and through its overseas affiliates, in Sandton, South Africa and Bracknell, England.

      On April 28, 1998, CPV acquired eight correctional and detention facilities operated by the Company. The Company and CPV previously had three common members on their respective boards of directors. Effective September 9, 2002, the Companies no longer had common members serving on their respective boards of directors. CPV also was granted the fifteen-year right to acquire and lease back future correctional and detention facilities developed or acquired by the Company. During fiscal 1998 and 1999, CPV acquired two additional facilities for $94.1 million. In fiscal 2000, CPV purchased an eleventh facility that the Company had the right to acquire for $15.3 million. The Company recognized no net proceeds from the sale. There were no purchase and sale transactions between the Company and CPV in 2001 or 2002.

      Simultaneous with the purchases, the Company entered into ten-year operating leases of these facilities from CPV. As the lease agreements are subject to contractual lease increases, the Company records operating lease expense for these leases on a straight-line basis over the term of the leases.

      The Company leases the following facilities from CPV: (i) Aurora INS Processing Center; (ii) Broward County Work Release Center; (iii) Central Valley Community Correctional Facility; (iv) Desert View Community Correctional Facility; (v) Golden State Community Correctional Facility; (vi) Jena Juvenile Justice Center; (vii) Karnes County Correctional Center; (viii) Lawton Correctional Facility; (ix) Lea County Correctional Facility; (x) McFarland Community Correctional Facility and (xi) Queens Private Correctional Facility.

      The Company also leases the following facilities it manages under operating leases: (i) Central Texas Parole Violator Facility; (ii) Coke County Juvenile Justice Facility; (iii) North Texas Intermediate Sanction Facility; and (iv) Western Region Detention Facility at San Diego.

      The Company owns a 72-bed private psychiatric hospital in Fort Lauderdale, Florida, which it purchased and renovated in 1997.

      Additionally, as a result of the refinancing transaction described in “Liquidity and Capital Resources”, the Company owns the following properties: (i) Guadalupe County Correctional Facility; (ii) Michigan Youth Correctional Facility; (iii) Rivers Correctional Institution; and (iv) Val Verde Correctional Facility.

Item 3.     Legal Proceedings

      The Company is defending a wage and hour lawsuit filed in California state court by ten current and former employees. The employees are seeking certification of a class which would encompass all current

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Item 4.     Submission of Matters to a Vote of Security Holders

      No matters were submitted to a vote of security holders during the fourth quarter of the fiscal year covered by this report.

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PART II

Item 5.     Market for the Company’s Common Equity and Related Stockholder Matters

      The following table shows the high and low prices for Wackenhut Corrections Corporation’s (“the Company”) common stock, as reported by the New York Stock Exchange, for each of the four quarters of fiscal 2002 and 2001. The prices shown have been rounded to the nearest $1/100th. The approximate number of shareholders of record as of March 10, 2003, was 175.

		2002								2001
Quarter		High				Low				High				Low
First		$	17.42			$	13.86			$	9.88			$	7.44
Second			15.95				13.95				14.50				8.85
Third			14.90				10.46				14.63				12.35
Fourth			12.60				10.50				16.30				11.90

      The Company intends to retain its earnings to finance the growth and development of its business and does not anticipate paying cash dividends on its capital stock in the foreseeable future. Future dividends, if any, will depend, among other things, on the future earnings, capital requirements, restrictions under the Company’s Senior Credit Facility and financial condition of the Company, and on such other factors as the Company’s Board of Directors may consider relevant.

      During fiscal 2001 the Company purchased 122,000 shares of its common stock at an average price of $12.68 per share. The Company did not buy back any of its stock during 2002.

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Item 6.	Selected Financial Data

      The selected consolidated financial data should be read in conjunction with the Company’s consolidated financial statements and the notes thereto.

Fiscal Year Ended:(1)
		2002
										2001
																		2000
																										1999
																																		1998
RESULTS OF OPERATIONS:
Revenues		$	568,612				100.0	%		$	562,073				100.0	%		$	535,557				100.0	%		$	438,484				100.0	%		$	312,759				100.0	%
Operating income			27,876				4.9	%			24,184				4.3	%			18,912				3.5	%			26,041				5.9	%			22,501				7.2	%
Income before cumulative effect of change in accounting for start-up costs			21,501				3.8	%			19,379				3.4	%			16,994				3.2	%			21,940				5.0	%			16,828				5.4	%
Cumulative effect of change in accounting for start-up costs			—				0.0	%			—				0.0	%			—				0.0	%			—				0.0	%			(11,528	)			(3.7	)%
Net income		$	21,501				3.8	%		$	19,379				3.4	%		$	16,994				3.2	%		$	21,940				5.0	%		$	5,300				1.7	%
EARNINGS PER SHARE — BASIC:
Income before cumulative effect of change in accounting for start-up cost		$	1.02							$	0.92							$	0.81							$	1.01							$	0.76
Cumulative effect of change in accounting for start-up costs			—								—								—								—								(0.52	)
Net income		$	1.02							$	0.92							$	0.81							$	1.01							$	0.24
EARNINGS PER SHARE — DILUTED:
Income before cumulative effect of change in accounting for start-up cost		$	1.01							$	0.91							$	0.80							$	1.00							$	0.74
Cumulative effect of change in accounting for start-up costs			—								—								—								—								(0.51	)
Net income		$	1.01							$	0.91							$	0.80							$	1.00							$	0.23
WEIGHTED AVERAGE SHARES OUTSTANDING:
Basic			21,148								21,028								21,110								21,652								22,119
Diluted			21,364								21,261								21,251								22,015								22,683
FINANCIAL CONDITION:
Current assets		$	139,583							$	140,132							$	129,637							$	134,893							$	94,464
Current liabilities			74,994								72,245								73,636								55,516								28,145
Total assets			402,658								242,023								223,571								204,425								148,008
Total debt			125,000								—								10,000								15,000								213
Shareholders’ equity			152,642								130,361								127,164								118,684								102,940
OPERATIONAL DATA:
Contracts/awards			59								61								57								56								52
Facilities in operation			59								59								51								50								40
Design capacity of contracts			39,216								39,965								39,944								39,930								35,707
Design capacity of facilities in operation			39,148								35,941								32,536								32,110								26,651
Compensated resident days(2)			10,850,003								11,068,912								10,572,093								9,636,099								7,678,858

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(1)	The Company’s fiscal year ends on the Sunday closest to the calendar year end. Fiscal 1998 included 53 weeks. Fiscal 2002, 2001, 2000, and 1999 each included 52 weeks.
(2)	Compensated resident days are calculated as follows: (a) per diem rate facilities — the number of beds occupied by residents on a daily basis during the fiscal year and, (b) fixed rate facilities — the design capacity of the facility multiplied by the number of days the facility was in operation during the fiscal year. Amounts exclude compensated resident days for United Kingdom and South Africa facilities.

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Item 7.     Management’s Discussion and Analysis of Financial Condition and results of Operations

Item 7A.     Quantitative and Qualitative Disclosures About Market Risk

Introduction

      The following discussion and analysis provides information which management believes is relevant to an assessment and understanding of the Company’s consolidated results of operations and financial condition. The discussion should be read in conjunction with the consolidated financial statements and notes thereto.

Forward-Looking Statements

      Certain statements included in this document may contain forward-looking statements regarding future events and future performance of the Company that involves risks and uncertainties that could materially affect actual results, including statements regarding estimated earnings, revenues and costs and estimated openings of new facilities and new global business development opportunities. For further discussion of these statements, refer to Item 1 “Business — Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995.”

Overview

      The Company, a 56% owned subsidiary of The Wackenhut Corporation, a wholly-owned subsidiary of Group 4 Falck A/ S, is a leader in offering government agencies a turnkey approach to developing new correctional institutions that includes design, construction, financing and operations. It provides a broad spectrum of correctional services, which include adult corrections, juvenile facilities, community corrections and special purpose institutions. Additionally, the Company is a leading developer and manager of public sector mental health facilities.

      The Company has contracts/awards to manage 59 correctional facilities in the United States, the United Kingdom, Australia, South Africa, and New Zealand with a total of 39,216 beds, and additional contracts for prisoner transportation, correctional health care services, mental health services, and facility design and construction.

Critical Accounting Policies

      The consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States. As such, we are required to make certain estimates, judgments and assumptions that we believe are reasonable based upon the information available. These estimates and assumptions affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. The Company routinely evaluates its estimates based on historical experience and on various other assumptions that management believes are reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. The significant accounting policies and estimates which we believe are the most critical to aid in fully understanding and evaluating our reported financial results include the following:

     Revenue Recognition

      In accordance with SEC Staff Accounting Bulletin No. 101 and related interpretations, facility management revenues are recognized as services are provided under facility management contracts with approved government appropriations based on a net rate per day per inmate or on a fixed monthly rate. Project development and design revenues are recognized as earned on a percentage of completion basis measured by the percentage of costs incurred to date as compared to estimated total cost for each contract. This method is used because management considers costs incurred to date to be the best available measure of progress on these contracts. Provisions for estimated losses on uncompleted contracts and changes to cost estimates are made in the period in which the Company determines that such losses

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      The Company extends credit to the government agencies contracted with and other parties in the normal course of business as a result of billing and receiving payment for services thirty to sixty days in arrears. Further, the Company regularly reviews outstanding receivables, and provides estimated losses through an allowance for doubtful accounts. In evaluating the level of established reserves, the Company makes judgments regarding its customers’ ability to make required payments, economic events and other factors. As the financial condition of these parties change, circumstances develop or additional information becomes available, adjustments to the allowance for doubtful accounts may be required.

     Property and Equipment

      As of December, 29 2002, the Company had approximately $206 million in long-lived property and equipment. Property and equipment are recorded at cost. Depreciation is provided using the straight-line method over the estimated useful lives. Leasehold improvements are amortized on a straight-line basis over the shorter of the useful life of the improvement or the term of the lease. We perform ongoing evaluations of the estimated useful lives of our property and equipment for depreciation purposes. The estimated useful lives are determined and continually evaluated based on the period over which services are expected to be rendered by the asset. Maintenance and repair items are expensed as incurred.

      The Company reviews for impairment of long-lived assets to be held and used whenever events or changes in circumstances indicate that the carrying amount of such assets may not be fully recoverable. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition. Measurement of an impairment loss for long-lived assets that management expects to hold and use is based on the fair value of the asset. Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value less costs to sell. Management has reviewed the Company’s long-lived assets and determined that there are no events requiring impairment loss recognition. Events that would trigger an impairment assessment include deterioration of profits for a business segment that has long-lived assets, or when other changes occur which might impair recovery of long-lived assets.

     Income Taxes

      Deferred tax assets and liabilities are recognized as the difference between the book basis and tax basis of its net assets. In providing for deferred taxes, the Company considers current tax regulations, estimates of future taxable income and available tax planning strategies. If tax regulations, operating results or the ability to implement tax-planning strategies vary, adjustments to the carrying value of deferred tax assets and liabilities may be required.

     Reserves for Insurance Losses

      Casualty insurance related to workers’ compensation, general liability and automobile insurance coverage is provided through an independent insurer. The insurance program consists of primary and excess insurance coverage. The primary general liability coverage has a $5 million limit per occurrence with a $20 million general aggregate limit and a $1 million deductible. The primary automobile coverage has a $5 million limit per occurrence with a $1 million deductible and the primary workers’ compensation insurance limits are based on state statutes and contain a $1 million deductible. The excess coverage has a $50 million limit per occurrence and in the aggregate. The Company believes such limits are adequate to insure against the various liability risks of its business. The Company is self-insured for employment claims and medical malpractice.

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      Because the policy is a high deductible policy, losses are recorded as reported and provision is made to cover losses incurred but not reported. Loss reserves are undiscounted and are computed based on independent actuarial studies.

Financial Condition

     Liquidity and Capital Resources

      The Company’s principal sources of liquidity are from operations, borrowings under its credit facilities, and sale of prison facilities or of its rights to acquire prison facilities. Cash and equivalents totaled $35.2 million at December 29, 2002, compared to $46.1 million at December 30, 2001. Net working capital totaled $64.6 million at December 29, 2002, compared to $67.9 million at December 30, 2001.

      Prior to December 12, 2002, the Company’s sources of liquidity were a $30 million multi-currency revolving credit facility, which included $5 million for the issuance of letters of credit and a $154.3 million operating lease facility established to acquire and develop new correctional institutions used in its business. No amounts were outstanding under the revolving credit facility and $154.3 million was outstanding under the operating lease facility. The term of the operating lease facility was set to expire December 18, 2002 upon which the Company had the ability to purchase the properties in the facility for their original acquisition cost.

      On December 12, 2002, the Company entered into a new $175 million Senior Secured Credit Facility (the “Senior Credit Facility”) consisting of a $50 million, 5-year revolving loan (the “Revolving Credit Facility”) and a $125 million, 6-year term loan (the “Term Loan Facility”). Borrowings under the Term Loan Facility and corporate cash were used to purchase four correctional facilities in operation under the Company’s $154.3 million operating lease facility. The purchase price totaled approximately $155 million, which included related fees and expenses. Simultaneous with the closing of the Senior Credit Facility, the Company terminated its $154.3 million operating lease facility and $30 million multi-currency revolving credit facility, both of which would have expired on December 18, 2002.

      The Revolving Credit Facility contains a $30 million limit for the issuance of standby letters of credit. At December 29, 2002, $125 million was outstanding under the Term Loan Facility, there were no borrowings under the Revolving Credit Facility, and there were $7.2 million of outstanding letters of credit. At December 29, 2002, $42.8 million of the Revolving Credit Facility was available to the Company for working capital, acquisitions, general corporate purposes, and certain restricted payments, as defined.

      The Senior Credit Facility permits the Company to make certain restricted payments, such as the repurchase of Company common stock. At December 29, 2002, the Company had $15 million available for restricted payments. The amount of permitted restricted payments may increase upon the Company’s generation of excess cash flow, as defined in the Senior Credit Facility and under certain permitted asset sales.

      Indebtedness under the Revolving Credit Facility bears interest at the Company’s option at the Base Rate (defined as the higher of the prime rate or federal funds plus 0.5%) plus a spread of 125 to 200 basis points or LIBOR plus 250 to 325 basis points, depending on the leverage ratio, as defined in the Senior Credit Facility. Indebtedness under the Term Loan Facility bears interest at LIBOR + 400 basis points, with a minimum LIBOR rate of 2.0% during the first 18-months. As LIBOR was below 2.0% at December 29, 2002, the effective rate on the Company’s term loan borrowings was 6.0%.

      Obligations under the Senior Credit Facility are guaranteed by the Company’s material domestic subsidiaries and are secured by substantially all of the Company’s tangible and intangible assets.

      The Senior Credit Facility includes covenants that require the Company, among other things, to maintain a maximum leverage ratio, a minimum fixed charge coverage ratio, a minimum net worth, and to limit the amount of annual capital expenditures. The facility also limits certain payments and distributions to the Company as well as the Company’s ability to enter into certain types of transactions. The Company was in compliance with the covenants of the Senior Credit Facility as of December 29, 2002.

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      The Senior Credit Facility has been rated Ba3/ BB by Moody’s Investors Service, Inc. (“Moody’s”) and Standard and Poor’s Ratings Group, a division of the McGraw – Hill Companies (“S&P”), respectively. In addition, the Company obtained issuer ratings of B1/ BB- from Moody’s and S&P, respectively.

      At December 29, 2002 the Company also had outstanding fourteen letters of guarantee totaling approximately $13 million under separate international credit facilities.

      In connection with the financing and management of one Australian facility, the Company’s wholly owned Australian subsidiary financed the facility’s development with long-term debt obligations, which are non-recourse to the Company. The Company has consolidated the subsidiary’s direct finance lease receivable from the state government and related non-recourse debt each totaling approximately $31 million as of December 29, 2002. The Company has reclassified the amounts reflected in the December 30, 2001 balance sheet to reflect the asset and related non-recourse debt of approximately $26 million to conform to current year presentation. The term of the non-recourse debt is through 2017 and it bears interest at a variable rate quoted by certain Australian banks plus 140 basis points. Any obligations or liabilities of the subsidiary are matched by a similar or corresponding commitment from the government of the State of Victoria. In connection with the non-recourse debt, the subsidiary is a party to an interest rate swap agreement to fix the interest rate on the variable rate non-recourse debt to 9.7%. Management of the Company has determined the swap to be an effective cash flow hedge. Accordingly, the Company has recorded the value of the interest rate swap in other comprehensive income, net of applicable income taxes.

      Cash provided by operating activities amounted to $22.2 million in fiscal 2002 compared to cash provided by operating activities of $29.5 million in fiscal 2001, primarily reflecting an increase in other current assets and accounts receivable as well as a decrease in accounts payable and accrued expenses offset by higher net income and depreciation expense as well as an increase in other liabilities primarily driven by costs related to employment agreements with certain key executives triggered by the change in control from the sale of TWC as well as an acceleration of the retirement age under the senior executive deferred compensation plans, also a result of the sale of TWC.

      Cash used in investing activities increased by $155.4 million to $159.3 million in fiscal 2002 as compared to fiscal 2001. This change is primarily due to the purchase by the Company in December 2002 of four correctional facilities in operation under the Company’s prior operating lease facility. In December 2002, the Company acquired four correctional properties that were formerly included in the Company’s operating lease facility for an aggregate purchase price of approximately $155 million.

      Cash provided by financing activities increased by $140.4 million to $129.2 million in fiscal 2002 as compared to fiscal 2001. This change primarily reflects borrowings under the Company’s Senior Credit Facility completed December 12, 2002.

      Current cash requirements consist of amounts needed for working capital, capital expenditures and supply purchases, investments in joint ventures, and investments in facilities. Some of the Company’s management contracts require the Company to make substantial initial expenditures of cash in connection with opening or renovating a facility. The initial expenditures subsequently are fully or partially recoverable as pass-through costs or are billable as a component of the “per diem” rates or monthly fixed fees to the contracting agency over the original term of the contract.

      Management believes that cash on hand, cash flows from operations and available lines of credit will be adequate to support currently planned business expansion and various obligations incurred in the operation of the Company’s business, both on a near and long-term basis.

      The Company’s access to capital and ability to compete for future capital-intensive projects is dependent upon, among other things, its ability to meet certain financial covenants in the $175 million Senior Credit Facility. A substantial decline in the Company’s financial performance as a result of an increase in operational expenses relative to revenue could limit the Company’s access to capital.

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     Inflation

      Management believes that inflation, in general, did not have a material effect on the Company’s results of operations during fiscal 2002 and 2001. However, in fiscal 2000, the Company experienced increased wage pressures due to tight labor markets in certain key geographic areas. In addition, the Company was negatively impacted by significant increases in utilities costs in fiscal 2000, particularly in the western United States. While some of the Company’s contracts include provisions for inflationary indexing, inflation could have a substantial adverse effect on the Company’s results of operations in the future to the extent that wages and salaries, which represent the largest expense to the Company, increase at a faster rate than the per diem or fixed rates received by the Company for its management services.

     Market Risk

      The Company is exposed to market risks, including changes in interest rates and fluctuations in foreign currency exchange rates between the U.S. dollar and the Australian dollar, British pound and South African rand currency exchange rates.

      These exposures primarily relate to changes in interest rates with respect to the $175 million Senior Credit Facility. Monthly payments under these facilities are indexed to a variable interest rate. Based upon the Company’s interest rate and foreign currency exchange rate exposure at December 29, 2002, a hypothetical 100 basis point change in the current interest rate or a 10 percent increase in historical currency rates would have approximately a $1.5 million effect on the Company’s financial position and results of operations over the next fiscal year.

      The Company has entered into certain interest rate swap arrangements fixing the interest rate on its Australian non-recourse debt to 9.7%. Additionally, the Company’s UK affiliate is a party to interest swap arrangements that fix the interest rate on the UK affiliate’s debt to rates ranging from 6.2% to 8.7%. The difference between the floating rate and the swap rate on these instruments is recognized in interest expense within the respective entity. Because the interest rates with respect to these instruments are fixed, a hypothetical 100 basis point change in the current interest rate would not have a material impact on our financial statements.

      Additionally, the Company invests its cash in a variety of short-term financial instruments. These instruments generally consist of highly liquid investments with original maturities at the date of purchase of three months or less. While these instruments are subject to interest rate risk, a hypothetical 10% increase or decrease in market interest rates would not have a material impact on our financial statements.

     Results of Operations

      The following discussion should be read in conjunction with the Company’s consolidated financial statements and notes thereto.

     Fiscal 2002 compared with Fiscal 2001

      Revenues increased $6.5 million, or 1.2% to $568.6 million in 2002 from $562.1 million in 2001. The increase in revenues is the result of new facility openings and increases in per diem rates offset by lower construction revenue and the closure of a number of facilities. Specifically, revenue increased approximately $27.4 million in 2002 compared to 2001 due to increased compensated resident days at a number of domestic facilities, including, but not limited to, the facilities opened in 2001, Val Verde Correctional Facility, Del Rio, Texas and the Rivers Correctional Institution, Winton, North Carolina and an overall increase in per diem rates. Revenues decreased by approximately $9.4 million in 2002 compared to 2001 due to the decline in construction revenue. Offsetting the increase, revenue was reduced by approximately $11.5 million in 2002 compared to 2001 due to the expiration of our contracts with the Arkansas Board of Correction and Community Punishment in 2001 and the expiration of the Bayamon Correctional Facility contract in June 2002.

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      The number of compensated resident days in domestic facilities remained constant at 9.2 million for 2002 and 2001. Average facility occupancy in domestic facilities increased to 98.5% in 2002 from 97% in 2001. Compensated resident days in Australian facilities decreased to 1.7 million in 2002 from 1.9 million in 2001 primarily due to lower population levels at the immigration and detention centers. Average facility occupancy in Australian facilities decreased to 91.4% in 2002 from 94.3% in 2001, based on declining facility capacity designation adjusted to client needs.

      In Australia, the Department of Immigration, Multicultural and Indigenous Affairs (“DIMIA”) announced its intention to enter into contract negotiations with a competitor of the Company’s Australian subsidiary for the management and operation of Australia’s immigration centers. DIMIA has further stated that if it is unable to reach agreement with the announced preferred bidder, it will enter into negotiations with the Company’s Australian subsidiary. The Company is continuing to operate the centers under its current contract, which is due to expire on or before June 23, 2003 but may be extended by the government if negotiations are not completed with the successful tenderer. If negotiations are not successful, WCC’s Australian subsidiary is the only other qualified tender for consideration. In 2002, the contract with DIMIA represented approximately 10% of the Company’s revenue (exclusive revenue of 50-50 joint ventures). In both 2001 and 2000, DIMIA represented approximately 11% of the Company’s revenue.

      The Company has thirty-three existing contracts up for renewal in 2003. Management expects to renew these contracts but can provide no assurance that the Company will be successful in these efforts.

      Operating expenses decreased by 1.4% to $496.5 million in 2002 compared to $503.5 million in 2001. As a percentage of revenues, operating expenses decreased to 87.3% in 2002 from 89.6% in 2001. This decrease primarily reflects the absence of $3.5 million in start-up costs related to the opening of the Val Verde, Texas and Winton, North Carolina facilities in 2001, as well as significantly lower expenses related to construction activities, the expiration of the contracts with the Arkansas Board of Correction and Community Punishment and Bayamon Correctional Facility and a decrease in expenses related to the Company’s operating lease facility, which was refinanced December 12, 2002. Additionally, there are a number of secondary factors contributing to operating expenses in 2002 as compared to 2001 which include the following: lease expense for payments made to CPV of $21.3 million offset by $1.8 million in amortization of the deferred revenue from the sale of properties to CPV.

      During 2000, the Company’s management contract at the 276-bed Jena Juvenile Justice Center in Jena, Louisiana (the “Facility”) was terminated. The Company has incurred operating charges of $3 million and $3.8 million during fiscal 2001 and 2000, respectively, related to the Company’s lease of the inactive Facility that represented the expected costs to be incurred under the lease until a sublease or alternative use could be initiated. In May 2002, the State of Louisiana and CPV entered into a tentative purchase and sale agreement for the Facility, subject to certain contingencies. Additionally, the Company entered into a lease termination agreement subject to the sale of the Facility that resulted in an additional operating charge of approximately $1.1 million during 2002. The State of Louisiana did not exercise its option to purchase the Facility and the agreements expired during October 2002. The Company is actively pursuing various sublease alternatives with several agencies of the federal and state government. The Company is continuing its efforts to find an alternative correctional use or sublease for the Facility and believes that it will be successful prior to early 2004. The Company has reserved for the lease payments through early 2004 and management believes the reserve balance currently established for anticipated future losses under the lease with CPV is sufficient to cover costs under the lease until a sublease is in place or an alternative future use is established. If the Company is unable to sublease or find an alternative correctional use for the Facility by that time, an additional operating charge will be required. The remaining obligation, exclusive of the reserve for losses through early 2004, on the Jena lease through the contractual term of 2009 is approximately $11 million.

      Depreciation and amortization increased by 21.9% to $12.1 million in 2002 from $9.9 million in 2001 due to the newly operational facilities in 2002, the addition of the four facilities as a result of the refinancing of the Company’s operating lease facility and incremental depreciation due to assets acquired

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      Contribution from operations increased 23.5% to $60.0 million in 2002 from $48.6 million in 2001. As discussed above, this increase is primarily attributable to the absence of start-up costs for newly constructed facilities, an overall increase in per diem rates, significantly improved financial performance at a number of existing facilities, the discontinuation of an unprofitable contract in 2001 in Arkansas, decreased expense under the Company’s operating lease facility and other factors as discussed above. As a percentage of revenue, contribution from operations increased to 10.6% in 2002 from 8.6% in 2001.

      General and administrative expenses increased 31.6% to $32.1 million in 2002 from $24.4 million in 2001. As a percentage of revenue, general and administrative expenses increased to 5.7% in 2002 from 4.3% in 2001. The increase was primarily driven by payments under employment agreements with certain key executives triggered by the change in control from the sale of TWC as well as an acceleration of the retirement age under the senior executive deferred compensation plans, also a result of the sale of TWC. Other factors impacting the increase were higher insurance costs, increased legal and professional fees and higher travel costs.

      Related party transactions occur in the normal course of business between the Company and TWC. Such transactions include the purchase of goods and services and corporate costs for information technology support, office space and interest expense. Total related party transaction costs with TWC, excluding casualty insurance, were approximately $3.1 million in fiscal 2002 as compared to $3.2 million in fiscal 2001.

      TWC provides various general and administrative services to the Company under a Services Agreement, through which TWC provides payroll services, human resources support, tax services and information technology support services through December 31, 2002. Beginning January 1, 2003, the only services provided are for information technology support through year-end 2004. The Company has negotiated annual rates with TWC based upon the level of service to be provided under the Services Agreement. The Company also leases office space from TWC for its corporate headquarters under a non-cancelable operating lease that expires February 11, 2011. Management of the Company has decided to relocate its corporate headquarters to Boca Raton, Florida and has entered into a ten-year lease for new office space. The Company expects to complete the move by April 2003. Management is in the process of marketing the space the Company currently leases from TWC and believes that a sublease will be entered into under terms and conditions similar to those contained in the Company’s lease with TWC. The remaining obligation on the lease is approximately $5.3 million. There can be no assurance that the Company will be successful in its efforts to sublease the current office space.

      Operating income increased by 15.3% to $27.9 million in 2002 from $24.2 million in 2001. As a percentage of revenue, operating income increased to 4.9% in 2002 from 4.3% in 2001 due to the factors impacting contribution from operations described above.

      Interest income increased 12.1% to $4.8 million in 2002 from $4.3 million in 2001. This increase is primarily due to higher average invested cash balances.

      Interest expense increased slightly to $3.7 million in 2002 from $3.6 million in 2001 reflecting higher effective interest rates as a result of the refinancing completed on December 12, 2002.

      Income before income taxes and equity in earnings of affiliates, increased to $28.9 million in 2002 from $24.9 million in 2001 due to the factors described previously.

      Provision for income taxes increased to $12.7 million in 2002 from $9.7 million in 2001 due to the increase in income before income taxes and a higher effective tax rate. The higher effective tax rate reflects an increase in the tax provision to provide for higher additional taxes due to the disallowance of certain expenses resulting from the sale of TWC.

      Equity in earnings of affiliates, net of income tax provision, increased 23.7% to $5.2 million in 2002 from $4.2 million in 2001. Fiscal year 2001 reflects start-up costs associated with the opening of the 800-

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      Net income increased 10.9% to $21.5 million in 2002 from $19.4 million in 2001 as a result of the factors described above.

     Fiscal 2001 compared with Fiscal 2000

      Revenues increased $26.5 million, or 5.0% to $562.1 million in 2001 from $535.6 million in 2000. The increase in revenues is the result of new facility openings offset by lower construction revenue, closure of two facilities and lower compensated resident days at the DIMIA facilities in Australia. Specifically, revenue increased approximately $52.5 million in 2001 compared to 2000 due to increased compensated resident days resulting from the opening of two facilities in 2000, (Auckland Central Remand Prison, Auckland, New Zealand in July 2000 and the Western Region Detention Facility at San Diego, San Diego, California in July 2000) and the opening of two facilities in 2001 (Val Verde Correctional Facility, Del Rio, Texas in January 2001 and the Rivers Correctional Institution, Winton, North Carolina in March 2001). Revenues decreased by approximately $27.3 million in 2001 compared to 2000 due to less construction activity. Revenues also decreased by approximately $10.4 million in 2001 compared to 2000 due to the cessation of operations at the Jena Juvenile Justice Center, the expiration of our contracts with the Arkansas Board of Correction and Community Punishment and a decline in compensated resident days at the DIMIA facilities. The balance of the increase in revenues was attributable to facilities open during all of both periods and increases in per diem rates.

      The number of compensated resident days in domestic facilities increased to 9.2 million in 2001 from 8.8 million in 2000. Average facility occupancy in domestic facilities was 97% for 2001 and 2000. Compensated resident days in Australian facilities increased to 1.9 million in 2001 from 1.8 million in 2000 primarily due to the opening of the Auckland Central Remand Prison in July 2000. Average facility occupancy in Australian facilities decreased to 94.3% in 2001 from 99.1% in 2000.

      In December 2001, the Company was issued a notice of contract non-renewal by the Administration of Corrections from the Commonwealth of Puerto Rico for the management of the Bayamon Correctional Facility. The current contract was set to expire March 23, 2002. The contract expired June 23, 2002. The termination of the management contract did not have a significant adverse impact on the Company’s results of operations and cash flows.

      Operating expenses increased by 3.4% to $503.5 million in 2001 compared to $486.9 million in 2000. As a percentage of revenues, operating expenses decreased to 89.6% in 2001 from 90.9% in 2000. This increase primarily reflects the four facilities that were opened in 2001 and 2000, as described above. Additionally, there are a number of secondary factors contributing to the increase in operating expenses in 2001 as compared to 2000 which include the following: lease expense for payments made to CPV of $20.9 million, excluding the Jena lease payments included in the Jena charge, offset by $1.9 million in amortization of the deferred revenue from the sale of properties to CPV; and expenses related to the construction of a new facility for the government of the Netherlands Antilles. The decrease as a percentage of revenue is the result of improved operations at a number of facilities including: Lea County Correctional Facility (New Mexico), Michigan Youth Correctional Facility (Michigan), and North Texas Intermediate Sanction Facility (Texas) and the termination of its management service contract for the Grimes and McPherson Correctional Facilities on June 30, 2001. The Company implemented strategies to improve the operational performance of these facilities and believes their performance has stabilized. However, there can be no assurance that these strategies will continue to be successful. Additionally during 2001 the Company renegotiated its management contract for the George W. Hill Correctional Facility. The Company purchases comprehensive general liability, automobile liability and workers’ compensation with a $1 million deductible per occurrence. The deductible portion of the Company’s risk was re-insured

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      In 2001, the Company reported an operating charge of $3 million ($1.8 million after tax, or $0.09 per share), related to the Jena, Louisiana facility which represents the expected losses to be incurred on the lease through December 2002 as management believed a sale of the facility would be finalized by that date or an alternative use would have been be found. At December 30, 2001, the Company’s total remaining obligation under the lease agreement was approximately $14 million. This compares with a charge of $3.8 million in 2000 ($2.3 million after tax, or $0.11 per share). At that time the Company estimated the facility would remain inactive through 2001.

      Depreciation and amortization increased by 14.8% to $9.9 million in 2001 from $8.6 million in 2000 due to the new facilities added in 2001 and a full year of depreciation on the San Diego facility added in 2000. As a percentage of revenues, depreciation and amortization increased to 1.8% from 1.6% in 2000.

      Contribution from operations increased 21.4% to $48.6 million in 2001 from $40.0 million in 2000. As discussed above, this increase is primarily attributable to the four new facilities that opened in 2001 and 2000 and the other factors discussed above. As a percentage of revenue, contribution from operations increased to 8.6% in 2001 from 7.5% in 2000.

      General and administrative expenses increased 15.6% to $24.4 million in 2001 from $21.1 million in 2000. The increase reflects costs related to additional personnel and infrastructure as well as increased salary costs and higher travel costs. As a percentage of revenue, general and administrative expenses increased to 4.3% in 2001 from 3.9% in 2000.

      Operating income increased by 27.9% to $24.2 million in 2001 from $18.9 million in 2000. As a percentage of revenue, operating income increased to 4.3% in 2001 from 3.5% in 2000 due to the factors impacting contribution from operations.

      Interest income decreased 29.9% to $4.3 million in 2001 from $6.1 million in 2000. This decrease is primarily due to lower average invested cash balances, lower interest rates and the sale of a portion of the Company’s loans to overseas affiliates in 2000.

      Interest expense decreased 25.0% to $3.6 million in 2001 from $4.8 million in 2000. This decrease is due to decreased interest rates and paying down $10.0 million in long-term debt during 2001.

      Other income in 2000 of $0.6 million represents a gain from the sale of a portion of the Company’s loans to overseas affiliates. There was no such activity in 2001.

      Income before income taxes and equity in earnings of affiliates, increased to $24.9 million in 2001 from $20.9 million in 2000 due to the factors described previously.

      Provision for income taxes increased to $9.7 million in 2001 from $8.4 million in 2000 due to the increase in income before income taxes. The Company’s effective tax rate decreased 1% due to lower foreign tax rates.

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      Equity in earnings of affiliates, net of income tax provision, decreased 6.0% to $4.2 million in 2001 from $4.5 million in 2000 due to phase-in costs associated with the 800-bed Dovegate prison in the United Kingdom, which opened in the third quarter of 2001, and start-up costs related to the 3,024-bed South African prison on schedule to open in mid-February, 2002.

      Net income increased 14.0% to $19.4 million in 2001 from $17 million in 2000 as a result of the factors described above.

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Item 8.     Financial Statements and Supplementary Data

WACKENHUT CORRECTIONS CORPORATION

CONSOLIDATED STATEMENTS OF INCOME

			2002				2001				2000
			(U.S. dollars in thousands,
			except per share data)
REVENUES			$	568,612			$	562,073			$	535,557
OPERATING EXPENSES (including amounts related to The Wackenhut Corporation (TWC) of $17,973, $21,952, and $13,588)				496,497				503,547				486,884
DEPRECIATION AND AMORTIZATION				12,093				9,919				8,639
CONTRIBUTION FROM OPERATIONS				60,022				48,607				40,034
GENERAL AND ADMINISTRATIVE EXPENSES (including amounts related to TWC of $3,105, $3,117, and $3,783)				32,146				24,423				21,122
OPERATING INCOME				27,876				24,184				18,912
INTEREST INCOME (including amounts related to TWC of $3, $9, and $8)				4,794				4,278				6,104
INTEREST EXPENSE (including amounts related to TWC of ($35), ($58), and $(73))				(3,737	)			(3,597	)			(4,801	)
OTHER INCOME, NET				—				—				641
INCOME BEFORE INCOME TAXES AND EQUITY IN EARNINGS OF
	AFFILIATES			28,933				24,865				20,856
PROVISION FOR INCOME TAXES				12,652				9,706				8,352
INCOME BEFORE EQUITY IN EARNINGS OF AFFILIATES				16,281				15,159				12,504
EQUITY IN EARNINGS OF AFFILIATES, (net of income tax provision of $3,000, $2,698, and $2,985)				5,220				4,220				4,490
NET INCOME			$	21,501			$	19,379			$	16,994
EARNINGS PER SHARE
	Basic:		$	1.02			$	0.92			$	0.81
	Diluted:		$	1.01			$	0.91			$	0.80
BASIC WEIGHTED AVERAGE SHARES OUTSTANDING				21,148				21,028				21,110
DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING				21,364				21,261				21,251

The accompanying notes to consolidated financial statements are an integral part of these statements.

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WACKENHUT CORRECTIONS CORPORATION

CONSOLIDATED BALANCE SHEETS

December 29, 2002 and December 30, 2001

				2002				2001
				(U.S. dollars in
				thousands,
				except per share data)
ASSETS
CURRENT ASSETS
	Cash and cash equivalents			$	35,240			$	46,099
	Accounts receivable, less allowance for doubtful accounts of $1,644 and $2,557.				84,737				79,002
	Deferred income tax asset				7,161				6,041
	Other				12,445				8,990
		Total current assets			139,583				140,132
PROPERTY AND EQUIPMENT, NET					206,466				53,758
INVESTMENTS IN AND ADVANCES TO AFFILIATES					19,776				15,328
DEFERRED INCOME TAX ASSET					119				716
DIRECT FINANCE LEASE RECEIVABLE					30,866				25,319
OTHER NON CURRENT ASSETS					5,848				6,770
				$	402,658			$	242,023
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES
	Accounts payable			$	10,138			$	14,079
	Accrued payroll and related taxes				17,489				13,318
	Accrued expenses				43,046				41,573
	Current portion of deferred revenue and non-recourse debt				3,071				3,275
	Current portion of long-term debt				1,250				—
		Total current liabilities			74,994				72,245
DEFERRED REVENUE					7,348				9,817
OTHER					13,058				4,281
LONG-TERM DEBT					123,750				—
NON-RECOURSE DEBT					30,866				25,319
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS’ EQUITY
	Preferred stock, $.01 par value, 10,000,000 shares authorized				—				—
	Common stock, $.01 par value, 30,000,000 shares authorized, 21,245,620 and 20,977,224 shares issued and outstanding				212				210
	Additional paid-in capital				63,500				61,157
	Retained earnings				111,337				89,836
	Accumulated other comprehensive loss				(22,407	)			(20,842	)
		Total shareholders’ equity			152,642				130,361
				$	402,658			$	242,023

The accompanying notes to consolidated financial statements are an integral part of these balance sheets.

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WACKENHUT CORRECTIONS CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

					2002				2001				2000
					(U.S. dollars in thousands)
CASH FLOW FROM OPERATING ACTIVITIES:
	Net income				$	21,501			$	19,379			$	16,994
	Adjustments to reconcile net income to net cash provided by operating activities
			Depreciation and amortization expense			12,093				9,919				8,639
			Deferred tax benefit			(711	)			(670	)			(1,952	)
			Provision for doubtful accounts			2,368				3,636				1,755
			Gain on sale of loans receivable			—				—				(641	)
			Equity in earnings of affiliates, net of tax			(5,220	)			(4,220	)			(4,490	)
			Tax benefit related to employee stock options			1,081				315				—
	Changes in assets and liabilities
		(Increase) decrease in assets
			Accounts receivable			(6,851	)			(3,219	)			(6,227	)
			Other current assets			(9,048	)			1,383				204
			Other assets			475				(414	)			(3,325	)
		Increase (decrease) in liabilities
			Accounts payable and accrued expenses			(3,485	)			1,525				15,669
			Accrued payroll and related taxes			3,936				756				1,768
			Deferred revenue			(2,673	)			(3,192	)			(2,488	)
			Other liabilities			8,777				4,281				—
	Net cash provided by operating activities					22,243				29,479				25,906
CASH FLOW FROM INVESTING ACTIVITIES:
	Investments in and advances to affiliates					(171	)			(130	)			(4,515	)
	Repayments of investments in and advances to affiliates					1,617				4,559				246
	Proceeds from the sale of loans receivable					—				—				2,461
	Capital expenditures					(160,698	)			(8,326	)			(19,138	)
	Net cash used in investing activities					(159,252	)			(3,897	)			(20,946	)
CASH FLOW FROM FINANCING ACTIVITIES:
	Proceeds from long-term debt and non-recourse debt					127,981				—				9,000
	Payments on long-term debt					—				(10,000	)			(14,000	)
	Proceeds from the exercise of stock options					1,264				397				12
	Repurchase of common stock					—				(1,547	)			(4,933	)
	Net cash provided by (used in) financing activities					129,245				(11,150	)			(9,921	)
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH
	EQUIVALENTS					(3,095	)			(2,154	)			(2,247	)
NET (DECREASE) INCREASE IN CASH AND CASH
	EQUIVALENTS					(10,859	)			12,278				(7,208	)
CASH AND CASH EQUIVALENTS, beginning of period						46,099				33,821				41,029
CASH AND CASH EQUIVALENTS, end of period					$	35,240			$	46,099			$	33,821
SUPPLEMENTAL DISCLOSURES:
	Cash paid during the year for:
	Income taxes				$	5,589			$	5,339			$	6,140
	Interest				$	525			$	479			$	631

The accompanying notes to consolidated financial statements are an integral part of these statements.

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WACKENHUT CORRECTIONS CORPORATION

CONSOLIDATED STATEMENTS OF SHAREHOLDERS’ EQUITY

			Common Stock
																			Accumulated
			Number								Additional								Other				Total
			of								Paid-in				Retained				Comprehensive				Shareholders’
			Shares				Amount				Capital				Earnings				Loss				Equity
			(U.S. dollars in thousands)
BALANCE, JANUARY 2, 2000				21,509			$	215			$	66,908			$	53,463			$	(1,902	)		$	118,684
Proceeds from stock options exercised				4				—				12				—				—				12
Common stock repurchased and retired				(500	)			(5	)			(4,928	)			—				—				(4,933	)
Comprehensive income:
	Net income			—				—				—				16,994				—
	Change in foreign currency translation, net of income tax benefit of $2,395.			—				—				—				—				(3,593	)
Total comprehensive income				—				—				—				—				—				13,401
BALANCE, DECEMBER 31, 2000				21,013				210				61,992				70,457				(5,495	)			127,164
Proceeds from stock options exercised				86				1				396				—				—				397
Tax benefit related to employee stock options				—				—				315				—				—				315
Common stock repurchased and retired				(122	)			(1	)			(1,546	)			—				—				(1,547	)
Comprehensive income:
	Net income			—				—				—				19,379				—
	Change in foreign currency translation, net of income tax benefit of $1,777.			—				—				—				—				(2,780	)
	Cumulative effect of change in accounting principle related to affiliate’s derivative instruments			—				—				—				—				(12,093	)
	Unrealized loss on derivative instruments			—				—				—				—				(474	)
Total comprehensive income				—				—				—				—				—				4,032
BALANCE, DECEMBER 30, 2001				20,977				210				61,157				89,836				(20,842	)			130,361
Proceeds from stock options exercised				269				2				1,262				—				—				1,264
Tax benefit related to employee stock options				—				—				1,081				—				—				1,081
Comprehensive income:
	Net income			—				—				—				21,501				—
	Change in foreign currency translation, net of income tax expense of $1,426.			—				—				—				—				2,230
	Minimum pension liability adjustment, net of income tax benefit of $323.			—				—				—				—				(505	)
	Unrealized loss on derivative instruments, net of income tax benefit of $1,688.			—				—				—				—				(3,290	)
Total comprehensive income				—				—				—				—				—				19,936
BALANCE, DECEMBER 29, 2002				21,246			$	212			$	63,500			$	111,337			$	(22,407	)		$	152,642

The accompanying notes to consolidated financial statements are an integral part of these statements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

      For the Fiscal Years Ended December 29, 2002, December 30, 2001, and December 1, 2000

1. General

      Wackenhut Corrections Corporation, a Florida corporation, and subsidiaries (the “Company”) is a leading developer and manager of privatized correctional, detention and public sector mental health services facilities located in the United States, the United Kingdom, Australia, South Africa, and New Zealand. The Company is a majority owned subsidiary of The Wackenhut Corporation (“TWC”), which owns 12 million shares of the Company’s stock.

      On May 8, 2002, TWC consummated a merger (the “Merger”) with a wholly owned subsidiary of Group 4 Falck A/ S (“Group 4 Falck”), a Danish multinational security and correctional services company. As a result of the Merger, Group 4 Falck acquired TWC and has become the indirect beneficial owner of 12 million shares of the Company. The Company’s common stock continues to trade on the New York Stock Exchange.

2. Summary of Significant Accounting Policies

     Fiscal Year

      The Company’s fiscal year ends on the Sunday closest to the calendar year end. Fiscal 2002, 2001 and 2000 each included 52 weeks.

     Basis of Financial Statement Presentation

      The consolidated financial statements include the accounts of the Company and its subsidiaries. Investments in 20 percent to 50 percent owned affiliates are accounted for under the equity method. All significant intercompany transactions and balances between the Company and its subsidiaries have been eliminated in consolidation. Certain reclassifications of the prior year’s financial statements have been made to conform to the current year’s presentation.

     Use of Estimates

      The preparation of consolidated financial statements in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. The Company’s significant estimates include allowance for doubtful accounts, construction cost estimates, employee deferred compensation accruals, reserves for insurance and legal, the reserve related to the Jena Facility and certain reserves required under its operating contracts. While the Company believes that such estimates are fair when considered in conjunction with the consolidated financial statements taken as a whole, the actual amounts of such estimates, when known, will vary from these estimates.

     Fair Value of Financial Instruments

      The carrying value of cash and cash equivalents, accounts receivable, accounts payable and accrued expenses approximate their fair value due to the short maturity of these items. The carrying value of the Company’s long-term debt and non-recourse debt approximates fair value based on the variable interest rates on the debt.

     Cash and Cash Equivalents

      The Company classifies as cash equivalents all interest-bearing deposits or investments with original maturities of three months or less.

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     Inventories

      Food and supplies inventories are carried at the lower of cost or market, on a first-in first-out basis and are included in “other current assets” in the accompanying consolidated balance sheets. Uniform inventories are carried at amortized cost and are amortized over a period of eighteen months. The current portion of unamortized uniforms is included in “other current assets.” The long-term portion is included in “other assets” in the accompanying consolidated balance sheets.

     Property and Equipment

      Property and equipment are stated at cost, less accumulated depreciation. Maintenance and repairs are expensed as incurred. Depreciation is computed using the straight-line method over the estimated useful lives of the related assets. Accelerated methods of depreciation are generally used for income tax purposes. Leasehold improvements are amortized on a straight-line basis over the shorter of the useful life of the improvement or the term of the lease. Interest is capitalized in connection with the construction of correctional and detention facilities. Capitalized interest is recorded as part of the asset to which it relates and is amortized over the asset’s estimated useful life. No interest cost was capitalized in 2002 or 2001.

     Impairment of Long-lived Assets

      The Company reviews for impairment of long-lived assets to be held and used whenever events or changes in circumstances indicate that the carrying amount of such assets may not be fully recoverable. Determination of recoverability is based on an estimate of undiscounted future cash flows resulting from the use of the asset and its eventual disposition. Measurement of an impairment loss for long-lived assets that management expects to hold and use is based on the fair value of the asset. Long-lived assets to be disposed of are reported at the lower of carrying amount or fair value less costs to sell. Management has reviewed the Company’s long-lived assets and determined that there are no events requiring impairment loss recognition. Events that would trigger an impairment assessment include deterioration of profits for a business segment that has long-lived assets, or when other changes occur which might impair recovery of long-lived assets.

     Goodwill and Other Intangible Assets

      Effective December 31, 2001, the Company adopted Statement of Financial Accounting Standards (“SFAS”) No. 142, “Goodwill and Other Intangible Assets.” As a result of adopting SFAS No. 142, the Company’s goodwill is no longer amortized, but are subject to an annual impairment test. In accordance with SFAS No. 142, the Company ceased amortizing goodwill as of the beginning of 2002. The Company’s goodwill at December 29, 2002 was associated with its Australian subsidiary in the amount of $0.4 million and in its UK affiliate in the amount of $1.1 million. SFAS 142 requires that transitional impairment tests be performed at its adoption, and provides that resulting impairment losses for goodwill and other intangible assets with indefinite useful lives be reported as the effect of a change in accounting principle. There was no impairment of goodwill or other intangible assets as a result of adopting SFAS No. 142 or the annual impairment test completed during the fourth quarter of 2002. Excluding goodwill, the Company has no intangible assets deemed to have indefinite lives.

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      The following table provides a reconciliation of reported net income for the year ended December 30, 2001 and December 31, 2000 to net income adjusted as if SFAS No. 142 had been applied as of the beginning of 2000:

		Year Ended				Year Ended
		December 30, 2001				December 31, 2000
		(in thousands, except per share amounts)
Net income as reported		$	19,379			$	16,994
Goodwill amortization, net of taxes			569				151
Equity method goodwill amortization, net of taxes			746				690
Adjusted net income		$	20,694			$	17,835
BASIC EARNINGS PER SHARE:
Net income as reported		$	0.92			$	0.81
Goodwill amortization, net of taxes			0.03				0.01
Equity method goodwill amortization, net of taxes			0.04				0.03
Adjusted net income		$	0.98			$	0.84
DILUTED EARNINGS PER SHARE:
Net income as reported		$	0.91			$	0.80
Goodwill amortization, net of taxes			0.03				0.01
Equity method goodwill amortization, net of taxes			0.04				0.03
Adjusted net income		$	0.97			$	0.84

      Goodwill represents the cost of acquired enterprises in excess of the fair value of the net tangible and identifiable intangible assets acquired. Prior to the adoption of SFAS 142 the Company amortized goodwill on a straight-line basis over periods of 5 to 10 years. Accumulated amortization totaled approximately $2.6 million and $1.8 million at December 30, 2001 and December 31, 2000, respectively. Amortization expense was $0.9 million in 2001 and includes the write-off of approximately $0.6 million of goodwill associated with the Company’s mental health services. Amortization expense was $0.3 million in 2000.

     Deferred Revenue

      Deferred revenue primarily represents the unamortized net gain on the development of properties and on the sale and leaseback of properties by the Company to Correctional Properties Trust (“CPV”), a Maryland real estate investment trust. The Company leases these properties back from CPV under operating leases. Deferred revenue is being amortized over the lives of the leases and is recognized in income as a reduction of rental expenses.

     Revenue Recognition

      In accordance with SEC Staff Accounting Bulletin No. 101 and related interpretations, facility management revenues are recognized as services are provided under facility management contracts with approved government appropriations based on a net rate per day per inmate or on a fixed monthly rate. The Company performs ongoing credit evaluations of its customers’ financial condition and generally does not require collateral. The Company maintains reserves for potential credit losses, and such losses traditionally have been within management’s expectations.

      Project development and design revenues are recognized as earned on a percentage of completion basis measured by the percentage of costs incurred to date as compared to estimated total cost for each contract. This method is used because management considers costs incurred to date to be the best available measure of progress on these contracts. Provisions for estimated losses on uncompleted contracts

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and changes to cost estimates are made in the period in which the Company determines that such losses and changes are probable. Contract costs include all direct material and labor costs and those indirect costs related to contract performance. Changes in job performance, job conditions, and estimated profitability, including those arising from contract penalty provisions, and final contract settlements may result in revisions to estimated costs and income, and are recognized in the period in which the revisions are determined.

     Operating Expenses

      Operating expenses consist primarily of compensation and other personnel related costs, facility lease and operational costs, inmate related expenses, and medical expenses and are recognized as incurred.

     Income Taxes

      The Company accounts for income taxes in accordance with Statement of Financial Accounting Standards No. 109, “Accounting for Income Taxes.” Under this method, deferred income taxes are determined based on the estimated future tax effects of differences between the financial statement and tax bases of assets and liabilities given the provisions of enacted tax laws. Deferred income tax provisions and benefits are based on changes to the assets or liabilities from year to year. Valuation allowances are recorded related to deferred tax assets if their realization does not meet the “not more likely than not” criteria.

     Earnings Per Share

      Basic earnings per share is computed by dividing net income by the weighted-average number of common shares outstanding. In the computation of diluted earnings per share, the weighted-average number of common shares outstanding is adjusted for the dilutive effect of shares issuable upon exercise of stock options calculated using the treasury stock method.

     Direct Finance Leases

      The Company accounts for the portion of its contracts with certain governmental agencies that represent capitalized lease payments on buildings and equipment as investments in direct finance leases. Accordingly, the minimum lease payments to be received over the term of the leases less unearned income are capitalized as the Company’s investments in the leases. Unearned income is recognized as income over the term of the leases using the interest method.

     Reserves for Insurance Losses

      Casualty insurance related to workers’ compensation, general liability and automobile insurance coverage is provided through an independent insurer. Prior to October 2, 2002, the first $1 million of coverage was reinsured by an insurance subsidiary of TWC. Effective October 2, 2002, the Company established a new insurance program with a $1 million deductible per occurrence with an independent insurer. The insurance program consists of primary and excess insurance coverage. The primary general liability coverage has a $5 million limit per occurrence with a $20 million general aggregate limit and a $1 million deductible. The primary automobile coverage has a $5 million limit per occurrence with a $1 million deductible and the primary worker’s compensation limits are based on state statutes and contain a $1 million deductible. The excess coverage has a $50 million limit per occurrence and in the aggregate. The Company believes such limits are adequate to insure against the various liability risks of its business. The Company is self-insured for employment claims and medical malpractice. There can be no assurance that the Company will be able to obtain or maintain insurance levels as required by its contracts.

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      Because the policy is a high deductible policy, losses are recorded as reported and provision is made to cover losses incurred but not reported. Loss reserves are undiscounted and are computed based on independent actuarial studies.

     Debt Issuance Costs

      Debt issuance costs totaling $2.8 million at December 29, 2002, are included in other non current assets in the consolidated balance sheets and are amortized into interest expense on a straight-line basis, which is not materially different than the interest method, over the term of the related debt.

     Comprehensive Income

      SFAS No. 130, “Reporting Comprehensive Income” requires companies to report all changes in equity in a financial statement for the period in which they are recognized, except those resulting from investment by owners and distributions to owners. The Company has disclosed Comprehensive Income, which encompasses net income, foreign currency translation adjustments, unrealized loss on derivative instruments and the minimum pension liability adjustment in the Consolidated Statements of Shareholders’ Equity and Comprehensive Income.

     Concentration of Credit Risk

      Financial instruments that potentially subject the Company to concentrations of credit risk consist principally of cash and cash equivalents, trade accounts receivable, direct finance lease receivable, long-term debt and financial instruments used in hedging activities. The Company’s cash management and investment policies restrict investments to low-risk, highly liquid securities, and the Company performs periodic evaluations of the credit standing of the financial institutions with which it deals. As of December 29, 2002, and December 30, 2001, management believes the Company had no significant concentrations of credit risk except as disclosed in Note 9.

     Foreign Currency Translation

      The Company’s foreign operations use their local currencies as their functional currencies. Assets and liabilities of the operations are translated at the exchange rates in effect on the balance sheet date and goodwill, certain other assets, and shareholders’ equity are translated at historical rates. Income statement items are translated at the average exchange rates for the year. The impact of currency fluctuation is included in shareholders’ equity as a component of accumulated other comprehensive income.

     Interest Rate Swaps

      In accordance with Statement of Financial Accounting Standards No. 133, “Accounting for Derivative Instruments and Hedging Activities,” and its related interpretations and amendments, the Company records derivatives as either assets or liabilities on the balance sheet and measures those instruments at fair value. For derivatives that are designed as and qualify as effective cash flow hedges, the portion of gain or loss on the derivative instrument effective at offsetting changes in the hedged item is reported as a component of accumulated other comprehensive income and reclassified into earnings when the hedged transaction affects earnings.

      The Company formally documents all relationships between hedging instruments and hedge items, as well as its risk-management objective and strategy for undertaking various hedge transactions. This process includes attributing all derivatives that are designated as cash flow hedges to floating rate liabilities. The Company also assesses whether each derivative is highly effective in offsetting changes in the cash flows of the hedged item. Fluctuations in the value of the derivative instruments are generally offset by changes in the hedged item; however, if it is determined that a derivative is not highly effective as a hedge or if a

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derivative ceases to be a highly effective hedge, the Company will discontinue hedge accounting prospectively for the affected derivative.

      The Company’s 50% owned equity affiliate operating in the United Kingdom has entered into interest rate swaps to fix the interest rate on its variable rate credit facility to rates ranging from 6.2% to 8.7%. Management of the Company has determined the swaps to be effective cash flow hedges. Accordingly, the Company records its share of the affiliate’s change in other comprehensive income as a result of applying SFAS No. 133. The adoption of SFAS No. 133 on January 1, 2001 resulted in a $12.1 million reduction of shareholders’ equity. The fair value of the swaps was a liability to the Company of approximately $11.9 million, net of taxes of approximately $6.7 million, and is reflected as a reduction in Investments in and Advances to Affiliates in the accompanying consolidated balance sheet at December 29, 2002.

      In connection with the financing and management of one Australian facility, the Company’s wholly-owned Australian subsidiary financed the facility’s development with long-term debt obligations, which are non-recourse to the Company. In connection with the non-recourse debt, the subsidiary is a party to an interest rate swap agreement to fix the interest rate on the variable rate non-recourse debt. Management of the Company has determined the swap to be an effective cash flow hedge. Accordingly, the Company has recorded the value of the interest rate swap in other comprehensive income, net of applicable income taxes. The total value of the swap liability as of December 29, 2002 was approximately $6 million and is recorded as a component of other liabilities in the accompanying consolidated financial statements.

     Accounting for Stock-Based Compensation

      Statement of Financial Accounting Standards No. 123, “Accounting for Stock-Based Compensation,” defines a fair value method of accounting for issuance of stock options and other equity instruments. Under the fair value method, compensation cost is measured at the grant date based on the fair value of the award and is recognized over the service period, which is usually the vesting period. Pursuant to SFAS No. 123, companies are not required to adopt the fair value method of accounting for employee stock-based transactions. Companies are permitted to account for such transactions under Accounting Principles Board Opinion No. 25 (“APB Opinion No. 25), “Accounting for Stock Issued to Employees,” but are required to disclose in a note to the financial statements pro forma net income and per share amounts as if the Company had applied the methods prescribed by SFAS No. 123.

      The Company applies APB Opinion No. 25 and related interpretations in accounting for its stock options granted to employees and non-employee directors and has complied with the disclosure requirements of SFAS No. 123. Except for non-employee directors, the Company has not granted any options to non-employees. See Note 13 for more information regarding the Company’s stock option plans.

     Recent Accounting Pronouncements

      In August 2001, the Financial Accounting Standards Board (“FASB”) issued Statement of Financial Accounting Standards No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.” SFAS No. 144 is effective for fiscal years beginning after December 15, 2001. For long-lived assets to be held and used, SFAS No. 144 retains the existing requirements to (a) recognize an impairment loss only if the carrying amount of a long-lived asset is not recoverable from its discounted cash flows and (b) measure an impairment loss as the difference between the carrying amount and the fair value of the asset. SFAS No. 144 establishes one accounting model to be used for long-lived assets to be disposed of by sale and revises guidance for assets to be disposed of other than by sale. The adoption of SFAS No. 144 did not have an impact on the Company’s financial position, results of operations or cash flows.

      In October 2001, the FASB issued SFAS No. 143, “Accounting for Asset Retirement Obligations.” This standard requires companies to record the fair value of a liability for an asset retirement obligation in the period in which it is incurred. When the liability is initially recorded, the Company capitalizes a cost by increasing the carrying amount of the related long-lived asset. Over time, the liability is accreted to its

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present value each period, and the capitalized cost is depreciated over the useful life of the related asset. Upon settlement of the liability, the Company either settles the obligation for its recorded amount or incurs a gain or loss upon settlement. The standard is effective for fiscal years beginning after June 15, 2002, with earlier application encouraged. Management expects that the adoption of SFAS No. 143 will not have a material impact on the Company’s financial position, results of operations or cash flows in the year of adoption.

      In April 2002, the FASB issued SFAS No. 145, “Rescission of FASB Statements No. 4, 44, and 64, Amendment of FASB Statement No. 13, and Technical Corrections.” SFAS No. 145, among other things, requires gains and losses on extinguishment of debt to be classified as part of continuing operations rather than treated as extraordinary, as previously required in accordance with SFAS No. 4. SFAS No. 145 also modifies accounting for subleases where the original lessee remains the secondary obligor and requires certain modifications to capital leases to be treated as a sale-leaseback transaction. The Company plans to adopt SFAS No. 145 at the beginning of fiscal 2003 and expects no material impact on its financial position, results of operations or cash flows.

      In July 2002, the FASB issued SFAS No. 146, “Accounting for Costs Associated with Exit or Disposal Activities.” SFAS No. 146 nullifies the guidance previously provided under Emerging Issues Task Force Issue No. 94-3, “Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring).” Among other things, SFAS No. 146 requires that a liability for a cost associated with an exit or disposal activity be recognized when the liability is incurred as opposed to when there is commitment to a restructuring plan as set forth under the nullified guidance. The Company has early adopted SFAS No. 146 and there was no material impact on its financial position, results of operations or cash flows as a result of adoption.

      In November 2002, the FASB issued FASB Interpretation No. 45, “Guarantors Accounting and Disclosure Requirements for Guarantees, Including Indirect Guarantees of Indebtedness of Others, an Interpretation of FASB Statements No. 5, 57, and 107 and rescission of FASB Interpretation No. 34” (“FIN 45”). FIN 45 elaborates on the disclosures to be made by a guarantor in its interim and annual financial statements about its obligations under certain guarantees that it has issued. It also clarifies that a guarantor is required to recognize, at the inception of a guarantee, a liability for the fair value of the obligation undertaken in issuing the guarantee. The initial recognition and initial measurement provisions shall be applied only on a prospective basis to guarantees issued or modified after December 31, 2002. The guarantor’s previous accounting for guarantees issued prior to the date of FIN 45’s initial application shall not be revised or restated to reflect the effect of the recognition and measurement provisions of FIN 45. The disclosure requirements are effective for financial statements of interim or annual periods ending after December 15, 2002. The Company implemented the disclosure requirements of FIN 45 as of December 29, 2002 and there was no material impact on its financial position, results of operations or cash flows as a result of this implementation.

      In December 2002, the FASB issued SFAS No. 148, “Accounting for Stock-Based Compensation – Transition and Disclosure, an Amendment of FASB Statement No. 123.” SFAS No. 148 amends FASB Statement No. 123, Accounting for Stock-Based Compensation, to provide alternative methods of transition for a voluntary change to the fair value based method of accounting for stock-based employee compensation. In addition, SFAS No. 148 amends the disclosure requirements of Statement 123 to require prominent disclosures in both annual and interim financial statements about the method of accounting for stock-based employee compensation and the effect of the method used on reported results. Currently, the Company accounts for stock option plans under APB Opinion No. 25, under which no compensation has been recognized. SFAS 148 is effective for fiscal years beginning after December 15, 2002. The Company does not intend to change its policy with regard to stock based compensation and expects no impact on the Company’s financial position, results of operations or cash flows upon adoption.

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      In January 2003, the FASB issued FIN No. 46, “Consolidation of Variable Interest Entities,” which addresses consolidation by a business of variable interest entities in which it is the primary beneficiary. FIN No. 46 is effective immediately for certain disclosure requirements and variable interest entities created after January 1, 2003, and in the first fiscal year or interim period beginning after June 15, 2003 for all other variable interest entities. The Company is currently in the process of determining the effects, if any, on its financial position, results of operations and cash flows that will result from the adoption of FIN No. 46.

3. Property and Equipment

      Property and equipment consist of the following at fiscal year end:

		Useful
		Life				2002				2001
		(Years)
						(In thousands)
Land			—			$	3,258			$	2,115
Buildings and improvements			2 to 40				203,639				52,913
Equipment			3 to 7				21,607				15,502
Furniture and fixtures			3 to 7				4,584				2,601
						$	233,088			$	73,131
Less-accumulated depreciation and amortization							(26,622	)			(19,373	)
						$	206,466			$	53,758

      Capitalized interest is recorded as part of the asset to which it relates and is amortized over the asset’s estimated useful life. No interest was capitalized in 2002 and 2001.

      In December 2002, the Company acquired four correctional properties that were formerly included in the Company’s operating lease facility for an aggregate purchase price of approximately $155 million.

4. Long-Term Debt

      Prior to December 12, 2002, the Company was a party to a $30 million multi-currency revolving credit facility, which included $5.0 million for the issuance of letters of credit and a $154.3 million operating lease facility established to acquire and develop new correctional institutions used in its business. No amounts were outstanding under the revolving credit facility and $154.3 million was outstanding under the operating lease facility. The term of the operating lease facility was set to expire December 18, 2002 upon which the Company had the ability to purchase the properties in the facility for their original acquisition cost.

      On December 12, 2002, the Company entered into a new $175 million Senior Secured Credit Facility (the “Senior Credit Facility”) consisting of a $50 million, 5-year revolving loan (the “Revolving Credit Facility”) and a $125 million, 6-year term loan (the “Term Loan Facility”). Borrowings under the Term Loan Facility and corporate cash were used to purchase four correctional facilities in operation under the Company’s $154.3 million operating lease facility. The purchase price totaled approximately $155 million, which included related fees and expenses. Simultaneous with the closing of the Senior Credit Facility, the Company terminated its $154.3 million operating lease facility and $30 million multi-currency revolving credit facility, both of which would have expired on December 18, 2002.

      The Revolving Credit Facility contains as $30 million limit for the issuance of standby letters of credit. At December 29, 2002, $125 million was outstanding under the Term Loan Facility, there were no borrowings under the Revolving Credit Facility, and there were $7.2 million of outstanding letters of credit. At December 29, 2002, $42.8 million of the Revolving Credit Facility was available to the Company for

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working capital, acquisitions, general corporate purposes, and for restricted payments as defined in the Senior Credit Facility.

      The Senior Credit Facility permits the Company to make certain restricted payments such as the repurchase of Company common stock. At December 29, 2002, the Company had $15 million available for restricted payments. The amount of permitted restricted payments may increase upon the Company’s generation of excess cash flow and under certain permitted asset sales.

      Indebtedness under the Revolving Credit Facility bears interest at the Company’s option at the base rate (defined as the higher of the prime rate or federal funds plus 0.5%) plus a spread of 125 to 200 basis points or LIBOR plus 250 to 325 basis points, depending on the leverage ratio. Indebtedness under the Term Loan Facility bears interest at LIBOR + 400 basis points, with a minimum LIBOR rate of 2.0% during the first 18-months. As LIBOR was below 2.0% at December 29, 2002, the effective rate on the Company’s term loan borrowings was 6.0%.

      Obligations under the Senior Credit Facility are guaranteed by the Company’s material domestic subsidiaries and are secured by substantially all of the Company’s tangible and intangible assets.

      The Senior Credit Facility includes covenants that require the Company, among other things, to maintain a maximum leverage ratio, a minimum fixed charge coverage ratio, a minimum net worth, and to limit that amount of annual capital expenditures. The facility also limits certain payments and distributions to the Company as well as the Company’s ability to enter into certain types of transactions. The Company was in compliance with the covenants of the Senior Credit Facility as of December 29, 2002.

      The Senior Credit Facility has been rated Ba3/ BB by Moody’s Investors Service, Inc. (“Moody’s”) and Standard and Poor’s Ratings Group, a division of the McGraw–Hill Companies (“S&P”), respectively. In addition, the Company obtained issuer ratings of B1/ BB- from Moody’s and S&P, respectively.

      The debt amortization schedule requires annual repayments of $1.25 million for fiscal years 2003 through 2007 and $118.25 million thereafter.

      At December 29, 2002 the Company also had outstanding fourteen letters of guarantee totaling approximately $13 million under separate international facilities.

      The Company’s wholly-owned Australian subsidiary financed the facility’s development with long-term debt obligations, which are non-recourse to the Company. The term of the non-recourse debt is through 2017 and it bears interest at a variable rate quoted by certain Australian banks plus 140 basis points. Any obligations or liabilities of the subsidiary are matched by a similar or corresponding commitment from the government of the State of Victoria. In connection with the non-recourse debt, the subsidiary is a party to an interest rate swap agreement to fix the interest rate on the variable rate non-recourse debt to 9.7%. See Note 2. The debt amortization schedule requires annual repayments of $0.5 million in 2003, $1.1 million in 2004, $1.2 million in 2005, $1.3 million in 2006, $1.5 million in 2007 and $25.8 million thereafter.

5. Investment in Direct Finance Leases

      The Company’s investment in direct finance leases relates to the financing and management of one Australian facility. The Company’s wholly-owned Australian subsidiary financed the facility’s development with long-term debt obligations, which are non-recourse to the Company. The Company has consolidated the subsidiary’s direct finance lease receivable from the state government and related non-recourse debt each totaling approximately $31 million as of December 29, 2002. The Company has reclassified the amounts reflected in the December 30, 2001 balance sheet to reflect the asset and related non-recourse debt of approximately $26 million to conform to current year presentation.

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      The future minimum rentals to be received are as follows (in thousands):

		Annual
Fiscal Year		Repayment
		(In thousands)
2003		$	520
2004			1,058
2005			1,197
2006			1,333
2007			1,492
Thereafter			25,786
		$	31,386
Current portion of direct finance lease receivable			(520	)
Non current portion of direct finance lease receivable		$	30,866

6. Transactions with Correctional Properties Trust (“CPV”)

      On April 28, 1998, CPV acquired eight correctional and detention facilities operated by the Company. The Company and CPV previously had three common members on their respective boards of directors. Effective September 9, 2002, the Companies no longer had common members serving on their respective boards of directors. CPV also was granted the fifteen-year right to acquire and lease back future correctional and detention facilities developed or acquired by the Company. During fiscal 1998 and 1999, CPV acquired two additional facilities for $94.1 million. In fiscal 2000, CPV purchased an eleventh facility that the Company had the right to acquire for $15.3 million. The Company recognized no net proceeds from the sale. There were no purchase and sale transactions between the Company and CPV in 2001 or 2002.

      Simultaneous with the purchases, the Company entered into ten-year operating leases of these facilities from CPV. As the lease agreements are subject to contractual lease increases, the Company records operating lease expense for these leases on a straight-line basis over the term of the leases.

      The deferred unamortized net gain related to sales of the facilities to CPV at December 29, 2002, which is included in “Deferred Revenue” in the accompanying consolidated balance sheets, is $9.9 million with $2.6 million short-term and $7.3 million long-term. The gain is being amortized over the ten-year lease terms. The Company recorded net rental expense related to the CPV leases of $19.6 million, $19.1 million and 19.7 million in 2002, 2001 and 2000, respectively, excluding the Jena rental expense (See Note 7).

      The future minimum lease commitments under the leases for these eleven facilities are as follows:

		Annual
Fiscal Year		Rental
		(In thousands)
2003		$	23,451
2004			23,527
2005			23,606
2006			23,688
2007			23,773
Thereafter			18,287
		$	136,332

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7. Commitments and Contingencies

     Facilities

      The Company has been notified by the Texas Youth Commission of a declining need for beds in the Coke County Texas Facility. The Company has an operating and management contract that is due to expire March 31, 2003 upon the termination of the contract by the Texas Youth Commission. An unrelated third party owns the facility. The Company believes that it has no continuing obligation with respect to the facility in the event the Company’s operating contract is terminated or expires. There can be no assurance that the contract will be extended. Termination of the contract would not have a material adverse impact on the Company’s financial results or cash flows.

      The Company leases the 300-bed Broward County Work Release Center in Broward County, Florida (the “Broward Facility”), from CPV under the terms of a non-cancelable lease, which expires on April 28, 2008. The Company operates the Broward Facility for the Broward County Board of County Commissioners and the Broward County Sheriff’s Department under the terms of a correctional services contract that was renewed effective February 17, 2003 for an additional eight-month term. The Broward County Sheriff’s Department previously advised the Company of the County’s declining need for the usage of the Broward Facility, and accordingly, the renewed contract reduced the number of beds in the facility reserved for use by the County. Therefore, the Company initiated discussions with the Immigration and Naturalization Service (the “INS”), which has expressed an interest in utilizing some or all of the Broward Facility, depending on availability and INS need. The INS executed a correctional services management contract with the Company for 72 beds in the Broward Facility, effective from August 1, 2002 through September 30, 2003. Effective January 2003, the INS increased the scope of the contract to house up to 150 detainees. The Company’s remaining obligation under the lease with CPV is approximately $8.5 million.

      During 2000, the Company’s management contract at the 276-bed Jena Juvenile Justice Center in Jena, Louisiana (the “Facility”) was terminated. The Company has incurred operating charges of $3 million and $3.8 million during fiscal 2001 and 2000, respectively, related to the Company’s lease of the inactive Facility that represented the expected costs to be incurred under the lease until a sublease or alternative use could be initiated. In May 2002, the State of Louisiana and CPV entered into a tentative purchase and sale agreement for the Facility, subject to certain contingencies. Additionally, the Company entered into a lease termination agreement subject to the sale of the Facility that resulted in an additional operating charge of approximately $1.1 million during 2002. The State of Louisiana did not exercise its option to purchase the Facility and the agreements expired during October 2002. The Company is actively pursuing various sublease alternatives with several agencies of the federal and state government. The Company is continuing its efforts to find an alternative correctional use or sublease for the Facility and believes that it will be successful prior to early 2004. The Company has reserved for the lease payments through early 2004 and management believes the reserve balance currently established for anticipated future losses under the lease with CPV is sufficient to cover costs under the lease until a sublease is in place or an alternative future use is established. If the Company is unable to sublease or find an alternative correctional use for the Facility by that time, an additional operating charge will be required. The remaining obligation, exclusive of the reserve for losses through early 2004, on the Jena lease through the contractual term of 2009 is approximately $11 million.

      The Company, through Premier Custodial Group Limited (“PCG”), a 50 percent owned joint venture in the United Kingdom, operates the 400-bed Youthful Offender Institution at Ashfield (the “Ashfield Facility”). On May 23, 2002, the UK Prison Service assumed operational control of the Ashfield Facility based upon the Prison Service’s concern over safety and control. Control of the Ashfield Facility was restored to PCG on October 14, 2002. Under the terms of PCG’s contract, PCG is paid for operational services on the basis of “Available Prisoner Places.” Prior to assuming operational control, the Prison Service paid PCG based upon 400 Available Prisoner Places. From May 23, 2002 through

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October 23, 2002, the Prison Service paid PCG only for the number of beds actually occupied, which averaged approximately 200 during this period. As a result, PCG’s revenues for the Ashfield Facility were reduced by approximately half during this period. In addition, PCG incurred costs in additional resources and staff brought in to address the operational issues at Ashfield. PCG provided the Prison Service with a comprehensive plan for addressing all operational issues at the Ashfield Facility, which was approved by the Authority and implemented by PCG. Effective October 23, 2002, the Prison Service restored payment to PCG for 400 Available Prisoner Places in accordance with the payment provisions set forth in the operating agreement. Subsequently, on January 8, 2003, the Prison Services notified PCG that due to operational issues it was again reducing payment to only pay for the number of beds actually occupied effective December 2, 2002 resulting in a reduction of facility revenues by approximately one-half. PCG has submitted a comprehensive plan for addressing these latest operational issues. On January 30, 2003, PCG notified the Prison Service that it considered all operational issues identified in the Prison Service Rectification Notice to be corrected and expected full payment to be restored effective from January 30, 2003. The Prison Service began an audit of the facility’s operations in February 2003 and is currently considering the outcome of that audit. PCG expects full revenues to be restored effective January 30, 2003, but there can be no assurance that this will occur until the Prison Service makes its determination.

      In Australia, the Department of Immigration, Multicultural and Indigenous Affairs (“DIMIA”) announced its intention to enter into contract negotiations with a competitor of the Company’s Australian subsidiary for the management and operation of Australia’s immigration centers. DIMIA has further stated that if it is unable to reach agreement with the announced preferred bidder, it will enter into negotiations with the Company’s Australian subsidiary. The Company is continuing to operate the centers under its current contract, which is due to expire on or before June 23, 2003 but may be extended by the government if negotiations are not completed with the successful tenderer. If negotiations are not successful, WCC’s Australian subsidiary is the only other qualified tenderer for consideration. In 2002, the contract with DIMIA represented approximately 10% of the Company’s revenue (exclusive revenue of 50-50 joint ventures). In both 2001 and 2000, DIMIA represented approximately 11% of the Company’s revenue.

     TWC MERGER WITH GROUP 4 FALCK

      On May 8, 2002, TWC consummated a merger (the “Merger”) with a wholly owned subsidiary of Group 4 Falck A/ S (“Group 4 Falck”), a Danish multinational security and correctional services company. As a result of the Merger, Group 4 Falck has become the indirect beneficial owner of 12 million shares in the Company. The Company’s common stock continues to trade on the New York Stock Exchange.

      Subsequent to the Merger, Group 4 Falck indicated that it intends to divest its interest in the Company. As a result, the Independent Committee of the Board of Directors has hired legal and financial advisors to advise the Company with respect to Group 4 Falck’s stated intentions.

      In the United Kingdom, the Merger has been reviewed by the Office of Fair Trade and was referred to the Competition Commission for further investigation. The Company conducts most of its business in the United Kingdom through PCG, a 50/50 joint venture with Serco Investments Limited (“Serco”). PCG currently manages six correctional facilities, one immigration detention center, two court escort contracts and two electronic monitoring services contracts. Many of PCG’s contracts include a provision that makes the failure to obtain United Kingdom Home Office approval of a change in control an event of default. The Competition Commission completed its investigation and in a report published on October 22, 2002 approved the Merger without conditions. The Youth Justice Board and the Scottish Prison Service have approved the merger. We are waiting for approval from The Home Office Prison Service, The Home Office Monitoring Service and The Immigration Service.

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      The Merger may affect the Company’s interests in PCG. The Company’s United Kingdom joint venture partner, Serco, has indicated that it believes the Merger provides Serco with a right to acquire the Company’s 50 percent interest in PCG in the absence of Serco’s consent to the Merger. The Company disputes the validity of this claim. Group 4 Falck has agreed that in the event the Company is ordered by a court of competent jurisdiction to sell its interest in PCG to Serco at a price below fair market value, Group 4 Falck will reimburse the Company for the amount by which the sale is below fair market value, up to a maximum of 10 percent of the fair market value of the interest. The Company has filed a declaratory judgment suit in the United Kingdom to determine its rights under the joint venture agreement with Serco. The case is scheduled to be heard in May 2003.

      The Company has taken steps to safeguard its interest in PCG, as well as PCG’s contract interests, but there can be no assurance that these steps will be sufficient to avoid a material adverse effect on the Company’s business interests in the United Kingdom.

     LEASES

      The Company leases correctional facilities, office space, computers and vehicles under non-cancelable operating leases expiring between 2003 and 2012. The future minimum commitments under these leases exclusive of lease commitments related to CPV, are as follows:

		Annual
Fiscal Year		Rental
		(In thousands)
2003.		$	6,779
2004			6,897
2005			6,911
2006			6,925
2007			3,710
Thereafter			21,061
		$	52,283

      Rent expense was approximately $15.7 million, $15.8 million, and $12.2 million for fiscal 2002, 2001, and 2000 respectively and included lease expense under our operating lease facility that expired in December 2002 (See Note 4).

     Litigation, Claims and Assessments

      The Company is defending a wage and hour lawsuit filed in California state court by ten current and former employees. The employees are seeking certification of a class which would encompass all current and former WCC California employees. Discovery is underway and the court has yet to hear the plaintiffs’ certification motion. The Company is unable to estimate the potential loss exposure due to the current procedural posture of the lawsuit. While the plaintiffs in this case have not quantified their claim of damages and the outcome of the matters discussed above cannot be predicted with certainty, based on information known to date, management believes that the ultimate resolution of these matters, if settled unfavorably to the Company, could have a material adverse effect on the Company’s financial position, operating results and cash flows. The Company is vigorously defending its rights in this action. The nature of the Company’s business results in claims or litigation against the Company for damages arising from the conduct of its employees or others. Except for routine litigation incidental to the business of the Company, there are no pending material legal proceedings to which the Company or any of its subsidiaries is a party or to which any of their property is subject.

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8. Common, Preferred and Shares Repurchased and Retired

      In April 1994, the Company’s Board of Directors authorized 10,000,000 shares of “blank check” preferred stock. The Board of Directors is authorized to determine the rights and privileges of any future issuance of preferred stock such as voting and dividend rights, liquidation privileges, redemption rights and conversion privileges.

      On February 18, 2000, the Company’s Board of Directors authorized the repurchase of up to 500,000 shares of its common stock, in addition to the 1,000,000 shares previously authorized for repurchase. As of December 30, 2001, the Company had repurchased all of the 1.5 million common shares authorized for repurchase at an average price of $15.52. For fiscal 2001, the Company repurchased 122,000 shares at an average price of $12.68. There were no share repurchases in 2002.

9. Business Segment and Geographic Information

      The Company operates in one industry segment encompassing the development and management of privatized government institutions located in the United States, the United Kingdom, Australia, South Africa, and New Zealand.

      The Company operates and tracks its results in geographic operating segments. Information about the Company’s operations in different geographical regions is shown below. Revenues are attributed to geographical areas based on location of operations and long-lived assets consist of property, plant and equipment.

Fiscal Year			2002				2001				2000
			(In thousands)
REVENUES:
	Domestic operations		$	451,465			$	454,053			$	426,510
	International operations			117,147				108,020				109,047
Total revenues			$	568,612			$	562,073			$	535,557
OPERATING INCOME:
	Domestic operations		$	26,066			$	19,559			$	9,620
	International operations			1,810				4,625				9,292
Total operating income			$	27,876			$	24,184			$	18,912
LONG-LIVED ASSETS:
	Domestic operations		$	200,258			$	47,639			$	48,274
	International operations			6,208				6,119				6,346
Total long-lived assets			$	206,466			$	53,758			$	54,620

      The Company’s international operations represent its wholly owned Australian subsidiaries. Through its wholly owned subsidiary, Wackenhut Corrections Corporation Australia Pty. Limited, the Company currently manages five correctional facilities, including a facility in New Zealand and six immigration detention centers and two temporary detention centers.

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      Except for the major customers noted in the following table, no single customer provided more than 10% of the Company’s consolidated revenues during fiscal 2002, 2001 and 2000:

Customer		2002				2001				2000
Various agencies of the U.S. Federal Government			19	%			18	%			11	%
Various agencies of the State of Texas			17	%			16	%			15	%
Various agencies of the State of Florida			14	%			14	%			19	%
Department of Immigration, Multicultural and Indigenous Affairs (Australia)			10	%			11	%			11	%

      Concentration of credit risk related to accounts receivable is reflective of the related revenues.

      Equity in earnings of affiliates represents the operations of the Company’s 50% owned joint ventures in the United Kingdom (Premier Custodial Group Limited) and South Africa (South African Custodial Management Pty. Limited and South African Custodial Services Pty. Limited). These entities and their subsidiaries are accounted for under the equity method. Premier Custodial Group Limited commenced operations of an initial prison in fiscal 1994, two court escort and transport contracts in fiscal 1996, a second correctional facility in fiscal 1998, three correctional facilities and electronic monitoring contracts in fiscal 1999 and a correctional facility and an immigration facility in fiscal 2001. Total equity in the undistributed earnings for Premier Custodial Group Limited, before income taxes, for fiscal 2002, 2001, and 2000 was $10.2 million, $7.6 million and $7.5 million, respectively. South African Custodial Management Pty. Limited and South African Custodial Services Pty. Limited commenced operations on their first prison in fiscal 2002. Total equity in undistributed loss for South African Custodial Management Pty Limited and South African Custodial Services Pty. Limited was ($2.0) million, ($0.7) million and zero in 2002, 2001 and 2000 respectively.

      A summary of financial data for the Company’s equity affiliates in the United Kingdom is as follows:

Fiscal Year			2002				2001				2000
			(In thousands)
STATEMENT OF OPERATIONS DATA
	Revenues		$	195,961			$	153,744			$	139,137
	Operating income			20,078				15,277				14,950
	Net income			12,921				9,881				8,980
BALANCE SHEET DATA
	Current assets			91,220				99,294				66,382
	Noncurrent assets			304,659				272,777				286,049
	Current liabilities			41,245				53,082				39,451
	Noncurrent liabilities			317,407				293,403				286,526
	Shareholders’ equity			37,227				25,586				26,454

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      A summary of financial data for the Company’s equity affiliates in South Africa is as follows:

Fiscal Year			2002				2001				2000
			(In thousands)
STATEMENT OF OPERATIONS DATA
	Revenues		$	15,928			$	—			$	—
	Operating income (loss)			1,016				(1,749	)			—
	Net loss			(2,481	)			(1,441	)			—
BALANCE SHEET DATA
	Current assets			6,426				5,112				6,561
	Noncurrent assets			47,125				31,924				14,357
	Current liabilities			1,808				913				32
	Noncurrent liabilities			52,170				32,746				13,969
	Shareholders’ (deficit) equity			(427	)			3,377				6,917

10. Income Taxes

      The provision for income taxes in the consolidated statements of income consists of the following components:

Fiscal Year			2002				2001				2000
			(In thousands)
Federal income taxes:
	Current		$	8,354			$	6,497			$	3,718
	Deferred			(603	)			(972	)			(1,429	)
				7,751				5,525				2,289
State income taxes:
	Current		$	2,262			$	1,382			$	1,341
	Deferred			(76	)			(123	)			(180	)
				2,186				1,259				1,161
Foreign:
	Current		$	2,747			$	2,497			$	5,245
	Deferred			(32	)			425				(343	)
				2,715				2,922				4,902
Total			$	12,652			$	9,706			$	8,352

      A reconciliation of the statutory U.S. federal tax rate (35.0%) and the effective income tax rate is as follows:

		2002				2001				2000
		(In thousands)
Provisions using statutory federal income tax rate		$	10,127			$	8,703			$	7,300
State income taxes, net of federal tax benefit			1,421				775				692
Change in control costs			896				—				—
Other, net			208				228				360
		$	12,652			$	9,706			$	8,352

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      The components of the net current deferred income tax asset at fiscal year end are as follows:

		2002				2001
		(In thousands)
Uniforms		$	(156	)		$	(264	)
Allowance for doubtful accounts			508				1,241
Accrued vacation			1,023				870
Accrued liabilities			5,786				4,194
		$	7,161			$	6,041

      The components of the net non-current deferred income tax asset at fiscal year end are as follows:

Fiscal Year		2002				2001
		(In thousands)
Depreciation		$	(2,454	)		$	(2,049	)
Deferred revenue			6,464				7,517
Deferred charges			2,929				2,111
Income of foreign subsidiaries and affiliates			(6,773	)			(6,826	)
Other, net			(47	)			(37	)
		$	119			$	716

      The exercise of non-qualified stock options which have been granted under the Company’s stock option plans give rise to compensation which is includable in the taxable income of the applicable employees and deducted by the Company for federal and state income tax purposes. Such compensation results from increases in the fair market value of the Company’s common stock subsequent to the date of grant. In accordance with Accounting Principles Board Opinion No. 25, such compensation is not recognized as an expense for financial accounting purposes and related tax benefits are credited directly to additional paid-in-capital.

11. Earnings Per Share

      The table below shows the amounts used in computing earnings per share (“EPS”) in accordance with Statement of Financial Accounting Standards No. 128 and the effects on income and the weighted average number of shares of potential dilutive common stock.

Fiscal Year			2002				2001				2000
			(In thousands, except per share
			data)
Net income			$	21,501			$	19,379			$	16,994
Basic earnings per share:
	Weighted average shares outstanding			21,148				21,028				21,110
	Per share amount		$	1.02			$	0.92			$	0.81
Diluted earnings per share:
	Weighted average shares outstanding			21,148				21,028				21,110
Effect of dilutive securities:
	Employee and director stock options			216				233				141
	Weighted average shares assuming dilution			21,364				21,261				21,251
	Per share amount		$	1.01			$	0.91			$	0.80

      For fiscal 2002, options to purchase 784,600 shares of the Company’s common stock with exercise prices ranging from $14.69 to $26.88 per share and expiration dates between 2006 and 2012 were

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outstanding at December 29, 2002, but were not included in the computation of diluted EPS because their effect would be anti-dilutive.

      For fiscal 2001, options to purchase 510,000 shares of the Company’s common stock with exercise prices ranging from $13.75 to $26.88 per share and expiration dates between 2005 and 2011 were outstanding at December 30, 2001, but were not included in the computation of diluted EPS because their effect would be anti-dilutive.

      For fiscal 2000, outstanding options to purchase 924,600 shares of the Company’s common stock with exercise prices ranging from $8.44 to $26.88 and expiration dates between 2005 and 2010, were also excluded from the computation of diluted EPS because their effect would be anti-dilutive.

12. Related Party Transactions with The Wackenhut Corporation

      Related party transactions occur in the normal course of business between the Company and TWC. Such transactions include the purchase of goods and services and corporate costs for management support, office space, insurance and interest expense.

      The Company incurred the following expenses related to transactions with TWC in the following years:

Fiscal Year		2002				2001				2000
		(In thousands)
General and administrative expenses		$	2,591			$	2,831			$	3,468
Casualty insurance premiums			17,973				21,952				13,588
Rent			514				286				315
Net interest expense			32				49				65
		$	21,110			$	25,118			$	17,436

      General and administrative expenses represent charges for management and support services. TWC provides various general and administrative services to the Company under a Services Agreement, through which TWC provides payroll services, human resources support, tax services and information technology support services through December 31, 2002. Beginning January 1, 2003, the only services provided will be for information technology support through year-end 2004. The Company has negotiated annual rates with TWC based upon the level of service to be provided under the Services Agreement.

      The Company also leases office space from TWC for its corporate headquarters under a non-cancelable operating lease that expires February 11, 2011. Management of the Company has decided to relocate its corporate headquarters to Boca Raton, Florida and has entered into a ten-year lease for new office space. The Company expects to complete the move by April 2003. Management is in the process of marketing the space the Company currently leases from TWC and believes that a sublease will be entered into under terms and conditions similar to those contained in the Company’s lease with TWC. The remaining obligation on the lease is approximately $5.3 million. There can be no assurance that the Company will be successful in its efforts to sublease the current office space.

13. Stock Options

      The Company has four stock option plans: the Wackenhut Corrections Corporation 1994 Stock Option Plan (First Plan), the Wackenhut Corrections Corporation Stock Option Plan (Second Plan), the 1995 Non-Employee Director Stock Option Plan (Third Plan) and the Wackenhut Corrections Corporation 1999 Stock Option Plan (Fourth Plan). All outstanding options vested immediately upon the Merger.

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      Under the First Plan, the Company may grant up to 897,600 shares of common stock to key employees and consultants. All options granted under this plan are exercisable at the fair market value of the common stock at the date of the grant, vest 100% immediately and expire no later than ten years after the date of the grant.

      Under the Second Plan and Fourth Plan, the Company may grant options to key employees for up to 1,500,000 and 550,000 shares of common stock, respectively. Under the terms of these plans, the exercise price per share and vesting period is determined at the sole discretion of the Board of Directors. All options that have been granted under these plans are exercisable at the fair market value of the common stock at the date of the grant. Generally, the options vest and become exercisable ratably over a four-year period, beginning immediately on the date of the grant. However, the Board of Directors has exercised its discretion and has granted options that vest 100% immediately. All options under the Second Plan and Fourth Plan expire no later than ten years after the date of the grant.

      Under the Third Plan, the Company may grant up to 60,000 shares of common stock to non-employee directors of the Company. Under the terms of this plan, options are granted at the fair market value of the common stock at the date of the grant, become exercisable immediately, and expire ten years after the date of the grant.

      A summary of the status of the Company’s four stock option plans is presented below.

		2002								2001								2000
						Wtd. Avg.								Wtd. Avg.								Wtd. Avg.
						Exercise								Exercise								Exercise
Fiscal Year		Shares				Price				Shares				Price				Shares				Price
Outstanding at beginning of year			1,417,102			$	12.40				1,315,202			$	12.70				1,132,634			$	14.21
Granted			330,000				15.41				248,500				9.40				301,000				8.45
Exercised			268,396				4.72				86,200				4.60				4,032				2.97
Forfeited/ Cancelled			68,400				18.67				60,400				17.75				114,400				16.79
Options outstanding at end of year			1,410,306				14.26				1,417,102				12.40				1,315,202				12.70
Options exercisable at year end			1,410,306			$	14.26				1,079,202			$	12.61				960,102			$	11.94

      The following table summarizes information about the stock options outstanding at December 29, 2002:

Options Outstanding														Options Exercisable
						Wtd. Avg.				Wtd. Avg.								Wtd. Avg.
		Number				Remaining				Exercise				Number				Exercise
Exercise Prices		Outstanding				Contractual Life				Price				Exercisable				Price
$ 3.75 — $ 3.75			81,406				1.4			$	3.75				81,406			$	3.75
$ 7.88 — $ 9.30			467,300				7.6				8.85				467,300				8.85
$11.88 – $13.75			77,000				3.5				11.94				77,000				11.94
$14.69 – $16.88			354,000				8.9				15.38				354,000				15.38
$18.38 – $21.50			248,600				5.5				19.56				248,600				19.56
$22.63 – $25.06			169,500				4.7				24.31				169,500				24.31
$26.13 – $26.88			12,500				5.5				26.28				12,500				26.28
			1,410,306				6.6			$	14.26				1,410,306			$	14.26

      The Company had 148,674 options available to be granted at December 29, 2002 under the aforementioned stock plans.

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      The Company accounts for these plans under APB Opinion No. 25, under which no compensation cost has been recognized. Had compensation cost for these plans been determined based on the fair value at date of grant in accordance with FASB Statement No. 123, the Company’s net income and earnings per share would have been reduced to the pro forma amounts as follows:

Pro Forma Disclosures		2002				2001				2000
		(In thousands, except per share data)
Pro forma net income			$20,441				$18,401				$15,872
Pro forma basic net earnings per share			$  0.97				$  0.88				$  0.75
Pro forma diluted net earnings per share			$  0.96				$  0.87				$  0.75
Pro forma weighted average fair value of options granted			$  5.25				$  5.15				$  4.90
Risk free interest rates			2.37%–3.47%				4.61%–5.04%				5.77%–6.70%
Expected lives			4-8 years				4-8 years				4-8 years
Expected volatility			49%				52%				54%

14. Retirement and Deferred Compensation Plans

      The Company has two noncontributory defined benefit pension plans covering certain of its executives. Retirement benefits are based on years of service, employees’ average compensation for the last five years prior to retirement and social security benefits. Currently, the plans are not funded. The Company purchases and is the beneficiary of life insurance policies for certain participants enrolled in the plans.

      The assumptions for the discount rate and the average increase in compensation used in determining the pension expense and funded status information are 6.5% and 5.5%, respectively. Prior to 2001, the Company used a discount rate of 7.5%.

      The total pension expense for 2002, 2001, and 2000 was $0.4 million, $0.2 million, and $0.4 million, respectively. The accumulated benefit obligation at year-end 2002 and 2001 was $0.5 million and $0.2 million, respectively and is included in “Other liabilities” in the accompanying consolidated balance sheets.

      In 2001, the Company established non-qualified deferred compensation agreements with three key executives providing for fixed annual benefits ranging from $150,000 to $250,000 payable upon retirement at age 60 for a period of 25 years. In March 2002, the Company and the executives agreed to amend the retirement agreements to provide for a lump sum payment at an accelerated retirement age of 55 and to enter into employment agreements upon a change in control.

      The Merger between TWC and Group 4 Falck triggered change in control provisions in the three key executives’ employment and retirement agreements. The employment agreements entitle the executives, if they remain employed by the Company for at least two years following the Merger, to twenty-four consecutive monthly payments equal, in total, to three times each executive’s 2002 salary plus bonus. In addition, the change in control accelerated the executive’s eligibility for retirement from age 60 to 55 and provided for a one-time payment at age 55 to the executive based on the net present value of the benefit, as defined by the executive retirement agreement.

      The cost of these revised agreements is being charged to expense and accrued using a present value method over the expected remaining terms of employment. The charge to expense for the amended agreements for 2002 was $3.1 million. Currently, the plan is not funded. Subsequent to year-end, the Company and the executives amended the agreements to defer the retirement payment until the respective executives actually retire, no sooner than age 55. The Company expects to payout approximately $3.1 million related to the change in control provisions per the employment agreements in 2003 and approximately $1.3 million in 2004.

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      The accumulated benefit obligation of $7.1 million and $4.1 million at year-end 2002 and 2001 is included in “Other liabilities” in the accompanying consolidated balance sheet. The unamortized prior service cost of $1 million is included in “Other noncurrent assets” in the accompanying consolidated financial statements and is being amortized over the estimated remaining service periods ranging from three to thirteen years.

      The Company has established a deferred compensation agreement for non-employee directors, which allows eligible directors to defer their compensation in either the form of cash or stock. Participants may elect lump sum or monthly payments to be made at least one year after the deferral is made or at the time the participant ceases to be a director. The Company recognized total compensation expense under this plan of zero, $0.1 million and $0.2 million for 2002, 2001, and 2000, respectively. Payouts under the plan were approximately $0.1 million in 2002. The liability for the deferred compensation was $0.4 million and $0.5 million at year-end 2002 and 2001, respectively, and is included in “Accrued expenses” in the accompanying consolidated balance sheets.

      The Company also has a non-qualified deferred compensation plan for employees who are ineligible to participate in the Company’s qualified 401(k) plan. Eligible employees may defer a fixed percentage of their salary, which earns interest at a rate equal to the prime rate less 0.75%. The Company matches employee contributions up to $400 each year based on the employee’s years of service. Payments will be made at retirement age of 65 or at termination of employment. The expense recognized by the Company in 2002, 2001, and 2000 was $0.2 million, $0.3 million and $0.4 million, respectively. The liability for this plan at year-end 2002 and 2001 was $1.3 million and $1.1 million, respectively, and is included in “Accrued expenses” in the accompanying consolidated balance sheets.

15. Selected Quarterly Financial Data (Unaudited)

      Selected quarterly financial data for the Company and its subsidiaries for the fiscal years ended December 29, 2002 and December 30, 2001, is as follows:

		First				Second				Third				Fourth
2002		Quarter				Quarter				Quarter				Quarter
		(In thousands, except per share data)
Revenues		$	140,182			$	141,192			$	141,706			$	145,532
Operating income		$	5,918			$	7,483			$	7,613			$	6,862
Net income		$	5,183			$	5,405			$	5,358			$	5,555
Basic earnings per share		$	0.25			$	0.26			$	0.25			$	0.26
Diluted earnings per share		$	0.24			$	0.25			$	0.25			$	0.26
2001
Revenues		$	135,003			$	141,715			$	142,207			$	143,148
Operating income		$	2,543			$	6,417			$	9,046			$	6,178
Net income		$	2,632			$	5,323			$	5,843			$	5,581
Basic earnings per share		$	0.13			$	0.25			$	0.28			$	0.27
Diluted earnings per share		$	0.12			$	0.25			$	0.27			$	0.26

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REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

The Board of Directors and Shareholders
Wackenhut Corrections Corporation

      We have audited the accompanying consolidated balance sheet of Wackenhut Corrections Corporation as of December 29, 2002, and the related consolidated statements of income, cash flows and shareholders’ equity for the year then ended. The consolidated financial statements of the Company as of December 30, 2001 and for each of the two years in the period ended December 30, 2001 were audited by other auditors who have ceased operations and whose report dated February 6, 2002, expressed an unqualified opinion on those statements. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

      We conducted our audit in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

      In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Wackenhut Corrections Corporation as of December 29, 2002, and the consolidated results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States.

      As discussed in Note 1 to the consolidated financial statements, effective December 31, 2001, the Company changed its method of accounting for goodwill and other intangible assets.

      As discussed above, the consolidated financial statements of the Company as of December 30, 2001 and for each of the two years in the period ended December 30, 2001 were audited by other auditors who have ceased operations. As described in Note 1, these financial statements have been revised to include the transitional disclosures required by Statement of Financial Accounting Standards (Statement) No. 142, Goodwill and Other Intangible Assets, which was adopted by the Company as of December 31, 2001. Our audit procedures with respect to the disclosures in Note 1 with respect to 2001 and 2000 included (a) agreeing the previously reported net income to the previously issued financial statements and the adjustments to reported net income representing amortization expense (including any related tax effects) recognized in those periods related to goodwill and goodwill related to equity investees to the Company’s underlying records obtained from management, and (b) testing the mathematical accuracy of the reconciliation of adjusted net income to reported net income, and the related earnings-per-share amounts. In our opinion, the disclosures for 2001 and 2000 in Note 1 are appropriate. However, we were not engaged to audit, review, or apply any procedures to the 2001 and 2000 financial statements of the Company other than with respect to such disclosures and, accordingly, we do not express an opinion or any other form of assurance on the 2001 and 2000 financial statements taken as a whole.

ERNST & YOUNG LLP

West Palm Beach, Florida

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      THIS REPORT IS A COPY OF A REPORT PREVIOUSLY ISSUED BY ARTHUR ANDERSEN LLP. THE REPORT HAS NOT BEEN REISSUED BY ARTHUR ANDERSEN LLP NOR HAS ARTHUR ANDERSEN LLP PROVIDED A CONSENT TO THE INCLUSION OF ITS REPORT IN THIS FORM 10-K.

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To Wackenhut Corrections Corporation:

      We have audited the accompanying consolidated balance sheets of Wackenhut Corrections Corporation (a Florida corporation) and subsidiaries as of December 30, 2001 and December 31, 2000, and the related consolidated statements of operations, stockholders’ equity and comprehensive income and cash flows for each of the three fiscal years in the period ended December 30, 2001. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

      We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

      In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Wackenhut Corrections Corporation and subsidiaries as of December 30, 2001 and December 31 2000, and the results of their operations and their cash flows for each of the three years in the period ended December 30, 2001 in conformity with accounting principles generally accepted in the United States.

      As discussed in Note 2 to the financial statements, effective January 1, 2001, the Company changed its method of accounting for derivative instruments.

ARTHUR ANDERSEN LLP

West Palm Beach, Florida,

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MANAGEMENT’S RESPONSIBILITY FOR FINANCIAL STATEMENTS

To the Shareholders of
Wackenhut Corrections Corporation:

      The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States. They include amounts based on judgments and estimates.

      Representation in the consolidated financial statements and the fairness and integrity of such statements are the responsibility of management. In order to meet management’s responsibility, the Company maintains a system of internal controls and procedures and a program of internal audits designed to provide reasonable assurance that the Company’s assets are controlled and safeguarded, that transactions are executed in accordance with management’s authorization and properly recorded, and that accounting records may be relied upon in the preparation of financial statements.

      The consolidated financial statements have been audited by Ernst & Young LLP, independent certified public accountants, whose appointment was ratified by the Company’s shareholders. Their report expresses a professional opinion as to whether management’s consolidated financial statements considered in their entirety present fairly, in conformity with accounting principles generally accepted in the United States, the Company’s financial position and results of operations. Their audit was conducted in accordance with auditing standards generally accepted in the United States. As part of this audit, Ernst & Young LLP considered the Company’s system of internal controls to the degree they deemed necessary to determine the nature, timing, and extent of their audit tests which support their opinion on the consolidated financial statements.

      The Audit Committee of the Board of Directors meets periodically with representatives of management, the independent certified public accountants and the Company’s internal auditors to review matters relating to financial reporting, internal accounting controls and auditing. Both the internal auditors and the independent certified public accountants have unrestricted access to the Audit Committee to discuss the results of their reviews.

	GEORGE C. ZOLEY
	Chairman and Chief Executive Officer
	WAYNE H. CALABRESE
	Vice Chairman, President and Chief Operating Officer
	JOHN G. O’ROURKE
	Senior Vice President
	Chief Financial Officer and Treasurer

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Item 9. Changes in and Disagreements With Accountants on Accounting and Financial Disclosure

      None.

PART III

      The information required by Items 10, 11, 12, and 13 of Form 10-K (except such information as is furnished in a separate caption “Executive Officers of the Company” and included below) will be contained in, and is incorporated by reference from, the proxy statement (with the exception of the Board Compensation Committee Report and the Performance Graph) for the Company’s 2002 Annual Meeting of Shareholders, which will be filed with the Securities and Exchange Commission pursuant to Regulation 14A within 120 days after the end of the fiscal year covered by this Annual Report.

PART IV

Item 14. Controls and Procedures

      (a) Evaluation of Disclosure Controls and Procedures

      Within the 90 days prior to the date of this Annual Report, the Company carried out an evaluation, under the supervision and with the participation of its management, including the Company Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of the Company’s disclosure controls and procedures pursuant to Securities Exchange Act Rule 13-a-14(c) and 15d-14(c). Based upon that evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the Company’s disclosure controls and procedures were effective as of the date of their evaluation in timely alerting them to material information relating to the Company (including its consolidated subsidiaries) required to be included in this Annual Report.

      (b) Changes in Internal Controls

      There were no significant changes in the Company’s internal controls or in other factors that could significantly affect such internal controls subsequent to the date of the evaluation described in paragraph (a) above. As a result, no corrective actions were required or undertaken.

Item 15. Exhibits, Financial Statement Schedules, and Reports on Form 8-K

      (a) 1. Financial Statements.

	Report of Independent Certified Public Accountants — Page 60
	Consolidated Balance Sheets — December 29, 2002 and December 30, 2001 — Page 36
	Consolidated Statements of Income — Fiscal years ended December 29, 2002, December 30, 2001, and December 31, 2000 — Page 35
	Consolidated Statements of Cash Flows — Fiscal years ended December 29, 2002, December 30, 2001, and December 31, 2000 — Page 37
	Consolidated Statements of Shareholders’ Equity and Comprehensive Income — Fiscal years ended December 29, 2002, December 30, 2001, and December 31, 2000 — Page 38
	Notes to Consolidated Financial Statements — Pages 39 through 59

          2. Financial Statement Schedules.

	Schedule II — Valuation and Qualifying Accounts — Page 71
	All other schedules specified in the accounting regulations of the Securities and Exchange Commission have been omitted because they are either inapplicable or not required.

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      3. Exhibits. The following exhibits are filed as part of this Annual Report:

Exhibit
Number						Description
	3.1**			—		Amended and Restated Articles of Incorporation of Wackenhut Corrections Corporation, dated May 16, 1994.
	3.2**			—		Bylaws of Wackenhut Corrections Corporation.
	4.1			—		Credit Agreement, dated December 12, 2002, by and among Wackenhut Corrections Corporation, Wachovia Bank, National Association, as Administrative Agent, BNP Paribas, as Syndication Agent, and the lenders who are, or may from time to time become, a party thereto (incorporated herein by reference to exhibit of the same number filed in Wackenhut Corrections Corporation’s report on Form 8-K, dated December 27, 2002).
	4.2*			—		First Amendment to Credit Agreement, dated January 10, 2003, by and among Wackenhut Corrections Corporation, Wachovia Bank, National Association, as Administrative Agent, and BNP Paribas, as Syndication Agent.
	10.1†**			—		Wackenhut Corrections Corporation Stock Option Plan.
	10.2†**			—		Wackenhut Corrections Corporation 1994 Stock Option Plan.
	10.3†**			—		Form of Indemnification Agreement between Wackenhut Corrections Corporation and its Officers and Directors.
	10.4†***			—		Wackenhut Corrections Corporation Senior Officer Retirement Plan.
	10.5†***			—		Wackenhut Corrections Corporation Director Deferral Plan.
	10.6†***			—		Wackenhut Corrections Corporation Senior Officer Incentive Plan.
	10.7			—		Lease Agreement, effective as of January 3, 1994, between Wackenhut Corrections Corporation and The Wackenhut Corporation (incorporated by reference to Exhibit 10.5 of Wackenhut Corrections Corporation’s Registration Statement on Form S-1, as amended, Registration Number 33-79264).
	10.8*			—		Wackenhut Corrections Corporation Nonemployee Director Stock Option Plan, as amended October 29, 1996.
	10.9****			—		Form of Master Agreement to Lease between CPT Operating Partnership L.P. and Wackenhut Corrections Corporation; Form of Lease Agreement between CPT Operating Partnership L.P. and Wackenhut Corrections Corporation; Form Right to Purchase Agreement between Wackenhut Corrections Corporation and CPT Operating Partnership L.P.; and, Form of Option Agreement between Wackenhut Corrections Corporation and CPT Operating Partnership L.P.
	10.10†			—		Wackenhut Corrections Corporation 1999 Stock Option Plan (incorporated by reference to Exhibit 10.12 of Wackenhut Corrections Corporation’s report on Form 10-K, dated March 30, 2000).
	10.11†			—		Senior Officer Retirement Agreement (incorporated by reference to Exhibit 10.1 of Wackenhut Corrections Corporation’s report on Form 10-Q, dated August 10, 2001).
	10.12†			—		Executive Employment Agreement, dated March 7, 2002, between Wackenhut Corrections Corporation and Dr. George C. Zoley (incorporated herein by reference to Exhibit 10.15 filed in Wackenhut Corrections Corporation’s report on Form 10-Q, dated May 15, 2002).
	10.13†			—		Executive Employment Agreement, dated March 7, 2002, between Wackenhut Corrections Corporation and Wayne H. Calabrese (incorporated herein by reference to Exhibit 10.16 filed in Wackenhut Corrections Corporation’s report on Form 10-Q, dated May 15, 2002).
	10.14†			—		Executive Employment Agreement, dated March 7, 2002, between Wackenhut Corrections Corporation and John G. O’Rourke (incorporated herein by reference to Exhibit 10.17 filed in Wackenhut Corrections Corporation’s report on Form 10-Q, dated May 15, 2002).
	10.15†			—		Executive Retirement Agreement, dated March 7, 2002, between Wackenhut Corrections Corporation and Dr. George C. Zoley (incorporated herein by reference to Exhibit 10.18 filed in Wackenhut Corrections Corporation’s report on Form 10-Q, dated May 15, 2002).
	10.16†			—		Executive Retirement Agreement, dated March 7, 2002, between Wackenhut Corrections Corporation and Wayne H. Calabrese (incorporated herein by reference to Exhibit 10.19 filed in Wackenhut Corrections Corporation’s report on Form 10-Q, dated May 15, 2002).
	10.17†			—		Executive Retirement Agreement, dated March 7, 2002, between Wackenhut Corrections Corporation and John G. O’Rourke (incorporated herein by reference to Exhibit 10.20 filed in Wackenhut Corrections Corporation’s report on Form 10-Q, dated May 15, 2002).

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Exhibit
Number						Description
	10.18*			—		Amended Executive Retirement Agreement, dated January 17, 2003, by and between Wackenhut Corrections Corporation and George C. Zoley.
	10.19*			—		Amended Executive Retirement Agreement, dated January 17, 2003, by and between Wackenhut Corrections Corporation and Wayne H. Calabrese.
	10.20*			—		Amended Executive Retirement Agreement, dated January 17, 2003, by and between Wackenhut Corrections Corporation and John G. O’Rourke.
	10.21			—		Agreement, dated as of March 8, 2002, by and among Group 4 Falck A/S, Wackenhut Corrections Corporation and The Wackenhut Corporation (incorporated by reference to Exhibit 10.1 in Wackenhut Corrections Corporation’s Form 8-K, dated March 8, 2002).
	10.22*			—		Office Lease, dated September 12, 2002, by and between Wackenhut Corrections Corporation and Canpro Investments Ltd.
	10.23*			—		Services Agreement, dated as of October 28, 2002, between Wackenhut Corrections Corporation and The Wackenhut Corporation.
	21.1*			—		Subsidiaries of Wackenhut Corrections Corporation.
	23.1*			—		Consent of Independent Certified Public Accountants.
	24.1*			—		Powers of Attorney (included as part of the signature page hereto).
	99.1*			—		CEO Certification.
	99.2*			—		CFO Certification.

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*	Filed herewith.
**	Incorporated herein by reference to exhibit of the same number filed in Wackenhut Corrections Corporation’s Registration Statement, as amended, on Form S-1 (Registration Number 33-79264).
***	Incorporated herein by reference to exhibit of the same number filed in Wackenhut Corrections Corporation’s Registration Statement, as amended, on Form S-1 (Registration Number 33-80785).
****	Incorporated by reference to Exhibits 10.2, 10.3, 10.4, and 10.5 of Wackenhut Corrections Corporation’s Registration Statement on Form S-3 (Registration Number 333-46681).

†	Management contract or compensatory plan, contract or agreement as defined in Item 402(a)(3) of Regulation S-K.

      (b) Reports on Form 8-K. Wackenhut Corrections Corporation filed a Form 8-K, Item 2, on December 27, 2002.

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SIGNATURES

      Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	WACKENHUT CORRECTIONS CORPORATION
	/s/ JOHN G. O’ROURKE
	John G. O’Rourke
	Senior Vice President of Finance, Treasurer &
	Chief Financial Officer

      Each person whose signature appears below hereby constitutes and appoints John G. O’Rourke, Senior Vice President of Finance, Treasurer and Chief Financial Officer; David N.T. Watson, Vice President of Finance, Chief Accounting Officer, Assistant Secretary, and Assistant Treasurer; and John J. Bulfin, Senior Vice President, General Counsel and Corporate Secretary; and each of them, the true and lawful attorneys-in-fact and agents of the undersigned, with full power undersigned, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, and hereby grants to such attorneys-in-fact and agents, and each of them, full power and authority to do and perform each and every act and thing requisite and necessary to be done, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or any of them, or their or his substitute or substitutes, may lawfully do or cause to be done by virtue thereof.

      Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Company and in the capacities and on the dates indicated.

		Signature		Title		Date
* George C. Zoley				Chairman of the Board and Chief Executive Officer (principal executive officer)		March 20, 2003
/s/ JOHN G. O’ROURKE John G. O’Rourke				Senior Vice President of Finance, Treasurer & Chief Financial Officer (principal financial officer)		March 20, 2003
/s/ DAVID N.T. WATSON David N.T. Watson				Vice President of Finance, Chief Accounting Officer, Assistant Secretary & Assistant Treasurer (principal accounting officer)		March 20, 2003
* Lars Norby Johansen				Director		March 20, 2003
* Soren Lundsberg-Nielsen				Director		March 20, 2003
* Wayne H. Calabrese				Vice Chairman of the Board, President and Director		March 20, 2003

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		Signature		Title		Date
* Norman A. Carlson				Director		March 20, 2003
* Benjamin R. Civiletti				Director		March 20, 2003
* Anne N. Foreman				Director		March 20, 2003
* G. Fred DiBona, Jr.				Director		March 20, 2003
* Richard H. Glanton				Director		March 20, 2003
*By: /s/ JOHN G. O’ROURKE John G. O’Rourke Attorney-in-fact

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CERTIFICATIONS

I, George C. Zoley, certify that:

1.	I have reviewed this annual report on Form 10-K of Wackenhut Corrections Corporation (the “Company”);
2.	Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;
3.	Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this annual report;
4.	The Company’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the Company and have:

	a)	Designed such disclosure controls and procedures to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;
	b)	Evaluated the effectiveness of the Company’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the “Evaluation Date”); and
	c)	Presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5.	The Company’s other certifying officers and I have disclosed, based on our most recent evaluation, to the Company’s auditors and the audit committee of the Company’s Board of Directors (or persons performing the equivalent function):

	a)	All significant deficiencies in the design or operation of internal controls which could adversely affect the Company’s ability to record, process, summarize and report financial data and have identified for the Company’s auditors any material weaknesses in internal controls; and
	b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal controls; and

6.	The Company’s other certifying officers and I have indicated in this annual report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weakness.

Date: March 20, 2003		/s/ GEORGE C. ZOLEY George C. Zoley Chief Executive Officer

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CERTIFICATIONS

I, John G. O’Rourke, certify that:

1.	I have reviewed this annual report on Form 10-K of Wackenhut Corrections Corporation (the “Company”);
2.	Based on my knowledge, this annual report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this annual report;
3.	Based on my knowledge, the financial statements, and other financial information included in this annual report, fairly present in all material respects the financial condition, results of operations and cash flows of the Company as of, and for, the periods presented in this annual report;
4.	The Company’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the Company and have:

	a)	Designed such disclosure controls and procedures to ensure that material information relating to the Company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this annual report is being prepared;
	b)	Evaluated the effectiveness of the Company’s disclosure controls and procedures as of a date within 90 days prior to the filing date of this annual report (the “Evaluation Date”); and
	c)	Presented in this annual report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;

5.	The Company’s other certifying officers and I have disclosed, based on our most recent evaluation, to the Company’s auditors and the audit committee of the Company’s Board of Directors (or persons performing the equivalent function):

	a)	All significant deficiencies in the design or operation of internal controls which could adversely affect the Company’s ability to record, process, summarize and report financial data and have identified for the Company’s auditors any material weaknesses in internal controls; and
	c)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the Company’s internal controls; and

6.	The Company’s other certifying officers and I have indicated in this annual report whether there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weakness.

Date: March 20, 2003		/s/ JOHN G. O’ROURKE John G. O’Rourke Chief Financial Officer

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REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

The Board of Directors and Shareholders
Wackenhut Corrections Corporation

      We have audited the accompanying consolidated balance sheet of Wackenhut Corrections Corporation as of December 29, 2002, and the related consolidated statements of income, cash flows and shareholders’ equity for the year then ended. The consolidated financial statements of the Company as of December 30, 2001 and for each of the two years in the period ended December 30, 2001 were audited by other auditors who have ceased operations and whose report dated February 6, 2002 expressed an unqualified opinion on those statements. Our audit also included the 2002 financial information included in the financial statement schedule listed in the Index at Item 15(a). These financial statements and schedule are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements and schedule based on our audit.

      We conducted our audit in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

      In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Wackenhut Corrections Corporation at December 29, 2002, and the consolidated results of its operations and its cash flows for the year then ended, in conformity with accounting principles generally accepted in the United States. Also, in our opinion, the related 2002 financial information included in the financial statement schedule, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

      As discussed in Note 2 to the consolidated financial statements, effective December 31, 2001, the Company changed its method of accounting for goodwill and other intangible assets.

      As discussed above, the consolidated financial statements of the Company as of December 30, 2001 and for each of the two years in the period ended December 30, 2001 were audited by other auditors who have ceased operations. As described in Note 2, these financial statements have been revised to include the transitional disclosures required by Statement of Financial Accounting Standards (Statement) No. 142, Goodwill and Other Intangible Assets, which was adopted by the Company as of December 31, 2001. Our audit procedures with respect to the disclosures in Note 2 with respect to 2001 and 2000 included (a) agreeing the previously reported net income to the previously issued financial statements and the adjustments to reported net income representing amortization expense (including any related tax effects) recognized in those periods related to goodwill and goodwill related to equity investees to the Company’s underlying records obtained from management, and (b) testing the mathematical accuracy of the reconciliation of adjusted net income to reported net income, and the related earnings-per-share amounts. In our opinion, the disclosures for 2001 and 2000 in Note 2 are appropriate. However, we were not engaged to audit, review, or apply any procedures to the 2001 and 2000 consolidated financial statements of the Company other than with respect to such disclosures and, accordingly, we do not express an opinion or any other form of assurance on the 2001 and 2000 consolidated financial statements taken as a whole.

ERNST & YOUNG LLP

West Palm Beach, Florida

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      THIS REPORT IS A COPY OF A REPORT PREVIOUSLY ISSUED BY ARTHUR ANDERSEN LLP. THE REPORT HAS NOT BEEN REISSUED BY ARTHUR ANDERSEN LLP NOR HAS ARTHUR ANDERSEN LLP PROVIDED A CONSENT TO THE INCLUSION OF ITS REPORT IN THIS FORM 10-K.

REPORT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

To Wackenhut Corrections Corporation:

      We have audited in accordance with auditing standards generally accepted in the United States, the consolidated financial statements included in Wackenhut Corrections Corporation’s 2001 Annual Report to Shareholders included in this Form 10-K, and have issued our report thereon dated February 6, 2002. Our audits were made for the purpose of forming an opinion on those statements taken as a whole. The schedule listed above in item 14(a)2 of the Company’s Annual Report on Form 10-K for the fiscal year ended December 30, 2001 is the responsibility of the Company’s management and is presented for purposes of complying with the Securities and Exchange Commission’s rules and is not part of the basic consolidated financial statements. This schedule has been subjected to the auditing procedures applied in the audits of the basic consolidated financial statements and, in our opinion, fairly states in all material respects the financial data required to be set forth therein in relation to the basic consolidated financial statements taken as a whole.

ARTHUR ANDERSEN LLP

West Palm Beach, Florida,

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SCHEDULE II

WACKENHUT CORRECTIONS CORPORATION

VALUATION AND QUALIFYING ACCOUNTS

															Deductions,
			Balance at				Charged to				Charged				Actual				Balance at
			Beginning				Cost and				to Other				Charge-				End of
Description			of Period				Expenses				Accounts				Offs				Period
			(In thousands)
Year Ended December 29, 2002:
	Allowance for doubtful accounts		$	2,557			$	2,368			$	—			$	(3,281	)		$	1,644
Year Ended December 30, 2001:
	Allowance for doubtful accounts		$	1,262			$	3,636			$	—			$	(2,341	)		$	2,557
Year Ended December 31, 2000:
	Allowance for doubtful accounts		$	1,499			$	1,755			$	—			$	(1,992	)		$	1,262

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EXHIBIT INDEX

Exhibit
Number						Description
	3.1**			—		Amended and Restated Articles of Incorporation of Wackenhut Corrections Corporation, dated May 16, 1994.
	3.2**			—		Bylaws of Wackenhut Corrections Corporation.
	4.1			—		Credit Agreement, dated December 12, 2002, by and among Wackenhut Corrections Corporation, Wachovia Bank, National Association, as Administrative Agent, BNP Paribas, as Syndication Agent, and the lenders who are, or may from time to time become, a party thereto (incorporated herein by reference to exhibit of the same number filed in Wackenhut Corrections Corporation’s report on Form 8-K, dated December 27, 2002).
	4.2*			—		First Amendment to Credit Agreement, dated January 10, 2003, by and among Wackenhut Corrections Corporation, Wachovia Bank, National Association, as Administrative Agent, and BNP Paribas, as Syndication Agent.
	10.1†**			—		Wackenhut Corrections Corporation Stock Option Plan.
	10.2†**			—		Wackenhut Corrections Corporation 1994 Stock Option Plan.
	10.3†**			—		Form of Indemnification Agreement between Wackenhut Corrections Corporation and its Officers and Directors.
	10.4†***			—		Wackenhut Corrections Corporation Senior Officer Retirement Plan.
	10.5†***			—		Wackenhut Corrections Corporation Director Deferral Plan.
	10.6†***			—		Wackenhut Corrections Corporation Senior Officer Incentive Plan.
	10.7			—		Lease Agreement, effective as of January 3, 1994, between Wackenhut Corrections Corporation and The Wackenhut Corporation (incorporated by reference to Exhibit 10.5 of Wackenhut Corrections Corporation’s Registration Statement on Form S-1, as amended, Registration Number 33-79264).
	10.8*			—		Wackenhut Corrections Corporation Nonemployee Director Stock Option Plan, as amended October 29, 1996.
	10.9****			—		Form of Master Agreement to Lease between CPT Operating Partnership L.P. and Wackenhut Corrections Corporation; Form of Lease Agreement between CPT Operating Partnership L.P. and Wackenhut Corrections Corporation; Form Right to Purchase Agreement between Wackenhut Corrections Corporation and CPT Operating Partnership L.P.; and, Form of Option Agreement between Wackenhut Corrections Corporation and CPT Operating Partnership L.P.
	10.10†			—		Wackenhut Corrections Corporation 1999 Stock Option Plan (incorporated by reference to Exhibit 10.12 of Wackenhut Corrections Corporation’s report on Form 10-K, dated March 30, 2000).
	10.11†			—		Senior Officer Retirement Agreement (incorporated by reference to Exhibit 10.1 of Wackenhut Corrections Corporation’s report on Form 10-Q, dated August 10, 2001).
	10.12†			—		Executive Employment Agreement, dated March 7, 2002, between Wackenhut Corrections Corporation and Dr. George C. Zoley (incorporated herein by reference to Exhibit 10.15 filed in Wackenhut Corrections Corporation’s report on Form 10-Q, dated May 15, 2002).
	10.13†			—		Executive Employment Agreement, dated March 7, 2002, between Wackenhut Corrections Corporation and Wayne H. Calabrese (incorporated herein by reference to Exhibit 10.16 filed in Wackenhut Corrections Corporation’s report on Form 10-Q, dated May 15, 2002).
	10.14†			—		Executive Employment Agreement, dated March 7, 2002, between Wackenhut Corrections Corporation and John G. O’Rourke (incorporated herein by reference to Exhibit 10.17 filed in Wackenhut Corrections Corporation’s report on Form 10-Q, dated May 15, 2002).
	10.15†			—		Executive Retirement Agreement, dated March 7, 2002, between Wackenhut Corrections Corporation and Dr. George C. Zoley (incorporated herein by reference to Exhibit 10.18 filed in Wackenhut Corrections Corporation’s report on Form 10-Q, dated May 15, 2002).
	10.16†			—		Executive Retirement Agreement, dated March 7, 2002, between Wackenhut Corrections Corporation and Wayne H. Calabrese (incorporated herein by reference to Exhibit 10.19 filed in Wackenhut Corrections Corporation’s report on Form 10-Q, dated May 15, 2002).
	10.17†			—		Executive Retirement Agreement, dated March 7, 2002, between Wackenhut Corrections Corporation and John G. O’Rourke (incorporated herein by reference to Exhibit 10.20 filed in Wackenhut Corrections Corporation’s report on Form 10-Q, dated May 15, 2002).

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Exhibit
Number						Description
	10.18*			—		Amended Executive Retirement Agreement, dated January 17, 2003, by and between Wackenhut Corrections Corporation and George C. Zoley.
	10.19*			—		Amended Executive Retirement Agreement, dated January 17, 2003, by and between Wackenhut Corrections Corporation and Wayne H. Calabrese.
	10.20*			—		Amended Executive Retirement Agreement, dated January 17, 2003, by and between Wackenhut Corrections Corporation and John G. O’Rourke.
	10.21			—		Agreement, dated as of March 8, 2002, by and among Group 4 Falck A/S, Wackenhut Corrections Corporation and The Wackenhut Corporation (incorporated by reference to Exhibit 10.1 in Wackenhut Corrections Corporation’s Form 8-K, dated March 8, 2002).
	10.22*			—		Office Lease, dated September 12, 2002, by and between Wackenhut Corrections Corporation and Canpro Investments Ltd.
	10.23*			—		Services Agreement, dated as of October 28, 2002, between Wackenhut Corrections Corporation and The Wackenhut Corporation.
	21.1*			—		Subsidiaries of Wackenhut Corrections Corporation.
	23.1*			—		Consent of Independent Certified Public Accountants.
	24.1*			—		Powers of Attorney (included as part of the signature page hereto).
	99.1*			—		CEO Certification.
	99.2*			—		CFO Certification.

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*	Filed herewith.
**	Incorporated herein by reference to exhibit of the same number filed in Wackenhut Corrections Corporation’s Registration Statement, as amended, on Form S-1 (Registration Number 33-79264).
***	Incorporated herein by reference to exhibit of the same number filed in Wackenhut Corrections Corporation’s Registration Statement, as amended, on Form S-1 (Registration Number 33-80785).
****	Incorporated by reference to Exhibits 10.2, 10.3, 10.4, and 10.5 of Wackenhut Corrections Corporation’s Registration Statement on Form S-3 (Registration Number 333-46681).

†	Management contract or compensatory plan, contract or agreement as defined in Item 402(a)(3) of Regulation S-K.

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                                                                     EXHIBIT 4.2


                      FIRST AMENDMENT TO CREDIT AGREEMENT

         THIS FIRST AMENDMENT TO CREDIT AGREEMENT (this "Amendment") is made
and entered into as of this 10th day of January, 2003 by and among WACKENHUT
CORRECTIONS CORPORATION, a Florida corporation (the "Borrower"), WACHOVIA BANK,
NATIONAL ASSOCIATION, as administrative agent (the "Administrative Agent") and
BNP PARIBAS, as syndication agent (the "Syndication Agent").

                              Statement of Purpose

         Certain credit facilities have been extended to the Borrower pursuant
to the Credit Agreement dated as of December 12, 2002, by and among the
Borrower, the lenders party thereto, the Administrative Agent and the
Syndication Agent (as amended, restated, supplemented or otherwise modified
from time to time, the "Credit Agreement").

         The parties now desire to amend certain provisions of the Credit
Agreement in certain respects subject to the terms and conditions set forth
below.

         NOW THEREFORE, for good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the parties hereto agree as follows:

         1.       Capitalized Terms. All capitalized undefined terms used in
this Amendment shall have the meanings assigned thereto in the Credit
Agreement.

         2.       Amendments to Credit Agreement. The Credit Agreement is
hereby modified as follows:

         (a)      Amendments to Existing Definition. The definition of
"Business Day" which is set forth in Section 1.1 of the Credit Agreement is
hereby amended in its entirety as follows:

                  "Business Day" means (a) for all purposes other than as set
         forth in clause (b) below, any day other than a Saturday, Sunday or
         legal holiday on which banks in Charlotte, North Carolina and New
         York, New York, are open for the conduct of their domestic or
         international commercial banking business, as applicable, and (b) with
         respect to all notices and determinations in connection with, and
         payments of principal and interest on, any LIBOR Rate Loan, any day
         that is a Business Day described in clause (a) and that is also a day
         for trading by and between banks in Dollar deposits in the London
         interbank market. Notwithstanding the foregoing, with respect to any
         amount denominated or to be denominated in the euro, any reference to
         a "Business Day" shall be construed as a reference to a day (other
         than a Saturday or Sunday) on which banks are generally open for
         business in New York, New York and prime banks in London generally
         provide quotations for deposits denominated in the euro.

         (b)      Additional Defined Terms. Section 1.1 (Definitions) of the
Credit Agreement is amended by the addition of the following defined terms (in
alphabetical order):




                  "Alternative Currency" means (a) the euro, (b) the Pound
         Sterling, (c) the Australian Dollar, (d) the South African Rand and
         (e) with the prior written consent of the Issuing Lender, any other
         lawful currency (other than Dollars); provided that in each case of
         (a) through (e) above, such currency is freely transferable and
         convertible into Dollars in the United States currency market and
         freely available to an Issuing Lender in the London interbank deposit
         market.

                  "Alternative Currency Amount" means with respect to each
         Alternative Currency Letter of Credit, the amount of such Alternative
         Currency which is equivalent to the principal amount in Dollars of
         such Alternative Currency Letter of Credit at the most favorable spot
         exchange rate determined by the applicable Issuing Lender to be
         available to it at approximately 11:00 a.m. (Charlotte time) two (2)
         Business Days before such Alternative Currency Letter of Credit is
         issued or extended (or to be issued or extended). When used with
         respect to any other sum expressed in Dollars, "Alternative Currency
         Amount" shall mean the amount of such Alternative Currency which is
         equivalent to the amount so expressed in Dollars at the most favorable
         spot exchange rate determined by the applicable Issuing Lender to be
         available to it at the relevant time.

                  "Alternative Currency Letter of Credit" means any Letter of
         Credit denominated in an Alternative Currency and all such Alternative
         Currency Letters of Credit collectively as the context requires.

                  "Australian Dollars" means, at any time of determination, the
         then official currency of Australia.

                  "Dollar Amount" means (a) with respect to each Letter of
         Credit issued or extended (or to be issued or extended), in Dollars,
         the principal amount thereof and (b) with respect to each Alternative
         Currency Letter of Credit, the amount of Dollars which is equivalent
         to the face amount of such Letter of Credit, at the most favorable
         spot exchange rate determined by the applicable Issuing Lender at
         approximately 11:00 a.m. (the time of the Issuing Lender's
         Correspondent) two (2) Business Days before such Letter of Credit is
         issued or extended (or to be issued or extended). When used with
         respect to any other sum expressed in an Alternative Currency, "Dollar
         Amount" shall mean the amount of Dollars which is equivalent to the
         amount so expressed in such Alternative Currency at the most favorable
         spot exchange rate determined by the applicable Issuing Lender to be
         available to it at the relevant time.

                  "EMU" means economic and monetary union as contemplated in
         the Treaty on European Union.

                  "EMU Legislation" means legislative measures of the Council
         of European Union for the introduction of, change over to or operation
         of the euro.




                  "euro" means the single currency to which the Participating
         Member States of the European Union have converted.

                  "Issuing Lender's Correspondent" means, with respect to
         Wachovia, in its capacity as Issuing Lender, Wachovia Bank, National
         Association, London Branch, and with respect to BNP Paribas, BNP
         Paribas, New York Branch, or any other financial institution
         designated by the applicable Issuing Lender to act as its
         correspondent hereunder with respect to the issuance and payment of
         Alternative Currency Letters of Credit.

                  "Participating Member State" means each state so described in
         any EMU Legislation.

                  "Permitted Currency" means Dollars or any Alternative
         Currency, or each such currency, as the context requires.

                  "Pounds Sterling" means, at any time of determination, the
         then official currency of the United Kingdom of Great Britain and
         Northern Ireland.

                  "South African Rand" means, at any time of determination, the
         then official currency of South Africa.

                  "Treaty on European Union" means the Treaty of Rome of March
         25, 1957, as amended by the Single European Act of 1986 and the
         Maastricht Treaty (signed February 7, 1992), as amended from time to
         time.

         (c)      Additional Section 1.4 and Section 1.5. Article I
(Definitions) of the Credit Agreement is amended by the addition of the
following new Section 1.4 and Section 1.5:

                  SECTION 1.4   Effectiveness of Euro Provisions. With respect
         to any state (or the currency of such state) that is not a
         Participating Member State on the date of this Agreement, the
         provisions of Sections 3.8(a), 3.8(b) and 3.11 shall become effective
         in relation to such state (and the currency of such state) at and from
         the date on which such state becomes a Participating Member State.

                  SECTION 1.5   Currency Equivalents.

                  (a)      For purposes of Articles II, III and IV, the
         applicable outstanding amount of Letters of Credit and L/C Obligations
         shall be deemed to refer to the Dollar Amount thereof.

                  (b)      All Loans made under this Agreement, including,
         without limitation, Loans made to refund drawings made under
         Alternative Currency Letters of Credit, shall be made only in Dollars.


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         (d)      Amendment to Article III. Article III (Letter of Credit
Facility) of the Credit Agreement is hereby deleted in its entirety and the
following is substituted in lieu thereof.

                                  ARTICLE III

                           LETTER OF CREDIT FACILITY

                  SECTION 3.1   L/C Commitment. Subject to the terms and
         conditions hereof, the Issuing Lenders, in reliance on the agreements
         of the L/C Participants set forth in Section 3.4(a), agree to issue
         standby letters of credit ("Letters of Credit") for the account of the
         Borrower on any Business Day from the Closing Date through but not
         including the Revolving Credit Maturity Date in such form as may be
         approved from time to time by the applicable Issuing Lender; provided,
         that the Issuing Lenders shall have no obligation to issue any Letter
         of Credit if, after giving effect to such issuance, (a) the L/C
         Obligations would exceed the L/C Commitment or (b) the aggregate
         principal amount of outstanding Revolving Credit Loans, plus the
         aggregate principal amount of outstanding Swingline Loans, plus the
         aggregate amount of L/C Obligations would exceed the Revolving Credit
         Commitment. Each Letter of Credit shall (i) be denominated in a
         Permitted Currency, (ii) be in a minimum amount of $25,000 (or the
         Alternative Currency Amount thereof with respect to any Alternative
         Currency Letters of Credit), (iii) be a standby letter of credit
         issued to support obligations of the Borrower or any of its
         Subsidiaries, contingent or otherwise, incurred in the ordinary course
         of business, (iv) expire on a date satisfactory to the applicable
         Issuing Lender, which date shall be no later than the earlier of (A)
         one (1) year after the date of its issuance or (B) five (5) Business
         Days prior to the Revolving Credit Maturity Date and (v) be subject to
         the Uniform Customs and/or ISP98, as set forth in the Application or
         as determined by the applicable Issuing Lender and, to the extent not
         inconsistent therewith, the laws of the State of New York. The
         applicable Issuing Lender shall not at any time be obligated to issue
         any Letter of Credit hereunder if such issuance would conflict with,
         or cause the applicable Issuing Lender or any L/C Participant to
         exceed any limits imposed by, any Applicable Law. References herein to
         "issue" and derivations thereof with respect to Letters of Credit
         shall also include extensions or modifications of any existing Letters
         of Credit, unless the context otherwise requires.

                  SECTION 3.2   Procedure for Issuance of Letters of Credit. The
         Borrower may from time to time request that the applicable Issuing
         Lender issue a Letter of Credit by delivering to the applicable
         Issuing Lender at the applicable Lending Office an Application
         therefor, completed to the satisfaction of the applicable Issuing
         Lender, and such other certificates, documents and other papers and
         information as the applicable Issuing Lender may request (which
         information shall include the Permitted Currency in which the Letter
         of Credit shall be denominated). Upon receipt of any Application, the
         applicable Issuing Lender shall process such Application and the
         certificates, documents and other papers and information delivered to
         it in connection therewith in accordance with its


                                       3


         customary procedures and shall, subject to Section 3.1 and Article VI
         hereof, promptly issue the Letter of Credit requested thereby (but in
         no event shall the applicable Issuing Lender be required to issue any
         Letter of Credit earlier than (a) three (3) Business Days, with
         respect to a Letter of Credit denominated in Dollars, and (b) four (4)
         Business Days, with respect to an Alternative Currency Letter of
         Credit, after its receipt of the Application therefor and all such
         other certificates, documents and other papers and information
         relating thereto) by issuing the original of such Letter of Credit to
         the beneficiary thereof or as otherwise may be agreed by the
         applicable Issuing Lender and the Borrower. The applicable Issuing
         Lender shall promptly furnish to the Borrower a copy of such Letter of
         Credit and promptly notify each Lender of the issuance and upon
         request by any Lender, furnish to such Lender a copy of such Letter of
         Credit and the amount of such Lender's participation therein.

                  SECTION 3.3   Commissions and Other Charges.

                  (a)      The Borrower shall pay to the Administrative Agent,
         for the account of the applicable Issuing Lender and the L/C
         Participants, a letter of credit commission with respect to each
         Letter of Credit in an amount equal to the face amount of such Letter
         of Credit (reflected as the Dollar Amount thereof, as determined by
         the Administrative Agent) multiplied by the Applicable Margin with
         respect to Revolving Credit Loans that are LIBOR Rate Loans
         (determined on a per annum basis). Such commission shall be payable
         quarterly in arrears on the last Business Day of each calendar quarter
         and on the Revolving Credit Maturity Date and shall be payable in
         Dollars based upon the Dollar Amount of such Letters of Credit for
         such quarter, as determined by the Administrative Agent. The
         Administrative Agent shall, promptly following its receipt thereof,
         distribute to the applicable Issuing Lender and the L/C Participants
         all commissions received pursuant to this Section 3.3(a) in accordance
         with their respective Revolving Credit Commitment Percentages.

                  (b)      In addition to the foregoing commission, the
         Borrower shall pay the applicable Issuing Lender, for its own account,
         an issuance fee with respect to each Letter of Credit in an amount
         equal to the face amount of such Letter of Credit multiplied by one
         quarter of one percent (0.25%). Such issuance fee shall be payable
         upon issuance of each Letter of Credit and shall be payable in the
         Permitted Currency in which the applicable Letter of Credit is
         denominated.

                  (c)      In addition to the foregoing fees and commissions,
         the Borrower shall pay or reimburse the applicable Issuing Lender, for
         its own account, for such normal and customary costs and expenses as
         are incurred or charged by the applicable Issuing Lender in issuing,
         effecting payment under, amending or otherwise administering any
         Letter of Credit. Such costs and expenses shall be payable in the
         Permitted Currency in which the applicable Letter of Credit is
         denominated.


                                       4


                  SECTION 3.4   L/C Participations.

                  (a)      The Issuing Lenders irrevocably agree to grant and
         hereby grant to each L/C Participant, and, to induce the Issuing
         Lenders to issue Letters of Credit hereunder, each L/C Participant
         irrevocably agrees to accept and purchase and hereby accepts and
         purchases from the applicable Issuing Lender, on the terms and
         conditions hereinafter stated, for such L/C Participant's own account
         and risk an undivided interest equal to such L/C Participant's
         Revolving Credit Commitment Percentage in the applicable Issuing
         Lender's obligations and rights under and in respect of each Letter of
         Credit issued hereunder and the Dollar Amount of each draft paid by
         the applicable Issuing Lender thereunder. Each L/C Participant
         unconditionally and irrevocably agrees with the applicable Issuing
         Lender that, if a draft is paid under any Letter of Credit for which
         the applicable Issuing Lender is not reimbursed in full by the
         Borrower through a Revolving Credit Loan or otherwise in accordance
         with the terms of this Agreement, such L/C Participant shall pay to
         the applicable Issuing Lender upon demand at the applicable Issuing
         Lender's address for notices specified herein an amount equal to such
         L/C Participant's Revolving Credit Commitment Percentage of the Dollar
         Amount of such draft, or any part thereof, which is not so reimbursed.

                  (b)      Upon becoming aware of any amount required to be
         paid by any L/C Participant to the applicable Issuing Lender pursuant
         to Section 3.4(a) in respect of any unreimbursed portion of any
         payment made by the applicable Issuing Lender under any Letter of
         Credit, the applicable Issuing Lender shall notify each L/C
         Participant of the Dollar Amount and due date of such required payment
         and such L/C Participant shall pay to the applicable Issuing Lender
         the Dollar Amount specified on the applicable due date. If any such
         amount is paid to the applicable Issuing Lender after the date such
         payment is due, such L/C Participant shall pay to the applicable
         Issuing Lender on demand, in addition to such amount, the product of
         (i) such amount, times (ii) the daily average Federal Funds Rate as
         determined by the Administrative Agent during the period from and
         including the date such payment is due to the date on which such
         payment is immediately available to the applicable Issuing Lender,
         times (iii) a fraction the numerator of which is the number of days
         that elapse during such period and the denominator of which is 360. A
         certificate of the applicable Issuing Lender with respect to any
         amounts owing under this Section 3.4(b) shall be conclusive in the
         absence of manifest error. With respect to payment to the applicable
         Issuing Lender of the unreimbursed amounts described in this Section
         3.4(b), if the L/C Participants receive notice that any such payment
         is due (A) prior to 1:00 p.m. (Charlotte time) on any Business Day,
         such payment shall be due that Business Day, and (B) after 1:00 p.m.
         (Charlotte time) on any Business Day, such payment shall be due on the
         following Business Day.


                                       5


                  (c)      Whenever, at any time after the applicable Issuing
         Lender has made payment under any Letter of Credit and has received
         from any L/C Participant its Revolving Credit Commitment Percentage of
         such payment in accordance with this Section 3.4, the applicable
         Issuing Lender receives any payment related to such Letter of Credit
         (whether directly from the Borrower or otherwise), or any payment of
         interest on account thereof, the applicable Issuing Lender will
         distribute to such L/C Participant its pro rata share of the Dollar
         Amount thereof; provided, that in the event that any such payment
         received by the applicable Issuing Lender shall be required to be
         returned by the applicable Issuing Lender, such L/C Participant shall
         return to the applicable Issuing Lender the portion thereof previously
         distributed by the applicable Issuing Lender to it.

                  (d)      All payments made by any L/C Participant under this
         Section 3.4 shall be made in Dollars; provided that the Borrower shall
         be liable for any currency exchange loss pursuant to the terms of
         Section 3.10.

                  SECTION 3.5   Reimbursement of Letter of Credit Drawings.

                  (a)      Reimbursement Obligation of the Borrower. In the
         event of any drawing under any Letter of Credit, the Borrower agrees
         to reimburse (either with the proceeds of a Revolving Credit Loan as
         provided for in this Section 3.5 or with funds from other sources), in
         the same day funds in the applicable Permitted Currency in which such
         Letter of Credit was denominated, the Issuing Lender on each date on
         which the Issuing Lender notifies the Borrower of the date and amount
         of a draft paid under any Letter of Credit for the amount of (i) such
         draft so paid and (ii) any amounts referred to in Section 3.3(c)
         incurred by the Issuing Lender in connection with such payment (other
         then those payable pursuant to Section 3.5(c) below).

                  (b)      Reimbursement By the Lenders. Unless the Borrower
         shall immediately notify the Issuing Lender that the Borrower intends
         to reimburse the Issuing Lender for such drawing from other sources or
         funds, the Borrower shall be deemed to have timely given a Notice of
         Borrowing to the Administrative Agent requesting that the Lenders make
         a Revolving Credit Loan funded in Dollars bearing interest at the Base
         Rate on such date in the amount of (a) such draft so paid and (b) any
         amounts referred to in Section 3.3(c) incurred by the Issuing Lender in
         connection with such payment (including, without limitation, any and
         all costs, fees and other expenses incurred by the Issuing Lender in
         effecting the payment of any Letter of Credit denominated in an
         Alternative Currency), and the Lenders shall make a Revolving Credit
         Loan funded in Dollars bearing interest at the Base Rate in such
         amount, the proceeds of which shall be applied to reimburse the Issuing
         Lender for the amount of the related drawing and costs and expenses.
         Each Lender acknowledges and agrees that its obligation to fund a
         Revolving Credit Loan in accordance with this Section 3.5 to reimburse
         the Issuing Lender for any draft paid under a Letter of Credit is
         absolute and unconditional and shall not be affected by any
         circumstance whatsoever, including, without limitation,
         non-satisfaction of the


                                       6


         conditions set forth in Section 2.3(a) or Article VI. If the Borrower
         has elected to pay the amount of such drawing with funds from other
         sources and shall fail to reimburse the Issuing Lender as provided
         above, the unreimbursed amount of such drawing shall bear interest at
         the rate which would be payable on any outstanding Base Rate Loans
         which were then overdue from the date such amounts become payable
         (whether at stated maturity, by acceleration or otherwise) until
         payment in full.

                  (c)      Payment of Alternative Currency Letters of Credit.
         Each payment by the Borrower on account of any Alternative Currency
         Letter of Credit (including the Reimbursement Obligation with respect
         to any Alternative Currency Letter of Credit) shall be made in such
         Alternative Currency not later than 1:00 p.m. (the time of the Issuing
         Lender's Correspondent) on the date specified for payment under this
         Agreement to the Administrative Agent's account with the Issuing
         Lender's Correspondent for the account of the Issuing Lender in
         immediately available funds, and shall be made without any set-off,
         counterclaim or deduction whatsoever. Any payment received after such
         time but before 2:00 p.m. (the time of the Issuing Lender's
         Correspondent) on such day shall be deemed a payment on such date for
         the purposes of Section 12.1, but for all other purposes shall be
         deemed to have been made on the next succeeding Business Day. Any
         payment received after 2:00 p.m. (the time of the Issuing Lender's
         Correspondent) shall be deemed to have been made on the next
         succeeding Business Day for all purposes.

                  SECTION 3.6   Obligations Absolute. The Borrower's obligations
         under this Article III (including, without limitation, the
         Reimbursement Obligation) shall be absolute and unconditional under
         any and all circumstances and irrespective of any set-off,
         counterclaim or defense to payment which the Borrower may have or have
         had against the applicable Issuing Lender or any beneficiary of a
         Letter of Credit or any other Person. The Borrower also agrees that
         the applicable Issuing Lender and the L/C Participants shall not be
         responsible for, and the Borrower's Reimbursement Obligation under
         Section 3.5 shall not be affected by, among other things, the validity
         or genuineness of documents or of any endorsements thereon, even
         though such documents shall in fact prove to be invalid, fraudulent or
         forged, or any dispute between or among the Borrower and any
         beneficiary of any Letter of Credit or any other party to which such
         Letter of Credit may be transferred or any claims whatsoever of the
         Borrower against any beneficiary of such Letter of Credit or any such
         transferee. The applicable Issuing Lender shall not be liable for any
         error, omission, interruption or delay in transmission, dispatch or
         delivery of any message or advice, however transmitted, in connection
         with any Letter of Credit, except for errors or omissions caused by
         the applicable Issuing Lender's gross negligence or willful
         misconduct. The Borrower agrees that any action taken or omitted by
         the applicable Issuing Lender under or in connection with any Letter
         of Credit or the related drafts or documents, if done in the absence
         of gross negligence or willful misconduct, shall be binding on the
         Borrower and shall not result in any liability


                                       7


         of the applicable Issuing Lender or any L/C Participant to the
         Borrower. The responsibility of the applicable Issuing Lender to the
         Borrower in connection with any draft presented for payment under any
         Letter of Credit shall, in addition to any payment obligation
         expressly provided for in such Letter of Credit, be limited to
         determining that the documents (including each draft) delivered under
         such Letter of Credit in connection with such presentment are in
         conformity with such Letter of Credit.

                  SECTION 3.7   Excess L/C Obligations. If at any time (as
         determined by the Administrative Agent pursuant to this Section 3.7)
         and because of currency fluctuations or for any other reason, based
         upon the Dollar Amount of all outstanding Loans and L/C Obligations,
         the outstanding amount of all L/C Obligations exceeds the lesser of
         (a) the Aggregate Commitment less the sum of the amount of all
         outstanding Loans and (b) the L/C Commitment, then, in each such case,
         the Borrower shall, at its option, either (i) repay Loans in an amount
         equal to such excess (to the extend such repayment will eliminate such
         excess) or (ii) make a payment of cash collateral into a cash
         collateral account opened by the Administrative Agent for the benefit
         of the Lenders in an amount equal to such excess (such cash collateral
         to be applied in accordance with Section 12.2(b)). The Borrower's
         compliance with this Section 3.7 shall be tested from time to time by
         the Administrative Agent at its sole discretion, but in any event
         shall be tested on (x) the date on which the Borrower requests the
         Lenders to make a Loan or the Issuing Lenders to issue a Letter of
         Credit under Section 6.3 and (y) the date an interest payment is due
         under Section 5.1(e). Each such repayment pursuant to this Section 3.7
         shall be accompanied by any amount required to be paid pursuant to
         Section 5.9 hereof.

                  SECTION 3.8   Redenomination under EMU.

                  (a)      Redenomination of Letters of Credit. Subject to
         Section 1.4 hereof, any Letter of Credit to be denominated in the
         currency of the applicable Participating Member State shall be made in
         the euro.

                  (b)      Redenomination of Obligations. Subject to Section
         1.4 hereof, any obligation of any party under this Agreement or any
         other Loan Document which has been denominated in the currency of a
         Participating Member State shall be redenominated into the euro.

                  (c)      Further Assurances. The terms and provisions of this
         Agreement will be subject to such reasonable changes of construction
         as determined by the Administrative Agent to reflect the
         implementation of the EMU in any Participating Member State or any
         market conventions relating to the fixing and/or calculation of
         interest being changed or replaced and to reflect market practice at
         that time, and subject thereto, to put the Administrative Agent, the
         Lenders and the Borrower in the same position, so far as possible,
         that they would have been if such implementation had not occurred. In
         connection therewith, the


                                       8


         Borrowers agree, at the request of the Administrative Agent, at the
         time of or at any time following the implementation of the EMU in any
         Participating Member State or any market conventions relating to the
         fixing and/or calculation of interest being changed or replaced, to
         enter into an agreement amending this Agreement in such manner as the
         Administrative Agent shall reasonably request.

                  SECTION 3.9   Regulatory Limitation. In the event, as a result
         of increases in the value of Alternative Currencies against the Dollar
         or for any other reason, the obligation of any of the Issuing Lenders
         to issue Alternative Currency Letters of Credit (taking into account
         the Dollar Amount of the Obligations and all other indebtedness
         required to be aggregated under 12 U.S.C.A. ss.84, as amended, the
         regulations promulgated thereunder and any other Applicable Law) is
         determined by such Issuing Lender to exceed its then applicable legal
         lending limit under 12 U.S.C.A. ss.84, as amended, and the regulations
         promulgated thereunder, or any other Applicable Law, the amount of
         additional Alternative Currency Letters of Credit such Issuing Lenders
         shall be obligated to issue hereunder shall immediately be reduced to
         the maximum amount which such Issuing Lender may legally advance (as
         determined by such Issuing Lender) and, to the extent necessary under
         such laws and regulations (as determined by such Issuing Lender, with
         respect to the applicability of such laws and regulations to itself),
         the Borrower shall reduce, or cause to be reduced, complying to the
         extent practicable with the remaining provisions hereof, the
         Obligations outstanding hereunder by an amount sufficient to comply
         with such maximum amounts.

                  SECTION 3.10  Exchange Indemnification and Increased Costs.
         The Borrower shall, upon demand from any Issuing Lender or L/C
         Participant, pay to such Issuing Lender or L/C Participant, the amount
         of (a) any loss or cost or increased cost incurred by such Issuing
         Lender or L/C Participant, (b) any reduction in any amount payable to
         or in the effective return on the capital to such Issuing Lender or
         L/C Participant, (c) any interest or any other return, including
         principal, foregone by such Issuing Lender as a result of the
         introduction of, change over to or operation of the euro or (d) any
         currency exchange loss, in each case that such Issuing Lender or L/C
         Participant sustains as a result of the Borrower's or any L/C
         Participant's repayment in Dollars of any Alternative Currency Letter
         of Credit. A certificate of such Issuing Lender setting forth in
         reasonable detail the basis for determining such additional amount or
         amounts necessary to compensate such Issuing Lender shall be
         conclusively presumed to be correct save for manifest error.

                  SECTION 3.11  Rounding and Other Consequential Changes.
         Subject to Section 1.4 hereof, without prejudice and in addition to
         any method of conversion or rounding prescribed by any EMU Legislation
         and without prejudice to the respective obligations of the Borrower to
         the Administrative Agent and the Lenders and the Administrative Agent
         and the Lenders to the Borrower under or pursuant to this Agreement,
         except as expressly provided in this Agreement, each provision of this
         Agreement, including, without limitation, the right to combine


                                       9


         currencies to effect a set-off, shall be subject to such reasonable
         changes of interpretation as the Administrative Agent may from time to
         time specify to be necessary or appropriate to reflect the
         introduction of or change over to the euro in Participating Member
         States.

                  SECTION 3.12  Effect of Application. To the extent that any
         provision of any Application related to any Letter of Credit is
         inconsistent with the provisions of this Article III, the provisions
         of this Article III shall apply.

         (e)      Amendment to Section 9.13. Section 9.13 (Existing Letters of
Credit) of the Credit Agreement is hereby amended by replacing "thirty (30)
days" with "sixty (60) days" in the first line thereof.

         (f)      Amendment to Section 12.2(b). Section 12.2 (Remedies) of the
Credit Agreement is hereby amended by adding the following phrase after the
words "Letter of Credit" at the end of the first sentence of clause (b)
thereof:

         "(which such cash collateral shall be deposited in the applicable
         Permitted Currency in which each Letter of Credit is denominated)"

         (g)      Amendment to Article XII. Article XII (Default and Remedies)
of the Credit Agreement is hereby amended by adding a new Section 12.4 as
follows:

                  SECTION 12.4  Judgment Currency. The obligation of the
         Borrower to make payments of any amounts payable hereunder or pursuant
         to any other Loan Document in the currency specified for such payment
         shall not be discharged or satisfied by any tender, or any recovery
         pursuant to any judgment, which is expressed in or converted into any
         other currency, except to the extent that such tender or recovery
         shall result in the actual receipt by each of the Administrative Agent
         and Lenders of the full amount of the particular Permitted Currency
         expressed to be payable pursuant to the applicable Loan Document. The
         Administrative Agent shall, using all amounts obtained or received
         from the Borrower pursuant to any such tender or recovery in payment
         of principal of and interest on the Obligations, promptly purchase the
         applicable currency at the most favorable spot exchange rate
         determined by the Administrative Agent to be available to it. The
         obligation of the Borrower to make payments in the applicable currency
         shall be enforceable as an alternative or additional cause of action
         solely for the purpose of recovering in the applicable currency the
         amount, if any, by which such actual receipt shall fall short of the
         full amount of the currency expressed to be payable pursuant to the
         applicable Loan Document.

         (h)      Amendment to Section 14.3. Section 14.3 (Set-Off) of the
Credit Agreement is hereby amended by adding an "(a)" at the beginning of such
Section and adding new paragraphs (b) and (c) as follows:


                                      10


                  "(b)     Any amount to be set-off pursuant to Section 14.3(a)
         shall be denominated in Dollars and any amount denominated in an
         Alternative Currency shall be in an amount equal to the Dollar Amount
         of such amount at the most favorable spot exchange rate determined by
         the Administrative Agent to be available to it; provided that if at
         the time of any such determination no such spot exchange rate can
         reasonably be determined, the Administrative Agent may use any
         reasonable method as it deems applicable to determine such rate, any
         such determination to be conclusive absent manifest error.

                  (c)      Each Lender and any assignee or participant of such
         Lender in accordance with Section 14.10 are hereby authorized by the
         Borrower to combine currencies, as deemed necessary by such Person, in
         order to effect any set-off pursuant to Section 14.3(a)."

         (i)      Amendment to Article XIV. Article XIV (Miscellaneous) of the
Credit Agreement is hereby amended by adding a new Section 14.22 thereto as
follows:

                  SECTION 14.22 Continuity of Contract. The parties hereto
         agree that the occurrence or non-occurrence of EMU, any event or
         events associated with EMU and/or the introduction of the euro in all
         or any part of the European Union (a) will not result in the
         discharge, cancellation, rescission or termination in whole or in part
         of this Agreement or any other Loan Document, (b) will not give any
         party the right to cancel, rescind, terminate or vary this Agreement
         or any other Loan Document or (c) will not give rise to an Event of
         Default, in each case other than as specifically provided in this
         Agreement.

         3.       Consent. Pursuant to the terms of Section 2.2 of the
Collateral Agreement, the Borrower and its Restricted Domestic Subsidiaries are
required to pledge 65% of their ownership interest in certain first-tier
Foreign Subsidiaries. Notwithstanding the provisions of Section 2.2 of the
Collateral Agreement to the contrary, the Borrower shall not be required to
pledge its ownership interest in Wackenhut Corrections Puerto Rico, Inc. unless
requested by the Administrative Agent pursuant to Section 4.13 of the
Collateral Agreement.

         4.       Effectiveness. This Amendment shall become effective on the
date that each of the following conditions has been satisfied:

         (a)      Amendment Documents. The Administrative Agent shall have
received this Amendment executed by the Administrative Agent (on behalf of and
with the consent of the Required Lenders), the Borrower and the Guarantors.

         (b)      Fees and Expenses. The Administrative Agent shall have been
reimbursed for all fees and out of pocket charges and other expenses incurred
in connection with this Amendment (including, without limitation, the costs and
expenses referred to in Section 8 hereof and the Credit Agreement) and the
transactions contemplated hereby.


                                      11


         (c)      Other Documents. The Administrative Agent shall have received
any other documents, certificates or instruments reasonably requested thereby
in connection with the execution of this Amendment.

         5.       Effect of the Amendment. Except as expressly modified hereby,
the Credit Agreement and the other Loan Documents shall be and remain in full
force and effect. This Amendment shall not be deemed (a) to be a waiver of, or
consent to, a modification or amendment of, any other term or condition of the
Credit Agreement or any other Loan Document or (b) to prejudice any other right
or rights which the Administrative Agent or the Lenders may now have or may
have in the future under or in connection with the Credit Agreement or the
other Loan Documents or any of the instruments or agreements referred to
therein, as the same may be amended or modified from time to time.

         6.       Representations and Warranties/No Default.

         (a)      By its execution hereof, the Borrower hereby certifies that
each of the representations and warranties set forth in the Credit Agreement
and the other Loan Documents is true and correct as of the date hereof as if
fully set forth herein (except to the extent that such representations and
warranties relate to a specific date, in which case such representations and
warranties shall be true and correct as of such specific date) and no Default
or Event of Default has occurred and is continuing as of the date hereof.

         (b)      By its execution hereof, the Borrower hereby represents and
warrants that as of the date hereof there are no claims or offsets against or
defenses or counterclaims to any of the obligations of the Borrower or any
Guarantor under the Credit Agreement or any other Loan Document.

         (c)      By its execution hereof, the Borrower hereby represents and
warrants that the Borrower and each Guarantor has the right, power and
authority and has taken all necessary corporate and other action to authorize
the execution, delivery and performance of this Amendment and each other
document executed in connection herewith to which it is a party in accordance
with their respective terms. This Amendment and each other document executed in
connection herewith has been duly executed and delivered by the duly authorized
officers of the Borrower and each Guarantor, and each such document constitutes
the legal, valid and binding obligation of the Borrower and each Guarantor,
enforceable in accordance with its terms.

         7.       Acknowledgement by Guarantors. By their execution hereof,
each of the Guarantors hereby expressly (a) consents to the modifications and
amendments set forth in this Amendment, (b) reaffirms all of its respective
covenants, representations, warranties and other obligations set forth in the
Guaranty Agreement and the other Loan Documents to which it is a party and (c)
acknowledges, represents and agrees that its respective covenants,
representations, warranties and other obligations set forth in the Guaranty
Agreement and the other Loan Documents to which it is a party remain in full
force and effect.


                                      12


         8.       Costs and Expenses. The Borrower shall pay all reasonable
out-of-pocket costs and expenses of the Administrative Agent in connection with
the preparation, execution and delivery of this Amendment, including, without
limitation, the reasonable fees and disbursements of counsel for the
Administrative Agent.

         9.       Governing Law. This Amendment, unless otherwise expressly set
forth herein, shall be governed by, construed and enforced in accordance with
the laws of the State of New York (including Section 5-1401 and Section 5-1402
of the General Obligations Law of the State of New York), without regard to the
conflicts of law provisions of such state.

         10.      Counterparts. This Amendment may be executed in separate
counterparts, each of which when executed and delivered is an original but all
of which taken together constitute one and the same instrument.

         11.      Fax Transmission. A facsimile, telecopy or other reproduction
of this Amendment may be executed by one or more parties hereto, and an
executed copy of this Amendment may be delivered by one or more parties hereto
by facsimile or similar instantaneous electronic transmission device pursuant
to which the signature of or on behalf of such party can be seen, and such
execution and delivery shall be considered valid, binding and effective for all
purposes. At the request of any party hereto, all parties hereto agree to
execute an original of this Amendment as well as any facsimile, telecopy or
other reproduction hereof.

                           [Signatures Pages Follow]


                                      13


         IN WITNESS WHEREOF, the parties hereto have caused this Amendment to
be duly executed as of the date and year first above written.


                                     BORROWER:


                                     WACKENHUT CORRECTIONS CORPORATION,
                                     as Borrower



                                     By: /s/ David T. Watson
                                        ---------------------------------------
                                     Name: David T. Watson
                                     Title: Vice President/Finance


                                     GUARANTORS:


                                     WCC RE HOLDINGS LLC, as Guarantor



                                     By: /s/ David T. Watson
                                        ---------------------------------------
                                     Name: David T. Watson
                                     Title: Assistant Treasurer


                                     ATLANTIC SHORES HEALTHCARE, INC.,
                                     as Guarantor



                                     By: /s/ David T. Watson
                                        ---------------------------------------
                                     Name: David T. Watson
                                     Title: Assistant Treasurer


                           [Signature Pages Continue]




                            AGENTS:


                            WACHOVIA BANK, NATIONAL ASSOCIATION,
                            as Administrative Agent, Issuing Lender and Lender



                            By: /s/ Gerald P. Hullinger
                               ------------------------------------------------
                               Name: Gerald P. Hullinger
                               Title: Vice President


                            BNP PARIBAS, as Syndication Agent, Issuing Lender
                            and Lender



                            By: /s/ Duane P. Helkowski
                               ------------------------------------------------
                               Name: Duane P. Helkowski
                               Title: Director


                            By: /s/ Shayn P. March
                               ------------------------------------------------
                               Name: Shayn P. March
                               Title: Vice President

                                                                    EXHIBIT 10.8

                        WACKENHUT CORRECTIONS CORPORATION
                     NONEMPLOYEE DIRECTOR STOCK OPTION PLAN

                          (As amended October 29, 1996)






WACKENHUT CORRECTIONS CORPORATION
NONEMPLOYEE DIRECTOR STOCK OPTION PLAN
(EFFECTIVE APRIL 27, 1995)

CONTENTS

- ------------------------------------------------------------------------------

SECTION                                                                 PAGE
- -------                                                                 ----

Article I.        The Plan................................................1
         1.1      Establishment of the Plan...............................1
         1.2      Purpose of the Plan.....................................1
         1.3      Duration of the Plan....................................1
Article II.       Definitions.............................................1
         2.1      Award Agreement.........................................1
         2.2      Board...................................................1
         2.3      Code....................................................2
         2.4      Company.................................................2
         2.5      Disability..............................................2
         2.6      Exchange Act............................................2
         2.7      Fair Market Value.......................................2
         2.8      Nonemployee Director....................................2
         2.9      Option..................................................2
         2.10     Participant.............................................2
         2.11     Plan Administrator......................................2
         2.12     Shares..................................................2
Article III.      Administration..........................................3
         3.1      The Plan Administrator..................................3
         3.2      Authority of the Plan Administrator.....................3
         3.3      Decisions Binding.......................................3
Article IV.       Shares Subject to the Plan..............................3
         4.1      Number of Shares........................................3
         4.2      Lapsed Option Grants....................................3
         4.3      Adjustments In Authorized Shares........................4
Article V.        Eligibility and Participation...........................4
         5.1      Eligibility.............................................4
         5.2      Actual Participation....................................4
Article VI.       Nonqualified Stock Options..............................4
         6.1      Grants of Options.......................................4
         6.2      Limitation on Grant of Options..........................4
         6.3      Award Agreement.........................................4
         6.4      Option Price............................................4
         6.5      Duration of Options.....................................5
         6.6      Vesting of Shares Subject to Option.....................5
         6.7      Payment.................................................6
         6.8      Termination of Service on Board Due to Death............6
         6.9      Termination of Service on Board Due to Disability ......6
         6.10     Termination of Service on Board for Other Reasons.......6


                                       i



WACKENHUT CORRECTIONS CORPORATION
NONEMPLOYEE DIRECTOR STOCK OPTION PLAN
(EFFECTIVE APRIL 27, 1995)

CONTENTS

- ------------------------------------------------------------------------------

SECTION                                                                 PAGE
- -------                                                                 ----

         6.11     Nontransferability of Options...........................6
         6.12     Restrictions on Share Transferability...................7
Article VII.      Amendment, Modification, and Termination................7
         7.1      Amendment, Modification, and Termination................7
         7.2      Options Previously Granted..............................7
Article VIII.     Miscellaneous...........................................7
         8.1      Indemnification.........................................7
         8.2      Beneficiary Designation.................................7
         8.3      Successors .............................................7
         8.4      Severability............................................8
         8.5      Requirements of Law.....................................8
         8.6      Governing Law...........................................8

                                       ii



                              ARTICLE I. THE PLAN

         1.1 ESTABLISHMENT OF THE PLAN

         Wackenhut Corrections Corporation, (the "Company"), hereby establishes
an incentive compensation plan providing for the grant of nonqualified stock
options to Nonemployee Directors, subject to the terms and provisions set forth
herein. This plan shall be known as the Wackenhut Corrections Corporation
Nonemployee Director Stock Option Plan (the "Plan").

         Subject to ratification by an affirmative vote of a majority of Shares
present and entitled to vote at the 1996 Annual Meeting at which a quorum is
present, the Plan shall become effective as of April 27, 1995 (the "Effective
Date").

         1.2 PURPOSE OF THE PLAN

         The purpose of the Plan is to promote the achievement of long-term
objectives of the Company by linking the personal interests of Nonemployee
Directors to those of Company shareholders, and to attract and retain
Nonemployee Directors of outstanding competence.

         1.3 DURATION OF THE PLAN

         The Plan shall commence on April 27, 1995 and shall remain in effect,
subject to the right of the Board to amend or terminate the Plan at any time
pursuant to section 7.1, until all Shares subject to the Plan have been
purchased or acquired according to the Plan's provisions. However, in no event
may an Option be granted under the Plan on or after April 26, 2005.

                            ARTICLE II. DEFINITIONS

         Whenever used in the Plan, the following terms shall have the meanings
set forth below unless otherwise expressly provided. When the defined meaning is
intended, the term is capitalized. The definition of any term in the singular
shall also include the plural.

         2.1 AWARD AGREEMENT

         Award Agreement means an agreement entered into by the Company and each
Participant setting forth the terms and provisions applicable to Options granted
under this Plan.

         2.2 BOARD

         Board means the Board of Directors of Wackenhut Corrections
Corporation.



                                       1



         2.3 CODE

         Code means the Internal Revenue Code of 1986, as amended from time to
time.

         2.4 COMPANY

         Company means Wackenhut Corrections Corporation and any successor
organization as provided in section 8.3.

         2.5 DISABILITY

         Disability means any disabling condition which entitles the Participant
to disability benefits under the federal Social Security Act.

         2.6 EXCHANGE ACT

         Exchange Act means the Securities Exchange Act of 1934, as amended from
time to time.

         2.7 FAIR MARKET VALUE

         Fair Market Value means the last closing sale price of a Share on or
prior to the relevant date that is reported by the principal securities exchange
on which the Shares are publicly traded.

         2.8 NONEMPLOYEE DIRECTOR

         Nonemployee Director means any individual who is a member of the Board,
but who has never otherwise been an employee of the Company.

         2.9 OPTION

         Option means an option to purchase Shares granted under Article VI.
Such Options are not intended to meet the requirements of Code section 422.

         2.10 PARTICIPANT

         Participant means a Nonemployee Director of the Company who has one or
more outstanding Options under the Plan.

         2.11 PLAN ADMINISTRATOR

         Plan Administrator means the Compensation Committee of the Company's
Board.

         2.12 SHARES

         Shares mean the common stock of the Company.



                                       2


                          ARTICLE III. ADMINISTRATION

         3.1 THE PLAN ADMINISTRATOR

         The Plan shall be administered by the Plan Administrator subject to the
restrictions set forth in this Plan. The Plan Administrator may delegate to one
or more individuals or a committee any of its powers and duties as Plan
Administrator that it deems desirable. In this case, every reference in the Plan
to the Plan Administrator shall be deemed to include these individuals or the
committee as to matters within their jurisdiction.

         3.2 AUTHORITY OF THE PLAN ADMINISTRATOR

         The Plan Administrator shall have the full power, discretion, and
authority to administer this Plan in a manner which is consistent with its
provisions. Except as provide below, the Plan Administrator shall have the
exclusive right to interpret the terms and provisions of the Plan and to
determine any and all questions arising under the Plan or in connection with the
administration thereof, including, without limitation, the right to remedy or
resolve possible ambiguities, inconsistencies, or omissions, by general rule or
particular decision.

         However, in no event shall the Plan Administrator have the power to
determine Plan eligibility, or to determine the number, the purchase price, the
vesting period, or the frequency and timing of Options to be granted under the
Plan to any Participant. All such determinations are automatic pursuant to the
provisions of this Plan.

         3.3 DECISIONS BINDING

         All determinations and decisions made by the Plan Administrator
pursuant to the provisions of the Plan shall be final, conclusive, and binding
on all persons, including the Company, its stockholders, employees,
Participants, and their estates beneficiaries.

                     ARTICLE IV. SHARES SUBJECT TO THE PLAN

         4.1 NUMBER OF SHARES

         Subject to adjustment as provided in section 4.3, no more than 30,000
Shares shall be eligible for purchase by Participants pursuant to Options
granted under this Plan.

         4.2 LAPSED OPTION GRANTS

         If any Option granted under this Plan terminates, expires, or lapses
for any reason, any Shares subject to purchase pursuant to such Option shall
again be available for the grant of an Option under the Plan.



                                       3


         4.3 ADJUSTMENTS IN AUTHORIZED SHARES

         In the event of any merger, reorganization, consolidation,
recapitalization, separation, liquidation, stock dividend, split-up, Share
combination, or other change in the corporate structure of the Company affecting
the Shares, such adjustment shall be made in the number and class of and/or
price of Shares subject to outstanding Options granted under this Plan, as may
be determined to be appropriate and equitable by the Board, in its sole
discretion, to prevent dilution or enlargement of rights.

                    ARTICLE V. ELIGIBILITY AND PARTICIPATION

         5.1 ELIGIBILITY

         Nonemployee Directors shall be eligible to become Participants in
accordance with section 5.2.

         5.2 ACTUAL PARTICIPATION

         Subject to the provisions of Article VI, all Nonemployee Directors
shall become Participants by receiving grants of Options upon election and/or
reelection to serve on the Board.

                     ARTICLE VI. NONQUALIFIED STOCK OPTIONS

         6.1 GRANTS OF OPTIONS

         Subject to the limitation on the number of Shares subject to this Plan,
each Nonemployee Director shall be granted an Option to purchase 2,000 Shares*
upon his or her election and/or reelection to serve on the Board.

         *Note: This number reflects the effect of the stock split of June 3,
         1996, as approved by the Board of Directors on April 26, 1996.

         6.2 LIMITATION ON GRANT OF OPTIONS

         Other than those grants of Options set forth in section 6.1, no
additional Options shall be granted under this Plan.

         6.3 AWARD AGREEMENT

         Each Option grant shall be evidenced by an Award Agreement that shall
specify the Option Price (as defined in section 6.4), the duration of the
Option, and the number of Shares available for purchase under the Option as set
forth in this Plan.

         6.4 OPTION PRICE

         The purchase price per Share available for purchase under an Option
shall be equal to the Fair Market Value of such Share on the date the Option is
granted.



                                       4


         6.5 DURATION OF OPTIONS

         Each Option shall expire on the tenth (10th) anniversary date of its
grant.

         6.6 VESTING OF SHARES SUBJECT TO OPTION

         Options granted under the Plan shall be 100 percent vested at all
times. Participants shall be entitled to exercise Options at any time and from
time to time, within the time period beginning on the date on which the Option
is granted, and ending ten (10) years after grant of the Option.



                                       5



         6.7 PAYMENT

         Options shall be exercised by the delivery of a written notice of
exercise to the Secretary of the Company, setting forth the number of Shares
with respect to which the Option is to be exercised. The Option Price (as
defined in section 6.4) of any Option shall be payable to the Company in full in
cash or its equivalent upon exercise.

         As soon as practicable after receipt of a written notification of
exercise and full payment, the Company shall deliver to the Participant, in the
Participant's name, Share certificates in an appropriate amount based upon the
number of Shares purchased pursuant to the exercise of the Option.

         6.8 TERMINATION OF SERVICE ON BOARD DUE TO DEATH

         If a Participant dies while he or she is actively serving as a
Nonemployee Director, any outstanding Options may be exercised by the
Participant's legal representative or beneficiary any time before the earlier
of-

         (a) the expiration date of such Options; or

         (b) the second anniversary of the Participant's death.

         6.9 TERMINATION OF SERVICE ON BOARD DUE TO DISABILITY

         If a Participant incurs a Disability while he or she is actively
serving as a Nonemployee Director, the Participant may exercise any Options that
are outstanding at the time of such Disability before the earlier of-

         (a) the expiration date of such Options; or

         (b) the second anniversary of the date of Disability.

(If the Participant dies after incurring a Disability, but before the expiration
of the exercise period described above, the Participant's legal representative
or beneficiary may exercise any outstanding Options before the expiration of
such period.)

         6.10 TERMINATION OF SERVICE ON BOARD FOR OTHER REASONS

         If the service of the Participant on the Board shall terminate for any
reason other than for death or Disability, any outstanding Options held by the
Participant shall remain exercisable at any time prior to their expiration date,
or for ten years from the date of the grant of the Options.

         6.11 NONTRANSFERABILITY OF OPTIONS

         No Option granted under this Plan may be sold, transferred, pledged,
assigned, or otherwise alienated or hypothecated, other than by will or by the
laws of descent and distribution. Further, all Options granted to a Participant
under this Plan shall be exercisable during his or her lifetime only by such
Participant.


                                       6



6.12     RESTRICTIONS ON SHARE TRANSFERABILITY

         The Board may impose such restrictions on any Shares acquired pursuant
to the exercise of an Option under this Plan, as it may deem advisable,
including, without limitation, restrictions under applicable Federal securities
laws, under the requirements of any Stock exchange or market upon which such
Shares are then listed and/or traded, and under any blue sky or state securities
laws applicable to such Shares.

             ARTICLE VII. AMENDMENT, MODIFICATION, AND TERMINATION

         7.1 AMENDMENT, MODIFICATION, AND TERMINATION

         The Board may at any time alter, amend, suspend, or terminate the Plan
in whole or in part. However, no amendment which fails to comply with the
exemptions available under Rule 16b-3 of the Exchange Act, including any
successor to the Rule, shall be effective.

         7.2 OPTIONS PREVIOUSLY GRANTED

         Unless required by law, no termination, amendment, or modification of
this Plan shall in any manner adversely affect any Option previously granted
under this Plan, without the written consent of the Participant holding the
Option.

                          ARTICLE VIII. MISCELLANEOUS

         8.1 INDEMNIFICATION

         The Company shall indemnify each person against any and all claims,
losses, damages, and expenses (including counsel fees) incurred by such
individual for the exercise of any duties as Plan Administrator, whether singly
or as a member of committee, and against any liability, including any amounts
paid in settlement with the Company's approval, arising from the individual's
action or failure to act, except when the same is judicially determined to be
attributable to the gross negligence or willful misconduct of the individual.

         8.2 BENEFICIARY DESIGNATION

         Each Participant under this Plan may, from time to time, name any
beneficiary or beneficiaries (who may be named contingently or successively) to
exercise the rights described in sections 6.8 and 6.9. Each designation will
revoke all prior designations by the same Participant, shall be in a form
prescribed by the Plan Administrator and will be effective only when filed by
the Participant in writing with the Plan Administrator during his or her
lifetime. In the absence of any such designation, such rights may be exercised
by the executor of the Participant's estate.

         8.3 SUCCESSORS

         All obligations of the Company under this Plan, with respect to Options
granted hereunder, shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or indirect purchase,



                                       7


merger, consolidation, or otherwise, of all or substantially all of the business
and/or assets of the Company.

         8.4 SEVERABILITY

         If a provision of this Plan shall be held illegal or invalid, the
illegality or invalidity shall not affect the remaining parts of the Plan. The
Plan shall be construed and enforced as if the illegal or invalid provision had
not been included herein.

         8.5 REQUIREMENTS OF LAW

         The granting of Options under this Plan shall be subject to all
applicable laws, rules, and regulations, and to such approvals by any
governmental agencies or national securities exchanges as may be required.

         8.6 GOVERNING LAW

         To the extent not preempted by Federal law, this Plan, and all Award
Agreements hereunder, shall be construed in accordance with the laws of the
State of Florida.

         IN WITNESS WHEREOF, the authorized officers of the Company have signed
this document and have affixed the corporate seal on _______________, 1996, but
effective as of April 27, 1995.

Attest:                                  WACKENHUT CORRECTIONS CORPORATION


By: /s/ John J. Bulfin                  By: /s/George C. Zoley
   --------------------------               ---------------------------------
   John J. Bulfin                           George C. Zoley

     Its: General Counsel                       Its: CEO
        ---------------------                       -------------------------
                                                      (Corporate Seal)



                                       8

                                                                   EXHIBIT 10.18

                     AMENDED EXECUTIVE RETIREMENT AGREEMENT


THIS AMENDED RETIREMENT AGREEMENT (this "Agreement") is entered into effective
the 17th day of January 2003 by and between Wackenhut Corrections Corporation
("Company") and George C. Zoley ("Executive"), or collectively, "the Parties",
and supersedes and replaces any prior written retirement agreement between the
Parties.

WHEREAS, Executive and Company previously entered into an Executive Retirement
Agreement dated March 7, 2002 (the "March 7 Retirement Agreement"), whereby,
INTER ALIA, the Executive is to receive certain payments and benefits upon a
Change in Control (as defined by incorporated reference in the March 7
Retirement Agreement); and

WHEREAS, the Wackenhut Corporation (TWC), a company listed on the New York Stock
Exchange and majority owner of Company, and Group 4 Falck, a Danish company
registered on the Copenhagen Exchange, completed a merger of TWC with a
subsidiary of Group 4 Falck, which merger constituted a Change of Control under
the terms of the March 7 Retirement Agreement; and

WHEREAS, the Executive and Company wish to amend the March 7 Retirement
Agreement and replace the March 7 Retirement Agreement with this Agreement in
order to facilitate the continued employment of Executive under restructured
terms and conditions that will benefit the Company by, INTER ALIA, requiring
Executive to actually retire from employment with the Company prior to receiving
any retirement benefits hereunder, and by amending the retirement benefits
provided hereunder to conform to those provided to TWC executives under their
retirement agreements; and

WHEREAS, Executive and Company have previously entered into an Executive
Employment Agreement (the "Employment Agreement") effective March 7, 2002; and

WHEREAS, the basic terms and conditions of this Agreement were reviewed and
approved by the Board of Directors of WCC and the Compensation Committee members
of the Board of Directors of WCC at a meeting held on the 20th day of December
2002;

NOW THEREFORE, in consideration of the mutual covenants and agreements contained
herein, and for other valuable consideration the receipt and adequacy of which
is hereby acknowledged, the Parties hereby agree as follows:

1. EMPLOYMENT. Company currently employs Executive as Chairman & Chief Executive
Officer. Executive will devote his full energy, skill and best efforts to the
affairs of Company on a full-time basis.

2. RETIREMENT DATE. Executive is first eligible to retire upon Executive's 55th
birthday, which is February 7, 2005.

3. TERMINATION. Either Company or Executive may terminate Executive's employment
at any time and for any reason upon ten (10) days written notice to the other in
accordance with the terms and conditions set forth in the Employment Agreement.




                                       1


4. RETIREMENT RIGHTS FULLY VESTED. Notwithstanding the termination of
Executive's employment with the Company for any reason whatsoever, Executive's
rights hereunder are fully vested.

5. RETIREMENT PAYMENTS.

         (a) ANNUITY FUNDING AMOUNT. Upon the later of (i) the date Executive
actually retires from employment with the Company, or (ii) the Executive's 55th
birthday, Company will pay to Executive an amount of money equal to the amount
set forth in the following Retirement Payment Table which corresponds to the
Executive's age on the date he retires. If the Executive should die after his
55th birthday but before he actually retires from the Company, the Company shall
immediately pay to the Executive's Beneficiar(ies) or Estate the amount the
Company would have paid to Executive had he retired immediately prior to his
death. In the event of Executive's death before the Executive's 55th birthday,
the Company will immediately pay to Executive's Beneficiar(ies) or Estate
one-half the amount that would otherwise be paid to Executive were Executive to
have retired on his 55th birthday. The amount payable under this Section 5(a) is
referred to as the "Annuity Funding Amount."

              --------------------------------------------
                       RETIREMENT PAYMENT TABLE
              --------------------------------------------
                                            ANNUITY
                    RETIREMENT              FUNDING
                       AGE                  AMOUNT
              ----------------------- --------------------
                        55                      2,917,000
              ----------------------- --------------------
                        56                      3,031,000
              ----------------------- --------------------
                        57                      3,149,000
              ----------------------- --------------------
                        58                      3,272,000
              ----------------------- --------------------
                        59                      3,400,000
              ----------------------- --------------------
                        60                      3,532,000
              ----------------------- --------------------
                        61                      3,670,000
              ----------------------- --------------------
                        62                      3,814,000
              ----------------------- --------------------
                        63                      3,963,000
              ----------------------- --------------------
                        64                      4,117,000
              ----------------------- --------------------
                        65                      4,278,000
              ----------------------- --------------------
                        66                      4,445,000
              ----------------------- --------------------
                        67                      4,619,000
              ----------------------- --------------------
                        68                      4,799,000
              ----------------------- --------------------
                        69                      4,986,000
              ----------------------- --------------------
                        70                      5,181,000
              ----------------------- --------------------
                   71 or older                  5,383,000
              ----------------------- --------------------


         (b) TAX GROSS-UP PAYMENT. In addition to the Annuity Funding Amount
provided for in Section 5(a) above, the Company shall also pay to the Executive
or Executive's Beneficiary(ies) or Estate, as the case may be, an amount equal
to the "Tax Gross-up Payment" simultaneously with the payment of the Annuity
Funding Amount. The "Tax Gross-up Payment" is an amount which will cause the



                                       2


remainder of (i) the sum of the Annuity Funding Amount plus the Tax Gross-up
Payment, minus (ii) all Applicable Taxes (defined below) for which the Executive
or other recipient of the payment becomes liable as a result of payment of the
Annuity Funding Amount and the Tax Gross-up Payment, to be equal to the Annuity
Funding Amount prior to deduction of any Applicable Taxes imposed with respect
to the Annuity Funding Amount. "Applicable Taxes" means all federal, state,
local and other taxes assuming that the Executive is subject to taxation at the
highest marginal rates, including income taxes, payroll taxes, excise taxes
(including taxes pursuant to Internal Revenue Code Section 4999) and any other
taxes, but not including any estate or gift taxes. The Tax Gross-up Payment is
intended to place the Executive in the same economic position with respect to
the Annuity Funding Amount that the Executive would have been in if the
Applicable Taxes did not apply. For example, if the Annuity Funding Amount is
$2,917,000, and the Executive is subject only to federal income tax at the rate
of 35% and employment tax at the rate of 1.45%, the Tax Gross-up Amount is equal
to $1,673,086.55.

6. BENEFICIARY. The Beneficiary (or Beneficiaries) of any payments to be made
after Executive's death shall be as designated by Executive and shown on Exhibit
A attached hereto or such other person or persons as Executive shall designate
in writing to the Company. If Executive has made no effective designation of
Beneficiaries, any such payments shall be made to Executive's Estate.

7. RESTRICTION AND NON-COMPETITION. Executive shall not for a period of two
years following Executive's employment with the Company, either directly or
indirectly, accept employment with, render service, assistance or advice to,
own, manage, operate, control or participate in the ownership, or allow his name
to be used by any competitor of the Company unless approved by the Board of
Directors of the Company. Determination by the Board of Directors of the Company
that Executive has engaged in any such activity shall be binding and conclusive
on all parties, and in addition to all other rights and remedies which Company
shall have, neither Executive nor Beneficiary shall be entitle to any payments
hereunder.

8. INSURANCE. If Company shall elect to purchase a life insurance contract to
provide Company with funds to make payments hereunder, Company shall at all
times be the sole and complete owner and beneficiary of such contract, and shall
have the unrestricted right to use all amounts and exercise all options and
privileges there under without knowledge or consent of Executive or Beneficiary
or any other person, it being expressly agreed that neither Executive nor
Beneficiary nor any other person shall have any right, title or interest
whatsoever in or to any such contract.

9. SOURCE OF PAYMENTS. Executive, Beneficiary and any other person or persons
having or claiming a right to payments hereunder or to any interest in this
Agreement shall rely solely on the unsecured promise of Company set forth
herein, and nothing in this Agreement shall be construed to give Executive,
Beneficiary or any other person or persons any right, title, interest or claim
in or to any specific asset, fund, reserve, account or property of any kind
whatsoever owned by Company or in which it may have any right, title or interest
now or in the future, but Executive shall have the right to enforce his claim
against Company in the same manner as any unsecured creditor.





                                       3


10. AMENDMENT. This Agreement may be amended at any time or from time to time by
written agreement of the parties.

11. ASSIGNMENT. Neither Executive, nor Beneficiary, nor any other person
entitled to payments hereunder shall have power to transfer, assign, anticipate,
mortgage or otherwise encumber in advance any of such payments, nor shall such
payments be subject to seizure for the payment of public or private debts,
judgments, alimony or separate maintenance, or be transferable by operation of
law in event of bankruptcy, insolvency or otherwise.

12. BINDING EFFECT. This Agreement shall be binding upon the parties hereto,
their heirs, executors, administrators, successors and assigns. The Company
agrees it will not be a party to any merger, consolidation or reorganization,
unless and until its obligations hereunder shall be expressly assumed by its
successors.

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the
date first above written.

                                            WACKENHUT CORRECTIONS CORPORATION


                                            /s/ Wayne H. Calabrese
                                            ---------------------------------
                                            Wayne H. Calabrese
                                            Vice Chairman & President



                                            EXECUTIVE


                                            /s/ George C. Zoley
                                            ---------------------------------
                                            George C. Zoley
                                            Chairman & Chief Executive Officer





                                       4

                                                                   EXHIBIT 10.19

                     AMENDED EXECUTIVE RETIREMENT AGREEMENT


THIS AMENDED RETIREMENT AGREEMENT (this "Agreement") is entered into effective
the 17th day of January 2003 by and between Wackenhut Corrections Corporation
("Company") and Wayne H. Calabrese ("Executive"), or collectively, "the
Parties", and supersedes and replaces any prior written retirement agreement
between the Parties.

WHEREAS, Executive and Company previously entered into an Executive Retirement
Agreement dated March 7, 2002 (the "March 7 Retirement Agreement"), whereby,
INTER ALIA, the Executive is to receive certain payments and benefits upon a
Change in Control (as defined by incorporated reference in the March 7
Retirement Agreement); and

WHEREAS, The Wackenhut Corporation (TWC), a company listed on the New York Stock
Exchange and majority owner of Company, and Group 4 Falck, a Danish company
registered on the Copenhagen Exchange, completed a merger of TWC with a
subsidiary of Group 4 Falck, which merger constituted a Change of Control under
the terms of the March 7 Retirement Agreement; and

WHEREAS, the Executive and Company wish to amend the March 7 Retirement
Agreement and replace the March 7 Retirement Agreement with this Agreement in
order to facilitate the continued employment of Executive under restructured
terms and conditions that will benefit the Company by, INTER ALIA, requiring
Executive to actually retire from employment with the Company prior to receiving
any retirement benefits hereunder, and by amending the retirement benefits
provided hereunder to conform to those provided to TWC executives under their
retirement agreements; and

WHEREAS, Executive and Company have previously entered into an Executive
Employment Agreement (the "Employment Agreement") effective March 7, 2002; and

WHEREAS, the basic terms and conditions of this Agreement were reviewed and
approved by the Board of Directors of WCC and the Compensation Committee members
of the Board of Directors of WCC at a meeting held on the 20th day of December
2002;

NOW THEREFORE, in consideration of the mutual covenants and agreements contained
herein, and for other valuable consideration the receipt and adequacy of which
is hereby acknowledged, the Parties hereby agree as follows:

1. EMPLOYMENT. Company currently employs Executive as President & Chief
Operating Officer. Executive will devote his full energy, skill and best efforts
to the affairs of Company on a full-time basis.

2. RETIREMENT DATE. Executive is first eligible to retire upon Executive's 55th
birthday, which is November 5, 2005.

3. TERMINATION. Either Company or Executive may terminate Executive's employment
at any time and for any reason upon ten (10) days written notice to the other in
accordance with the terms and conditions set forth in the Employment Agreement.




                                       1


4. RETIREMENT RIGHTS FULLY VESTED. Notwithstanding the termination of
Executive's employment with the Company for any reason whatsoever, Executive's
rights hereunder are fully vested.

5. RETIREMENT PAYMENTS.

         (a) ANNUITY FUNDING AMOUNT. Upon the later of (i) the date Executive
actually retires from employment with the Company, or (ii) the Executive's 55th
birthday, Company will pay to Executive an amount of money equal to the amount
set forth in the following Retirement Payment Table which corresponds to the
Executive's age on the date he retires. If the Executive should die after his
55th birthday but before he actually retires from the Company, the Company shall
immediately pay to the Executive's Beneficiary(ies) or Estate the amount the
Company would have paid to Executive had he retired immediately prior to his
death. In the event of Executive's death before the Executive's 55th birthday,
the Company will immediately pay to Executive's Beneficiary(ies) or Estate
one-half the amount that would otherwise be paid to Executive were Executive to
have retired on his 55th birthday. The amount payable under this Section 5(a) is
referred to as the "Annuity Funding Amount."

        --------------------------------------------------------------
                          RETIREMENT PAYMENT TABLE
        --------------------------------------------------------------
        RETIREMENT ANNUITY
            AGE FUNDING                          AMOUNT
        -------------------------- -----------------------------------
                   55                          2,333,000
        -------------------------- -----------------------------------
                   56                          2,425,000
        -------------------------- -----------------------------------
                   57                          2,519,000
        -------------------------- -----------------------------------
                   58                          2,618,000
        -------------------------- -----------------------------------
                   59                          2,720,000
        -------------------------- -----------------------------------
                   60                          2,826,000
        -------------------------- -----------------------------------
                   61                          2,936,000
        -------------------------- -----------------------------------
                   62                          3,051,000
        -------------------------- -----------------------------------
                   63                          3,170,000
        -------------------------- -----------------------------------
                   64                          3,294,000
        -------------------------- -----------------------------------
                   65                          3,422,000
        -------------------------- -----------------------------------
                   66                          3,556,000
        -------------------------- -----------------------------------
                   67                          3,695,000
        -------------------------- -----------------------------------
                   68                          3,839,000
        -------------------------- -----------------------------------
                   69                          3,989,000
        -------------------------- -----------------------------------
                   70                          4,145,000
        -------------------------- -----------------------------------
               71 or older                     4,307,000
        -------------------------- -----------------------------------

         (b) TAX GROSS-UP PAYMENT. In addition to the Annuity Funding Amount
provided for in Section 5(a) above, the Company shall also pay to the Executive
or Executive's Beneficiary(ies) or Estate, as the case may be, an amount equal
to the "Tax Gross-up Payment" simultaneously with the payment of the Annuity
Funding Amount. The "Tax Gross-up Payment" is an amount which will cause the
remainder of (i) the sum of the Annuity Funding Amount plus the Tax Gross-up
Payment, minus (ii) all Applicable Taxes (defined below) for which the Executive
or other recipient of the payment becomes liable as a result of payment of the



                                       2


Annuity Funding Amount and the Tax Gross-up Payment, to be equal to the Annuity
Funding Amount prior to deduction of any Applicable Taxes imposed with respect
to the Annuity Funding Amount. "Applicable Taxes" means all federal, state,
local and other taxes assuming that the Executive is subject to taxation at the
highest marginal rates, including income taxes, payroll taxes, excise taxes
(including taxes pursuant to Internal Revenue Code Section 4999) and any other
taxes, but not including any estate or gift taxes. The Tax Gross-up Payment is
intended to place the Executive in the same economic position with respect to
the Annuity Funding Amount that the Executive would have been in if the
Applicable Taxes did not apply. For example, if the Annuity Funding Amount is
$2,333,000, and the Executive is subject only to federal income tax at the rate
of 35% and employment tax at the rate of 1.45%, the Tax Gross-up Amount is equal
to $1,338,125.10.

6. BENEFICIARY. The Beneficiary (or Beneficiaries) of any payments to be made
after Executive's death shall be as designated by Executive and shown on Exhibit
A attached hereto or such other person or persons as Executive shall designate
in writing to the Company. If Executive has made no effective designation of
Beneficiaries, any such payments shall be made to Executive's Estate.

7. RESTRICTION AND NON-COMPETITION. Executive shall not for a period of two
years following Executive's employment with the Company, either directly or
indirectly, accept employment with, render service, assistance or advice to,
own, manage, operate, control or participate in the ownership, or allow his name
to be used by any competitor of the Company unless approved by the Board of
Directors of the Company. Determination by the Board of Directors of the Company
that Executive has engaged in any such activity shall be binding and conclusive
on all parties, and in addition to all other rights and remedies which Company
shall have, neither Executive nor Beneficiary shall be entitle to any payments
hereunder.

8. INSURANCE. If Company shall elect to purchase a life insurance contract to
provide Company with funds to make payments hereunder, Company shall at all
times be the sole and complete owner and beneficiary of such contract, and shall
have the unrestricted right to use all amounts and exercise all options and
privileges there under without knowledge or consent of Executive or Beneficiary
or any other person, it being expressly agreed that neither Executive nor
Beneficiary nor any other person shall have any right, title or interest
whatsoever in or to any such contract.

9. SOURCE OF PAYMENTS. Executive, Beneficiary and any other person or persons
having or claiming a right to payments hereunder or to any interest in this
Agreement shall rely solely on the unsecured promise of Company set forth
herein, and nothing in this Agreement shall be construed to give Executive,
Beneficiary or any other person or persons any right, title, interest or claim
in or to any specific asset, fund, reserve, account or property of any kind
whatsoever owned by Company or in which it may have any right, title or interest
now or in the future, but Executive shall have the right to enforce his claim
against Company in the same manner as any unsecured creditor.



                                       3



10. AMENDMENT. This Agreement may be amended at any time or from time to time by
written agreement of the parties.

11. ASSIGNMENT. Neither Executive, nor Beneficiary, nor any other person
entitled to payments hereunder shall have power to transfer, assign, anticipate,
mortgage or otherwise encumber in advance any of such payments, nor shall such
payments be subject to seizure for the payment of public or private debts,
judgments, alimony or separate maintenance, or be transferable by operation of
law in event of bankruptcy, insolvency or otherwise.

12. BINDING EFFECT. This Agreement shall be binding upon the parties hereto,
their heirs, executors, administrators, successors and assigns. The Company
agrees it will not be a party to any merger, consolidation or reorganization,
unless and until its obligations hereunder shall be expressly assumed by its
successors.

IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the
date first above written.

                                            WACKENHUT CORRECTIONS CORPORATION


                                            /s/ George C. Zoley
                                            ---------------------------------
                                            George C. Zoley
                                            Chairman & Chief Executive Officer



                                            EXECUTIVE


                                            /s/ Wayne H. Calabrese
                                            ---------------------------------
                                            Wayne H. Calabrese
                                            Vice Chairman & President





                                       4

                                                                   EXHIBIT 10.20


                     AMENDED EXECUTIVE RETIREMENT AGREEMENT


         THIS AMENDED RETIREMENT AGREEMENT (this "Agreement") is entered into
effective the 17th day of January 2003 by and between Wackenhut Corrections
Corporation ("Company") and John G. O'Rourke ("Executive"), or collectively,
"the Parties", and supersedes and replaces any prior written retirement
agreement between the Parties.

         WHEREAS, Executive and Company previously entered into an Executive
Retirement Agreement dated March 7, 2002 (the "March 7 Retirement Agreement"),
whereby, INTER ALIA, the Executive is to receive certain payments and benefits
upon a Change in Control (as defined by incorporated reference in the March 7
Retirement Agreement); and

         WHEREAS, The Wackenhut Corporation (TWC), a company listed on the New
York Stock Exchange and majority owner of Company, and Group 4 Falck, a Danish
company registered on the Copenhagen Exchange, completed a merger of TWC with a
subsidiary of Group 4 Falck, which merger constituted a Change of Control under
the terms of the March 7 Retirement Agreement; and

         WHEREAS, the Executive and Company wish to amend the March 7 Retirement
Agreement and replace the March 7 Retirement Agreement with this Agreement in
order to facilitate the continued employment of Executive under restructured
terms and conditions that will benefit the Company by, INTER ALIA, requiring
Executive to actually retire from employment with the Company prior to receiving
any retirement benefits hereunder, and by amending the retirement benefits
provided hereunder to conform to those provided to TWC executives under their
retirement agreements; and

         WHEREAS, Executive and Company have previously entered into an
Executive Employment Agreement (the "Employment Agreement") effective March 7,
2002; and

         WHEREAS, the basic terms and conditions of this Agreement were reviewed
and approved by the Board of Directors of WCC and the Compensation Committee
members of the Board of Directors of WCC at a meeting held on the 20th day of
December 2002;

         NOW THEREFORE, in consideration of the mutual covenants and agreements
contained herein, and for other valuable consideration the receipt and adequacy
of which is hereby acknowledged, the Parties hereby agree as follows:

         1. EMPLOYMENT. Company currently employs Executive as Senior Vice
President, Chief Financial Officer & Treasurer. Executive will devote his full
energy, skill and best efforts to the affairs of Company on a full-time basis.

         2. RETIREMENT DATE. Executive is first eligible to retire upon
Executive's 55th birthday, which is August 1, 2005.

         3. TERMINATION. Either Company or Executive may terminate Executive's
employment at any time and for any reason upon ten (10) days written notice to
the other in accordance with the terms and conditions set forth in the
Employment Agreement.




         4. RETIREMENT RIGHTS FULLY VESTED. Notwithstanding the termination of
Executive's employment with the Company for any reason whatsoever, Executive's
rights hereunder are fully vested.

         5. RETIREMENT PAYMENTS.

                  (a) ANNUITY FUNDING AMOUNT. Upon the later of (i) the date
Executive actually retires from employment with the Company, or (ii) the
Executive's 55th birthday, Company will pay to Executive an amount of money
equal to the amount set forth in the following Retirement Payment Table which
corresponds to the Executive's age on the date he retires. If the Executive
should die after his 55th birthday but before he actually retires from the
Company, the Company shall immediately pay to the Executive's Beneficiar(ies) or
Estate the amount the Company would have paid to Executive had he retired
immediately prior to his death. In the event of Executive's death before the
Executive's 55th birthday, the Company will immediately pay to Executive's
Beneficiar(ies) or Estate one-half the amount that would otherwise be paid to
Executive were Executive to have retired on his 55th birthday. The amount
payable under this Section 5(a) is referred to as the "Annuity Funding Amount."

                            RETIREMENT PAYMENT TABLE
                  ----------------------------------------------
                        Retirement           Annuity Funding
                            Age                   Amount
                  ------------------------ ---------------------
                            55                    1,750,000
                  ------------------------ ---------------------
                            56                    1,818,000
                  ------------------------ ---------------------
                            57                    1,889,000
                  ------------------------ ---------------------
                            58                    1,963,000
                  ------------------------ ---------------------
                            59                    2,040,000
                  ------------------------ ---------------------
                            60                    2,119,000
                  ------------------------ ---------------------
                            61                    2,202,000
                  ------------------------ ---------------------
                            62                    2,288,000
                  ------------------------ ---------------------
                            63                    2,378,000
                  ------------------------ ---------------------
                            64                    2,470,000
                  ------------------------ ---------------------
                            65                    2,567,000
                  ------------------------ ---------------------
                            66                    2,667,000
                  ------------------------ ---------------------
                            67                    2,771,000
                  ------------------------ ---------------------
                            68                    2,879,000
                  ------------------------ ---------------------
                            69                    2,992,000
                  ------------------------ ---------------------
                            70                    3,109,000
                  ------------------------ ---------------------
                        71 or older               3,230,000
                  ------------------------ ---------------------

                  (b) TAX GROSS-UP PAYMENT. In addition to the Annuity Funding
Amount provided for in Section 5(a) above, the Company shall also pay to the
Executive or Executive's Beneficiary(ies) or Estate, as the case may be, an
amount equal to the "Tax Gross-up Payment" simultaneously with the payment of
the Annuity Funding Amount. The "Tax Gross-up Payment" is an amount which will
cause the remainder of (i) the sum of the Annuity Funding Amount plus the Tax



                                       2


Gross-up Payment, minus (ii) all Applicable Taxes (defined below) for which the
Executive or other recipient of the payment becomes liable as a result of
payment of the Annuity Funding Amount and the Tax Gross-up Payment, to be equal
to the Annuity Funding Amount prior to deduction of any Applicable Taxes imposed
with respect to the Annuity Funding Amount. "Applicable Taxes" means all
federal, state, local and other taxes assuming that the Executive is subject to
taxation at the highest marginal rates, including income taxes, payroll taxes,
excise taxes (including taxes pursuant to Internal Revenue Code Section 4999)
and any other taxes, but not including any estate or gift taxes. The Tax
Gross-up Payment is intended to place the Executive in the same economic
position with respect to the Annuity Funding Amount that the Executive would
have been in if the Applicable Taxes did not apply. For example, if the Annuity
Funding Amount is $1,750,000, and the Executive is subject only to federal
income tax at the rate of 35% and employment tax at the rate of 1.45%, the Tax
Gross-up Amount is equal to $1,003,737.21.

         6. BENEFICIARY. The Beneficiary (or Beneficiaries) of any payments to
be made after Executive's death shall be as designated by Executive and shown on
Exhibit A attached hereto or such other person or persons as Executive shall
designate in writing to the Company. If Executive has made no effective
designation of Beneficiaries, any such payments shall be made to Executive's
Estate.

         7. RESTRICTION AND NON-COMPETITION. Executive shall not for a period of
two years following Executive's employment with the Company, either directly or
indirectly, accept employment with, render service, assistance or advice to,
own, manage, operate, control or participate in the ownership, or allow his name
to be used by any competitor of the Company unless approved by the Board of
Directors of the Company. Determination by the Board of Directors of the Company
that Executive has engaged in any such activity shall be binding and conclusive
on all parties, and in addition to all other rights and remedies which Company
shall have, neither Executive nor Beneficiary shall be entitle to any payments
hereunder.

         8. INSURANCE. If Company shall elect to purchase a life insurance
contract to provide Company with funds to make payments hereunder, Company shall
at all times be the sole and complete owner and beneficiary of such contract,
and shall have the unrestricted right to use all amounts and exercise all
options and privileges there under without knowledge or consent of Executive or
Beneficiary or any other person, it being expressly agreed that neither
Executive nor Beneficiary nor any other person shall have any right, title or
interest whatsoever in or to any such contract.

         9. SOURCE OF PAYMENTS. Executive, Beneficiary and any other person or
persons having or claiming a right to payments hereunder or to any interest in
this Agreement shall rely solely on the unsecured promise of Company set forth
herein, and nothing in this Agreement shall be construed to give Executive,
Beneficiary or any other person or persons any right, title, interest or claim
in or to any specific asset, fund, reserve, account or property of any kind
whatsoever owned by Company or in which it may have any right, title or interest
now or in the future, but Executive shall have the right to enforce his claim
against Company in the same manner as any unsecured creditor.



                                       3


         10. AMENDMENT. This Agreement may be amended at any time or from time
to time by written agreement of the parties.

         11. ASSIGNMENT. Neither Executive, nor Beneficiary, nor any other
person entitled to payments hereunder shall have power to transfer, assign,
anticipate, mortgage or otherwise encumber in advance any of such payments, nor
shall such payments be subject to seizure for the payment of public or private
debts, judgments, alimony or separate maintenance, or be transferable by
operation of law in event of bankruptcy, insolvency or otherwise.

         12. BINDING EFFECT. This Agreement shall be binding upon the parties
hereto, their heirs, executors, administrators, successors and assigns. The
Company agrees it will not be a party to any merger, consolidation or
reorganization, unless and until its obligations hereunder shall be expressly
assumed by its successors.

         IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as
of the date first above written.

                                             WACKENHUT CORRECTIONS CORPORATION


                                             /s/ George C. Zoley
                                             ----------------------------------
                                             George C. Zoley
                                             Chairman & Chief Executive Officer



                                             EXECUTIVE


                                             /s/ John G. O'Rourke
                                             ----------------------------------
                                             John G. O'Rourke
                                             Senior Vice President, Chief
                                             Financial Officer & Treasurer




                                       4

                                                                   EXHIBIT 10.22


                                 REFERENCED DATA

Any reference in this lease to the following subjects shall incorporate therein
the data stated for the subject(s) in this Section:


DATE OF LEASE:                              SEPTEMBER 12, 2002
LANDLORD:                                   CANPRO INVESTMENTS LTD., a
                                            corporation organized under the laws
                                            of Canada and authorized to transact
                                            business in the State of Florida

LANDLORD'S ADDRESS:                         621 N.W. 53RD STREET, STE. 100, BOCA
                                            RATON, FLORIDA 33487


TENANT:                                     WACKENHUT CORRECTIONS CORPORATION

TENANT'S ADDRESS BEFORE
OCCUPANCY:                                  4200 WACKENHUT DRIVE, SUITE 100
                                            PALM BEACH GARDENS, FLORIDA
                                            33410-4243

TENANT'S ADDRESS AFTER
OCCUPANCY:                                  621 NW 53RD STREET, SUITE 700, BOCA
                                            RATON, FLORIDA 33487

DEMISED PREMISES:                           THIRTY FIVE THOUSAND SIX HUNDRED
                                            SIXTY EIGHT (35,668) rentable square
                                            feet on the SEVENTH (7TH) floor of
                                            the Building. For all purposes
                                            hereof the Building shall be deemed
                                            to contain TWO HUNDRED THIRTY SEVEN
                                            THOUSAND, THREE HUNDRED THIRTY ONE
                                            (237,331) rentable square feet,
                                            regardless of the actual number of
                                            square feet found to be in the
                                            Leased Premises.

LEASE TERM:                                 TEN (10) years.

ESTIMATED DATE OF SUBSTANTIAL
COMPLETION:                                 APRIL 1, 2003


RENTAL COMMENCEMENT DATE:                   THE EARLIER OF A) TENANT OCCUPANCY
                                            AND RECEIPT OF CERTIFICATE OF
                                            OCCUPANCY B) APRIL 1, 2003

EXPIRATION DATE OF LEASE
TERM:                                       MARCH 31, 2013


RENT IS DUE ON THE FIRST (1ST) DAY OF EACH MONTH AND IS DELINQUENT IF NOT PAID
WITHIN TEN (10) DAYS FROM WRITTEN NOTICE FROM LANDLORD.


MINIMUM ANNUAL RENT:


From April 1, 2003 through March 31, 2004, Four Hundred Sixty-Three Thousand Six
Hundred Eighty-Four and 00/100 Dollars ($463,684.00) or Thirty-Eight Thousand
Six Hundred Forty and 33/100 Dollars ($38,640.33) per month, which is based upon






                                                                 Initials ______

                                                                          ______
                                       1



the annual rate of Thirteen and 00/100 Dollars ($13.00) per rentable square
foot.

From April 1, 2004 through March 31, 2005, Four Hundred Seven-Seven Thousand
Five Hundred Ninety-Four and 52/100 Dollars ($477,594.52) or Thirty-Nine
Thousand Seven Hundred Ninety-Nine and 54/100 Dollars ($39,799.54) per month,
which is based upon the annual rate of Thirteen and 39/100 Dollars ($13.39) per
rentable square foot.

From April 1, 2005 through March 31, 2006, Four Hundred Ninety-One Thousand Nine
Hundred Twenty-Two and 36/100 Dollars ($491,922.36) or Forty Thousand Nine
Hundred Ninety-Three and 53/100 Dollars ($40,993.53) per month, which is based
upon the annual rate of Thirteen and 79/100 Dollars ($13.79) per rentable square
foot.

From April 1, 2006 through March 31, 2007, Five Hundred Six Thousand Six Hundred
Eighty and 03/100 Dollars ($506,680.03) or Forty-Two Thousand Two Hundred
Twenty-Three and 34/100 Dollars ($42,223.34) per month, which is based upon the
annual rate of Fourteen and 20/100 Dollars ($14.20) per rentable square foot.

From April 1, 2007 through March 31, 2008, Five Hundred Twenty-One Thousand
Eight Hundred Eighty and 43/100 Dollars ($521,880.43) or Forty-Three Thousand
Four Hundred Ninety and 04/100 Dollars ($43,490.04) per month, which is based
upon the annual rate of Fourteen and 63/100 Dollars ($14.63) per rentable square
foot.

From April 1, 2008 through March 31, 2009, Five Hundred Thirty-Seven Thousand
Five Hundred Thirty-Six and 84/100 Dollars ($537,536.84) or Forty-Four Thousand
Seven-Hundred Ninety-Four and 74/100 Dollars ($44,794.74) per month, which is
based upon the annual rate of Fifteen and 07/100 ($15.07) per rentable square
foot.

From April 1, 2009 through March 31, 2010, Five Hundred Fifty-Three Thousand Six
Hundred Sixty-Two and 95/100 Dollars ($553,662.95) or Forty-Six Thousand One
Hundred Thirty-Eight and 58/100 Dollars ($46,138.58) per month, which is based
upon the annual rate of Fifteen and 52/100 Dollars ($15.52) per rentable square
foot.

From April 1, 2010 through March 31, 2011, Five Hundred Seventy Thousand Two
Hundred Seventy-Two and 83/100 Dollars ($570,272.83) or Forty-Seven Thousand
Five Hundred Twenty-Two and 74/100 Dollars ($47,522.74) per month, which is
based upon the annual rate of Fifteen and 99/100 Dollars ($15.99) per rentable
square foot.

From April 1, 2011 through March 31, 2012, Five Hundred Eighty-Seven Thousand
Three Hundred Eighty-One and 02/100 Dollars ($587,381.02) or Forty-Eight
Thousand Nine Hundred Forty-Eight and 42/100 Dollars ($48,948.42) per month,
which is based upon the annual rate of Sixteen and 47/100 Dollars ($16.47) per
rentable square foot.

From April 1, 2012 through March 31, 2013, Six Hundred Five Thousand Two and
45/100 Dollars ($605,002.45) or Fifty Thousand Four Hundred Sixteen and 87/100
($50,416.87) per month, which is based upon the annual rate of Sixteen and
96/100 Dollars ($16.96) per rentable square foot.


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                                       2



TENANT'S INITIAL SHARE OF
TAXES AND OPERATING EXPENSES
FOR THE BUILDING AND FOR
OCCUPIED PREMISES:                          THREE HUNDRED NINE THOUSAND TWO
                                            HUNDRED FORTY ONE AND 56/100 DOLLARS
                                            ($ 309,241.56)


TENANT'S PROPORTIONATE SHARE
OF THE BUILDING:                            15.03%

PERMITTED USES:                             General Office

SECURITY DEPOSIT:                           $ N/A




WITNESSES:                       LANDLORD:
                                 CANPRO INVESTMENTS LTD.


                                  By:
- ------------------------             ------------------------------------------
                                  Ofer Drucker, Vice President of Finance



                                  TENANT:
                                  WACKENHUT CORRECTIONS CORPORATION


                                  By:
- ------------------------                ---------------------------------------
                                        John J. Bulfin
                                        Senior Vice President
                                        General Counsel




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                                                                          ______

                                       3




                                  OFFICE LEASE


THIS LEASE made and entered into as of the 12TH day of SEPTEMBER, 2002 by and
between CANPRO INVESTMENTS LTD., a corporation organized under the laws of
Canada and authorized to do business in the State of Florida (hereinafter
referred to as "Landlord") and WACKENHUT CORRECTIONS CORPORATION (hereinafter
referred to as "Tenant").


                              W I T N E S S E T H:

1.       DEMISED PREMISES.

         A. Landlord is the Owner of a tract of land situated at 621 N.W. 53rd
Street, Boca Raton, Florida, more particularly described in Exhibit "A" attached
hereto. Upon said tract is located a multistory building known as ONE PARK PLACE
OF BOCA (hereinafter referred to as the "Building"), a parking garage,
surrounding parking areas and driveways (collectively called the "Parking
Facilities") and curbs, sidewalks, fountains, parks and plazas. The tract, along
with the Building, Parking Facilities and all other improvements presently or
hereafter located upon the tract, are hereinafter collectively referred to as
the "Property".

         B. Landlord, for the term and subject to the provisions and conditions
hereof, shall lease to Tenant, and Tenant shall accept from Landlord, certain
space more particularly described by the cross-hatched area on the floor plans
annexed hereto as Exhibit "B", which for all purposes hereof shall be deemed to
contain THIRTY FIVE THOUSAND SIX HUNDRED SIXTY EIGHT (35,668) rentable square
feet on the SEVENTH 7TH floor of the Building, (the "Demised Premises"),
together with a license for the duration of the term of the Lease to use the
parking spaces (the "Parking Spaces") described in the Parking Space Schedule
attached hereto as Exhibit "C", at the rates set forth therein, for parking of
VEHICLES automobiles of Tenant and Tenant's invitees and employees and for no
other purpose. TENANT ACKNOWLEDGES THE DEMISED PREMISES TO BE THIRTY FIVE
THOUSAND SIX HUNDRED SIXTY EIGHT (35,668) RENTABLE SQUARE FEET ALL PERSONAL
PROPERTY CURRENTLY LOCATED IN THE DEMISED PREMISES SHALL BE REMOVED BY LANDLORD
AS DIRECTED BY TENANT AND THE BALANCE REMAINING SHALL BE PART OF THE DEMISED
PREMISES. ALL EXISTING TENANT IMPROVEMENTS, SUCH AS SPRINKLERS, CEILINGS ETC.
SHALL BE INCLUDED IN THE DEMISED PREMISES.

         C. The Demised Premises shall be used for general office purposes and
for no other purposes.

         D. The use and occupation by Tenant of the Demised Premises shall
include the non-exclusive use, in common with others entitled thereto, of the
common areas, employees' parking areas, service roads, loading facilities,
sidewalks and customer car parking areas as such common areas now exist or as
such common areas may hereafter be constructed, and other facilities as may be
designated from time to time by Landlord, subject however to the terms and
conditions of this agreement and to the rules and regulations for the use
thereof as prescribed from time to time by Landlord.

2.       TERM.



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                                       4


         A. The term of this Lease shall commence on the EARLIER OF (1) APRIL 1,
2003 (THE "COMMENCEMENT DATE"); OR (2) THE DATE DEMISED PREMISES ARE OCCUPIED BY
TENANT AND RECEIPT OF CERTIFICATE OF OCCUPANCY and end at 12:00 Midnight on the
last day of the month in which the TENTH (10TH) anniversary of the Rental
Commencement Date occurs, unless sooner terminated as herein provided.

         OPTION TO EXTEND

         TENANT SHALL HAVE THE OPTION TO EXTEND THE LEASE TERM FOR TWO (2)
ADDITIONAL PERIOD OF FIVE (5) YEARS, IF TENANT SHALL NOT BE IN DEFAULT OF ANY OF
ITS OBLIGATIONS UNDER THE LEASE, UPON THE SAME TERMS AND CONDITIONS SAVE AND
EXCEPT FOR: (I) THE PREMISES SHALL BE EXTENDED ON AN "AS-IS" BASIS IN THAT
LANDLORD SHALL NOT BE REQUIRED TO PERFORM ANY WORK ON, TO OR FOR THE PREMISES:
(II) THERE SHALL BE NO FURTHER OPTION TO EXTEND; (III) MINIMUM ANNUAL RENT SHALL
BE IN ACCORDANCE WITH "FAIR MARKET VALUE" THE OPTION TO EXTEND IS ALSO
CONDITIONAL UPON TENANT PROVIDING LANDLORD WRITTEN NOTICE BY CERTIFIED MAIL OF
ITS EXERCISE OF THE EXTENSION (THE "OPTION TO EXTEND" NO LATER THAN NINE (9)
MONTHS PRIOR TO THE COMMENCEMENT OF THE EXTENSION TERM. IF TENANT DULY AND
TIMELY GIVES LANDLORD THE EXTENSION NOTICE, THE TERM OF THIS LEASE SHALL BE
AUTOMATICALLY EXTENDED FOR THE EXTENSION TERM WITHOUT THE EXECUTION OF AN
EXTENSION OR RENEWAL LEASE AND DURING THE EXTENSION TERM. LANDLORD AND TENANT
SHALL BE BOUND BY ALL OF THE TERMS, COVENANTS AND CONDITIONS OF THIS LEASE
(SUBJECT TO RENTAL ADJUSTMENT PROVISIONS SET FORTH HEREIN) AS IF THE EXTENSION
TERM WERE PART OF THE INITIAL TERM.


3.       CONSTRUCTION OF LEASEHOLD IMPROVEMENTS.

         A. TENANT shall construct all of the improvements required to ready the
Demised Premises for occupancy by Tenant in accordance with plans and
specifications to be prepared by Tenant's Architect (the "Plans and
Specifications), AND APPROVED BY LANDLORD WITHIN FIVE (5) BUSINESS DAYS, WHICH
APPROVAL SHALL NOT BE UNREASONABLY WITHHELD. IF THE PLANS AND SPECIFICATIONS ARE
PREPARED BY GEORGE WHITE ARCHITECT, THEY SHALL BE DEEMED APPROVED BY LANDLORD.

         B. Within 5 days of Landlord approving the Plans and Specifications,
and receiving the appropriate government permit, TENANT OR TENANT'S contractor
shall commence the construction of the Leasehold Improvements in accordance with
the Plans and Specifications and diligently pursue the completion of the
Leasehold Improvements, which shall be completed in a good and workmanlike
manner and in accordance with all applicable governmental codes and regulations.

         C. All work on the Leasehold Improvements shall be performed by
qualified, responsible contractors selected by TENANT AND APPROVED BY LANDLORD.
H.A. CONTRACTING INC. IS APPROVED BY LANDLORD AS CONTRACTOR. DEMOLITION MAY
BEGIN PRIOR TO APPROVAL OF THE INITIAL PLANS AND SPECIFICATIONS PROVIDED
NECESSARY PERMITS ARE OBTAINED FOR DEMOLITION.




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                                       5


         D. Tenant shall not suffer any mechanics' or materialmen's lien to be
filed against the Demised Premises by reason of work, labor, services or
materials performed or furnished to Tenant or anyone holding any part of the
Demised Premises under Tenant. Tenant agrees that it will make full and prompt
payment of all sums necessary to pay for the costs of all repairs and permitted
alterations, improvements, changes and other work done by or for the benefit of
Tenant in or to the Demised Premises and further agrees to indemnify and save
harmless Landlord from and against any and all costs and liabilities incurred by
Landlord against any all construction, mechanics', materialmen's, laborers' and
other statutory or common law liens arising out of or from such work, or the
cost thereof, which may be asserted, claimed or changed against all or any part
of the Leased Demised Premises. Notwithstanding anything to the contrary set
forth in this Lease, the interest of Landlord in all or any part of the Demised
Premises shall not subject to any liens of any kind for improvements or work
made or done by or at the instance, of for the benefit, of Tenant whether or not
the same shall be made or done by or at the permission or by agreement between
Tenant and Landlord, and it is agreed that in no event shall landlord, or the
interest of Landlord in the Demised Premises, or any portion thereof, be liable
for or subjected to construction, mechanics', materialmen's, laborers' or other
statutory or common law liens for improvements or work made or done by or at the
instance of Tenant, or concerning which Tenant is responsible for payment under
the terms hereof or otherwise, and all persons dealing with or contracting with
Tenant or any contractor of Tenant are hereby put on notice of these provisions.
In the event any notice, claim or lien shall be asserted or recorded against the
interest of Landlord in the Demised Premises, or any portion thereof, on the
account of or extending from any improvement or work made or done by or at the
instance, or for the benefit, of Tenant, or any person claiming by, through or
under Tenant, or from any improvement or work the cost of which is the
responsibility of Tenant, then Tenant agrees to have such notice, claim or lien
canceled, discharged, released or transferred to other security in accordance
with applicable Florida Statutes within ten (10) days after notice to Tenant by
Landlord, and in the event Tenant fails to do so, Tenant shall be considered in
default under this Lease with like effect as if Tenant shall have failed to pay
an installment of rent when due and within any applicable grace period provided
for the payment thereof. In the event of Tenant's failure to release of record
any such lien within the aforesaid period, Landlord may remove said lien by
paying the full amount thereof or by bonding or in any other manner Landlord
deems appropriate, without investigating the validity thereof, and irrespective
to the fact that Tenant may contest the propriety of the amount thereof, and
Tenant, upon demand, shall pay Landlord the amount so paid out by Landlord in
connection with the discharge of said lien, together with interest thereon, at
the rate of 18% and reasonable expenses incurred in connection therewith,
including reasonable attorneys' fees, which amounts are due and payable to
Landlord as additional rent on the first day of the next following month.
Nothing contained in this Lease shall be construed as consent on the part of
Landlord to subject Landlord's estate in the Demised Premises to any lien or
liability under the lien laws of the State of Florida. Tenant's obligation to
observe and perform any of the provisions of this Section shall survive the
expiration of the Lease Term or the earlier termination of this Lease.

         E. Tenant shall not create or suffer to be created a security interest
or other lien against any improvements, additions or other construction made by
Tenant in or to the Demised Premises or against any equipment or fixtures


                                                                 Initials ______

                                                                          ______


                                       6


installed by Tenant therein (other than Tenant's property), and should any
security interest be created in breach of the foregoing, Landlord shall be
entitled to discharge the same by exercising the rights and remedies afforded it
under Paragraph A of this Section.

                  F. Upon Tenant's opening of the Demised Premises, Tenant shall
furnish to Landlord lien waivers from the general contractor, sub-contractors
and materialmen who provided work, labor, services or material to Tenant.

         G. Landlord shall provide Tenant with an improvement allowance (the
"Improvement Allowance"), which shall be applied to the cost of completing the
Leasehold Improvements, in an amount equal to EIGHT HUNDRED NINETY ONE THOUSAND
SEVEN HUNDRED AND 00/100 DOLLARS ($891,700.00) HELD IN AN ESCROW ACCOUNT PER
ATTACHED ESCROW AGREEMENT TO BE FUNDED WITHIN TEN (10) BUSINESS DAYS OF
EXECUTION OF THIS LEASE.

         H. Tenant shall be responsible for performing, at Tenant's sole
expense, any work in addition to the Leasehold Improvements to be constructed by
Landlord as set forth above. If Tenant desires to perform any additional
improvements beyond the Leasehold Improvements to be constructed by Landlord,
Tenant shall cause Plans and Specifications for such additional work to be
prepared and submit the same to Landlord for Landlord's approval. Any such
approved additional work, shall be performed by responsible contractors and
subcontractors approved by Landlord. All such contractors shall furnish in
advance and maintain in effect workmen's compensation insurance in accordance
with statutory requirements and comprehensive public liability insurance (naming
Landlord and Landlord's manager and mortgagee as additional insureds) with
limits satisfactory to Landlord and each shall, prior to commencement of any
work, comply with the Mechanic's Lien Law of the State of Florida. All work
shall be performed in such manner and at such time so as to avoid interference
with any work being done by Landlord or its contractors and subcontractors at
the Property generally. Landlord shall, however, allow Tenant access for such
work prior to the Rental Commencement Date. Tenant and its contractors and
subcontractors shall be solely responsible for the transportation, safekeeping
and storage of materials and equipment used in the performance of its work, for
the removal of waste and debris resulting therefrom and for any damage caused by
them to any installations or work performed by Landlord or its contractors and
subcontractors. Tenant's contractors and subcontractors shall be subject to the
general administrative supervision of Landlord for scheduling purposes, but
Landlord shall not be responsible for any aspect of the work performed by
Tenant's contractors or subcontractors. All work shall be performed in a good
and workmanlike manner, in accordance with applicable building codes and other
governmental requirements, and shall be diligently prosecuted to completion. No
work shall adversely affect the structural integrity of the Building or the
Demised Premises, nor shall such work diminish the value of the Building or the
Demised Premises. Upon the completion of Tenant's work, Tenant shall deliver to
Landlord and/or comply with the following: (1) Tenant's affidavit stating that
Tenant's work has been completed; (2) an Affidavit of all contractors and all
laborers and material suppliers stating that they have all been paid in full and
that all liens therefor that have been filed have been discharged of record or



                                                                 Initials ______

                                                                          ______


                                       7


waived; (3) a complete release and waiver of lien with respect to the Demised
Premises, executed by said contractor or contractors supplying labor and/or
materials for Tenant's work; and (4) all certificates and approvals with respect
to Tenant's work that may be required by any governmental authorities as a
condition for the issuance of a Certificate of Occupancy for the Demised
Premises. Landlord or Landlord's representative shall, during the course of
construction and after completion of construction of the Demised Premises, have
the right to inspect the Demised Premises to verify construction and completion
in accordance with the approved Plans and Specifications. It is agreed that
Tenant assumes the entire responsibility and liability for any and all injuries
or death of any and all persons, including Tenant's contractor or
subcontractors, and their respective employees, and for any and all damages to
property caused by, or resulting from or arising out of, any act or omission on
the part of the Tenant, Tenant's contractor or subcontractors, or their
respective employees, in the prosecution of the Tenant's work, and with respect
to such work, Tenant agrees to indemnify and save harmless Landlord from and
against any losses and/or expenses including reasonable legal fees and expenses,
which it may suffer or pay as a result of claims or lawsuits due to, because of,
or arising out of any and all such injuries or death and/or damage, whether real
or alleged and Tenant and Tenant's contractor and/or subcontractors shall assume
and defend at their own expense all such claims or lawsuits. Tenant agrees to
insure this assumed liability in its comprehensive general liability policy and
the Certificate of Insurance or copy of the policy that the Tenant will present
to Landlord prior to commencement of Tenant's work shall so indicate such
contractual coverage.

         I. LEASE IS NOT CONTINGENT UPON ISSUANCE OR APPROVAL OF PERMITS.

4.       MINIMUM ANNUAL RENTAL.

         A. TENANT SHALL PAY MINIMUM RENT ANNUALLY IN ACCORDANCE WITH THE
SCHEDULE SET FORTH ON THE REFERENCED DATA SHEET.

                  B. Concurrently with each monthly installment of Minimum
Annual Rent, Tenant shall pay Tenant's Proportionate Share of Taxes and
Operating Expenses of the Building and Tenant's Proportionate Share of the
occupied premises in the Building (the numerator of which is the rentable square
foot area of the Tenant's premises and the denominator shall be the weighted
average of occupied premises in the Building during the year in question), the
amount due from Tenant for its use of the Parking Spaces as provided in Exhibit
"C" hereof, together with Sales Tax on all of the above and all other sums which
are due to Landlord under the terms of this Lease (all such sums being
hereinafter collectively referred to as "Additional Rent"). The Minimum Annual
Rental and Additional Rent are hereinafter sometimes collectively referred to as
"Rent".

         C. If the Rental Commencement Date occurs on a day other than the first
(lst) day of the month, Rent from the Rental Commencement Date until the first
(lst) day of the following month shall be prorated (calculated on the basis of a
thirty (30) day month) and shall be payable in advance of the Rental
Commencement Date (and, in such event, the installment of Rent paid at execution
hereof shall be applied to the Rent due for the first (1st) full calendar month
of the term hereof).

         D. The Minimum Annual Rental shall be adjusted annually in accordance
with the Minimum Annual Rent schedule on the anniversary of each Rental
Commencement date.


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                                       8



         E. Adjustments to the Minimum Annual Rental under Paragraph 4D hereof
shall be effective as of each applicable Adjustment Date. Tenant shall pay the
Minimum Annual Rental so adjusted for each Lease Year in twelve (12) equal
monthly installments upon receipt of a written statement from Landlord
("Landlord's Statement of Minimum Annual Rental") setting forth (i) the new
Minimum Annual Rental for the Lease Year following the applicable Adjustment
Date and (ii) the difference, if any, between the Minimum Annual Rental paid by
Tenant on and after the applicable Adjustment Date and the amount of Minimum
Annual Rental actually due from Tenant on and after any applicable Adjustment
Date because of adjustments made in accordance with Paragraph 3D hereof. Tenant
shall, immediately with the next installment of rent due after receipt of
Landlord's Statement of Minimum Annual Rental, begin to pay the new Minimum
Annual Rental. Within ten (10) days after the receipt of such Landlord's
Statement of Minimum Annual Rental, Tenant shall pay the full amount of any
deficiency in the amounts of the monthly installments of Minimum Annual Rental
theretofore made between the Adjustment Date and the date of receipt of
Landlord's Statement of Minimum Annual Rental as set forth in Subparagraph (ii)
of this Paragraph. Tenant shall not be in default under the terms of this Lease
for failure to pay the full amount of Minimum Annual Rental, as newly adjusted
under Paragraph 4D hereof, until Tenant has received Landlord's Statement of
Minimum Annual Rental and has theretofore failed to pay the installments of
Minimum Annual Rental or any deficiency due as set forth under this Paragraph
4E. Nothing contained herein shall relieve Tenant of the responsibility to pay
Minimum Annual Rental at the prior Lease Year's rate until such time as it has
received Landlord's statement of the new Minimum Annual Rental.

         F. Landlord shall provide electricity to the Demised Premises which
shall be included in the Operating Expenses. In no event shall the Landlord be
liable for any injury to the Tenant's servants, agents, employees, customers and
invitees or for any injury or damage to the Demised Premises or to any property
of the Tenant or to any property of any other person, firm or corporation on or
about the Demised Premises caused by an interruption or failure in the supply of
any such electricity to the Demised Premises. In the event that any other Tenant
or Tenants incur consumption of electricity which materially exceeds the average
component of the operating expenses inequitably, Landlord shall delete the usage
cost of excess of the average consumption in calculating the operating expenses
for billing to Tenant. In the event of an interruption, Landlord agrees to use
reasonable effort and due diligence to remedy the interruption, provided such
remediation is in Landlord's control.

         G. All sums payable by Tenant under this Lease, whether or not stated
to be Minimum Annual Rental or Additional Rent, shall be collectible by Landlord
as Rent, and in the event of a default in payment thereof, Landlord shall have
the same rights and remedies as for a failure to pay Minimum Annual Rental
(without prejudice to any other right or remedy available thereof).

         H. If Landlord, at any time or times, shall accept said Rent or any
other sum due to it hereunder after same shall become due and payable, such
acceptance shall not excuse delay upon subsequent occasions, or constitute, or
be construed as, a waiver of any of Landlord's rights hereunder.



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                                       9


         I. All Rent and other sums due to Landlord hereunder shall be payable
without demand, deduction, set-off, or counterclaim at the office address of
Landlord first above given, or at such other address as Landlord may designate,
from time to time, by written notice to Tenant.

5.       TAXES AND OPERATING EXPENSES.

         A. As used in this Paragraph 5, the following terms shall be defined as
hereinafter set forth:

                  (1) "Taxes" shall mean all real estate taxes and assessments,
transit taxes, and any other federal, state, city, county or other local
governmental charges or charges by any school, drainage or other special
improvement district, (but not including income taxes or any other taxes imposed
upon or measured by Landlord's income or profits, unless the same shall be
imposed in lieu of real estate taxes or limited solely to income from real
property), general or special, ordinary or extraordinary, foreseen or
unforeseen, which may now or hereafter be levied, assessed or imposed upon the
Property or with respect to the ownership thereof. Taxes shall also include any
personal property taxes imposed upon the furniture, fixtures, machinery,
equipment, apparatus, systems and appurtenances used in connection with the
Property for the operation thereof. If, due to a future change in the method of
taxation, any franchise, income, profit or other tax, however designated, shall
be levied, assessed or imposed in substitution, in whole or in part, for (or in
lieu of) any tax which would otherwise be included within the definition of
Taxes, such other tax shall be deemed to be included within Taxes as defined
herein, Taxes shall also include all of Landlord's expenses, including, but not
limited to, attorney's fees incurred by Landlord in any effort to minimize
taxes; provided, however, that Landlord shall have no obligation to undertake
any contest, appeal or other procedure to minimize taxes. TENANT'S SHARE OF REAL
ESTATE TAXES WILL BE BASED UPON THE MAXIMUM ALLOWABLE DISCOUNT. ANY SPECIAL
ASSESSMENTS SHALL BE ASSESSED OVER THE TERM ALLOWABLE FOR THE ASSESSMENT.

                  (2) Subject to adjustment as herein before provided, "Tenant's
Proportionate Share" for all purposes of this Lease shall be deemed to be 15.03
percent.

                  (3) "Tenant's Initial Share" shall mean Tenant's initial share
of Taxes and Operating Expenses which is estimated by Landlord to be THREE
HUNDRED NINE THOUSAND TWO HUNDRED FORTY ONE AND 56/100 Dollars ($ 309,241.56)
for the first calendar year. A CAP OF 5% PER ANNUM EXCLUDING TAXES, ELECTRIC,
AND INSURANCE SHALL BE APPLIED TO THE TERM OF THE LEASE.

                  (4) (a) "Operating Expenses" shall mean all expenses incurred
by Landlord in the operation, repair, replacements, maintenance, protection,
inspection and management of all or any portion of the Property and shall
include, without limitation:

                           (i) operation, repair, replacement, maintenance,
inspection, protection and management of the systems and components of the
Building or any portion thereof;

                           (ii) wages, salaries, fees and other compensation
(and taxes imposed upon employers in connection therewith) and fringe benefits
paid to persons employed by Landlord or Landlord's managing agent, including but
not limited to social security taxes, unemployment insurance taxes, cost for
providing coverage for disability benefits, cost of any pensions,



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                                       10



hospitalization, welfare or retirement plans, or any other similar or like
expenses incurred under the provisions of any collective bargaining agreement,
or any other cost or expense which Landlord pays or incurs to provide benefits
for employees so engaged in the operation, maintenance, protection and repair of
the Property, excluding any overtime wages or salaries paid for providing extra
services to specific tenants which is directly chargeable to and paid by such
tenants;

                           (iii) contract costs of independent contractors hired
for the operation, maintenance, inspection, protection or repair of the Property
or any portion thereof, including but not limited to, service, materials and
supplies included in such contract costs;

                           (iv) costs of electricity, steam, water, sewer, and
all other utilities consumed in the operation, repair, maintenance, inspection
management of the Property (excluding utilities consumed within space occupied
by tenants, which are metered to and paid directly by tenants);

                           (v) cost of all insurance carried by Landlord for the
Property, including, but not limited to, all risk or fire and extended coverage
(including windstorm and flood coverage), elevator, boiler, sprinkler leakage,
water damage, public liability and property damage, plate glass, rental
insurance, and workmen's compensation, but excluding any charge for increased
premiums due to acts or omissions of any tenants of the Property because of
extra risks which are reimbursed to Landlord by such other tenants;

                           (vi) alterations, additions or improvements to the
non-rentable portions of the Property (hereinafter, the "Common Areas") which
benefit all tenants thereof, or which are made to decrease the Operating
Expenses of the Property;

                           (vii) all materials, supplies, tools and equipment
purchased or rented to maintain and keep the Property in good condition and
repair;

                           (viii) legal, accounting and other professional
expenses incurred in connection with the Operation, maintenance, repair,
protection and management of the Property;

                           (ix) reasonable reserves for the operation,
maintenance, repair, protection and management of the Property;

                           (x) janitorial service for the Building and Parking
Facilities, including, but not limited to, the cost of window cleaning,
uniforms, supplies and sundries;

                           (xi) cleaning costs for the Property including the
facade, windows, and sidewalks and trash removal and the cost of all labor,
supplies, equipment and materials incidental to such cleaning;

                           (xii) management fees of the managing agent for the
Property, if any, and if there is no managing agent, or if the managing agent is
affiliated with Landlord, management fees shall be an amount customarily charged


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                                       11


for the management of a first class office building by an independent managing
agent in the County of Palm Beach, Florida;

                           (xiii) the cost of repainting, redecorating, or
refurbishing any part of the Property, including the cost of displays, plantings
or decorations for the lobby, balconies and other public portions of the
Property; and

                           (xiv) the amortized portion of the cost of any
capital improvements or alterations made to the Property which is either
required by law (or governmental regulation), required by any insurance company
issuing insurance carried by Landlord or intended by Landlord to reduce
Operating Expenses (including but not limited to energy costs), it being
understood that such amortization shall be in accordance with generally accepted
accounting principles and shall include interest at the rate incurred by
Landlord in connection with the installation of the capital improvement or
alteration;

                           (xv) any and all sums for landscaping, ground
maintenance, sanitation control, cleaning, lighting, Parking Facilities and
driveway maintenance, line striping and resurfacing, equipment and fixture
replacement, fire protection, and security;

                           (xvi) depreciation of hand tools and other moveable
equipment used in the repair, maintenance or operation of the Property; and

                           (xvii) all other expenses whether or not hereinabove
mentioned which in accordance with generally accepted accounting and management
principles would be considered as an expense for the repair, maintenance,
protection and operation of the Property by virtue of the ownership thereof.

                  (b) The term "Operating Expenses" shall not include: (1) the
cost of painting, decorating, or installing fixtures or equipment in space for
the purposes of preparing the space for occupancy by a tenant; (2) wages,
salaries or fees paid to executive personnel of Landlord; (3) the cost of any
repair or replacement item which, by standard accounting practice, should be
capitalized, except as described above; (4) any charge for depreciation,
interest or rents paid or incurred by Landlord, except as described above; (5)
any charge for Landlord's income tax, excess profit taxes, franchise taxes or
similar taxes on Landlord's business; (6) leasing commissions; or the following:

1.       cost of alteration of tenant space;

2.       capital improvements (except for amortized costs for capital
         improvements in accordance with GAAP, where the purpose is to reduce
         operating expenses or made for the purpose of complying laws not in
         effect on the beginning of the term;

3.       leasing fees or commissions;

4.       payments to affiliate's of Lessor in excess of market amounts;

5.       all costs attributable to financing or refinancing the Building;

6.       depreciation;

7.       advertising and marketing expenses for the Building, including signs
         identifying the owner of the Building;

8.       costs for the benefit of one or more but not all tenants (other than
         common area expenses);

9.       legal, space planning, construction and other expenses incurred
         procuring tenants for the Building or renewing or amending leases with
         existing tenants or occupants of the Building;


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                                       12


10.      all costs associated with leasing, marketing or selling the Building;

11.      fines or penalties incurred by Landlord due to violation by Landlord or
         other tenants of governmental laws or regulations;

12.      any expense for which the Landlord receives reimbursement from third
         parties, such as insurance or warranty reimbursements;

13.      costs incurred in connection with a sale, refinancing or other change
         of ownership of the Building;

14.      late payment fees or penalties charged so long as Tenant has timely
         paid its bills to Landlord;

15.      salaries and wages and other benefits paid to on behalf of employees
         above the level of property manager of the building, or other relatives
         of any principals of Landlord;

16.      costs of formation and continuation of Landlord;

17.      charitable or political contributions;

18.      costs to INITIALLY comply with any laws in effect prior to the
         commencement date of the term;

19.      costs related to the negligence of Landlord or its agents, employees or
         contractors or the violation by Landlord of the terms of any lease of
         space in the Building;

20.      costs related to the presence of hazardous materials in the Building,
         unless caused by Tenant;

21.      Landlord's general corporate overhead and general and administrative
         expense;

22.      costs arising from STRUCTURAL latent defects in the Building;

23.      entertainment, dining or travel expenses;

24.      costs of any publications;

25.      tenant relations' parties or special events;

26.      any cost of expense with regard to the Building caused by negligent or
         defective construction;

27.      Tenant or its agents and representatives may review the books and
         records of Landlord, together with all invoices and other backup
         material upon which the Landlord's request for repairs, maintenance and
         operating costs are based, upon reasonable notice ANNUALLY AFTER BILL
         PRESENTMENT FOR THE PRECEDING YEAR;

28.      costs and expenses of repairs and replacement to the roof and
         structural parts of the buildings and other improvements within the
         Building EXCLUDING TENANT ITEMS/IMPROVEMENTS ON THE ROOF.

                  B. For and with respect to each calendar year during the term
of this Lease after the Rental Commencement Date (and any renewals or extensions
thereof), Tenant shall pay to Landlord, as Additional Rent, an amount equal to
Tenant's Proportionate Share of the Taxes and Operating Expenses for such
calendar year, appropriately prorated on a per diem basis for any partial
calendar year included within the beginning and end of the term, Tenant's


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                                       13


Proportionate Share of Taxes and Operating Expense shall be computed by
multiplying the total amount of Taxes and Operating Expenses by Tenant's
Proportionate Share. Tenant's Initial Share of Taxes and Operating Expenses
shall be as set forth in Paragraph 5A(3). Tenant's Proportionate Share of such
Taxes and Operating Expenses shall include a building management fee calculated
at 15% of the operating expense to be paid in accordance with the following
procedures:

                  (1) Landlord shall furnish to Tenant for each calendar year of
the term hereof:

                           (a) A written statement (the "Estimate Statement") of
Landlord's good faith estimate of Taxes and Operating Expenses and Tenant's
Proportionate Share of same (the "Estimated Share"), for the current calendar
year, Landlord may, at any time, change Tenant's Estimated Share by sending
Tenant a revised Estimate Statement if, in Landlord's reasonable opinion,
Landlord determines that Tenant's Proportionate Share of Taxes and Operating
Expenses for any calendar year will exceed those set forth in the most recent
Estimate Statement.

                           (b) A written statement (the "Expense Statement")
setting forth: (i) Taxes and Operating Expenses for the calendar year
immediately prior to (the "Prior Year") the calendar Year in which any Expense
Statement is issued; (ii) Tenant's Proportionate Share of the Taxes and
Operating Expenses for the Prior Year; (iii) the amount, if any, due from Tenant
for any deficiency between Tenant's Proportionate Share of Taxes and Operating
Expenses for the Prior Year and the actual amounts paid by Tenant as its
Estimated Share during such Prior Year, and (iv) the amount due from Tenant for
any deficiency in the payments of Tenant's Estimated Share for the current
calendar year resulting from any adjustment of Tenant's Estimated Share for the
current calendar year.

                           (c) However, Landlord's failure to provide such
Operating Expense statement by the date provided in Paragraph 5.B.(1) shall in
no way excuse Tenant from its obligation to pay its pro rata share of Operating
Expenses or constitute a waiver of Landlord's right to bill and collect such pro
rata share of Operating Expenses from Tenant in accordance with this Clause.

                  (2) Tenant's Proportionate Share of Taxes and Operating
Expenses shall be paid monthly as Additional Rent together with payments of
Minimum Annual Rental as follows:

                           (a) The amount of any deficiency due from Tenant as
shown on the Expense Statement shall be paid by Tenant within twenty (20) days
from the date of issuance of such Expense Statement described above. If any
Expense Statement reflects an excess paid by Tenant during such period (the "Tax
and Operating Expense Credit"), said Tax Operating Expense Credit shall be
credited against Tenant's Estimated Share falling due after the date of the
applicable Expense Statement until such credit is depleted.

                           (b) On the first day of the first full month after
the Rental Commencement Date, Tenant shall pay Landlord one twelfth of the
amount of Tenant's Initial Share of Taxes and Operating Expenses set forth in
the Reference Data at the beginning of this Lease, together with the pro-rata
portion of Tenant's Initial Share determined on a per diem basis with respect to
a thirty day month for any period of time elapsed between the Rental
Commencement Date and the first day of the first full month after the Rental
Commencement Date.


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                                       14


                           (c) On the first day of each subsequent month during
the first calendar year of the term of this Lease, and continuing thereafter
until issuance of any Estimate Statement in which Tenant's Estimated Share
exceeds Tenant's Initial Share of Taxes and Operating Expenses, Tenant shall pay
Landlord one-twelfth of Tenant's Initial Share of Taxes and Operating Expenses
set forth in the Reference Data at the beginning of this Lease.

                           (d) On the first (1st) day of the month after receipt
of an Estimate Statement increasing Tenants Estimated Share above Tenants
Initial Share and on the first day of each succeeding month thereafter until
Tenant shall receive a revised Estimate Statement, Tenant shall pay to Landlord,
on account of its share of Taxes and Operating Expense, one-twelfth (1/12) of
the then current Estimated Share.

6. SECURITY. As additional security for the full and prompt performance by
Tenant of the terms and covenants of this Lease Tenant shall deliver to Landlord
concurrently upon execution of this Lease the amount of N/A Dollars ($N/A) (the
"Security Deposit"), none of which Security Deposit shall constitute rent for
any month unless so applied by Landlord to compensate Landlord for all loss,
cost, expense or damage suffered by Landlord due to default or failure of Tenant
hereunder. Tenant shall, upon demand, restore any portion of said Security
Deposit so applied by Landlord on account of any default or failure by Tenant
hereunder and Tenant's failure to do so shall constitute a default hereunder. To
the extent that Landlord has not applied said sum on account of a default, the
Security Deposit shall be returned (without interest) to Tenant promptly after
termination of this Lease. Landlord may, in its absolute discretion, commingle
the Security Deposit with other funds of Landlord. In the event Landlord
delivers the Security Deposit to a purchaser or other successor to Landlord's
interest in the Property, Landlord shall be discharged of any further liability
with respect to the Security Deposit.

         If Tenant is in default under this Lease more than TWO (2) times within
any twelve-month period, irrespective of whether or not such default is cured,
then, without limiting Landlord's other rights and remedies provided for in this
Lease or at law or in equity, the Security Deposit shall automatically be
increased by an amount equal to the greater of:

         1)       Three (3) times the original Security Deposit; or

         2)       Three (3) months' Minimum and Additional Rent, which shall be
                  paid by Tenant to Landlord forthwith on demand; or

         3)       Should Tenant not have a Security Deposit with Landlord, then
                  Tenant shall deposit an amount equal to Three (3) months'
                  Minimum and Additional Rent.

7. TENANT'S COVENANTS. Tenant agrees, on behalf of itself, its employees and
agents, that it shall:

         A. Waiver of Offset and Compensation. The Tenant hereby waives and
renounces any and all existing and future offsets and compensation against any
rental or other amounts due hereunder and agrees to pay such rental and other
amounts regardless of any claim, offset, or compensation which may be asserted
by the Tenant or on its behalf and without any abatement of deduction.

         B. Comply at all times with any and all Federal, state, and local
statutes, regulations, ordinances and other requirements of any applicable


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                                       15



public authorities relating to its use and occupancy of the Demised Premises.

         C. Give Landlord access to the Demised Premises at all reasonable
times, without charge or diminution of rent, to enable Landlord: (1) to examine
the same and to make such repairs, additions and alterations as Landlord may be
permitted to make hereunder or as Landlord may deem advisable to the Demised
Premises or any other portion of the Property or any part thereof; and (2) upon
reasonable notice, to show the Demised Premises to any prospective mortgagees
and purchasers, and, during the six (6)months prior to expiration of the term,
to prospective tenants. Tenant shall exercise its option(s) if applicable by
giving Landlord One Hundred Eighty (180) days notice prior to the expiration of
the term.

         D. Maintain and repair, at its cost and expense, the Demised Premises,
including the plumbing, electrical, HVAC and other systems within the Demised
Premises, INCLUDING THE THREE (3) PACKAGE AIR CONDITIONING UNITS AND THE TWO (2)
LIEBERT SUPPLEMENTAL UNITS INSIDE THE PREMISES,AND ALL OTHER EQUIPMENT INSTALLED
BY TENANT as required to keep the Demised Premises in good working order and
condition Tenant shall commit no waste in or upon the Demised Premises.

         E. Upon the termination of this Lease for any reason whatsoever, remove
Tenant's goods and effects and those of any other person claiming under Tenant,
and quit and deliver up the Demised Premises to Landlord peaceably and quietly
in as good order and condition as at the inception of the term of this Lease or
as the same hereafter may be improved by Landlord or Tenant, reasonable use and
wear thereof, damage from fire and other insured casualty and repairs which are
Landlord's obligation excepted. Goods and effects not removed by Tenant at the
termination of this Lease, however terminated, shall be considered abandoned and
Landlord may dispose of and/or store the same as it deems expedient, the cost
thereof to be charged to Tenant.

         F. Not place signs on the Demised Premises except in accordance with
sign criteria approved by Landlord. All signs shall be purchased and erected at
Tenant's expense. Identification of Tenant and Tenant's location shall be
provided by Landlord at Tenant's expense in a directory in the Building Lobby.

         G. Not overload, damage or deface the Demised Premises or do any act
which might make void or voidable any insurance on the Demised Premises of the
building and/or the Property or which may render an increased or extra premium
payable for insurance (and without prejudice to any right or remedy of Landlord
regarding this Subparagraph, Landlord shall have the right to collect from
Tenant, upon demand, any such increased or extra premium).

         H. Not make any alteration of or addition to the Demised Premises
without the prior written approval of Landlord and in accordance with the
provisions of Paragraph 3E of this Lease. All such alterations and additions, as
well as all fixtures, equipment, improvements and appurtenances installed in the
Demised Premises (but excluding Tenant's trade fixtures) shall, upon
installation, become and remain the property of Landlord and shall be maintained
by Tenant during the term hereof and any renewals and extensions thereof, in the
same good order and repair in which the Demised Premises are required to be
maintained. Tenant shall, at the expiration of the term hereof, remove Tenant's


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                                       16


trade fixtures and other personal property which can be removed without damage
to the Demised Premises. All alterations and additions to the Demised Premises
shall be performed in accordance with plans and specifications therefore
submitted to and approved by Landlord, in a good and workmanlike manner and in
conformity with all building codes, laws, regulations, rules, ordinances and
other requirements of all governmental or quasi-governmental authorities having
jurisdiction.

         I. Intentionally Deleted

         J. Not bring any flammable, explosive or dangerous material or article
onto the Property.

         K. Not violate Landlord's regulation that only persons approved from
time to time by Landlord may prepare, solicit orders for, sell, serve or
distribute foods or beverages in the Building, or use the elevators, corridors
or common areas for any such purpose. Except with Landlord's prior written
consent and in accordance with arrangements approved by Landlord, Tenant shall
not permit on the Demised Premises the use of equipment for dispensing food or
beverages or for the preparation, solicitation of orders for sale, serving or
distribution of food or beverages. NOTWITHSTANDING THE FOREGOING, TENANT MAY
PREPARE AND SERVE FOOD OR BEVERAGES WITHIN THE DEMISED PREMISES FOR ITS
EMPLOYEES AND GUESTS.

         L. Not bring safes, heavy files, or other heavy equipment into the
Property unless the weight, location and handling of same is approved by
Landlord. Regardless of said approval, Tenant shall indemnify, defend and save
Landlord harmless from any and all expenses and other damages, including
attorney's fees, and costs, resulting from the use or installation by Tenant of
such heavy equipment.

         M. Not use, create, store, or permit any toxic or hazardous material
anywhere on the Property, Tenant shall not dispose of any toxic or other
hazardous waste through the plumbing system or drainage system of the Building
or the Property, and Tenant shall not violate any requirement of the Florida
Department of Environmental Regulation or the Florida Department of Health, or
any other governmental agency, with respect to waste disposal, Tenant shall
indemnify, defend and hold Landlord harmless from any and all expenses and other
damages, including attorney's fees and costs incurred by Landlord, as a result
of improper storage or handling of any hazardous materials or waste or any
improper waste disposal by Tenant, which indemnification shall survive the
expiration or earlier termination of this Lease.

         N. Bio-hazardous contamination, Tenant shall be responsible to and
shall indemnify the Landlord against any and all damages and costs related to
clean-up or other damages resulting from any bio-hazardous infestation,
contamination or spoilage of the leased area, common areas or other areas within
the Building occasioned by business invitees, employees or third parties
entering in the premises or packages mailer or delivered to the premises of the
Tenant.

         O. Immediately and at its expense, Tenant shall repair and restore any
and all damages caused to the Demised Premises or the Property due to Tenant's
improvements, installations, alterations, additions or other work conducted by
Tenant within the Demised Premises, and Tenant shall restore the Property to the
condition existing prior to improvement, installations, alterations, additions
or other work conducted by Tenant within the Demised Premises.


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                                       17


         P. Comply with the rules and regulations as initially set forth on
Exhibit "E" which is attached hereto and incorporated herein, and comply with
such other rules and regulations as Landlord may establish, and from time to
time amend, for the general safety, comfort and convenience of Landlord,
occupants and tenants of the Building, PROVIDED SUCH AMENDMENTS SHALL NOT
ADVERSELY AFFECT TENANT AND TENANT'S USE OF THE BUILDING AND COMMON AREAS
INCLUDING THE PARKING GARAGE.

         Q. IF Landlord elects to SEPARATELY meter the Demised Premises in
accordance with Paragraph 4F of this Lease, Tenant shall pay directly to the
entity providing same, the costs of all utilities consumed within the Demised
Premises, and all other sums assessed against Tenant or the Demised Premises by
any governmental or quasi-governmental entity in connection with Tenant's use or
occupancy of the Demised Premises.

         R. Not install or operate in the Demised Premises any electrically
operated equipment or other machinery, including computers, WHICH REQUIRE MORE
than three-phase, four-wire 227/480 Volt electrical service and normally used in
modern offices, or any plumbing fixtures, without first obtaining the prior
written consent of Landlord, WHICH CONSENT SHALL NOT BE UNREASONABLY WITHHELD OR
DELAYED. In the event that Landlord determines, in its sole and absolute
discretion, that Tenant's electrical consumption within the Premises is greater
than the normal usage of other tenants within the building, Landlord reserves
the right to charge Tenant for such additional consumption, or cause Tenant to
separately meter electrical service to the Premises at Tenant's sole cost and
expense. Tenant shall not install any equipment of any kind or nature whatsoever
which would or might necessitate any changes, replacements or additions to the
structural system, water system, plumbing system, heating system, air
conditioning system or the electrical system servicing the Demised Premises or
any other portion of the Building without the prior written consent of Landlord,
and in the event such consent is granted, such replacements, changes or
additions shall be paid for by Tenant.

8. SERVICES. Landlord agrees that it shall:

         A. Provide self service passenger elevator service to the Demised
Premises from the ground floor, WHICH MAY BE SECURED ACCESS AT TENANT'S EXPENSE.
Access to the Demised Premises shall at all times be subject to compliance with
such security measures as shall be in effect for the Building.

         B. Provide janitorial service to the Demised Premises and the Common
Areas in the Building as are customarily provided in first class office
buildings in Palm Beach County, Florida. Any and all additional or specialized
janitorial service desired by Tenant shall be contracted for by Tenant directly
and the cost and payment thereof shall be and remain the sole responsibility of
Tenant. The firm providing such janitorial service shall first be approved by
Landlord, and Tenant shall not be entitled to any reduction, abatement, or other
credit against its Proportionate Share of Operating Expenses on account of any
contract for additional or specialized janitorial services, whether or not
Landlord's janitorial services are continued by Tenant. Janitorial services are
to be provided as detailed in Cleaning Specifications Schedule attached as
Exhibit "D".



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                                       18


         C. Subject to the provisions of paragraphs 12 and 15 hereof, make all
necessary repairs of damage to the Common Areas of the Building, equipment used
to provide services specified herein and to the roof, outside walls and
structural members of the Building and Parking Facilities. In the event that any
repair is required by reason of the negligence or abuse of Tenant or its agents,
employees or invitees, or of any other person entering the Building with
Tenant's consent, express or implied, Landlord may make such repair and add the
cost thereof to the first installment of rent which will thereafter become due.

         D. Furnish the Common Areas of the Property with electric service for
lighting and normal office use. Furnish the Demised Premises with heating or air
conditioning between the hours of 7:00 A.M. AND 7:30 P.M. Monday through Friday,
EXCLUDING CHRISTMAS AND NEW YEARS DAY. Tenant SHALL be permitted the use of
after hours air-conditioning, said after hours air-conditioning to be separately
metered by floor only, and Tenant shall pay to Landlord, in addition to Tenant's
Proportionate Share of Operating Expenses, the after hours air conditioning fee
determined by Landlord, in its sole and absolute discretion to be a reasonable
charge for said services, and such sums shall be paid by Tenant as Additional
Rent under this Lease. CURRENTLY BILLED AT $22.00 PER HOUR PLUS 15% MANAGEMENT
FEE AND APPLICABLE SALES TAX, ANY INCREASE SHALL BE BASED ON INCREASED COST TO
LANDLORD.

         E. The costs of all services provided in this Paragraph 8 not
separately charged to Tenant shall constitute Operating Expenses as defined in
Paragraph 5 above, Tenant acknowledges that Landlord does not warrant that any
of the services referred to in this Paragraph 8 will be free from interruption
from causes beyond the reasonable control of Landlord. No interruption of
service shall ever be deemed an eviction or disturbance of Tenant or render
Landlord liable to Tenant for damages by abatement of Rent or otherwise, or
relieve Tenant from performance of Tenant's obligations under this Lease, unless
Landlord, after reasonable notice, shall willfully and without cause fail or
refuse to take reasonable action within its control to restore such service.

         F. LANDLORD SHALL PROVIDE TENANT AND TENANT'S CONTRACTOR USE OF THE
BUILDING FREIGHT ELEVATOR AS REQUIRED DURING CONSTRUCTION, AND LANDLORD WILL
ALSO PERMIT TENANT TO CREATE A CONSTRUCTION CHUTE AND LOCATE A CONSTRUCTION
DUMPSTER ON THE COMMON AREA SUITABLE FOR REMOVAL OF CONSTRUCTION TRASH AND
DEBRIS DURING CONSTRUCTION. LOCATION SUBJECT TO LANDLORD'S APPROVAL NOT TO BE
DENIED OR UNREASONABLE WITHHELD.

9. SUBLETTING AND ASSIGNING. Tenant shall not assign, mortgage or otherwise
transfer or encumber this Lease or any portion of Tenant's interest herein, or
sublet all or any portion of the Demised Premises without first obtaining
Landlord's prior written consent thereto, which SHALL NOT BE UNREASONABLY
DELAYED OR WITHHELD. If Landlord consents to any given assignment or subletting,
such consent will not be deemed a consent to any further subletting or
assignment. Duly attempted assignment, mortgage, sublease or other encumbrance
of the Demised Premises in violation of this paragraph shall be null and void.
If Landlord consents to any subletting or assignment, it shall nevertheless be a
condition to the effectiveness thereof that a fully executed copy of the
sublease or assignment be furnished to Landlord and that any assignee assume in


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                                       19


writing all obligations of Tenant hereunder. Notwithstanding any consent by
Landlord to any subletting or assignment, in the event of any subletting or
assignment of the Demised Premises, Tenant shall remain liable for all of the
obligations of Tenant set forth herein. The sale by Tenant of a controlling
interest in the Tenant entity shall NOT be deemed an assignment of this Lease
requiring the consent of Landlord as specified above.

If, as a result of any assignment, subletting or parting with possession, Tenant
directly or indirectly, receives from the assignee, subtenant or transferee a
rent, payment, fee or any other consideration, in the form of cash, negotiable
instrument, goods, services or in any other form whatsoever, which is greater
than the Minimum Rental and Additional Rental payable hereunder to the Landlord,
then Tenant shall pay ONE HALF (1/2) OF any such excess to Landlord forthwith on
demand as Additional Rental. Tenant shall immediately make available to Landlord
upon request all of Tenant's books, records and documentation AS AVAILABLE TO
THE PUBLIC, so as to enable Landlord to verify the receipt or the amount of such
excess.

10. INDEMNIFICATION; WAIVER OF LIABILITY.

         A. Tenant agrees to indemnify, defend and save harmless Landlord and
its building manager and their officers, employees, agents and independent
contractors and any other person or persons related to or employed by the
Landlord or for which the Landlord has agreed to indemnify, from any and all
loss liability or expense including any suits actions or request for damages
including, but not limited to, legal defense cost and any other costs incurred
by Landlord in connection with loss of income, bodily injury, personal injury or
property damage arising from any failure of the Tenant to fully perform its
obligations under this lease. This indemnification shall include loss of any
type or nature resulting out of the breach of this Lease by Tenant, its
employees, sub-tenants, invitees, contractors sub-contractor or any other person
entering the property under express or implied invitation of the Tenant.

         B. Landlord agrees to indemnify, defend and save harmless Tenant and
its officers, employees, agents and independent contractors and any other person
or persons related to or employed by the Tenant or for which the Tenant has
agreed to indemnify, from any and all loss liability or expense including any
suits actions or request for damages including, but not limited to, legal
defense cost and any other costs incurred by Tenant in connection with loss of
income, bodily injury, personal injury or property damage arising from any
failure of the Landlord to fully perform its obligations under this lease. This
indemnification shall include loss of any type or nature resulting out of the
breach of this Lease by Landlord, its employees, sub-tenants, invitees,
contractors sub-contractor or any other person entering the property under
express or implied invitation of the Landlord.

11. PUBLIC LIABILITY AND BUSINESS INTERRUPTION INSURANCE.

         A. Tenant, at its own cost and expense, shall obtain and maintain in
full force and effect for the mutual benefit of the Landlord and the Tenant,
both being named as co-insureds, general public liability insurance against
claims for personal injury, death or property damage occurring upon, in or about
the Premises, in or about the adjoining streets and passageways, such insurance

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                                       20


to afford protection to the limits of not less than Two Million Dollars
($2,000,000.00) in respect to injury or death to a single person, $4,000,000.00
in respect to any one occurrence, and $1,000,000.00 in respect to property
damage. Under no circumstances shall the rent due under this Lease be abated
because of damage to the premises.

         B. Tenant, at its own cost and expense, shall obtain and maintain in
full force and effect during the original term hereof, and any extensions or
renewals, business interruption insurance payable in case of loss resulting from
damage to the Demised Premises or the Building by fire or other casualty. Such
insurance shall be maintained in an amount not less than the sum of all Minimum
Annual Rental and additional rent coming due for the then current calendar year
as estimated by Landlord.

         C. Tenant agrees to carry full replacement cost all risk fire and
extended coverage insurance in form satisfactory to Landlord on all improvements
to the Demised Premises. Tenant also agrees to carry such all risk insurance
covering Tenant's fixtures, furnishings, wall covering, carpeting, drapes,
equipment and all other items of personal property of Tenant located on or
within the Demised Premises.

         D. All policies of insurance described above shall name Landlord and
any mortgagee of Landlord as named insureds, and shall include an endorsement
providing that the policies will not be cancelled or amended until after thirty
(30) days' prior written notice to Landlord. All such policies of insurance
shall be issued by a financially responsible company or companies satisfactory
to Landlord and authorized to issue such policy or policies, and licensed to do
business in the State of Florida. Tenant shall deposit with Landlord duplicate
originals of such insurance on or prior to the Rental Commencement Date,
together with evidence of paid-up premiums, and shall deposit with Landlord
renewals thereof at least fifteen (15) days prior to expiration of any such
policies.

12. FIRE OR OTHER CASUALTY. In case of damage to the Demised Premises by fire or
other casualty, Tenant shall promptly give notice thereof to Landlord. In case
of damage to the Building, the Demised Premises or the Parking Facilities by
fire or other casualty, Landlord shall, unless Landlord elects to terminate this
Lease as described below, and subject to the rights of Landlord's Mortgagees,
thereupon undertake the repair and restoration of: (a) the Building, to
substantially the same condition as existed prior to the casualty; provided that
Landlord is not obligated to restore any portion of the Building or Parking
Facilities not necessary for Tenant's use of the Demised Premises (hereinafter
the "Excluded Area"); and (b) the Demised Premises, to substantially the
condition in which Landlord was obligated to deliver the Demised Premises to
Tenant on the Rental Commencement Date, at the expense of Landlord, subject to
delays which may arise by reason of adjustment of loss under insurance policies
and for delays beyond the reasonable control of Landlord; provided, however,
that Landlord shall not be obligated to restore the Demised Premises if adequate
insurance proceeds are not available to Landlord to complete such work. The
Minimum Annual Rent payable by Tenant hereunder shall be equitably apportioned
during the period of Landlord's repair and/or restoration of the Demised
Premises in accordance with the portion of the Demised Premises which has been
rendered untenable. If Landlord elects to make such repairs, Tenant shall,


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                                       21


within thirty (30) days after completion by Landlord of such repair and/or
restoration, at Tenant's sole cost and expense, commence to repair or restore
the remainder of the Demised Premises to the condition it was in prior to such
fire or casualty, (which work shall be completed by Tenant within one hundred
twenty (120) days of commencement.) In the event that Landlord, in Landlord's
discretion, shall decide not to repair or rebuild the Demised Premises, the
Building or the Parking Facilities, Landlord shall deliver written notice to
Tenant of its election to terminate this Lease within ninety (90) days after
Landlord is notified of the casualty, and this Lease shall terminate as of the
date specified in such notice which date shall not be more than ninety (90) days
thereafter, and the Rent (taking into account any apportionment as aforesaid)
shall be adjusted to the termination date, and Tenant shall thereupon promptly
vacate the Demised Premises.

13. INCREASE IN PREMIUMS. Tenant shall not do, permit or suffer to be done any
act, matter, thing or failure to act in respect to the Property or the Demised
Premises or use or occupy the Property or the Demised Premises or conduct or
operate Tenant's business in any manner objectionable to insurance companies
whereby the fire insurance or any other insurance now in force or hereafter to
be placed on the Demised Premises or any part thereof shall become void or
suspended or whereby any premiums in respect of insurance maintained by Landlord
shall be higher than those which would normally have been in effect for the
occupancy contemplated under the permitted uses. In case of a breach of this
covenant, in addition to all other rights and remedies of Landlord hereunder,
Tenant shall (a) indemnify Landlord and hold Landlord harmless from and against
any loss which would have been covered by insurance which shall become void or
suspended because of such breach by Tenant, and (b) pay to Landlord any and all
increase of premiums on any insurance, including, without limitation, rent
insurance, resulting from any such breach.

14. WAIVER OF SUBROGATION. Landlord and Tenant waive, unless said waiver should
invalidate any insurance required or permitted hereunder, their right to recover
damages against each other for any reason whatsoever to the extent the damaged
party recovers indemnity from its insurance carrier. Any insurance policy
procured by either Tenant or Landlord which does not name the other as a named
insured shall, if obtainable, contain an express waiver of any right of
subrogation by the insurance company, including but not limited to Tenant's
workmen's compensation carrier, against Landlord or Tenant, whichever the case
may be. All public liability and property damage policies shall contain an
endorsement that Landlord, although named as an insured, shall nevertheless
entitled to recover for damages caused by the negligence of Tenant.

15. EMINENT DOMAIN.

         A. If the whole of the Property, or the Demised Premises shall be taken
or condemned for a public or quasi-public use under any law, ordinance or
regulation, or by right of eminent domain or private purchase in lieu thereof by
any competent authority, this Lease shall terminate and Rent shall abate for the
un-expired portion of the term of this Lease as of the date the right to
possession shall vest in the condemning authority.

         B. If part of the Demised Premises shall be acquired or condemned as
aforesaid, and such acquisition or condemnation shall render the remaining
portion unsuitable for the business of Tenant (in the reasonable opinion of
Landlord), the term of this Lease shall cease and terminate as provided in
Paragraph 15(A) hereof, provided however, that diminution of rentable area shall
not in and of itself be conclusive as to whether the portion of the Demised
Premises remaining after such acquisition is unsuitable for Tenant's business.
If such partial taking is not extensive enough to render the Demised Premises
unsuitable for the business of Tenant, this Lease shall continue in full force
and effect except that the Minimum Annual Rental shall be reduced in the same
proportion that the rentable area of the Demised Premises taken bears to the
rentable area demised. Subject to the rights of any mortgagee of Landlord's
estate, Landlord shall, upon receipt of the net condemnation award, make all



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necessary repairs or alterations to the Building so as to render the portion of
the Building not taken a complete architectural unit, but Landlord shall in no
event be required to spend for such work an amount in excess of the net amount
received by Landlord as damages for the part of the Building so taken. "Net
amount received by Landlord" shall mean that portion of the condemnation award
in excess of any sums required to be paid by Landlord to the holder of any
mortgage on the property so condemned, and all expenses and legal fees incurred
by Landlord in connection with the condemnation proceeding.

         C. If part of the Building, but no part of the Demised Premises, is
taken or condemned as aforesaid, and, in the reasonable opinion of Landlord,
such partial acquisition or condemnation shall render Landlord unable to comply
with its obligations under this Lease, or shall render the Demised Premises
unsuitable for the business of Tenant, the term of the Lease shall cease and
terminate as provided in Paragraph 15(A) hereof, by Landlord sending written
notice to such effect to Tenant, whereupon Tenant shall immediately vacate the
Demised Premises.

         D. In the event of any condemnation or taking as hereinbefore provided,
whether whole or partial, Tenant shall not be entitled to any part of the award,
as damages or otherwise, for such condemnation and Landlord is to receive the
full amount of such award, and Tenant hereby expressly waives any right or claim
to any part thereof. Although all damages in the event of any condemnation are
to belong to the Landlord whether such damages are awarded as compensation for
diminution in value of the leasehold or the fee of the Demised Premises, Tenant
shall have the right to claim and recover from the condemning authority, but not
from Landlord, such compensation as may be separately awarded or recoverable by
Tenant in Tenant's own right on account of any damage to Tenant's business by
reason of the condemnation and for or on account of any cost or loss to which
Tenant might be put in removing Tenant's merchandise, furniture, fixtures, and
equipment, or the loss of Tenant's business or decrease in value thereof.

16. EVENTS OF DEFAULT. Each of the following events shall constitute an Event of
Default under this Lease:

         A. If Tenant shall fail to pay Minimum Annual Rental, Additional Rent,
or any other sum payable to Landlord hereunder when due; AS SET FORTH IN THE
REFERENCED DATA WITHIN TEN (10) DAYS OF WRITTEN NOTICE or

         B. If Tenant shall fail to perform or observe any of the other
covenants, terms or conditions contained in this Lease within THIRTY (30) days
after written notice thereof by Landlord; WHICH PERIOD SHALL BE EXTENDED SO LONG
AS TENANT IS USING IT'S BEST EFFORTS TO CURE. or

         C. If a receiver or trustee is appointed to take possession of all or a
substantial portion of the assets of Tenant or any Guarantor and such receiver
or trustee is not dismissed within thirty (30) days; or



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         D. If Tenant or any Guarantor makes an assignment for the benefit of
creditors; or

         E. If any bankruptcy, reorganization, insolvency, creditor adjustment
or debt rehabilitation proceedings are instituted by or against Tenant or any
Guarantor under any state or federal law and the same are not dismissed within
thirty (30) days: or

         F. If levy, execution, or attachment proceedings or other process of
law are commenced upon, on or against Tenant or any Guarantor or a substantial
portion of Tenant's or any Guarantor's assets and the same are not dismissed
within thirty (30) days; or

         G. If a liquidator, receiver, custodian, sequester, conservator,
trustee, or other similar judicial officer is applied for by Tenant or any
Guarantor; or

         H. If Tenant or any Guarantor becomes insolvent in the bankruptcy or
equity sense; or

         I. Intentionally Deleted

17. REMEDIES.

         A. If Tenant fails to pay Minimum Annual Rental, Additional Rent, or
any other sum payable to Landlord hereunder when due AFTER WRITTEN NOTICE AS
PROVIDED IN REFERENCED DATA, Tenant shall pay a late charge in the amount of
Fifty Dollars ($50.00) plus interest accruing on the unpaid sums from the date
such sums are due at a rate equal to the greater of (a) Eighteen percent (18%)
per annum or (b) Three percent (3%) per annum in excess of the prime rate of
interest paid by Landlord on sums borrowed by Landlord (the "Late Charge"). The
Late Charge shall be Additional Rent under the terms of this Lease. In no event
however shall any interest or other charge on any delinquent payments exceed the
amount allowed to be charged under the usury laws of the State of Florida, it
being acknowledged and agreed that any amount in excess of such limitation shall
be refunded to Tenant by Landlord by means of a credit against the next
installment(s) of Rent coming due hereunder, or if no such Rent payments remain
to be paid, then the excess shall be refunded in cash. The Late Charge shall be
in addition to, and shall not in any way limit any other rights or remedies
available to Landlord under the terms of this Lease or at law and in equity.

         B. Upon the occurrence of an Event of Default, Landlord may, at any
time thereafter, and in addition to any other available rights or remedies at
law and/or in equity, elect EITHER OPTION ONE (1) BELOW OR (TWO AND/OR THREE (2
AND/OR 3)) of the following remedies:

                  (1) Without obligation to re-let the Demised Premises, to
accelerate the whole or any part of the Minimum Annual Rental, the Additional
Rent, or any other sum payable to Landlord hereunder for the entire un-expired
balance of the Term of this Lease, as well as all other charges, payments, costs
and expenses herein agreed to be paid by Tenant and for purposes of this
Paragraph, the Minimum Annual Rental shall be deemed to be increased and
adjusted as described in Paragraphs 4D and 4E hereof, with the annual Cost of
Living Increase calculated as if the Adjustment Date was the month in which such
default occurred, and any Rent or other charges, payments, costs and expenses if
so accelerated shall, in addition to any and all installments of Rent already
due and payable and in arrears, and/or any other charge or payment herein
reserved, included or agreed to be treated or collected as rent and/or any other


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charge, expense or cost herein agreed to be paid by Tenant which may be due and
payable and in arrears, be deemed due and payable as if, by the terms and
provisions of this Lease, such accelerated Rent and other charges, payments,
costs and expenses were on that date payable in advance, and Landlord shall be
entitled to all costs of collection, including attorney's fees and costs through
all appellate levels and post judgment proceedings, and to interest on all such
amounts at the maximum rate allowed by law until such amounts are actually paid
to Landlord. NOTWITHSTANDING THE FOREGOING, THE ACCELERATED TERM FOR WHICH
AMOUNTS MAY BE COLLECTED SHALL BE LIMITED TO FOUR (4) YEARS DURING THE FIRST
FOUR (4) YEARS OF THE LEASE, THREE (3) YEARS DURING THE FIFTH (5TH) YEAR OF
LEASE AND TWO (2) YEARS DURING THE SIXTH (6TH) YEAR OF LEASE AND BEYOND.

                  (2) To immediately re-enter the Demised Premises without
accepting surrender of the leasehold estate and remove all persons and all or
any property therefrom, with or without summary dispossess proceedings or by any
suitable action or proceeding at law, without being liable to indictment,
prosecution or damages therefore, and repossess and enjoy the Demised Premises;
together with all additions, alterations and improvements. Upon recovering
possession of the Demised Premises by reason of or based upon or arising out of
a default on the part of Tenant, Landlord may, at Landlord's option, either
terminate this Lease or make such alterations and repairs as may be necessary in
order to re-let the Demised Premises or any part or parts thereof, either in
Landlord's name or otherwise, for a term or terms which may at Landlord's option
be less than or exceed the period which would otherwise have constituted the
balance of the Term of this Lease and at such rent or rents and upon such other
terms and conditions as in Landlord's sole discretion may seem advisable and to
such person or persons as may in Landlord's discretion seem best. Upon each such
re-letting all rents received by Landlord from such re-letting shall be applied:
first, to the payment of any indebtedness other than Rent due hereunder from
Tenant to Landlord; second, to the payment of any costs and expenses of such
re-letting, including brokerage fees and attorney's fees and all costs of such
alterations and repairs; third, to the payment of Rent due and unpaid hereunder;
and the residue if any, shall be held by Landlord and applied in payment of
future rent as it may become due and payable hereunder. If such rentals received
from such re-letting during any month shall be less than that to be paid during
that month by Tenant hereunder, Tenant shall pay any such deficiency to
Landlord. Such deficiency shall be calculated and paid monthly. No such re-entry
or taking possession of the Demised Premises or the making of alterations and/or
improvements thereto or the re-letting thereof shall be construed as an election
on the part of Landlord to terminate this Lease unless written notice of such
intention be given to Tenant. Landlord shall in no event be liable in any way
whatsoever for failure to re-let the Demised Premises or, in the event that the
Demised Premises or any part or parts thereof are re-let, for failure to collect
the rent thereof under such re-letting. Tenant, for Tenant and Tenant's
successors and assigns, hereby irrevocably constitutes and appoints Landlord as
Tenant's agent to collect the rents due and to become due under all subleases of
the Demised Premises or any part thereof without in any way affecting Tenant's
obligation to pay any unpaid balance of Rent due or to become due hereunder.
Notwithstanding any such re-letting without termination, Landlord may at any
time thereafter elect to terminate this Lease for such previous breach.


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                  (3) To terminate this Lease and the term hereby created
without accepting any surrender of the leasehold estate and without any right on
the part of Tenant to waive the forfeiture by payment of any sum due or by other
performance of any condition, term or covenant broken, whereupon Landlord shall
be entitled to recover, in addition to any and all sums and damages for
violation of Tenant's obligations hereunder in existence at the time of such
termination, damages for Tenant's default in an amount equal to the amount of
the Rent reserved for the balance of the term of this Lease, as well as all
other charges, payments, costs and expenses herein agreed to be paid by Tenant,
all discounted at the rate of six percent (6%) per annum to their then present
worth, less the fair rental value of the Demised Premises for the remainder of
said term, also discounted at the rate of six percent (6%) per annum to its then
present worth, all of which amount shall be immediately due and payable from
Tenant to Landlord.

THE RIGHT to enforce all of the other provisions of this Lease herein provided
for may at the option of any assignee of this Lease, be exercised by any
assignee of the Landlord's right, title and interest in this Lease in his, her,
or their own name, any statute, rule of court, custom, or practice to the
contrary notwithstanding.

All of the remedies hereinbefore given to Landlord and all rights and remedies
given to it by law and equity shall be cumulative and concurrent. No
determination of this Lease or the taking or recovering possession of the
premises shall deprive Landlord of any of its remedies or actions against the
Tenant for rent due at the time or which, under the terms hereof would in the
future become due as if there had been no determination, nor shall the bringing
of any action for rent or breach of covenant, or the resort to any other remedy
herein provided for the recovery of rent be construed as a waiver of the right
to obtain possession of the premises.

         C. No right or remedy herein conferred upon or reserved to Landlord is
intended to be exclusive of any other right or remedy herein or by law provided
but each shall be cumulative and in addition to every other right or remedy
given herein or now or hereafter existing at law or in equity or by statute.

         D. In the event of a breach or threatened breach by Tenant of any of
the covenants or provisions hereof, Landlord, in its sole and absolute
discretion, shall have the right of injunction and the right to invoke any
remedy allowed at law or in equity as if re-entry, summary proceedings and other
remedies were not herein provided for in law or in equity.

         E. No waiver by Landlord of any breach by Tenant of any of Tenant's
obligations, agreements or covenants herein shall be a waiver of any subsequent
breach or of any obligation, agreement or covenant, nor shall any forbearance by
Landlord to seek a remedy for any breach by Tenant be a waiver by Landlord of
any rights and remedies with respect to such or any subsequent breach.

18. QUIET ENJOYMENT. Upon paying the Minimum Annual Rental, Additional Rent, and
other charges and sums herein provided for, and upon Tenant's observance and
keeping of all the covenants, agreements and conditions of this Lease, Tenant
shall quietly have and enjoy the Demised Premises during the term of this Lease
without hindrance or molestation by anyone claiming by or through Landlord;
subject, however, to the terms, exceptions, reservations and conditions of this
Lease.



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19. NO WAIVER. The failure of either party to insist in any one or more
instances upon the strict performance of any one or more agreements, terms,
covenants, conditions, or obligations of this Lease, or to exercise any right,
remedy or election therein contained, shall not be construed as a waiver or
relinquishment for the future of the performance of such one or more obligations
of this Lease or of the right to exercise such right, remedy or election, with
respect to any subsequent breach, act, or omission. The manner of enforcement or
the failure of Landlord to enforce any of the covenants, conditions, rules and
regulations set forth herein or hereafter adopted, against any tenant in the
Building shall not be deemed a waiver of any such covenants, conditions, rules
and regulations.

20. ATTORNMENT AND SUBORDINATION.

         A. Subject to the provisions in subsection B hereof, this Lease, and
the rights of Tenant hereunder, shall be subject or subordinate to any mortgages
which now are or may hereafter be placed upon the Property or any portion
thereof (a "mortgage") or any interest therein or to any leases (hereinafter
called "underlying leases") of the Property as a whole which now exist or may
hereafter be made (any holder of any such mortgage, or landlord with respect to
any underlying lease being hereinafter called an "Interested Party"). The terms
of this Subordination shall be self operative, provided however, that Tenant
shall execute such documents as may be requested by Landlord in order to confirm
this Subordination from time to time. Any failure by Tenant to execute any such
documents shall be a default hereunder.

         B. Upon the request of Tenant, any Interested Party shall provide to
Tenant its written agreement providing substantially as follows: so long as
Tenant has not defaulted under this Lease; (I) Tenant's rights shall not be
terminated or disturbed by reason of any foreclosure of such mortgage or
termination of such underlying lease: (II) in the event that the property
containing the Demised Premises is sold or otherwise disposed of pursuant to any
right or power contained in or existing by reason of any such mortgage or the
bond, note or debt secured thereby, the purchaser thereof or other person
acquiring title thereto through or by virtue of such sale or other disposition
shall take title thereto subject to this Lease and all rights of Tenant
hereunder; (III) upon termination of any such underlying lease, that lessor
shall accept Tenant's attornment upon all the terms and conditions of this Lease
for the balance of the term hereof. Any such written agreement shall also
reserve to the Interested Party the rights specified in section D hereof.
LANDLORD SHALL PROCURE A WRITTEN ATTORNMENT PURSUANT TO THIS PARAGRAPH ON OR
BEFORE JANUARY 2ND, 2003 IN A FORM PROVIDING FOR THE SUBSTANTIVE RIGHTS OF THE
TENANT AS OUTLINED IN THIS PARAGRAPH FAILING WHICH THE TENANT MAY ELECT TO
TERMINATE THIS LEASE. SHOULD TENANT EXERCISE SUCH RIGHT OF TERMINATION, LANDLORD
SHALL REIMBURSE ANY OUT OF POCKET BONAFIDE EXPENSES UP TO ONE HUNDRED THOUSAND
AND 00/100 DOLLARS ($100,000.00) TO THE TENANT. UPON PAYMENT OF SUCH EXPENSES
THE TENANT SHALL DIRECT THE ESCROW AGENT TO RETURN ALL ESCROW FUNDS TO THE
LANDLORD. THE ATTORNMENT PROCUREMENT TIME MAY BE EXTENDED BY MUTUAL AGREEMENT OF
THE PARTIES.

         C. Upon any foreclosure sale on any such mortgage or termination of any
underlying lease, if the holder of the mortgage or other purchaser at
foreclosure sale or any lessor with respect to any underlying lease shall so
request, Tenant shall attorn to such holder, purchaser or lessor as Tenant's


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landlord under this Lease and shall promptly execute and deliver any instrument
that such holder, purchaser or lessor may reasonably request to evidence such
attornment. Upon such attornment, this Lease shall continue in full force and
effect as a direct lease between such holder, purchaser or lessor and Tenant
upon all of the terms, conditions and covenants as are set forth in this Lease.

         D. In the event that the holder of such mortgage or the lessor under
such underlying lease shall succeed to the interest of Landlord hereunder, such
Interested Party shall not be: (i) liable for any act or omission of any prior
landlord (including Landlord); (ii) liable for the return of any security
deposit not actually received by it; (iii) subject to any offsets or defenses
which Tenant might have against any prior landlord (including Landlord); (iv)
bound by any Rent or Additional Rent which Tenant might have paid for more than
the current month to any prior landlord (including Landlord); or (v) bound by an
amendment or modification of this Lease made without its written consent.

         E. Within ten (10) days after written request from Landlord from time
to time, Tenant shall execute and deliver to Landlord, or Landlord's designee, a
written statement certifying, (i) that this Lease is unmodified and in full
force and effect, or is in full force and effect as modified and stating the
modifications; (ii) the amount of Minimum Annual Rent and the date to which
Minimum Annual Rent and Additional Rent have been paid in advance; and (iii)
that Landlord is not in default hereunder or, if Landlord is claimed to be in
default, stating the nature of any claimed default; (iv) the amount of security
deposit landlord is holding and (v) any options to renew or purchase that tenant
may have. Within ten (10) days after written request from Tenant from time to
time, Landlord shall execute and deliver to Tenant, or Tenant's designee, a
written statement certifying, (i) that this Lease is unmodified and in full
force and effect, or is in full force and effect as modified and stating the
modifications; (ii) the amount of Minimum Annual Rent and the date to which
Minimum Annual Rent and Additional Rent have been paid in advance; and (iii)
that Tenant is not in default hereunder, or if Tenant is claimed to be in
default, stating the nature of any claimed default.

21. NOTICES. All bills, statements, notices or communications which either party
hereto may desire or be required to give to the other shall be deemed
sufficiently given or rendered if in writing and either hand delivered to
Landlord or Tenant or sent by registered or certified mail or overnight courier,
postage prepaid, addressed to Landlord or Tenant at the address set forth on the
first page hereof or any other address pursuant to notice given as herein set
forth. Any notices given in accordance with the Lease shall be deemed to be
given when the same is hand delivered to the other party, deposited with the
overnight courier or three (3) days after depositing in the mail, as the case
may be.

22. HOLDING OVER. Should Tenant continue to occupy the Demised Premises after
expiration of the term of this Lease or any renewals thereof, or after a
forfeiture incurred such tenancy shall (without limitation on any of Landlord's
rights or remedies therefore) be one at sufferance from month to month at a
minimum monthly rent equal to twice the rent payable for the previous month of
the term of this Lease.

23. BROKERS. Tenant represents and warrants that it has not employed any broker
or agent as its representative in the negotiation for or the obtaining of this


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Lease other than Landlord's leasing agent, GRUBB & ELLIS AND TENANT'S LEASING
AGENT LAUTIN DOHM REALTY, INC., and agrees to indemnify and hold Landlord
harmless from and against any and all cost or liability for compensation claimed
by any broker or agent other than Landlord's leasing agent LAUTIN DOHM REALTY,
INC., with whom it has dealt or claimed to have been engaged by Tenant.

24. DEFINITIONS OF LANDLORD AND TENANT.

         A. The word "Tenant" as used in this Lease shall be construed to mean
tenants in all cases where there is more than one tenant, and the necessary
grammatical changes required to make the provisions hereof apply to
corporations, partnerships, or individuals, men or women, shall in all cases be
assumed as through in each case fully expressed. Each provision hereof shall
extend to and shall, as the case may require, bind and inure to the benefit of
Tenant and its heirs, legal representatives, successors and assigns, provided
that this Lease shall not inure to the benefit of any assignee, heir, legal
representative, transferee or successor of Tenant except upon the express
written consent or election of Landlord, except as herein otherwise provided.

         B. The term "Landlord" as used in this Lease shall mean the fee owner
of the entire Property or, if different, the party holding and exercising the
right, as against all others (except space tenants of Building) to possession of
the entire Property. In the event of voluntary or involuntary transfer of such
Ownership or right to a successor in interest of Landlord, Landlord shall be
freed and relieved of all liability and obligation hereunder which shall
thereafter accrue (and, as to any unapplied portion of Tenant's security
deposit, Landlord shall be relieved of all liability therefore upon transfer of
such portion to its successor in interest) and Tenant shall look solely to such
successor in interest for the performance of the covenants and obligations of
Landlord hereunder which shall thereafter accrue. Notwithstanding the foregoing,
no mortgagee or ground lessor which shall succeed to the interest of Landlord
hereunder (either in terms of ownership or possessory rights) shall: (1) be
liable for any previous act or omission of a prior landlord; (2) be subject to
any rental offsets or defenses against a prior landlord; (3) be bound by any
amendment of this Lease made without its written consent, or by payment by
Tenant of rent in advance in excess of one (1) month's rent; or (4) be liable
for any security deposit not actually received by it. Subject to the foregoing,
the provisions hereof shall be binding upon and inure to the benefit of the
heirs, personal representatives, successors and assigns of Landlord. In no event
shall the liability of Landlord to Tenant hereunder exceed Landlord's interest
in the Property. Tenant agrees that no judgment arising from any default of
Tenant's agreements under the terms of this Lease or by reason of any willful or
negligent act of Landlord and its Building manager, and their employees,
officers, agents and independent contractors, shall attach against any property
of Landlord other than the Property, and in no event shall any such judgment
constitute a lien upon any other lands or properties owned by Landlord
wheresoever located. Neither shall any such judgment attach or constitute a lien
against any property of any principal or partner of the Landlord, or of their
heirs, executors, administrators, successors or assigns.

25. PRIOR AGREEMENTS; AMENDMENTS. Neither party hereto has made any
representations or promises except as contained herein. No agreement hereinafter


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                                       29


made shall be effective to change, modify, discharge or effect an abandonment of
this Lease, in whole or in part, unless such agreement is in writing and signed
by the party against whom enforcement of the change, modification, discharge or
abandonment is sought.

26. CAPTIONS. The captions of the paragraphs in this Lease are inserted and
included solely for convenience and shall not be considered or given any effect
in construing the provisions hereof.

27. CONSTRUCTION OF LEASE. If any term of this Lease, or the application thereof
to any person or circumstances, shall to any extent, be invalid or
unenforceable, the remainder of this Lease, or the application of such term to
persons or circumstances other than those as to which it is invalid or
unenforceable, shall not be affected thereby, and each term of this Lease shall
be valid and enforceable to the fullest extent permitted by law.

28. MECHANICS' LIENS, ETC.

         A. Nothing contained in this Lease shall be deemed or construed in any
way as constituting the consent or request of Landlord, express or implied by
inference or otherwise, to any contractor, subcontractor, laborer or materialman
for the performance of any labor or the furnishing of any materials for any
alteration, addition, improvement or repair to the Property, the Demised
Premises or any part thereof, nor as giving Tenant any right, power or authority
to contract for or permit the rendering of any services or the furnishing of any
materials that would give rise to the filing of any lien against the Property,
the Demised Premises or any part thereof, nor to subject Landlord's estate in
the Property to liability under the Mechanic's Lien Law of the State of Florida
in any way, it being expressly understood that Landlord's estate shall not be
subject to any such liability.

         B. Notwithstanding any provision to the contrary set forth in this
Lease, it is expressly understood and agreed that the interest of the Landlord
shall not be subject to liens for improvements made by Tenant in and to the
Demised Premises, Tenant shall notify each and every contractor making any such
improvements of the provision set forth in the preceding sentence of this
Paragraph. The parties agree to execute, acknowledge and deliver to Landlord
without charge a Mechanic's Lien Notice, in recordable form, containing a
confirmation that the interest of the Landlord shall not be subject to liens for
improvements made by Tenant to the Property or the Demised Premises. THESE
PROVISIONS SUPPLEMENT THE LANGUAGE OF SECTION 3 OF THIS AGREEMENT.

29. CERTAIN RIGHTS RESERVED TO LANDLORD. Landlord reserves the following rights:

         A. BUILDING NAME. To name the Building and to change the name or street
address of the Building.

         B. EXTERIOR SIGNS. To install and maintain a sign or signs on the
exterior of the Building, EXCEPT AS DESCRIBED IN PARAGRAPH 14A OF THE RULES AND
REGUALTIONS.

         C. REDECORATION. During the last ninety (90) days of the term, if
during or prior to that time Tenant has vacated the Demised Premises, to
decorate, remodel, repair, alter or otherwise prepare the Demised Premises for
re-occupancy, without affecting Tenant's obligation to pay Minimum Annual
Rental, Additional Rent and all other sums due under the terms of this Lease.


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         D. PASS KEYS. To constantly have pass keys to the Demised Premises,
WHICH SHALL BE USED ONLY IN AN EMERGENCY

         E. ADJOINING AREAS. The use and reasonable access thereto through the
Demised Premises for the purposes of operation, maintenance, decoration and
repair of all walls, windows and doors bounding the Demised Premises (including
exterior walls of the Building, core corridor walls and doors and any core
corridor entrance) except the inside surface thereof, any terraces or roofs
adjacent to the Demised Premises and any space in or adjacent to the Demised
Premises used for shafts, pipes, conduits, fan rooms, ducts, electric or other
utilities, sinks or other facilities are reserved to Landlord, WITH REASONABLE
NOTICE TO TENANT.

         F. COMMON AREAS AND PARKING FACILITIES. The exclusive right to manage
the Common Areas and the Parking Facilities.

30. LANDLORD'S LIEN. LANDLORD WAIVES ALL STATUTORY AND CONTRACTUAL LIEN RIGHTS
TO THE PROPERTY OF THE TENANT UNDER THIS LEASE

31. RULES AND REGULATIONS. Tenant covenants and agrees that it shall comply with
and observe all nondiscriminatory, uniformly applied reasonable rules and
regulations ("Rules and Regulations") which Landlord shall from time to time
promulgate for the management and use of the Demised Premises, the Building and
the Parking Facilities. Landlord's initial Rules and Regulations are set forth
on Exhibit "E" attached hereto and made a part hereof Landlord shall have the
right from time to time to reasonably amend or supplement the Rules and
Regulations theretofore promulgated.

32. WAIVER OF JURY TRIAL. LANDLORD AND TENANT HEREBY WAIVE ANY AND ALL RIGHT TO
A TRIAL BY JURY IN ANY ACTION, PROCEEDING, COUNTERCLAIM, OR SUBSEQUENT
PROCEEDING, BROUGHT BY EITHER OF THE PARTIES HERETO AGAINST THE OTHER ON ANY
MATTERS WHATSOEVER ARISING OUT OF OR IN ANY WAY CONNECTED WITH THIS LEASE,
TENANT'S USE OR OCCUPANCY OF THE DEMISED PREMISES, THE BUILDING OR THE PARKING
FACILITIES AND/OR ANY CLAIM OF INJURY OR DAMAGE.

33. RADON GAS. Radon is a naturally occurring radioactive gas that, when it has
accumulated in a building in sufficient quantities, may present health risks to
persons who are exposed to it over time. Levels of Radon that exceed Federal and
State guidelines have been found in buildings in Florida. Additional information
regarding Radon and Radon testing may be obtained from your county public health
unit.

34. NO OPTION. The submission of this Lease to Tenant for examination does not
constitute a reservation of or option for the Demised Premises and this Lease
becomes effective as a lease only upon execution and delivery thereof by the
Landlord and Tenant.

35. FORCE MAJEURE. Notwithstanding anything to the contrary contained herein,
Landlord shall not be deemed in default with respect to the delivery of the
Demised Premises or any other obligation of Landlord hereunder, if Landlord's
inability to perform is due to any strike, lockout, civil commotion, warlike
operation, invasion, rebellion, hostilities, military or usurped power,
governmental regulation, moratoriums or controls, acts of God or any other cause
beyond the control of Landlord, provided that such cause is not due to the
willful act or negligence of Landlord.

36. TELECOMMUNICATIONS CARRIER'S ACCESS

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                                       31


a. Grant of Carrier's License. Tenant's right to select and utilize a
telecommunications and date carrier (the "Carrier") shall be conditioned on the
execution by such Carrier of: (i) a license agreement, in form and substance
acceptable to Landlord, pursuant to which Landlord shall grant to the Carrier a
license (which shall be coextensive with the rights and privileges granted to
Tenant under this Lease) to install, operate, maintain, repair, replace, and
remove cable and related equipment within (INSERT LOCATIONS).

LANDLORD WILL GIVE THE TENANT RIGHT TO UTILIZE THE COMMON AREA CHASE FOR
COMMUNICATION WIRE/DATA.

b. No Exclusive Rights. The license contemplated herein to be granted to the
Carrier shall permit the Carrier to provide services only to Tenant and not to
any other tenants or occupants of the Building and shall require all of the
carrier's equipment (other than connecting wiring) to be located in the Tenant's
Premises. The License shall not grant an exclusive right to Tenant or to the
Carrier. Landlord reserves the right, at its sole discretion, to grant, renew,
or extend licenses to other telecommunications and data carriers for the
purposes of locating telecommunications equipment in the Building which may
serve Tenant or other tenants in the Building.

c. No Greater Rights. Except to the extent expressly set forth herein, nothing
herein shall grant to the Carrier any greater rights or privileges than Tenant
is granted pursuant to the terms of this Lease or diminish Tenant's obligations
or Landlord's rights hereunder.

d. Tenant Ensures Carrier's Compliance. Tenant shall be responsible for ensuring
that the Carrier complies with the terms and conditions of the license agreement
relating to the use of the Premises or the making of any physical Alterations
imposed upon Tenant under this Lease to the extent the Carrier operates or
maintains any equipment or delivers any services in the Premises. Any failure by
the Carrier to observe and comply with such terms, conditions, agreement, and
covenants on behalf of Tenant, to the extent the Carrier operates or maintains
any equipment or delivers any services in the Premises or the Licensed Areas,
shall be a default under the Lease.

Landlord and Tenant understand, agree, and acknowledge that: This Lease has been
freely negotiated by both parties; and that, in any controversy, dispute, or
contest over the meaning, interpretation, validity, or enforceability of this
Lease or any of its terms or conditions, there shall be no inference,
presumption, or conclusion drawn whatsoever against either party by virtue of
that party having drafted this Lease or any portion thereof.


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                                       32




                  IN WITNESS WHEREOF, the parties hereto have executed this
Lease on the day and year first aforesaid.


Signed, sealed and delivered           LANDLORD:
in the presence of:                    CANPRO INVESTMENTS LTD.


                                       By: /s/ Ofer Drucker
- ------------------------------         ----------------------------------------
                                       Ofer Drucker
                                       Vice President of Finance



                                       TENANT:
                                       WACKENHUT CORRECTIONS CORPORATION


                                       By: /s/ John J. Bulfin
- ------------------------------         ----------------------------------------
                                       John J. Bulfin
                                       Senior Vice President
                                       General Counsel


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                                       33




                                   Exhibit "A"

                                Legal Description
                         Parcel 2 - Office Building Site
                                              (O.R.B. 4312 PG. 1726)

A portion of section 6, Township 47 South, Range 43 East, Palm Beach County,
Florida, being more particularly described as follows: Commencing at the South
one quarter corner of said section 6: Thence North 00)58'48" East, along said
North-South quarter line, a distance of 664.54 feet, Thence South 89)41'52"
East, a distance of 347.76 feet: Thence South 89)41'52" East, a distance of
347.49 feet: Thence North 01)00'11" East, a distance of 30.00 feet to the point
of beginning of this description: Thence continue North 01)00'11" East, a
distance of 634.46 feet: Thence South 89)41'01" East, a distance of 347.76 feet:
Thence South 01)01'35" West, a distance of 522.29 feet: Thence South 72)29'41"
West, a distance of 366.48 feet to the point of beginning: together with the
following described parcel:

Commencing at the South one quarter of said section 6: Thence North 00)58'48"
East along the North-South quarter line, a distance of 664.54 feet: Thence South
89)41'52" East a distance of 347.49 feet: Thence North 01)00'11" East, a
distance of 30.00 feet: Thence North 72)29'41" East, a distance of 366.48 feet
to the point of beginning of this description: Thence South 01)01'35" West, a
distance of 41.33 feet to a point on the right-of-way line of the seaboard
coastline railroad, that is now laid out and in use: Thence North 45)35'19"
East, a distance of 596.03 feet to the point of curvature of a circular curve to
the left: Thence Northerly and Easterly along the arc of said curve, having a
radius of 3365.62 feet, and an arc distance of 0.25 feet to a point on the
Easterly boundary of the Lake Worth drainage district: The last two described
courses being coincident with said right-of-way line: Thence North 17)26'44"
West, a distance of 40.08 feet: Thence North 44)26'44" West, a distance of
141.82 feet: the last two described courses being coincident with the Easterly
boundary of the Lake Worth drainage district: Thence North 89)41'01" West, a
distance of 309.96 feet: Thence South 01)01'35" West, a distance 522.29 feet to
the point of beginning: less and except therefrom the following described
parcel:

Commencing at the South one quarter of said section 6: Thence North 00)58'48"
East along said North-South quarter line, a distance of 664.54 feet: Thence
South 89)41'52" East, a distance of 347.49 feet: Thence North 01)00'11" East, a
distance of 242.48 feet to the point of beginning of this description: Thence
continue North 01)00'11" East, a distance of 421.98 feet: Thence South 89)41'01"
East, a distance of 98.61 feet: Thence South 00)18'59" West, a distance of 97.55
feet: Thence South 89)41'01" East, a distance of 81.73 feet: Thence South
44)24'41" East, a distance of 100.00 feet: Thence South 45)35'19" West, a
distance of 245.00 feet: Thence South 44)24'41" East, a distance of 65.00 feet:
Thence South 45)35'19" West, a distance of 80.00 feet: Thence North 44)24'41"
West, a distance of 65.00 feet: Thence South 45)35'19" West, a distance of 35.00
feet to the point of beginning.

Said lands situate, lying, and being in Palm Beach County, Florida, and subject
to all easements, reservations, and right-of-way of record.

Together with (a) non-exclusive easements for ingress and egress for pedestrian
and vehicular traffic, and for the installation and maintenance of utility lines
and appurtenances over, across and under Parcel R-1, Parcel R-2, Parcel R-2A,
Parcel R-3, APOC II Roads and Parcel R-3A to the extent that a portion of Parcel
R-3A is not located within the insured lands: and (B) a non-exclusive easement
for water retention, water management and drainage purposes over, across and
under all lakes, water retention areas and drainage easements or areas
established within the Total Arvida Property, all as more particularly described
and defined in that certain Agreement for and Grant of Easements and Other
Rights, dated September 8,1982 and recorded in Official Records Book 3788, page
1058: as supplemented by Supplemental Agreement dated September 8, 1982 and
recorded in Official Records Book 3788, page 1095: and as amended by
Reconfirmation and Regrant of Easements and Other Rights dated September 19,1983
and recorded in Official Records Book 4041, page 1854 and as further amended by
Amendment to Agreement for and Grant of Easements and Other Rights dated April
18, 1984 and recorded in Official Records Book 4312, page 1721 all of the Public
Records of Palm Beach County, Florida.

And, further together with all of the non-exclusive, access easements, parking
easements and utility easements, over the common areas located within the
perimetrical boundaries of the Park Place Royale lands as set forth in exhibit
"1" attached hereto, as contained in that certain Common Area Operations and
Reciprocal Easement Agreement, dated May 30,1984 and recorded in Official
Records Book 4259, page 1548, as amended by First Amendment to Common Area


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                                       34


Operation and Reciprocal Easement Agreement, dated August 29,1984 and recorded
in Official Records Book 4341, page 258 and further amended by Second Amendment
to Common Area Operation and Reciprocal Easement Agreement, recorded in Official
Records Books 6403, page 553 all of the public records of Palm Beach County,
Florida.




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                                       35




                                   EXHIBIT "B"








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                                       36



                                   EXHIBIT "C"


                             Parking Space Schedule



Tenant shall be permitted to use undercover and/or covered parking spaces based
upon availability.

All said parking spaces shall be in areas designated by Landlord and are subject
to relocation by Landlord at any time. Landlord will not monitor the parking
spaces nor the Parking Facilities and shall have no liability to Tenant, its
employees, agents, licensees or invitees for any damages to or loss of vehicles,
automobiles, or accessories, or the contents thereof, caused by fire, theft,
collision or any other cause whatsoever.

LANDLORD SHALL PROVIDE TENANT WITH SIX (6) TEN (10) RESERVED PARKING SPACES IN
THE PARKING STRUCTURE AT NO CHARGE AS FOLLOWS:




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                                       37




                                   EXHIBIT "D"

                             CLEANING SPECIFICATIONS
                    to be performed during non business hours

                               SPECIFICATIONS FOR
                                    WACKENHUT




                                                                                                            SERVICE
                                                                                                            DAYS/YR
                                                                                                            -------
                                                                                                      
LOBBY

o        Empty all trash receptacles and replace liners as necessary.                                        260
o        Remove all collected trash to designated area.                                                      260
o        Dust all chair and table legs and rungs, baseboards,                                                260
         ledges, moldings, and other low reach areas.
o        Spot clean all horizontal and vertical surfaces removing                                            260
         fingerprints, smudges and stains.
o        Clean and polish all drinking fountains.                                                            260
o        Fully vacuum all carpets from to wall.                                                              260
o        Clean both sides of all glass doors.                                                                260
o        Clean and polish all bright metal work.                                                             260
o        Clean lobby sign directories removing all soil.                                                     260
o        Vacuum walk-off mats.                                                                               260
o        Dust mop all hard surface floors with treated dust mop.                                             260
o        Mop all stains and spills, especially coffee and drink spills.                                      260
o        Dry buff all hard surface floors using a standard floor machine.                                     52
o        Detail clean threshold plates removing all visible soil.                                             52
o        Dust all surfaces above normal reach including sills, ledges,                                        52
         moldings, shelves, doorframes, pictures and vents.
o        Clean all baseboards.                                                                                 4
o        Wash all trash containers.                                                                            4

OFFICE AREAS

o        Empty all trash receptacles and replace liners as necessary.                                        260
o        Remove all collected trash to designated area.                                                      260
o        Dust all horizontal surfaces.                                                                       260
o        Spot clean all walls, light switches and doors.                                                     260
o        Damp clean interior and exterior of microwave oven.                                                 260
o        Clean and polish all drinking fountains.                                                            260
o        Using approved spotter, spot clean carpeted area.                                                   260
o        Fully vacuum all carpets from wall to wall.                                                         260
o        Clean all partition glass.                                                                          260
o        Dust mop all hard surface floors with treated dust mop.                                             260
o        Mop all stains and spills, especially coffee and drink spills.                                      260
o        Dust ledges and window sills.                                                                        52
o        Dust all low reach areas.                                                                            52
o        Damp mop entire area.                                                                                52
o        Spot clean all horizontal and vertical surfaces removing                                             52
         fingerprints, smudges and stains.
o        Dust all high reach areas.                                                                           12
o        Machine scrub hard surface floor and apply one coat of polish,                                       12
         allow to dry, then buff.
o        Clean all ceiling vents.                                                                             12
o        Strip hard surface floor and recoat with three coats of                                               1
         floor polish.

RESTROOMS

o        Refill dispensers and empty trash, clean and sanitize all                                           260
         restroom fixtures, wipe all counters, clean mirrors,
         wipe chrome, spot wipe partitions, sweep and damp mop floors
         using a germicidal cleaner.
o        Dust and clean all return air vents.                                                                 12
o        Wash all restroom partitions on both sides.                                                          12
o        Machine scrub all restroom floors using germicidal detergent.                                        12




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                                       38




                                                                                                       
o        Clean both sides of all doors.                                                                       12
o        Hand wash all walls.                                                                                  4

ELEVATORS

o        Completely clean elevator floors.                                                                   260
o        Clean and polish elevator bright work.                                                              260
o        Clean and polish metal elevator threshold plates.                                                    52

STAIRS

o        Police stairs and pick up litter.                                                                   260
o        Dust all horizontal surfaces.                                                                        52
o        Spot clean all walls, light switches and doors.                                                      52
o        Dust mop stairs, dust railings, ledges and spot clean.                                               52
o        Damp mop stairs, dust railings, ledges and spot clean.                                               12

PUBLIC AREAS

o        Empty all trash receptacles and replace liners as necessary.                                        260
o        Remove all collected trash to designated area.                                                      260
o        Empty and damp wipe ashtrays; clean cigarette urns,                                                 260
         smooth sand and replace as necessary.
o        Dust all horizontal surfaces.                                                                       260
o        Clean and polish all drinking fountains.                                                            260
o        Fully vacuum all carpets from wall to wall.                                                         260
o        Using approved spotter, spot clean carpeted area.                                                   260
o        Dust high and low areas (e.g., pictures, clocks, partition                                           52
         tops, etc.)
o        Clean all ceiling vents.                                                                             12
o        Clean all baseboards.                                                                                 4


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                                       39




                                   EXHIBIT "E"

                              RULES AND REGULATIONS


BUILDING RULES AND REGULATIONS. Tenant and its employees, agents, licensees and
invitees shall faithfully observe and comply with the following Rules and
Regulations and all reasonable modifications of any additions thereto from time
to time put into effect by Landlord, Landlord shall not be responsible to Tenant
for the non-performance of any said Rules and Regulations by any other tenant or
occupant of the Building.

1. ADVERTISING. Landlord shall have the right to prohibit any advertising by
Tenant IN THE BUILDING which, in Landlord's opinion tends to impair the
reputation of the Building or its desirability as an office building, and upon
written notice from Landlord, Tenant promptly shall refrain from or discontinue
such advertising. Without limiting the foregoing, no advertising or notices
shall be permitted in the windows or common areas of the Building.

2. BICYCLES, ANIMALS. Tenant shall not bring any animals or birds into the
Building, and shall not permit any type of vehicle including bicycles, inside or
on the sidewalks outside the Building except in areas designated from time to
time by Landlord for such purposes.

3. DANGEROUS OR IMMORAL ACTIVITIES. Tenant shall not make any use of the Demised
Premises which involves the danger of injury to person or property, nor shall
the same be used for any immoral use.

4. DELIVERIES. Tenant shall ensure that deliveries of materials and supplies to
the Demised Premises are made through such entrances, elevators and corridors
and at such times as may from time to time be designated by Landlord, and shall
promptly pay or cause to be paid to Landlord the cost of repairing any damage to
the Building caused by any person making such deliveries.

5. FURNITURE AND EQUIPMENT. Tenant shall ensure that furniture and equipment
being moved into or out of the Demised Premises is moved through such entrances,
elevators and corridors and at such times as may from time to time be designated
by Landlord, and MOVERS SHALL NAME LANDLORD AS AN ADDITIONAL INSURED, and shall
promptly pay or cause to be paid to Landlord the cost of repairing any damage in
the Building caused thereby.

6. HEAVY ARTICLES. Tenant shall not place in or move about the Demised Premises
without Landlord's prior written consent any safe or other heavy article which
in Landlord's reasonable opinion may damage the Building. Landlord may designate
the location of any heavy articles in the Demised Premises.

7. LOADING, UNLOADING AND MOVING.

         A. The delivery and shipping of merchandise, supplies, fixtures, and
other materials or goods of whatsoever nature to or from the Demised Premises
and all loading, unloading and handling thereof shall be done only at such
times, in such areas, by such means and through such elevators, entrances, halls
and corridors as are designated by Landlord.



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                                       40


         B. Landlord accepts no liability and Tenant hereby releases Landlord of
all liability with respect to the operation of delivery facilities for the
Building, or the adequacy thereof, or of the acts or omissions of any person or
persons engaged in the operation thereof, or in the acceptance, holding,
handling or dispatch, or any error, negligence or delay therein.

         C. Landlord may from time to time make and amend regulations for the
orderly and efficient operation of the delivery facilities for the Building, and
may require the payment of reasonable and equitable charges for delivery
services provided by Landlord, SUBJECT TO THE PROVISIONS OF SECTION 7. P. OF THE
LEASE..

         D. No furniture may be moved in or out of the Building without prior
SCHEDULING of Landlord. Arrangements for the moving must be made with Landlord's
office and must be supervised by Landlord's representative. Tenant agrees to pay
for any and all damages to any part of the Building or Demised Premises because
of such moving, by either Tenant, its agents or movers. Reasonable charges will
be made for the use of material and office building personnel including
supervision, needed to assist in the Tenant's move in, within, or out of the
Building.

8. OBSTRUCTIONS. Tenant shall not obstruct or place anything in or on the
sidewalks or driveways outside the Building or in the lobbies, corridors,
stairwells or other common areas of the Building, or use such locations for any
purpose except access to and exit from the Demised Premises without Landlord's
prior written consent, Landlord may remove at Tenant's expense any such
obstruction or item (unauthorized by Landlord) without notice or obligation to
Tenant. Additionally, Tenant shall not permit its employees, agents, invitees,
or customers to loiter, sleep, assemble or congregate within any common areas or
grounds of the Building.

9. ODORS. Tenant shall not permit any odors of cooking or other processes
including smoking, or any unusual or other objectionable odors to permeate in or
emanate from the Demised Premises.

10. PARKING. Tenant shall ensure that its employees, customers, clients, guests,
invitees and licensees comply with the following parking regulations, and
acknowledges that such regulations shall be strictly enforced by Landlord.

         A. The designated area on the first floor of the Parking Facilities
shall be used only by guests, clients and customers of the tenants of the
Building.

         B. The other areas of the Parking Facilities shall be used only by the
employees of tenants of the Building.

         C. All service vehicles (including those engaged in deliveries, loading
and unloading) must park only in the designated service parking area. Parking in
the service parking area shall be limited to a maximum of one (1) hour,
provided, however, that a tenant may make arrangements with the Landlord for
longer parking periods when moving in or moving out of the Building.

         D. Landlord reserves the right to control the method, manner and time
of parking in the Parking Facilities.



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                                       41


         E. In the event of any violation of the parking regulations, Landlord
shall have the right to post a notice of violation on the offending vehicle and
to tow the offending vehicle (regardless of whether the vehicle is owned by a
Tenant or any party, including any employee, customer, client, invitee or
licensee of a Tenant), and to charge the expense thereof to the applicable
Tenant as Additional Rent, or terminate the Tenant's license to park in the
Parking Facilities. In the event of continued violations of these Regulations,
and after notice to the Tenant, the Landlord may assess a charge of twenty
dollars ($20.00) against the Tenant for each violation, which shall be payable
as additional rent.

11. PROPER CONDUCT. Tenant, its employees and invitees, shall not conduct
themselves in any manner which is inconsistent with the character of the
Building as a first quality Building or which will impair the comfort and
convenience of other tenants in the Building.

12. PERSONAL USE OF PREMISES. The Demised Premises shall not be used or
permitted to be used for residential, lodging or sleeping purposes, or for the
storage of personal effects or property not required for business purposes.

13. REFUSE. Tenant shall place all refuse in proper receptacles provided by
Tenant at its expense in the Demised Premises, or in receptacles (if any)
provided by Landlord for the Building, and shall keep sidewalks and driveways
outside the Building, and lobbies, corridors, stairwells, ducts and shafts of
the Building free of all refuse.

14. SIGNS. No sign, advertisement, notice or other lettering shall be exhibited,
inscribed, painted or affixed by any Tenant on any part of the outside of the
Demised Premises or the Building (or on the inside of the Demised Premises if
the same is visible from the outside of the Demised Premises) without the prior
written consent of Landlord, except that the name of the Tenant may appear on
the entrance door of the Demised Premises. In the event of the violation of the
foregoing by any Tenant, Landlord may remove same without any liability, and may
charge the expense incurred by such removal to the Tenant violating this Rule.
All signs and lettering, including the Building directory, shall be inscribed,
painted or affixed for each Tenant by Landlord at the expense of such Tenant,
and shall be of a size, color and style acceptable to Landlord. TENANT WILL BE
PERMITTED STANDARD BUILDING SIGNAGE IN THE ONE PARK PLACE LOBBY DIRECTORY, AS
WELL AS EXCLUSIVE SIGNAGE AT THE ENTRANCE TO THE SEVENTH FLOOR.

14A. EXTERIOR SIGNAGE. TENANT WILL BE GRANTED EXCLUSIVE SIGNAGE ON THE EASTERN
EXTERIOR FACADE OF THE PARKING STRUCTURE, SUBJECT TO MUNICIPAL CODES AND REVIEW
AND APPROVAL BY THE ARVIDA PARK OF COMMERCE, AS WELL AS LANDLORD'S APPROVAL OF
THE ACTUAL SIGNAGE.

15. SOLICITATIONS. Landlord reserves the right to prohibit canvassing,
soliciting or peddling in the Building but shall not be in any manner liable for
any such acts within or about the Building.

16. WATER FIXTURES. Tenant shall not use water fixtures for any purposes for
which they are not intended, nor shall water be wasted by tampering with such
fixtures. Any cost or damage resulting from such misuse by Tenant shall be paid
for by Tenant.



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                                       42


17. WINDOWS. The Tenant acknowledges the importance of the exterior glass to the
architectural integrity of the Building, and agrees to observe Landlord's rules
with respect to maintaining at all windows in the Demised Premises so that the
Building presents a uniform exterior appearance. Tenant shall not install any
window shades, drapes, covers or other materials on or at any window in the
Demised Premises without Landlord's prior consent, Landlord shall have the right
to approve the color, design and all materials of window treatments. Further, no
window treatments which may be installed by Landlord shall be removed or altered
by Tenant.

18. PUBLIC ACCESS. Landlord reserve the right at all times to exclude the
general public from the Building upon such days and at such hours as in
Landlord's sole judgment will be in the best interest of the Building and its
tenants.

19. WIRES. No wires of any kind or type (including but not limited to T.V. and
radio antennas) shall be attached to the outside of the Building and no wires
shall be run or installed in any part of the Building without Landlord's prior
written consent. TENANT WILL INSTALL AT ITS OWN COST AND EXPENSE WITH LANDLORD'S
PRIOR WRITTEN APPROVAL A SMALL SATELLITE DASH ON THE ROOF OF THE BUILDING WHICH
SHALL NOT BE UNREASONABLY WITHHELD OR DELAYED.

20. LOCKS. No lock or similar devices shall be attached to any door or window in
the Demised Premises without Landlord's Prior Written consent. In the event
Tenant installs locks incompatible with the Building Master Locking System:

         A. Landlord without abatement of Rent, shall be relieved of any
obligation to provide any service whatsoever to areas so restricted;

         B. Tenant shall indemnify Landlord against any expense as a result of
forced entry into any areas so restricted which may be required in an emergency;

         C. Tenant shall at the end of the term remove such locks at Tenant's
expense.

21. BIOLOGICAL HAZARDS Tenant shall take all necessary and reasonable actions to
protect the leased and common areas of the Building from intrusion,
contamination, transport or spread of biological hazards from third parties,
business invitees or employees of the Tenant. To that end, all mail shall be
removed promptly from the mail facilities in the Building and thereafter
examined and/or opened only within the confines of the Tenant's leased areas or
outside of the Building premises.

         Tenant shall be responsible for any contamination caused by the
negligent handling or opening of mail within the common areas of the premises.



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                                       43




                                    EXHIBIT G

                         ENVIRONMENTAL IMPACT PROVISIONS

Section A.   Compliance with Law.

Tenant, at Tenant's expense, shall comply with all laws, rules, orders,
ordinances, directions, regulations and requirements of federal, state county
and municipal authorities pertaining to Tenant's use of the Premises and with
the recorded covenants, conditions and restrictions, regardless of when they
become effective, including, without limitation, all applicable federal, state
and local laws, regulations or ordinances pertaining to air and water quality,
Hazardous Materials (as hereinafter defined), waste disposal, air emissions and
other environmental matters, all zoning and other land use matters, and utility
availability, and with any direction of any public officer or officers, pursuant
to law, which shall impose any duty upon Landlord or Tenant with respect to the
use or occupation of the Premises.


Section B.  Use of Hazardous Material.

1. Tenant shall not cause or permit any hazardous material to be brought upon,
kept or used in or about the Premises by Tenant, its agents, employees
contractors or invitees EXCEPT AS CUSTOMARILY USED FOR OFFICE PURPOSES. If
Tenant breaches this obligation, the Tenant shall indemnify, defend and hold
Landlord harmless from any and all claims, judgments, damages, penalties, fines,
costs, liabilities or losses including, without limitation, diminution in value
of the Premises, damages for the loss or restriction on use of rentable or
usable space or of any amenity of the Building, damages arising from any adverse
impact on marketing of space, and sums paid in settlement of claims, attorney's
fees, consultant fees and expert fees which arise during or after the term of
the Lease as a result of such contamination. This indemnification of Landlord by
Tenant includes, without limitation, costs incurred in connection with any
investigation of site conditions or any clean-up, remedial, removal or
restoration work required by any federal, state or local governmental agency or
political subdivision because of Hazardous Material present in the soil or
ground water on or under the Demised Premises. Without limiting the foregoing,
if the presence of any Hazardous Material on the Demised Premises caused by
tenant results in any contamination of the Demised Premises, Tenant shall
promptly take all actions at its sole expense as are necessary to return the
Demised Premises to the conditions existing prior to the introduction of any
such Hazardous Material to the Premises; provided that Landlord's approval of
such actions shall first be obtained, which approval shall not be unreasonably
withheld so long as such actions would not potentially have any material adverse
long-term or short-term effect on the Demised Premises. The foregoing indemnity
shall survive the expiration or earlier termination of this Lease.

2. As used herein, the term "Hazardous Material" means any hazardous or toxic
substance, material or waste, including, but not limited to, those substances,
materials, and wastes listed in the United States Department of Transportation
Hazardous Materials Table (49 CFR 172.101) or by the Environmental Protection
Agency as hazardous substances (140 CFR Part 302) and amendments thereto, or
such substances, materials and wastes that are or become regulated under any
applicable local, state or federal law.



                                                                 Initials ______

                                                                          ______


                                       44


3. INSPECTION. Landlord and its agents shall have the right, but not the duty,
to inspect the Demised Premises at any time AFTER REASONABLE NOTICE TO TENANT
DURING BUSINESS HOURS to determine whether Tenant is complying with the terms of
this Lease. If Tenant is not in compliance with this Lease, Landlord shall have
the right to immediately enter upon the Premises to remedy any contamination
caused by Tenant's failure to comply notwithstanding any other provision of this
Lease. landlord shall use its best efforts to minimize interference with
Tenant's business but shall not be liable for any interference caused thereby.

4. DEFAULT. Any default under this Paragraph shall be a material default
enabling Landlord to exercise any of the remedies set forth in this Lease.










                                                                 Initials ______

                                                                          ______


                                       45

                                                                   Exhibit 10.23



                                      WCC


                               SERVICES AGREEMENT


                                     BETWEEN

                        WACKENHUT CORRECTIONS CORPORATION


                                       AND


                            THE WACKENHUT CORPORATION

            FOR THE PERIOD JANUARY 1, 2002 THROUGH DECEMBER 31, 2004



                       FINAL DOCUMENT - OCTOBER 28 , 2002




                               SERVICES AGREEMENT

This AGREEMENT (the Agreement) is made as of January 1, 2002 by and between The
Wackenhut Corporation, a Florida corporation with its principal place of
business at 4200 Wackenhut Drive #100, Palm Beach Gardens, Florida 33410
(together with all of its subsidiaries other than Wackenhut Corrections
Corporation, "TWC") and Wackenhut Corrections Corporation, a Florida corporation
with its principal place of business at 4200 Wackenhut Drive #100, Palm Beach
Gardens, Florida 33410 (together with all of its subsidiaries, "WCC").

                                    RECITALS

By means of this Agreement, the parties wish to set forth the terms and
conditions on which TWC will provide WCC with services and assistance in its
business and operations.

                               TERMS OF AGREEMENT

NOW, THEREFORE, in consideration of the above premises and the mutual covenants
contained herein, it is agreed by and between the parties as follows:

A.       PRICE/PAYMENT. As consideration for the services to be provided to WCC
         by TWC under the terms of this Agreement, WCC shall pay to TWC an
         annual fee (the "Annual Services Fee") as follows:


                             PAYMENT PER AGREEMENT



MONTHS OF THE YEAR                           2002                     2003                   2004
- ------------------                           ----                     ----                   ----

- ---------------------------------- ------------------------- ------------------------ --------------------
                                                                             
January                            $       204,918           $       134,615          $     134,615
- ---------------------------------- ------------------------- ------------------------ --------------------
February                                   204,918                   134,615                134,615
- ---------------------------------- ------------------------- ------------------------ --------------------
March                                      256,147                   168,270                168,270
- ---------------------------------- ------------------------- ------------------------ --------------------
April                                      204,918                   134,615                134,615
- ---------------------------------- ------------------------- ------------------------ --------------------
May                                        204,918                   134,615                134,615
- ---------------------------------- ------------------------- ------------------------ --------------------
June                                       256,147                   168,270                168,270
- ---------------------------------- ------------------------- ------------------------ --------------------
July                                       204,918                   134,615                134,615
- ---------------------------------- ------------------------- ------------------------ --------------------
August                                     192,163                   134,615                134,615
- ---------------------------------- ------------------------- ------------------------ --------------------
September                                  240,201                   168,270                168,270
- ---------------------------------- ------------------------- ------------------------ --------------------
October                                    108,844                   134,615                134,615
- ---------------------------------- ------------------------- ------------------------ --------------------
November                                   108,844                   134,615                134,615
- ---------------------------------- ------------------------- ------------------------ --------------------
December                                   136,052                   168,270                168,270
                                         ---------                 ---------              ---------
- ---------------------------------- ------------------------- ------------------------ --------------------
          Total                    $     2,322,988           $     1,750,000          $   1,750,000
- ---------------------------------- ========================= ======================== ====================



                                       2




         The Annual Services Fee shall be payable by WCC to TWC in scheduled
         installments on a monthly basis. Any services provided by TWC to WCC
         beyond the services covered by the Annual Services Fee shall be billed
         to WCC on a cost basis as described below, or on such other basis as
         the parties may agree from time to time.

         B.       TERM. The term of this Agreement shall be for the period
                  January 1, 2002 through December 31, 2004.

         C.       SERVICES. TWC agrees to provide the following services
                  (subject to such modification or adjustment as may be mutually
                  agreed upon by the parties) to WCC during the term of this
                  Agreement:

I.       CORPORATE FINANCIAL GROUP: The Financial Department of TWC will provide
         the following services:

         A.       RISK MANAGEMENT

                  o   Procure general liability, workers' compensation,
                      automobile, Directors and Officers and property insurance
                      coverage on behalf of WCC through September 30, 2002.

                  o   As of October 1, 2002 TWC will manage all general
                      liability, automobile and workers' compensation claims
                      with occurrence dates prior to September 30, 2002.

         B.       TAX DEPARTMENT:

                  o   Prepare all tax returns and filings.

                  o   Provide guidance on tax matters in the preparation of bids
                      and proposals, financing structures, and in the
                      structuring of joint ventures and international business
                      arrangements.

                  o   Manage any IRS and State audits.

                  o   THESE COSTS AND RELATED ACTIVITIES WILL NO LONGER BE
                      PROVIDED AFTER DECEMBER 31, 2002.

         C.       CASH & TREASURY FUNCTIONS:

                  o   Manage daily cash transactions

                  o   Controlled disbursement funding

                  o   Stop payments

                  o   Debit & Credit detail

                  o   Lockbox, wire & ACH transfers

                  o   Electronic positive pay

                  o   Balance reporting

                  o   Daily investment sweeps

                  o   Research and analysis

                  o   Manage excess cash and maximize interest income while
                      ensuring sufficient liquidity to meet capital expenditure
                      requirements

                  o   Provide daily balance position, interest calculation and
                      transaction detail

                  o   Manage new account setup and account deletions as directed
                      by WCC.

                  o   THESE SERVICES WILL NO LONGER BE PROVIDED AFTER JULY 31,
                      2002.

         D.       PAYROLL:

                  o   Provide weekly and bi-weekly payroll processing, check
                      issuance and handle federal withholding and reporting.

                  o   THESE COSTS AND RELATED ACTIVITIES WILL NO LONGER BE
                      PROVIDED AFTER DECEMBER 31, 2002.

                                       3



         E.       MAIL/WAREHOUSE/STORAGE:

                  o   TWC will provide mail pickup and delivery at two times
                      daily.

                  o   THESE COSTS AND RELATED ACTIVITIES WILL NO LONGER BE
                      PROVIDED AFTER MARCH 31, 2003.

II.      INFORMATION SYSTEMS FOR THE PERIOD JANUARY 1, 2002 THROUGH DECEMBER 31,
         2002:

         TWC will provide Information Services in three areas:

         A.       Regarding Enterprise Resource Planning (ERP) System, TWC will,

                  o   Provide quarterly training services according to WCC
                      business requirements.

                  o   Provide application development to support data analysis
                      needs of WCC Corporate and Regional business management.

                  o   Schedule, coordinate and distribute weekly and monthly
                      financial reports.

                  o   Provide Help Desk telephone support in the use of
                      application software.

                  o   Provide support with respect to configuration and
                      deployment of personal computers for Corporate and field
                      user.

                  o   Update existing application systems in the areas of human
                      resources and financials.

                  o   Design disaster recovery procedures and execute disaster
                      recovery plan in the event of a disaster.

                  o   Establish and support the existence of The Wackenhut User
                      Group.

                  o   Provide on-site support for Enterprise applications to PGA
                      office

         B.       Regarding Telecommunications, TWC will,

                  o   Provide necessary infrastructure and equipment to support
                      the use of telecommunications equipment throughout the
                      organization.

                  o   Provide on-site support for telecommunications to PGA
                      office.

                  o   Provide the necessary infrastructure and equipment to
                      support the sharing of applications and data throughout
                      the organization.

                  o   Provide the necessary hardware to support the enterprise
                      systems in the areas of high-speed printing and
                      distribution, automated report distribution, automated
                      job-scheduling, back up and recovery services.

                  o   Provide Internet access and Internet e-mail capabilities
                      to WCC Corporate, PGA office and field sites.

         C.       Regarding Project Management, TWC will,

                  o   Provide project management services as required in the
                      form of day- to-day project management.

III.     INFORMATION SYSTEMS: JANUARY 1, 2003 THROUGH DECEMBER 31, 2004
         ENTERPRISE APPLICATIONS

         A.       INFINIUM MODULES

                  Through the use of the shared Infinium/CCM system, TWC will
                  continue to provide core transactional application services to
                  WCC. To support the business requirements of WCC, the
                  following Infinium subsystems will continue to be utilized
                  under this service agreement:
                  In addition, if WCC decided to use any of the functionality
                  provided in the CCM specific software, WCC will negotiate with
                  TWC an appropriate fee to be paid for this use. This fee will
                  be determined by market comparison of similar software using a
                  third party,

                                       4


                  such as Gartner Group or IBM, and will be agreed upon prior to
                  WCC's use of the CCM functionality.

               i.    Financial Systems

                  o   General Ledger (GL)

                  o   Accounts Receivable (AR)

                  o   Accounts Payable (AP)

                  o   Purchasing

                  o   Fixed Assets

               ii.   Payroll

               iii.  Human Resources

               iv.   Benefits

               v.    Financial Analysis System

                  As a supplemental analytical capability to Infinium's
                  reporting system, WCC also uses Essbase, an industry leader in
                  the financial Online Analytical Processing (OLAP) sector.

         B.       IT SUPPORT SERVICES

                  Consistent with the services rendered since the implementation
                  of Infinium, the TWC IT staff will provide the following
                  service and support functions to include:

                  o   Ongoing application support

                  o   Apply Infinium upgrades as needed to support core business
                      requirements

                  o   Printing and distribution of financial reports

                  o   Help Desk support for all WCC Infinium users

                  o   Essbase administration, which includes the ongoing
                      maintenance of the financial "cubes" and the monthly
                      loading process from the Infinium financial subsystems.

                  o   Ongoing Infinium user-ID administration as authorized by
                      WCC

                  o   Affirmative action and EEO reporting

                  o   Processing of daily bank extracts

         C.       HOURS OF OPERATION

                  The TWC IT function operates on a 7x24 basis. The full staff
                  is onsite from 08:30 to 17:30 Monday through Friday. A
                  computer operator is onsite from 06:30 to 24:00 Monday through
                  Friday and 00:00 to 08:00 on Sundays. During off-hours, the
                  Wackenhut Call Center can page the on-call staff member(s)
                  whenever requested. In addition, system management
                  capabilities have been implemented in the data center that
                  automatically page personnel if key systems or networks fail.

                  Please note that the all major IT applications, including
                  Infinium, are not available to users on Sundays, from 00:00 to
                  12:00. System maintenance, modifications and upgrades are
                  performed during this weekly "change window".

         D.       NETWORK SERVICES

                  TWC will continue to provide both long distance voice
                  communications and Wide Area Network (WAN) data network
                  communications under the respective AT&T services contracts.

                                       5


                  The AT&T long distance voice contract expires January 1, 2003.
                  The value of WCC participating under a common long distance
                  contract is simply an optimal cost per minute as part of a
                  larger volume-based service. WCC intends to continue to
                  participate in a shared long distance contract. TWC is
                  currently negotiating a two-year extension with AT&T given the
                  unsettled dynamics associated with the telecommunications
                  industry (there is a fear the cost per minute could rise due
                  to reduced competition). WCC will participate in discussions
                  with TWC prior to and during negotiations of this contract.
                  WCC reserves the right to opt out of participating in any
                  common long distance contract up until contract signing.
                  Nothing in this agreement prevents WCC from negotiating a
                  separate agreement with the same or different contractor.

                  The AT&T WAN contracts (one for the data services and one for
                  management services) expire November 2003. TWC will continue
                  to provide WCC data network services to HQ and Field employees
                  to provide access to Infinium, email, operational applications
                  and the Internet.

                  Technically, the network links at the correctional and
                  hospital facilities will be redirected to the new WCC
                  Headquarters facility. Optionally, two high-speed, diverse
                  network links will be provided between the WCC and TWC
                  locations for authorized access to Infinium depending on the
                  location of the AS-400 and the location of the Essbase server.

                  From a security perspective, TWC will place and manage a
                  firewall at the WCC location to ensure only authorized network
                  traffic is routed to the TWC Infinium environment.

                  WCC will directly pay for the network links between their HQ
                  facility and the TWC Headquarter facility. In addition, WCC
                  will contract with an Internet Service Provider (ISP) to gain
                  direct access to the Internet from their new HQ facility.

         E.       END USER TRAINING

                  The TWC IT department will provide quarterly classroom-style
                  training sessions on all applicable Infinium modules for WCC
                  personnel. Typically, the training sessions are three days in
                  length. Assuming that the new WCC Headquarters facility has an
                  adequate training classroom, the session will be held at the
                  WCC location. If training facilities are not available,
                  training will be held at the TWC Headquarters location.

                  WCC is responsible for all travel, lodging, and meal costs for
                  WCC field personnel who attend the quarterly training
                  sessions.

                  TWC will provide Infinium technical training to WCC IT
                  personnel for support of the Infinium system.

         F.       DISASTER RECOVERY PLANNING (DRP)

                  TWC has a commercial contract with IBM for IT DRP services.
                  Specifically, TWC can restore all major business applications
                  at an IBM location in New Jersey in the event of a disaster.
                  In addition, the TWC IT department conducts a "dry-run" of the
                  DRP restoral process on an annual basis to best ensure the
                  staff is prepared to support TWC and WCC in the event of an
                  actual business disaster.

                  Please note two important elements of the DRP contract with
                  IBM:

                  o   There will be an incremental charge of $39,000 to WCC due
                      to the need for a second AS400. This charge will be in
                      addition to the $1.75mm annual service fee.

                                       6


                  o   Systems based at the WCC correctional facilities (e.g.,
                      PDS, commissary system) are NOT covered under the TWC DRP
                      plan per previous direction from the WCC management team.
                      These systems could be covered under the DRP strategy if
                      desired at an incremental cost. Please note that a DRP
                      strategy for critical business systems will be a primary
                      element of any external audit of IT systems and processes.

                  o   If WCC elects to operate the server at its new
                      headquarters in Boca Raton Florida, it may elect to obtain
                      IT DRP services from an alternative provider.

         G.       TRANSITIONAL SERVICES AND ASSOCIATED COSTS

                  WCC will build and implement fully functional Human Resources,
                  Payroll, Accounts Payable and Tax capabilities by January 1,
                  2003. These functional areas will continue to use the infinium
                  application supported and maintained by TWC. To securely
                  support this functional separation, a dedicated AS400 is
                  required to run a copy of Infinium/CCM for WCC. The one-time
                  capital / operating expense associated with the AS400 is
                  estimated at $810,000. WCC will be the owner of the new AS 400
                  and all associated data and software except for Infinium/CCM.
                  WCC will determine the operating location of the AS-400 and
                  Essbase server. Ongoing operating expenses are estimated at
                  $64,000 (excludes depreciation, software maintenance and
                  hardware maintenance). These costs will be directly paid by
                  WCC and are not part of the $1.75mm annual service charge.

                  In the event that the AS400 is moved from TWC Headquarters to
                  any other location, WCC will provide and will be responsible
                  for operational support to TWC in the following areas: Backup
                  and recovery, offsite date storage, and other support as
                  necessary.

                  If WCC elects to select new service providers (e.g., banking
                  partner, medical insurer, 401K/retirement) and electronic
                  interfaces are required between Infinium and the third party
                  business partner, the development of the computer interfaces
                  will be charged to WCC on a time and materials basis. All work
                  will have proper authorization from the WCC management team
                  before any expense is incurred.

                  At some point, during the term of this agreement for IT
                  Services, WCC will begin the process of transitioning to its
                  own fully functional IT department. TWC will assist with this
                  process on a negotiated basis. Specifically, TWC may assist
                  with programming, data retrieval, etc.

         H.       OUT OF SCOPE SERVICES

               i.    Electronic Mail

                      While part of the Year 2000 systems strategy called for a
                      common, Lotus Notes-based email solution for Security
                      Services, WCC and WRI, only Security Services fully
                      adopted this mail platform. There was a stated direction
                      for WCC to adopt Lotus Notes approximately six months ago,
                      but with the planned separation, WCC has elected to
                      implement their own email platform (Microsoft Exchange) no
                      later than January 1, 2003. The WCC technical support team
                      will implement and manage this email package.

               ii.   PC Service and Support

                      WCC will continue to provide help desk and technical
                      support for all PCs within their respective organization.
                      Whenever upgraded PC software is required to access
                      Infinium, TWC will provide a copy of the software via a CD
                      to the WCC staff for installation.

                                       7


               iii.  Local Area Network (LAN) Service and Support

                      WCC will continue to support all file and print services
                      as well as the physical infrastructure associated with
                      their LAN environments (e.g., wiring, Ethernet hubs).

               iv.   Corporate Headquarters Telephone System (PBX) Service and
                     Support

                      WCC will manage the PBX system in the new HQ facility.
                      This includes all moves, additions, and troubleshooting of
                      telephones and inside wiring.

               v.    REMOTE FACILITY APPLICATION SUPPORT

                      WCC will continue to have full responsibility and
                      accountability for all correctional and hospital-base
                      business applications. Key examples include PDS, their
                      inmate tracking system, and their commissary system.

               vi.   NEW PROJECTS PROCESS

                      If and when WCC elects engage the TWC IT staff for any new
                      project activity, a detailed proposal will be jointly
                      developed outlining overall project goals and objectives,
                      business benefits, project costs, and a project timeline
                      for management review. If approved by the WCC and TWC
                      management teams, the project will then be fully
                      initiated. Please note that the costs of any project are
                      not included in the $1.75mm service charge and will result
                      in an incremental charge to WCC.

                  THESE SERVICES WILL EXPIRE DECEMBER 31, 2004.

IV.      Human  Resources Department: The Human Resources Department of TWC will
         provide the following services until December 31, 2002. After that the
         services described in A. though F. will no longer be provided:

         A.       EMPLOYEE GROUP BENEFIT PLANS:

                  o   Administration of group health benefit programs to include
                      preparation of employee communications, processing of
                      enrollments/cancellations, reconciling and processing of
                      insurance carrier invoices for payment, responding to
                      employee inquiries, etc.

                  o   Provide compliance with laws affecting employee group
                      health benefit programs in an effort to avoid penalties
                      and potential lawsuits, (e.g., Section 125, Form 5500,
                      preparation/distribution of Summary Annual Reports and
                      COBRA).

                  o   Identify benefit providers and appropriate plan designs to
                      support new and existing WCC business needs.

                  o   Negotiate annual renewal of HMO contracts. Present
                      information with alternatives, if applicable, to WCC
                      Management.

                  o   Implementation of new benefit plans to include set up of
                      new plans in the Payroll/HR System, participation in
                      education and orientation of employees, etc.

         B.       SALARY ADMINISTRATION:

                  o   Administer merit budget for headquarters to provide
                      compliance with WCC guidelines.

                                       8


                  o   Analyze Position Analysis Questionnaires to develop
                      recommendations for competitive salary ranges and merit
                      budgets.

                  o   Provide recommendations for competitive salaries for
                      facility employees, as needed.

         C.       RETIREMENT PROGRAMS:

                  o   Oversee plan administration to include preparation of plan
                      documents and required amendments, processing of
                      enrollments/withdrawals, responding to employee inquiries,
                      etc.

                  o   Design and develop retirement plans to support new and
                      existing WCC business needs.

                  o   Provide compliance with regulatory issues.

                  o   Compile all information required for discrimination
                      testing and review results.

                  o   Prepare employee communication materials as well as
                      educate employees through orientation meetings.

         D.       AFFIRMATIVE ACTION/EEOC:

                  o   Provide guidance and support with respect to equal
                      employment opportunity/affirmative action concerns and
                      claims.

                  o   Serve as a source for certain affirmative action
                      statistical information, Federal and State civil rights
                      legislation, and TWC and WCC policy interpretation.
                      Prepare equal employment/affirmative action policies and
                      make periodic modifications to provide consistency with
                      Federal and State Civil Rights Laws.

                  o   Investigation and prepare position statements in response
                      to charges of discrimination filed with Federal (EEOC) and
                      State Agencies (Texas Commission on Human Rights,
                      California Department of Fair Employment and Housing,
                      etc.) Serve as liaison with investigating agencies
                      throughout the duration of said charges. Prepare and
                      provide additional information when requested by the
                      government agencies. Coordinate settlement of charges if
                      deemed appropriate.

                  o   Coordinate OFCCP Compliance reviews and provide technical
                      support for audits of WCC locations; serve as liaison with
                      the OFCCP.

         E.       RECRUITMENT AND SELECTION:

                  o   Provide support in the area of identifying, interviewing,
                      and selecting candidates.

                  o   Coordinate relocation of new hires and transfers.


                                       9



         F.       EMPLOYEE RELATIONS:

                  o   Provide guidance and compliance with certain Federal and
                      State Regulations pertaining to the Family Medical Leave
                      Act, Fair Labors Standards Act, Wage and Hour issues, etc.

                  o   Assist in the review and critique of employee handbooks.

                  o   Provide support and interpretation of company human
                      resources policies and practices.

                  o   Administer service and recognition award programs.

                  o   Provide support with unemployment claim issues.

                  o   Monitor Worker Opportunity Tax Credit (WOTC) program for
                      compliance.

                  o   Provide guidance with respect to employee issues involving
                      disciplinary actions and counseling.


V.       Details of Performance; Changes. Reasonable details of TWC's
         performance of services hereunder may be specified in greater detail in
         one or more memoranda signed by the parties and such memoranda shall be
         deemed incorporated in this Agreement by reference as if recited herein
         in their entirety.

VI.      Audit Rights. WCC shall have the right to (or cause its accountants to)
         review the books and records of TWC at any time during reasonable
         business hours to (a) confirm that the services required to be provided
         by TWC hereunder as part of the Annual Services Fee have been provided,
         and (b) to confirm the cost basis of any services provided by TWC which
         are not provided as part of the Annual Services Fee. The cost of such
         audit shall be borne by WCC, unless such audit shall reveal a
         discrepancy in the cost of any services in excess of 5%, in which case,
         the cost of such audit shall be borne by TWC.

VII.     No Agency. TWC shall perform its services under this Agreement as an
         independent contractor. Each party acknowledges and agrees that it is
         not granted any express or implied authority to assume or create any
         obligation or responsibility on behalf of the other party, or to bind
         the other party with regard to third parties in any manner.

VIII.    Notices. Any notices required or permitted to be provided pursuant to
         this Agreement shall be provided in writing and be deemed received upon
         delivery by hand or five days after mailing by certified mail, return
         receipt requested, addressed to the recipient party at its address set
         forth above.

IX.      Transition: TWC will assist WCC in the process of transitioning
         services currently provided for human resources, payroll and tax. This
         assistance will include, but not be limited to, historical information,
         job descriptions, access to data, discussion of policies, electronic
         copies of policies.

X.       For purposes of historical payroll and tax information TWC will provide
         access to this information in the event of audits by local state or
         federal regulators or agencies. Labor and material cost incurred
         related to retrieving information will be paid for by WCC.

XI.      Force Majeure. In the event that either party is prevented from
         performing, or is unable to perform, any of its obligations under this
         Agreement due to any act of God, fire, casualty, flood, war, strike,
         lock out, failure of public utilities, injunction or any act, exercise,
         assertion or requirement of governmental authority, epidemic,
         destruction of production facilities, insurrection, inability to
         procure materials, labor, equipment, transportation or energy

                                       10


         sufficient to meet manufacturing needs, or any other cause beyond the
         reasonable control of the party invoking this provision, and if such
         party shall have used its best efforts to avoid such occurrence and
         minimize its duration and has given prompt written notice to the other
         party, then the affected party's performance for the period of delay or
         inability to perform due to such occurrence shall be suspended. Should
         TWC fail to perform hereunder and shall have provided proper notice to
         WCC that it is unable to perform on account of one or more reasons set
         forth in this section, WCC may obtain replacement services from a third
         party for the duration of such delay or inability to perform, or for
         such longer period as WCC shall be reasonably required to commit to in
         order to obtain such replacement services and the Annual Services Fee
         shall be reduced accordingly up to a maximum of the annual service fee
         calculated on a pro rate basis for each day services are not provided.
         However, WCC will not be permitted to recover any resultant or
         consequential damages due to the inability of TWC to perform.

XII.     Deleted

XIII.    Miscellaneous.

         A.       This Agreement embodies the entire agreement and understanding
                  of the parties hereto with respect to the subject matter
                  hereof, and supersedes all prior agreements and understandings
                  relative to said subject matter.

         B.       This Agreement shall be binding upon, and shall inure to the
                  benefit of TWC, WCC and their respective successors and
                  assigns.

         C.       Neither this Agreement nor any rights or obligations hereunder
                  shall be assignable by either party without the prior written
                  consent of the other party hereto, which consent shall not be
                  unreasonably withheld.

         D.       This Agreement shall be governed by and construed in
                  accordance with the law of the State of Florida applicable to
                  contracts to be performed entirely in that State.

         E.       This Agreement may be executed in any number of counterparts,
                  each of which shall be an original but all of which together
                  shall constitute one and the same instrument.

         F.       The headings contained in this Agreement are for reference
                  purposes only and shall not affect the meaning or
                  interpretation of this Agreement.

         EXECUTION

         The parties have caused this Agreement to be signed as of the date
         first above written, whereupon it became a binding agreement.



              THE WACKENHUT                 WACKENHUT CORRECTIONS
               CORPORATION                       CORPORATION

BY:         DANIEL E. MASON           BY:   JOHN G. O'ROURKE
  ---------------------------------      -----------------------------
NAME:       DANIEL E. MASON           NAME: JOHN G. O'ROURKE
     ------------------------------        ---------------------------
TITLE:   VICE PRESIDENT & CFO         TITLE: CHIEF FINANCIAL OFFICER & TREASURER
      -----------------------------         ------------------------------------
DATE:      OCTOBER 22, 2002           DATE: OCTOBER 22, 2002
     ------------------------------        -------------------------------------


                                       11


                       ALLOCATION OF ANNUAL SERVICES FEE



    SERVICES                                    2002                    2003                    2004
- ------------------------------------- ----------------------- ----------------------- -----------------------
                                                                             
     PAYROLL                          $       213,531                   -                       -
- ------------------------------------- ----------------------- ----------------------- -----------------------
     WAREHOUSE                                  9,991                   -                       -
- ------------------------------------- ----------------------- ----------------------- -----------------------
     TREASURY                                  28,119                   -                       -
- ------------------------------------- ----------------------- ----------------------- -----------------------
     INFORMATION SYSTEMS                    1,438,086         $       1,750,000       $       1,750,000
- ------------------------------------- ----------------------- ----------------------- -----------------------
     TAX                                      148,011                   -                       -
- ------------------------------------- ----------------------- ----------------------- -----------------------
     BUILDING SERVICES                                                  -                       -
- ------------------------------------- ----------------------- ----------------------- -----------------------
     HUMAN RESOURCES                          415,144                   -                       -
- ------------------------------------- ----------------------- ----------------------- -----------------------
     INTERNAL AUDIT                            70,106                   -                       -
- ------------------------------------- ----------------------- ----------------------- -----------------------
     TOTAL G&A                        $     2,322,988         $       1,750,000       $       1,750,000
                                      ======================= ======================= =======================
- ------------------------------------- ----------------------- ----------------------- -----------------------


                                       12

                                                                    EXHIBIT 21.1


                WACKENHUT CORRECTIONS CORPORATION'S SUBSIDIARIES


WACKENHUT CORRECTIONS UK, LTD.

PREMIER CUSTODIAL DEVELOPMENT LTD.

WACKENHUT CORRECTIONS CORPORATION AUSTRALIA, PTY LTD.

WACKENHUT CORRECTIONAL SERVICES, PTY LTD.

AUSTRALASIAN CORRECTIONAL MANAGEMENT, PTY LTD.

PREMIER EMPLOYMENT SERVICES, PTY LTD.

AUSTRALASIAN CORRECTIONAL SERVICES, PTY LTD.

AUSTRALASIAN CORRECTIONAL INVESTMENT, PTY LTD.

AUSTRALASIAN CORRECTIONAL MANAGEMENT LTD. NEW ZEALAND

PACIFIC RIM EMPLOYMENT PTY LTD.

STRATEGIC HEALTHCARE SOLUTIONS PTY LTD.

WACKENUT CORRECTIONS CORPORATION N.V.

CANADIAN CORRECTIONAL MANAGEMENT, INC.

MIRAMICHI YOUTH CENTER MANAGEMENT, INC.

WACKENHUT CORRECTIONS PUERTO RICO, INC.

WCC RE HOLDINGS, LLC

WCC FINANCIAL, INC.

WCC DEVELOPMENT, INC.

WCC/FL/01, INC.

WCC/FL/02, INC.

WACKENHUT CORRECTIONS DESIGN SERVICES, INC.

ATLANTIC SHORES HEALTHCARE, INC.

WCC SOUTH AFRICA, PTY LTD.

 

Exhibit 23.1

CONSENT OF INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS

      We consent to the incorporation by reference in the Registration Statement (Form S-8 No. 333-79817) pertaining to the 1999 Stock Option Plan, the Registration Statement (Form S-8 No. 333-17265) pertaining to the Employees’ 401 (K) and Retirement Plan, the Registration Statement (Form S-8 No. 333-09977) pertaining to the Wackenhut Corrections Corporation Stock Option Plan, and the Registration Statement (Form S-8 No. 333-09981) pertaining to the Nonemployee Director Stock Option Plan of Wackenhut Corrections Corporation of our report dated February 11, 2003, with respect to the consolidated financial statements and schedule of Wackenhut Corrections Corporation included in the Form 10-K for the year ended December 29, 2002.

ERNST & YOUNG LLP

West Palm Beach, Florida

73

                                                                    EXHIBIT 24.1

                                POWER OF ATTORNEY


The undersigned member of the Board of Directors of Wackenhut Corrections
Corporation hereby constitute and appoint John G. O'Rourke, David N. T. Watson,
and John J. Bulfin and each of them severally, his true and lawful
attorneys-in-fact and agents, with full power of substitution and resubstitution
for him and in his name, place and stead, in any and all capacities to sign any
and all Reports of Form 10-K (Annual Report pursuant to the Securities Exchange
Act of 1934) and any amendments thereto, and to file the same, with all exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, and each
of them, full power and authority to do and perform each and every act and thing
requisite or necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents or any of them, or their
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.

/s/ LARS NORBY JOHANSEN                         DATE: MARCH 18, 2003
- -----------------------                               ----------------


                                                                    EXHIBIT 24.1

                                POWER OF ATTORNEY


The undersigned member of the Board of Directors of Wackenhut Corrections
Corporation hereby constitute and appoint John G. O'Rourke, David N. T. Watson,
and John J. Bulfin and each of them severally, his true and lawful
attorneys-in-fact and agents, with full power of substitution and resubstitution
for him and in his name, place and stead, in any and all capacities to sign any
and all Reports of Form 10-K (Annual Report pursuant to the Securities Exchange
Act of 1934) and any amendments thereto, and to file the same, with all exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, and each
of them, full power and authority to do and perform each and every act and thing
requisite or necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents or any of them, or their
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.

/s/ GEORGE C. ZOLEY                             DATE: MARCH 20, 2003
- -----------------------                               ----------------


                                                                    EXHIBIT 24.1

                                POWER OF ATTORNEY


The undersigned member of the Board of Directors of Wackenhut Corrections
Corporation hereby constitute and appoint John G. O'Rourke, David N. T. Watson,
and John J. Bulfin and each of them severally, his true and lawful
attorneys-in-fact and agents, with full power of substitution and resubstitution
for him and in his name, place and stead, in any and all capacities to sign any
and all Reports of Form 10-K (Annual Report pursuant to the Securities Exchange
Act of 1934) and any amendments thereto, and to file the same, with all exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, and each
of them, full power and authority to do and perform each and every act and thing
requisite or necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents or any of them, or their
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.

/s/ SOREN LUNDSBERG-NIELSEN                     DATE: MARCH 17, 2003
- ----------------------------                          ----------------


                                                                    EXHIBIT 24.1

                                POWER OF ATTORNEY


The undersigned member of the Board of Directors of Wackenhut Corrections
Corporation hereby constitute and appoint John G. O'Rourke, David N. T. Watson,
and John J. Bulfin and each of them severally, his true and lawful
attorneys-in-fact and agents, with full power of substitution and resubstitution
for him and in his name, place and stead, in any and all capacities to sign any
and all Reports of Form 10-K (Annual Report pursuant to the Securities Exchange
Act of 1934) and any amendments thereto, and to file the same, with all exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, and each
of them, full power and authority to do and perform each and every act and thing
requisite or necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents or any of them, or their
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.

/s/ WAYNE H. CALABRESE                          DATE: MARCH 19, 2003
- -----------------------                               ----------------


                                                                    EXHIBIT 24.1

                                POWER OF ATTORNEY


The undersigned member of the Board of Directors of Wackenhut Corrections
Corporation hereby constitute and appoint John G. O'Rourke, David N. T. Watson,
and John J. Bulfin and each of them severally, his true and lawful
attorneys-in-fact and agents, with full power of substitution and resubstitution
for him and in his name, place and stead, in any and all capacities to sign any
and all Reports of Form 10-K (Annual Report pursuant to the Securities Exchange
Act of 1934) and any amendments thereto, and to file the same, with all exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, and each
of them, full power and authority to do and perform each and every act and thing
requisite or necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents or any of them, or their
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.

/s/ NORMAN A. CARLSON                           DATE: MARCH 15, 2003
- -----------------------                               ----------------


                                                                    EXHIBIT 24.1

                                POWER OF ATTORNEY


The undersigned member of the Board of Directors of Wackenhut Corrections
Corporation hereby constitute and appoint John G. O'Rourke, David N. T. Watson,
and John J. Bulfin and each of them severally, his true and lawful
attorneys-in-fact and agents, with full power of substitution and resubstitution
for him and in his name, place and stead, in any and all capacities to sign any
and all Reports of Form 10-K (Annual Report pursuant to the Securities Exchange
Act of 1934) and any amendments thereto, and to file the same, with all exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, and each
of them, full power and authority to do and perform each and every act and thing
requisite or necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents or any of them, or their
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.

/s/ BENJAMIN R. CIVILETTI                       DATE: MARCH 18, 2003
- ----------------------------                          ----------------


                                                                    EXHIBIT 24.1

                                POWER OF ATTORNEY


The undersigned member of the Board of Directors of Wackenhut Corrections
Corporation hereby constitute and appoint John G. O'Rourke, David N. T. Watson,
and John J. Bulfin and each of them severally, his true and lawful
attorneys-in-fact and agents, with full power of substitution and resubstitution
for him and in his name, place and stead, in any and all capacities to sign any
and all Reports of Form 10-K (Annual Report pursuant to the Securities Exchange
Act of 1934) and any amendments thereto, and to file the same, with all exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, and each
of them, full power and authority to do and perform each and every act and thing
requisite or necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents or any of them, or their
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.

/s/ ANNE N. FOREMAN                             DATE: MARCH 14, 2003
- -----------------------                               ----------------


                                                                    EXHIBIT 24.1

                                POWER OF ATTORNEY


The undersigned member of the Board of Directors of Wackenhut Corrections
Corporation hereby constitute and appoint John G. O'Rourke, David N. T. Watson,
and John J. Bulfin and each of them severally, his true and lawful
attorneys-in-fact and agents, with full power of substitution and resubstitution
for him and in his name, place and stead, in any and all capacities to sign any
and all Reports of Form 10-K (Annual Report pursuant to the Securities Exchange
Act of 1934) and any amendments thereto, and to file the same, with all exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, and each
of them, full power and authority to do and perform each and every act and thing
requisite or necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents or any of them, or their
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.

/s/ G. FRED DiBONA, JR.                         DATE: MARCH 17, 2003
- -----------------------                               ----------------


                                                                    EXHIBIT 24.1

                                POWER OF ATTORNEY


The undersigned member of the Board of Directors of Wackenhut Corrections
Corporation hereby constitute and appoint John G. O'Rourke, David N. T. Watson,
and John J. Bulfin and each of them severally, his true and lawful
attorneys-in-fact and agents, with full power of substitution and resubstitution
for him and in his name, place and stead, in any and all capacities to sign any
and all Reports of Form 10-K (Annual Report pursuant to the Securities Exchange
Act of 1934) and any amendments thereto, and to file the same, with all exhibits
thereto and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, and each
of them, full power and authority to do and perform each and every act and thing
requisite or necessary to be done in and about the premises, as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents or any of them, or their
or his substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.

/s/ RICHARD H. GLANTON                          DATE: MARCH 14, 2003
- -----------------------                               ----------------

 

Exhibit 99.1

CERTIFICATION PURSUANT TO

      In connection with the Annual Report on Form 10-K of Wackenhut Corrections Corporation (the “Company”) for the period ended December 29, 2002 as filed with the Securities and Exchange Commission on the date hereof (the “Form 10-K”), I, George C. Zoley, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

      (1) The Form 10-K fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

      (2) The information contained in the Form 10-K fairly presents, in all material respects, the financial condition and results of operations of the Company.

March 20, 2003		/s/ GEORGE C. ZOLEY George C. Zoley Chief Executive Officer

74

 

Exhibit 99.2

CERTIFICATION PURSUANT TO

      In connection with the Annual Report on Form 10-K of Wackenhut Corrections Corporation (the “Company”) for the period ended December 29, 2002 as filed with the Securities and Exchange Commission on the date hereof (the “Form 10-K”), I, John G. O’Rourke, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

      (1) The Form 10-K fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

      (2) The information contained in the Form 10-K fairly presents, in all material respects, the financial condition and results of operations of the Company.

March 20, 2003		/s/ JOHN G. O’ROURKE John G. O’Rourke Chief Financial Officer

75