XML 106 R13.htm IDEA: XBRL DOCUMENT
v2.4.0.8

Equity Incentive Plans | 12 Months Ended
--- | ---
Dec. 31, 2013
Disclosure of Compensation Related Costs, Share-based Payments [Abstract] |
Equity Incentive Plans | Equity Incentive Plans The Company had awards outstanding under four equity compensation plans at December 31, 2013: The Wackenhut Corrections Corporation 1994 Stock Option Plan (the “1994 Plan”); the 1995 Non-Employee Director Stock Option Plan (the “1995 Plan”); the Wackenhut Corrections Corporation 1999 Stock Option Plan (the “1999 Plan”); and The GEO Group, Inc. 2006 Stock Incentive Plan (the “2006 Plan” and, together with the 1994 Plan, the 1995 Plan and the 1999 Plan, the “Company Plans”). On August 12, 2010, the Company’s Board of Directors adopted and its shareholders approved an amendment to the 2006 Plan to increase the number of shares of common stock subject to awards under the 2006 Plan by 2,000,000 shares from 2,400,000 to 4,400,000 shares of common stock. On February 16, 2011, the Company’s Board of Directors approved Amendment No. 1 to the 2006 Plan to provide that of the 2,000,000 additional shares of Common Stock that were authorized to be issued pursuant to awards granted under the 2006 Plan, up to 1,083,000 of such shares may be issued in connection with awards, other than stock options and stock appreciation rights, that are settled in common stock. On February 4, 2013, the Compensation Committee resolved to increase the number of shares of common stock subject to awards under the 2006 Plan from 4,400,000 to 5,087,385 shares of common stock pursuant to Section 5(f) of the Plan as a result of the adjustment necessary because of the stock portion of the special dividend paid on December 31, 2012. The 2006 Plan, as amended, specifies that up to 2,166,000 of such total shares pursuant to awards granted under the plan may constitute awards other than stock options and stock appreciation rights, including shares of restricted stock. As of December 31, 2013, under the 2006 Plan, the Company had 1,629,303 shares of common stock available for issuance pursuant to future awards that may be granted under the plan of which up to 317,694 shares were available for the issuance of awards other than stock options. See Restricted Stock below for further discussion. Under the terms of the Company Plans, the vesting period and, in the case of stock options, the exercise price per share, are determined by the terms of each plan. All stock options that have been granted under the Company Plans are exercisable at the fair market value of the common stock at the date of the grant. Generally, the stock 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 to grant stock options that vest 100% immediately for the Chief Executive Officer. In addition, stock options granted to non-employee directors under the 1995 Plan became exercisable immediately. All stock options awarded under the Company Plans expire no later than ten years after the date of the grant. When options are exercised, the Company issues shares related to exercised options out of common stock. Award Modifications In connection with the 2012 divestiture of RTS (Refer to Note 2 - Discontinued Operations), all employees of RTS terminated their employment with GEO effective December 31, 2012. Nineteen of these employees had 24,100 unvested options and 8,375 unvested shares of restricted stock from previously granted GEO share-based awards. The Compensation Committee of the Board of Directors resolved on December 11, 2012 to accelerate the vesting of these awards and the Company recorded a compensation charge of approximately $0.3 million during the fourth quarter and fiscal year ended December 31, 2012. In connection with mandatory anti-dilution provisions of GEO's equity incentive plans, as it pertained to the Special Dividend, an adjustment was made to all options outstanding on December 31, 2012 to (i) increase the number of shares subject to an option by multiplying the number of shares by 1.156 (the “Adjustment Factor”) and (ii) reduce the exercise price per share of common stock subject to the options by dividing the initial exercise price by the Adjustment Factor. The Adjustment Factor was determined by the percentage increase in the Company's common stock in connection with the stock portion of the Special Dividend. The adjustment affected all GEO employees who had outstanding option grants on December 31, 2012 (313 employees) and resulted in approximately 0.2 million of incremental options awarded. As the adjustment was designed to equalize the fair value of the option award for the stock portion of the Special Dividend and the Company Plans included an anti-dilution provision, there was no incremental compensation cost resulting from the incremental options awarded. The Company recognized compensation expense related to the Company Plans for the year ended December 31, 2013 and fiscal years ended December 31, 2012 and January 1, 2012 as follows (in thousands):
|  | 2013 |  | 2012 |  | 2011
Stock option plan expense |  | $ | 1,307 |  |  | $ | 2,539 |  |  | $ | 2,681 |
Restricted stock expense |  | $ | 6,582 |  |  | $ | 4,004 |  |  | $ | 3,432 |
Stock Options A summary of the activity of the Company’s stock options plans is presented below:
|  | Shares |  | Wtd. Avg. Exercise Price |  | Wtd. Avg. Remaining Contractual Term (years) |  | Aggregate Intrinsic Value
|  | (In thousands) |  |  |  |  |  | (In thousands)
Options outstanding at December 31, 2012 |  | 1,198 |  |  | $ | 18.92 |  |  | 6.85 |  | $ | 11,090 |
Granted |  | — |  |  | — |  |  |  |  |
Exercised |  | (318 | ) |  | 17.04 |  |  |  |  |
Forfeited/Canceled |  | (31 | ) |  | 21.52 |  |  |  |  |
Options outstanding at December 31, 2013 |  | 849 |  |  | $ | 19.67 |  |  | 6.39 |  | $ | 10,654 |
Options vested and expected to vest at December 31, 2013 |  | 831 |  |  | $ | 19.63 |  |  | 6.37 |  | $ | 10,473 |
Options exercisable at December 31, 2013 |  | 584 |  |  | $ | 18.81 |  |  | 5.90 |  | $ | 7,842 |
The aggregate intrinsic value in the table above represents the total pretax intrinsic value (i.e., the difference between the Company’s closing stock price on the last trading day of fiscal year 2013 and the exercise price, times the number of shares that are “in the money”) that would have been received by the option holders had all option holders exercised their options on December 31, 2013. This amount changes based on the fair value of the Company’s stock. The following table summarizes information relative to stock option activity during the Company’s year ended December 31, 2013 and fiscal years ended December 31, 2012 and January 1, 2012 (in thousands):
|  | 2013 |  | 2012 |  | 2011
Intrinsic value of options exercised |  | $ | 5,564 |  |  | $ | 7,051 |  |  | $ | 4,718 |
Fair value of shares vested |  | $ | 1,679 |  |  | $ | 2,062 |  |  | $ | 2,358 |
The following table summarizes information about the exercise prices and related information of stock options outstanding under the Company Plans at December 31, 2013:
|  | Options Outstanding |  | Options Exercisable
Exercise Prices |  | Number Outstanding |  | Wtd. Avg. Remaining Contractual Life |  | Wtd. Avg. Exercise Price |  | Number Exercisable |  | Wtd. Avg. Remaining Contractual Life |  | Wtd. Avg. Exercise Price
|  | (In thousands) |  |  |  |  |  |  |  |  |  |
6.66 – 13.72 |  | 27 |  |  | 1.64 |  | $ | 9.06 |  |  | 27 |  |  | 1.64 |  | $ | 9.06 |
14.44 – 22.26 |  | 734 |  |  | 6.30 |  | $ | 19.75 |  |  | 526 |  |  | 6.30 |  | $ | 19.10 |
22.30 – 24.61 |  | 88 |  |  | 8.62 |  | $ | 22.31 |  |  | 31 |  |  | 8.62 |  | $ | 22.30 |
Total |  | 849 |  |  | 6.4 |  | $ | 19.67 |  |  | 584 |  |  | 5.90 |  | $ | 18.81 |
The weighted average grant date fair value of options granted during the fiscal years ended December 31, 2012 and January 1, 2012 was $6.81 and $9.75 per share, respectively. There were no options granted during the year ended December 31, 2013. The following table summarizes the status of non-vested stock options as of December 31, 2012 and 2013, and changes during the year ending December 31, 2013:
|  | Number of Shares |  | Wtd. Avg. Grant Date Fair Value
|  | (In thousands) |  |
Options non-vested at December 31, 2012 |  | 476 |  |  | $ | 8.89 |
Granted |  | — |  |  | — |
Vested |  | (200 | ) |  | 6.95 |
Forfeited |  | (10 | ) |  | 8.61 |
Options non-vested at December 31, 2013 |  | 266 |  |  | $ | 10.36 |
As of December 31, 2013, the Company had $1.3 million of unrecognized compensation costs related to non-vested stock option awards that are expected to be recognized over a weighted average period of 1.5 years. Restricted Stock During the fiscal year ended December 31, 2013, the Company granted 345,060 shares of restricted stock to certain employees and executive officers. Of these awards, 92,810 are performance-based awards which will be forfeited if the Company does not achieve certain annual metrics during 2013, 2014 and 2015. The fair value of restricted stock awards, which do not contain a market-based performance condition, is determined using the closing price of the Company’s common stock on the date of the grant and compensation expense is recognized over the vesting period. Generally, the restricted stock awards vest in equal increments over either a three or four year period. The vesting of the performance-based restricted stock grants awarded in 2013 are subject to the achievement by GEO of two annual performance metrics as follows: (i) up to 75% of the shares of restricted stock ("TSR Target Award") can vest at the end of a three-year performance period if GEO meets certain total shareholder return ("TSR") performance targets, as compared to the total shareholder return of a peer group of companies, during 2013, 2014 and 2015; and (ii) up to 25% of the shares of restricted stock ("ROCE Target Award") can vest at the end of a three-year period if GEO meets certain return on capital employed ("ROCE") performance targets in 2013, 2014 and 2015. These performance awards can vest at between 0% and 200% of the target awards for both metrics. The number of shares shown for the performance-based awards is based on the target awards for both metrics. Both of the TSR and ROCE performance metrics were met during 2013. The metric related to ROCE is considered to be a performance condition. For share-based awards that contain a performance condition, the achievement of the targets must be probable before any share-based compensation expense is recorded. The Company reviews the likelihood of which target in the range will be achieved and if deemed probable, compensation expense is recorded at that time. If subsequent to initial measurement there is a change in the estimate of the probability of meeting the performance condition, the effect of the change in the estimated quantity of awards expected to vest is recognized by cumulatively adjusting compensation expense. If ultimately the performance targets are not met, for any awards where vesting was previously deemed probable, previously recognized compensation expense will be reversed in the period in which vesting is no longer deemed probable. During 2013, the Company deemed the achievement of the target award to be probable and there were no changes in the estimated quantity of awards expected to vest. The fair value of these awards was determined based on the closing price of the Company's common stock on the date of grant. The metric related to TSR is considered to be a market condition. For share-based awards that contain a market condition, the probability of satisfying the market condition must be considered in the estimate of grant-date fair value. Compensation expense is recognized over the vesting period and previously recorded compensation expense is not reversed if the market condition is never met. Refer to Note 1 - Summary of Business Organization, Operations and Significant Accounting Policies, Stock-Based Compensation Expense, for the assumptions and method used to value these awards. During the fiscal year ended December 31, 2012, the Company granted 315,000 shares of restricted stock to its executive officers and to certain senior employees. Of these awards, 205,000 are performance based awards which will be forfeited if the Company does not achieve certain annual metrics during 2012, 2013 and 2014. The vesting of these grants are subject to the achievement by GEO of two annual performance metrics as follows: (i) up to 75% of the shares of restricted stock in each award can vest annually or cumulatively if GEO meets certain earnings per share performance targets during 2012, 2013 and 2014; and (ii) up to 25% of the shares of restricted stock in each award can vest annually if GEO meets certain return on capital performance targets in 2012, 2013, and 2014. The Company achieved the earnings per share and return on capital annual performance metrics in 2012 and 2013. The following table summarizes the status of restricted stock awards as of December 31, 2012 and 2013, and changes during the year ended December 31, 2013:
|  | Shares |  | Wtd. Avg. Grant date Fair value
|  | (In thousands) |  |
Restricted stock outstanding at December 31, 2012 |  | 670 |  |  | $ | 18.14 |
Granted |  | 345 |  |  | 37.40 |
Vested |  | (273 | ) |  | 18.44 |
Forfeited/Canceled |  | (8 | ) |  | 34.88 |
Restricted stock outstanding at December 31, 2013 |  | 734 |  |  | $ | 26.87 |
As of December 31, 2013, the Company had $14.3 million of unrecognized compensation cost that is expected to be recognized over a weighted average period of 2.8 years. Employee Stock Purchase Plan The Company previously adopted The GEO Group Inc. 2011 Employee Stock Purchase Plan (the “Plan”), which was approved by the Company's shareholders. The purpose of the Plan, which is qualified under Section 423 of the Internal Revenue Service Code of 1986, as amended, is to encourage stock ownership through payroll deductions by the employees of GEO and designated subsidiaries of GEO in order to increase their identification with the Company’s goals and secure a proprietary interest in the Company’s success. These deductions are used to purchase shares of the Company’s Common Stock at a 5% discount from the then current market price. The Company has made available up to 500,000 shares of its common stock, which were registered with the Securities and Exchange Commission on May 4, 2012, for sale to eligible employees. The Plan is considered to be non-compensatory. As such, there is no compensation expense required to be recognized. Share purchases under the Plan are made on the last day of each month. During the years ended December 31, 2013 and December 31, 2012, 9,794 and 22,760 shares, respectively, were issued out of the Company's treasury stock in connection with the Plan.

X
- Details
Name: | us-gaap_DisclosureOfCompensationRelatedCostsSharebasedPaymentsAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5047-113901 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5070-113901 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -SubTopic 50 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6406099&loc=d3e25284-112666 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 40 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6418621&loc=d3e17540-113929 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 718 -SubTopic 10 -Section 50 -Paragraph 4 -URI http://asc.fasb.org/extlink&oid=6415400&loc=d3e5444-113901 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher SEC -Name Staff Accounting Bulletin (SAB) -Number Topic 14 + Details
Name: | us-gaap_DisclosureOfCompensationRelatedCostsShareBasedPaymentsTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration