This summary highlights information contained elsewhere in this joint proxy statement/prospectus. It does not contain all of the information that may be important to you. You are urged to read carefully this entire joint proxy statement/prospectus, including the attached annexes, and the other documents to which this joint proxy statement/prospectus refers you in order for you to understand fully the proposed merger. See “Where You Can Find More Information” beginning on page 126. Each item in this summary refers to the page of this joint proxy statement/prospectus on which that subject is discussed in more detail.

 

The GEO Group Inc. (see page 70)

One Park Place, Suite 700

621 NW 53^rd Street

Boca Raton, Florida 33487

(561) 893-0101

 

www.geogroup.com (The information contained on GEO’s website shall not be deemed part of this joint proxy statement/prospectus.)

 

GEO is a leading provider of government-outsourced services specializing in the management of correctional, detention and mental health and residential treatment facilities in the United States, Canada, Australia, South Africa and the United Kingdom.

 

As of April 4, 2010, GEO managed 56 facilities totaling approximately 52,700 beds worldwide. GEO has an additional 4,325 beds under development at three facilities, including an expansion and renovation of one vacant facility which GEO currently owns, the expansion of one facility GEO currently owns and operates and a new 2,000-bed facility which GEO will manage upon completion. GEO owns three idle facilities totaling 954 beds and two facilities totaling 1,560 beds that are leased to Cornell and other private operators. GEO maintained an average companywide facility occupancy rate of 94.4% for the thirteen weeks ended April 4, 2010, excluding facilities that are either idle or under development.

 

Cornell Companies, Inc. (see page 70)

1700 West Loop South, Suite 1500

Houston, Texas 77027

(713) 623-0790

 

www.cornellcompanies.com (The information contained on Cornell’s website shall not be deemed part of this joint proxy statement/prospectus.)

 

Cornell is a leading provider of correctional, detention, educational, rehabilitation and treatment services outsourced by federal, state, county and local government agencies for adults and juveniles.

 

As of March 31, 2010, Cornell operated 63 facilities among Cornell’s three operating divisions, representing a total operating service capacity of 20,531 beds. Cornell also had five facilities that were vacant, representing additional service capacity of 861 beds. Service capacity is comprised of the number of beds currently available for service in residential facilities and on either the contractual terms or an estimate of the number of clients to be served for non-residential community-based programs. Cornell’s facilities are located in 15 states and the District of Columbia.

 

The Agreement and Plan of Merger, dated as of April 18, 2010, among The GEO Group, Inc., GEO Acquisition III, Inc. and Cornell Companies, Inc., which is referred to as the merger agreement, is included as Annex A to this joint proxy statement/prospectus. GEO and Cornell encourage you to carefully read the merger agreement in its entirety because it is the principal legal agreement that governs the merger.

Structure of the Merger (see page 72)

 

Subject to the terms and conditions of the merger agreement and in accordance with Delaware law, GEO Acquisition III, Inc., a wholly owned subsidiary of GEO that was formed for the sole purpose of the merger, will be merged with and into Cornell, with Cornell surviving the merger and becoming a wholly owned subsidiary of GEO. Immediately following the merger, GEO will continue to be named “The GEO Group, Inc.” and will be the parent company of Cornell. Accordingly, after the effective time of the merger, shares of Cornell common stock will no longer be publicly traded.

 

Merger Consideration (see page 72)

 

Cornell Stockholders.  For each share of Cornell common stock, Cornell stockholders may elect to receive either (i) 1.3 shares of GEO common stock or (ii) an amount of cash equal to the greater of (x) the fair market value (as defined below) of one share of GEO common stock plus $6.00 or (y) the fair market value of 1.3 shares of GEO common stock. Cornell stockholders desiring to receive a combination of GEO common stock and cash may do so by making a stock election with respect to a portion of their shares and a cash election with respect to their remaining shares. If a Cornell stockholder fails to make an election, the holder will receive the stock consideration.

 

“Fair market value” of GEO common stock for the purpose of determining the cash consideration means the average of the daily closing prices per share of GEO common stock for the ten consecutive trading days on which shares of GEO common stock are actually traded (as reported on the New York Stock Exchange, or NYSE) ending on the last trading day immediately preceding the tenth business day preceding the closing date.

 

No more than 20% of the shares of Cornell common stock are permitted to be exchanged for the cash consideration. If cash elections are made with respect to more than 20% of the shares of Cornell common stock outstanding immediately before the effective time, the excess over 20% shall be exchanged for shares of GEO common stock, such that only 20% of the shares of Cornell common stock outstanding immediately before the effective time are exchanged for the cash consideration. In such event, a pro rata portion (rounded up to the nearest whole share) of each holder’s shares of Cornell common stock with respect to which an election was made to elect cash consideration shall instead be converted to GEO common stock.

 

If the Cornell stockholders’ election would otherwise result in more than $100.0 million of cash in the aggregate being paid to holders electing cash consideration, GEO may elect, in its sole discretion, to reduce the amount of cash paid to each holder electing cash consideration pro rata based on the number of shares held so that the total cash paid with respect to all Cornell stockholders electing cash consideration is $100.0 million. If the cash consideration otherwise payable to any holder is reduced under this mechanism, such holder shall be entitled to receive GEO common stock equal to the amount of the reduction. GEO intends to pay such excess amount in cash. Based on the closing price of GEO’s common stock of $21.10 on May 28, 2010, the date used to calculate the estimated cash payout on the pro forma financial statements, if 20% of Cornell’s shares elect the cash consideration (the maximum cash election possible), GEO would pay an aggregate of $82.9 million in cash consideration.

 

An election form and letter of transmittal have been enclosed with this joint proxy statement/prospectus pursuant to which Cornell stockholders may elect whether they would prefer to receive GEO common stock or cash in exchange for their Cornell shares. If you were a record holder of Cornell common stock on [               ], 2010, the record date, you should carefully review and follow the instructions included in the election form and the letter of transmittal. To make an election, record holders must properly complete and sign the election form and letter of transmittal and send those documents and the certificates for their shares (or a properly completed notice of guaranteed delivery) to the exchange agent at the address listed in the election form and letter of transmittal by the election deadline, which is 5:00 p.m. New York time, on [               ], 2010. If the merger agreement is terminated, all election forms delivered to the exchange agent on or prior to the date of such termination will be automatically revoked and all share certificates will be returned. If you own shares of Cornell common stock in “street name” through a bank, broker or other financial institution and you wish to make an election, you will receive or should seek instructions from the financial institution holding your shares concerning how to make your election.

 

Please do not send your election form and stock certificates with your proxy card for the special meeting. Your election form and stock certificates are to be submitted separately from your proxy card.

All elections are subject to the proration procedures described above. If you do not make a valid election, your shares will be considered non-election shares, and when the merger is completed you will be entitled to receive the stock consideration for non-election shares as described above.

 

GEO Shareholders.  GEO shareholders will continue to own their existing shares of GEO common stock after the merger. Each share of GEO common stock will represent one share of common stock in the combined company.

 

Comparative Per Share Market Price and Share Information (see page 18)

 

GEO common stock is listed on the NYSE under the symbol “GEO.” Cornell common stock is listed on the NYSE under the symbol “CRN.” The following table sets forth the closing sale prices of GEO common stock as reported on the NYSE and the closing sale prices of Cornell common stock as reported on the NYSE, each on April 16, 2010, the last trading day before the day on which GEO and Cornell announced the execution of the merger agreement, and on [          ], 2010, the last practicable trading day prior to the printing of this joint proxy statement/prospectus. This table also shows the implied value of a Cornell common share, which was calculated by multiplying the closing price of GEO common stock on those dates by 1.3, which is the total GEO stock consideration in the merger per share of Cornell common stock (assuming that the merger consideration received consists exclusively of GEO common stock).

 

 

The market prices of both GEO common stock and Cornell common stock will fluctuate before the special meetings and before the merger is completed. Therefore, you should obtain current market quotations for GEO common stock and Cornell common stock.

 

Comparison of Stockholder Rights

 

GEO is a Florida corporation and Cornell is a Delaware corporation. The GEO Amended and Restated Articles of Incorporation, as amended, and the Amended and Restated Bylaws contain provisions that are different from the Cornell Restated Certificate of Incorporation, as amended, and the Third Amended and Restated Bylaws. Upon completion of the merger, Cornell stockholders that receive GEO common stock in the merger will become shareholders of GEO, and their rights will be governed by the Florida Business Corporation Act, GEO’s Amended and Restated Articles of Incorporation, as amended, and GEO’s Amended and Restated Bylaws. No change to GEO’s articles of incorporation or bylaws will be made as a result of the completion of the merger. For a discussion of certain differences among the rights of GEO shareholders and Cornell stockholders, see “Comparison of Stockholder Rights” beginning on page 99.

 

Recommendations to GEO Shareholders and Cornell Stockholders

 

Recommendations to GEO Shareholders.  The GEO board of directors has determined that the GEO share issuance in connection with the merger and the amendments to the 2006 Plan are advisable and in the best interests of GEO and its shareholders. The GEO board of directors recommends that GEO shareholders vote:

 

 

For additional information see “The GEO Special Meeting — Board Recommendations” beginning on page 89.

Recommendations to Cornell Stockholders.  The Cornell board of directors has determined that the merger agreement and the merger contemplated thereby are advisable and in the best interests of Cornell and its stockholders. The Cornell board of directors recommends that Cornell stockholders vote:

 

 

For additional information see “The Cornell Special Meeting — Board Recommendations” beginning on page 92.

 

In making its respective recommendation, each board considered those matters set forth under the headings “The Merger — GEO Reasons for the Merger and the Recommendation of GEO’s Board of Directors Relating to the Merger” and “The Merger — Cornell Reasons for the Merger and the Recommendation of the Cornell Board of Directors” beginning on pages 36 and 50, respectively.

 

Opinions of Financial Advisors (see pages 38 and 53)

 

GEO.  In connection with the proposed merger, GEO’s board of directors received separate written opinions, dated April 18, 2010, of GEO’s financial advisors, Barclays Capital Inc., referred to as Barclays Capital, and Merrill Lynch, Pierce, Fenner & Smith Incorporated, referred to as BofA Merrill Lynch, as to the fairness, from a financial point of view and as of the date of such opinions, to GEO of the consideration to be paid by GEO in the merger. The full texts of the written opinions are attached as Annexes C and D, respectively, to this joint proxy statement/prospectus and are incorporated herein by reference. The written opinions set forth, among other things, the assumptions made, procedures followed, factors considered and limitations on the review undertaken by GEO’s financial advisors in rendering their respective opinions. The opinions are addressed to GEO’s board of directors for its use in connection with its evaluation of the merger consideration and relate only to the fairness, from a financial point of view, to GEO of the consideration to be paid by GEO in the merger. The opinions do not in any manner address GEO’s underlying business decision to proceed with or effect the merger or any other matter and are not intended to and do not constitute a recommendation to any shareholder as to how such shareholder should vote or act with respect to the merger or any related matter.

 

Cornell.  In connection with the merger, the Cornell board of directors received an oral opinion, subsequently confirmed by delivery of a written opinion dated April 18, 2010, from Cornell’s financial advisor, Moelis & Company LLC, which is referred to as Moelis & Company, as to the fairness, from a financial point of view and as of the date of such opinion, to the Cornell stockholders of the per share consideration to be received by the Cornell stockholders pursuant to the merger agreement. The full text of Moelis & Company’s written opinion is attached to this joint proxy statement/prospectus as Annex E. Cornell stockholders are encouraged to read Moelis & Company’s opinion carefully in its entirety for a description of the assumptions made, procedures followed, matters considered, qualifications and limitations on the review undertaken by Moelis & Company. Moelis & Company’s opinion was provided for the benefit of the Cornell board of directors in connection with, and for the purpose of, its evaluation of the per share consideration to be received by Cornell from a financial point of view and does not address any other aspect of the merger. The opinion does not address the relative merits of the merger as compared to other business strategies or transactions that might be available with respect to Cornell or Cornell’s underlying business decision to effect the merger. The opinion does not constitute a recommendation to any stockholder as to how to vote or act with respect to the merger.

 

Cornell Options and Other Equity-Based Awards (see page 74)

 

At the effective time of the merger, each outstanding option issued by Cornell to purchase shares of Cornell common stock granted under any stock option or other equity incentive plan, which is outstanding and unexercised immediately following the effective time and which does not, by its terms, terminate on the effective time, whether vested or unvested, which is referred to as a Cornell option, will be assumed by GEO, and these options will entitle the holder to receive GEO common stock as adjusted to account for the exchange ratio, rounded down to the nearest whole number of shares of GEO common stock, on the same terms and conditions as were applicable before the merger (but taking into account any acceleration of Cornell options in connection with the merger). In addition, at the effective time of the merger, each Cornell option that has been assumed by GEO will have an exercise price per

share equal to the quotient determined by dividing the exercise price per share of Cornell common stock at which such Cornell Option was exercisable immediately prior to the effective time by the exchange ratio rounded up to the nearest whole cent.

 

At the effective time of the merger, each outstanding share of Cornell restricted stock will vest and be automatically converted into GEO common stock as adjusted to account for the exchange ratio. For more information regarding Cornell equity-based awards, please see “The Merger Agreement — Cornell Options and Other Equity-Based Awards” beginning on page 74.

 

Cornell will use reasonable best efforts to ensure that, immediately prior to the effective time, the following occurs: (i) each outstanding option or right to acquire Cornell common stock under Cornell’s employee stock purchase plan will automatically be exercised or deemed exercised, and (ii) in lieu of the shares of Cornell common stock otherwise issuable upon the exercise of each such option or right, the holder of such option or right will have the right to elect to receive from GEO, following the effective time, either the stock consideration or the cash consideration, subject to the same prorations and adjustments set forth in “The Merger — Merger Consideration” above, except to the extent that the holder of such option or right elects not to exercise the holder’s options and to withdraw the entire balance of holder’s Cornell employee stock purchase plan account prior to the effective time.

 

Interests of GEO and Cornell Executive Officers and Directors in the Merger (see pages  50 and 59)

 

When you consider the GEO and Cornell board of directors’ respective recommendations that GEO shareholders and Cornell stockholders vote in favor of the proposals described in this joint proxy statement/prospectus, you should be aware that (1) some GEO executive officers and directors may have interests that may be different from, or in addition to, GEO shareholders’ interests, and (2) some Cornell executive officers and directors may have interests that may be different from, or in addition to, Cornell stockholders’ interests, including their receipt of change in control benefits under existing Cornell employment arrangements, accelerated vesting of Cornell equity-based awards and participation in various benefits plans. The following is a brief summary of the additional interests of executive officers and directors of GEO and Cornell.

 

GEO.  There are no change in control, compensatory, severance payments or benefits that the executive officers, directors, key employees or affiliates of GEO have received or will receive as a result of this transaction, other than potential future awards under GEO’s 2006 Stock Incentive Plan, as amended by the proposed amendments, to GEO directors, employees and consultants who will be involved in the completion of the merger, the integration of Cornell’s operations, as well as the operations of the larger combined company going forward. The awards, benefits or amounts that will be received or allocated to eligible participants under the 2006 Plan, as amended by the proposed amendment, have not been determined.

Cornell.

 

Stock Options.  The stock options and restricted stock held by directors and executive officers of Cornell will be treated the same as all other stock options and restricted stock under the terms of the merger agreement. The following table sets forth, as of August 1, 2010, the number of unvested options and unvested shares of restricted stock held by directors and executive officers of Cornell that will become fully vested in advance of, or upon, the consummation of the merger:

 

 

Employee Stock Purchase Plan.  Each outstanding option or right to acquire Cornell common stock under the terms of Cornell’s Employee Stock Purchase Plan, which is referred to as the ESPP, held by executive officers of Cornell will be treated the same as other options or rights to acquire Cornell common stock under the ESPP. The following table sets forth the number of in-the-money options to acquire Cornell common stock held by executive officers under the ESPP as of August 1, 2010, and the dollar amount payable to each officer, upon the exercise of such options upon completion of the merger if such holder elects to receive cash:

 

 

 

 

Nonqualified Deferred Compensation Plan.  Cornell maintains a nonqualified deferred compensation plan, which is referred to as the NQDC Plan, into which directors and executive officers may choose to defer amounts of compensation. All amounts credited to the NQDC Plan are fully vested at all times and are fully accrued (i.e., no additional contributions will be made to the NQDC Plan because of the merger). However, amounts credited to the NQDC Plan will become payable to the plan participants earlier than when such payment would ordinarily have been made absent the merger to NQDC Plan participants and could be viewed as an interest in addition to that held

by stockholders generally. The following table sets forth the dollar amount of compensation accrued by each participating director and executive officer under the NQDC Plan as of June 4, 2010:

 

 

 

 

Employment and Change in Control Agreements.  Upon consummation of the merger, GEO shall honor the existing amended and restated employment agreement between Cornell and James E. Hyman, the employment/separation agreement between Cornell and John Nieser, the executive management employment agreement between Cornell and Cathryn L. Porter and the severance agreement between Cornell and Patrick N. Perrin. The merger would constitute a change of control for purposes of these agreements.

 

Assuming that the merger occurred on August 1, 2010 and each of the above executive officers were terminated immediately following the completion of the merger in accordance with their respective agreement, the following table sets forth the dollar amount of cash and benefits such executive officer would be entitled to receive:

 

 

 

 

Stock Ownership of GEO and Cornell Directors and Executive Officers (see page 89 and 93)

 

On [          ], 2010, the GEO record date, directors and executive officers of GEO and their respective affiliates, as a group, beneficially owned and were entitled to vote approximately [          ] shares of GEO common stock. These shares represent approximately [     ]% of the shares of GEO common stock outstanding on the GEO record date.

 

On          , 2010, the Cornell record date, directors and executive officers of Cornell and their respective affiliates, as a group, beneficially owned and were entitled to vote approximately [          ] shares of Cornell common stock. These shares represent approximately [     ]% of the shares of Cornell common stock outstanding on the Cornell record date.

 

No Appraisal Rights (see page 64)

 

Neither Cornell stockholders nor GEO shareholders have appraisal rights in connection with the merger.

 

Material Federal Income Tax Consequences of the Merger (see page 64)

 

GEO and Cornell intend for the merger to qualify as a reorganization under Section 368(a) of the Code for U.S. federal income tax purposes. It is a condition to the closing of the merger that GEO will have received a written opinion from Akerman Senterfitt and Cornell will have received a written opinion from Hogan Lovells US LLP, hereafter referred to as Hogan Lovells, both as of the closing date of the merger and to the effect that for U.S. federal income tax purposes, the merger will constitute a reorganization within the meaning of Section 368(a) of the Code. If such opinions are not delivered, and if the parties seek to proceed with the transaction notwithstanding that fact, then we will recirculate this joint merger proxy/prospectus with appropriate revisions and resolicit the vote of the GEO and Cornell stockholders.

Receipt by a holder of Cornell common stock of GEO common stock pursuant to the merger will not cause gain or loss to be recognized for U.S. federal income tax purposes, except that (i) gain or loss will be recognized on the receipt of cash in lieu of a fractional share of GEO common stock, (ii) gain (but not loss) will be recognized to the extent of other cash received in exchange for shares of Cornell common stock in the case of a holder of Cornell common stock who receives a combination of cash and GEO common stock and (iii) gain or loss will be recognized in the case of a holder of Cornell common stock who receives solely cash in exchange for such stock.

 

The U.S. federal income tax consequences described above may not apply to some holders of Cornell common stock, including some types of holders specifically referred to on page 64. Accordingly, please consult your tax advisor for a full understanding of the particular tax consequences of the merger to you.

 

Accounting Treatment (see page 64)

 

The merger will be accounted for as an acquisition by GEO of Cornell under the acquisition method of accounting according to accounting principles generally accepted in the United States, referred to herein as GAAP.

 

Regulatory Matters (see page 69)

 

The merger is subject to review by federal and state antitrust authorities pursuant to applicable federal and state antitrust laws. Under the provisions of the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, referred to herein as the HSR Act, and the rules and regulations thereunder, the merger cannot be completed until the companies have made the required notifications and the occurrence of the first of the following: (1) the early termination of the waiting period; (2) the expiration of the required waiting period; or (3) the resolution of any applicable federal or state litigation. The required notification and report forms were filed by each of GEO and Cornell on April 30, 2010 with the United States Department of Justice, Antitrust Division and the Federal Trade Commission. The waiting period under the HSR Act expired as of 11:59 pm on June 1, 2010.

 

Financing (see page 69)

 

Completion of the merger is not conditioned on receipt of any financing. However, in connection with the merger, GEO may choose to refinance Cornell’s existing senior secured credit facility, and Cornell’s existing 10.75% senior notes due 2012 and pay the cash component of the merger consideration, by utilizing a combination of existing cash and one or more draws upon GEO’s existing senior credit facility with BNP Paribas, as amended. BNP Paribas has committed $150.0 million to GEO in order to effect such an increase, which commitment will expire if the merger is not closed on or prior to April 18, 2011. In the alternative, GEO may choose to pursue alternate financing sources, including debt financing or accessing the capital markets. For more information regarding the financing in connection with the merger, see “Financing.”

 

Voting Agreement (see page 86)

 

Certain significant stockholders of Cornell have entered into a voting agreement with GEO requiring them, among other things, to vote their shares of Cornell common stock in favor of the adoption and approval of the terms of the merger agreement, the merger and the other transactions contemplated by the merger agreement and any actions required in furtherance thereof and vote against any alternative proposal, action, transaction or agreement that would result in a breach of any covenant, representation, warranty or other obligation or agreement of Cornell set forth in the merger agreement or of a Cornell stockholder set forth in the voting agreement. The Cornell stockholders party to the voting agreement beneficially owned 18.4% of Cornell’s outstanding common stock as of April 15, 2010. The voting agreement is attached as Annex B to this joint proxy statement/prospectus.

 

Listing of GEO Stock (see page 75)

 

GEO has agreed to use its reasonable best efforts to cause the shares of GEO common stock that are to be issued pursuant to the merger and the shares of GEO common stock that are required to be reserved for issuance upon exercise or settlement of Cornell options and other equity-based awards to be approved for listing on the NYSE. It is also a condition to the merger that the shares of GEO common stock issuable in connection with the merger be approved for listing on the NYSE on or prior to the effective time of the merger.

Conditions to Completion of the Merger (see page 83)

 

Each party’s obligations to effect the merger is subject to the satisfaction or waiver of mutual conditions, including the following:

 

 

The obligations of GEO and GEO Acquisition III, Inc. to effect the merger are subject to the satisfaction or waiver of the following additional conditions:

 

 

Cornell’s obligation to effect the merger is subject to the satisfaction or waiver of the following additional conditions:

 

 

Termination of the Merger Agreement (see page 84)

 

The merger agreement may be terminated at any time before the effective time of the merger by mutual written consent of GEO, GEO Acquisition III, Inc. and Cornell.

 

The merger agreement may also be terminated prior to the effective time of the merger by either GEO or Cornell if:

 

 

The merger agreement may also be terminated prior to the effective time of the merger by GEO if:

 

 

The merger agreement may also be terminated prior to the effective time of the merger by Cornell if Cornell, in compliance with the terms of the merger agreement, has entered into a definitive acquisition agreement to effect a proposal that the Cornell board of directors determines in good faith to be more favorable to Cornell stockholders and it pays to GEO a $12 million termination fee and the GEO-related fees and expenses (as defined below) within the time frame provided.

 

Reimbursement of Fees and Expenses; Termination Fees (see page 85)

 

Fees and Expenses Payable by GEO.  GEO has agreed to reimburse Cornell for its reasonable and documented out-of-pocket fees and expenses up to $2 million incurred by Cornell and its affiliates in connection with the merger agreement and the transactions contemplated thereby, under any of the following circumstances:

 

 

Fees and Expenses Payable by Cornell.  Cornell has agreed to reimburse GEO up to $2 million of GEO’s and GEO Acquisition III’s reasonable and documented out-of-pocket fees and expenses incurred by GEO, GEO Acquisition III, Inc. and their respective affiliates in connection with the merger agreement and the transactions contemplated thereby, referred to as the GEO-related fees and expenses, under any of the following circumstances:

 

 

Termination Fee Payable by Cornell.  Cornell has agreed to pay GEO a termination fee of $12 million and reimburse GEO the GEO-related fees and expenses under any of the following circumstances:

 

 

If the merger agreement is terminated pursuant to the reasons below, and any acquisition proposal that was received by Cornell or publicly announced prior to such termination of the merger agreement is consummated no later than the 12-month anniversary of the date of the termination, then Cornell has agreed to pay GEO a termination fee of $12 million upon the consummation of the acquisition proposal:

 

 

The GEO Special Meeting (see page 88)

 

Meeting.  The GEO special meeting will be held on [          ], 2010 at [  ] p.m., Eastern time, at [          ]. At the GEO special meeting, GEO shareholders will be asked to:

 

 

Record Date; Votes.  GEO has fixed the close of business on [          ], 2010 as the record date, which is referred to as the GEO record date, for determining the GEO shareholders entitled to receive notice of and to vote at the GEO special meeting. Only holders of record of GEO common stock on the GEO record date are entitled to receive notice of and vote at the GEO special meeting, and any adjournment or postponement thereof.

 

Each share of GEO common stock is entitled to one vote on each matter brought before the meeting. On the GEO record date, there were [          ] shares of GEO common stock issued and outstanding.

 

Required Vote.  The GEO proposals require different percentages of votes in order to approve them:

 

 

Approval of the GEO share issuance by GEO shareholders is a condition to completion of the merger. Approval of the amendments to the 2006 Plan by GEO shareholders is not a condition to approval of the merger agreement and the closing of the merger.

 

Failure to Vote; Abstentions.  If you are a GEO shareholder, any of your shares as to which you abstain or which are not voted will have the same effect as a vote “AGAINST” the GEO share issuance, a vote “AGAINST” the amendments to the 2006 Plan and a vote “AGAINST” approving an adjournment of the GEO special meeting. For more information regarding the effect of abstentions, a failure to vote or a broker non-vote, see “The GEO Special Meeting — Votes Required to Approve GEO Proposals” on page 89.

 

The Cornell Special Meeting (see page 92)

 

Meeting.  The Cornell special meeting will be held on [          ], 2010, at [  ] p.m., Central time, at [          ]. At the Cornell special meeting, Cornell stockholders will be asked to:

 

 

Record Date; Votes.  Cornell has fixed the close of business on [          ], 2010 as the record date, which is referred to as the Cornell record date, for determining the Cornell stockholders entitled to receive notice of and to vote at the Cornell special meeting. Only holders of record of Cornell common stock on the Cornell record date are entitled to receive notice of and vote at the Cornell special meeting, and any adjournment or postponement thereof.

 

Each share of Cornell common stock is entitled to one vote on each matter brought before the meeting. On the Cornell record date, there were [          ] shares of Cornell common stock issued and outstanding.

 

Required Vote.  The Cornell proposals require different percentages of votes in order to approve them:

 

 

 

Adoption of the merger agreement by Cornell stockholders is a condition to the completion of the merger.

 

Failure to Vote; Abstentions.  If you are a Cornell stockholder, any of your shares as to which you abstain or which are not voted will have the same effect as a vote “AGAINST” the proposal to approve the merger agreement and a vote “AGAINST” approving an adjournment of the Cornell special meeting. For more information regarding the effect of abstentions, a failure to vote or a broker non-vote, see “The Cornell Special Meeting — Votes Required to Approve Cornell Proposals” beginning on page 93.

 

The following tables set forth the selected historical consolidated financial data for GEO. The selected consolidated financial data as of and for the thirteen weeks ended April 4, 2010 and March 29, 2009 and as of and for the fiscal years ended January 3, 2010, December 28, 2008, December 30, 2007, December 31, 2006 and January 1, 2006 have been derived from GEO’s consolidated financial statements. You should not take historical results as necessarily indicative of the results that may be expected for any future period.

 

You should read this selected consolidated financial data in conjunction with GEO’s Quarterly Report on Form 10-Q for the thirteen weeks ended April 4, 2010 and Annual Report on Form 10-K for the fiscal year ended January 3, 2010.

 

 

 

 

The following tables set forth the selected historical consolidated financial data for Cornell. The selected consolidated financial data as of and for the three months ended March 31, 2010 and March 31, 2009 and for the fiscal years ended December 31, 2009, 2008, 2007, 2006 and 2005 have been derived from Cornell’s consolidated financial statements. You should not take historical results as necessarily indicative of the results that may be expected for any future period.

 

You should read this selected consolidated financial data in conjunction with Cornell’s Quarterly Report on Form 10-Q for the three months ended March 31, 2010 and Cornell’s Annual Report on Form 10-K, as amended, for the fiscal year ended December 31, 2009.

 

 

 

 

The following Selected Unaudited Pro Forma Condensed Combined Financial Data is based on the historical financial data of GEO and Cornell, and has been prepared to illustrate the effects of the merger. The Selected Unaudited Pro Forma Condensed Combined Financial Data does not give effect to any anticipated synergies, operating efficiencies or costs savings that may be associated with the merger. The Selected Unaudited Pro Forma Condensed Combined Financial Data also does not include any integration costs the companies may incur related to the merger as part of combining the operations of the companies. The Selected Unaudited Pro Forma Condensed Combined Statements of Income from Continuing Operations Data below is presented as if the merger were completed on December 29, 2008, the first day of GEO’s fiscal year ended January 3, 2010, and the Selected Unaudited Pro Forma Condensed Combined Balance Sheet Data below is presented as if the merger were completed on April 4, 2010. The unaudited pro forma financial data included in this joint proxy statement/prospectus is based on the historical financial statements of GEO and Cornell, and on publicly available information and certain assumptions that we believe are reasonable, which are described the notes to the Unaudited Pro Forma Condensed Combined Financial Statements included in this joint proxy statement/prospectus. This data should be read in conjunction with GEO’s and Cornell’s historical consolidated financial statements and accompanying notes in GEO’s Quarterly Report on Form 10-Q as of and for the thirteen-weeks ended April 4, 2010 and GEO’s Annual Report on Form 10-K as of and for the year ended January 3, 2010 and Cornell’s Quarterly Report on Form 10-Q as of and for the three months ended March 31, 2010 and Cornell’s Annual Report on Form 10-K, as amended, as of and for the year ended December 31, 2009. GEO has not performed a detailed valuation analysis necessary to determine the fair market values of Cornell’s assets to be acquired and liabilities to be assumed. Accordingly, the pro forma financial statements include only a preliminary allocation of the purchase price, which will be finalized at closing using a third party financial valuation service. The preliminary purchase price allocation is primarily based on the carrying value of Cornell’s assets, liabilities and noncontrolling interest. See also the Unaudited Pro Forma Condensed Combined Financial Statements and notes thereto beginning on page 107.

 

 

 

The following table sets forth selected per share data for GEO and Cornell separately on a historical basis. It also includes unaudited pro forma combined per share data for GEO, which combines the data of GEO and Cornell on a pro forma basis giving effect to the merger. This data does not give effect to any anticipated synergies, operating efficiencies or costs savings that may be associated with the merger. This data also does not include any integration costs the companies may incur related to the merger as part of combining the operations of the companies. This data should be read in conjunction with GEO’s and Cornell’s historical consolidated financial statements and accompanying notes in GEO’s Annual Report on Form 10-K for the year ended January 3, 2010 and Cornell’s Annual Report on Form 10-K, as amended, for the year ended December 31, 2009. See also the Unaudited Pro Forma Condensed Combined Financial Statements and notes thereto beginning on page 107.

 

 

 

 

 

 

Shares of GEO common stock and Cornell common stock are each listed and principally traded on the NYSE. GEO common stock is listed for trading under the symbol “GEO” and Cornell common stock is listed for trading under the symbol “CRN.” The following table sets forth, for the periods indicated, the high and low sales prices per share of GEO common stock and Cornell common stock, in each case as reported on the consolidated tape of the NYSE. Neither GEO nor Cornell declared or paid cash dividends on their common stock for the fiscal years and interim periods shown below.

 

 

The following table shows the closing sale prices of GEO common stock and Cornell common stock as reported on the NYSE on April 16, 2010, the last full trading day before the public announcement of the signing of the merger agreement, and on          , 2010, the most recent practicable date before the printing of this joint proxy statement/prospectus. The table also sets forth the value of the GEO common stock that a Cornell stockholder would have received for one share of Cornell common stock, assuming that the transaction had occurred on those dates. The numbers have been calculated by multiplying the closing sale price of GEO common stock as of the specified date by the exchange ratio and assumes that the merger consideration received consists exclusively of GEO common stock. The actual value of the GEO common stock that a stockholder will receive on the date of the transaction may be higher or lower than the prices set forth below.