RESTRICTED STOCK UNIT AWARD AGREEMENT
SPECIAL RETENTION AWARD -VERSION B
RECITALS
A. The Corporation has implemented the Plan as an equity incentive program to encourage key
employees and officers of the Corporation and the non-employee members of the Board to remain in
the employ or service of the Corporation by providing them with an opportunity to acquire a
proprietary interest in the success of the Corporation.
B. Participant is to render valuable services to the Corporation (or any Parent or Subsidiary),
and this Agreement is executed pursuant to, and is intended to carry out the purposes of, the Plan
in connection with the Corporation’s issuance of shares of Class A Common Stock to Participant
under the Plan.
C. All capitalized terms in this Agreement shall have the meaning assigned to them in the attached
Appendix A.
NOW, THEREFORE, it is hereby agreed as follows:
1. Grant of Restricted Stock Units. The Corporation hereby awards to Participant, as
of the Award Date, restricted stock units under the Plan. Each restricted stock unit that vests
hereunder shall entitle Participant to one share of the Corporation’s Class A Common Stock on the
designated issuance date. The number of shares of Class A Common Stock underlying the awarded
restricted stock units, the applicable vesting requirements for those units and the underlying
shares and the issuance dates for the shares that vest are set forth in the Award Summary below.
The remaining terms and conditions governing the Award are set forth in the remainder of this
Agreement.
Participant:
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«First_Name» «Last_Name» | |
Award Date: |
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Number of Shares Subject to Award: |
«Shares» shares of Class A Common Stock (the “Shares”) | |
Vesting Schedule:
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The Shares shall vest in a series of installments over the period of Participant’s continued Service as follows: . Such Service-vesting schedule shall constitute the “Normal Vesting Schedule.” However, the Shares may vest on an accelerated basis in accordance with the applicable provisions of Paragraph 3(b) or Paragraph 5 of this Agreement. |
Issuance Schedule:
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Each Share in which Participant vests in accordance with the Normal Vesting Schedule shall be issued, subject to the Corporation’s collection of all applicable Withholding Taxes, on the date that particular Share vests (the “Vesting Date”) or as soon after that scheduled Vesting Date as administratively practicable, but in no event later than the later of (i) the close of the calendar year in which such Vesting Date occurs or (ii) the fifteenth day of the third calendar month following such Vesting Date. The Shares which vest pursuant to Paragraph 3(b) or Paragraph 5 of this Agreement shall be issued in accordance with the provisions of the applicable paragraph. The applicable Withholding Taxes shall be collected pursuant to the procedure set forth in Paragraph 7 of this Agreement. |
2. Limited Transferability. Prior to the actual issuance of the Shares which vest
hereunder, Participant may not transfer any interest in the restricted stock units subject to the
Award or the underlying Shares or pledge or otherwise hedge the sale of those units or Shares,
including (without limitation) any short sale or any acquisition or disposition of any put or call
option or other instrument tied to the value of those Shares. However, any Shares which vest
hereunder but otherwise remain unissued at the time of Participant’s death shall be transferred to
Participant’s designated beneficiary or beneficiaries of this Award or, in the absence of such
designated beneficiaries, pursuant to the provisions of Participant’s will or the laws of
inheritance. Participant may make a beneficiary designation with respect to this Award at any time
by filing the appropriate form with the Plan Administrator or its designate.
3. Cessation of Service.
(a) Except as otherwise provided in Paragraph 3(b) below, Participant shall not vest in any
additional Shares following his or her cessation of Service. Accordingly, should Participant cease
Service for any reason prior to vesting in one or more Shares subject to this Award, then the Award
will be immediately cancelled with respect to those unvested Shares, and the number of restricted
stock units will be reduced accordingly. Participant shall thereupon cease to have any right or
entitlement to receive any Shares under those cancelled units, and those Shares shall cease to be
subject to this Award.
(b) Should Participant cease Service prior to the completion of the Normal Vesting Schedule by
reason of an Involuntary Termination, then Participant shall, upon satisfaction of the Release
Condition set forth in Paragraph 3(c) below, vest in all of the unvested Shares at the time subject
to this Award. The Shares that vest on such accelerated basis will be issued to Participant
within the sixty (60)-day period following the date of Participant’s Involuntary Termination;
provided, however, that should such sixty (60)-day period span two taxable years, the issuance
shall be effected during the portion of that period that occurs in the second taxable year.
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(c) The accelerated vesting of the unvested Shares subject to this Award at the time of
Participant’s Involuntary Termination shall be contingent upon Participant’s satisfaction of the
following requirements (collectively the “Release Condition”): (i) Participant must execute and
deliver to the Corporation, within twenty-one (21) days (or forty-five (45) days to the extent such
longer period is required under applicable law) after the effective date of such Involuntary
Termination, a comprehensive general release (in the form provided by the Corporation at the time
of such Involuntary Termination) releasing the Corporation and its officers, directors, employees,
stockholders, subsidiaries, affiliates, representatives and other related parties from all claims
that Participant may have with respect to such parties relating to or arising from Participant’s
employment with the Corporation (or any affiliated entity) and the termination of that employment
relationship and containing such confidentiality, non-solicitation, non-disparagement and
non-competition covenants as the Corporation deems satisfactory under the circumstances and (ii)
such release must become effective and enforceable under applicable law after the expiration of any
applicable revocation periods under federal or state law.
4. Stockholder Rights.
(a) The holder of this Award shall not have any stockholder rights, including voting, dividend
or liquidation rights, with respect to the Shares subject to the Award until Participant becomes
the record holder of those Shares following their actual issuance upon the Corporation’s collection
of the applicable Withholding Taxes.
(b) Notwithstanding the foregoing, should any dividend or other distribution, whether regular
or extraordinary, payable other than in shares of Class A Common Stock, be declared and paid on the
Corporation’s outstanding Class A Common Stock in one or more calendar years during which Shares
remain subject to this Award (i.e., those Shares are not otherwise issued and outstanding for
purposes of entitlement to the dividend or distribution), then a special book account shall be
established for Participant and credited with a phantom dividend equivalent to the actual dividend
or distribution which would have been paid on the Shares had such Shares been issued and
outstanding and entitled to that dividend or distribution. As the Shares subsequently vest in one
or more installments hereunder, the phantom dividend equivalents credited to those Shares in the
book account shall vest, and those vested phantom dividend equivalents shall be distributed to
Participant (in cash or such other form as the Plan Administrator may deem appropriate in its sole
discretion) concurrently with the issuance of the vested Shares to which they relate. However, each
such distribution shall be subject to the Corporation’s collection of the Withholding Taxes
applicable to that distribution. In no event shall any phantom dividend equivalents vest or become
distributable unless the Shares to which they relate vest in accordance with the terms of this
Agreement.
5. Change in Control. Should a Change in Control be effected during the period of
Participant’s Service and at a time when one or more unvested Shares remain subject to this Award,
then Participant shall, immediately prior to the closing of that Change in Control transaction,
vest in all those unvested Shares. The Shares that so vest shall be converted into the right to
receive for each such Share the same consideration per share of Class A Common Stock payable to the
other holders of such Class A Common Stock in consummation of the Change in
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Control and distributed
at the same time as such stockholder payments, but in no event shall such
distribution to Participant be completed later than the later of (i) the end of the calendar
year in which such Change in Control is effected or (ii) the fifteenth (15th) day of the third
(3rd) calendar month following the effective date of that Change in Control. Each distribution made
under this Paragraph 5 shall be subject to the Corporation’s collection of the applicable
Withholding Taxes. This Agreement shall not in any way affect the right of the Corporation to
adjust, reclassify, reorganize or otherwise change its capital or business structure or to merge,
consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets.
6. Adjustment in Shares. Should any change be made to the Class A Common Stock by
reason of any stock split, stock dividend, recapitalization, combination of shares, exchange of
shares, spin-off transaction, extraordinary dividend or distribution or other change affecting the
outstanding Class A Common Stock as a class without the Corporation’s receipt of consideration, or
should the value of outstanding shares of Class A Common Stock be substantially reduced as a result
of a spin-off transaction or an extraordinary dividend or distribution, or should there occur any
merger, consolidation or other reorganization, then equitable adjustments shall be made by the Plan
Administrator to the total number and/or class of securities issuable pursuant to this Award in
order to reflect such change and thereby prevent a dilution or enlargement of benefits hereunder.
In making such equitable adjustments, the Plan Administrator shall take into account any amounts
credited to Participant’s book account under Paragraph 4(b) in connection with the transaction, and
the determination of the Plan Administrator shall be final, binding and conclusive. However, in
the event of a Change of Control, the adjustments (if any) shall be made in accordance with the
applicable provisions of Section 13.8 of the Plan governing Change of Control transactions.
Notwithstanding the above, the conversion of any convertible securities of the Corporation shall
not be deemed to have been effected without the Corporation’s receipt of consideration.
7. Withholding Taxes.
(a) The Corporation shall collect the Withholding Taxes with respect to each distribution of
phantom dividend equivalents by withholding a portion of that distribution equal to the amount of
the applicable Withholding Taxes, with the cash portion of the distribution to be the first portion
so withheld.
(b) The Corporation shall collect the applicable Withholding Taxes with respect to all Shares
which vest and become issuable pursuant to the provisions of this Agreement through the following
automatic share withholding method:
• On the applicable issuance date, the Corporation shall withhold, from the
vested Shares otherwise issuable to Participant at that time, a portion of those
Shares with a Fair Market Value (measured as of the issuance date) equal to the
applicable Withholding Taxes; provided, however, that the number of Shares which the
Corporation shall be required to so withhold shall not exceed in Fair Market Value
(other than by reason of the rounding up of any fractional share to the next whole
Share) the amount necessary to satisfy the Corporation’s required tax withholding
obligations using the minimum statutory withholding rates for
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federal and state tax
purposes, including payroll taxes, that are applicable to
supplemental taxable income. Participant hereby expressly authorizes the Corporation
to withhold any such additional fractional Share that is needed to round up the
Share withholding to the next whole Share, with the Fair Market Value of that
additional fractional Share to be added to the amount of taxes withheld by the
Corporation from his or her wages for the calendar year in which the issuance date
occurs, and to report that additional tax withholding as part of his or her W-2 tax
withholdings for such year.
(c) Except as otherwise provided in Paragraph 5 or this Paragraph 7, the settlement of all
restricted stock units which vest under the Award shall be made solely in shares of Class A Common
Stock. No fractional share of Class A Common Stock shall be issued pursuant to this Award, and any
fractional share resulting from any calculation made in accordance with the terms of this Agreement
shall be rounded down to the next whole share of Class A Common Stock.
8. Non-Disparagement Covenant. Participant hereby agrees that Participant will not
make any disparaging, negative or untrue statements about the Corporation, including (without
limitation) any statements about the Corporation, its products or services, business affairs or
officers, directors or employees. Participant acknowledges and agrees that any of the benefits
payable to Participant under this Agreement may, without prior notice, terminate immediately upon
his or her failure to abide by the terms of this Paragraph 8.
9. Notices. Any notice required to be given or delivered to the Corporation under the
terms of this Agreement shall be in writing and addressed to the Corporation at its principal
corporate offices or shall be effected by properly addressed electronic mail delivery. Any notice
required to be given or delivered to Participant shall be in writing and addressed to Participant
at the most recent address then on file for Participant in the Corporation’s Human Resources
Department. All notices shall be deemed effective upon personal or electronic delivery or upon
deposit in the U.S. mail, postage prepaid and properly addressed to the party to be notified.
10. Compliance with Laws and Regulations. The issuance of shares of Class A Common
Stock pursuant to the Award shall be subject to compliance by the Corporation and Participant with
all applicable requirements of law relating thereto and with all applicable regulations of any
Stock Exchange on which the Class A Common Stock may be listed for trading at the time of such
issuance.
11. Successors and Assigns. Except to the extent otherwise provided in this
Agreement, the provisions of this Agreement shall inure to the benefit of, and be binding upon, the
Corporation and its successors and assigns and Participant and the legal representatives, heirs and
legatees of Participant’s estate and any beneficiaries of the Award designated by Participant.
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12. Code Section 409A It is the intention of the parties that the provisions of this
Agreement shall comply with the requirements of the short-term deferral exception to Section 409A
of the Code and Treasury Regulations Section 1.409A-1(b)(4). Accordingly, to the extent there is
any ambiguity as to whether one or more provisions of this Agreement would otherwise contravene the
requirements or limitations of Code Section 409A applicable to such short-term deferral exception,
then those provisions shall be interpreted and applied in a manner that does not result in a
violation of the requirements or limitations of Code Section 409A and the Treasury Regulations
thereunder that apply to such exception.
13. Construction. This Agreement and the Award evidenced hereby are made and granted
pursuant to the Plan and are in all respects limited by and subject to the terms of the Plan. All
decisions of the Plan Administrator with respect to any question or issue arising under the Plan or
this Agreement shall be conclusive and binding on all persons having an interest in the Award.
14. Governing Law. The interpretation, performance and enforcement of this Agreement
shall be governed by the laws of the State of Arizona without resort to that State’s
conflict-of-laws rules.
15. Participant Acceptance. The Participant must accept the terms and conditions of
this Agreement either electronically through the electronic acceptance procedure established by the
Corporation or through a written acceptance delivered to the Corporation in a form satisfactory to
the Corporation. In no event shall any shares of Class A Common Stock be issued under this
Agreement in the absence of such acceptance.
IN WITNESS WHEREOF, the parties have executed this Agreement on the day and year first indicated
above.
| APOLLO GROUP, INC. |
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| By: | ||||
| Title: | ||||
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APPENDIX A
DEFINITIONS
The following definitions shall be in effect under the Agreement:
A. Agreement shall mean this Restricted Stock Unit Issuance Agreement.
B. Award shall mean the award of restricted stock units made to Participant pursuant
to the terms of this Agreement.
C. Award Date shall mean the date the restricted stock units are awarded to
Participant pursuant to the Agreement and shall be the date indicated in Paragraph 1 of the
Agreement.
D. Board shall mean the Corporation’s Board of Directors.
E. Change in Control shall have the meaning assigned to such term in Section 3.1(e) of
the Plan.
F. Code shall mean the Internal Revenue Code of 1986, as amended.
G. Class A Common Stock shall mean shares of the Corporation’s Class A common stock.
H. Corporation shall mean Apollo Group, Inc., an Arizona corporation, and any
successor corporation to Apollo Group, Inc. which shall by appropriate action adopt the Plan.
I. Employee shall mean an individual who is in the employ of the Corporation (or any
Parent or Subsidiary), subject to the control and direction of the employer entity as to both the
work to be performed and the manner and method of performance.
J. Fair Market Value per share of Class A Common Stock on any relevant date shall be
the closing price per share of such Class A Common Stock on the date in question on the Stock
Exchange serving as the primary market for the Class A Common Stock, as such price is reported by
the National Association of Securities Dealers (if primarily traded on the Nasdaq Global or Global
Select Market) or as officially quoted in the composite tape of transactions on any other Stock
Exchange on which the Class A Common Stock is then primarily traded. If there is no closing
selling price for the Class A Common Stock on the date in question, then the Fair Market Value
shall be the closing price on the last preceding date for which such quotation exists.
K. Involuntary Termination shall mean the unilateral termination of the Participant’s
Service by the Corporation (or any Parent or Subsidiary employing Participant) for any reason
other than a Termination for Cause; provided, however, in no event shall an Involuntary
Termination be deemed to incur in the event the Participant’s Service terminates by reason of his
or her death or disability.
L. 1934 Act shall mean the Securities Exchange Act of 1934, as amended from time to
time.
M. Participant shall mean the person to whom the Award is made pursuant to the
Agreement.
N. Parent shall mean any corporation (other than the Corporation) in an unbroken chain
of corporations ending with the Corporation, provided each corporation in the unbroken chain (other
than the Corporation) owns, at the time of the determination, stock possessing fifty percent (50%)
or more of the total combined voting power of all classes of stock in one of the other corporations
in such chain.
O. Plan shall mean the Corporation’s 2000 Stock Incentive Plan, as amended or restated
from time to time.
P. Plan Administrator shall mean the Compensation Committee of the Board acting in its
capacity as administrator of the Plan.
Q. Service shall mean Participant’s performance of services for the Corporation (or
any Parent or Subsidiary) in the capacity of an Employee. However, Participant shall be deemed to
cease Service immediately upon the occurrence of the any of the following events: (i) Participant
no longer performs services in an Employee capacity for the Corporation (or any Parent or
Subsidiary), (ii) the entity for which Participant renders services in an Employee capacity ceases
to remain a Parent or Subsidiary of the Corporation, even though Participant may subsequently
continue to perform services for that entity, or (iii) if Participant is employed on the Award
Date in a capacity other than (or in addition to) a faculty member, Participant ceases to remain
employed in that capacity and is accordingly employed by the Corporation (or any Parent or
Subsidiary) solely in the capacity of a faculty member. Service as an Employee shall not be deemed
to cease during a period of military leave, sick leave or other personal leave approved by the
Corporation; provided, however, that except to the extent otherwise required by law or expressly
authorized by the Plan Administrator or by the Corporation’s written policy on leaves of absence,
no Service credit shall be given for vesting purposes for any period Participant is on a leave of
absence.
R. Shares shall mean the shares of Class A Common Stock which may vest and become issuable
under the Award pursuant to the terms of this Agreement.
S. Stock Exchange shall mean the American Stock Exchange, the Nasdaq Global or Global
Select Market or the New York Stock Exchange.
T. Subsidiary shall mean any corporation (other than the Corporation) in an unbroken
chain of corporations beginning with the Corporation, provided each corporation (other than the
last corporation) in the unbroken chain owns, at the time of the determination, stock possessing
fifty percent (50%) or more of the total combined voting power of all classes of stock in one of
the other corporations in such chain.
U. Termination for Cause shall mean the termination of the Participant’s Service by
the Corporation (or any Parent or Subsidiary employing Participant) for one or more of the
following reasons:
(i) repeated dereliction of the material duties and responsibilities of his or
her position with the Corporation (or any Parent or Subsidiary);
(ii) misconduct, insubordination or failure to comply with the policies of the
Corporation (or any Parent or Subsidiary employing the Participant) governing
employee conduct and procedures;
(iii) excessive lateness or absenteeism;
(iv) conviction of or pleading guilty or nolo contendere to any felony
involving theft, embezzlement, dishonesty or moral turpitude;
(v) commission of any act of fraud against, or the misappropriation of property
belonging to, the Corporation (or any Parent or Subsidiary);
(vi) commission of any act of dishonesty in connection with his or her
responsibilities as an Employee that is intended to result in his or her personal
enrichment or the personal enrichment of his or her family or others;
(vii) any other misconduct adversely affecting the business or affairs of the
Corporation (or any Parent or Subsidiary); or
(viii) a material breach of any agreement the Participant may have at the time
with the Corporation (or any Parent or Subsidiary employing the Participant),
including (without limitation) any proprietary information, non-disclosure or
confidentiality agreement.
V. Withholding Taxes shall mean the (i) the employee portion of the federal, state and
local employment taxes required to be withheld by the Corporation in connection with the vesting of
the shares of Class A Common Stock under the Award and any phantom dividend equivalents relating to
those shares and (ii) the federal, state and local income taxes required to be withheld by the
Corporation in connection with the issuance of those vested shares and the distribution of any
phantom dividend equivalents relating to such shares.
