AMENDMENT NO. 2 TO EMPLOYMENT AGREEMENT
EXHIBIT 10.1
The EMPLOYMENT AGREEMENT entered into by and between Apollo Group, Inc. (the “Company”) and
Xxxxxxx Xxxxxxxx (the “Executive”), dated March 31, 2007 and amended effective January 1, 2009 (as
amended, the “Agreement”), is hereby further amended effective April 24, 2009, as follows:
1. Section 2 of the Agreement is hereby amended to read in its entirety as follows:
(a) Position. (i) The Executive will be employed as, and hold the title of, the
Company’s Co-Chief Executive Officer (“Co-CEO”). The Executive and the Company’s
other Co-CEO shall have primary responsibility for the implementation and execution
of the Company’s strategic business plans and objectives as approved from time to
time by the Company’s Board of Directors (the “Board”). The Executive, together
with and the Company’s other Co-CEO, shall have the authority and responsibilities
of the position of Chief Executive Officer (“CEO”) as allocated between them in the
attached Exhibit 1. The authority and responsibilities contained in Exhibit 1 may be
altered by the Board from time to time if in its reasonable judgment the change is
necessary to assure a proper and effective organizational allocation of duties and
responsibilities of the CEO position between the Co-CEOs; provided, however, that
any such subsequent change in the duties and responsibilities of the Executive,
without his consent, that results in a material reduction of his duties and
responsibilities shall constitute grounds for a Good Reason termination. The
Executive shall also have such additional duties and responsibilities as directed
and approved from time to time by the Board. The Executive shall have the
responsibility and duty to work with and coordinate with the Company’s other Co-CEO.
The Executive shall report directly to the Board and shall have all the authority
needed to perform the duties and undertake the responsibilities of his position. The
Executive will be a member of the Board Chairman’s Cabinet and shall be involved in
all the Company’s major strategic decisions relating to the scope of his
responsibilities. The Executive will have the authority to hire appropriate
personnel as may be needed to carry out his duties.
ii) Any disagreements between the Co-CEOs shall be resolved by the Executive
Committee and that Committee’s decision shall be final.
(x) For purposes of this function of the Executive
Committee, the Executive Committee shall be chaired by Xxxx X.
Xxxxxxxx or, in his absence, by Xxxxx X. Xxxxxxxx, in each case for
so long as he is a member of the Board. In connection with all
other business of the Executive Committee, the Co-CEOs will
generally share the chairmanship of the Committee with each Co-CEO
chairing every other regular meeting of the Committee.
(y) The composition of the Executive Committee shall not be
changed without the approval of the Board and a majority of the then
serving Executive Committee members. Any changes made to the
membership of the Executive Committee (other than as a result of a
member ceasing employment with the Company) without prior Board
approval will automatically and immediately suspend the delegation
of the dispute resolution set forth herein, and the Board will
resolve all management disputes between the Co-CEOs until it has
approved the membership of the Executive Committee.
(iii) For so long as Executive is serving as a Co-CEO, Executive shall be
deemed to be a Principal Executive Officer for purposes of the Company’s filings
with the Securities and Exchange Commission, including periodic reports and other
filings under the Securities Exchange Act of 1934, as amended.
(b) Board Membership. The Company acknowledges that the Executive currently
serves as a member of the Board. The Company shall, during the remainder of the
Term, use its best efforts to have the Executive nominated for election and
re-election as a Board member at all meetings of the Company’s Class B shareholders
held during the Term at which Board members are to be elected.
(c) Obligations. The Executive shall devote his full business time and attention to
the business and affairs of the Company. During the term of this Agreement, the
Executive shall not engage in any other employment, service or consulting activity
without the prior written approval of the Board. The foregoing, however, shall not
preclude the Executive from (i) serving on any corporate, civic or charitable boards
or committees on which the Executive is serving on the Commencement Date, provided
those positions are listed in attached Schedule I, or on which he commences service
following the Commencement Date with the prior written approval of the Board or (ii)
managing personal investments, so long as such clause (i) and (ii) activities do not
interfere with the performance of the Executive’s responsibilities hereunder.
(d) Change in Co-CEO. If the Company’s other Co-CEO ceases to be employed by the
Company as Co-CEO, the Board may either appoint the Executive as the sole CEO of the
Company or may, in consultation with the Executive, appoint a replacement for the
Company’s other Co-CEO. If the Executive is not appointed the sole CEO, the Board
will give the Executive written notice of any tentative decision to appoint a
specified individual as Co-CEO before announcement and employment of that new
Co-CEO. The Executive shall have five (5) business
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days from receipt of such written notice in which to submit his notice of
termination. Said notice shall be effected in accordance with Paragraphs 7(c) and
7(e) and shall be deemed a Notice of Termination for Good Reason for purposes of
Paragraph 8(b), but no Preliminary Notice of Good Reason or waiting period prior to
the effectiveness of such Notice of Termination shall be required under Paragraph
7(c) as a condition to the effectiveness of such notice, and such termination shall
accordingly be effective immediately upon the Company’s receipt of the notice of
termination. Failure of the Executive to provide the above notice of termination
within the applicable five (5) day period shall be deemed an acceptance of the new
Co-CEO, and thereafter the Executive will not have the right to assert that the
appointment of the new Co-CEO constitutes grounds for a Good Reason termination
hereunder. If Executive becomes the sole CEO, he shall continue to report directly
to the Board, with such duties, responsibilities and authorities as are commensurate
with such position, and any allocation of responsibilities set forth in attached
Exhibit 1 shall cease to apply. The appointment of the Executive as sole CEO shall
not be considered Good Reason under Section 7.
2. Section 3(a) of the Agreement is hereby amended in its entirety to read as follows:
(a) Base Salary. The Company agrees to pay or cause to be paid to the Executive an
annual base salary at the rate of $600,000 less applicable withholding. This base
salary will be subject to annual review and may be increased from time to time by
the Compensation Committee of the Board of Directors (the “Compensation Committee”)
upon consideration of such factors as the Executive’s responsibilities, compensation
of similar executives within the Company and in other companies, performance of the
Executive and other pertinent factors. The Executive’s annual rate of base salary,
as it may be increased from time to time, will be hereinafter referred to as the
“Base Salary”. Such Base Salary will be payable in accordance with the Company’s
customary practices applicable to its executives.
3. Except as modified by this Amendment, all the terms and provisions of the Agreement shall
continue in full force and effect.
IN WITNESS WHEREOF, Apollo Group, Inc. has caused this Amendment to be executed on its behalf
by its duly-authorized officer on the date indicated below, and the Executive has executed this
Amendment on the date indicated below.
| XXXXXXX XXXXXXXX | APOLLO GROUP, INC. | |||||||
| /s/ Xxxxxxx Xxxxxxxx | By: | /s/ Xxxxxx X. X’Xxxxx | ||||||
Date:
|
April 24, 2009 | Title: | President and Chief Operating Officer | |||||
| Date: | April 24, 2009 | |||||||
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Exhibit 1
| External Communi-cations Global Strategy Apollo Global IR Operations Legal Human Resources Ombuds Corporate Development Financial Xxxxxxxx Xxxxxxxxx Board |
