APOLLO GROUP, INC. RESTRICTED STOCK UNIT AWARD AGREEMENT
APOLLO GROUP, INC.
RESTRICTED STOCK UNIT AWARD AGREEMENT
RESTRICTED STOCK UNIT AWARD AGREEMENT
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. The number of shares of Class A Common
Stock underlying the awarded restricted stock units and the applicable performance vesting
requirement for those units and the underlying shares are set forth in the Award Summary below. The
remaining terms and conditions governing the Award, including the applicable service vesting
requirements, are set forth in the remainder of this Agreement.
AWARD SUMMARY
Participant
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Award Date:
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, 200 | |
Number of Shares
Subject to Award:
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shares of Class A Common Stock (the “Shares”) | |
Vesting Provisions:
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Performance Vesting: None of the Shares subject to this Award shall vest, and this Award shall terminate in its entirety, should the Corporation fail to attain the Performance Goal specified in attached Schedule I for the applicable Performance Period. | |
| Service Vesting: If such Performance Goal is attained, then the number of Shares in which Participant may vest hereunder shall be determined in accordance with the service vesting provisions of Paragraph 3. | ||
| Accelerated Vesting: The Shares subject to this Award shall be subject to accelerated vesting pursuant to the provisions of Paragraph 5. |
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 may be transferred
pursuant to the provisions of Participant’s will or the laws of inheritance or to Participant’s
designated beneficiary or beneficiaries of this Award. Participant may make such a beneficiary
designation at any time by filing the appropriate form with the Plan Administrator or its designee.
3. Vesting Requirements. The Shares subject to the Award shall initially be unvested
and shall vest only in accordance with the vesting provisions of this Paragraph 3 or the special
vesting acceleration provisions of Paragraph 5. The actual number of Shares in which Participant
shall vest under this Paragraph 3 shall be determined as follows:
(a) Performance Vesting: As soon as administratively practicable following the completion of
the Performance Period, the Plan Administrator shall, on the basis of the Corporation’s audited
financial statements for the fiscal year coincident with such Performance Period, determine whether
the Performance Goal for that period has been attained. If the Performance Goal has not been
attained, then the restricted stock units hereby awarded shall be immediately cancelled, and
Participant shall thereupon cease to have any right or entitlement to receive any of the Shares
underlying those cancelled units. Should the Plan Administrator determine and certify, on the
basis of such audited financial statements, that the Performance Goal for the Performance Period
has been attained, then the Shares subject to this Award shall be re-designated as Performance
Shares, and the number of those Performance Shares in which Participant may vest shall be dependent
upon his or her completion of the Service vesting requirements set forth below.
(b) Service Vesting: The Participant shall vest in twenty-five percent (25%) of the
Performance Shares upon his or her continuation in Employee status through the completion of the
Performance Period. Participant shall vest in the remaining Performance Shares upon his or her
completion of each successive twelve (12)-month period of continued Service over the thirty-six
(36)-month period measured from , 200 .
(c) Cessation of Service. In no event shall Participant vest in any additional Performance
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.
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4. Stockholder Rights and Dividend Equivalents
(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 payable other
than in shares of Class A Common Stock, whether regular or extraordinary, 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 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 those phantom dividend equivalents relate. However, each such distribution
shall be subject to the Corporation’s collection of the Withholding Taxes applicable to that
distribution.
5. Change in Control. Should a Change in Control be effected 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 so
vested shall be issued immediately on the effective date of such Change in Control or as soon as
administratively practicable thereafter, but in no event more than fifteen (15) business days after
such effective date, or shall otherwise be converted into the right to receive 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 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 issuance or 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
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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. Issuance of Shares of Common Stock.
(a) The Performance Shares in which Participant vests in accordance with the provisions of
Paragraph 3 shall be issued in accordance with the following provisions:
(i) The first twenty-five percent (25%) of the Performance Shares shall be
issued as soon as administratively practicable following the Plan Administrator’s
determination and certification, based on the Corporation’s audited financial
statements for the fiscal year coincident with the Performance Period, that the
Performance Goal for that period has been attained. The Performance Shares subject
to each subsequent installment in which Participant vests on the basis of his or her
continued Service shall be issued as soon as administratively practicable following
the applicable vesting date for that installment. In no event shall any Performance
Shares which vest in accordance with Paragraph 3 be issued later than the later of
(A) the last day of the calendar year in which the particular
vesting date for those shares occurs or (B the fifteenth (15th) day of third (3rd) calendar month following
such vesting date. The phantom dividend equivalents credited to the Participant’s
book account under Paragraph 4(b) shall be distributed concurrently with the
issuance of the vested Performance Shares to which they relate.
(ii) Except as otherwise provided in Paragraph 5, no Shares shall be issued
prior to the completion of the Performance Period.
(b) 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.
(c) The Corporation shall collect the applicable Withholding Taxes with respect to all Shares
which vest pursuant to the provisions of this Agreement through the following automatic share
withholding method:
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- 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 the amount necessary to satisfy the Corporation’s required tax withholding
obligations using the minimum statutory withholding rates for federal and state tax
purposes, including payroll taxes, that are applicable to supplemental taxable
income.
(d) 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 Common Stock.
In no event, however, shall any fractional shares be issued. Accordingly, the total number of
shares of Common Stock to be issued at the time the Award vests shall, to the extent necessary, be
rounded down to the next whole share in order to avoid the issuance of a fractional share.
8. 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 Common Stock may be listed for trading at the time of such issuance.
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. 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
delivery or upon deposit in the U.S. mail, postage prepaid and properly addressed to the party to
be notified.
10. 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.
11. 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.
12. 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.
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IN WITNESS WHEREOF, the parties have executed this Agreement on the day and year first
indicated above.
| APOLLO GROUP, INC. | ||||||
| By: | ||||||
| Title: | ||||||
| PARTICIPANT | ||||||
| Signature: | ||||||
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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 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. 1934 Act shall mean the Securities Exchange Act of 1934, as amended from time to
time.
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L. Participant shall mean the person to whom the Award is made pursuant to the
Agreement.
M. 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.
N. Performance Goal shall mean the performance goal specified in Schedule I to this
Agreement.
O. Performance Period shall mean the period specified on attached Schedule I to this
Agreement over which the attainment of the Performance Goal is to be measured.
P. Performance Shares shall mean the Shares in which Participant can vest under this
Agreement if the Performance Goal is attained.
Q. Plan shall mean the Corporation’s 2000 Stock Incentive Plan, as amended or restated
from time to time.
R. Plan Administrator shall mean the Compensation Committee of the Board acting in its
capacity as administrator of the Plan.
S. Service shall mean Participant’s performance of services for the Corporation (or
any Parent or Subsidiary) in the capacity of an Employee. For purposes of this Agreement,
Participant shall be deemed to cease Service immediately upon the occurrence of the either of the
following events: (i) Participant no longer performs services in an Employee capacity for the
Corporation (or any Parent or Subsidiary) or (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. 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.
T. 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.
U. Stock Exchange shall mean the American Stock Exchange, the Nasdaq Global or Global
Select Market or the New York Stock Exchange.
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V. 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.
W. Withholding Taxes shall mean the federal, state and local income taxes and the
employee portion of the federal, state and local employment taxes required to be withheld by the
Corporation in connection with the vesting and issuance of the shares of Common Stock which vest
under of the Award and any phantom dividend equivalents distributed with respect to those shares.
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SCHEDULE I
PERFORMANCE PERIOD AND PERFORMANCE GOAL
