AMENDED AND RESTATED EMPLOYMENT AGREEMENT
EXHIBIT 10.10
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Employment Agreement”), dated December
31, 2008, is entered into by and between Xxxx X. Xxxxxxxx (the “Employee”) and Apollo Group, Inc.,
an Arizona corporation (the “Company”). This Employment Agreement as so amended and restated shall
be effective as of January 1, 2008.
WHEREAS, the Employee is currently a party to an employment agreement with the Company dated
December 31, 1993 (the “Prior Agreement”).
WHEREAS, the Company desires that the Employee continue to be employed by the Company and the
Employee is willing to continue to be employed by the Company; and
WHEREAS, the Company and the Employee desire to amend and restate the terms and conditions of
the Prior Agreement in order to bring those terms and conditions into documentary compliance with
the final Treasury Regulations under Section 409A of the Internal Revenue Code of 1986, as amended
(the “Code”) and continue Employee’s employment with the Company in accordance with those amended
and restated terms and conditions.
NOW, THEREFORE, the Employee and the Company, in consideration of the mutual agreements
hereinafter set forth, do hereby agree as follows:
1. DUTIES. The Company does hereby agree to continue to employ and engage the
Employee, and the Employee does hereby accept and agree to such continued employment and
engagement, in the capacity of Executive Chairman of the Company’s Board of Directors (the
“Board”). Employee agrees to perform any and all other duties and to assume any and all
responsibilities that may be assigned to him from time to time by the Company. The Employee shall
devote his full time, energy and skill to the performance of his duties for the Company and for the
benefit of the Company, reasonable vacations authorized in accordance with the Company’s policies
and reasonable absences because of illness excepted. Furthermore, the Employee will exercise due
diligence and care in the performance of his duties to the Company under this Agreement.
2. EMPLOYMENT PERIOD.
(a) INITIAL TERM. The Employee shall continue to be employed by the Company for the
duties as set forth in Section 1 for the period commencing on January 1, 2008 and ending December
31, 2008 (the “Initial Term”) unless sooner terminated in accordance with the provisions of this
Employment Agreement.
(b) RENEWAL: EMPLOYMENT PERIOD DEFINED. This Employment Agreement will be
automatically renewed at the end of the Initial Term for one or more additional successive one-year
periods commencing on each January 1 each year and ending the next following December 31 (a
“Renewal Term”), unless either party serves notice to
terminate this Employment Agreement on the other. Such notice must be given at least thirty (30) days
before the end of the Initial Term or the applicable Renewal Term to be effective.
1
3. COMPENSATION.
(a) BASE SALARY. The Company shall pay the Employee and the Employee agrees to accept
from the Company in full payment for his services and promises to the Company a base salary at the
rate of Eight Hundred Fifty Thousand and No/100 Dollars ($850,000.00) per year, payable in equal
biweekly installments in accordance with the Company’s normal payroll practices for salaried
employees. This base salary may be adjusted annually by the Board or the Compensation Committee of
the Board (the “Compensation Committee”) in its discretion; provided, however that any adjustment
that decreases the Employee’s base salary must be approved by the Employee before such adjustment
becomes effective.
(b) BONUS AND OTHER COMPENSATION. The Employee shall also receive such bonuses and
other forms of compensation as may be declared from time to time by the Board or the Compensation
Committee in its sole and absolute discretion. Any bonus awarded to the Employee shall be paid by
the 15th day of the third calendar month following the close of the Company’s fiscal year for which
such bonus is earned or as soon thereafter as administratively practicable, but in no event shall
such payment be made later December 31st of that calendar year in which fiscal year ends.
4. FRINGE BENEFITS. The Employee shall be entitled to participate in any benefit
programs adopted from time to time by the Company for the benefit of its employees, and the
Employee shall receive such other fringe benefits as may be granted to him from time to time by the
Board or the Compensation Committee.
5. BUSINESS EXPENSES. The Company shall reimburse the Employee for any and all
necessary, customary and usual expenses, properly receipted in accordance with the Company’s
policies, incurred by the Employee in the performance of his duties hereunder. Employee must submit
proper documentation for each such expense within sixty (60) days after the later of (i) Employee’s
incurrence of such expense or (ii) Employee’s receipt of the invoice for such expense. If such
expense qualifies hereunder for reimbursement, then the Company will reimburse Employee for that
expense within thirty (30) business days thereafter. In no event shall any such expense be
reimbursed later than the close of the calendar year following the calendar year in which incurred.
6. DEATH OR DISABILITY.
(a) TERMINATION OF EMPLOYMENT. If the Employee dies while employed by the Company, the
Employee’s employment shall automatically cease and terminate. The Company’s obligation to pay the
Employee’s base salary pursuant to Section 3 shall terminate as of the date of the Employee’s
death, and any accrued but unpaid salary and vacation pay due the Employee shall be paid at that
time. If Employee becomes physically or mentally disabled while employed by the Company, and as a
result thereof becomes unable to continue the proper performance of his duties hereunder, with or
without reasonable accommodation, then the Employee’s employment hereunder and the Company’s
obligation to
2
pay the Employee’s base salary pursuant to Section 3 shall be terminated as of the date the
Employee is determined to be disabled, and any accrued but unpaid salary and vacation pay due the
Employee shall be paid at that time; provided, however, that the Employee shall be eligible to
receive payments in accordance with the terms and conditions of the amended and restated Deferred
Compensation Agreement entered into by the parties on this date pursuant to Section 18 of this
Employment Agreement, a copy of which is attached hereto as Exhibit A (the “Deferred Compensation
Agreement”).
(b) DEFINITION OF DISABLED. The Employee shall be considered to be “disabled” for
purposes of this Section 6, if in the judgment of a licensed physician selected by the Board, the
Employee is unable to perform his customary duties under this Employment Agreement because of a
physical or mental impairment. The determination by the physician shall be binding and conclusive
for all purposes.
7. TERMINATION BY THE COMPANY.
(a) TERMINATION FOR CAUSE. The Company may terminate this Employment Agreement for
“cause” at any time before the end of the Initial Term or the end of any Renewal Term. An
illustrative, but not exclusive, listing of matters that shall be deemed to constitute “cause”
follows:
(1) the refusal of the Employee to implement or adhere to lawful policies or
directives of the Board;
(2) the repeated failure of the Employee to achieve performance objectives
established and clearly stated from time to time by the Board or the Compensation
Committee in consultation with the Employee;
(3) conduct of a criminal nature which may have an adverse impact on the
Company’s reputation and standing in the community;
(4) conduct that is in violation of Employee’s common law duty of loyalty to
the Company; or
(5) fraudulent conduct in connection with the business affairs of the Company,
regardless of whether said conduct is designed to defraud the Company or others.
If Employee’s employment is terminated for “cause”, Employee’s employment may be terminated
immediately without any advance written notice. Notwithstanding the above, the Company may
terminate this Employment Agreement for cause only upon the affirmative vote of two-thirds of the
Board members that constitute a quorum.
(b) TERMINATION WITHOUT CAUSE. The Company shall not have the authority to terminate
this Employment Agreement without cause.
3
(c) FINAL COMPENSATION PAYMENTS. The Company’s obligation to pay the Employee’s base
salary pursuant to Section 3 shall terminate upon the Employee’s termination for cause, the
Employee’s retirement or the Employee’s voluntary termination of employment with the Company. Any
accrued but unpaid salary and vacation pay due the Employee at the time of such termination of
employment shall be paid at that time. To the extent the Employee is, at the time of such
termination of employment, participating in one or more deferred compensation arrangements subject
to Section 409A of the Code (including, without limitation, the Deferred Compensation Agreement),
the payments and benefits provided under those arrangements shall continue to be governed by, and
to become due and payable in accordance with, the specific terms and conditions of those
arrangements, and nothing in this Employment Agreement shall be deemed to modify or alter those
terms and conditions.
8. TERMINATION BY THE EMPLOYEE. The Employee shall have the right to terminate this
Employment Agreement at any time. The Employee agrees to provide the Company with thirty (30) days
prior written notice of any such termination. The Company’s obligation to pay the Employee’s base
salary pursuant to Section 3 shall cease as of the Employee’s last day of work, and any accrued but
unpaid salary and vacation pay due the Employee shall be paid at that time.
9. EFFECT OF TERMINATION. Upon the proper termination of this Employment Agreement by
the Company or upon the termination of this Employment Agreement by the Employee, this Employment
Agreement shall thereupon be and become void and of no further force or effect, except that the
Proprietary Information provision of Section 10, and the Arbitration provisions of Section 16 shall
continue to govern any disputes arising hereunder and any payments due pursuant to the provisions
of this Employment Agreement for services rendered prior to the termination shall be made as
provided in this Employment Agreement.
10. PROPRIETARY INFORMATION.
(a) RETURN OF PROPRIETARY INFORMATION. Upon termination of this Employment Agreement
for any reason, the Employee shall immediately turn over to the Company any “proprietary
information,” as defined below. The Employee shall have no right to retain any copies of any
material qualifying as “proprietary information” for any reason whatsoever after termination of his
employment hereunder without the express written consent of the Company.
(b) NON DISCLOSURE. It is understood and agreed that, in the course of his employment
hereunder and through his activities for and on behalf of the Company, the Employee will receive,
deal with and have access to the Company’s proprietary information and that the Employee holds the
Company’s proprietary information in trust and confidence for the Company. The Employee shall not,
during the term of this Employment Agreement or thereafter, in any fashion, form or manner,
directly or indirectly, retain, make copies of, divulge, disclose or communicate to any person, in
any manner whatsoever, any of the Company’s proprietary information or any information of any kind,
nature or description whatsoever concerning any matters affecting or relating to the Company’s
business, except when necessary or required in the normal course of the Employee’s employment
hereunder and for the benefit of the Company or with the express written consent of the Company.
4
(c) PROPRIETARY INFORMATION DEFINED. For purposes of this Employment Agreement,
“proprietary information” means and includes information concerning the organization, business and
finances of the Company or of any third party which the Company is under an obligation to keep
confidential that is maintained by the Company as confidential, including (without limitation):
(i) the Company’s Lead List which is comprised of prospective students who meet
the admission requirements of the Company;
(ii) the information and data on current and prospective corporate accounts,
including, but not limited to, the identity of the corporate accounts, the decision
makers or decision influencers, the buying criteria of the accounts and programs for
those accounts;
(iii) the management process, training materials, scripts, programs and
preferred responses to features and benefits provided to Admission Counselors;
(iv) the certification training materials and processes for the certification
of the Company’s Student Advisors (known as the ACU online learning system program),
including, but not limited to, the tests taken, materials provided and course work;
(v) the information and data contained in the Company’s enrollment data system,
all monthly enrollment reports;
(vi) the salary, terms of employment, tenure and performance information on the
faculty members and other employees of the Company, all business models and
financial information, data and materials of the Company not otherwise available to
the general public through the Company’s Annual Report or otherwise;
(vii) all market research or works for hire materials, including, but not
limited to, industry data, demographics, company profiles and/or specific consumer
behavior information, all monthly financial, statistical and operational information
and reports including but not limited to the “Yellow Book”, and all other
information concerning enrollment by campus, profit and loss per campus and the
terms of any lease;
(viii) all monthly financial statements, including, but not limited to, the
“Board Book”;
(ix) all internally developed source code, including, but not limited to,
modifications to existing source codes for student information systems (such as
Galaxy, Campus Tracking, OSIRIS and eCampus), academic systems (such as rEsource and
OnLine Learning System (OLS), proprietary modifications to packaged applications
(such as PeopleSoft, Oracle Financials and EV3 HRizon) and all future internally
developed source code; and
5
(x) all technical or non-technical data, formulas, compilations (including
business, research or product plans), programs (including computer programs),
devices (including improvements or modifications of devices), drawings (including
designs), processes, techniques, financial data, lists of customers, clients,
partners, service providers or suppliers, price lists and planning, and specific
terms of contracts.
11. TERMINATION OF PRIOR AGREEMENTS. This Employment Agreement, together with the
Deferred Compensation Agreement and any other agreements evidencing outstanding equity or
non-equity incentive awards made to the Employee, terminates and supersedes any and all prior
agreements and understandings between the parties with respect to employment or with respect to the
compensation of the Employee by the Company.
12. ASSIGNMENT. This Employment Agreement is personal in its nature and neither of
the parties hereto shall, without the consent of the other, assign or transfer this Employment
Agreement or any rights or obligations hereunder; provided that, in the event of the merger,
consolidation or transfer or sale of all or substantially all of the assets of the Company with or
to any other individual or entity, this Employment Agreement shall, subject to the provisions
hereof, be binding upon and insure to the benefit of such successor and such successor shall
discharge and perform all the promises, covenants, duties and obligations of the Company hereunder.
13. GOVERNING LAW. This Employment Agreement and the legal relations thus created
between the parties hereto shall be governed by and construed under and in accordance with the laws
of the State of Arizona without resort to that State’s conflict-of-laws rules.
14. ENTIRE AGREEMENT. This Employment Agreement, together with the Deferred
Compensation Agreement and any other agreements evidencing outstanding equity or non-equity
incentive awards made to the Employee, embodies the entire agreement of the parties respecting the
matters within its scope and may be modified only in writing.
15. WAIVER. Failure to insist upon strict compliance with any of the terms, covenants
or conditions hereof shall not be deemed a waiver of such term, covenant or condition, nor shall
any waiver or relinquishment of, or failure to insist upon strict compliance with, any right or
power hereunder at any one or more times be deemed a waiver or relinquishment of such right or
power at any other time or times.
16. ARBITRATION. In the event any dispute or controversy arising out of this
Agreement cannot be settled by the parties, such controversy or dispute shall be submitted for
arbitration in Phoenix, Arizona, and for this purpose each party hereby expressly consents to such
arbitration in such place. In the event the parties cannot mutually agree upon an arbitrator and
procedure to settle their dispute or controversy within fifteen (15) days after written demand by
one of the parties for arbitration, then the dispute or controversy shall be arbitrated by a sole
arbitrator pursuant to the then-existing rules and regulations of the Center for Public Resources
Rules for Non-Administrated Arbitration of Business Disputes. The decision of the arbitrator
6
shall be binding upon the parties hereto for all purposes, and judgment to enforce any such
binding decision may be entered in Maricopa County Superior Court (and for this purpose each party
hereby expressly and irrevocably consents to the jurisdiction of said court). At the request of
either party, arbitration proceedings shall be conducted in the utmost secrecy. In such case, all
documents, testimony, and records shall be received, heard, and maintained by the arbitrator in
secrecy, available for inspection only by either party and by their attorneys and experts who shall
agree, in advance and in writing, to receive all such information in secrecy. In all other
respects, the arbitration shall be conducted pursuant to the Uniform Arbitration Act as adopted in
the State of Arizona and the then-existing rules and regulations of the Center for Public Resources
Rules for Non-Administrated Arbitration of Business Disputes to the extent such rules are not
inconsistent with such Act or this Agreement.
17. SEVERABILITY. In the event that a court of competent jurisdiction determines that
any portion of this Employment Agreement is in violation of any statute or public policy, then only
the portions of this Employment Agreement which violate such statute or public policy shall be
stricken. All portions of this Employment Agreement which do not violate any statute or public
policy shall continue in full force and effect. Further, any court order striking any portion of
this Employment Agreement shall modify the stricken terms to give as much effect as possible to the
intentions of the parties under this Employment Agreement.
18. DEFERRED COMPENSATION AGREEMENT. A separate Deferred Compensation Agreement, as
amended and restated as of [ ], 2008, has been entered into by the parties and is
attached hereto as Exhibit A.
19. SECTION 409A Notwithstanding any other provisions in this Employment Agreement
to the contrary, the following special provisions shall govern the payment date of any payment or
benefit provided under this Employment Agreement that may be deemed to constitute an item of
deferred compensation under Section 409A of the Code
(a) No payments or benefits subject to Section 409A of the Code to which Employee becomes
entitled under this Employment Agreement in connection with his termination of employment with the
Company shall be made or provided to Employee prior to the date of Employee’s separation from
service (as such term is defined in Section 1.409A-1(h) of the Treasury Regulations issued under
Section 409A of the Code).
(b) In addition, no payments or benefits subject to Section 409A of the Code to which Employee
becomes entitled under this Employment Agreement in connection with his termination of employment
with the Company shall be made or provided to Employee prior to the earlier of (i) the first
business day of the seventh month following the date of Employee’s separation from service or
(ii) the date of Employee’s death, if Employee is deemed at the time of such separation from
service a “specified employee” within the meaning of that term under Section 409A of the Code and
such delayed commencement is otherwise required in order to avoid a prohibited distribution under
Code Section 409A(a)(2). Upon the expiration of the
7
applicable deferral period, all payments deferred pursuant to this Section 19(b) shall be paid
in a lump sum to Employee, and any remaining payments due under this Employment Agreement shall be
paid in accordance with the normal payment dates specified for them herein.
IN WITNESS WHEREOF, the Company has caused this Employment Agreement to be executed by its
duly authorized officer, and the Employee has signed this Employment Agreement, as of the 31st
day of December, 2008.
| APOLLO GROUP, INC. | ||||||
| By: Title: |
/s/ P. Xxxxxx Xxxx
|
|||||
ATTEST:
/s/ Xxxxxxxx X. Xxxxxxxxx, Asst. Sec.
|
||||
| /s/ Xxxx X. Xxxxxxxx
|
8
EXHIBIT A
AMENDED AND RESTATED DEFERRED COMPENSATION AGREEMENT
9
AMENDED AND RESTATED DEFERRED COMPENSATION AGREEMENT
THIS AMENDED AND RESTATED AGREEMENT (the “Agreement’) is entered into on this 31st day of
December, 2008 by and between APOLLO GROUP, INC. (the “Company”) and XXXX X. XXXXXXXX (“Xxxxxxxx”).
This Agreement as so amended and restated shall be effective as of January 1, 2008.
WHEREAS, Xxxxxxxx is currently a party to a deferred compensation agreement with the Company
dated December 31, 1993 (the “Prior Agreement”).
WHEREAS, the Company and Xxxxxxxx desire to amend and restate the terms and conditions of the
Prior Agreement in order to bring those terms and conditions into documentary compliance with the
final Treasury Regulations under Section 409A of the Internal Revenue Code of 1986, as amended (the
“Code”), and continue the deferred compensation arrangement pursuant to those amended and restated
terms and conditions.
NOW THEREFORE, the Company and Xxxxxxxx, in consideration of the mutual promises set forth
herein, hereby agree as follows:
1. PURPOSE. In recognition of Xxxxxxxx’x long service with the Company, including
years in which Xxxxxxxx agreed to accept a smaller current salary than would normally be paid to a
person of Xxxxxxxx’x knowledge, expertise and experience and in consideration for Xxxxxxxx’x
continued employment with the Company, the Company hereby agrees to pay Xxxxxxxx certain amounts
following his termination from the Company’s employ.
2. TERMINATION OF EMPLOYMENT.
(a) TERMINATION BENEFIT. Following Xxxxxxxx’x termination of employment, the Company
shall pay Xxxxxxxx a monthly annuity for life in an amount equal to one-twelfth (1/12th) of his
“Highest Annual Base Pay.” Such lifetime annuity shall be hereinafter referred to as the “Monthly
Annuity,” and the present value of such annuity shall be divided into the following two components
for purposes of Section 409A of the Code:
- The Grandfathered Component: This is the portion of the total Monthly Annuity that
has a present value on the annuity commencement date equal to the present value (subject to
re-calculation below) of the lifetime annuity to which Xxxxxxxx would have been entitled
under the Prior Agreement had he voluntarily terminated employment with the Company on
December 31, 2004 and begun to receive a monthly annuity at that time in accordance with the
benefits available to him under that agreement, as determined pursuant to Treasury
Regulation section 1.409A-6(a)(3). The present value of such Grandfathered Component shall
be re-calculated as of the date on which payment of the Monthly Annuity actually commences
hereunder, with such recalculation to be based on the terms of the Agreement in effect on
October 3, 2004, without regard, however, for any service rendered by Xxxxxxxx after
December 31, 2004 or any increases to his Highest
1
Annual Base Pay that occurred after that date, and such recalculated present value shall
constitute the Grandfathered Component if greater than the initially calculated amount. For
all present value calculations under this Section 2(e)(ii), reasonable actuarial assumptions
and methods shall be used.
- The Post-2004 Component. This is the portion of the present value of the total
Monthly Annuity on the annuity commencement date that is in excess of the Grandfathered
Component as calculated above.
(b) COMMENCEMENT AND DURATION OF MONTHLY ANNUITY. Following Xxxxxxxx’x termination of
employment with the Company, the Company shall pay Xxxxxxxx the Monthly Annuity as follows:
- To the extent each monthly payment is attributable to the Grandfathered Component of
the Monthly Annuity, the first such payment shall be made on the first business day of the
month following the month in which Xxxxxxxx terminates employment with the Company and shall
not be subject to the hold-back provisions of Section (e) of this Agreement. Such monthly
payments shall continue to be made on the first business day of each succeeding month, with
the last such monthly payment to be made on the first business day of the month in which
Xxxxxxxx’x death occurs
- To the extent the monthly payment is attributable to the Post-2004 Component of the
Monthly Annuity, the first such payment shall be made on the first business day of the month
following the month in which Xxxxxxxx’x Separation from Service occurs by reason of his
termination of employment. Such monthly payments shall continue to be made on the first
business day of each succeeding month, with the last such monthly payment to be made on the
first day of the month in which Xxxxxxxx’x death occurs
- In no event shall any monthly payment of the Monthly Annuity be made later than
thirty (30) calendar days after the due date, except for any required deferral under Section
2(e).
(c) AVERAGE ANNUAL BASE PAY. For purposes of this Agreement, Xxxxxxxx’x “Highest
Annual Base Pay” shall be equal to the highest base salary (exclusive of bonuses, incentive
compensation, fringe benefits and other extraordinary types of compensation) paid by the Company to
Xxxxxxxx during any one of the three (3) calendar years preceding the calendar year in which
Xxxxxxxx’x employment terminates.
(d) SEPARATION FROM SERVICE. For purposes of this Agreement, “Separation from Service”
shall mean Xxxxxxxx’x cessation of Employee status and shall be deemed to occur at such time as the
level of the bona fide services Xxxxxxxx is to perform in Employee status (or as a consultant or
other independent contractor) permanently decreases to a level that is not more than twenty percent
(20%) of the average level of services Xxxxxxxx rendered in Employee status during the immediately
preceding thirty-six (36) months. Any such determination as to Separation from Service, however,
shall be made in accordance with the applicable standards of the Treasury Regulations issued under
Section 409A of the Code. For
2
purposes of determining whether Xxxxxxxx has incurred a Separation from Service, Xxxxxxxx will
be deemed to continue in “Employee” status for so long as he remains in the employ of one or more
members of the Employer Group, 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. “Employer Group” means the
Company and any other corporation or business controlled by, controlling or under common control
with, the Company as determined in accordance with Sections 414(b) and (c) of the Code and the
Treasury Regulations thereunder, except that in applying Sections 1563(1), (2) and (3) for purposes
of determining the controlled group of corporations under Section 414(b), the phrase “at least 50
percent” shall be used instead of “at least 80 percent” each place the latter phrase appears in
such sections, and in applying Section 1.414(c)-2 of the Treasury Regulations for purposes of
determining trades or businesses that are under common control for purposes of Section 414(c), the
phrase “at least 50 percent” shall be used instead of “at least 80 percent” each place the latter
phrase appears in Section 1.414(c)-2 of the Treasury Regulations.
(e) SECTION 409A HOLD-BACK
(i) Notwithstanding any provision to the contrary in this Agreement, no monthly payment of the
portion of the Monthly Annuity attributable to the Post-2004 Component shall be made or paid to
Xxxxxxxx prior to the earlier of (i) the first business day of the seventh month following the date
of Xxxxxxxx’x Separation from Service or (ii) the date of Xxxxxxxx’x death, if Xxxxxxxx is deemed
at the time of such Separation from Service a “specified employee” within the meaning of that term
under Section 409A of the Code and such delayed commencement is otherwise required in order to
avoid a prohibited distribution under Code Section 409A(a)(2). Upon the expiration of the
applicable deferral period, all payments deferred pursuant to this Section 2(e)(i) shall be paid in
a lump sum to Xxxxxxxx, and any remaining payments due under this letter shall be paid in
accordance with the normal payment dates specified for them herein.
(ii) The six month holdback set forth in Section 2(e)(i) above shall not be applicable to the
monthly payment of the portion of the Monthly Annuity attributable to the Grandfathered Component.
3. DEATH BENEFITS.
(a) GENERAL. At Xxxxxxxx’x death, regardless of whether he is then employed by the
Company, the Company agrees to pay Xxxxxxxx’x beneficiary an amount equal to three (3) times
Xxxxxxxx’x Highest Annual Base Pay, as calculated pursuant to Section 2(c). The death benefit
shall be paid in thirty-six (36) successive equal monthly installments on the first business day of
each month, with the first such installment to be paid on the first business day of the month
following the month in which Xxxxxxxx’x death occurs.
(b) BENEFICIARY DESIGNATIONS. Xxxxxxxx shall designate a beneficiary in a written
instrument filed with the Company. A beneficiary designation may be modified or revoked by
Xxxxxxxx at any time without the consent of the previously designated beneficiary. If Xxxxxxxx’x
beneficiary predeceases him or dies prior to the receipt of all payments due hereunder,
3
the payments shall be made to Xxxxxxxx’x contingent beneficiary. If Xxxxxxxx fails to
designate a beneficiary or contingent beneficiary, or if the designated beneficiary predeceases
him, or if the contingent beneficiary predeceases the beneficiary, the payments shall be made to
Xxxxxxxx’x surviving descendants per stirpes, or if none of Xxxxxxxx’x descendants are then living,
to Xxxxxxxx’x estate.
4. CLAIMS PROCEDURES.
(a) CLAIMS FOR BENEFITS. Claims for benefits under the Agreement shall be filed with
the Company. Written notice of the disposition of a claim shall be furnished the claimant within
sixty (60) days after the application therefor is filed. In the event the claim is denied, the
reasons for the denial shall be specifically set forth. Pertinent provisions of the Agreement
shall be cited. In addition, the written notice shall describe any additional material or
information necessary for the claimant to perfect the claim (along with an explanation of why such
material or information is needed), and the written notice will fully describe the claim review
procedures of Section 4(b), below.
(b) APPEALS. Any claimant who has been denied a benefit shall be entitled, upon
request to the Company, to receive a written notice of such action, together with a full and clear
statement of the reasons for the action. The claimant may also review this Agreement if he or she
so chooses. If the claimant wishes further consideration of his or her position, he or she may
request a hearing. The request, together with a written statement of the claimant’s position,
shall be filed with an officer of the Company no later than sixty (60) days after receipt of the
written notification provided for above. The Company shall schedule an opportunity for a full and
fair hearing of the issue within the next sixty (60) days. The date of the hearing shall be
communicated in writing to the claimant. If the claimant requests, the hearing may be waived, in
which case the Company’s decision shall be made within sixty (60) days from the date on which the
hearing is waived and shall be communicated in writing to the claimant.
5. MISCELLANEOUS.
(a) PROHIBITION AGAINST ALIENATION. Neither Xxxxxxxx nor his beneficiary may
anticipate, encumber, alienate or assign (either at law or in equity) any of their right, claim or
interest under this Agreement, and the payments, benefits, or rights arising by reason of this
Agreement shall not in any way be subject to their debts, contracts or engagements and shall not be
subject to attachment, garnishment, levy, execution or other legal or equitable process, except as
otherwise required under applicable law.
(b) DISTRIBUTION TO MINORS. Distributions to minors or persons under legal disability
may be made by the Company, in its discretion, either (A) directly to said persons, (B) to the
guardian or custodian of said persons, or (C) by expending the same for the education and
maintenance of said persons. Except as to (C), the Company shall not be required to see to the
application of any distributions so made.
(c) INTEGRATION. This Agreement shall supersede and replace the Prior Agreement, and
the Prior Agreement shall no longer be of any force or effect.
4
(d) BINDING NATURE OF AGREEMENT. This Agreement shall be binding upon the heirs,
executors, administrators, successors and assigns of any and all interested parties, present and
future.
IN WITNESS WHEREOF, the parties hereto execute this Agreement as of the day and year first
above written.
| APOLLO GROUP, INC. | ||||||
| By: Title: |
/s/ P. Xxxxxx Xxxx
|
|||||
| /s/ Xxxx X. Xxxxxxxx | ||||||
| XXXX X. XXXXXXXX | ||||||
5
