Exhibit 10.26
EMPLOYMENT AGREEMENT
          THIS AGREEMENT is entered into, effective this 31st day of
August 2007, by and between Apollo Group, Inc. (the “Company”), and P. Robert
Moya (the “Executive”) (hereinafter collectively referred to as “the parties”).
          WHEREAS, the Company has determined that it is in the best interests
of the Company and its shareholders to employ the Executive as described herein;
          WHEREAS, the Company desires to employ the Executive and to enter into
an agreement embodying the terms of such employment; and
          WHEREAS, the Executive desires to enter into this Agreement and to
accept such employment;
          NOW, THEREFORE, in consideration of the foregoing and the respective
agreements of the parties contained herein, the parties hereby agree as follows:
     1 . Term. The initial term of employment under this Agreement will be for
the period commencing on September 1, 2007 (the “Commencement Date”) and ending
on August 31, 2011 (the “Initial Term”); provided, however, that thereafter the
term of employment under this Agreement will be automatically renewed from year
to year, unless either the Company or the Executive will have given written
notice to the other at least sixty (60) calendar days prior thereto that the
term of employment under this Agreement will not be so renewed (a “Notice of
Non-Renewal”).
     2. Employment.
     (a) Position. The Executive will be employed as, and hold the title of,
Senior Vice President and General Counsel of the Company, and will have the
duties, powers, and responsibilities as are customary for such position. The
Executive will be given the authority needed to perform the duties and undertake
the responsibilities assigned to his position. The Executive will report to
either the Company’s President or the Company’s Chief Executive Officer or to
any other individual with equivalent authority.
     (b) 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 Company’s Board of
Directors. 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 person to whom the
Executive reports, (ii) serving as Of Counsel to Quarles & Brady LLP, or (iii)
managing personal investments, so long as such clause (i), (ii), and
(iii) activities do not interfere, in the judgment of the person to whom the
Executive reports, with the performance of the Executive’s responsibilities or
otherwise conflict with Executive’s obligations to the Company herein, including
the obligations in Section 10.
     3. Base Salary and Bonus.
     (a) Base Salary. The Company agrees to pay or cause to be paid to the
Executive an annual base salary at the rate of $400,000, less applicable
withholding. This base salary will be subject

 

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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.
     (b) Bonus. For each fiscal year completed during the Term, the Executive
will be eligible to receive an annual cash bonus (“Annual Bonus”) based upon
individual and Company performance goals that are established in good faith by
the Compensation Committee and that are reasonable in comparison to the
individual and Company performance goals the Compensation Committee sets for the
Company’s other executive officers, provided that the Executive’s target Annual
Bonus will be no less than 100% of his Base Salary (the “Target Bonus”). The
Annual Bonus for each fiscal year shall be paid in accordance with the Company’s
customary practices, but in no event more than 75 days following the end of such
fiscal year.
     4. Equity Compensation Awards. In addition to the grants below, the
Executive will be eligible during the Term for grants of equity compensation
awards in accordance with the Company’s policies, as in effect from time to
time. The grants below will be issued pursuant and subject to the terms of the
Company’s 2000 Stock Incentive Plan, as amended and restated effective as of
August 28, 2004 and as subsequently amended to expressly provide for the grant
of restricted stock units (the “Incentive Plan”) and to the award agreements
evidencing the grants, except that in the event of any conflict between the
terms of the Incentive Plan or the award agreements and this Agreement, the
terms of this Agreement will control:
     (a) Initial Stock Option Grant. As soon as practicable on or after the
Commencement Date, the Compensation Committee shall grant the Executive stock
options for 110,000 shares of Class A common stock with an exercise price equal
to the closing selling price per share on the grant date and a maximum term of
six (6) years assuming continued employment (the “Initial Option Grant”).
     (b) Initial Restricted Stock Unit Award. As soon as practicable on or after
the Commencement Date, the Compensation Committee shall grant the Executive
restricted stock units covering 17,000 shares of the Company’s Class A common
stock (the “Initial RSU Award’). Each restricted stock unit will represent the
right to receive one share of such Class A common stock upon the vesting of that
unit, subject to the Company’s collection of all applicable withholding taxes.
     (c) Vesting. The Initial Option Grant will vest and become exercisable
either (i) in a series of four successive equal annual installments upon the
Executive’s completion of each year of employment with the Company over the
four-year period measured from the Commencement Date (regardless of the actual
grant date); or (ii) as otherwise provided in Sections 8 and 11 of this
Agreement. The shares of the Company’s Class A common stock underlying the
Initial RSU Award will vest and become immediately issuable, subject to the
Company’s collection of the applicable withholding taxes, either: (i) in a
series of four successive equal annual installments upon the Executive’s
completion of each year of employment with the Company over the four-year period
measured from the Commencement Date (regardless of the actual grant date); or
(ii) as otherwise provided in Sections 8 and 11 of this Agreement.
     (d) Shares to Be Registered; Stock Certificates. All shares issued to the
Executive pursuant to his exercise of the Initial Option Grant and the vesting
of the Initial RSU Award will be registered

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under an appropriate and effective registration statement under the Securities
Act of 1933, as amended (the “1933 Act”).
     (e) The Company represents and warrants that this Agreement, the grants
described in subsections (a) and (b) above, and the terms of those grants have
been authorized and approved by the Compensation Committee.
     5. Employee Benefits. Provided he otherwise satisfies any applicable
eligibility requirements for participation, the Executive will be entitled to
participate in the welfare, retirement, perquisite, and fringe benefit plans,
practices, and programs maintained by the Company and made available to senior
executives generally and as may be in effect from time to time. The Executive’s
participation in any such plans, practices and programs for which he satisfies
the applicable eligibility requirements will be on the same basis and terms as
are applicable to senior executives of the Company generally.
     6. Other Benefits.
     (a) Expenses. Subject to applicable Company policies, including (without
limitation) the timely submission of appropriate documentation and expense
reports, the Executive will be entitled to receive prompt reimbursement of all
expenses reasonably incurred by him in connection with the performance of his
duties hereunder or for promoting, pursuing, or otherwise furthering the
business or interests of the Company.
     (b) Vacation. During the Term, the Executive will be eligible for paid
vacation in accordance with the Company’s policies, as may be in effect from
time to time, for its senior executives generally; provided, however, that the
Executive will be eligible for no less than four weeks of paid vacation per
year.
     7. Termination. Except for a Notice of Non-Renewal, as described in
Section 1, the Executive’s employment hereunder may only be terminated in
accordance with the following terms and conditions:
     (a) Termination by the Company without Cause. The Company will be entitled
to terminate the Executive’s employment at any time by delivering a Notice of
Termination to the Executive pursuant to Section 7(e); provided, however, that
any termination of the Executive’s employment for Cause shall be governed by the
provisions of Section 7(b).
     (b) Termination by the Company for Cause.
          (i) The Company may terminate the Executive’s employment hereunder for
“Cause” (as defined below) by delivering to him a Notice of Termination. For
purposes of the foregoing, any of the following shall constitute grounds for
terminating the Executive’s employment for Cause: (A) the Executive’s pleading
“guilty” or “no contest” to, or his conviction of, a felony or any crime
involving moral turpitude, (B) his commission of any act of fraud or any act of
personal dishonesty involving the property or assets of the Company intended to
result in material financial enrichment to the Executive or material injury or
harm to the Company, including the Company’s reputation, (C) a material breach
by the Executive of one or more of his obligations under Section 9 of this
Agreement or his Proprietary Information and Inventions Agreement with the
Company, (D) a material breach by the Executive of any of his other obligations
under this Agreement or any other agreement with the Company, (E) the
Executive’s commission of a material violation of Company policy which would
result in an employment termination if committed by any other employee of the

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Company or his gross misconduct, (F) the Executive’s material dereliction of the
major duties, functions and responsibilities of his executive position (other
than a failure resulting from the Executive’s incapacity due to physical or
mental illness), (G) a material breach by the Executive of any of the
Executive’s fiduciary obligations as an officer of the Company, (H) the
Executive’s willful and knowing participation in the preparation or release of
false or materially misleading financial statements relating to the Company’s
operations and financial condition or his willful and knowing submission of any
false or erroneous certification required of him under the Sarbanes-Oxley Act of
2002 or any securities exchange on which shares of the Company’s Class A common
stock are at the time listed for trading, or (I) the suspension or revocation of
the Executive’s license to practice law. However, prior to any termination of
the Executive’s employment for Cause based on any of the reasons specified in
clauses (C) through (F) and the delivery of a Notice of Termination in
connection therewith, the Company shall give written notice to the Executive of
the actions or omissions deemed to constitute the grounds for such a termination
for Cause, and the Executive shall have a period of not less than sixty (60)
calendar days after the receipt of such notice in which to cure the specified
default in his performance and thereby avoid a Notice of Termination under this
subsection (b)(i).
          (ii) In the event the Executive is provided with a Notice of
Termination under subsection (b)(i), the Notice of Termination shall specify a
Termination Date that is no earlier than the third business day following the
date of the Notice of Termination, and the Executive will have three
(3) business days following the date of such Notice of Termination to submit a
written request to the Board for a meeting to review the circumstances of his
termination. If the Executive timely submits such a written request to the
Board, the Board or a committee of the Board shall set a meeting whereby the
Executive, together with his counsel, shall be permitted to present any
mitigating circumstances or other information as to why he should not be
terminated for Cause, and the Executive’s Termination Date shall be delayed
until such meeting has occurred. Such meeting will be held, at the Company’s
option, either on a mutually agreeable date prior to the Termination Date
specified in the Notice of Termination or on a mutually agreeable date within
fifteen (15) calendar days after the Executive’s timely written notice to the
Company requesting such a meeting. Within five (5) business days after such
meeting, the Board or committee of the Board, as applicable, shall deliver
written notice to the Executive of its final determination and, if the
termination decision is upheld, the final actual Termination Date. During the
period following the date of the Notice of Termination until the Termination
Date or other resolution of the matter, the Company shall have the option to
place the Executive on an unpaid leave of absence. The rights under this
subsection will not be deemed to prejudice the Executive’s other rights and
remedies in any way or give rise to any waiver, estoppel, or other defense or
bar. Without limiting the foregoing sentence and for purposes of clarification,
the failure by the Executive to request a meeting under this subsection, to
participate in a meeting that has been requested, or to present any evidence or
argument will not prevent the Executive from making any claim against the
Company, from seeking any legal or equitable remedy, or from putting forward any
evidence or argument at any judicial or arbitral hearing.
     (c) Termination by the Executive. The Executive may terminate his
employment hereunder for “Good Reason” by delivering to the Company (1) a
Preliminary Notice of Good Reason (as defined below) no later than one hundred
and twenty (120) calendar days following the act or omission which the Executive
sets forth in such notice as grounds for a Good Reason termination, and (2) not
earlier than fourteen (14) calendar days after the delivery of such Preliminary
Notice or (if later) the third business day following the Company’s failure to
take appropriate remedial action within the applicable sixty (60)-day cure
period provided below to the Company following the receipt of such the
Preliminary Notice, a Notice of Termination. For purposes of this Agreement,
“Good Reason” means:
          (i) a material reduction in the scope of the Executive’s duties,
responsibilities or authority;

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          (ii) the repeated assignment to the Executive of duties materially
inconsistent with the Executive’s positions, duties, authority or
responsibilities, or a materially adverse change in Executive’s reporting
requirements as set forth in Section 2(a) hereof or an adverse change to his
title set forth in Section 2(a) hereof: provided however, that none of the
following shall constitute Good Reason: (A) the occasional assignment of duties
that are inconsistent with Section 2(a) hereof, or (B) a change in the
Executive’s reporting requirements so that he is required to report to a person
with equivalent authority of the Company’s President or Chief Executive Officer
but without such title;
          (iii) a relocation of the Executive’s principal place of employment
other than in Phoenix, Arizona; provided, however that travel to other locations
as reasonably required to carry out the Executive’s duties and responsibilities
hereunder shall not be a basis for a termination for Good Reason; or
          (iv) a material breach by the Company of any of its obligations under
this Agreement.
     In no event will any acts or omissions of the Company which are not the
result of bad faith and which are cured within sixty (60) days after receipt of
written notice from the Executive identifying in reasonable detail the acts or
omissions constituting “Good Reason” (a “Preliminary Notice of Good Reason”) be
deemed to constitute grounds for a Good Reason resignation. A Preliminary Notice
of Good Reason will not, by itself, constitute a Notice of Termination.
     A ten percent (10%) or less aggregate reduction in the Executive’s base
salary and Target Bonus shall not constitute Good Reason if substantially all of
the other executive officers of the Company are subject to the same aggregate
reduction to their base salary and target bonuses.
     (d) Termination due to the Executive’s Death or Disability. This Agreement
will terminate upon the death of the Executive. The Company may terminate the
Executive’s employment hereunder if he is unable to perform, with or without
reasonable accommodation, the principal duties and responsibilities of his
position with the Company for a period of six (6) consecutive months or more by
reason of any physical or mental injury or impairment; provided, however, that
in the event the Executive is at the time covered under any long-term disability
benefit program in effect for the Company’s executive officers or employees,
such termination of the Executive’s employment shall not occur prior to the date
he first becomes eligible to receive benefits under such program. The
termination of the Executive’s employment under such circumstances shall, for
purposes of this Agreement, constitute a termination for “Disability.”
     (e) Notice of Termination. Any purported termination for Cause by the
Company or for Good Reason by the Executive will be communicated by a written
Notice of Termination to the other at least three (3) business days prior to the
Termination Date (as defined below). For purposes of this Agreement, a “Notice
of Termination” will mean a notice which indicates the specific termination
provision in this Agreement relied upon and will, with respect to a termination
for Cause or Good Reason, set forth in reasonable detail the facts and
circumstances claimed to provide a basis for such termination of the Executive’s
employment under the provision so indicated. Any termination by the Company
under this Section 7 other than for Cause or by the Executive without Good
Reason will be communicated by a written Notice of Termination to the other
party fourteen (14) calendar days prior to the Termination Date. However, the
Company may elect to pay the Executive in lieu of fourteen (14) calendar days’
written notice. For purposes of this Agreement, no such purported termination of
employment pursuant to this Section 7 will be effective without such Notice of
Termination.

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     (f) Termination Date. “Termination Date” will mean in the case of the
Executive’s death, the date of death; in the case of non-renewal of the
Agreement pursuant to Section 1, the date the Term of the Agreement expires; and
in all other cases, the date specified in the Notice of Termination.
     8. Compensation Upon Termination.
     (a) Except as provided further in this Section 8(a), if the Executive’s
employment is terminated: (i) by the Company for Cause; (ii) by reason of the
Executive’s death or Disability; (iii) pursuant to a Notice of Non-Renewal
delivered by the Executive; or (iv) by the Executive by delivery of a written
notice of resignation without Good Reason, the Company’s sole obligations
hereunder will be to pay the Executive or his estate on the Termination Date the
following amounts earned hereunder but not paid as of the Termination Date:
(i) Base Salary, (ii) reimbursement for any and all monies advanced or expenses
incurred pursuant to Section 6(a) through the Termination Date, provided the
Executive has submitted appropriate documentation for such expenses, and
(iii) the amount of the Executive’s accrued but unpaid vacation time (together,
these amounts will be referred to as the “Accrued Obligations”). In addition to
the Accrued Obligations, in the event the Executive’s employment terminates by
reason of the Executive’s death or Disability or pursuant to a Notice of
Non-Renewal delivered by the Executive, the Executive or his estate will be paid
his Target Bonus, pro-rated for his actual period of service during the fiscal
year in which such termination of employment occurs. Furthermore, if the
Executive’s employment terminates as a result of his death or Disability, then
any unvested stock options, restricted stock, restricted stock units, or other
equity granted to the Executive that would have otherwise been vested on the
date of such termination of employment had the vesting schedule for each of
those grants been in the form of successive equal monthly installments over the
applicable vesting period will immediately vest. The Executive’s entitlement to
any other benefits will be determined in accordance with the Company’s employee
benefit plans then in effect.
     (b) If the Executive’s employment is terminated: (i) by the Company for any
reason other than for Cause; (ii) by the Executive for Good Reason; or
(iii) pursuant to a Notice of Non-Renewal delivered by the Company, the
Executive will, in addition to the Accrued Obligations, be entitled to the
following compensation and benefits from the Company, provided and only if he
(i) executes and delivers to the Company a general release (substantially in the
form of attached Exhibit A) which becomes effective and enforceable in
accordance with applicable law and (ii) complies with the restrictive covenants
set forth in Section 10:
          (i) an amount equal to the sum of the Executive’s Base Salary and
Target Bonus at the time of the Notice of Termination, to be paid in equal
increments, in accordance with the Company’s normal payroll practices, over the
one-year measured from the Termination Date;
          (ii) accelerated vesting of the Initial RSU Award and the Initial
Option Grant to the extent of the portion of such grant which would have vested
had the Executive completed an additional twelve (12) months of employment with
the Company prior to the Termination Date;
          (iii) provided the Executive and/or his dependents are eligible and
timely elect to continue their healthcare coverage under the Company’s group
health plan pursuant to their rights under COBRA, continued coverage under such
plan at the Company’s expense until the earliest of (A) the end of the twelve
(12)-month period measured from the Termination Date, (B) the date that the
Executive and/or his eligible dependents are no longer eligible for COBRA
coverage, and (C) the date that the Executive becomes eligible for such coverage
under the health plan of any new employer (the Executive agrees to provide the
Company with written notice of such eligibility within ten calendar days); and

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          (iv) the Executive’s entitlement to any other benefits will be
determined in accordance with the Company’s employee benefit plans then in
effect.
     (c) The Executive shall have the right to resign, for any reason or no
reason, at any time within the thirty (30) day period beginning six (6) months
after the closing of a Change in Control (as defined in Section 11) and to
receive, in connection with such resignation, the same severance benefits to
which he would be entitled under Section 8(b) above had such resignation been
for Good Reason; provided, however, that the Executive’s entitlement to
severance benefits under this Section 8(c) shall be conditioned upon (i) his
execution and delivery to the Company of a general release (substantially in the
form of attached Exhibit A) which becomes effective and enforceable in
accordance with applicable law and (ii) his compliance with the restrictive
covenants set forth in Section 10 of this Agreement.
     (d) The Executive will not be required to mitigate the amount of any
payment provided for in this Section 8 by seeking other employment or otherwise,
and no such payment or benefit will be eliminated, offset or reduced by the
amount of any compensation provided to the Executive in any subsequent
employment.
     9. Confidentiality.
     (a) The Executive hereby acknowledges that the Company may, from time to
time during the Term, disclose to the Executive confidential information
pertaining to the Company’s business, strategic plans, technology or financial
affairs. All information, data and know-how, whether or not in writing, of a
private or confidential nature concerning the Company’s trade secrets,
processes, systems, marketing strategies and future marketing plans, student
enrollment lists, prospective course offerings, finances and financial reports,
employee and faculty member information and other organizational information
(collectively, “Proprietary Information”) is and shall remain the sole and
exclusive property of the Company and shall not be used or disclosed by the
Executive except to the extent necessary to perform his duties and
responsibilities under this Agreement. All tangible manifestations of such
Proprietary Information (whether written, printed or otherwise reproduced) shall
be returned by the Executive upon the termination of his employment hereunder,
and the Executive shall not retain any copies or excerpts of the returned items.
The foregoing restrictions on the use, disclosure and disposition of the
Company’s Proprietary Information shall also apply to the Executive’s use,
disclosure and disposition of any confidential information relating to the
business or affairs of the Company’s faculty, students and employees.
     (b) The Executive shall on the Commencement Date execute and deliver to the
Company the standard form Proprietary Information and Inventions Agreement, as
attached as Exhibit B to this Agreement. The Executive shall, throughout the
term of this Agreement and thereafter, remain subject to the terms and
conditions of such Proprietary Information and Inventions Agreement.
     (c) The Executive shall not, in connection with his duties and
responsibilities hereunder, improperly use or disclose any trade secrets or
proprietary and confidential information of any former employer or other person
or entity.
     10. Restrictive Covenants. At all times during the Executive’s employment
with the Company, and for a period of one (1) year after the termination of his
employment with the Company, regardless of the reason or cause for such
termination, the Executive shall comply with the following restrictions:
     (a) The Executive shall not directly or indirectly encourage or solicit any
employee, faculty member, consultant or independent contractor to leave the
employment or service of the Company (or

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any affiliated company) for any reason or interfere in any other manner with any
employment or service relationships at the time existing between the Company (or
any affiliated company) and its employees, faculty members, consultants and
independent contractors.
     (b) The Executive shall not directly or indirectly solicit any vendor,
supplier, licensor, licensee or other business affiliate of the Company (or any
affiliated company) with respect to products or services competitive with those
offered by the Company or directly or indirectly induce any such person to
terminate its existing business relationship with the Company (or affiliated
company) or interfere in any other manner with any existing business
relationship between the Company (or any affiliated company) and any such
vendor, supplier, licensor, licensee or other business affiliate.
     (c) The Executive shall not, on his own or as an employee, agent, promoter,
consultant, advisor, independent contractor, general partner, officer, director,
investor, lender or guarantor or in any other capacity, directly or indirectly:
          (i) conduct, engage in, be connected with, have any interest in, or
assist any person or entity engaged in, any business, whether in the United
States, any possession of the United States or any foreign country or territory,
that competes with any of the businesses or programs conducted by the Company in
the education industry during the period of his employment with the Company
(hereafter collectively referred to as the “Businesses”); or
          (ii) permit his name to be used in connection with a business which is
competitive or substantially similar to the Businesses.
     Notwithstanding the foregoing the Executive may own, directly or
indirectly, solely as an investment, up to one percent (1%) of any class of
publicly traded securities of any business that is competitive or substantially
similar to the Businesses shall not be deemed a breach of his restrictive
covenant under this Section 10(c).
     11. Change in Control. For purposes of this Agreement, “Change in Control”
shall have the same meaning assigned to such term under the Incentive Plan, and
upon the occurrence of such Change in Control, any unvested stock options,
restricted stock, restricted stock units, or other equity granted to the
Executive and outstanding at that time shall vest on an accelerated basis to the
same extent as all other outstanding awards under the Incentive Plan held by
individuals who are executive officers of the Company at that time.
     12. Benefit Limitation. In the event it should be determined (in the manner
set forth below) that any payment or distribution of any type to or for the
benefit of the Executive made by the Company, any of its affiliates, any Person
who acquires ownership or effective control of the Company or ownership of a
substantial portion of the Company’s assets (within the meaning of Section 280G
of the Internal Revenue Code of 1986, as amended (the “Code”), and the
regulations thereunder—a “Change in Control Event”) or any affiliate of such
Person, whether paid or payable or distributed or distributable pursuant to the
terms of this Agreement or otherwise (the “Total Payments”), would otherwise
exceed the amount that could be received by the Executive without the imposition
of an excise tax under Section 4999 of the Code (the “Safe Harbor Amount”), then
the Total Payments shall be reduced to the extent, and only to the extent,
necessary to assure that their aggregate present value, as determined in
accordance the applicable provisions of Code Section 280G and the regulations
thereunder, does not exceed the greater of the following dollar amounts (the
“Benefit Limit”):
                    (A) The Safe Harbor Amount, or

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                    (B) the greatest after-tax amount payable to the Executive
after taking into account any excise tax imposed under Code Section 4999 on the
Total Payments.
All determinations under this Section 12 shall be made by an independent
registered public accounting firm selected by the Company from among the largest
four accounting firms in the United States (the “Accounting Firm”). However, in
determining whether such Benefit Limit is exceeded, the Accounting Firm shall
make a reasonable determination of the value to be assigned to the restrictive
covenants in effect for the Executive pursuant to Section 10 of the Agreement,
and the amount of his potential parachute payment under Code Section 280G shall
reduced by the value of those restrictive covenants to the extent consistent
with Code Section 280G and the regulations thereunder.
     13. Section 409A. Certain payments contemplated by this Agreement may be
“deferred compensation” for purposes of Section 409A of the Code. Accordingly,
the following provisions shall be in effect for purposes of avoiding or
mitigating any adverse tax consequences to the Executive under Code
Section 409A.
     (a) It is the intent of the parties that the provisions of this Agreement
comply with all applicable requirements of Code Section 409A. Accordingly, to
the extent any provisions of this Agreement would otherwise contravene one or
more requirements or limitations of Code Section 409A, then the Company and the
Executive shall, within the remedial amendment period provided under the
regulations issued under Code Section 409A, effect through mutual agreement the
appropriate amendments to those provisions which are necessary in order to bring
the provisions of this Agreement into compliance with Section 409A: provided
such amendments shall not reduce the dollar amount of any such item of deferred
compensation or adversely affect the vesting provisions applicable to such item
or otherwise reduce the present value of that item. If any federal legislation
is enacted during the term of this Agreement which imposes a dollar limit on
deferred compensation, then the Executive will co-operate with the Company in
restructuring any items of compensation under this Agreement that are deemed to
be deferred compensation subject to such limitation; provided such restructuring
shall not reduce the dollar amount of any such item or adversely affect the
vesting provisions applicable to such item or otherwise reduce the present value
of that item.
     (b) Notwithstanding any provision to the contrary in this Agreement, no
payments or benefits to which the Executive becomes entitled under Section 8 of
this Agreement shall be made or paid to the Executive prior to the earlier of
(i) the expiration of the six (6)-month period measured from the date of his
“separation from service” with the Company (as such term is defined in the final
regulations under Section 409A) or (ii) the date of his death, if the Executive
is deemed at the time of such separation from service a “key employee” within
the meaning of that term under Code Section 416(i) 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 Code Section
409A(a)(2) deferral period, all payments deferred pursuant to this subsection
13(b) shall be paid in a lump sum to the Executive, and any remaining payments
due under this Agreement shall be paid in accordance with the normal payment
dates specified for them herein.
     14. Indemnification. The Executive shall be covered by any policy of
liability insurance which the Company maintains during the Term for its officers
and directors (“D&O Insurance”), to the maximum extent of such coverage provided
any other executive officer of the Company. The Company agrees to provide the
Executive with information about all D&O Insurance maintained during the Term,
including proof that such insurance is in place and the terms of coverage, upon
the Executive’s reasonable request. In addition to any rights the Executive may
have under such D&O Insurance, applicable law, or the articles of incorporation
and bylaws of the Company and except as may be

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prohibited by applicable law, the Company agrees to indemnify, defend, and hold
the Executive harmless from and against any and all claims and/or liability
arising from, as a result of, or in connection with the Executive’s employment
by the Company or any outside appointments and offices held at the Company’s
request, except to the extent such claims or liability are attributable to the
Executive’s gross negligence or willful misconduct.
     15. Injunctive Relief. The Executive expressly agrees that the covenants
set forth in Sections 9 and 10 of this Agreement are reasonable and necessary to
protect the Company and its legitimate business interests, and to prevent the
unauthorized dissemination of Proprietary Information to competitors of the
Company. The Executive also agrees that the Company will be irreparably harmed
and that damages alone cannot adequately compensate the Company if there is a
violation of Section 9 or 10 of this Agreement by the Executive, and that
injunctive relief against the Executive is essential for the protection of the
Company. Therefore, in the event of any such breach, it is agreed that, in
addition to any other remedies available, the Company shall be entitled as a
matter of right to injunctive relief in any court of competent jurisdiction,
plus attorneys’ fees actually incurred for the securing of such relief.
     16. Survival of Certain Provisions. The provisions of Sections 8, 9, 10, 11
through 21, and 24 will survive any termination of this Agreement.
     17. Withholdings. Any compensation and/or benefits provided to the
Executive by the Company shall be subject to the Company’s collection of all
applicable payroll deductions and applicable withholding and payroll taxes.
     18. Successors and Assigns. This Agreement will be binding upon and will
inure to the benefit of the Company, its successors and assigns, and the Company
will require any successor or assign to expressly assume and agree to perform
this Agreement in the same manner and to the same extent that the Company would
be required to perform it if no such succession or assignment had taken place.
The term “the Company” as used herein will include any such successors and
assigns to the Company’s business and/or assets. The term “successors and
assigns” as used herein will mean a corporation or other entity acquiring or
otherwise succeeding to, directly or indirectly, all or substantially all the
assets and business of the Company (including this Agreement) whether by
operation of law or otherwise. This Agreement will inure to the benefit of and
be enforceable by the Executive’s legal personal representative.
     19. Arbitration. Except as otherwise provided in Section 15, any
controversy or claim between the Company or any of its affiliates and the
Executive arising out of or relating to this Agreement or its termination or any
other dispute between the parties, whether arising in tort, contract, or
pursuant to a statute, regulation, or ordinance now in existence or which may in
the future be enacted or recognized will be settled and determined by a single
arbitrator whose award will be accepted as final and binding upon the parties.
The arbitration shall be conducted in Phoenix, Arizona and in accordance with
the American Arbitration Association (“AAA”) Employment Arbitration Rules in
effect at the time such arbitration is properly initiated. To the extent that
any of the AAA rules or anything in the Agreement conflicts with any arbitration
procedures required by applicable law, the arbitration procedures required by
applicable law shall govern. The costs of the arbitration, including
administrative fees and fees charged by the arbitrator, will be borne by the
Company. Each party will bear its or his own travel expenses and attorneys’
fees: provided, however that the arbitrator (i) shall award attorneys’ fees to
the Executive with respect to any claim for breach of this Agreement on which he
is the prevailing party and may award attorneys’ fees to the Executive as
otherwise allowed by law and (ii) shall award attorneys’ fees to the Company
with respect to any claim brought under Section 15 on which it is the prevailing
party and may award attorneys’ fees to the Company with respect to any other
claim on which it is the prevailing party and it is determined by the arbitrator
that such claim by

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the Executive was frivolous in that it presented no colorable arguments for
recovery; but the maximum amount of attorneys’ fees that may be awarded to the
Company other than with respect to any claim brought under Section 15 shall not
exceed one hundred thousand dollars ($100,000). The arbitration shall be instead
of any civil litigation; and the Executive hereby waives any right to a jury
trial. The arbitrator’s decision shall be final and binding to the fullest
extent permitted by law and enforceable by any court having jurisdiction
thereof. In any situation in which emergency injunctive relief may be necessary,
either party may seek such relief from a court until such time as the arbitrator
is able to address the matter covered by this Section 19. Both parties agree
that the state and federal courts located in Phoenix, Arizona, will be the sole
venue for any such action involving emergency injunctive relief, and the parties
submit to personal jurisdiction in these courts for this purpose. Judgment upon
any award rendered by the arbitrator may be entered in any court having
jurisdiction thereof.
     20. Notice. For the purposes of this Agreement, notices and all other
communications provided for in the Agreement (including the Notice of
Termination) will be in writing and will be deemed to have been given when
personally delivered or on the third business day following mailing if sent by
registered or certified mail, return receipt requested, postage prepaid, or upon
receipt if overnight delivery service is used, addressed as follows:
To the Executive:
P. Robert Moya
5119 E. Desert Park Lane
Paradise Valley, Arizona 85253
To the Company:
Apollo Group, Inc
4615 East Elwood Street
Phoenix, AZ 85040
Attention: Chief Financial Officer
With a copy to:
Peter F. Donati
Levenfeld Pearlstein, LLC
2 N. LaSalle Street
Chicago, Illinois 60602
     21. Miscellaneous. No provision of this Agreement may be modified, waived,
or discharged unless such waiver, modification, or discharge is agreed to in
writing and signed by the Executive and the Company. No waiver by either party
hereto at any time of any breach by the other party hereto of, or compliance
with, any condition or provision of this Agreement to be performed by such other
party will be deemed a waiver of similar or dissimilar provisions or conditions
at the same or at any prior or subsequent time. No agreement or representation,
oral or otherwise, express or implied, with respect to the subject matter hereof
has been made by either party which is not expressly set forth in this
Agreement.

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     22. Counterparts. This Agreement may be executed in several counterparts,
each of which will be deemed an original and all of which will constitute but
one and the same instrument. An electronic facsimile of a signature, when
delivered by the signing party to the non-signing party, will have the same
force and effect as an original.
     23. Governing Law. This Agreement will be governed by and construed and
enforced in accordance with the laws of the State of Arizona without giving
effect to the conflict of law principles thereof.
     24. Severability. If any provision of this Agreement as applied to any
party or to any circumstance should be adjudged by a court of competent
jurisdiction (or determined by the arbitrator) to be void or unenforceable for
any reason, the invalidity of that provision shall in no way affect (to the
maximum extent permissible by law) the application of such provision under
circumstances different from those adjudicated by the court or determined by the
arbitrator, the application of any other provision of this Agreement, or the
enforceability or invalidity of this Agreement as a whole. Should any provision
of this Agreement become or be deemed invalid, illegal or unenforceable in any
jurisdiction by reason of the scope, extent or duration of its coverage, then
such provision shall be deemed amended to the extent necessary to conform to
applicable law so as to be valid and enforceable or, if such provision cannot be
so amended without materially altering the intention of the parties, then such
provision will be stricken, and the remainder of this Agreement shall continue
in full force and effect.
     25. Entire Agreement. This Agreement, together with the Proprietary
Information and Inventions Agreement referred to in Section 9 and the
documentation for the equity grants referred to in Section 4, shall constitute
the entire agreement between the parties hereto with respect to the subject
matter hereof and shall supersede all prior agreements, if any, understandings
and arrangements, oral or written, between the parties hereto with respect to
the subject matter hereof.
          IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its duly authorized officer and the Executive has executed this
Agreement as of the day and year first above written.

              P. ROBERT MOYA       THE APOLLO GROUP, INC.
 
           
/s/ P. Robert Moya
      By:   /s/ Joseph L. D’Amico
 
           
 
      Its:   Executive VP and CFO

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EXHIBIT A
FORM OF GENERAL RELEASE

 

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GENERAL RELEASE
           This AGREEMENT is made as of           
                              , 200                     , by and between P.
Robert Moya (“Executive”), and Apollo Group, Inc. (the “Company”).
          In consideration for the severance benefits offered by the Company to
Executive pursuant to Section 8 of his Employment Agreement with the Company
dated                     , 2007 (the “Employment Agreement”), Executive agree
as follows:
     1. Termination of Employment. Executive acknowledges that his employment
with the Company is terminated effective                      (the “Termination
Date”), and he agrees that he will not apply for or seek re-employment with the
Company, its parent companies, subsidiaries and affiliates after that date.
Executive agrees that he has received and reviewed his final paycheck and he has
received all wages and accrued but unpaid vacation pay earned by him through the
Termination Date.
     2. Waiver and Release.
          (a) Except as set forth in Section 2(b), which identifies claims
expressly excluded from this release, Executive hereby releases the Company, all
affiliated companies, and their respective officers, directors, agents,
employees, stockholders, successors and assigns from any and all claims,
liabilities, demands, causes of action, costs, expenses, attorney fees, damages,
indemnities and obligations of every kind and nature, in law, equity or
otherwise, known and unknown, suspected and unsuspected, disclosed and
undisclosed, arising from or relating to Executive’s employment with the Company
and the termination of that employment, including (without limitation): claims
of wrongful discharge, emotional distress, defamation, fraud, breach of
contract, breach of the covenant of good faith and fair dealing, discrimination
claims based on sex, age, race, national origin, disability or any other basis
under Title VII of the Civil Rights Act of 1964, as amended, the Age
Discrimination in Employment Act of 1967, as amended (“ADEA”), the Americans
with Disability Act, the Employee Retirement Income Security Act, as amended,
the Equal Pay Act of 1963, as amended, and any similar law of any state or
governmental entity, any contract claims, tort claims and wage or benefit
claims, including (without limitation) claims for salary, bonuses, commissions,
equity awards (including stock grants, stock options and restricted stock
units), vesting acceleration, vacation pay, fringe benefits, severance pay or
any other form of compensation.
          (b) The only claims that Executive is not waiving and releasing under
this Agreement are claims he may have for (1) unemployment, state disability,
worker’s compensation, and/or paid family leave insurance benefits pursuant to
the terms of applicable state law; (2) continuation of existing participation in
Company-sponsored group health benefit plans under the federal law known as
“COBRA” and/or under an applicable state law counterpart(s); (3) any benefits
entitlements that are vested and unpaid as of his termination date pursuant to
the terms of a Company- sponsored benefit plan; (4) any benefits to which he is
entitled pursuant to Section 8 of the Employment Agreement or his rights to
indemnification pursuant to Section 14 of the Employment Agreement,
(5) violation of any federal state or local statutory and/or public policy right
or entitlement that, by applicable law, is not waivable; and (6) any wrongful
act or omission occurring after the date he executes this Agreement. In
addition, nothing in this Agreement prevents or prohibits Executive from filing
a claim with the Equal Employment Opportunity Commission (EEOC) or any other
government agency that is responsible for enforcing a law on behalf of the
government and deems such claims not waivable. However, because Executive is
hereby waiving and releasing all claims “for monetary damages and any other form
of personal relief (per Section 2(a) above), he may only seek and receive
non-personal forms of relief from the EEOC and similar government agencies.

 

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          (c) Executive represents that he has not filed any complaints,
charges, claims, grievances, or lawsuits against the Company and/or any related
persons with any local, state or federal agency or court, or with any other
forum.
          (d) Executive acknowledges that he may discover facts different from
or in addition to those he now knows or believes to be true with respect to the
claims, demands, causes of action, obligations, damages, and liabilities of any
nature whatsoever that are the subject of this Agreement, and he expressly
agrees to assume the risk of the possible discovery of additional or different
facts, and agrees that this Agreement shall be and remain in effect in all
respects regardless of such additional or different facts. Executive expressly
acknowledges that this Agreement is intended to include, and does include in its
effect, without limitation, all claims which Executive does not know or suspect
to exist in his favor against the Company and/or any related persons at the
moment of execution thereof, and that this Agreement expressly contemplates
extinguishing all such claims.
          (e) Executive understands and agrees that the Company has no
obligation to provide him with any severance benefits under the Employment
Agreement unless he executes this Agreement. Executive also understands that he
has received or will receive, regardless of the execution of this Agreement, all
wages owed to him, together with any accrued but unpaid vacation pay, less
applicable withholdings and deductions, earned through the Termination Date.
          (f) This Agreement is binding on Executive, his heirs, legal
representatives and assigns.
     3. Cooperation. Executive agrees reasonably to cooperate with and assist
the Company and its counsel at any time and in any manner reasonably required by
the Company or its counsel (with due regard for the Executive’s other
commitments if he has obtained other employment) in connection with any
litigation or other legal process affecting the Company or in answering
questions concerning any other matter of which Executive has knowledge as result
of his employment (other than any litigation with respect to this Agreement). In
the event of such requested cooperation, the Company shall reimburse Executive
for his reasonable out-of-pocket expenses.
     4. Entire Agreement. This Agreement and the Employment Agreement constitute
the entire understanding and agreement between Executive and the Company in
connection with the matters described, and replaces and cancels all previous
agreements and commitments, whether spoken or written, with respect to such
matters. Nothing in this Agreement supersedes or replaces any of Executive’s
obligations under his Employment Agreement that survive termination, including,
but not limited to (i) his (and the Company’s) agreement to arbitrate disputes,
(ii) his restrictive covenants under Section 10 of the Employment Agreement and
(iii) his obligations under Section 9 of the Employment Agreement, his existing
Proprietary Information Inventions Agreement with the Company and any other
obligations not to use or disclose Company confidential and/or proprietary
information.
     5. Modification in Writing. No oral agreement, statement, promise,
commitment or representation shall alter or terminate the provisions of this
Agreement. This Agreement cannot be changed or modified except by written
agreement signed by Executive and authorized representatives of the Company.
     6. Governing Law: Jurisdiction. This Agreement shall be governed by and
enforced in accordance with the laws of the State of Arizona.
     7. Severability. Any term or provision of this Agreement which is invalid
or unenforceable in any jurisdiction shall, as to that jurisdiction, be
ineffective to the extent of such

15

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invalidity or unenforceability without rendering invalid or unenforceable the
remaining terms and provisions of this Agreement or affecting the validity or
enforceability of any of the terms or provisions of this Agreement in any other
jurisdiction. If any provision of this Agreement is so broad as to be
unenforceable, the provision shall be interpreted to be only so broad as is
enforceable.
     8. No Admission of Liability. This Agreement does not constitute an
admission of any unlawful discriminatory acts or liability of any kind by the
Company or anyone acting under their supervision or on their behalf. This
Agreement may not be used or introduced as evidence in any legal proceeding,
except to enforce or challenge its terms.
     9. Acknowledgements. Executive is advised to consult with an attorney of
his choice prior to executing this Agreement. By signing below, Executive
acknowledges and certifies that he:
          (a) has read and understands all of the terms of this Agreement and is
not relying on any representations or statements, written or oral, not set forth
in this Agreement;
          (b) has been provided a consideration period of twenty-one calendar
days within which to decide whether he will execute this Agreement and that no
one hurried him into executing this Agreement;
          (c) is signing this Agreement knowingly and voluntarily; and
          (d) has the right to revoke this Agreement within seven (7) days after
signing it, by providing written notice of revocation via certified mail to the
Company to the address specified in the Employment Agreement. Executive’s
written notice of revocation must be postmarked on or before the end of the
eighth (8th) calendar day after he has timely signed this Agreement. This
deadline will be extended to the next business day should it fall on a Saturday,
Sunday or holiday recognized by the U.S. Postal Service.
     Because of the revocation period, the Company’s obligations under this
Agreement shall not become effective or enforceable until the eighth (8th)
calendar day after the date Executive signs this Agreement provided he has
delivered it to the Company without modification and not revoked it (the
“Effective Date”).
I HAVE READ, UNDERSTAND AND VOLUNTARILY ACCEPT AND AGREE TO THE ABOVE TERMS
P. Robert Moya

     
                                                            
Signature
  Date:                                         , 20                    

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EXHIBIT B
FORM OF PROPRIETARY INFORMATION AND INVENTIONS AGREEMENT

 

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PROPRIETARY INFORMATION AND INVENTIONS
AGREEMENT
This Proprietary Information and Inventions Agreement (“PIIA”) confirms certain
terms of my employment with The Apollo Group (the “Company”), is a condition of
my employment, and is a material part of the consideration for my employment by
the Company. The headings contained in this PIIA are for convenience only, have
no legal significance, and are not intended to change or limit this PIIA in any
matter whatsoever.
     A. Definitions
          1. The “Company”
          As used in this PIIA, the “Company” refers to The Apollo Group, each
of its subsidiaries, affiliated and parent companies, and successors and
assigns. I recognize and agree that my obligations under this PIIA and all terms
of this PIIA apply to me regardless of whether I am employed by or provide
services to The Apollo Group, any subsidiary, affiliate or parent companies of
The Apollo Group.
          2. “Proprietary Information”
          I understand that the Company possesses and will possess Proprietary
Information which is important to its business. For purposes of this PIIA,
“Proprietary Information” is information that was or will be developed, created,
or discovered by or on behalf of the Company, or which became or will become
known by, or was or is conveyed to the Company, which has commercial value in
the Company’s business. “Proprietary Information” 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):
          a. the Company’s Lead List which is comprised of prospective students
who meet the admission requirements of the Company;
          b. data and information 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;
          c. the management process, training materials, scripts, programs and
preferred responses to features and benefits provided to Admission Counselors;
          d. 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;
          e. the information and data contained in the Company’s enrollment data
system, all monthly enrollment reports;
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          f. salary, terms of employment, tenure and performance review
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;
          g. 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;
          h. all monthly financial statements, including, but not limited to,
the “Board Book”;
          i. 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 ADP HRizon) and all
future internally developed source code.
          I understand and agree that my employment creates a relationship of
confidence and trust between the Company and me with respect to Proprietary
Information.
          3. “Company Documents and Materials”
          I understand that the Company possesses or will possess “Company
Documents and Materials” which are important to its business. For purposes of
this PIIA, “Company Documents and Materials” are documents or other media or
tangible items that contain or embody Proprietary Information or any other
information concerning the business, operations or plans of the Company, whether
such documents, media or items have been prepared by me or by others.
          “Company Documents and Materials” include (without limitation)
blueprints, drawings, photographs, charts, graphs, notebooks, customer lists,
computer disks, tapes, computer hard drives, floppy disks, CD ROMS, or
printouts, sound recordings and other printed, typewritten or handwritten
documents, sample products, prototypes and models and any information recorded
in any other form whatsoever. “Company Documents and Materials” also include
copies of any of the foregoing.
     B. Assignment of Rights
          All Proprietary Information and all patents, patent rights,
copyrights, trade secret rights, trademark rights and other rights (including,
without limitation, intellectual property rights) anywhere in the world in
connection therewith is and shall be the sole property of the Company. I hereby
assign to the Company any and all rights, title and interest I may have or
acquire in such Proprietary Information.
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          At all times, both during my employment by the Company and after its
termination, I will keep in confidence and trust and will not use or disclose
any Proprietary Information or anything relating to it without the prior written
consent of an officer of the Company, except as may be necessary in the ordinary
course of performing my duties to the Company.
     C. Maintenance and Return of Company Documents and Materials
          I agree to make and maintain adequate and current written records, in
a form specified by the Company, of all inventions, trade secrets and works of
authorship assigned or to be assigned to the Company pursuant to this PIIA. All
Company Documents and Materials are and shall be the sole property of the
Company.
          I agree that during my employment by the Company, I will not remove
any Company Documents and Materials from the business premises of the Company or
deliver any Company Documents and Materials to any person or entity outside the
Company, except in connection with performing the duties of my employment. I
further agree that, immediately upon the termination of my employment by me or
by the Company for any reason, or during my employment if so requested by the
Company, I will return all Company Documents and Materials, apparatus, equipment
and other physical property, or any reproduction of such property, excepting
only (i) my personal copies of records relating to my compensation; (ii) my
personal copies of any materials previously distributed generally to
stockholders of the Company; and (iii) my copy of this PIIA.
     D. Disclosure of Inventions to the Company
          I will promptly disclose in writing to the Chair of the Company’s
Board of Directors or to such other person designated by the Board all
“Inventions,” which includes (without limitation) all software programs or
subroutines, source or object code, algorithms, improvements, inventions, works
of authorship, trade secrets, technology, designs, formulas, ideas, processes,
techniques, know-how and data, whether or not patentable, made or discovered or
conceived or reduced to practice or developed by me, either alone or jointly
with others, during the term of my employment.
          I will also disclose to the Chair of the Company’s Board of Directors
or to such other person designated by the Board all Inventions made, discovered,
conceived, reduced to practice, or developed by me within six (6) months after
the termination of my employment with the Company which resulted, in whole or in
part, from my prior employment by the Company. Such disclosures shall be
received by the Company in confidence (to the extent such Inventions are not
assigned to the Company pursuant to Section (E) below) and do not extend the
assignment made in Section (E) below.
          Notwithstanding any other provision of this Agreement to the contrary,
this Agreement does not obligate me to assign to the Company any of my rights in
an invention for which no equipment, supplies, facility, or trade secret
information of the Company was used and
Page 3 of 8

 

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which was developed entirely on my own time, unless (a) the invention relates
(i) directly to the business of the Company, or (ii) to the Company’s actual or
demonstrably anticipated research or development, or (b) the invention results
from any work performed by me for the Company.
     E. Right to New Ideas
          1. Assignment of Inventions to the Company
          I agree that all Inventions that I make, discover, conceive, reduce to
practice or develop (in whole or in part, either alone or jointly with others)
during my employment shall be the sole property of the Company to the maximum
extent permitted by applicable law. However, any inventions that I make,
discover, conceive, reduce to practice or develop (in whole or in part, either
alone or jointly with others) during my employment shall not be the sole
property of the Company so long as such inventions have been developed entirely
on my own time without using any of the Company’s equipment, supplies,
facilities or Proprietary Information, unless such inventions constitute
Inventions for purposes of this Agreement because:
          a. they relate at the time of conception or reduction to practice of
the invention to the Company’s business, or actual or demonstrably anticipated
research or development of the Company, or
          b. they result from any work I performed for the Company.
          2. Works Made for Hire
          The Company shall be the sole owner of all patents, patent rights,
copyrights, trade secret rights, trademark rights and all other intellectual
property or other rights in connection with Inventions. I further acknowledge
and agree that such Inventions, including (without limitation) any computer
programs, programming documentation, and other works of authorship, are “works
made for hire” for purposes of the Company’s rights under copyright laws. I
hereby assign to the Company any and all rights, title and interest I may have
or acquire in such Inventions. If in the course of my employment with the
Company, I incorporate into a Company product, service or process a prior
Invention owned by me or in which I have interest, the Company is hereby granted
and shall have a nonexclusive, royalty-free, irrevocable, perpetual,
sublicensable, worldwide license to make, have made, modify, use, market, sell
and distribute such prior Invention as part of or in connection with such
product, service or process.
          3. Cooperation
          I agree to perform, during and after my employment, all acts deemed
necessary or desirable by the Company to permit and assist it, at the Company’s
expense, in further evidencing and perfecting the assignments made to the
Company under this PIIA and in obtaining, maintaining, defending and enforcing
patents, patent rights, copyrights, trademark rights, trade secret rights or any
other rights in connection with such Inventions and improvements thereto in any
and all countries. Such acts may include (without limitation) execution of
documents and assistance or cooperation in legal proceedings. I hereby
irrevocably designate and appoint the Company and its duly authorized officers
and agents, as my agents and attorney-in-fact to act for and on my behalf and
instead of me, to execute and file any
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documents, applications or related findings and to do all other lawfully
permitted acts to further the purposes set forth above in this Subsection 3,
including (without limitation) the perfection of assignment and the prosecution
and issuance of patents, patent applications, copyright applications and
registrations, trademark applications and registrations or other rights in
connection with such Inventions and improvements thereto with the same legal
force and effect as if executed by me.
          4. Assignment or Waiver of Moral Rights
          Any assignment of copyright hereunder (and any ownership of a
copyright as a work made for hire) includes all rights of paternity, integrity,
disclosure and withdrawal and any other rights that may be known as or referred
to as “moral rights” (collectively “Moral Rights”). To the extent such Moral
Rights cannot be assigned under applicable law and to the extent the following
is allowed by the laws in the various countries where Moral Rights exist, I
hereby waive such Moral Rights and consent to any action of the Company that
would violate such Moral Rights in the absence of such consent.
          5. List of Inventions
          I have attached hereto as Appendix A a complete list of all inventions
or improvements to which I claim ownership and that I desire to remove from the
operation of this PIIA (except for the license granted in Section (E)(2) above),
and I acknowledge and agree that such list is complete. If no such list is
attached to this PIIA, I represent that I have no such inventions or
improvements at the time of signing this PIIA.
     F. Company Authorization for Publication
          Prior to my submitting or disclosing for possible publication or
dissemination outside the Company any material prepared by me that incorporates
information that concerns the Company’s business or anticipated research, I
agree to deliver a copy of such material to an officer of the Company for his or
her review. Within twenty (20) days following such submission, the Company
agrees to notify me in writing whether the Company believes such material
contains any Proprietary Information or Inventions, and I agree to make such
deletions and revisions as are reasonably requested by the Company to protect
its Proprietary Information and Inventions. I further agree to obtain the
written consent of the Company prior to any review of such material by persons
outside the Company.
     G. Restrictive Covenants
          I agree to abide by the restrictive covenants described in Section 10
of my Employment Agreement with the Company dated August 31st 2007 (the
“Employment Agreement”).
     H. Former Employer’s and Others’ Information
          I represent that my performance of all the terms of this PIIA does not
and will not breach any agreement to keep in confidence proprietary information,
knowledge or data acquired or developed by me in confidence or in trust prior to
my employment by the Company.
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          I agree that I will not disclose to the Company, or use in the
performance of my duties and responsibilities as an employee of the Company, any
trade secrets or confidential or proprietary information or material belonging
to any previous employers or other person or entity.
     I. Reformation and Severability
          I agree that if any provision, or portion of a provision, of this
Agreement is deemed unenforceable by reason of the scope, extent or duration of
its coverage, then such provision shall be deemed amended to the extent
necessary to conform to applicable law so as to be valid and enforceable. Should
any provision, or portion of a provision, of this Agreement be deemed
unenforceable for any other reason, such unenforceability will not affect any
other provision, or portion of a provision, of this Agreement and this Agreement
shall be construed as if such unenforceable provision, or portion of provision,
had never been contained herein.
     J. Authorization for Post-Termination Notification of Obligations Under
PIIA
          I hereby authorize the Company to notify any person or entity with
whom I become employed, or to whom I provide services, following the termination
of my employment with the Company of my ongoing obligations under this PIIA.
     K. Entire Agreement
          This PIIA and the Employment Agreement set forth the entire agreement
and understanding between the Company and me relating to the subject matters
covered therein, and this PIIA and the Employee Agreement merge, cancel,
supersede and replace all prior discussions between us, including (without
limitation) any and all statements, representations, negotiations, promises or
agreements relating to the subject matters covered by this PIIA and the
Employment Agreement that may have been made by any officer, employee or
representative of the Company.
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I HAVE READ THIS PIIA CAREFULLY, AND I UNDERSTAND AND ACCEPT THE OBLIGATIONS
THAT IT IMPOSES UPON ME WITHOUT RESERVATION.
I SIGN THIS PIIA FREELY AND VOLUNTARILY, WITHOUT COERCION OR DURESS.

         
Date: August 31, 2007
  /s/ P. Robert Moya
 
   
 
  Employee Signature    
 
       
 
  P. Robert Moya    
 
       
 
  Employee Name [Please Print]    

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APPENDIX A

1.   The following is a complete list of all Inventions or improvements relevant
to the subject matter of my employment by the Company that have been made or
discovered or conceived or first reduced to practice by me or jointly with
others prior to my employment by the Company that I desire to remove from the
operation of the Company’s Proprietary Information and Inventions Agreement
(“PIIA”), except for the license granted in Section (E)(2) of the PIIA:

  þ    No inventions or improvements.     o    See below:     o     See
                    (#) additional sheets attached.

2.   I propose to bring to my employment the following materials and documents
of a former employer or other person/entity:

  þ    No materials or documents     o    See below:     o   
See                     (#) additional sheet(s) attached:

                Date: August 31, 2007  /s/ P. Robert Moya       Employee
Signature           

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SCHEDULE I
LIST OF EXISTING BOARD MEMBERSHIPS
InPlay Technologies Inc.: Member of Board of Directors, Audit Committee and
Compensation Committee; member and Chairman of Nominations and Corporate
Governance Committee