Exhibit 10.02
GRANT NOTICE AGREEMENT FOR
PERFORMANCE RESTRICTED STOCK AWARD
                                                             , 200_
          THIS GRANT NOTICE FOR PERFORMANCE RESTRICTED STOCK AWARD (this “Grant
Notice”) is entered into as of the date first written above between Education
Management Corporation (the “Company”) and the Grantee identified below.
Capitalized terms used in this Grant Notice shall have the respective meanings
given to such terms in the Agreement, unless otherwise defined in this Grant
Notice. This Grant Notice confirms the grant to the Grantee of an award of
Restricted Shares with the terms set forth below. Such grant was made under the
Education Management Corporation 2003 Incentive Plan.

     
Grantee Name:
                                                              
 
   
Grant Date:
                                                                  , 200_
 
   
Number of Restricted Shares Granted:
                                          
 
   
Performance Period:
  July 1, 200___to June 30, 200_
 
   
Key Performance Objectives
(“KPOs”):
  [KPO’S AND WEIGHTING FOR EACH KPO TO COME]

          This Grant Notice hereby incorporates the provisions with respect to
satisfaction of the KPOs set forth in the Company’s 2006 Management Incentive
Compensation Plan (the “2006 MICP”) under the section titled “Long Term Equity
Award Component”. The Restricted Shares granted pursuant to this Grant Notice
(the “Restricted Shares”) will be earned by the Grantee in accordance with the
provisions of the 2006 MICP. The Grantee will have the opportunity to vest in
fifty percent (50%) of the Restricted Shares on each of the first and second
anniversaries of the Grant Date to the extent that the applicable KPOs are
satisfied during each such one-year period. Upon vesting, all restrictions on
the vested portion of the Restricted Shares shall cease and shall no longer be
in effect. The determination of whether the Grantee has earned the Restricted
Shares will be made in accordance with the terms of the 2006 MICP. All such
determinations shall be final and binding upon the parties hereto.
          This Grant Notice shall be subject to the terms and conditions of this
Performance Restricted Stock Award Agreement (the “Agreement”) attached hereto
as Exhibit A. The Agreement shall be deemed to be incorporated by reference into
this Grant Notice to form a complete agreement between the parties.

 

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          IN WITNESS WHEREOF, the parties hereto, intending to be legally bound
and for good and valuable consideration, the sufficiency of which is hereby
acknowledged, have entered into this Grant Notice as of the date first written
above.
Education Management Corporation
By:                                                             
Name:
Title:
GRANTEE
                                                            
Name:
Address:

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EXHIBIT A
EDUCATION MANAGEMENT CORPORATION
PERFORMANCE RESTRICTED STOCK AWARD AGREEMENT
          The parties to this Performance Restricted Stock Award Agreement (this
“Agreement”) are Education Management Corporation, a Pennsylvania corporation
(the “Company”), and the person identified as the “Grantee” on the signature
page to the Grant Notice (“Grant Notice”) to which this Agreement is attached as
Exhibit A.
          The Company has adopted the Education Management Corporation 2003
Stock Incentive Plan, as amended (the “Plan”), for the benefit of eligible
employees of the Company and its Subsidiaries. Capitalized terms used but not
defined in this Agreement shall have the meanings set forth in the Plan. The
Compensation Committee of the Board of Directors of the Company approved the
award of shares of the Company’s Common Stock to the Grantee subject to certain
transfer and forfeiture restrictions set forth in this Agreement, as well as the
provisions of the Plan. The Grant Notice specifies the date of grant of the
Award (the “Grant Date”), the number of Restricted Shares granted and the Key
Performance Objective applicable to such Restricted Shares. Such award shall be
subject to the terms and conditions of this Agreement and this Agreement shall
be deemed to be incorporated by reference into the Grant Notice to form a
complete agreement between the parties.

1.   RESTRICTED SHARES

          1.1      Grant of Restricted Shares.
          (a) As of the Date of Grant, the Company grants to the Grantee the
number of shares of Common Stock (the “Restricted Shares”) specified in the
Grant Notice, subject to the terms, condition and restrictions set forth in this
Agreement and the terms and conditions of the Plan. If and when the Restricted
Period set forth in the Grant Notice expires without forfeiture of the
Restricted Shares, and upon the satisfaction of all other applicable conditions
as to the Restricted Shares, such shares shall no longer be considered
Restricted Shares for purposes of this Agreement.
          (b) As soon as practicable after the Grant Date, the Company shall
direct that the Restricted Shares be credited to the Grantee but held by the
Company’s transfer agent in an account in electronic form. The Restricted Shares
shall be subject to such stop-transfer orders and other restrictions as the
Company may deem advisable under the rules, regulations, and other requirements
of the Securities and Exchange Commission, any stock exchange upon which the
Common Stock is then listed, and any applicable federal or state securities law.
          (c) As soon as administratively practicable following the expiration
of the Restricted Period without a forfeiture of such Restricted Shares, and
upon the satisfaction of all other applicable conditions as to the Restricted
Shares, including, but not limited to, the payment by the Grantee of all
applicable withholding taxes, the Company shall deliver or cause to be delivered
to the Grantee, either electronically or in certificate form, the applicable
Restricted Shares which shall not bear a restrictive legend. The Company may
cause a legend or legends to be placed on any such stock certificate to make
appropriate reference to any securities law or other legal restrictions
applicable to such shares.

 

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          1.2      Restrictions.
          (a) The Grantee shall have all rights and privileges of a shareholder
as to the Restricted Shares, including the right to vote and receive dividends
or other distributions with respect to the Restricted Shares, except that the
following restrictions shall apply:
          (i) the Grantee shall not be entitled to delivery of the Restricted
Shares, electronically or in certificate form, until the expiration of the
applicable restrictions as set forth in the Grant Notice and upon the
satisfaction of all other applicable conditions;
          (ii) none of the Restricted Shares may be sold, transferred, assigned,
pledged or otherwise encumbered or disposed of during the applicable Restricted
Period, except as provided in Section 7.01(c) of the Plan or as otherwise
permitted by the Committee in its sole discretion or pursuant to rules adopted
by the Committee in accordance with the Plan; provided, however, that unless the
Committee determines otherwise, the Grantee shall be permitted, upon request to
the Committee, to sell or otherwise dispose of a sufficient number of Restricted
Shares which have vested in accordance with this Agreement as may be reasonably
necessary to satisfy any applicable tax liability of the Grantee (including
federal, state or local taxes, estimated tax payments or required tax
withholding) related to the vesting of such Restricted Shares;
          (iii) all shares of Common Stock distributed as a dividend or
distribution, if any, with respect to the Restricted Shares prior to the
expiration of the Restricted Period shall be delivered to and held by the
Company and subject to the same restrictions as the Restricted Shares until the
termination of the Restricted Period; and
          (iv) all of the Restricted Shares shall be forfeited and returned to
the Company and all rights of the Grantee with respect to the Restricted Shares
shall terminate in their entirety on the terms and conditions set forth in
Paragraph 1.3 and in the Grant Notice.
          (b) Any attempt to dispose of Restricted Shares or any interest in the
Restricted Shares in a manner contrary to the restrictions set forth in this
Agreement shall be void and of no effect.
          1.3      Vesting/Forfeiture of the Restricted Shares. The Restricted
Shares shall be subject to the vesting terms and conditions set forth in the
Grant Notice. In the event any Restricted Shares are forfeited under the terms
and conditions of the Grant Notice, the electronic records of the Company’s
transfer agent shall reflect the cancellation of the Restricted Shares to the
extent of any Restricted Shares that were forfeited.
          1.4      Withholding.
          (a) The Committee shall determine the amount of any withholding or
other tax required by law to be withheld or paid by the Company with respect to
any income recognized by the Grantee with respect to the Restricted Shares.
          (b) The Grantee shall be required to meet any applicable tax
withholding obligation in accordance with the provisions of Section 10.05 of the
Plan.

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          (c) The Committee shall be authorized, in its sole discretion, to
establish such rules and procedures relating to the use of shares of Common
Stock to satisfy tax withholding obligations as it deems necessary or
appropriate to facilitate and promote the conformity of the Grantee’s
transactions under the Plan and this Agreement with Rule 16b-3 under the
Securities Exchange Act of 1934, as amended, if such Rule is applicable to
transactions by the Grantee.
          1.5      Committee’s Discretion. Notwithstanding any provision of this
Agreement to the contrary, the Committee shall have discretion under
Section 7.02(b) of the Plan to waive any forfeiture of the Restricted Shares and
any other conditions set forth in this Agreement.

2.   REPRESENTATIONS OF THE GRANTEE

          The Grantee hereby represents to the Company that the Grantee has read
and fully understands the provisions of this Agreement and the Plan and his or
her decision to participate in the Plan is completely voluntary. Further, the
Grantee acknowledges that the Grantee is relying solely on his or her own
advisors with respect to the tax consequences of this restricted stock award.

3.   NOTICES

          All notices or communications under this Agreement shall be in
writing, addressed as follows:
To the Company:
Education Management Corporation
210 Sixth Avenue
Pittsburgh, PA 15222
Attention:                                                             ,
To the Grantee:
To the address set forth on the Grant Notice
Any such notice or communication shall be (a) delivered by hand (with written
confirmation of receipt) or sent by a nationally recognized overnight delivery
service (receipt requested) or (b) be sent certified or registered mail, return
receipt requested, postage prepaid, addressed as above (or to such other address
as such party may designate in writing from time to time), and the actual date
of receipt shall determine the time at which notice was given.

4.   ASSIGNMENT; BINDING AGREEMENT

          This Agreement shall be binding upon and inure to the benefit of the
heirs and representatives of the Grantee and the assigns and successors of the
Company, but neither this Agreement nor any rights hereunder shall be assignable
or otherwise subject to hypothecation by the Grantee.

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5.   ENTIRE AGREEMENT; AMENDMENT; TERMINATION

          This Agreement represents the entire agreement of the parties with
respect to the subject matter hereof. The provisions of the Plan are
incorporated in this Agreement in their entirety. In the event of any conflict
between the provisions of this Agreement and the Plan, the provisions of the
Plan shall control. The Agreement may be amended at any time by written
agreement of the parties hereto.

6.   GOVERNING LAW

          This Agreement and its validity, interpretation, performance and
enforcement shall be governed by the laws of the Commonwealth of Pennsylvania
other than the conflict of laws provisions of such laws.

7.   SEVERABILITY

          Whenever possible, each provision in this Agreement shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Agreement shall be held to be prohibited by or
invalid under applicable law, then (a) such provision shall be deemed amended to
accomplish the objectives of the provision as originally written to the fullest
extent permitted by law and (b) all other provisions of this Agreement shall
remain in full force and effect.

8.   NO RIGHT TO CONTINUED EMPLOYMENT OR PARTICIPATION; EFFECT ON OTHER PLANS

          This Agreement shall not confer upon the Grantee any right with
respect to continued employment by the Company or its Subsidiaries or continued
participation under the Plan, nor shall it interfere in any way with the right
of the Company and its Subsidiaries to terminate the Grantee’s employment at any
time. Payments received by the Grantee pursuant to this Agreement shall not be
included in the determination of benefits under any pension, group insurance or
other benefit plan of the Company or any Subsidiaries in which the Grantee may
be enrolled or for which the Grantee may become eligible, except as may be
provided under the terms of such plans or determined by the Board.

9.   NO STRICT CONSTRUCTION

          No rule of strict construction shall be implied against the Company,
the Committee or any other person in the interpretation of any of the terms of
the Plan, this Agreement or any rule or procedure established by the Committee.

10.   USE OF THE WORD “GRANTEE”

          Wherever the word “Grantee” is used in any provision of this Agreement
under circumstances where the provision should logically be construed to apply
to the executors, the administrators, or the person or persons to whom the
Restricted Shares may be transferred by will or the laws of descent and
distribution, the word “Grantee” shall be deemed to include such person or
persons.

11.   FURTHER ASSURANCES

          The Grantee agrees, upon demand of the Company or the Committee, to do
all acts and execute, deliver and perform all additional documents, instruments
and agreements (including, without limitation, stock powers with respect to
shares of Common Stock issued as a dividend or distribution on Restricted

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Shares) which may be reasonably required by the Company or the Committee, as the
case may be, to implement the provisions and purposes of this Agreement and the
Plan.

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