exv10w1






Exhibit 10.1









August 23, 2010



Mr. Sean Martin



Dear Sean,




On behalf of the Apollo Group, Inc. It is a pleasure to extend to you this offer for the position
of SVP, General Counsel. In this role, you will report directly to me, Co-Chief Executive Officer.
You will also have a dotted line to Greg Cappelli; our other Co-Chief Executive Officer. Your
target start date will be September 20, 2010 and your principal work location will be in Apollo’s
Chicago corporate offices. You will also be required from time to time to work at Apollo’s corporate
offices in Phoenix in performing the duties and responsibilities of your position. As compensation
for your services, you will receive the following:




	 	 	 

	Base Salary

	 	$435,000 Annual Base Salary payable in accordance with Apollo’s
standard payroll practices and pay dates in effect for other
salaried employees.
	 
	 	 
	Annual Incentive 

Bonus

	 	Participation in the Incentive Bonus program with a target of 75%
of your base salary per full fiscal year. Your actual bonus each
year will depend upon Apollo’s attainment of pre-established
performance goals and your individual performance and may range
from 0% to 200% of your target bonus.
	 
	 	 
	Signing Cash Bonus

	 	$263,000 paid as a lump sum, less applicable State and Federal tax
withholding. This cash payment is intended to offset your annual bonus at above target
performance under your current employers plan, pro-rata for the year. Such payment will
be made within 7 business days following your start date.
	 
	 	 
	Long-Term Incentive

	 	You will receive a pro-rata grant as part of the FY 2011 equity award process.
Such pro-ration will be applied to your full year target grant-date value of $1,000,000. This
award will be delivered through a combination of Stock Options, Restricted Stock Units and
Performance Share Units as determined by the Compensation  Committee.
The FY 2011 grant cycle
began on July 6, 2010 and that date will serve to pro-rate each of your awards based on your
September 20, 2010 start date.
	 
	 	 
	Make Whole Equity

	 	In addition to the annual equity award above, you will receive two make
whole equity grants with a total grant date fair value of $960,000 (the “Make-Whole
Awards”). One of these grants will be






 









 






	 	 	 

	 

	 	in the form of Restricted Stock Units with a grant date value of $150,000
and will vest upon your completion of six months of employment with
Apollo. The second grant will have a grant date value of $810,000 (this
grant will be allocated $480,000 to Stock Options and $330,000 to
Restricted Stock Units) and will vest in four successive equal annual
installments over your first four years of employment with Apollo.
	 
	 	 
	Benefits

	 	Benefits commensurate with those provided to other employees at
your level, once you have completed the eligibility period of two months.
Given this delay in coverage, you will be reimbursed for 60 days of COBRA
expenses.
	 
	 	 
	Severance Plan

	 	As an Executive officer you will be eligible to participate in the Executive
Officer Severance Pay Plan. Under this plan, if you were terminated without cause, you would
be eligible for 18 months of salary continuation plus one times your average bonus payout over
the last three years (or such fewer number of years of Apollo employment) preceding your
termination date. Such severance pay will be paid in accordance with the terms of the plan.
You will also be entitled to full vesting of your Make Whole Award plus limited pro-rata
vesting of a portion of your outstanding annual grants in accordance with the provisions of
the plan.
	 
	 	 
	Relocation

	 	You will be eligible for Apollo’s Executive relocation package.
Since you will not be relocating until the end of the 2010-11 school year,
Apollo will provide you within 7 business days following your start date, a
lump sum of $10,000 (net of taxes) to cover approximately 20 trips
home
from Chicago or Phoenix. Apollo will also reimburse you, on a monthly
basis, for up to six months of temporary housing in Chicago. As an
exception to the Company’s relocation policy, Apollo agrees to reimburse
you up to $290,000 of loss on the sale of your home in California. This
loss will be calculated at the time of sale using the difference of the
HUD statement at the time of your purchase and the HUD statement at the
time of your sale. Travel to Phoenix will be treated as business expense.
(Executive relocation plan enclosed.)
	 
	 	 
	Miscellaneous

	 	All of the foregoing equity awards are subject to approval by the
Compensation Committee. The Restricted Stock Units and Stock Option grants
vest annually over a period of four years (with the exception of $150,000
of Make Whole Equity Restricted Stock Unit award which will vest upon your
completion of 6 months of employment with Apollo). The Stock Options will
have an exercise price per share equal to the closing selling  price per share
of Apollo Group Class A common stock on the effective date of the grant and
will have a maximum term of six years from such date of grant, subject to
earlier termination following your cessation of employment. Performance
Share Units vest over three years with performance results measured at the
end of the three year period. If approved, the equity awards will be
evidenced by Apollo’s standard equity award agreements and will be subject
to the terms and conditions of those agreements and the equity award plans
under which the awards are granted. To obtain reimbursement of






 









 






	 	 	 

	 

	 	any expense (or housing loss) to which you become entitled in accordance
with this offer letter, you must submit appropriate documentation
evidencing that expense (or housing loss) within 45 days after the day
you incur that expense (or housing loss). Apollo will reimburse you for
all property documented expenses (or housing loss) covered under this
offer letter within 10 business days after your submission of the
appropriate documentation. In no event will any expense (or housing
loss) be reimbursed later  than the last day of the calendar year
following the calendar year in which that expense (or housing loss) is
incurred, and you may not liquidate or exchange your right to
reimbursement for any other benefit or payment.





In summary, the Total Direct Compensation (pay received over an annual period at target
incentive bonus) and Additional Compensation for the package that is being offered by Apollo
Group, Inc. are as follows:




	 	 	 	 	 	 	 

	Total Direct Compensation (prior to pro-ration)
	 	Base Salary	 	$	435,000	 
	 
	 	Annual Incentive Bonus	 	 	326,250	 
	 
	 	LTI	 	 	1,000,000	 
	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	Total Direct Compensation 	 	$	1,761,250	 
	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	Additional Compensation
	 	Sign On Bonus	 	$	263,000	 
	 
	 	Make Whole Award 	 	 	960,000	 
	 
	 	 	 	 	 
	 
	 	 	 	 	 	 
	 
	 	Total Offer Value	 	$	2,984,250	 
	 
	 	 	 	 	 




Your employment with the Apollo Group,
Inc. is contingent upon completion of a standard
Apollo background check, with results acceptable to Apollo, and will be subject to all terms
and conditions contained in current version of the Apollo Employee Handbook. Should you have
any questions concerning any part of this offer please contact Fred Newton at 602-557-1703.




Congratulations
Sean. We look forward to welcoming you to our team.




Regards,




	 	 	 

	/s/ Chas Edelstein
 

Chas Edelstein

	 	 
	Co-Chief Executive Officer
	 	 






I accept the offer as presented.




	 	 	 	 	 

	/s/ Sean Martin
 

Sean Martin

	 	 
	 	August 23, 2010  

Date