exv10w1





Exhibit 10.1




APOLLO GROUP, INC.

4025 South Riverpoint Parkway

Phoenix. AZ 85040




May 17, 2010




Mr. P. Robert Moya

Apollo Group, Inc.

4025 South Riverpoint Parkway

Phoenix, AZ 85040




Dear Bob:




The purpose of this letter is to document the understanding we have reached concerning the
termination of your full-time employment and transition to part-time employment with Apollo Group,
Inc. (the “Company”). This document (the “Transition Agreement”) will supersede anything to the
contrary in your existing employment agreement with the Company originally dated August 31, 2007
and subsequently amended effective January 1, 2009 (the “Employment Agreement”). Any terms of the
Employment Agreement (or any other agreement between you and the Company, including without
limitation any equity award agreements) that are not superseded by the terms of this Transition
Agreement shall remain unmodified and in full force and effect. The capitalized terms used in this
Transition Agreement, to the extent not defined herein, shall have the meanings set forth in the
Employment Agreement.




     1. Continued Full-Time Employment. Subject to the terms and conditions of this
Transition Agreement, you will remain in full-time employment with the Company until the earlier of
(a) October 31, 2010, or (b) the date on which your employment is sooner terminated under Section 2
below. Unless your full-time employment with the Company is terminated under Section 2 below prior
to August 31, 2010, you shall resign as General Counsel and Corporate Secretary effective as of the
close of business on August 31, 2010. Thereafter, you will remain employed as the Company’s
Executive Vice President, Special Projects until your period of part-time employment commences
under Section 3 below. There will be no change in your annual rate of base salary or your
eligibility for participation in the Company’s employee benefit plans while you remain in full-time
employment with the Company, but you will not (x) be eligible to receive any new equity awards,
including any awards for the 2011 fiscal year that are expected to be made in July 2010, (y)
participate in any bonus plans of the Company after August 31, 2010, or (z) otherwise be entitled
to any actual or target bonus compensation for your period of service after August 31, 2010.



     Provided you continue in employment with the Company through July 2, 2010, you will vest on
that date in 25% of the stock option grant made to you in July 2009 for 26,876 shares of the
Company’s Class A common stock. In addition, should you continue in employment through August 31,
2010, you will vest in the following installments of your other outstanding equity awards in
accordance with the applicable award agreements:



 









 






     (i) 25% of your July 2009 restricted stock unit award for 11,058 shares of the
Company’s Class A common stock, provided the $350 million net book income
performance goal for the 2010 fiscal year is attained, and




     (ii) the third annual installment of each of the new hire equity awards made to
you on September 1, 2007, namely, the third annual installment of your stock option
grant for 110,000 shares of the Company’s Class A common stock and the third annual
installment of your restricted stock unit award for 17,000 shares of the Company’s
Class A common stock.



     In addition, provided your employment with the Company continues through August 31, 2010, you
will be entitled to any bonus you earn under the Executive Officer Bonus Plan for the fiscal year
ending August 31, 2010 based on (i) the Company’s performance for such year, as measured in terms
of the revenue and operating income targets established for such year, (ii) the Compensation
Committee’s assessment of the Company’s performance in relation to certain qualitative education
initiatives and (iii) your individual performance for the year. Assessment of your achievement of
performance objectives shall be in the same manner as for other executives of the Company.



     2. Termination of Full-Time Employment. Your full-time employment with the Company
will continue through October 31, 2010 unless (a) the Company terminates your employment for Cause,
(b) your employment terminates by reason of your death or Disability, (c) the Company terminates
your employment for any reason other than for Cause or (d) you terminate your employment with or
without Good Reason. Should your employment terminate for any of the foregoing reasons prior to
October 31, 2010, then the provisions of your Employment Agreement will govern any rights or
entitlement you may have with respect to your outstanding equity awards and any other additional
severance benefits, including any potential severance benefits under Section 8(b) of your
Employment Agreement.



     Effective as of October 31, 2010, you will resign as an executive officer of the Company and
will not hold any further officer positions with the Company. Following the date of such
resignation, you will cease to be subject to the insider reporting and trading restrictions under
Section 16 of the Securities Exchange Act of 1934, as amended; however, you will, during your
period of continued employment with the Company, continue to be a restricted person subject to the
addendum to the Company’s insider trader policy through February 1, 2011, at which time the Company
will determine whether you should continue to be such a restricted person or whether you should
instead become subject to the Company’s general insider trading policy in the same manner as any
other Company employee. Any determination that you should continue to remain in restricted person
status will be subject to periodic re-assessment from time to time after February 1, 2011 upon your
request.



     3. Conversion to Part-Time Employment. Unless your employment with the Company
terminates earlier pursuant to Section 2 above, effective November 1, 2010 you will become a
part-time employee of the Company and your commitment will be permanently reduced to a level not
more than 20% of the average level of services provided by you during the three-year period
preceding your conversion to such part-time status. During your period of



 









 





part-time employment, you will not be required to work, nor will you work, an average of more than
one full day per week. Your part-time employment with the Company as described below will continue
through September 1, 2011 unless (a) your part-time employment period is extended for an
additional period by mutual agreement between you and the Company or (b) your employment
terminates earlier by reason of any of the events specified in Section 2 above. Upon the
termination of your part-time employment with the Company, you will no longer render any services
in any capacity to the Company or any of its affiliates. The unvested portion of your July 2, 2009
equity awards will be cancelled upon the termination of your part-time status.




     The following provisions will govern your period of part—time employment:


          (a) Depending on your duties, as they may be agreed upon from time to time, your services as a
part-time employee may be performed at the Company’s offices, via telecommuting and/or while
traveling on Company business. In that regard, the Company and you will take reasonable steps to
ensure you maintain connectivity via VPN and Blackberry or similar personal digital assistant
device. You will at all times during the part-time employment period remain subject to the control
and direction of the Company as to both the work to be performed and the manner and method of
performance.


          (b) You will hold the title of Senior Advisor and will report directly to Dr. John Sperling,
the Company’s Executive Chair, and Terri Bishop, the Company’s Executive Vice President, External
Affairs, and Chief of Staff to the Executive Chair. The Company, in conjunction with those two
executive officers, will, from time to time, delineate the specific duties and responsibilities you
will have during this period, including the provision of transitional assistance and support to
your successor.


          (c) You will remain subject to all employee workplace rules and standards.


          (d) Your base salary will be $5,000 per semi-monthly pay period, subject to the Company’s
collection of all applicable withholding taxes. You will not be eligible for any bonus
compensation during your period of part-time employment.


          (e) You will not be eligible to participate in the Company’s employee benefit plans, including
the group health plans, the term insurance and disability plans and the employee stock purchase
plan, but you may continue to make pre-tax contributions to the Company’s 401(k) plan.


          (f) You will not be eligible to receive any new equity awards, including any awards for the
2011 or 2012 fiscal years.


          (g) You will continue to accrue service vesting credit with respect to the unvested portions
of your September 1, 2007 and July 2, 2009 equity awards in accordance with the terms and
conditions of the applicable equity award documents.



 









 







          (h) You will continue to be eligible for payment or reimbursement from the Company of business
expenses for all of your continuing professional dues and licenses and for the reasonable costs of
attending continuing legal education courses, subject to the Company’s prior approval of each such
expense and up to a maximum dollar reimbursement of Three Thousand Dollars ($3,000.00) in the
aggregate.



     4. Severance Package. Unless your employment with the Company terminates prior to
October 31, 2010 by reason of any of the events listed in Section 2 above, your full-time
employment will be deemed to have been terminated by the Company without Cause effective as of the
close of business on October 31, 2010, and you will therefore be entitled to receive the severance
compensation described in Section 8(b) of the Employment Agreement, subject to the conditions
described therein and in this Section 4 and payable in accordance with the terms of the Employment
Agreement and the applicable award agreements. This Transition Agreement shall constitute the
“Notice of Termination” required by Section 7(e) of the Employment Agreement and no further notice
of termination without Cause shall be required. For avoidance of doubt, you and the Company agree
that such severance compensation under Section 8(b) of the Employment Agreement includes the
following:


          (a) a cash severance amount (the “Cash Severance Benefit”) equal to the sum of (i) $400,000
(one times your annual rate of base salary as of the date of this Transition Agreement) and (ii)
one times the average of the actual annual bonuses you earned for the 2008, 2009 and 2010 fiscal
years, with such amounts to be paid as follows: on May 2, 2011 (or upon your death, if earlier),
you will receive in a lump sum the semi-monthly installments for the period from November 1, 2010
through April 30, 2011 that will have been delayed pursuant to Section 13(b) of your Employment
Agreement, and the balance will be paid in twelve successive equal semi-monthly installments,
beginning May 15, 2011; and


          (b) accelerated vesting on May 2 , 2011 (or upon your death, if earlier) of the final
installment of your September 1, 2007 option grant and restricted stock unit award (the “Equity
Severance Benefit”).



     Although Section 8(b) of the Employment Agreement also provides for reimbursement for COBRA
continuation costs, you hereby acknowledge that you will not be eligible for such reimbursement as
part of your severance package because you do not carry health care coverage through the Company’s
group health plan.



     All payments made pursuant to the above-described severance package will be subject to the
Company’s collection of all applicable withholding taxes, and you will only receive the net amount
remaining after such taxes have been withheld.



     As a condition to your right to receive both the Cash Severance and Equity Severance Benefits
above described, you must execute and deliver to the Company a general release in the form of
attached Exhibit A to this Transition Agreement, with such release as so amended to be dated April
22, 2011, and such release must become enforceable and effective by you not revoking it within the
seven-day period in which you have to revoke it after signing.



 









 





     5. Exercise Period Following Termination of Employment. You will have a three-month
period following the date your employment with the Company terminates, in which to exercise the
outstanding vested balance of your 110,000-share hire date option grant and the vested portion of
your July 2, 2009 option grant (or twelve (12)-months in the event your employment terminates by
reason of your death or Disability); provided, however, that in the event your employment is
terminated by the Company other than for Cause prior to September 1, 2011, you will have until the
later of (i) August 31, 2011 or (ii) the expiration of the three-month period following such
termination in which to exercise the outstanding vested balance of the foregoing options. In no
event, however, shall any option remain outstanding or exercisable beyond its maximum term.



     6. Independent Counsel and Tax Responsibility. It is intended that this Transition
Agreement and the payments hereunder will either be exempt from or otherwise satisfy the
requirements of Section 409A(a)(2), (3) and (4) of the Internal Revenue Code of 1986, as amended
(“Code”), including current and future guidance and regulations interpreting such provisions, and
should be interpreted accordingly; provided, however, that the Company provides no assurances to
you as to the actual treatment of those payments under Section 409A of the Code You hereby
represent and acknowledge that you have retained your own legal counsel and obtained your own tax
advice regarding the subject matter of this Transition Agreement and the payments to be made
pursuant to it. Other than the Company’s obligation to withhold federal, state and local taxes
from your taxable wages, you will be responsible for any and all taxes, interest and penalties that
may be imposed with respect to any of the payments and benefits that are made or provided to you in
accordance with the terms of this Transition Agreement (including, without limitation, any and all
tax implications under Internal Revenue Code Section 409A). You acknowledge and agree that the
Company has not made any representations, and has not provided any advice, regarding the taxation
of the payments and benefits that are to be provided you hereunder, including (without limitation)
any potential taxes, interest and/or penalties under Internal Revenue Code Section 409A and similar
liabilities under state tax laws. In no event will the Company be liable to you for any federal,
state or local tax consequences you may incur with respect to any payments or benefits that are
provided to you in compliance with the terms of this Transition Agreement, including (without
limitation) any such consequences that may arise under Internal Revenue Code Section 409A.



     7. Legal Fees. The Company will pay or reimburse you for your legal fees incurred in
connection with the preparation and negotiation of this Transition Agreement, up to a maximum
dollar amount of $15,000.00. Such payment or reimbursement will be made within thirty (30) days
after submission by you of documentation of such legal fees, but not later than December 31, 2010.



     8. Non-Renewal of Employment Agreement. Your Employment Agreement will not be renewed
upon the expiration of its initial four (4)-year term on August 31, 2011, and your Employment
Agreement will accordingly terminate and cease to have any force or effect at the close of business
on that date, except that (a) the restrictive covenants set forth in Section 10 of your Employment
Agreement will continue to be binding upon you for the one (1)-year period



 









 





measured from the date you cease employment with the Company and (b) Sections 9, 11 through 21
and 24 of your Employment Agreement will also survive the termination of your Employment Agreement.
In addition, you will remain subject to the applicable provisions of your Proprietary Information
Agreement with the Company.




     9. Public Announcement. The Company will provide you with a reasonable opportunity to
review and provide input into the 8-K filing that will be made by the Company in connection with
the parties entering into this Transition Agreement, and with respect to any other public
announcement made in connection with your transition and departure from the Company.



Sincerely




/s/ Joseph L. D’Amico




Title: President & COO




ACCEPTANCE




I hereby accept the foregoing terms and conditions of this Transition Agreement governing my
resignation as General Counsel and Corporate Secretary effective as of the close of business on
August 31, 2010, my continuation in full-time status as Executive Vice President, Special Projects
through October 31, 2010 and my conversion to part-time employment with Apollo Group, Inc. as
Senior Advisor, effective November 1, 2010, and agree that my existing Employment Agreement is
hereby amended and modified in accordance with the foregoing terms and conditions and will
terminate on August 31, 2011. I also agree that (i) the restrictive covenants set forth in Section
10 of my Employment Agreement shall continue to be binding upon me for the one (1)-year period
measured from the date I cease to be an employee of the Company, (ii) Sections 9, 11 through 21 and
24 of my Employment Agreement shall survive the termination of my Employment Agreement, (iii) I
shall also remain subject to the applicable provisions of my Proprietary Information Agreement with
the Company, and (iv) except with respect to the Company’s obligations to withhold, I am solely
responsible for all federal, state and local tax consequences I incur with respect to the payments
and benefits provided me in compliance with the terms of this Transition Agreement, including
(without limitation) any such consequences that may arise under Internal Revenue Code Section 409A.




	 	 	 	 	 
	 	 	 
	 	/s/ P. Robert Moya
 	 
	 	P. Robert Moya 	 
	 	 	 
	 	Dated:   May 17, 2010 
	 	 	 
	 	 	 



 









 






	 	 	 	 	 



GENERAL RELEASE





     This AGREEMENT is made as of                     , 2011, 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 August 31, 2007 and as subsequently
amended effective January 1, 2009 (the “Employment Agreement”), Executive agrees as follows:



     1. Termination of Employment. Executive acknowledges that his full-time employment
with the Company terminated on October 31, 2010 and he currently remains in part-time employment
with the Company pursuant to the terms of his Transition Agreement with the Company dated May ___,
2010 (the “Transition Agreement”), and he agrees that following the cessation of that part-time
employment, 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 all wages and
accrued but unpaid vacation pay earned by him through the date of this Agreement, other than any
unpaid wages attributable to his part-time employment during the payroll period in which this
Agreement is executed.



     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 through the date of this Agreement and the termination of
his full-time employment with the Company and his executive officer positions, 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 or rights to which he is entitled pursuant to Section 8 of the
Employment Agreement or pursuant to the terms of his presently-outstanding equity awards from the
Company, including the future vesting of those awards that occurs in accordance with the applicable
award agreements and his post-employment exercise rights under Section 5 of the Transition
Agreement, or his rights to indemnification pursuant to Section 15 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.



          (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 and reimbursements owed to him, together with any accrued but unpaid vacation
pay, less applicable withholdings and deductions, earned through the date of this Agreement.
Nothing in this Agreement shall affect, impair or waive the Executive’s right to receive any wages
that become due and payable to him after the date of this Agreement by reason of his continued
part-time employment pursuant to the Transition Agreement.


          (f) This Agreement is binding on Executive, his heirs, legal representatives and assigns.



     3. Entire Agreement. This Agreement, the Employment Agreement and the Transition
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 or Transition
Agreement that survive his termination of employment, 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.



     4. 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.



 









 





     5. Governing Law; Jurisdiction. This Agreement shall be governed by and enforced in
accordance with the laws of the State of Arizona.



     6. 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 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.



     7. 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.



     8. 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




	 	 	 	 	 	 

	 

	 	 	Date: 	 
	, 
	201___
	 	 	 	 	 
	Signature