exv10w3






EXHIBIT 10.3




FORM A




APOLLO GROUP, INC.

STOCK OPTION AGREEMENT




RECITALS




     A. The Corporation has implemented the Incentive Plan for the purpose of providing eligible
persons in the Corporation’s service with the opportunity to receive one or more equity incentive
awards designed to encourage them to continue their service relationship with the Corporation.



     B. Optionee is to render valuable services to the Corporation, and this Agreement is executed
pursuant to, and is intended to carry out the purposes of, the Incentive Plan in connection with
the Corporation’s grant of an option to Optionee as an additional inducement to perform those
services.



     C. All capitalized terms in this Agreement shall have the meaning assigned to them in the
attached Appendix.



          NOW, THEREFORE, it is hereby agreed as follows:




          1. Grant of Option. The Corporation hereby grants to Optionee on                     , 20     
(the “Grant Date”) a Non-Statutory Option to purchase
           shares of the Corporation’s Class A
Common Stock (the “Option Shares”) at an exercise price of $       per share (the “Exercise Price”),
the closing price per share of such Class A Common Stock on the Nasdaq Global Select Market on the
Grant Date.




          2. Option Term. The term of this option shall commence on the Grant Date and continue
in effect until the close of business on                     , 20      (the “Expiration Date”), unless
sooner terminated in accordance with Paragraph 5 or 6.




          3. Limited Transferability. This option shall be neither transferable nor assignable
by Optionee other than by will or the laws of inheritance following Optionee’s death and shall be
subject to the transfer restrictions set forth in Section 13.5 of the Incentive Plan. This option
may be exercised, during Optionee’s lifetime, only by Optionee. However, Optionee may designate
one or more persons as the beneficiary or beneficiaries of this option, and this option shall, in
accordance with such designation, automatically be transferred to such beneficiary or beneficiaries
upon the Optionee’s death while holding this option. Such beneficiary or beneficiaries shall take
the transferred option subject to all the terms and conditions of this Agreement, including
(without limitation) the limited time period during which this option may, pursuant to Paragraph 5,
be exercised following Optionee’s death.




          4. Dates of Exercise. This option shall vest and become exercisable for the Option
Shares in one or more installments, over Optionee’s period of Service, in accordance with the
following schedule:                                         . However, this option may vest and become exercisable
in whole or in part on an accelerated basis in accordance with the special vesting acceleration
provisions of Paragraph 5 or Paragraph 6. As the option becomes exercisable for one or more
installments, those installments shall accumulate, and the option shall remain exercisable for the
accumulated installments until the Expiration Date or sooner termination of the option term under
Paragraph 5 or 6.




          5. Cessation of Service. The option term specified in Paragraph 2 shall terminate
(and this option shall cease to be outstanding) prior to the Expiration Date should any of the
following provisions become applicable:




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               (a) Except as otherwise expressly provided in subparagraphs (b) through (e) of this Paragraph
5, should Optionee cease to remain in Service for any reason while this option is outstanding,
then Optionee shall have a three (3)-month period measured from the date of such cessation of
Service during which to exercise this option for any or all of the Option Shares for this option is
vested and exercisable at the time of Optionee’s cessation of Service, but in no event shall this
option be exercisable at any time after the Expiration Date.



               (b) Should Optionee’s Service terminate by reason of his death, then this option, to the
extent outstanding at that time but not otherwise vested and exercisable for all the Option Shares,
shall immediately vest and become exercisable for that number of additional Option Shares (if any)
in which Optionee would have otherwise been vested under this option at the time of his death had
this option vested in a series of            (___) successive equal monthly installments over the           
(___)-year measured from                     . Following Optionee’s death (whether before or after
termination of Service) this option may be exercised, for any or all of the Option Shares for which
this option is vested and exercisable at the time of Optionee’s cessation of Service (including any
Option Shares which vest on an accelerated basis should such cessation of Service occur by reason
of Optionee’s death), by (i) the personal representative of Optionee’s estate or (ii) the person
or persons to whom the option is transferred pursuant to Optionee’s will or the laws of inheritance
following Optionee’s death, as the case may be. However, if Optionee dies while holding this option
and has an effective beneficiary designation in effect for this option at the time of his death,
then the designated beneficiary or beneficiaries shall have the exclusive right to exercise this
option following Optionee’s death. Any such right to exercise this option shall lapse, and this
option shall cease to be outstanding, upon the earlier of (i) the expiration of the twelve
(12)-month period measured from the date of Optionee’s death or (ii) the Expiration Date. Upon the
expiration of such limited exercise period or (if earlier) upon the Expiration Date, this option
shall terminate and cease to be outstanding for any exercisable Option Shares for which the option
has not otherwise been exercised.



               (c) Should Optionee cease Service by reason of Disability while this option is outstanding,
then this option, to the extent not otherwise at that time vested and exercisable for all the
Option Shares, shall immediately vest and become exercisable for that number of additional Option
Shares (if any) in which Optionee would have otherwise been vested under this option at the time of
such cessation of Service had this option vested in a series of                      (___) successive equal
monthly installments over the            (___)-year measured from                                         . Optionee shall
have a twelve (12)-month period measured from the date of such cessation of Service during which to
exercise this option for any or all of the Option Shares for which this option is vested and
exercisable at the time of Optionee’s cessation of Service (including any Option Shares which vest
on an accelerated basis should such cessation of Service occur by reason of Optionee’s Disability).
In no event, however, shall this option be exercisable at any time after the Expiration Date. Upon
the expiration of such limited exercise period or (if earlier) upon the Expiration Date, this
option shall terminate and cease to be outstanding for any exercisable Option Shares for which the
option has not otherwise been exercised.



               Alternative:



               (c) Should Optionee cease Service by reason of Disability while this option is outstanding,
then Optionee shall have a twelve (12)-month period measured from the date of such cessation of
Service during which to exercise this option for any or all of the Option Shares for which this
option is vested and exercisable at the time of Optionee’s cessation of Service. In no event,
however, shall this option be exercisable at any time after the Expiration Date. Upon the
expiration of such limited exercise period or (if earlier) upon the Expiration Date, this option
shall terminate and cease to be outstanding for any exercisable Option Shares for which the option
has not otherwise been exercised.



               (d) The applicable period of post-Service exercisability in effect pursuant to the foregoing
provisions of this Paragraph 5 shall automatically be extended by an additional period of time
equal in duration to any interval within such post-Service exercise period during which the
exercise of this option or the immediate sale of the Option Shares acquired under this option
cannot be effected in compliance with applicable federal and state securities laws, but in no event
shall such an extension result in the continuation of this option beyond the Expiration Date.



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               (e) Should Optionee’s Service be terminated for Cause, then this option, whether or not vested
and exercisable, shall terminate immediately and cease to be outstanding.



               (f) During the limited period of post-Service exercisability, this option may not be exercised
in the aggregate for more than the number of Option Shares for which this option is, at the time of
Optionee’s cessation of Service, vested and exercisable pursuant to the Vesting Schedule specified
in Paragraph 2 or the special vesting acceleration provisions of Paragraph 5(b) [or 5(c)] above or
Paragraph 6. This option shall not vest or become exercisable for any additional Option Shares,
whether pursuant to the normal Vesting Schedule specified in Paragraph 2 or the special vesting
acceleration provisions of Paragraphs 5(b) [5(c)] and 6 of this Agreement, following the
Optionee’s cessation of Service. Upon the expiration of such limited exercise period or (if
earlier) upon the Expiration Date, this option shall terminate and cease to be outstanding for any
exercisable Option Shares for which the option has not otherwise been exercised.



          6. Special Acceleration of Option.




               (a) This option, to the extent outstanding at the time of an actual Change in Control but not
otherwise fully exercisable, shall automatically accelerate so that this option shall, immediately
prior to the effective date of such Change in Control, become exercisable for all of the Option
Shares at the time subject to this option and may be exercised for any or all of those Option
Shares as fully vested shares of Class A Common Stock.



               (b) Immediately following the Change in Control, this option shall terminate and cease to be
outstanding, except to the extent assumed by the successor corporation (or parent thereof) or
otherwise continued in effect pursuant to the terms of the Change in Control transaction.



               (c) If this option is assumed in connection with a Change in Control or otherwise continued in
effect, then this option shall be appropriately adjusted, immediately after such Change in Control,
to apply to the number and class of securities into which the shares of Class A Common Stock
subject to this option would have been converted in consummation of such Change in Control had
those shares actually been outstanding at the time. Appropriate adjustments shall also be made to
the Exercise Price, provided the aggregate Exercise Price shall remain the same. To the extent the
actual holders of the Corporation’s outstanding Class A Common Stock receive cash consideration for
their Common Stock in consummation of the Change in Control, the successor corporation may, in
connection with the assumption or continuation of this option, substitute one or more shares of its
own common stock with a fair market value equivalent to the cash consideration paid per share of
Common Stock in such Change in Control, provided such common stock is readily tradable on an
established U.S. securities exchange or market.



               (d) This Agreement shall not in any way affect the right of the Corporation to adjust,
reclassify, reorganize or otherwise change its capital or business structure or to merge,
consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets.



          7. Adjustment in Option Shares. Should any change be made to the Class A Common Stock
by reason of any stock split, stock dividend, recapitalization, combination of shares, exchange of
shares, spin-off transaction, extraordinary dividend or distribution or other change affecting the
outstanding Class A Common Stock as a class without the Corporation’s receipt of consideration, or
should the value of outstanding shares of Class Common Stock be substantially reduced as a result
of a spin-off transaction or an extraordinary dividend or distribution, or should there occur any
merger, consolidation or other reorganization, then equitable adjustments shall be made by the Plan
Administrator to (i) the total number and/or class of securities subject to this option and (ii)
the Exercise Price per share, provided, however, that the aggregate Exercise Price shall remain the
same. The adjustments shall be made in such manner as the Plan Administrator deems appropriate in
order to reflect such change, and those adjustments shall be final, binding and conclusive upon
Optionee and any other person or persons having an interest in the option. In the event of any
Change in Control transaction, the adjustment provisions of Paragraph 6(c) shall be controlling.




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          8. Stockholder Rights. The holder of this option shall not have any stockholder
rights with respect to the Option Shares until such person shall have exercised the option, paid
the Exercise Price and become a holder of record of the purchased shares.




          9. Manner of Exercising Option.




               (a) In order to exercise this option with respect to all or any part of the Option Shares for
which this option is at the time exercisable, Optionee (or any other person or persons exercising
the option) must take the following actions:




               (i) Execute and deliver to the Corporation a Notice of Exercise as to the
Option Shares for which the option is exercised or comply with such other procedures
as the Corporation may establish for notifying the Corporation of the exercise of
this option for one or more Option Shares.




               (ii) Pay the aggregate Exercise Price for the purchased shares in one or more
of the following forms:




               (A) cash or check made payable to the Corporation;




               (B) shares of Common Stock (whether delivered in the form of actual
stock certificates or through attestation of ownership in a manner
reasonably satisfactory to the Corporation) held for the requisite period
(if any) necessary to avoid any resulting charge to the Corporation’s
earnings for financial reporting purposes and valued at Fair Market Value on
the Exercise Date; or




               (C) through a special sale and remittance procedure pursuant to which
Optionee (or any other person or persons exercising the option) shall
concurrently provide irrevocable instructions (i) to a brokerage firm
(reasonably satisfactory to the Corporation for purposes of administering
such procedure in accordance with the Corporation’s
pre-clearance/pre-notification policies) to effect the immediate sale of the
purchased shares and remit to the Corporation, out of the sale proceeds
available on the settlement date, sufficient funds to cover the aggregate
Exercise Price payable for the purchased shares plus all applicable
Withholding Taxes required to be withheld by the Corporation by reason of
such exercise and (ii) to the Corporation to deliver the certificates for
the purchased shares directly to such brokerage firm on such settlement date
in order to complete the sale.




     Except to the extent the sale and remittance procedure is utilized in
connection with the option exercise, payment of the Exercise Price must
accompany the Notice of Exercise (or other notification procedure).




               (iii) Furnish to the Corporation appropriate documentation that the person or
persons exercising the option (if other than Optionee) have the right to exercise
this option.




               (iv) Make appropriate arrangements with the Corporation (or Parent or
Subsidiary employing Optionee) for the satisfaction of all Withholding Taxes
applicable to the option exercise.



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               (b) As soon as practical after the Exercise Date and the Corporation’s collection of the
applicable Withholding Taxes, the Corporation shall issue to or on behalf of Optionee (or any other
person or persons exercising this option) a certificate for the purchased Option Shares.



               (c) In no event may this option be exercised for any fractional shares.



          10. Withholding Taxes. Optionee may satisfy the Withholding Taxes applicable to each
exercise of this option by either (i) delivering to the Corporation that number of shares of Class
A Common Stock then owned by Optionee, duly endorsed for transfer to the Corporation and free and
clear of any liens, claims, security interests or other encumbrances, with an aggregate Fair Market
Value equal of the dollar amount of such Withholding Taxes, (ii) delivering to the Corporation
cash, a check payable to the Corporation or such other form of payment permitted by the Plan
Administrator in the aggregate dollar amount required to satisfy such Withholding Taxes or (iii)
using a portion of the sale proceeds of the purchased Option Shares to satisfy such tax withholding
amount, to the extent Optionee exercises the Option pursuant to the sale and remittance procedure
set forth in paragraph 9(a)(ii)(C) hereof.




          11. Compliance with Laws and Regulations. The exercise of this option and the issuance
of the Option Shares upon such exercise shall be subject to compliance by the Corporation and
Optionee with all applicable requirements of law relating thereto and with all applicable
regulations of any Stock Exchange on which the Class A Common Stock may be listed for trading at
the time of such exercise and issuance. All shares of Class A Common Stock issued pursuant to the
exercise of this option shall be registered on a Form S8 registration statement under the
Securities Act of 1933, as amended.




          12. Successors and Assigns. Except to the extent otherwise provided in Paragraphs 3
and 6, the provisions of this Agreement shall inure to the benefit of, and be binding upon, the
Corporation and its successors and assigns and Optionee, Optionee’s assigns, the legal
representatives, heirs and legatees of Optionee’s estate and any beneficiaries of this option
designated by Optionee.




          13. Notices. Any notice required to be given or delivered to the Corporation under
the terms of this Agreement shall be in writing and addressed to the Corporation at its principal
corporate offices or shall be effected by properly-addressed electronic mail delivery. Any notice
required to be given or delivered to Optionee shall be in writing and addressed to Optionee at the
address at the time on file for Optionee in the Corporation’s Human Resources Department. All
notices shall be deemed effective upon personal delivery or upon deposit in the U.S. mail, postage
prepaid and properly addressed to the party to be notified.




          14. Construction. This Agreement and the option evidenced hereby are made and granted
pursuant to the Incentive Plan and are in all respects limited by and subject to the terms of the
Incentive Plan and the Employment Agreement. All decisions of the Plan Administrator with respect
to any question or issue arising under the Incentive Plan or this Agreement shall be conclusive and
binding on all persons having an interest in this option.




          15. Governing Law. The interpretation, performance and enforcement of this Agreement
shall be governed by the laws of the State of Arizona without resort to that State’s
conflict-of-laws rules.




          16. Employment at Will. Nothing in this Agreement or in the Incentive Plan shall
confer upon Optionee any right to continue in Service for any period of specific duration or
interfere with or otherwise restrict in any way the rights of the Corporation (or any Parent or
Subsidiary employing Optionee) or of Optionee, which rights are hereby expressly reserved by each,
to terminate Optionee’s Service at any time for any reason, with or without cause.




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          IN WITNESS WHEREOF, Apollo Group, Inc. has caused this Agreement to be executed on its behalf
by its duly-authorized officer on the date indicated below its signature line, and Optionee has
executed this Agreement on the date below his signature line.




	 	 	 	 	 
	 

	 	APOLLO GROUP, INC.	 	 
	 
	 	 	 	 
	 

	 	BY:	 	 
	 

	 	 
	 	 
	 
	 	TITLE:	 	 
	 
	 	 
	 	 
	 
	 	 	 	 
	 

	 	DATED:             
                     
          , 2008	 	 
	 
	 	 	 	 
	 

	 	OPTIONEE	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	DATED:             
                     
          , 2008	 	 







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APPENDIX




          The following definitions shall be in effect under the Agreement:




          A. Agreement shall mean this Stock Option Agreement.




          B. Board shall mean the Corporation’s Board of Directors.




          C. Cause shall have the meaning assigned to such term in Section 7(b)(i) of the
Employment Agreement.




          D. Change in Control shall have the meaning assigned to such term in Section 3.1 of
the Incentive Plan.




          E. Class A Common Stock shall mean shares of the Corporation’s Class A common stock.




          F. Corporation shall mean Apollo Group, Inc., an Arizona corporation, and any
successor corporation to all or substantially all of the assets or voting stock of Apollo Group,
Inc. which shall by appropriate action adopt the Incentive Plan.




          G. Employee shall mean an individual who is in the employ of the Corporation (or any
Parent or Subsidiary), subject to the control and direction of the employer entity as to both the
work to be performed and the manner and method of performance.




          H. Code shall mean the Internal Revenue Code of 1986, as amended.




          I. Disability shall mean the Optionee’s inability to perform, with or without
reasonable accommodation, the principal duties and responsibilities of his position with the
Corporation for a period of six (6) consecutive months or more by reason of any physical or mental
injury.




          J. Exercise Date shall mean the date on which the option shall have been exercised in
accordance with Paragraph 9 of this Agreement.




          K. Exercise Price shall mean the exercise price per Option Share as specified in
Paragraph 1 of this Agreement.




          L. Expiration Date shall mean the date on which the option expires as specified in
Paragraph 2 of this Agreement.




          M. Fair Market Value per share of Class A Common Stock on any relevant date shall be
the closing price per share of Class A Common Stock on the date in question on the Stock Exchange
serving as the primary market for the Common Stock, as such price is reported by the National
Association of Securities Dealers (if primarily traded on the Nasdaq Global or Global Select
Market) or as officially quoted in the composite tape of transactions on any other Stock Exchange
on which the Common Stock is then primarily traded. If there is no closing price for the Common
Stock on the date in question, then the Fair Market Value shall be the closing price on the last
preceding date for which such quotation exists.




          N. Grant Date shall mean the grant date of the option as specified in Paragraph 1 of
this Agreement.




          O. Incentive Plan shall mean the Corporation’s 2000 Stock Incentive Plan, as amended
and restated effective May 15, 2007.




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          P. Non-Statutory Option shall mean an option not intended to satisfy the requirements
of Code Section 422.




          Q. Notice of Exercise shall mean the notice of option exercise in the form prescribed
by the Corporation.




          R. Option Shares shall mean the number of shares of Class A Common Stock subject to
the option as specified in Paragraph 1 of this Agreement.




          S. Optionee shall mean the person to whom the option is granted.




          T. Parent shall mean any corporation (other than the Corporation) in an unbroken chain
of corporations ending with the Corporation, provided each corporation in the unbroken chain (other
than the Corporation) owns, at the time of the determination, stock possessing fifty percent (50%)
or more of the total combined voting power of all classes of stock in one of the other corporations
in such chain.




          U. Plan Administrator shall mean either the Board or a committee of the Board acting
in its capacity as administrator of the Plan.




          V. Service shall mean Optionee’s performance of services for the Corporation (or any
Parent or Subsidiary, whether now existing or subsequently established) in the capacity of an
Employee. Service shall not be deemed to cease during a period of military leave, sick leave or
other personal leave approved by the Corporation. However, except to the extent otherwise required
by law or expressly authorized by the Plan Administrator or by the Corporation’s written policy on
leaves of absence, no Service credit shall be given for vesting purposes for any period the
Optionee is on a leave of absence.




          W. Stock Exchange shall mean the American Stock Exchange, the Nasdaq Global Market or
Global Select Market or the New York Stock Exchange.




          X. Subsidiary shall mean any corporation (other than the Corporation) in an unbroken
chain of corporations beginning with the Corporation, provided each corporation (other than the
last corporation) in the unbroken chain owns, at the time of the determination, stock possessing
fifty percent (50%) or more of the total combined voting power of all classes of stock in one of
the other corporations in such chain.




          Y. Vesting Schedule shall mean the schedule set forth in Paragraph 4 of this Agreement
pursuant to which the option is to become exercisable for the Option Shares in installments over
the Optionee’s period of Service.




          Z. Withholding Taxes shall mean the federal, state and local income taxes and the
employee portion of the federal, state and local employment taxes required to be withheld by the
Corporation in connection with the exercise of the option.





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