Document:

exv10w1

 

Description of Amended and
Restated DeVry Inc. Employee Stock Purchase Plan

EXHIBIT 10.1

Administration

     
The ESPP is administered by the Company, which has final
authority to decide any question of interpretation of the ESPP
or rights arising thereunder. The Company pays all expenses of
the ESPP. The Company has hired an independent, third-party
administrator to maintain the records of the ESPP.

Shares Reserved for Issuance

     
The ESPP reserves 200,000 shares for issuance pursuant to
employee purchases through payroll deductions under the ESPP,
subject to approval by the Company’s stockholders at the
2005 Annual Meeting.

Eligibility

     
Except as described below, all employees of the Company and
certain designated subsidiaries who customarily work more than
20 hours per week and more than five months during each
year are eligible to participate in the ESPP as of any
enrollment date after their first day of employment. Employees
who are ineligible to participate in the ESPP include those
(1) who are prohibited by the laws and regulations of the
country of their residence or employment from participating in
the ESPP, as determined by the Company, or to whom the Company
may not offer or sell Common Stock under the ESPP, (2) who
are executive officers or for whom the Company makes filings
pursuant to Section 16 of the Securities Exchange Act of
1934, or (3) who own or would be deemed to own five percent
or more of the voting power or value of all classes of stock of
the Company. Rights to purchase shares under the ESPP are not
transferable.

Purchase of Shares

     
The ESPP provides for monthly purchase dates on the last
business day of each month (the “Purchase Date”). Each
eligible employee may elect to purchase shares of Common Stock
pursuant to the ESPP by filing a payroll deduction
authorization. Shares may be purchased under the ESPP only
through payroll deductions of not more than 10% of an
employee’s base salary plus bonuses and commissions. On the
Purchase Date, the amounts withheld by payroll deduction for the
period beginning on the first business day following the most
recent Purchase Date and ending on the next Purchase Date (the
“Purchase Period”) are applied to purchase shares for
the employee from the Company, provided the employee is employed
by the Company on the Purchase Date. If the employee is not
employed by the Company on the Purchase Date, then the
employee’s accumulated payroll deductions are returned to
the employee.

     
The purchase price for the shares (the “Purchase
Price”) is 95% of the fair market value of a Common Share
on the Purchase Date. No participant may purchase Common Shares
in any calendar year having an aggregate value (determined at
time of purchase) exceeding $25,000. An employee may increase or
decrease, or cease, payroll deductions by submitting an
appropriate form to the Company at least 10 days before the
date a paycheck is issued; provided, however, only one change is
allowed in any Purchase Period.

Issuance and Delivery of Shares

     
Shares purchased by employees under the ESPP are delivered by
the Company to, and held by, the third-party administrator on
behalf of the purchasing employees.

Amendments

     
The Board of Directors may amend the ESPP, except that, without
the approval of the stockholders of the Company, the ESPP may
not be amended to increase the number of reserved shares. The
Board of Directors may terminate the ESPP at any time.

Tax Consequences

     
The following description is a summary of the federal income tax
consequences to the Company and employees participating in the
ESPP. Applicable state, local and foreign tax consequences may
differ.

     
The ESPP is intended to qualify as an “employee stock
purchase plan” within the meaning of Section 423 of
the Internal Revenue Code. Under the Internal Revenue Code,
employees are not taxed on income or gain with respect to the
ESPP either at the first day of the Purchase Period or at the
Purchase Date. If an employee disposes of the shares purchased
under the ESPP more than one year after the Purchase Date and
more than two years after the beginning of the Purchase Period,
the employee will be required to report as ordinary compensation
income for the taxable year of disposition an amount equal to
the lesser of (1) the gain on the disposition of the shares
or (2) the purchase price discount (five percent) applied
to the fair market value of the shares on the first day of the
Purchase Period. Any gain on the disposition in excess of the
amount treated as ordinary compensation income will be capital
gain. In the case of such a disposition, the Company will not be
entitled to any deduction from income.

     
If an employee disposes of shares purchased under the ESPP
(including by way of gift, but not death, bequest or
inheritance) within either the one-year or the two-year holding
periods described above (a “disqualifying
disposition”), the employee will be required to report the
excess of the fair market value of the shares on the Purchase
Date over the Purchase Price as ordinary compensation income for
the year of disposition. Any difference between the fair market
value of the shares on the Purchase Date and the disposition
price will be capital gain or loss, either short-term or
long-term depending upon the employee’s holding period for
the shares. In the event of a disqualifying disposition, the
Company will be entitled to a deduction from income in the year
of such disposition equal to the amount that the employee is
required to report as ordinary compensation income. The Company
will treat any transfer of record ownership of shares as a
disposition, unless it is notified to the contrary.

     
The ESPP is not subject to any of the provisions of ERISA nor is
it qualified under Section 401(a) of the Internal Revenue
Code.exv10w2

 

Description of DeVry Inc.
Incentive Plan of 2005

EXHIBIT 10.2

Shares Available for Issuance

     
The aggregate number of shares of Common Stock that may be
issued under the 2005 Plan will not exceed 3,000,000 (subject to
the adjustment provisions discussed below). The 3,000,000 new
shares represent 4.3% of the currently outstanding shares of
Common Stock.

     
The number of shares that may be issued under the 2005 Plan for
Benefits other than stock options and SARs will not exceed a
total of 2,000,000 shares (subject to the adjustment provisions
discussed below).

Administration and Eligibility

     
The 2005 Plan will be administered by the Compensation Committee
of the Board (the “Committee”) which consists of two
or more directors, each of whom will satisfy the requirements
established for administrators acting under plans intended to
qualify for exemption under Rule 16b-3 under the Securities
Exchange Act of 1934 (“Exchange Act”), for outside
directors acting under plans intended to qualify for exemption
under Section 162(m) of the Internal Revenue Code and with
any applicable requirements established by the New York Stock
Exchange. The Committee will approve the aggregate Benefits and
the individual Benefits for the most senior elected officers and
non-employee directors. The Committee will delegate its
authority to grant Benefits to other Participants to the Chief
Executive Officer or other designated officers in accordance
with the terms of the 2005 Plan. The Chief Executive Officer or
such other officers authorized to select employees to receive
such option shares and other awards will provide written notice
of all such action to the Committee.

     
No Participant may receive in any calendar year: (i) stock
options relating to more than 150,000 shares,
(ii) restricted stock or restricted stock units relating to
more than 50,000 shares, (iii) SARs relating to more than
125,000 shares, or (iv) performance shares relating to more
than 50,000 shares. No non-employee director may receive in any
calendar year stock options relating to more than 15,000 shares
or restricted stock units relating to more than 5,000 shares.
(Each of the above limits is subject to the adjustment
provisions discussed below.) The maximum amount that may be
earned under performance cash awards by any Participant who is a
covered employee within the meaning of Section 162(m) of
the Internal Revenue Code (“Covered Employee”) in any
calendar year may not exceed $1,000,000.

Benefits

Stock Options

     
Stock options granted to Participants (“Optionees”)
may be either incentive stock options (“ISOs”) or
nonqualified stock options (“NSOs”). NSOs and ISOs are
collectively referred to as “Stock Options.” The
exercise price of any ISO must be equal to or greater than the
fair market value of the shares on the date of the grant. The
terms of a Stock Option cannot exceed 10 years.

     
For purposes of the 2005 Plan, fair market value shall be
determined in such manner as the Committee may deem equitable,
or as required by applicable law or regulation. Generally, fair
market value means the closing price on the last trading day
preceding the day of the transaction, as reported for the New
York Stock Exchange Composite Transactions in The Wall Street
Journal.

     
At the time of grant, the Committee, Chief Executive Officer or
other designated officer will determine when Options are
exercisable and when they expire.

     
Payment for shares purchased upon exercise of a Stock Option
must be made in full at the time of purchase. Payment may be
made in cash, by the transfer to the Company of shares owned by
the Participant having a fair market value on the date of
transfer equal to the option exercise price (or certification of
ownership of such shares) or in such other manner as may be
authorized by the Committee.

 

SARs

     
The Committee, Chief Executive Officer or other designated
officer has the authority to grant SARs to Participants and to
determine the number of shares subject to each SAR, the term of
the SAR, the time or times at which the SAR may be exercised,
and all other terms and conditions of the SAR. A SAR is a right,
denominated in shares, to receive, upon exercise of the right,
in whole or in part, without payment to the Company an amount,
payable in shares, in cash or a combination thereof, that is
equal to the excess of: (i) the fair market value of Common
Stock on the date of exercise of the right; over (ii) the fair
market value of Common Stock on the date of grant of the right
multiplied by the number of shares for which the right is
exercised.

Restricted Stock and Restricted Stock Units

     
Restricted Stock consists of shares which are transferred by the
Company to a Participant, subject to substantial risk of
forfeiture and to restrictions on their sale or other transfer
by the Participant. Restricted Stock Units are the right to
receive shares at a future date in accordance with the terms of
such grant upon the attainment of certain conditions specified
by the Committee which are subject to substantial risk of
forfeiture and restrictions on their sale or other transfer by
the Participant. The Committee, Chief Executive Officer or other
designated officer determines the eligible Participants to whom,
and the time or times at which, grants of Restricted Stock or
Restricted Stock Units will be made, the number of shares or
units to be granted, the time or times within which the shares
covered by such grants will be subject to forfeiture, the time
or times at which the restrictions will terminate, and all other
terms and conditions of the grants. Restrictions or conditions
could include, but are not limited to, the attainment of
performance goals (as described below), continuous service with
the Company, the passage of time or other restrictions or
conditions.

Performance Stock

     
A Participant who is granted Performance Stock has the right to
receive shares or cash equal to the fair market value of such
shares at a future date in accordance with the terms of such
grant and upon the attainment of performance goals specified by
the Committee.

     
The award of Performance Stock to a Participant will not create
any rights in such Participant as a stockholder of the Company
until the issuance of Common Stock with respect to an award.

Performance Cash Awards

     
A Participant who is granted Performance Cash Awards has the
right to receive a payment in cash upon the attainment of
performance goals specified by the Committee. The Committee may
substitute shares of Common Stock for the cash payment otherwise
required to be made pursuant to a Performance Cash Award.

Performance Goals

     
Awards of Restricted Stock, Restricted Stock Units, Performance
Stock, Performance Cash Awards and other incentives under the
2005 Plan shall be made subject to the attainment of performance
goals relating to one or more business criteria within the
meaning of Section 162(m) of the Internal Revenue Code,
including, but not limited to: cash flow; cost; ratio of debt to
debt plus equity; profit before tax; economic profit; earnings
before interest and taxes; earnings before interest, taxes,
depreciation and amortization; earnings per share; operating
earnings; economic value added; ratio of operating earnings to
capital spending; free cash flow; net profit; net sales, sales
growth; price of the Common Stock; return on net assets, equity,
or stockholders’ equity; market share; or total return to
stockholders (“Performance Criteria”). Awards of Stock
Options under the 2005 Plan may be made subject to attainment of
such performance goals.

     
Any Performance Criteria may be used to measure the performance
of the Company as a whole or any business unit of the Company
and may be measured relative to a peer group or index. Any
Performance Criteria may be adjusted to include or exclude
special items as described below.

 

Annual Management Incentive Awards

     
The Committee has the authority to grant Management Incentive
Awards to designated executive officers of the Company or any
subsidiary.

     
Management Incentive Awards will be paid out of an incentive
pool equal to five percent of the Company’s consolidated
operating earnings for each calendar year. The Committee will
allocate an incentive pool percentage to each designated
Participant for each calendar year. In no event may the
incentive pool percentage for any one Participant exceed 20% of
the total pool. For purposes of the 2005 Plan,
“consolidated operating earnings” will mean the
consolidated earnings before income taxes of the Company,
computed in accordance with generally accepted accounting
principles, but shall exclude the effects of special items.
Special items include: (i) gains or losses on the
disposition of a business, (ii) changes in tax or
accounting regulations or laws, or (iii) the effect of a
merger or acquisition, as determined in accordance with
generally accepted accounting principles. The Participant’s
incentive award then will be determined by the Committee based
on the Participant’s allocated portion of the incentive
pool subject to adjustment in the sole discretion of the
Committee. In no event may the portion of the incentive pool
allocated to a Participant who is a Covered Employee be
increased in any way, including as a result of the reduction of
any other Participant’s allocated portion.

Stock Awards

     
The Committee, Chief Executive Officer or other designated
officer may award shares of Common Stock to Participants without
payment therefor, as additional compensation for service to the
Company or a subsidiary. Stock awards may be subject to other
terms and conditions, which may vary from time to time and among
employees, as the Committee determines to be appropriate.
However, an outright grant of stock will not be made unless it
is offered in exchange for cash compensation that has otherwise
already been earned by the recipient.

Cash Awards

     
A cash award consists of a monetary payment made by the Company
to an employee as additional compensation for his or her
services to the Company or a subsidiary. A cash award may be
made in tandem with another Benefit or may be made independently
of any other Benefit. Cash awards may be subject to other terms
and conditions, which may vary from time to time and among
employees, as the Committee, Chief Executive Officer or other
designated officer determines to be appropriate.

Amendment of the 2005 Plan

     
The Board or the Committee has the right and power to amend the
2005 Plan, provided, however, that neither the Board nor the
Committee may amend the 2005 Plan in a manner which would impair
or adversely affect the rights of the holder of a Benefit
without the holder’s consent. No material amendment of the
Plan shall be made without stockholder approval.

Termination of the 2005 Plan

     
The Board may terminate the 2005 Plan at any time. Termination
will not in any manner impair or adversely affect any Benefit
outstanding at the time of termination. No award shall be made
more than ten years after the adoption of the Plan by the Board
of Directors.

Committee’s Right to Modify Benefits

     
Any Benefit granted may be modified, forfeited, or canceled, in
whole or in part, by the Committee if and to the extent
permitted in the 2005 Plan, or applicable agreement entered into
in connection with a Benefit grant or with the consent of the
Participant to whom such Benefit was granted. The Committee may
grant Benefits on terms and conditions different than those
specified in the 2005 Plan to comply with the laws and
regulations of any foreign jurisdiction, or to make the Benefits
more effective under such laws and regulations.

 

     
The Committee may require a Participant to have amounts or
shares of Common Stock that otherwise would be paid or delivered
to the Participant as a result of the exercise or settlement of
an award under the 2005 Plan credited to a deferred compensation
or stock unit account established for the Participant by the
Committee on the Company’s books of account.

     
Neither the Board nor the Committee may cancel any outstanding
Stock Option for the purpose of reissuing the option to the
Participant at a lower exercise price, or reduce the option
price of an outstanding option.

Change in Control

     
Except as otherwise determined by the Committee at the time of
grant of an award, upon a Change in Control of the Company, all
performance goals shall be deemed achieved at target levels and
all other terms and conditions met; all outstanding Stock
Options and SARs shall become vested and exercisable; all
restrictions on Restricted Stock and Restricted Stock Units
shall lapse; all Performance Stock shall be delivered; all
Performance Cash Awards and Restricted Stock Units shall be paid
out as promptly as practicable; all Annual Management Incentive
Awards shall be paid out based on the consolidated operating
earnings of the immediately preceding year or such other method
of payment as may be determined by the Committee at the time of
award or thereafter but prior to the Change in Control; and all
Other Stock or Cash Awards shall be delivered or paid.

     
A “Change in Control” shall mean: (i) the sale or
disposition by the Company of all or substantially all of the
assets of the Company (or any transaction having a similar
effect); (ii) the consummation of a merger or consolidation
of the Company with any other entity other than (A) a
merger or consolidation which would result in the voting
interests of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by
being converted into voting interests of the surviving entity)
at least 50% of the combined voting power of the voting
interests of the Company or such surviving entity outstanding
immediately after such merger or consolidation, or (B) a
merger or consolidation effected to implement a recapitalization
of the Company (or similar transaction); or (iii) the
acquisition, other than from the Company, by any individual,
entity or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Exchange Act), of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange
Act) of 25% or more of the then outstanding voting interests of
the Company but excluding, for this purpose, any such
acquisition by the Company or any of its affiliates, or by any
employee benefit plan (or related trust) of the Company or any
of its affiliates.

Adjustments

     
In the event of any change affecting the shares of Common Stock
by reason of stock dividend, stock split, reverse stock split,
spin-off, recapitalization, merger, consolidation,
reorganization, share combination, exchange of shares, stock
rights offering, liquidation, extraordinary cash dividend,
disaffiliation of a subsidiary or similar event, the Committee
shall make such adjustments (if any) as it deems appropriate and
equitable, in its discretion, to outstanding awards to reflect
such event, including without limitation, (1) adjustments
in the aggregate number or class of shares which may be
distributed under the Plan, the maximum number of shares which
may be made subject to an award in any calendar year and in the
number, class and option price or other price of shares subject
to the outstanding awards granted under the Plan, (2) the
substitution of other property (including, without limitation,
other securities) for the stock covered by outstanding awards,
and (3) in connection with any disaffiliation of a
subsidiary, arrangement for the assumption, or replacement with
new awards, of awards held by Participants employed by the
affected subsidiary by the entity that controls the subsidiary
following the disaffiliation.

     
In the event of any merger, consolidation, or reorganization of
the Company with or into another corporation which results in
the Company’s outstanding securities being converted into
or exchanged for different securities, cash, or other property,
there shall be substituted on an equitable basis as determined
by the Committee, for each share of common stock subject to a
Benefit, the number and kind of shares of stock,

 

other securities, cash, or other property to which holders of
Common Stock of the Company are entitled pursuant to the
transaction.

Substitution and Assumption of Benefits

     
Either the Board or the Committee may authorize the issuance of
Benefits in connection with the assumption of, or substitution
for, outstanding benefits previously granted to individuals who
become employees of the Company or any subsidiary as the result
of any merger, consolidation, acquisition of property or stock,
or reorganization other than a Change in Control, upon such
terms and conditions as it deems appropriate.

Reusage

     
If a Stock Option granted under the 2005 Plan expires or is
terminated, surrendered or canceled without having been fully
exercised, if Restricted Stock is forfeited, or if Restricted
Stock Units, Performance Shares or SARs are forfeited or
terminated without the issuance of all of the shares subject
thereto, the shares covered by such Benefits will again be
available for use under the 2005 Plan. Shares covered by a
Benefit granted under the 2005 Plan would not be counted as used
unless and until they are actually issued and delivered to a
Participant. Any Shares covered by a SAR shall be counted as
used only to the extent Shares are actually issued to the
Participant upon exercise of the SAR. Shares covered by a
Benefit granted under the 2005 Plan that is settled in cash will
not be counted as used.

Federal Income Tax Consequences

     
The Company has been advised by counsel that the federal income
tax consequences as they relate to Benefits are as follows:

ISOs

     
An optionee does not generally recognize taxable income upon the
grant or upon the exercise of an ISO. Upon the sale of ISO
shares, the Optionee recognizes income in an amount equal to the
difference, if any, between the exercise price of the ISO shares
and the fair market value of those shares on the date of sale.
The income is taxed at long-term capital gains rates if the
Optionee has not disposed of the stock within two years after
the date of the grant of the ISO and has held the shares for at
least one year after the date of exercise and the Company is not
entitled to a federal income tax deduction. The holding period
requirements are waived when an Optionee dies.

     
The exercise of an ISO may in some cases trigger liability for
the alternative minimum tax.

     
If an Optionee sells ISO shares before having held them for at
least one year after the date of exercise and two years after
the date of grant, the Optionee recognizes ordinary income to
the extent of the lesser of: (i) the gain realized upon the
sale, or (ii) the difference between the exercise price and
the fair market value of the shares on the date of exercise. Any
additional gain is treated as long-term or short-term capital
gain depending upon how long the Optionee has held the ISO
shares prior to disposition. In the year of disposition, the
Company receives a federal income tax deduction in an amount
equal to the ordinary income which the Optionee recognizes as a
result of the disposition.

NSOs

     
An Optionee does not recognize taxable income upon the grant of
an NSO. Upon the exercise of such a Stock Option, the Optionee
recognizes ordinary income to the extent the fair market value
of the shares received upon exercise of the NSO on the date of
exercise exceeds the exercise price. The Company receives an
income tax deduction in an amount equal to the ordinary income
that the Optionee recognizes upon the exercise of the Stock
Option.

 

Restricted Stock

     
A Participant who receives an award of Restricted Stock does not
generally recognize taxable income at the time of the award.
Instead, the Participant recognizes ordinary income in the first
taxable year in which his or her interest in the shares becomes
either: (i) freely transferable, or (ii) no longer
subject to substantial risk of forfeiture. The amount of taxable
income is equal to the fair market value of the shares.

     
A Participant may elect to recognize the income at the time he
or she receives Restricted Stock in an amount equal to the fair
market value of the Restricted Stock (less any cash paid for the
shares) on the date of the award.

     
The Company receives a compensation expense deduction in an
amount equal to the ordinary income recognized by the
Participant in the taxable year in which restrictions lapse (or
in the taxable year of the award if, at that time, the
Participant had filed a timely election to accelerate
recognition of income).

Other Benefits

     
In the case of an exercise of an SAR or an award of Restricted
Stock Units, Performance Stock, Performance Units, or Common
Stock or cash, the Participant will generally recognize ordinary
income in an amount equal to any cash received and the fair
market value of any shares received on the date of payment or
delivery. In that taxable year, the Company will receive a
federal income tax deduction in an amount equal to the ordinary
income which the Participant has recognized.

Million Dollar Deduction Limit

     
Under Section 162(m) of the Internal Revenue Code, the
Company may not deduct compensation of more than $1,000,000 that
is paid to an individual who, on the last day of the taxable
year, is either the Company’s chief executive officer or is
one of the four other most highly-compensated officers for that
taxable year as reported in the Company’s proxy statement.
The limitation on deductions does not apply to certain types of
compensation, including qualified performance-based
compensation. The Company believes that Benefits in the form of
Stock Options, Performance Stock, Performance Cash Awards, SARs,
performance-based Restricted Stock and Restricted Stock Units
and cash payments under Management Incentive Awards under the
2005 Plan constitute qualified performance-based compensation
and, as such, will be exempt from the $1,000,000 limitation on
deductible compensation.

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