Document:

exv10w4

EXHIBIT 10.4

Insurance Letters of Credit — Master Agreement

Form 3/CEP

AGREEMENT DATED 30 June 2011

BETWEEN:

	(1)	 	PLATINUM UNDERWRITERS REINSURANCE, INC. (“Platinum America”);
	 
	 	 	AND
	 
	(2)	 	PLATINUM UNDERWRITERS BERMUDA, LTD. (“Platinum Bermuda”);
	 
	 	 	AND
	 
	(3)	 	CITIBANK EUROPE PLC (“CEP”) whose offices and registered address are at 1 North Wall Quay,
I.F.S.C., Dublin 1, Ireland

PREAMBLE

Subject to the satisfaction by Platinum America and Platinum Bermuda (each a “Company” and together
the “Companies”) of the terms and conditions contained in this Agreement, CEP agrees to establish
letters of credit (each a “Credit” and collectively the “Credits”) on behalf of each Company in
favour of beneficiaries located in the United States of America or elsewhere (the “Beneficiary” or
“Beneficiaries” as relevant). In furtherance of this Agreement, the parties have separately agreed
the contractual or security arrangements that will apply in respect of each Company’s obligations
under or pursuant to this Agreement.

	1.	 	AGREEMENT
	 
	 	 	It is agreed between us in relation to each Credit that:-

	 	1.1	 	in order to establish a Credit, the Company is required to submit an application form
to CEP (the “Application Form”). The Application Form must (a) be in the form set out in
Schedule Two or in such other form as CEP is willing to accept (acting reasonably) for
this purpose; Application Forms may be sent by letter, facsimile, Citidirect or via any
other electronic system(s) or transmission arrangement(s) agreed between the parties; (b)
be completed by or on behalf of the Company in accordance with the terms of the Company’s
banking mandate(s) or other authorities lodged with CEP or as otherwise agreed in writing
between the Company and CEP; and (c) indicate therein the name of the Beneficiary and the
amount, currency and term of the Credit required. Upon receipt of an Application Form
that satisfies the above criteria, CEP shall, within five Business Days, establish on
behalf of the Company an irrevocable clean sight Credit (or such other form of Credit as
may be required by the Application Form relating thereto) available, in whole or in part,
by the Beneficiary’s sight draft (the Company hereby agreeing that CEP may accept as a
valid “sight draft” any written or electronic demand or other request for payment under
the Credit, even if such demand or other request is not in the form of a negotiable
instrument) on CEP or otherwise as may be required by the terms of the Credit; provided,
however, that:

	 	(i)	 	subject to the terms of the committed facility letter dated on or about
the date hereof between CEP, Platinum Underwriters Holdings, Ltd. and the Companies
(the “Facility Letter”), the opening of any Credit hereunder shall, in every
instance, be at CEP’s option and nothing herein shall be construed as obliging CEP
to open any Credit; and

 

 

	 	(ii)	 	prior to the establishment of any Credit or in order to maintain a Credit
the Company undertakes to pledge sufficient collateral in accordance with the terms
of the pledge agreement dated on or about the date hereof (the “Pledge Agreement”)
between the Company and CEP, to ensure that the Company will be in compliance with
the Pledge Agreement, in particular Clause 6(h) thereof, once the Credit is
established.

	 	 	 	(In relation to any Credit, the bank or other financial institution that issued such
Credit shall be referred to as the “Issuing Bank”.)
	 
	 	1.2	 	Each Company undertakes to reimburse CEP, on demand, the amount of any and all
drawings (including, for the avoidance of doubt, drawings presented electronically) under
each Credit established on behalf that Company.

	 	1.3	(a)	 Each Company undertakes to indemnify CEP, on demand, for and against all actions,
proceedings, losses, damages, charges, costs, expenses, claims and demands, in all cases
documented and reasonable, which CEP may incur, pay or sustain in connection with any
Credit established on behalf of that Company howsoever arising (unless resulting from
CEP’s bad faith, gross negligence or wilful misconduct or that of the Issuing Bank).
	 
	 	 	(b)	Each Company undertakes to indemnify CEP, on demand, for and against all
actions, proceedings, losses, damages, charges, costs, expenses, claims and demands,
in all cases documented and reasonable (together referred to as the “Indemnified
Losses”), which CEP may incur, pay or sustain in connection with this Agreement,
howsoever arising (unless resulting from CEP’s bad faith, gross negligence or wilful
misconduct or that of the Issuing Bank). If in relation to an Indemnified Loss it
is possible to determine that one Company was wholly responsible for causing that
Indemnified Loss, that Company shall indemnify CEP in full for that Indemnified Loss
and that Indemnified Loss shall fall outside the other Company’s indemnity. In all
other cases, the Companies shall be jointly and severally liable for the Indemnified
Loss.

	 	1.4	 	Each Company undertakes to pay CEP, on demand, such fees and/or commissions of such
amount(s) and/or at such rate(s) as shall have been advised by CEP in the Fee Letter
between the Companies and CEP as payable by such Company in connection with each Credit
established on behalf of that Company;
	 
	 	1.5	 	Each Company hereby irrevocably authorises CEP to make any payments and comply with
any demands which may be claimed from or made upon CEP in connection with any Credit
established on behalf of that Company in accordance with the terms thereof and without any
reference to, or further authority from, the Company provided that such demands comply, in
CEP’s judgment (acting in good faith), with the terms of that Credit. Each Company hereby
agrees that it shall not be incumbent upon CEP to enquire or take notice of whether or not
any such payments or demands claimed from or made upon CEP in connection with that Credit
are properly made (subject to CEP’s obligation to act in good faith in determining whether
such demands comply with the terms of that Credit) or whether any dispute exists between
the Company and the Beneficiary thereof. Each Company further agrees that any payment CEP
makes in accordance with the terms and conditions of each Credit established on behalf of
that Company shall (in the absence of CEP’s or the Issuing Bank’s bad faith, gross
negligence or wilful misconduct) be binding upon the Company and shall be accepted by the
Company, but only as between the Company and CEP, as conclusive evidence that CEP was
liable to make such payment or comply with such demand.
	 
	 	1.6	 	Each Credit will be in a form acceptable to the Beneficiary.

	2.	 	REPRESENTATIONS AND WARRANTIES

	 	2.1	 	Each Company represents and warrants to CEP and undertakes that:-

	 	(i)	 	it has and will at all times have the necessary power to enable it to
enter into and perform the obligations expressed to be assumed by it under this
Agreement;
	 
	 	(ii)	 	the Agreement constitutes its legal, valid, binding and enforceable
obligation effective in accordance with its terms subject to (i) the effect
of any applicable bankruptcy, insolvency, reorganisation, moratorium or similar law
affecting creditors’ rights generally, and (ii) the effect of general principles of
equity (regardless of whether such enforceability is considered in a proceeding in
equity or law); and

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	 	(iii)	 	all necessary authorisations to enable or entitle it to enter into this
Agreement have been obtained and are in full force and effect and will remain in
such force and effect at all times during the subsistence of this Agreement;

	 	2.2	 	Each Company represents and warrants to CEP that:-

	 	(i)	 	it is not unable to pay its debts as they fall due;
	 
	 	(ii)	 	it has not been deemed or declared to be unable to pay its debts under
any applicable law;
	 
	 	(iii)	 	it has not suspended making payments on any of its debts;
	 
	 	(iv)	 	it has not, by reason of actual or anticipated financial difficulties,
commenced negotiations with any of its creditors with a view to rescheduling any of
its indebtedness;
	 
	 	(v)	 	the value of its assets is not less than its liabilities (taking into
account contingent and prospective liabilities);
	 
	 	(vi)	 	no moratorium has been declared in respect of any of its indebtedness;
and
	 
	 	(vii)	 	no analogous or similar event or concept to those set out in this Clause
2.2 has occurred or is the case under the laws of any jurisdiction.

	3.	 	EXTENSION/TERMINATION

	 	3.1	(a)	Any Credit established hereunder shall, if requested by the Company on the
relevant Application Form and subject to CEP’s consent, bear a clause to the effect that
it will automatically be extended for successive periods of one year (or such other period
as may be stated in the relevant Application Form) UNLESS the Beneficiary has received
from the Issuing Bank by registered mail (or other appropriate receipted delivery)
notification of intention not to renew such Credit at least 30 days (or such other period
as may be stated in the relevant Application Form) prior to the end of the original term
or, as the case may be, of a period of extension (the “Notice Period”).
	 
	 		(b)	The Issuing Bank shall be under no obligation to the Company to send the
Beneficiary such notification (and without such notification to the Beneficiary the
Credit will be automatically extended as provided above) UNLESS Company shall have
sent notification to CEP by registered mail (or other means acceptable to CEP) of
its election not to renew such Credit at least 30 days prior to the commencement of
the Notice Period.
	 
	 		(c)	CEP reserves the right, at its sole option and discretion, to give or
procure the giving at any time to the Beneficiary of notification of intention not
to renew any Credit. If CEP exercises such said right, it will give the Company
notice in writing thereof as soon as is reasonably possible.

	4.	 	UCC/ISP
	 
	 	 	CEP may, at its sole option, arrange for the issuance of any Credit as being subject to either
(i) the Uniform Customs and Practice for Documentary Credits (2007 Revision) ICC Publication
No. 600 (the “UCP”) or (ii) the International Chamber of Commerce Publication No. 590 — the
International Standby Practices 1998 (the “ISP”), (or any subsequent version of either);
provided however that CEP may agree such modifications thereof as may be required by any
regulatory or other authority having jurisdiction as to the acceptability of the Credit in
question.
	 
	5.	 	PREVIOUS AGREEMENTS

	 	5.1	 	Unless otherwise agreed between CEP and the Companies in writing, the previous
agreement(s) (if any) entered into between either Company and CEP (other than those at any
time governed by a “Master Agreement — London Market Letter of Credit Scheme” or
substantially equivalent agreement) governing Credits established by CEP on that Company’s
behalf in favour of Beneficiaries shall, on due execution by the parties of this
Agreement, cease to apply to all such Credits, which Credits shall henceforth be governed
by this Agreement, save that any such previous agreement which relates to the First
Existing Credit (as defined in the Facility Letter) and the Second Existing Credit (as
defined in the Facility Letter) or pursuant to which such First Existing Credit or the
Second Existing Credit were

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	 	 	 	issued shall not cease to apply unless and until paragraphs 13.9 and 13.10 of the
Facility Letter come into effect as contemplated by paragraph 13.11 of the Facility
Letter, whereupon such First Existing Credit or the Second Existing Credit shall
henceforth be governed by this Agreement.

	 	5.2	 	For the avoidance of doubt any letter or letters of credit or similar or equivalent
instrument or instruments (the “Existing Credit(s)”) which has or have been established or
opened pursuant to the terms of any previous agreement(s) entered into between either
Company and Citibank, N.A. governing the Existing Credits (including any security
arrangements that apply in respect of any obligation under or pursuant to such previous
agreement(s)) (the “Existing Agreement(s)”) shall continue in force until cancelled. The
Existing Agreement(s) shall continue to apply to the Existing Credit(s) until all the
Existing Credit(s) have been cancelled. Each Company undertakes, on CEP’s request, to
take all reasonable steps to procure that any cancelled Existing Credit(s) are destroyed
or returned to the Issuing Bank.

	6.	 	CREDIT CHOICE OF LAW
	 
	 	 	If, at a Company’s request, a Credit expressly chooses a state or country law other than New
York, U.S.A. or English law, or is silent with respect to the UCP, the ISP or a governing law,
CEP shall not be liable for any payment, cost, expense or loss resulting from any action or
inaction it takes provided such action or inaction is justified in the circumstances under UCP,
ISP, New York law, English law or the law governing the Credit.
	 
	7.	 	BRANCHES/CORRESPONDENT BANKS

	 	7.1	 	Each Company acknowledges that CEP may carry out any of its obligations or exercise
any of its rights under this Agreement through any of its offices or branches, wheresoever
situated.
	 
	 	7.2	 	Each Company further understands that CEP reserves the right to issue any Credit
through any third party correspondent of its choice and/or to have any Credit confirmed by
Citibank, N.A., and CEP shall be entitled to do so provided the obligations and liability
of the Company are no greater than they would have been if the Credit had not been issued
through such third party correspondent or confirmed by Citibank, N.A., save as may
otherwise be agreed between the parties from time to time. In such circumstances, CEP
will be required to guarantee reimbursement to such correspondent and/or Citibank, N.A. of
any payments which such correspondent and/or Citibank, N.A. may make under the Credit in
question and such guarantee (howsoever described) shall be treated mutatis mutandis as a
Credit for the purpose of this Agreement.

	8.	 	INCREASES ETC/REINSTATEMENTS
	 
	 	 	The provisions of the foregoing Clauses shall be equally applicable to any increase, extension,
renewal, partial renewal, modification or amendment of, or substitute instrument for, any
Credit to which they apply. If for any reason any amount paid under any Credit is repaid, in
whole or in part, by the Beneficiary thereof, CEP may, in its sole discretion, treat (or
procure the treatment of) such repayment as a reinstatement of an amount (equal to such
repayment) under such Credit. The value date CEP applies to any such reinstatement shall not
be earlier than the date of such repayment and CEP shall not be liable for losses of any nature
which either Company may suffer or incur and/or which may arise from any inadvertent or
erroneous drawing except to the extent arising out of the bad faith, gross negligence or wilful
misconduct of CEP or the Issuing Bank.
	 
	9.	 	NOTICES

	 	9.1	 	Any notice or demand to be served on either Company by CEP hereunder may be served
by:

	 	(i)	 	facsimile to each of the facsimile numbers for the relevant Company specified in
Schedule Three;

	 		 	or

	 	(ii)	 	registered or certified letter to each of the addresses for the relevant Company
listed in Schedule Three,

	 	 	 	in each case marked for the attention of the relevant addressees listed in Schedule Three
and such notice or demand shall only be deemed served upon deemed service of the
follow-up facsimile or letter in accordance with Clause 9.3.

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	 	9.2	 	Unless otherwise stated, any notice or demand to be served on CEP by either Company
hereunder must be served either at CEP’s address as stated above (or such other address as
CEP may notify the Companies of from time to time on at least five Business Days’ notice)
or by facsimile to facsimile number +353 1 247 6389 or such other facsimile number as CEP
may notify the Companies of from time to time on at least five Business Days’ notice.
	 
	 	9.3	 	Any notice or demand:-

	 	(a)	 	sent by post to any address in the Republic of Ireland or the United
Kingdom shall be deemed to have been served on the relevant party at 10am. (London
time) on the first Business Day after the date of posting (in the case of an address
in the Republic of Ireland) and on the second Business Day after posting (in the
case of an address in the United Kingdom) or, in the case of an address outside the
Republic of Ireland or the United Kingdom (or a notice or demand to CEP), shall be
deemed to have been served on the relevant party at 10am. (London time) on the third
Business Day after and exclusive of the date of posting; or
	 
	 	(b)	 	sent by facsimile shall be deemed to have been served on the relevant
party when dispatched.

	 	9.4	 	In proving service by post it shall be sufficient to show that the letter containing
the notice or demand was properly addressed and posted (by registered or certified letter
where applicable) and such proof of service shall be effective notwithstanding that the
letter was in fact not delivered or was returned undelivered.
	 
	 	9.5	 	In this Agreement, “Business Day” shall be construed as a reference to a day (other
than a Saturday or a Sunday) on which banks are generally open in London, and, when used
with reference to serving notices or demands on a Company, shall include Bermuda and New
York.

	10.	 	ASSIGNMENT/NOVATION

	 	10.1	 	CEP has a full and unfettered right (a) to assign or otherwise dispose of the whole
or any part of its rights and/or benefits under this Agreement or (b) (subject to Clauses
10.2 to 10.5) to novate its rights and obligations under this Agreement. The words “CEP”
and “CEP’s” wherever used in Clauses 10.2 to 10.5 shall be deemed to include CEP’s
permitted assignees and permitted novatees and other successors, whether immediate or
derivative, who shall be entitled to enforce and proceed upon this Agreement in the same
manner as if named herein. CEP shall be entitled to impart any information concerning the
Companies to any such permitted assignee, permitted novatee or other successor or any
participant or proposed permitted assignee, permitted novatee, successor or participant
provided such proposed permitted assignee, permitted novatee, successor or participant has
agreed not to disclose such information except to a professional adviser that is bound by
a duty of confidentiality.
	 
	 	10.2	 	The person who is for the time being liable to perform CEP’s obligations under this
Agreement (a “Transferring Bank”) shall be entitled to novate at any time, upon service of
a notice on both Companies in the form attached as Schedule One to this Agreement (a
“Novation Notice”), any or all of its rights and obligations under, and the benefit of,
this Agreement to any Permitted Transferee. With effect from the date on which a Novation
Notice is executed by the Transferring Bank and the Permitted Transferee and served on
both Companies (the “Novation Date”), the provisions of Clause 10.3 shall have effect (but
not otherwise).
	 
	 	10.3	 	With effect from (and subject to the occurrence of) the Novation Date:

	 	10.3.1	 	the Permitted Transferee shall be bound by the terms of this Agreement (as
novated) in every way as if the Permitted Transferee was and had been a party hereto
in place of the Transferring Bank and the Permitted Transferee shall undertake and
perform and discharge all of CEP’s obligations and liabilities under this Agreement
(as novated) whether the same fell or fall to be performed or arose or arise on,
before or after the Novation Date;
	 
	 	10.3.2	 	each Company shall release and discharge the Transferring Bank from further
performance of its obligations arising in favour of that Company on and after the
Novation Date under this Agreement and all claims and demands whatsoever in
respect thereof against the Transferring Bank, and each Company shall accept
the liability of the Permitted Transferee in respect of such obligations in
place of the liability of the Transferring Bank;
	 
	 	10.3.3	 	the Transferring Bank shall release and discharge each Company from further
performance of its obligations arising in favour of the Transferring Bank on and
after the Novation Date under

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	 	 	 	this Agreement and all claims and demands whatsoever in respect thereof by the
Transferring Bank; and
	 
	 	10.3.4	 	each Company shall be bound by the terms of this Agreement (as novated) in every
way, and it shall undertake and perform and discharge in favour of the Permitted
Transferee each of its obligations whether the same fell or fall to be performed or
arose or arise on, before or after the Novation Date and expressed to be owed to
CEP.

	 	10.4	 	Without prejudice to the automatic novation of the Transferring Bank’s rights and
obligations pursuant to Clause 10.3, each Company undertakes to sign and return promptly
each acknowledgement of the Novation Notice from time to time delivered to it promptly
following receipt of the same from the Transferring Bank.
	 
	 	10.5	 	For the purposes of this Clause 10 a “Permitted Transferee” shall mean any holding
company, subsidiary or affiliate of Citigroup Inc.

	11. 	 	SET-OFF 

	 	11.1 Without prejudice to any rights of set-off which may be available to CEP as a matter law,
contract or otherwise, CEP may set off any obligation of either Company under this Agreement or
in respect of any Credit established on behalf of that Company which is due and payable to CEP
against any obligation owed by CEP or Citibank, N.A. to that Company (including without
limitation in relation to any account held by that Company with CEP), regardless of the place
of payment, booking branch or currency of either obligation. If the obligations are in
different currencies, CEP may convert either obligation using CEP’s spot rate of exchange
prevailing for the relevant currencies in the London foreign exchange market at or about 11am
on the date of conversion for the purpose of the set-off.
	 
	 	11.2 Each Company hereby agrees that Citibank N.A. shall be entitled to rely on and action any
credit or debit made by CEP in accordance with Clause 11.1, save that Citibank, N.A. shall
not be entitled to exercise the foregoing right of set-off in relation to any account held by a
Company with Citibank, N.A. (excluding any account held with Citibank N.A. over which a
security interest is granted to CEP).

	12.	 	GOVERNING LAW/JURISDICTION
	 
	 	 	This Agreement and all non-contractual obligations arising hereunder shall be governed by
English law and, for CEP’s benefit, each Company hereby irrevocably submits to the jurisdiction
of the English Courts in respect of any dispute which may arise from or in connection with this
Agreement. The terms of this Agreement may not be modified or amended unless such modification
or amendment is in writing and signed by CEP and both Companies. The rights of CEP or the
Companies may only be waived in writing by CEP or the relevant Company (as applicable). A
Company may not assign any of its rights hereunder without CEP’s prior written consent.
	 
	13.	 	MISCELLANEOUS PROVISIONS

	 	13.1	 	Subject to this Clause and to Clause 11.2 a person who is not a party to this
Agreement has no rights under the Contracts (Rights of Third Parties) Act 1999 (the “Third
Parties Act”) to enforce any terms of this Agreement.
	 
	 	13.2	 	Citibank, N.A. may enforce the terms of Clause 11 subject to, and in accordance with,
this Clause 13.2 and Clause 12 and the provisions of the Third Parties Act.
	 
	 	13.3	 	The parties to this Agreement do not require the consent of Citibank, N.A. to rescind
or vary this Agreement at any time.
	 
	 	13.4	 	If Citibank, N.A. brings proceedings to enforce the terms of Clause 11 against either
Company, the relevant Company shall only have available to it by way of defence, set-off
or counterclaim a matter that would have been available by way of defence, set-off or
counterclaim if Citibank, N.A. had been party to this Agreement.
	 
	 	13.5	 	Citibank, N.A. may not take proceedings to enforce Clause 11 unless and until it
gives notice in writing to the relevant Company in any manner as is permitted by Clause 9,
agreeing irrevocably to the provisions of Clause 12.

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	 	13.6	 	Unless expressly provided herein to the contrary, the obligations and liabilities of
the Companies under this Agreement shall be several, and not joint.

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EXECUTED THIS DAY ABOVE WRITTEN BY:

	 	 	 	 	 
	 

	 
	PLATINUM UNDERWRITERS
REINSURANCE, INC.

/s/ N. Adriana Nivia, Senior Vice President, Chief Financial
Officer
and Treasurer

(Signature(s))
	 
	 	 	 
	Dated	  June
30, 2011 	 

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EXECUTED THIS DAY ABOVE WRITTEN BY:

	 	 	 	 	 
	 

	 
	PLATINUM UNDERWRITERS BERMUDA, LTD.

/s/ Gavin Collery, Senior Vice President, Chief Financial Officer
and Secretary

(Signature(s))

	 
	 	 	 
	Dated	 June
30, 2011	 
	 
	
 
(Signature(s))

	 
	 	 	 
	Dated	 	 

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EXECUTED THIS DAY ABOVE WRITTEN BY:

	 	 	 	 	 
	 

	 
	CITIGROUP EUROPE PLC

/s/ Phillip Arch, Vice President                            

(Signature(s))

	 
	 	 	 
	Dated	 June
30, 2011	 

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SCHEDULE ONE

Form of Novation Notice for Clause 10

To: [                    ]

Date:

Dear Sirs

Insurance Letters of Credit — Master Agreement (Form 3/CEP) dated 30 June 2011 and made between
Citibank Europe plc, Platinum Underwriters Reinsurance, Inc. and Platinum Underwriters Bermuda,
Ltd. (the “Agreement”)

We refer to Clause 10 of the Agreement. We hereby notify you that we wish to exercise our option
to novate under Clause 10 thereof so that with effect from today’s date the rights, liabilities and
obligations of [name of Transferring Bank] shall be novated to [name of Permitted Transferee] in
the manner set out in Clause 10 thereof.

The relevant address for the purposes of Clauses 3.1 and 9 is as follows:

[insert new address]

Yours faithfully

______________________________

for and on behalf of

[TRANSFERRING BANK]

______________________________

for and on behalf of

[PERMITTED TRANSFEREE]

[NAME OF COUNTERPARTY 1]:

	(1)	 	acknowledges receipt of the Novation Notice; and
	 
	(2)	 	agrees that with effect from the date of the Novation Notice the rights, liabilities and
obligations of [                    ] are novated to
[                    ] in the manner set
out in Clause 10 of the Agreement.

______________________________

for and on behalf of

[NAME OF COUNTERPARTY 1]

[NAME OF COUNTERPARTY 2]:

	(1)	 	acknowledges receipt of the Novation Notice; and
	 
	(2)	 	agrees that with effect from the date of the Novation Notice the rights, liabilities and
obligations of [                    ] are novated to
[                    ] in the manner set
out in Clause 10 of the Agreement.

______________________________

for and on behalf of

[NAME OF COUNTERPARTY 2]

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SCHEDULE TWO

Form of Application Form

	Page 1 of 2
FORM 4 (TO BE USED FOR NON-SCHEME LOC OPENINGS AND INCREASES ONLY)
HEADER DETAILS:
ILOC No.: ILOC Type:
For openings leave blank (Choose from dropdown box)
Effective date: Expiry date:
(DD/MM/YYYY) New / to be changed to (DD/MM/YYYY)
Advising period: Other advising period:
(Choose from dropdown box)
Evergreen clause: YES Other information:
NO
BENEFICIARY DETAILS:
Full Company Name:
Street Address:
City / Post Code: S t ate / Country:
For attention of:
INTERMEDIARY DETAILS: (to be completed if the Credit is to be sent to a party different to the addressee shown above)
Full Company Name:
Street Address:
City / Post Code: S t ate / Country:
For attention of:
TRANSACTION DETAILS:
Transaction Type: Currency:
(Choose from dropdown box)
Previous ILOC amount: (A)
Opening / Increase ILOC amount: (B)
New ILOC amount: (C)
(Complete boxes A, B and C when amending a credit. Complete only box C in case of a new credit)
SIGNATURES
Authorised Signatories only must sign form (as per Current Mandate/General Communications Indemnity and Master Reimbursement
Agreement lodged with Citibank). If signatures below do not appear on the mandate Citibank has on file, form will be rejected and transaction
will not be processed.
SIGNED FOR AND ON BEHALF OF THE COMPANY (PLEASE TYPE IN FULL COMPANY NAME)
TYPE FULL NAME AND SURNAME SIGNATURE TYPE DATE (DD/MM/YYYY)
TYPE FULL NAME AND SURNAME SIGNATURE TYPE DATE (DD/MM/YYYY)

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	Page 2 of 2
ACCOUNT DETAILS:
LOC a/c no.: Customer a/c no.:
Mendes & Mount: YES
NO
WORDING DETAILS:
Liquidator Wording: Comments:
(Choose from dropdown box)
Domicile:
Multi-beneficiary Indicator: YES NO (If yes is chosen, fill in multi-beneficiary details below)
Multi-beneficiary details:
1st Beneficiary name: Percentage:
2nd Beneficiary name: Percentage:
3rd Beneficiary name: Percentage:
Multi-beneficiary Wording:
(Choose from dropdown box)
Option A: Designate an agent to act on behalf of the beneficiaries listed:
CONTENT OF LC:
Beneficiary: [NAME OF AGENT] for and on behalf of: “A”, “B”,...
“All presentations, consents and instructions received from, and any action taken by, [NAME OF AGENT] shall bind each of the above-named
beneficiaries. Only [NAME OF AGENT] and no other beneficiary named above, shall present documents hereunder for payment or provide any
other consent or instruction hereunder.”
Option B: “A” or “B” (means either one or the other, but not both, is the beneficiary; only one or the other can draw and either one, alone, can
accept amendments or consent to revoke the credit):
CONTENT OF LC:
Beneficiary: “A” or “B”
“Any one of the above-named parties shall constitute the Beneficiary with respect to any presentation, amendment, or consent to revoke. The
above-named parties may not act simultaneously. Presentations, amendments and consents will be given effect in the order in which they are
received.”
Option C: “A” and/or “B” (means either one can act and bind both, or both can act simultaneously; if both draw simultaneously, payment must be
made either to a joint account or to an account(s) of one or more of the beneficiaries that are drawing; an acceptance of an amendment or
consent to revoke by either one binds both):
CONTENT OF LC:
Beneficiary: “A” and/or “B”
“Any drawing hereunder or other action taken in connection herewith by one or more of the Beneficiaries shall bind all the Beneficiaries.
Presentations, amendments and consents will be given effect in the order in which they are received. [Optional Clause: Payment under any
presentation made to more than one named beneficiary shall be made pro-rata to the presenting parties.]”
ORIGINAL FORM TO BE SENT TO:
ILOC DEPARTMENT, CITIBANK EUROPE PLC, 1 NORTH WALL QUAY, BLOCK A, 2ND FLOOR, DUBLIN 1, REPUBLIC OF IRELAND. IF
YOU HAVE ANY QUERIES WHILE FILLING IN THIS FORM, PLEASE CONTACT ILOC CUSTOMER SERVICES AT +353 1 622 55 70 OR BY
E-MAIL AT ILOC.CSU@CITI.COM
PLEASE NOTE THAT INCOMPLETE FORMS WILL BE RETURNED UNPROCESSED.
5 8
OTHER (fill comments box)

- 13 - 

 

SCHEDULE THREE

Notice Details

	 	 	 

	For notices or demands to Platinum Underwriters Bermuda, Ltd.
	 
	 	 
	Facsimile:

	 	(441) 295 4605
	Address:

	 	The Belvedere Building, 69 Pitts Bay Road, 2nd Floor, Pembroke, HM08, Bermuda
	FAO:

	 	Gavin P. Collery, Senior Vice President, Chief Financial Officer and Secretary
Roger M. Marshall, Vice President and Controller
Douglas J. Anthony, Assistant Vice President and Assistant Controller
	 
	 	 
	For notices or demands to Platinum Underwriters Reinsurance, Inc.
	 
	 	 
	Facsimile:

	 	(212) 238 9438
	Address:

	 	2 World Financial Center, 225 Liberty Street, Suite 2300, New York, NY 10281
	FAO:

	 	N. Adriana Nivia, Senior Vice President, Chief Financial Officer and Treasurer
Karen E. Kattan, Treasury Operations Officer

- 14 -exv10w3

Exhibit
10.3

AMENDED AND RESTATED EMPLOYMENT AGREEMENT

          THIS AMENDED AND RESTATED AGREEMENT is entered into, effective as of April 2, 2011 (the
“Effective Date”), by and between Apollo Group, Inc. (the “Company”), and Gregory W. Cappelli (the
“Executive”) (hereinafter collectively referred to as “the parties”).

          WHEREAS, the Company currently has in effect an employment agreement with the Executive dated
March 31, 2007 (and subsequently modified by two separate amendments) that has an initial term
scheduled to expire on April 1, 2011, subject to automatic
one–year renewals unless either the
Company or the Executive provides notice of non-renewal on a timely basis;

          WHEREAS, the Company has determined that it is in the best interests of the Company and its
shareholders to continue to employ the Executive upon the terms and conditions set forth herein for
an additional term ending August 31, 2014; and the Executive is willing to continue his employment
with the Company on such terms and conditions through August 31, 2014; and

          WHEREAS, the Company and the Executive desire to consolidate the Executive’s existing
employment agreement with the Company and the separate amendments to that agreement into a new
amended and restated agreement that effects the extension of the contract term and includes
additional modifications that will be in effect during the extended term.

          NOW, THEREFORE, in consideration of the foregoing and the respective agreements of the parties
contained herein, the parties hereby agree as follows:

     1. Term. The term of employment under this Amended and Restated Agreement will
commence on the Effective Date and continue through August 31, 2014 (the “Extended Term”);
provided, however, that thereafter this Amended and Restated Agreement will automatically be
renewed from year to year, unless either the Company or the Executive will have given written
notice to the other at least ninety (90) calendar days prior thereto that the term of this Amended
and Restated Agreement will not be so renewed (a “Notice of Non-Renewal”).

     2.
Employment.

       (a) Position.

          (i) The Executive will be employed as, and hold the title of, the Company’s Co-Chief Executive
Officer (“Co-CEO”). The Executive and the Company’s other Co-CEO shall have primary responsibility
for the implementation and execution of the Company’s strategic business plans and objectives as
approved from time to time by the Company’s Board of Directors (the “Board”). The Executive,
together with the Company’s other Co-CEO, shall have the authority and responsibilities of the
position of
Chief Executive Officer (“CEO”) as allocated between them in the attached Exhibit 1. The
authority and responsibilities contained in Exhibit 1 may be altered by the Board from time to time
if in its reasonable judgment the change is necessary to assure a proper and effective
organizational allocation of duties and responsibilities of the CEO position between the Co-CEOs;
provided, however, that any such subsequent change in the duties and responsibilities of the
Executive, without his consent, that results in a material reduction of his duties and
responsibilities shall constitute grounds for a Good Reason termination. The Executive shall also
have such additional duties and responsibilities as directed and approved from time to time by the
Board. The Executive shall have the responsibility and duty to work with and coordinate with the
Company’s other Co-CEO. The Executive shall report directly to

 

 

the Board and shall have all the authority needed to perform the duties and undertake the
responsibilities of his position. The Executive will be a member of the Board Chairman’s Cabinet
and shall be involved in all the Company’s major strategic decisions relating to the scope of his
responsibilities. The Executive will have the authority to hire appropriate personnel as may be
needed to carry out his duties.

          (ii) Any disagreements between the Co-CEOs shall be resolved by the Executive Committee and that
Committee’s decision shall be final.

          (x) For purposes of this function of the Executive Committee, the Executive Committee shall be
chaired by John G. Sperling or, in his absence, by Peter V. Sperling, in each case for so long as
he is a member of the Board. In connection with all other business of the Executive Committee, the
Co-CEOs will generally share the chairmanship of the Committee with each Co-CEO chairing every
other regular meeting of the Committee.

          (y) The composition of the Executive Committee shall not be changed without the approval of the
Board and a majority of the then serving Executive Committee members. Any changes made to the
membership of the Executive Committee (other than as a result of a member ceasing employment with
the Company) without prior Board approval will automatically and immediately suspend the delegation
of the dispute resolution set forth herein, and the Board will resolve all management disputes
between the Co-CEOs until it has approved the membership of the Executive Committee.

               (iii) For so long as Executive is serving as a Co-CEO, Executive shall be deemed to be a Principal
Executive Officer for purposes of the Company’s filings with the Securities and Exchange
Commission, including periodic reports and other filings under the Securities Exchange Act of 1934,
as amended.

     (b) Board Membership. The Company acknowledges that the Executive currently serves as a member of
the Board. The Company shall, during the remainder of the Term, use its best efforts to have the
Executive nominated for election and re-election as a Board member at all meetings of the Company’s
Class B shareholders held during the Term at which Board members are to be elected.

     (c) Obligations. The Executive shall devote his full business time and attention to the business
and affairs of the Company. During the term of this Amended and Restated Agreement, the Executive
shall not engage in any other employment, service or consulting activity without the Board’s prior
written approval. The foregoing, however, shall not preclude the Executive from (i) serving on any
corporate, civic or charitable boards or committees on which he is serving on the Effective Date or
on which he commences service following the Effective Date with the Board’s prior written approval
or (ii) managing personal investments, so long as such clause (i) and (ii) activities do not
interfere with the performance of the Executive’s responsibilities hereunder.

     (d) Change in Co-CEO. If the Company’s other Co-CEO ceases to be employed by the Company as Co-CEO,
the Board may either appoint the Executive as the sole CEO of the
Company or may, in consultation with the Executive, appoint a replacement for the Company’s other
Co-CEO. If the Executive is not appointed the sole CEO, the Board will give the Executive written
notice of any tentative decision to appoint a specified individual as Co-CEO before announcement
and employment

2

 

of that new Co-CEO. The Executive shall have five (5) business days from receipt of such written
notice in which to submit his notice of termination. Said notice shall be effected in accordance
with Paragraphs 7(c) and 7(e) and shall be deemed a Notice of Termination for Good Reason for
purposes of Paragraph 8(b), but no Preliminary Notice of Good Reason or waiting period prior to the
effectiveness of such Notice of Termination shall be required under Paragraph 7(c) as a condition
to the effectiveness of such notice, and such termination shall accordingly be effective
immediately upon the Company’s receipt of the notice of termination. Failure of the Executive to
provide the above notice of termination within the applicable five (5) day period shall be deemed
an acceptance of the new Co-CEO, and thereafter the Executive will not have the right to assert
that the appointment of the new Co-CEO constitutes grounds for a Good Reason termination hereunder.
If Executive becomes the sole CEO, he shall continue to report directly to the Board, with such
duties, responsibilities and authorities as are commensurate with such position, and any allocation
of responsibilities set forth in attached Exhibit 1 shall cease to apply. The appointment of the
Executive as sole CEO shall not be considered Good Reason under Section 7.

     3.
Base Salary and Bonus.

       (a) Base Salary. As of the Effective Date, the Executive’s annual base salary shall be increased to
the annualized rate of $650,000 for the balance of the 2011 fiscal year. For each subsequent fiscal
year within the Extended Term, Executive’s annual base salary shall be increased as follows,
effective as of the September 1 start date of each such fiscal year:

	 	 	 	 	 
	Fiscal Year	 	Annual Base Salary	 
	September 1, 2011 to August 31, 2012
	 	$	700,000	 
	September 1, 2012 to August 31, 2013
	 	$	750,000	 
	September 1, 2013 to August 31, 2014
	 	$	800,000	 

          The Executive’s annual rate of base salary, as in effect from time to time during the Extended Term
in accordance with this Section 3(a), will be hereinafter referred to as the “Base Salary”. Such
Base Salary will be payable in accordance with the Company’s customary payroll practices applicable
to its executives and will be subject to the Company’s collection of all applicable withholding
taxes.

       (b) Bonus. For each fiscal year completed during the Extended Term, the Executive will be eligible
to receive an annual cash bonus (“Annual Bonus”) based upon individual and Company performance
goals that are established in good faith by the Compensation Committee (the “Compensation
Committee”) of the Board and that are reasonable in comparison to the individual and Company
performance goals the Compensation Committee sets for the Company’s other executive officers,
provided that the Executive’s target Annual Bonus will be no less than 100% of his Base Salary (the
“Target Bonus”). The Annual Bonus for each fiscal year shall be paid in accordance with the
Company’s customary payroll practices, but in no event later than the fifteenth day of the third
calendar month following the end of such fiscal year, and will be subject to the Company’s
collection of all applicable withholding taxes.

3

 

    4.
Equity Compensation Awards.

     (a) Initial Equity Awards. In connection with the Executive’s commencement of employment with the
Company in April 2007, Executive received a series of equity awards under the Company’s 2000 Stock
Incentive Plan, as amended and restated from time to time (the “Incentive Plan”). Nothing in this
Amended and Restated Agreement shall affect or in any way modify the terms and conditions in effect
for those initial equity awards.

     (b) Additional Equity Award. On January 18, 2011, the Executive also received an additional
restricted stock unit award covering 57,740 shares of Class A common stock. Nothing in this Amended
and Restated Agreement shall affect or in any way modify the terms and conditions in effect for
that additional restricted stock unit award.

     (c) New Multi-Year Equity Award. The Compensation Committee will authorize a multi-year equity
award for the Executive that will cover the Company’s 2012, 2013 and 2014 fiscal years (the
“Multi-Year Equity Award”), and there is no current expectation that any other equity awards shall
be made to the Executive during that period of coverage. Part of the Multi-Year Equity Award will
be made on or before April 14, 2011 (the “April 2011 Grants”) and will be allocated as follows:

          (i) a restricted stock unit component covering 248,000 shares of Class A common stock with a
performance-vesting condition tied to the Company’s net book income for the 2012 fiscal year that
will qualify such award as performance-based compensation for purposes of Section 162(m) of the
Internal Revenue Code of 1986, as amended (the “Code”), and

          (ii) a stock option component covering 235,000 shares of Class A common stock with an exercise
price per share equal to the closing price per share of Class A common stock on the grant date.

          The remainder of the Multi-Year Equity Award will have a grant-date fair value of $4.14 million and
will be made at the same time the annual awards for the Company’s other executive officers are made
for the 2012 fiscal year (June or July 2011), with such grant-date fair value to be applied on the
basis of the values of the underlying securities and Black-Scholes values on the actual grant date,
and will be allocated, in such percentages as to which the Compensation Committee and Mr. Cappelli
mutually agree prior to the award date, among one or more of the following components (the
“Mid-Year Grants”): (i) Apollo Group performance share units in the same form as made at that time
to the Company’s other executive officers, (ii) stock options covering shares of Apollo Group Class
A common stock, (iii) performance share units tied to the long-term performance of Apollo Global
and/or (iv) performance share units tied to the long-term performance of the Apollo Services entity
currently headed by Steve Giusto, with the applicable performance goals and multi-year performance
periods for these latter two components to be determined by mutual agreement of the Compensation
Committee and Mr. Cappelli prior to the award date.

     (d) Stub Period Equity Award. For the stub period between the Effective Date and the close of the
Company’s 2011 fiscal year, the Executive will be awarded restricted stock units under the
Incentive Plan covering 49,000 shares of Class A common stock (the “Stub Period Equity Award”). The
Stub Period Equity Award will be made at the same time the April 2011 Grants are made in accordance
with Section 4(c) above.

4

 

     (e) Special Retention Equity Award. The Executive will be awarded a special retention equity grant
under the Incentive Plan in the form of restricted stock units covering 38,000 shares of Class A
common stock (the “Special Retention Equity Award”). The Special Retention Equity Award will be
made at the same time the April 2011 Grants are made in accordance with Section 4(c) above.

     (f) Vesting of Multi-Year Equity Award. The following terms and provisions will govern the various
components of the Multi-Year Equity Award that is to be made to the Executive pursuant to Section
4(c) above:

          (i) The stock option component of the April 2011 Grants will vest in four (4) successive equal
annual installments over the Executive’s period of continued employment with the Company measured
from the effective date of that grant and will have a maximum term of six (6) years, subject to
earlier termination following the Executive’s termination of employment with the Company. Should
the Executive receive stock options in connection with the Mid-Year Grants, then twenty-five
percent (25%) of those stock options will vest and become exercisable on the one-year anniversary
of the effective date of the April 2011 Grants, and the balance will vest in no more than three (3)
successive equal annual installments measured from the one-year anniversary of the effective date
of the April 2011 Grants, provided the Executive continues in the Company’s employ through each of
those vesting dates. The stock options awarded in connection with the Mid-Year Grants will have a
maximum term of 6 years, subject to earlier termination following the Executive’s termination of
employment with the Company. However, should the Executive’s employment terminate by reason of (i)
an involuntary termination by the Company other than for Cause (as such term is defined in Section
7(b) below), (ii) a Notice of Non-Renewal provided by the Company, (iii) death or Disability (as
such term is defined in Section 7(d) below) or (iv) a resignation for Good Reason (as such term is
defined in Section 7(c) below) and the Executive execute and deliver (other than in connection with
a termination by reason of his death) the general release required in accordance with Section 8(b)
below, then the Executive shall, for purposes of vesting in any unvested portion of each stock
option component of the April 2011 Grants and the Mid-Year Grants, receive an additional twelve
(12) months of service-vesting credit. In addition, each stock option component of the April 2011
Grants and the Mid-Year Grants, to the extent vested and outstanding at the time of a clause (i),
(ii) or (iv) termination event, will remain exercisable for a twenty-four (24)-month period
measured from the date of that termination event, but in no event beyond the expiration of the
maximum six (6)-year option term. In the event of (i) Executive’s resignation other than for Good
Reason or (ii) the termination of his employment by reason of death or Disability, each such stock
option component of the April 2011 Grants and the Mid-Year Grants will remain exercisable until the
earlier of (i) the expiration of the twelve (12)-month period measured from the date of such
resignation or termination event or (ii) the expiration of the maximum six (6)-year option term.

5

 

               (ii) The restricted stock unit component will have a performance-vesting condition tied to the
Company’s net book income for the 2012 fiscal year that will be the same as the performance-vesting condition applicable to the restricted stock unit awards made to the Company’s other
executive officers for that fiscal year. Upon the satisfaction of the applicable performance
condition for the award, twenty-five percent (25%) of that award will vest on the last day of the
2012 fiscal year, provided the Executive continues in the Company’s employ through such date, with
the shares of the Company’s Class A common stock underlying that vested portion to be issued to the
Executive following the Compensation Committee’s certification of the attained performance
condition, but in no event later than the close of the calendar year in which the 2012 fiscal year
ends. The balance of the restricted stock units will vest, and the underlying shares concurrently
issued to the Executive, in three (3) successive equal annual installments over the three (3)-year
period measured from the first one-year anniversary of the effective date of the award, provided
the Executive continues in the Company’s employ through each such vesting date. However, should the
Executive’s employment terminate prior to the completion of the vesting schedule by reason of (i)
an involuntary termination by the Company other than for Cause, (ii) a Notice of Non-Renewal
provided by the Company, (iii) death or Disability or (iv) a resignation for Good Reason and the
Executive execute and deliver (other than in connection with a termination by reason of his death)
the required general release in accordance with Section 8(b), then the Executive shall, solely for
purposes of satisfying the service-vesting requirement of any unvested portion of the restricted
stock unit component, receive an additional service-vesting credit. The service-vesting credit will
be seventeen (17) months if the applicable termination event occurs before August 31, 2011 and
twelve (12) months if such termination event occurs on or after that date. In no event, however,
shall the Executive vest in any portion of such restricted stock unit component unless the
applicable performance goal is attained. The agreement evidencing such restricted stock unit
component shall contain such other terms and conditions as are necessary to bring the agreement
into compliance with the applicable requirements of Section 409A of the Code or any applicable Code
Section 409A exemption.

               (iii) Following the completion of the applicable multi-year performance period for each performance
share unit component of the Mid-Year Grants, the total number of shares of the Company’s Class A
common stock (if any) issuable under each such component will be determined on the basis of (i) the
levels at which the applicable performance goals have in fact been attained and (ii) the years of
service completed by the Executive during the applicable multi-year performance period. The number
of shares so calculated will be issued to the Executive following the Compensation Committee’s
certification of the level of performance goal attainment, but in no event later than the close of
the calendar year in which the performance period ends. However, should the Executive’s employment
terminate prior to the completion of the applicable performance
period by reason of (i) an
involuntary termination by the Company other than for Cause, (ii) a Notice of Non-Renewal provided
by the Company, (iii) death or Disability or (iv) a resignation for Good Reason and the Executive
execute and deliver (other than in connection with a termination by reason of his death) the
required general release in accordance with Section 8(b) below, then the Executive shall, solely
for purposes of satisfying the service-vesting requirement of any unvested performance share unit
component of his Mid-Year Grants, receive an additional service-vesting credit. The service-vesting
credit will be seventeen (17) months if the applicable termination event occurs before August 31,
2011 and twelve (12) months if such termination event occurs on or after that date. In no event,
however, shall the Executive vest in any such performance share unit component unless the
applicable performance goal or goals for that component are attained. The agreement evidencing such
performance share unit component shall contain such other terms and conditions as are necessary to
bring the agreement into compliance with the applicable requirements of Section 409A of the Code or
any applicable Code Section 409A exemption.

          (g) Vesting of Stub Period Equity Award. The following terms and provisions will govern the Stub
Period Equity Award that is to be made to the Executive pursuant to Section 4(d) above:

6

 

                    The restricted stock unit award shall have a performance-vesting condition tied to the Company’s
net book income for the 2012 fiscal year that will be the same as the performance-vesting condition
applicable to the restricted stock unit awards made to the Company’s other executive officers for
that fiscal year. Upon the satisfaction of the applicable performance condition for the award,
fifty percent (50%) of the award will vest on the last day of the 2012 fiscal year, provided the
Executive continues in the Company’s employ through such date, with the shares of the Company’s
Class A common stock underlying that vested portion to be issued following the Compensation
Committee’s certification of the attained performance condition, but in no event later than the
close of the calendar year in which the 2012 fiscal year ends. The balance of the restricted stock
units will vest, and the underlying shares concurrently issued, in two (2) successive equal annual
installments over the two (2)-year period measured from the first anniversary of the effective date
of the award, provided the Executive continues in the Company’s employ through each such vesting
date. However, should the Executive’s employment terminate prior to the completion of the vesting
schedule by reason of (i) an involuntary termination by the Company other than for Cause, (ii)
death or Disability or (iii) a resignation for Good Reason and the Executive execute and deliver
(other than in connection with a termination by reason of his death) the required general release
in accordance with Section 8(b) below, then the Executive shall, solely for purposes of satisfying
the service-vesting requirement of any unvested portion of such restricted stock unit award,
receive an additional service-vesting credit. The service-vesting credit will be seventeen (17)
months if the applicable termination event occurs before August 31, 2011 and twelve (12) months if
such termination event occurs on or after that date. In no event, however, shall the Executive vest
in any portion of such restricted stock unit award unless the applicable performance goal is
attained. The agreement evidencing such restricted stock unit award shall contain such other terms
and conditions as are necessary to bring the agreement into compliance with the applicable
requirements of Section 409A of the Code or any applicable Code Section 409A exemption.

          (h) Vesting of Special Retention Equity Award. The Special Retention Equity Award will vest in the
following increments over the Executive’s period of continued employment with the Company through
August 31, 2014: (i) twenty percent (20%) of the Special Retention Equity Award will vest on the
first anniversary of the grant date of that award, (ii) an additional forty percent (40%) will vest
on the second anniversary of such grant date, and (iii) the remaining forty percent (40%) of the
Special Retention Equity Award will vest on the third anniversary of such grant date, provided the
Executive continues in the Company’s employ through each such annual vesting date. However, should
the Executive’s employment terminate prior to the completion of such vesting schedule by reason of
(i) an involuntary termination by the Company other for Cause, (ii) death or Disability or (iii) a
resignation for Good Reason and the Executive execute and deliver (other than in connection with a
termination by reason of his death) the required general release in accordance with Section 8(b)
below, then the Executive shall, for purposes of satisfying the service-vesting requirement of the
Special Retention Equity Award, receive an additional twelve (12) months of service-vesting credit.

          (i) Issuance of Underlying Shares. The shares of Class A common stock that vest under the
restricted stock unit or performance share unit component of the Multi-Year Award, the restricted
stock unit component of the Stub Period Equity Award made to the
Executive pursuant to Section 4(d) or the restricted stock unit component of the Special Retention
Equity Award made to the Executive pursuant to Section 4(e) will be subject to the following
limitations on issuance:

               (i) No shares of Class A common stock subject to a performance-vesting condition will be issued
until the completion of the applicable performance period. Following the completion of the
performance period, there will be determined the maximum number of shares of Class A common stock
(if any) issuable under the award based on the levels at which the applicable performance goals
have in fact been attained and assuming the Executive had continued in the Company’s employ through
the completion of the applicable vesting schedule. Any shares of Class A common stock in which the

7

 

Executive is, upon the completion of the performance period, vested on the basis of the attained
level of the applicable performance goals and his satisfaction of the applicable service-vesting
requirements through that date shall be issued as soon as reasonably practicable following the
completion date of such performance period, but in no event later than the close of the calendar
year in which that performance period ends, unless a further delay in issuance is required pursuant
to Section 13(d) of this Amended and Restated Agreement. Should the Executive’s employment
terminate prior to the completion date of the applicable performance period under circumstances
entitling the Executive to a service-vesting credit under Section 4(f), Section 4(g), Section 4(h)
or Section 4(j) of this Amended and Restated Agreement, then any shares of Class A common stock in
which the Executive subsequently vests upon the attainment of the applicable performance goal or
goals and such service-vesting credit shall be issued to the Executive, provided he has satisfied
the applicable Required Release requirements of Section 8(b), as soon as reasonably practicable
after the completion date of the applicable performance period, but in no event later than the
later of the (A) the close of the calendar year in which such performance period ends or (B) the
fifteenth day of the third calendar month following such completion date, unless a further delay in
issuance is required pursuant to Section 13(d) of this Amended and Restated Agreement.

               (ii) Any shares of Class A common stock not otherwise at the time subject to a performance-vesting
condition in which the Executive vests by reason of the service-vesting credit provided under
Section 4(f), Section 4(g), Section 4(h) or Section 4(j) of this Amended and Restated Agreement in
connection with his termination of employment shall be issued on the third (3rd) business day,
within the sixty (60)-day period following the date of Executive’s Separation from Service due to
such termination, on which the Required Release under Section 8(b) is effective and enforceable
following the expiration of any applicable revocation period in effect for that Release. However,
should such sixty (60)-day period span two taxable years, then the issuance shall not be effected
until the end of such sixty (60)-day period, provided the Required Release is effective and
enforceable at that time. Should the service-vesting credit under Section 4(f), Section 4(g) or
Section 4(h) be provided in connection with the termination of the Executive’s employment by reason
of death, then any shares of Class A common stock that vest at the time of such termination by
reason of such credit shall be issued not later than the fifteenth day of the third calendar month
following the date of such termination, unless a further delay in issuance is required pursuant to
Section 13(d) of this Amended and Restated Employment Agreement.

               (iii) Should the Executive’s employment terminate prior to vesting in any of the shares of Class A
common stock (after taking into account the vesting acceleration provisions of this Amended and
Restated Agreement) or should the applicable performance goal or goals for the award not be
attained, then the Executive shall not be issued any shares of Class A common stock or other
consideration under such award.

               (iv) For purposes of Section 409A of the Code, each installment issuance of shares of the Company’s
Class A common stock to which the Executive may become entitled under the Multi-Year Equity Award,
the Stub-Period Equity Award or Special Retention Equity Award shall be treated as a right to a
separate payment. In no event shall the Required Release requirements of Section 8 provide the
Executive with right to determine the taxable year of the payments or issuances conditioned upon
that release.

          (j) Special Resignation Service-Vesting Credit. If the Executive provides notice to the Company at
least six (6) months before the end of the Extended Term that he intends to resign at the end of
the Extended Term and executes and delivers to the Company a general release in the form of the
Required Release upon his resignation date, then upon the effective date of such resignation, he
will receive a partial service-vesting credit with respect to each component of his Multi-Year
Equity Award that is otherwise unvested at the time of such resignation. Such vesting credit shall
be applied as if the

8

 

service-vesting condition for the annual installment of each such component of his Multi-Year
Equity Award in which his August 31, 2014 resignation date occurs were in the form of twelve (12)
successive equal monthly installments of continued employment with the Company and shall be in the
amount necessary to bring his service vesting within that installment period to a total of six (6)
months. Any shares of Class A common stock that vest on the basis of the service-vesting credit
provided under this Section 4(j) shall be issued in accordance with the applicable provisions of
Section 4(i) above. However, in no event will any such service-vesting credit result in the vesting
in whole or in part of any component of the Multi-Year Equity Award with performance-vesting
conditions if those conditions are not in fact satisfied.

          (k) Additional Provisions. Each of the equity awards to be made to the Executive in accordance with
the provisions of Sections 4(c), 4(d) and 4(e) above will be issued pursuant and subject to the
terms of the Incentive Plan and the award agreements evidencing those grants, except that in the
event of any conflict between the terms of the Incentive Plan or the award agreements and this
Amended and Restated Agreement, the terms of this Amended and Restatement Agreement will control.

          (1) Shares to Be Registered; Stock Certificates. All shares issued to the Executive pursuant to his
exercise of the stock options granted to him under the Incentive Plan and the vesting of the
restricted stock unit and performance share unit awards made to him under the Incentive Plan will
be registered under an appropriate and effective registration statement under the Securities Act of
1933, as amended (the “1933 Act”).

     5. Employee
Benefits. Provided he otherwise satisfies any applicable eligibility requirements for
participation, the Executive will be entitled to participate in the welfare, retirement, perquisite
and fringe benefit plans, practices, and programs maintained by the Company and made available to
senior executives generally and as may be in effect from time to time. The Executive’s
participation in any such plans, practices and programs for which he satisfies the applicable
eligibility requirements will be on the same basis and terms as are applicable to senior executives
of the Company generally.

     6. 
Other Benefits.

          (a) Expenses. Subject to applicable Company policies, including (without limitation) the timely
submission of appropriate documentation and expense reports, the Executive will be entitled to
receive prompt reimbursement of all expenses reasonably incurred by him in connection with the
performance of his duties hereunder or for promoting, pursuing, or otherwise furthering the
business or interests of the Company. Accordingly, the Executive shall submit appropriate evidence
of each such expense within sixty (60) days after the
later of (i) his incurrence of that expense
or (ii) his receipt of the invoice or billing statement for such expense, and the Company shall
provide the Executive with the requisite reimbursement within ten (10) business days thereafter;
provided, however, that (i) no expense shall be reimbursed later than the close of the calendar
year following the calendar year in which that expense is incurred, (ii) the amounts eligible for
reimbursement in any one calendar year shall not affect the amounts reimbursable in any other
calendar year and (iii) the right to such reimbursement may not be liquidated or exchanged for any
other benefit.

          (b) Office and Facilities. The Executive will be provided with appropriate offices in Chicago,
Illinois and with such secretarial and other support facilities as are
commensurate with the Executive’s status with the Company and adequate for the performance of his
duties hereunder.

          (c) Vacation. During the Term, the Executive will be eligible for paid vacation in accordance with
the Company’s policies, as may be in effect from time to time, for its senior

9

 

executives
generally; provided, however, that the Executive will be eligible for no less than four
weeks of paid vacation per year.

     7. 
Termination. Except for a Notice of Non-Renewal, as described in Section 1, the Executive’s
employment hereunder may only be terminated in accordance with the following terms and conditions:

          (a) Termination by the Company without Cause. The Company will be entitled to terminate the
Executive’s employment at any time by delivering a Notice of Termination to the Executive pursuant
to Section 7(e); provided, however, that any termination of the Executive’s employment for Cause
shall be governed by the provisions of Section 7(b).

          (b) Termination by the Company for Cause.

               (i) The Company may terminate the Executive’s employment hereunder for “Cause” (as defined below)
by delivering to him a Notice of Termination. For purposes of the foregoing, any of the following
shall constitute grounds for terminating the Executive’s employment for Cause: (A) the Executive’s
pleading “guilty” or “no contest” to, or his conviction of, a felony or any crime involving moral
turpitude, (B) his commission of any act of fraud or any act of personal dishonesty involving the
property or assets of the Company intended to result in substantial financial enrichment to the
Executive, (C) a material breach by the Executive of one or more of his obligations under Section 9
of this Agreement or under his Proprietary Information and Inventions Agreement with the Company,
(D) a material breach by the Executive of any of his other obligations under this Amended and
Restated Agreement or any other agreement with the Company, (E) the Executive’s commission of a
material violation of Company policy which would result in an employment termination if committed
by any other employee of the Company or his gross misconduct, (F) the Executive’s material
dereliction of the major duties, functions and responsibilities of his executive position (other
than a failure resulting from the Executive’s incapacity due to physical or mental illness), (G) a
material breach by the Executive of any of the Executive’s fiduciary obligations as an officer of
the Company or (H) the Executive’s willful and knowing participation in the preparation or release
of false or materially misleading financial statements relating to the Company’s operations and
financial condition or his willful and knowing submission of any false or erroneous certification
required of him under the Sarbanes-Oxley Act of 2002 or any securities exchange on which shares of
the Company’s Class A common stock are at the time listed for trading. However, prior to any
termination of the Executive’s employment for Cause based on any of the reasons specified in
clauses (C) through (F) and the delivery of a Notice of Termination in connection therewith, the
Company shall give written notice to the Executive of the actions or omissions deemed to constitute
the grounds for such a termination for Cause, and the Executive shall have a period of not less
than sixty (60) calendar days after the receipt of such notice in which to cure the specified
default in his performance and thereby avoid a Notice of Termination under this subsection (b)(i).

               (ii) In the event the Executive is provided with a Notice of Termination under subsection (b)(i),
the Notice of Termination shall specify a Termination Date that is no earlier than the third
business day, and no later than the thirtieth business day, following the date of the Notice of
Termination, and the Executive will have three (3) business days following the date of such Notice
of Termination to submit a written request to the Board for a meeting to review the circumstances
of his termination. If the Executive timely submits
such a written request to the Board, the Board or a committee of the Board shall set a meeting
whereby the Executive, together with his counsel, shall be permitted to present any mitigating
circumstances or other information as to why he should not be terminated for Cause, and the
Executive’s Termination Date shall be delayed until such meeting has occurred. Such meeting will be
held, at the Executive’s option, either on a mutually agreeable date prior to the Termination Date
specified in the Notice of Termination or on a mutually agreeable date within

10

 

fifteen (15) calendar days after his timely written notice to the Company requesting such a
meeting. Within five (5) business days after such meeting, the Board or committee of the Board, as
applicable, shall deliver written notice to the Executive of its final determination and, if the
termination decision is upheld, the final actual Termination Date. The specified Termination Date
shall in no event be more than ten (10) business days after the date of such meeting. During the
period following the date of the Notice of Termination until the Termination Date or other
resolution of the matter, the Company shall have the option to place the Executive on an unpaid
leave of absence. The rights under this subsection will not be deemed to prejudice the Executive’s
other rights and remedies in any way or give rise to any waiver, estoppel, or other defense or bar.
Without limiting the foregoing sentence and for purposes of clarification, the failure by the
Executive to request a meeting under this subsection, to participate in a meeting that has been
requested, or to present any evidence or argument will not prevent the Executive from making any
claim against the Company, from seeking any legal or equitable remedy, or from putting forward any
evidence or argument at any judicial or arbitral hearing.

          (c) Termination
by the Executive. The Executive may terminate his employment hereunder for “Good
Reason” by delivering to the Company (1) a Preliminary Notice of Good Reason (as defined below) no
later than one hundred and twenty (120) calendar days following the act or omission which the
Executive sets forth in such notice as grounds for a Good Reason termination, and (2) a Notice of
Termination no later than the third business day following the Company’s failure to take
appropriate remedial action within the applicable sixty (60)-day cure period provided below to the
Company following the receipt of such the Preliminary Notice. The Notice of Termination must
specify a Termination Date that is within sixty (60) days following the expiration of the
applicable sixty (60)-day cure period below in which the Company fails to take appropriate remedial
action. For purposes of this Amended and Restated Agreement, “Good Reason” means:

               (i) a material reduction in the scope of the Executive’s duties, responsibilities or authority;

               (ii) the repeated assignment to the Executive of duties materially inconsistent with the
Executive’s position, duties, authority or responsibilities, or a materially adverse change in
Executive’s reporting requirements as set forth in Section 2(a) hereof or an adverse change to his
title set forth in Section 2(a) hereof: provided, however, that none of the following shall
constitute Good Reason:
(A) the occasional assignment of duties that are inconsistent with Section 2(a) hereof or (B) a ten
percent (10%) or less aggregate reduction in the Executive’s Base Salary and Target Bonus if
substantially all of the other executive officers of the Company are subject to the same aggregate
reduction to their base salary and target bonuses;

               (iii) a relocation of the Executive’s principal place of employment other than in Chicago,
Illinois; provided, however that travel to other locations as reasonably required to carry out the
Executive’s duties and responsibilities hereunder and travel from time to time to the Company’s
headquarters in Phoenix. AZ as reasonably requested by the Company shall not be a basis for a
termination for Good Reason; or

               (iv) a material breach by the Company of any of its obligations under this Agreement.

          In no event will any acts or omissions of the Company which are cured within sixty (60) days after
receipt of written notice from the Executive identifying in reasonable detail the acts or omissions
constituting “Good Reason” (a “Preliminary Notice of Good Reason”) be deemed to constitute grounds
for a Good Reason resignation. A Preliminary Notice of Good Reason will not, by itself, constitute
a Notice of Termination.

11

 

          (d)
Termination due to the Executive’s Death or Disability. This Agreement will terminate
upon the death of the Executive. The Company may terminate the Executive’s employment hereunder if
he is unable to perform, with or without reasonable accommodation, the principal duties and
responsibilities of his position with the Company for a period of six (6) consecutive months or
more by reason of any physical or mental injury or impairment; provided, however, that in the event
the Executive is at the time covered under any long-term disability benefit program in effect for
the Company’s executive officers or employees, such termination of the Executive’s employment shall
not occur until the earlier of (i) the date he first becomes eligible to receive benefits under
such program or (ii) the date the Executive is deemed to have a Separation from Service (as defined
below) by reason of such disability. The termination of the Executive’s employment under such
circumstances shall, for purposes of this Agreement, constitute a termination for “Disability.”

          (e) Notice of Termination. Any purported termination for Cause by the Company or for Good Reason by
the Executive will be communicated by a written Notice of Termination to the other at least three
(3) business days prior to the Termination Date (as defined below). For purposes of this Amended
and Restated Agreement, a “Notice of Termination” will mean a notice which indicates the specific
termination provision in this Amended and Restated Agreement relied upon and will, with respect to
a termination for Cause or Good Reason, set forth in reasonable detail the facts and circumstances
claimed to provide a basis for such termination of the Executive’s employment under the provision
so indicated. Any termination by the Company under this Section 7 other than for Cause or by the
Executive without Good Reason will be communicated by a written Notice of Termination to the other
party fourteen (14) calendar days prior to the Termination Date specified in such notice. However,
the Company may elect to pay the Executive in lieu of fourteen (14) calendar days’ written notice.
For purposes of this Amended and Restated Agreement, no such purported termination of employment
pursuant to this Section 7 will be effective without such Notice of Termination.

          (f)
Termination Date. “Termination Date” will mean in the case of the Executive’s death, the date
of death; in the case of non-renewal of this Amended and Restated Agreement pursuant to Section 1,
the date the Extended Term of this Amended and Restated Agreement expires; and in all other cases,
the date specified in the Notice of Termination, subject to the applicable time limitations for
such Termination Date as set forth above.

     8. Compensation Upon Termination.

          (a) If the Executive’s employment is terminated by the Company for Cause or by reason of the
Executive’s death or Disability, or if the Executive provides a Notice of Non-Renewal or gives a
written notice of resignation without Good Reason, the Company’s sole obligations hereunder will be
to (A) pay the Executive or his estate the following amounts that the Executive earned pursuant to
the provisions of this Amended and Restated Agreement but that were not paid as of the Termination
Date: (i) Base Salary, (ii) reimbursement for any and all monies advanced or expenses incurred pursuant
to Section 6(a) through the Termination Date, provided the Executive has submitted appropriate
documentation for such expenses, and (iii) the amount of the Executive’s accrued but unpaid
vacation time (these amounts will collectively be referred to as the “Accrued Cash Obligations”)
and (B) in the event of a written resignation without Good Reason that meets the requirements of
Section 4(j) and Section 8(d) of this
Amended and Restated Agreement, provide the service-vesting credit under Section 4(j) with respect
to any components of his Multi-Year Equity Award that are not otherwise fully vested on the
effective date of such resignation. In addition to the Accrued Cash Obligations, in the event the
Executive’s employment terminates by reason of his death or Disability, the Executive or his estate
will be paid his Target Bonus, pro-rated for his actual period of service during the fiscal year in
which such termination of employment occurs. Such pro-rated Target Bonus shall be paid to the
Executive or his estate by the fifteenth day of the third calendar month following the date of the
Executive’s termination

12

 

of employment, subject to any required holdback under Section 13(b). Furthermore, if the
Executive’s employment terminates as a result of death or Disability, then any unvested portion of
his Multi-Year Award, Stub-Period Award and/or Special Retention Equity Award shall be governed by
the provisions of Sections 4(f), 4(g), 4(h) and 4(i). The Executive’s entitlement to any other
benefits will be determined in accordance with the Company’s employee benefit plans then in effect.

          (b) If the Executive’s employment is terminated: (i) by the Company for any reason other than for
Cause or Disability; (ii) by the Executive for Good Reason; or (iii) pursuant to a Notice of Non-Renewal delivered by the Company, the Executive will, in addition to the Accrued Cash Obligations,
be entitled to the following compensation and benefits from the Company, provided and only if (x)
the Executive executes and delivers to the Company a general release substantially in the form of
attached Exhibit A (the “Required Release”) within twenty-one (21) days (or forty-five (45) days if
such longer period is required under applicable law) after such termination of employment, (y) the
Required Release becomes effective and enforceable in accordance with applicable law and (z) the
Executive complies with the restrictive covenants set forth in Section 10:

               (i) a separation payment equal to (A) two times the Executive’s Base Salary in effect at the time
of the Notice of Termination and (B) two times the average of his actual Annual Bonuses for the
three fiscal years immediately preceding the fiscal year in which such termination of employment
occurs, with such payment to be made in successive equal increments, in accordance with the
Company’s normal payroll practices for salaried employees, over the one-year period measured from
the date of the Executive’s Separation from Service due to such termination of employment,
beginning on the first regular pay day within the sixty (60)-day period following the date of such
Separation from Service on which the Required Release under this Section 8(b) is effective and
enforceable following the expiration of any applicable revocation period in effect for that
Release. However, should such sixty (60)-day period span two taxable years, then the first such
installment shall not be paid until the end of such sixty (60)-day period. The remaining
installments shall be paid on successive regular pay days for the Company’s salaried employees,
beginning with the first such regular payday following the payment of the initial installment
hereunder. For purposes of Section 409A of the Internal Revenue Code of 1986, as amended (the
“Code”), the Executive’s right to receive such installments shall be deemed a right to receive a
series of separate individual payments and not a right to single payment.

               (ii) service-vesting credit under the Multi-Year Equity Award, the Stub Period Equity Award and the
Special Retention Equity Award, to the extent provided under Section 4(f), Section 4(g) and Section
4(h), respectively, of this Amended and Restated Employment Agreement, with any shares that vest on
the basis of such credit under the restricted stock unit or performance share unit components of
those awards to be issued in accordance with Section 4(i), subject to any required holdback under
Section 13(b);

               (iii) the extended exercise period provided under Section 4(f)(i) for each stock option component
of the Multi-Year Equity Award;

               (iv) the Company will make a lump sum cash payment (the “Lump Sum Health Care Payment”) to the
Executive in the dollar amount determined by multiplying (A) the monthly cost that would be payable
by the Executive, as measured as of his Termination Date, to obtain continued medical care coverage
for himself and his spouse and eligible
dependents under the Company’s employee group health plan, pursuant to their COBRA rights, at the
level in effect for each of them on such Termination Date by (B) eighteen (18). The Company shall
pay the Lump Sum Health Care Payment to the Executive concurrently with the first installment of
the separation payment made to the Executive in accordance with Section 8(b)(i) of this Amended and
Restated Agreement. Notwithstanding the foregoing, the Lump Sum Health Care Payment shall not be
subject to any holdback under Section 13(b), to the extent such

13

 

payment does not exceed the applicable dollar amount under section 402(g)(1) of the Code for the
year in which the Executive’s Separation from Service occurs. The Lump Sum Health Care Payment
shall constitute taxable income to the Executive and shall be subject to the Company’s collection
of all applicable withholding taxes, and the Executive shall receive only the portion of the Lump
Sum Health Care Payment remaining after such withholding taxes have been collected. It shall be the
sole responsibility of the Executive and his or her spouse and eligible dependents to obtain actual
COBRA coverage under the Company’s group health care plan; and

               (v) the Executive’s entitlement to any other benefits will be determined in accordance with the
Company’s employee benefit plans then in effect.

          (c) The Executive shall have the right to resign, for any reason or no reason, at any time within
the thirty (30) day period beginning six (6) months after the closing of a Change in Control (as
defined in Section 11) and to receive, in connection with such resignation, the same severance
benefits to which he would be entitled under Section 8(b) above had such resignation been for Good
Reason and payable at the same time as provided under Section 8(b); provided, however, that the
Executive’s entitlement to severance benefits under this Section 8(c) shall be conditioned upon the
satisfaction of each of the following requirements: (I) the Executive executes and delivers to the
Company the Required Release within twenty-one (21) days (or forty-five (45) days if such longer
period is required under applicable law) after such resignation, (ii) the Required Release becomes
effective and enforceable in accordance with applicable law and (iii) the Executive complies with
the restrictive covenants set forth in Section 10 of this Agreement.

          (d) The Required Release shall also be a condition to the Executive’s service-vesting credit under
Section 4(j) of this Amended and Restated Agreement. Accordingly, the Executive must execute and
deliver to the Company the Required Release on the August 31, 2014 effective date of his
resignation and the Required Release must become effective and enforceable in accordance with
applicable law. In addition, the Executive must comply with the restrictive covenants set forth in
Section 10 of this Amended and Restated Agreement.

          (e) Except as otherwise provided in Section 8(b)(iv) above with respect to the Lump Sum Health Care
Payment, all payments and benefits under this Section 8 shall be subject to the applicable holdback
provisions of Section 13(b).

          (f) The Executive will not be required to mitigate the amount of any payment provided for in this
Section 8 by seeking other employment or otherwise, and no such payment or benefit will be
eliminated, offset or reduced by the amount of any compensation provided to the Executive in any
subsequent employment.

     9. Confidentiality.

          (a) The Executive hereby acknowledges that the Company may, from time to time during the Extended
Term, disclose to the Executive confidential information pertaining to the Company’s business,
strategic plans, technology or financial affairs. All information, data and know-how, whether or
not in writing, of a private or confidential nature concerning the Company’s trade secrets,
processes, systems, marketing strategies and future marketing plans, student enrollment lists,
prospective course offerings, finances and financial reports, employee and faculty member
information and other organizational information (collectively, “Proprietary Information”) is and
shall remain the sole and exclusive property of the Company and shall not be used or disclosed by
the Executive
except to the extent necessary to perform his duties and responsibilities under this Amended and
Restated Agreement. All tangible manifestations of such Proprietary Information (whether written,
printed or

14

 

otherwise reproduced) shall be returned by the Executive upon the termination of his employment
hereunder, and the Executive shall not retain any copies or excerpts of the returned items. The
foregoing restrictions on the use, disclosure and disposition of the Company’s Proprietary
Information shall also apply to the Executive’s use, disclosure and disposition of any confidential
information relating to the business or affairs of the Company’s faculty, students and employees.

          (b) The Executive shall, throughout the term of this Amended and Restated Agreement and thereafter,
remain subject to the terms and conditions of his Proprietary Information and Inventions Agreement
with the Company.

          (c) The Executive shall not, in connection with his duties and responsibilities hereunder,
improperly use or disclose any trade secrets or proprietary and confidential information of any
former employer or other person or entity.

     10. Restrictive Covenants. At all times during the Executive’s employment with the Company,
and for a period of one (1) year after the termination of his employment with the Company (the
“Restriction Period”), regardless of the reason or cause for such termination, the Executive shall
comply with each of the following restrictions:

          (a) The Executive shall not directly or indirectly encourage or solicit any employee, faculty
member, consultant or independent contractor to leave the employment or service of the Company (or
any affiliated company) for any reason or interfere in any other manner with any employment or
service relationships at the time existing between the Company (or any affiliated company) and its
employees, faculty members, consultants and independent contractors.

          (b) The Executive shall not directly or indirectly solicit any vendor, supplier, licensor, licensee
or other business affiliate of the Company (or any affiliated company) or directly or indirectly
induce any such person to terminate its existing business relationship with the Company (or
affiliated company) or interfere in any other manner with any existing business relationship
between the Company (or any affiliated company) and any such vendor, supplier, licensor, licensee
or other business affiliate.

          (c) The Executive shall not, on his own or as an employee, agent, promoter, consultant, advisor,
independent contractor, general partner, officer, director, investor, lender or guarantor or in any
other capacity, directly or indirectly:

               (i) conduct, engage in, be connected with, have any interest in, or assist any person or entity
engaged in, any business, whether in the United States, any possession of the United States or any
foreign country or territory, that competes with any of the businesses or programs conducted by the
Company in the education industry during the period of his employment with the Company (hereafter
collectively referred to as the “Businesses”); or

               (ii) permit his name to be used in connection with a business which is competitive or substantially
similar to the Businesses.

     Notwithstanding the foregoing: (i) the Executive may own, directly or indirectly, solely as an
investment, up to one percent (1%) of any class of publicly traded securities of any business that
is competitive or substantially similar to the Business and (ii) the Executive’s employment with
any investment banking firm, private equity fund, hedge fund or similar investment fund following
the termination of his employment with the Company shall not be deemed a breach of his restrictive
covenant under this Section 10(c), even though the Executive may be engaged in investment decisions
pertaining to
the education industry.

15

 

     11. Change in Control.

          (a) For
purposes of this Amended and Restated Agreement, the term
“Change in Control” shall have
the same meaning assigned to such term under the Incentive Plan. Upon the occurrence of such Change
in Control, any unvested stock options, restricted stock units, performance share units or other
equity awards granted to the Executive and outstanding at that time, including the components of
the Multi-Year Equity Award, the Stub Period Equity Award and the Special Retention Equity Award
made to the Executive pursuant to Sections 4(c), Section 4(d) or Section 4(e) of this Amended and
Restated Agreement, shall vest on an accelerated basis to the same extent as all other outstanding
awards of the same type under the Incentive Plan that are held by individuals who are executive
officers of the Company at that time. However, the shares of the Company’s Class A common stock
subject to the restricted stock unit or performance share unit components of the Multi-Year Equity
Award, the restricted stock unit award comprising the Stub Period Equity Award or the restricted
stock unit award comprising the Special Retention Equity Award that vest upon the occurrence of
such Change in Control shall not, to the extent they are subject to Code Section 409A, be issued at
that time unless the Change in Control also constitutes a Qualifying Change in Control as defined
in Section 11(b) below. In the absence of such Qualifying Change in Control, such shares shall be
issued on each applicable date on which they would have otherwise vested and become issuable, in
accordance with the terms of the applicable award agreements, had there been no Change in Control.

          (b) The
term “Qualifying Change in Control” shall mean a change in control of ownership of the
Company effected by one or more of the following transactions:

               (i) a merger or consolidation in which the Company is not the surviving entity and in
which one person or a group of related persons (other than the Company or a person that
directly or indirectly controls, is controlled by, or is under common control with, the
Company) acquires ownership of securities possessing more than fifty percent (50%) of the
total combined voting power of the Company’s outstanding securities or constituting more
than fifty percent (50%) of the total fair market value of the Company’s outstanding
securities;

               (ii) the sale, transfer or other disposition of all or substantially all of the assets of
the Company in complete liquidation or dissolution of the Company;

               (iii) any reverse merger in which the Company is the surviving entity but in which one
person or a group of related persons (other than the Company or a person that directly or
indirectly controls, is controlled by, or is under common control with, the Company)
acquires ownership of securities possessing more than fifty percent (50%) of the total
combined voting power of the Company’s outstanding securities or constituting more than
fifty percent (50%) of the total fair market value of the Company’s outstanding
securities;

               (iv) the acquisition, directly or indirectly, by any person or related group of persons (other than
the Company or a person that directly or indirectly controls, is controlled by, or is under common
control with, the Company) of beneficial ownership of securities possessing more than fifty percent
(50%) of the total combined voting power of the Company’s outstanding securities or constituting
more than fifty percent (50%) of the total fair market value of the Company’s outstanding
securities pursuant to a tender or exchange offer made directly to the Company’s stockholders; or

               (v) a change in the composition of the Board over a period of twelve (12) consecutive months or
less such that a majority of the Board members ceases, by reason of one or more contested elections
for Board membership, to be comprised of individuals who either (A) have been Board members
continuously since the beginning of such period or (B) have been elected or nominated

16

 

for election as Board members during such period by at least a majority of the Board members
described in clause (A) who were still in office at the time the Board approved such election or
nomination.

     The foregoing definition of Qualifying Change in Control shall in all instances be applied and
interpreted in such manner that the applicable Qualifying Change in Control transaction that serves
as an issuance event for the shares of the Company’s Class A common stock subject to the restricted
stock unit or performance share unit components of the Multi-Year Equity Award, the restricted
stock unit award comprising the Stub Period Equity Award and the restricted stock unit award
comprising the Special Retention Equity Award that vest upon the occurrence of a Change in Control
will also qualify as: (i) a change in the ownership of the Company, as determined in accordance
with Section 1.409A-3(i)(5)(v) of the Treasury Regulations, (ii) a change in the effective
control of the Company, as determined in accordance with Section 1.409A-3(i)(5)(vi) of the Treasury
Regulations, or (iii) a change in the ownership of a substantial portion of the assets of the
Company, as determined in accordance with Section 1.409A- 3(i)(5)(vii) of the Treasury
Regulations.

     12. Benefit Limitation.

     (a) In the event it is determined that the Total Payments (as defined below) to be made to the
Executive would otherwise exceed the amount that could be received by the Executive without the
imposition of an excise tax under Section 4999 of the Code (the
“Safe Harbor Amount”), then those
Total Payments shall be reduced to the extent, and only to the extent, necessary to assure that
their aggregate present value, as determined in accordance the applicable provisions of Code
Section 280G and the Treasury Regulations thereunder, does not
exceed the greater of the following
dollar amounts (the “Benefit Limit”):

(A) The Safe Harbor Amount, or

(B) the greatest after-tax amount payable to the Executive after taking into account any excise tax
imposed under Code Section 4999 on the Total Payments.

     For
purposes of this Section 12(a), the term “Total
Payments” shall mean any payment or
distribution of any type to or for the benefit of the Executive made by the Company, any of its
affiliates, any person who acquires ownership or effective control of the Company or ownership of a
substantial portion of the Company’s assets (within the meaning of Code Section 280G) or any
affiliate of such person, whether paid or payable or distributed or distributable pursuant to the
terms of this Amended and Restated Agreement or otherwise, that would be subject to the excise tax
imposed by Code Section 4999 or any interest or penalties with respect to such excise tax

     All determinations under this Section 12 shall be made by an independent registered public
accounting firm (the “Accounting Firm”);
provided, however, such Accounting Firm shall not have an
ongoing audit or consulting relationship with the Company at the time of its selection. In
determining whether such Benefit Limit is exceeded, the Accounting Firm shall make a reasonable
determination of the value to be assigned to the restrictive covenants in effect for the Executive
pursuant to Section 10 of the Agreement, and the amount of his potential parachute payment under
Code Section 280G shall be reduced by the value of those restrictive covenants to the extent
consistent with Code Section 280G and the Treasury Regulations thereunder. To the extent a
reduction to the Total Payments is required to be made in accordance with this Section 12, the
Total Payments attributable to any cash severance payments otherwise due the Executive under
Section 8 of this Agreement shall be reduced first (with such reduction to be applied pro-rata to
each such severance payment and without any change in the applicable payment dates), then the
accelerated vesting of any restricted stock unit or performance share unit awards made to him by
the Company, including (without limitation) the restricted stock unit and performance share unit

17

 

components of the Multi-Year Equity Award, the restricted stock unit award comprising the Stub
Period Equity Award and the restricted stock unit award comprising the Special Retention Equity
Award, shall be reduced as follows: first the accelerated vesting of the performance share unit
award shall be reduced and then the accelerated vesting of the restricted stock unit awards shall
be reduced in the reverse chronological order in which those awards would have vested in the
absence of such acceleration, and finally the accelerated vesting of the Executive’s stock options
shall be reduced (based on the amount of the parachute payment calculated for each such option in
accordance with the Treasury Regulations under Code Section 280G), with such reduction to occur in
the same reverse chronological order of the dates on in which those options were granted.

     13. Section 409A. Certain payments contemplated by this Amended and Restated Agreement may
be “deferred compensation” for purposes of Section 409A of the Code. Accordingly, the following
provisions shall be in effect for purposes of avoiding or mitigating any adverse tax consequences
to the Executive under Code Section 409A.

     (a) It is the intent of the parties that the provisions of this Amended and Restated Agreement
comply with all applicable requirements of Code Section 409A. Accordingly, to the extent any
provisions of this Amended and Restated Agreement would otherwise contravene one or more
requirements or limitations of Code Section 409A, such provisions shall be construed, interpreted
and applied in a manner that does not result in a violation of the applicable requirements or
limitations of Code Section 409A and the Treasury Regulations thereunder.

     (b) Notwithstanding any provision to the contrary in this Amended and Restated Agreement, no
payments or benefits to which the Executive becomes entitled under this Amended and Restated
Agreement in connection with the termination of his employment with the Company (other than the
portion of the Lump Sum Health Care Payment that is not in excess of the applicable dollar amount
under Section 402(g)(1) of the Code for the year in which the Executive’s Separation from Service
occurs) shall be made or paid to the Executive prior to the earlier of (i) the first day of the
seventh (7th) month following the date of his Separation from Service due to such termination of
employment or (ii) the date of his death, if the Executive is deemed, pursuant to the procedures
established by the Compensation Committee in accordance with the applicable standards of Code
Section 409A and the Treasury Regulations thereunder and applied on a consistent basis for all for
all non-qualified deferred compensation plans of the Employer Group subject to Code Section 409A,
to be at the time of such separation from service a “specified employee” within the meaning of that
term under Code Section 416(i) and such delayed commencement is otherwise required in order to
avoid a prohibited distribution under Code Section 409A(a)(2). Upon the expiration of the
applicable Code Section 409A(a)(2) deferral period, all payments deferred pursuant to this Section
13(b) shall be paid in a lump sum to the Executive, and any remaining payments due under this
Amended and Restated Agreement shall be paid in accordance with the normal payment dates specified
for them herein. The specified employees subject to such a delayed commencement date shall be
identified on December 31 of each calendar year. If the Executive is so identified on any such
December 31, he shall have specified employee status for the twelve (12)-month period beginning on
April 1 of the following calendar year. For purposes of this Amended and Restated Agreement,
including (without limitation) this Section 13(b), the following definitions shall be in effect:

          (i)
“Separation from Service” shall mean the date on which the level of the Executive’s bona fide
services as an Employee (or non-employee consultant) permanently decreases to a level that is not
more than twenty percent (20%) of the average level of services the Executive rendered as an
Employee during the immediately preceding thirty-six (36) months. Any such determination, however,
shall be made in accordance with the applicable standards of the Treasury Regulations issued under
Code Section 409A. In addition to the foregoing, a Separation from Service will not be deemed to
have

18

 

occurred while the Executive is on a sick leave or other bona fide leave of absence if the
period of such leave does not exceed six (6) months or any longer period for which the Executive’s
right to reemployment with the Company is provided either by statute or contract; provided,
however, that in the event of a leave of absence due to any medically determinable physical or
mental impairment that can be expected to result in death or to last for a continuous period of not
less than six (6) months and that causes the Executive to be unable to perform his duties as an
Employee, no Separation from Service shall be deemed to occur during the first twenty-nine (29)
months of such leave. If the period of the leave exceeds six (6) months (or twenty-nine (29) months
in the event of disability as indicated above) and the Executive’s right to reemployment is not
provided either by statute or contract, then the Executive will be deemed to have Separated from
Service on the first day immediately following the expiration of the applicable six (6)-month or
twenty-nine (29)-month period.

          (ii) The
Executive shall be deemed to remain an
“Employee” for so long he remains in the
employ of at least one member of the Employer Group, 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.

          (iii)
“Employer Group” shall mean the Company and each member of the group of commonly
controlled corporations or other businesses that include the Company, as determined in accordance
with Sections 414(b) and (c) of the Code and the Treasury Regulations thereunder, except that in
applying Sections 1563(1), (2) and (3) of the Code for purposes of determining the controlled group
of corporations under Section 414(b), the phrase “at least 50 percent” shall be used instead of
“at least 80 percent” each place the latter phrase appears in such sections and in applying Section
1.414(c)-2 of the Treasury Regulations for purposes of determining trades or businesses that are
under common control for purposes of Section 414(c), the phrase “at least 50 percent” shall be
used instead of “at least 80 percent” each place the latter phrase appears in Section 1.414(c)-2
of the Treasury Regulations.

     (c) Should
the Executive incur the 20% penalty tax imposed under
Section 409A (the “Section 409A Penalty
Tax”) with respect to one or more payments or benefits provided to him under this
Amended and Restated Agreement, then the Executive will be entitled to receive an additional
payment (the “409A Gross-Up Payment”) in an amount such that after payment by the Executive of all
taxes (including any interest or penalties imposed with respect to such taxes), including any tax
imposed upon the 409A Gross-Up Payment, the Executive retains an amount of the 409A Gross-Up
Payment equal to the Section 409A Penalty Tax imposed upon the Executive’s deferred compensation.
The amount of the 409A Gross-Up Payment shall be calculated, by an Accounting Firm mutually
agreeable to the Company and the Executive, within ten (10) business days after it is first
determined that the Executive is subject to the Section 409A Penalty Tax, and the 409A Gross-Up
Payment so calculated shall be paid to or on behalf of the Executive within five (5) business days
after the completion of such determination or (if later) at the time the related Section 409A
Penalty Tax is remitted to the appropriate tax authorities. In the event that the Executive’s
actual Section 409A Penalty Tax liability is determined
by a Final Determination to be greater than the Section 409A Penalty Tax liability taken into
account for purposes of the 409A Gross-Up Payment initially made to the Executive pursuant to the
provisions of this Section 13(c), then within thirty (30) days following that Final Determination,
the Executive shall notify the Company of such determination, and the Accounting Firm shall, within
thirty (30) days thereafter, make a new calculation of the 409A Gross-Up Payment based upon that
Final Determination and provide the Company and the Executive with the supporting calculations for
any supplemental 409A Gross-Up Payment attributable to that excess Section 409A Penalty Tax
liability. The Company shall make the supplemental 409A Gross-Up payment to the Executive within
five (5) business days following the completion of the applicable calculations or (if later) at the
time such excess Section 409A Penalty Tax liability is remitted to the appropriate tax authorities.
In the event that the Executive’s actual Section 409A Penalty Tax liability is determined by a
Final Determination to be less than the Section 409A Penalty Tax liability taken into account for
purposes of the 409A Gross-Up Payment

19

 

initially made to the Executive pursuant to the provisions of this Section 13(c), then the
Executive shall refund to the Company, within five (5) business days after receipt, any federal or
state tax refund attributable to the overpayment of his Section 409A Penalty Tax. In no event shall
any 409A Gross-Up Payment to which the Executive becomes entitled hereunder be made later than the
later of (i) the end of the calendar year in which the related Section 409A Penalty Tax is remitted
to the appropriate tax authorities or (ii) the end of the sixty (60)-day period measured from the
date such tax is so remitted.

     (d) For
purposes of Section 13(c), the term “Final
Determination” shall mean an audit
adjustment by the Internal Revenue Service that is either (i) agreed to by both the Executive and
the Company (such agreement by the Company to be not unreasonably withheld) or (ii) sustained by a
court of competent jurisdiction in a decision with which the Executive and the Company concur or
with respect to which the period within which an appeal may be filed has lapsed without a notice of
appeal being filed.

     14. Legal
Fees. Within fourteen (14) calendar days after the date this Amended and
Restated Agreement becomes effective, the Company will reimburse the Executive for his legal fees
incurred in connection with the preparation and negotiation of this Amended and Restated Agreement,
up to a maximum dollar amount of $35,000.00.

     15. Indemnification. The Executive shall be covered by any policy of liability
insurance which the Company maintains during the Extended Term for
its officers and directors (“D&O Insurance”), to the maximum extent of such coverage provided any other executive officer of the
Company. The Company agrees to provide the Executive with information about all D&O Insurance
maintained during the Extended Term, including proof that such insurance is in place and the terms
of coverage, upon the Executive’s reasonable request. In addition to any rights the Executive may
have under such D&O Insurance, applicable law, or the articles of incorporation and bylaws of the
Company and except as may be prohibited by applicable law, the Company agrees to indemnify, defend,
and hold the Executive harmless from and against any and all claims and/or liability arising from,
as a result of, or in connection with the Executive’s employment by the Company or any outside
appointments and offices held at the Company’s request, except to the extent such claims or
liability are attributable to the Executive’s gross negligence or willful misconduct.

     16. Injunctive
Relief. The Executive expressly agrees that the covenants set forth in
Sections 9 and 10 of this Agreement are reasonable and necessary to protect the Company and its
legitimate business interests, and to prevent the unauthorized dissemination of Proprietary
Information to competitors of the Company. The Executive also agrees that the Company will be
irreparably harmed and that damages alone cannot adequately compensate the Company if there is a
violation of Section 9 or 10 of this Agreement by the Executive, and that injunctive relief against
the Executive is essential for the protection of the Company. Therefore, in the event of any such
breach, it is agreed that, in addition to any other remedies available, the Company shall be
entitled as a matter of right to injunctive relief in any court of competent jurisdiction, plus
attorneys’ fees actually incurred for the securing of such relief.

     17. Survival
of Certain Provisions. The provisions of Sections 8, 9, 10, 12, 13, 15,
16, 18,
19, 20, 21, 24 and 25 will survive any termination of this Amended and Restated Agreement.

     18. Withholdings. Any compensation and/or benefits provided to the Executive by the
Company shall be subject to the Company’s collection of all applicable payroll deductions and
applicable withholding and payroll taxes.

20

 

     19. Successors
and Assigns. This Amended and Restated Agreement will be binding upon
and will inure to the benefit of the Company, its successors and assigns, and the Company will
require any successor or assign to expressly assume and agree to perform this Amended and Restated
Agreement in the same manner and to the same extent that the Company would be required to perform
it if no such succession or assignment had taken place. The term
“Company” as used herein will
include any such successors and assigns to the Company’s business and/or assets. The term
“successors and assigns” as used herein will mean a corporation or other entity acquiring or
otherwise succeeding to, directly or indirectly, all or substantially all the assets and business
of the Company (including this Agreement) whether by operation of law or otherwise. This Agreement
will inure to the benefit of and be enforceable by the Executive’s legal personal representative.

     20. Arbitration. Except as otherwise provided in Section 16, any controversy or claim between
the Company or any of its affiliates and the Executive arising out of or relating to this Amended
and Restated Agreement or its termination or any other dispute between the parties, whether arising
in tort, contract, or pursuant to a statute, regulation, or ordinance now in existence or which may
in the future be enacted or recognized will be settled and determined by a single arbitrator whose
award will be accepted as final and binding upon the parties. The arbitration shall be conducted in
Chicago, Illinois and in accordance with the American Arbitration Association (“AAA”) Employment
Arbitration Rules in effect at the time such arbitration is properly initiated. To the extent that
any of the AAA rules or anything in the Amended and Restated Agreement conflicts with any
arbitration procedures required by applicable law, the arbitration procedures required by
applicable law shall govern. The costs of the arbitration, including administrative fees and fees
charged by the arbitrator, will be borne by the Company. Each party will bear its or his own travel
expenses and attorneys’ fees: provided, however that the arbitrator (i) shall award attorneys’ fees
to the Executive with respect to any claim for breach of this Agreement on which he is the
prevailing party and may award attorneys’ fees to the Executive as otherwise allowed by law and
(ii) shall award attorneys’ fees to the Company with respect to any claim brought under Section 16
on which it is the prevailing party and may award attorneys’ fees to the Company with respect to
any other claim on which it is the prevailing party and it is determined by the arbitrator that
such claim by the Executive was frivolous in that it presented no colorable arguments for recovery;
but the maximum amount of attorneys’ fees that may be awarded to the Company other than with
respect to any claim brought under Section 16 shall not exceed one hundred thousand dollars
($100,000). The arbitration shall be instead of any civil litigation; and the Executive hereby
waives any right to a jury trial. The arbitrator’s decision shall be final and binding to the
fullest extent permitted by law and enforceable by any court having
jurisdiction thereof. In any
situation in which emergency injunctive relief may be necessary, either party may seek such relief
from a court until such time as the arbitrator is able to address the matter covered by this
Section 20. Both parties agree that the state and federal courts located in Chicago, Illinois, will
be the sole venue for any such action involving emergency injunctive
relief, and the parties submit
to personal jurisdiction in these courts for this purpose. Judgment upon any award rendered by the
arbitrator may be entered in any court having jurisdiction thereof.

     21. Notice. For the purposes of this Amended and Restated Agreement, notices and all
other communications provided for in this Amended and Restated Agreement (including the Notice of
Termination) will be in writing and will be deemed to have been given when personally delivered or
on the third business day following mailing if sent by registered or certified mail, return receipt
requested, postage prepaid, or upon receipt if overnight delivery service is used, addressed as
follows:

21

 

To the Executive:

Gregory Cappelli

1046 Jackson Ave.

River Forest, Illinois 60305

With a copy to:

Peter Donati

Levenfeld Pearlstein, LLC

2 N. LaSalle, Suite 1300

Chicago, Illinois 60602

To the Company:

Apollo Group, Inc

4025 South Riverpoint Parkway

Phoenix, AZ 85040

Attention: General Counsel

With a copy to:

John Hartigan

Morgan Lewis & Bockius LLP

300 South Grand Avenue

Los Angeles, CA 90071

     22. Miscellaneous.

          (a) No provision of this Amended and Restated Agreement may be modified, waived, or discharged
unless such waiver, modification, or discharge is agreed to in writing and signed by the Executive
and the Company. No waiver by either party hereto at any time of any breach by the other party
hereto of, or compliance with, any condition or provision of this Amended and Restated Agreement to
be performed by such other party will be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. No agreement or representation, oral or
otherwise, express or implied, with respect to the subject matter hereof has been made by either
party which is not expressly set forth in this Amended and Restated Agreement.

          (b) To the extent there is any conflict between the provisions of this Amended and Restated
Agreement and the Executive’s January 18, 2011 Restricted Stock Unit Award Agreement covering
57,740 shares of the Company’s Class A common stock (the “RSU Retention Award”), the provisions of
the RSU Retention Award shall be controlling, and none of the special vesting acceleration
provisions of this Amended and Restated Agreement shall be applicable to the RSU Retention Award.
Accordingly, the vesting of the RSU Retention Award shall be governed solely by the express terms
and conditions of that award.

22

 

     23. Counterparts.
This Amended and Restated Agreement may be executed in several
counterparts, each of which will be deemed an original and all of which will constitute but one and
the same instrument. An electronic facsimile of a signature, when delivered by the signing party to
the non-signing party, will have the same force and effect as an original.

     24. Governing Law. This Amended and Restated Agreement will be governed by and construed
and enforced in accordance with the laws of the State of Arizona without giving effect to the
conflict of law principles thereof.

     25. Severability. If any provision of this Amended and Restated Agreement as applied to any
party or to any circumstance should be adjudged by a court of competent jurisdiction (or determined
by the arbitrator) to be void or unenforceable for any reason, the invalidity of that provision
shall in no way affect (to the maximum extent permissible by law) the application of such provision
under circumstances different from those adjudicated by the court or determined by the arbitrator,
the application of any other provision of this Amended and Restated Agreement, or the
enforceability or invalidity of this Amended and Restated Agreement as a whole. Should any
provision of this Amended and Restated Agreement become or be deemed invalid, illegal or
unenforceable in any jurisdiction by reason of the scope, extent or duration of its coverage, then
such provision shall be deemed amended to the extent necessary to conform to applicable law so as
to be valid and enforceable or, if such provision cannot be so amended without materially altering
the intention of the parties, then such provision will be stricken, and the remainder of this
Amended and Restated Agreement shall continue in full force and effect.

     26. Entire Agreement. This Amended and Restated Agreement, together with the Proprietary
Information and Inventions Agreement referred to in Section 9 and the documentation for the equity
grants referred to in Section 4, shall constitute the entire agreement between the parties hereto
with respect to the subject matter hereof and shall supersede all prior agreements, if any,
understandings and arrangements, oral or written, between the parties hereto with respect to the
subject matter hereof.

          IN
WITNESS WHEREOF, the Company has caused this Agreement to be executed by its duly authorized
officer and the Executive has executed this Agreement as of the day and year first above written.

	 	 	 	 
			
	GREGORY W. CAPPELLI

	 	THE APOLLO GROUP, INC.
	 

	 		 
	 		
	/s/ GREGORY W. CAPPELLI

		By: 	/s/ CHARLES B. EDELSTEIN 
	 

	 		 
	 

		Its: 	Co-Chief Executive Officer	 
	 

	 		 

23

 

EXHIBIT A

FORM OF GENERAL RELEASE

 

 

GENERAL
RELEASE

          This
AGREEMENT is made as
of               , 20     , by and between Gregory
W. Cappelli (“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 Amended and Restated Employment Agreement with the Company
dated _________, 2011 (the
“Employment Agreement”), Executive agree as follows:

     1. Termination
of Employment. Executive acknowledges that his employment with the Company is
terminated effective _______________ (the “Termination Date”), and he agrees that 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 and reviewed his final paycheck and he has
received all wages and accrued but unpaid vacation pay earned by him through the Termination Date.

     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 and the termination of that employment, 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.

     (a) 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 to which he is entitled pursuant to Section 8 of the Employment 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 3(a) above), he may only seek and receive non-personal
forms of relief from the EEOC and similar government agencies.

 

 

          (b) 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.

          (c) 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.

          (d) 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 owed to him, together with any accrued but unpaid vacation pay, less applicable
withholdings and deductions, earned through the Termination Date.

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

     3. Entire Agreement. This Agreement and the Employment 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 that survive termination, 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.

26

 

     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

	 	 	 	 	 	 	 	 

	GREGORY W. CAPPELLI
	 	 	 	 	 	 	 
	 

	 	 	Date:
	 	, 	20	 
	 

	 	 	 	 
	 	 	 
	 
	 	 	 	 	 	 	 
	Signature
	 	 	 	 	 	 	 

 

 

EXHIBIT 1

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