UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported): November 23, 2010
Apollo Group, Inc.
Arizona | 0-25232 | 86-0419443 | ||
(State or other jurisdiction | (Commission | (I.R.S. Employer | ||
of incorporation) | File Number) | Identification No.) |
4025 S. Riverpoint Parkway, Phoenix, | ||
Arizona | 85040 | |
(Address of principal executive offices) | (Zip Code) |
Registrants telephone number, including area code: | (480) 966-5394 |
Former name or former address, if changed since last report
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions:
o | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
o | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
o | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
o | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Section 5 Corporate Governance and Management
Item 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
(e) Material Compensatory Plan, Contract or Arrangement.
1. Amendment of Executive Officer Incentive Bonus Plan. On November 23, 2010, the
Compensation Committee (the Compensation Committee) of the Board of Directors of Apollo Group,
Inc. (the Company) approved an amendment to the Companys Executive Officer Incentive Bonus Plan
(the Plan), pursuant to which additional performance criteria were added to the Plan upon which
specific target levels of attainment can be established by the Compensation Committee as a
condition to bonus payments under the Plan. The additional performance goals are as follows: (i)
measures of student academic success, (ii) measures of student satisfaction at one or more of the
Companys universities or throughout the Companys university system as a whole, (iii) measures of
faculty performance or levels of faculty engagement at one or more of the Companys universities or
throughout the Companys university system as a whole, and (iv) measures of enhanced student
service at one or more of the Companys universities or throughout the Companys university system
as a whole.
The amendment is subject to the approval of the holders of the Companys Class B Common Stock,
the only outstanding voting securities of the Company.
2. Approval of 2011 Fiscal Year Executive Officer Bonus Plan. On November 23, 2010,
the Compensation Committee also approved the 2011 fiscal year bonus plan under the Executive
Officer Incentive Bonus Plan (the 2011 Plan). The key features of the 2011 Plan may be
summarized as follows:
Participants. All of the Companys executive officers will be eligible to participate in the
2011 Plan, including the following individuals, who are the named executive officers in the
Companys Information Statement dated December 30, 2010 and filed on Schedule 14C with
the Securities and Exchange Commission on December 29, 2009:
Name | Position | |
John G. Sperling
|
Chairman of the Board | |
Charles B. Edelstein
|
Co-Chief Executive Officer | |
Gregory W. Cappelli
|
Co-Chief Executive Officer | |
Joseph L. DAmico
|
President and Chief Operating Officer | |
Brian L. Swartz
|
Senior VP, Chief Financial Officer | |
Robert W. Wrubel
|
Executive VP, Marketing and Product Strategy |
For Dr. Sperling and Messrs. Edelstein, Cappelli and DAmico, the target bonus opportunity was
set at 100% of annual base salary, and for Messrs. Swartz and Wrubel, the target bonus was set at
75%.
Performance Goals. The Compensation Committee established five separate performance goals
under the 2011 Plan.
- The first goal, weighted forty percent (40%) for purposes of determining the potential cash
incentive amount for each participant, will be tied to the Companys operating income for the first
three quarters of the 2011 fiscal year. The Companys operating income for such period will be
determined in accordance with GAAP on a consolidated basis but will be subject to certain
pre-established exclusions and adjustments. Specific levels of operating income at threshold,
target and maximum levels will be set by the Compensation Committee.
- The second performance goal, weighted fifteen percent (15%), will be tied to the level of
student academic success and will be measured in terms of the percentage of students who first
enroll in a University of Phoenix (UOPX) course at any time during the first two quarters of the
2011 fiscal year and subsequently earn at least one unit of academic credit. Specific percentages
will be set by the Compensation Committee for the threshold, target and maximum levels of
attainment.
- The third performance goal, weighted fifteen percent (15%), will be measured in terms of an
independently-conducted survey of UOPX students addressing a particular measure of student
satisfaction. Goal attainment will be measured in terms of the percentage of responding UOPX
students who score the measured item favorably, and specific percentages have been set for the
threshold, target and maximum levels of attainment.
- The fourth performance goal, weighted fifteen percent (15%), will be measured in terms of an
independently-conducted survey addressing four particular measures of UOPX faculty engagement at
the Companys universities. Goal attainment will be measured in terms of the percentage of
responding UOPX faculty members who score the measured items favorably, with the percentage of
favorable responses received for each item to be combined and the combined percentage to be
measured against the threshold, target and maximum levels of attainment set by the Committee.
- The fifth and final performance goal, weighted fifteen percent (15%), will be measured in
terms of the improvement made by the individual UOPX campuses in (i) responding to student concerns
on a timely basis at the campus point of origin and (ii) responding on a timely basis to
external agents or agencies addressing individual student concerns and complaints. Specific levels
of attainment have been set for threshold, target and maximum levels.
Potential Cash Incentive Payment. The potential cash incentive payable to each participant
will be based on the actual attained level of each performance goal. Accordingly, the percentage
of the target bonus amount assigned to each performance goal will be multiplied by the applicable
factor (ranging from 0.5 at threshold to 2.0 at maximum level attainment). Should a performance
goal be attained at a level between threshold and target or between target and maximum, then the
applicable factor for the calculation of the potential cash incentive attributable to that
performance goal shall be interpolated between those two levels on a straight linear basis.
Actual Cash Incentive Payment. The portion of the cash incentive payment calculated for each
participant on the basis of the attained levels of the operating-income and
student-academic-success goals may be reduced by the Compensation Committee by up to 20% in the
event the Committee determines that such a reduction is warranted based on its overall assessment of
Company and individual performance.
The portion of the actual bonus attributable to the operating-income and the
student-academic-success goals will be paid during the month of June 2011 to each participant who
continues in the Companys employ through the end of the third quarter of the 2011 fiscal year. The
portion of the actual bonus attributable to the remaining performance goals will be paid to each
participant who continues in the Companys employ through the end of the 2011 fiscal year.
However, in either instance, pro-rated bonuses will be paid to participants who do not complete the
applicable service requirement by reason of death or disability.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
Apollo Group, Inc. |
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November 24, 2010 | By: | /s/ Brian L. Swartz | ||
Name: | Brian L. Swartz | |||
Title: | Senior Vice President and Chief Financial Officer | |||