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DEF 14C
APOLLO EDUCATION GROUP INC filed this Form DEF 14C on 12/27/2013
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attainment of a non-financial goal that was measured in terms of employee productivity. Threshold, target and maximum levels of attainment were pre-established by the Compensation Committee for each goal. In addition, the Compensation Committee reserved the discretion to reduce the bonus amount by up to 30%. The threshold, target and maximum levels of attainment for Mr. Sperling and Ms. Bishop were increased by the Compensation Committee on December 12, 2012 to reflect the new base salaries for their positions as Chairman of the Board and Vice Chair of the Board, respectively, effective December 31, 2012. Based on the actual level at which each of the applicable performance goals was attained and the Compensation Committee’s decision to exercise negative discretion over the amounts payable under such awards, the actual bonus amount paid to Mr. Cappelli and each of the other named executive officers was at 124.2% and 134.2%, respectively, of the target level indicated for the named executive officer in the above table. A description of the principal provisions of the Executive Officer Performance Incentive Plan for the 2013 fiscal year is set forth below.
(3)
The reported values include the grant-date fair values of the following awards: (i) stock option grants and (ii) restricted stock unit awards with both performance-vesting and service-vesting conditions. The dollar value reported under Grant-Date Fair Value of Equity Awards with respect to stock options represents the grant-date fair value of each option determined in accordance with the provisions of ASC 718. A discussion of the valuation assumptions used in the ASC 718 calculation of grant-date fair value is set forth in Notes 2 and 16 to the Company’s audited financial statements for the fiscal year ended August 31, 2013, included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission on October 22, 2013. The dollar value reported under Grant-Date Fair Value of Equity Awards with respect to the restricted stock unit awards represents the grant-date fair value of each such award that is, in accordance with ASC 718, equal to the fair market value of the underlying shares of the Company’s Class A Common Stock on the grant date.
(4)
In October 2012, the March 2012 performance share unit award to Mr. Cappelli was modified to adjust the calculation of the adjusted operating free cash flow metric to which those particular performance share units were tied. There was no incremental value in such award resulting from such modification. In determining any potential incremental value, the grant-date fair value of this award immediately before and immediately after the adjustment was, in accordance with ASC 718, calculated on the basis of the probable outcome of the applicable performance goal and the number of shares of Class A Common Stock that would result from such projected outcome. For purposes of such calculation, the probable outcome of the adjusted operating free cash flow metric was measured immediately before and immediately after the adjustment. The grant-date fair value was not reduced for any estimated forfeitures related to service-vesting conditions.
(5)
The stock options will vest and become exercisable for the underlying shares as follows: 20% of the options will vest on December 12, 2013, and the balance will vest in two successive equal installments on August 31, 2014 and February 12, 2015, respectively, provided the named executive officer continues in the Company’s employ through each such vesting date, subject to full vesting acceleration in the event of a change in control of the Company.
(6)
Represents a restricted stock unit award with both performance-vesting and service-vesting conditions. Each restricted stock unit represents the right to receive one share of the Company’s Class A Common Stock following the satisfaction of the applicable performance and service-vesting requirements. The performance-vesting condition is the Company’s attainment of adjusted net income of not less than $75 million for the fiscal year ending August 31, 2014. Upon the attainment of the applicable 2014 fiscal year adjusted net income performance goal, one fourth of the restricted stock units will vest, and the balance of the restricted stock units will vest in three successive equal annual installments on each of the second, third and fourth one-year anniversaries of the August 13, 2013 grant date, provided the named executive officer continues in the Company’s employ through each such annual vesting date, subject to full vesting acceleration upon a change in control of the Company.
(7)
Represents a special restricted stock unit award with both performance-vesting and service-vesting conditions. Each restricted stock unit that vests will entitle the named executive officer to receive one share of the Company’s Class A Common Stock on the designated issuance date for that share. The performance-vesting condition is the Company’s attainment of adjusted net income of not less than $75 million for the fiscal year ending August 31, 2014. Upon the attainment of the applicable 2014 fiscal year adjusted net income performance goal, 20% of the restricted stock units will vest, and the balance of the restricted stock units will vest in two successive equal annual installments on each of the second and third one-year anniversaries of the August 13, 2013 grant date, provided the named executive officer continues in the Company’s employ through each such annual vesting date, subject to full vesting acceleration upon a change in control of the Company.
(8)
The shares covered by each option will vest in four successive equal annual installments on each of the first four one-year anniversaries of the indicated grant date for that award, provided the named executive officer continues in the Company’s employ through each such annual vesting date, subject to full vesting acceleration in the event of a change in control of the Company.
(9)
Represents a special restricted stock unit award with both performance-vesting and service-vesting conditions. Each restricted stock unit represents the right to receive one share of the Company’s Class A Common Stock following the satisfaction of the applicable performance and service-vesting requirements. The performance-vesting condition is the Company’s attainment

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