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DEF 14C
APOLLO EDUCATION GROUP INC filed this Form DEF 14C on 12/27/2013
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AGREEMENTS REGARDING EMPLOYMENT, CHANGE OF CONTROL AND TERMINATION OF EMPLOYMENT
During the 2013 fiscal year, we had employment agreements in effect with the following named executive officers: Dr. John G. Sperling, Joseph L. D’Amico and Gregory W. Cappelli. The principal terms of each of those employment agreements are summarized below.
Dr. John G. Sperling
Employment Agreement: Dr. Sperling retired effective December 31, 2012. There were no termination or severance benefits payable to Dr. Sperling under this employment agreement as a result of his retirement.
Deferred Compensation Agreement: As a result of his retirement, Dr. Sperling will receive monthly payments of $70,833.33 per month under the terms of his deferred compensation agreement. For further information concerning the terms of this deferred compensation agreement, please the section above entitled “Pension Benefits.”
Other Agreements: As Chairman Emeritus, Dr. Sperling is entitled to reimbursement of the reasonable out-of-pocket costs he incurs over his lifetime to obtain continued medical and dental care coverage under the Company’s self-insured employee group health plan, whether pursuant to his COBRA rights or otherwise, but subject to applicable laws and regulations now or hereafter governing such reimbursement arrangements.
Joseph L. D’Amico
On June 5, 2007, the Company entered into an employment agreement with Mr. D’Amico. In May 2010, the Company entered into an amended and restated employment agreement with Mr. D’Amico that extended the term of that agreement to August 31, 2012 and revised his compensation in several respects. The term of the agreement was subsequently extended through August 31, 2013 pursuant to its automatic renewal feature.
As a result of the termination of Mr. D’Amico’s employment, he became eligible to receive cash severance benefits of $2,640,761 under his employment agreement, which is an amount equal to the sum of (i) two times his annual rate of base salary at the time of termination and (ii) two times the average of his actual annual bonuses for the 3 fiscal years immediately preceding the fiscal year of his termination. This amount will, in general, be paid as follows: approximately one half of the amount will paid on the first day of the 7th month following his termination date and the balance will be paid in 12 successive equal semi-monthly increments thereafter. Mr. D’Amico will also be entitled to reimbursement of the health care coverage costs for himself and his eligible dependents under the Company’s group health plans for a period not to exceed 18 months. As a condition of entitlement to receive such severance benefits, Mr. D’Amico was required to deliver a general release to the Company as a condition to his entitlement to such severance benefits.
Under the terms of his cash retention awards of November 2012 and March 2013, Mr. D’Amico also became eligible to receive accelerated vesting and payment of the unvested portions of these awards, which resulted in a lump sum cash payment of $450,000.
Additionally, pursuant to the terms of his employment agreement, Mr. D’Amico is entitled to continued vesting of his existing equity awards on their original vesting schedules. The portion of these awards that are stock options may be exercised until the earlier of (a) the expiration of the 6-year term of the award, or (b) 12 months after the last annual installment of the particular option grant vests. The restricted stock unit and performance share unit portions of the awards will have the shares payable after the installment vesting dates provided for in these awards, subject to any performance-vesting requirements applicable to such awards.
Gregory W. Cappelli
Mr. Cappelli, the Chief Executive Officer, has an employment agreement with the Company which expires August 31, 2014. This agreement will be automatically renewed from year to year, unless either party elects otherwise at least 90 days prior to the start of the next one-year term.
Under the terms of the current agreement, Mr. Cappelli’s base salary was set at the annualized rate of $650,000 from April 1, 2011 to August 31, 2011. For each subsequent fiscal year within the term of the agreement, Mr. Cappelli’s annual base salary will be increased as follows, effective as of the September 1 start date of the applicable 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

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