2013 Fiscal Year Grant-Date Award Value
(excluding retention awards)
Apollo Education Group PSUs
Includes the pro-rata restricted stock unit award approved in January 2013 (with an effective date of May 1, 2013) with a grant date award value of $55,000 in recognition of Ms. Bishop’s appointment to Vice Chairman of the Board effective December 31, 2012.
Includes the pro-rata restricted stock unit award approved in January 2013 (with an effective date of May 1, 2013) with a grant date award value of $186,000 in recognition of Mr. Sperling’s appointment to Chairman of the Board effective December 31, 2012.
The equity awards that were made in July 2012 to each named executive officer for the 2013 fiscal year are comprised of three components (with an additional performance share award component tied to the financial performance of Apollo Global for Mr. Cappelli, as noted below):
restricted stock unit awards with an initial performance-vesting requirement tied to our attainment of $190 million of adjusted net income for the 2013 fiscal year (which performance-vesting requirement was attained) and an additional 4-year service vesting requirement measured from the effective date of the award;
stock options with a 4-year service vesting requirement measured from the effective date of the award; and
performance share unit awards with a performance-vesting condition tied to the performance of Apollo Education Group and a 3-year service-vesting requirement.
The performance-vesting requirement for seventy-five percent (75%) of each Apollo Education Group performance share unit award is tied to the dollar amount by which our adjusted free cash flow for our 2015 fiscal year exceeds our adjusted free cash flow for our 2012 fiscal year. Adjusted free cash flow will be determined on a consolidated basis with our consolidated subsidiaries for financial reporting purposes and in accordance with current GAAP and will be confirmed on the basis of our audited financial statements for that fiscal year. However, our adjusted free cash flow will also be subject to a series of adjustments that the Compensation Committee pre-authorized at the time the awards were made.
Following the scheduled August 31, 2015 completion date of our 2015 fiscal year, the Compensation Committee will determine and certify the actual level at which the adjusted free cash flow performance goal has been attained. On the basis of that certified level of attainment, seventy-five percent (75%) of the target number of performance shares authorized for each named executive officer will be multiplied by the applicable percentage (which may range from 0% to 300%) determined in accordance with the schedule below to determine the maximum number of shares of our Class A common stock issuable on the basis of the attained level of the adjusted free cash flow performance goal. The number of shares so calculated for each named executive officer will constitute his performance-qualified shares with respect to the adjusted free cash flow performance goal.
Adjusted Free Cash Flow $ Growth
Target Number of Shares
Allocated to Adjusted Free Cash Flow Performance Goal to Qualify as
$115 Million or Less
$375 Million or More
The conversion factor for any percentage between threshold level and target level or between target level and maximum level will be interpolated on a straight-line basis between the two applicable levels.
The performance-vesting requirement for the remaining twenty-five percent (25%) of the awarded performance share units is tied to the dollar amount by which our net revenue for the 2015 fiscal year differs (in terms of the dollar amount of the positive increase or the negative decline) from the net revenue realized for the base period coincident with our 2012 fiscal