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DEF 14C
APOLLO EDUCATION GROUP INC filed this Form DEF 14C on 12/27/2013
Entire Document
 


year. Our net revenue 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 net revenue 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 net revenue performance goal has been attained. On the basis of that certified level of attainment, twenty-five percent (25%) 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 net revenue performance goal. The number of shares so calculated for each named executive officer will constitute his performance-qualified shares with respect to the net revenue performance goal.
Net Revenue $ Growth/Decline
 
Percentage of
Target Number of Shares
Allocated to Net Revenue
Performance Goal to Qualify as
Performance-Qualified Shares
($75 Million) or Greater Decline
 
—%
($25 Million)
 
100%
$165 Million or Greater Increase
 
300%
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.
Since the performance share unit awards also contain a service-vesting component, the actual number of shares of Class A Common Stock in which each named executive officer will vest will be determined by multiplying the aggregate number of shares of Class A common stock into which his performance share units are converted based on the levels at which the two performance goals are attained by a fraction, the numerator of which is the number of fiscal years of employment such named executive officer completes with us within the applicable service period and the denominator of which is the total number of fiscal years within that service period. For such purpose, the service period will commence with the September 1, 2012 start date of our 2013 fiscal year and will conclude with the August 31, 2015 end date of our 2015 fiscal year.
(2) Performance Share Unit Awards for Mr. Cappelli. As part of Mr. Cappelli’s multi-year equity awards pursuant to his employment agreement entered into in April 2011, Mr. Cappelli has received the following performance share unit awards:
(i) Apollo Education Group Performance Share Unit Award. Mr. Cappelli received an Apollo Education Group performance share unit award in July 2011. This award covered a target number of 55,617 PSUs.
Eighty percent (80%) of these awarded target PSUs (i.e., 44,493 PSUs) are tied to the average of the actual annual percentage rates of growth or decline in adjusted free cash flow for each of our 2012, 2013 and 2014 fiscal years. Adjusted free cash flow for each applicable fiscal year is based on cash flow from operations for each such fiscal year but will also be subject to a series of adjustments that the Compensation Committee pre-authorized at the time this award was made. 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.
The actual number of PSUs allocated to this performance goal that may be earned ranges from 0% to 200% of the target number of PSUs allotted to this performance goal depending on the level of attainment determined in accordance with the schedule below:

Average of the Annual Percentage Rates of Growth or Decline in Adjusted Free Cash Flow
 
Percentage of Target Number
of Performance Share Units
to Qualify as
Performance-Qualified Shares*
Threshold: (10%)
 
50%
Target: (5%)
 
100%
Maximum: 0% or greater
 
200%
The performance-vesting requirement for the next ten percent (10%) of the awarded target PSUs (i.e., 5,562 PSUs) is tied to the number of academic credits earned per identified bachelor-degree enrolled University of Phoenix student over a measurement period commencing December 1, 2012 and concluding November 30, 2013. Such performance metric is

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