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Exhibit 10.5
APOLLO GROUP, INC.
SECOND AMENDED AND RESTATED
1994 EMPLOYEE STOCK PURCHASE PLAN
1.
Purpose. The purpose of this 1994 Employee Stock Purchase Plan
(the
"Plan") of Apollo Group, Inc. (the
"Company") is to encourage stock ownership by
employees of the Company and its
Subsidiaries and thereby provide employees with
an incentive to contribute to the
profitability and success of the Company. The
Plan, which is intended to qualify as an
"employee stock purchase plan" meeting
the requirements of Section 423 of the
Code, is for the exclusive benefit of
eligible employees of the Company and its
Subsidiaries.
2.
Definitions. For purposes of the Plan, in addition to the terms
defined
in Section 1, terms are defined as set
forth below:
(a) "Board" means the Board of Directors of the Company.
(b) "Cash Account" means the account maintained on behalf of
the
Participant by the Custodian for the
purpose of holding cash contributions
pending investment in Stock.
(c) "Code" means the Internal Revenue Code of 1986, as amended
from
time to time. References to any provision
of the Code will be deemed to include
successor provisions thereto and
regulations thereunder.
(d) "Custodian" means Smith Barney Inc., or such successor
thereto
as may be appointed by the Board.
(e) "Earnings" means that portion of a Participant's salary or
wages
which is designated as "regular pay" under
the payroll system of the Company and
its Subsidiaries and received by a
Participant for services rendered during a
specified pay period during which time the
Participant participated in the Plan.
(f) "Enrollment Date" means the first business day of each
Offering
Period.
(g) "Fair Market Value" means the closing sale price of Stock
reported in the table entitled "Nasdaq
National Market Issues" or any successor
table in the Wall Street Journal (or, if
Stock is then principally traded on a
national securities exchange, in the table
reporting composite transactions for
such exchange) for such date or, if no
shares of Stock were traded on that date,
on the next preceding day on which there
was such a trade.
(h) "Offering Period" means the three-month period beginning on
January 1, April 1, July 1, or October 1 of
each year, with the first Offering
Period to begin on the first such date
after the Company's Stock is publicly
traded on the Nasdaq National Market or a
national securities exchange.
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(i) "Participant" means an employee of the Company or a
Subsidiary
who is participating in the Plan.
(j) "Purchase Date" means the fifth business day after the end
of
each Offering Period.
(k) "Purchase Right" means a Participant's option to purchase
shares
which is deemed to be outstanding during an
Offering Period. A Purchase Right
represents an "option" as such term is used
under Section 423 of the Code.
(l) "Stock" means the Company's Apollo Education Group Class A
common stock, no par value per share, and
such other securities as may be
substituted or resubstituted for Stock
under Section 4.
(m) "Stock Account" means the account maintained on behalf of
the
Participant by the Custodian for the
purpose of holding Stock acquired upon
investment under the Plan.
(n) "Subsidiary" means any corporation (other than the Company)
in
an unbroken chain of corporations beginning
with the Company if each of the
corporations (other than the last
corporation in the unbroken chain) owns stock
possessing 50% or more of the total
combined voting power of all classes of
stock in one of the other corporations in
the chain.
3.
Administration.
(a) Board Administration. The Plan will be administered by the
Board; provided, however, that the Board
may delegate any administrative duties
and authority (other than authority to
amend the Plan) to any Board committee or
to any officers or employees or committee
thereof as the Board may designate (in
which case references herein to the Board
will be deemed to mean the
administrator to which such duties and
authority have been delegated). The Board
will have full authority to adopt, amend,
suspend, waive, and rescind such rules
and regulations and appoint such agents as
it may deem necessary or advisable to
administer the Plan, to correct any defect
or supply any omission or reconcile
any inconsistency in the Plan and to
construe and interpret the Plan and rules
and regulations thereunder, to furnish to
the Custodian such information as the
Custodian may require, and to make all
other decisions and determinations under
the Plan (including determinations relating
to eligibility). No person acting in
connection with the administration of the
Plan will, in that capacity,
participate in deciding any matter relating
to his or her participation in the
Plan.
(b) The Custodian. The Custodian will act as custodian under
the
Plan, and will perform such duties as are
set forth in the Plan and in any
agreement between the Company and the
Custodian. The Custodian will establish
and maintain, as agent for Participants,
Cash and Stock accounts and any other
subaccounts as may be necessary or
desirable for the administration of the Plan.
(c) Waivers. The Board may waive or modify any requirement that
a
notice or election be made or filed under
the Plan a specified period in advance
in an individual case or
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by adoption of a rule or regulation under
the Plan, without the necessity of an
amendment to the Plan.
(d) Other Administrative Provisions. The Company will furnish
information from its records as directed by
the Board, and such records,
including as to a Participant's Earnings,
will be conclusive on all persons
unless determined by the Board to be
incorrect. Each Participant and other
person claiming benefits under the Plan
must furnish to the Company in writing
an up-to-date mailing address and any other
information as the Board or
Custodian may reasonably request. Any
communication, statement, or notice mailed
with postage prepaid to any such
Participant or other person at the last mailing
address filed with the Company will be
deemed sufficiently given when mailed and
will be binding upon the named recipient.
The Plan will be administered on a
reasonable and nondiscriminatory basis and
will apply uniform rules to all
persons similarly situated. All
Participants will have equal rights and
privileges (subject to the terms of the
Plan) with respect to Purchase Right
outstanding during any given Offering
Period.
4. Stock
Subject to Plan. Subject to adjustment as hereinafter provided,
the aggregate number of shares of Stock
reserved and available for issuance or
which may be otherwise acquired upon
exercise of Purchase Rights under the Plan
shall be 7,593,750 (which number takes into
account all stock splits from the
Effective Date through August 28, 2004 and
after the conversion of the
University of Phoenix Online common stock
into the Stock). Any shares of Stock
delivered by the Company under the Plan may
consist, in whole or in part, of
authorized and unissued shares or treasury
shares. The number and kind of such
shares of Stock subject to the Plan will be
proportionately adjusted, as
determined by the Board, in the event of
any extraordinary dividend or other
distribution, recapitalization, forward or
reverse split, reorganization,
merger, consolidation, spin-off,
combination, repurchase, or share exchange, or
other similar corporate transaction or
event affecting the Stock.
5.
Enrollment and Contributions.
(a) Eligibility. An employee of the Company or a Subsidiary may
be
enrolled in the Plan for any Offering
Period if such employee was continuously
so employed during the 90 days preceding
the Enrollment Date, unless one of the
following applies to the employee:
(i) Such person
has been employed for less than one year with
the Company or a Subsidiary;
(ii) Such person is a "highly compensated employee" of the
Company within the meaning of Section
414(q) of the Code and was a participant
in the Apollo Group, Inc. Long-Term
Incentive Plan on September 1, 1994;
(iii) Such person would, immediately upon enrollment, be
deemed to own, for purposes of Section
423(b)(3) of the Code, an aggregate of
five percent or more of the total combined
voting power or value of all
outstanding shares of all classes of the
Company or any Subsidiary; or
(iv) Such person is no longer employed by the Company or a
Subsidiary.
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The Company will notify an employee of the
date as of which he or she is
eligible to enroll in the Plan, and will
make available to each eligible
employee the necessary enrollment
forms.
Notwithstanding the above, any individual
who is employed by the Company or a
Subsidiary designated by the Board and who
is working outside of the United
States shall not be eligible to participate
in the Plan if the laws of the
country in which the employee is working
makes the offer of the Purchase Right
or the delivery of Stock under the Plan
impractical. Additionally, the offer of
the Purchase Right and the delivery of
Stock under the Plan shall be effective
for any individual who is employed by the
Company or a Subsidiary and who is
working outside of the United States only
after the Company has complied with
the applicable laws of the country in which
the employee is working.
(b) Initial Enrollment. An employee who is eligible under
Section
5(a) (or who will become eligible on or
before a given Enrollment Date) may,
after receiving current information about
the Plan, initially enroll in the Plan
by executing and filing with the Company's
Human Resources Office a properly
completed enrollment form, including
thereon the employee's election as to the
rate of payroll contributions for the
Offering Period. To be effective for any
Offering Period, such enrollment form must
be filed at least 15 days before the
Enrollment Date for the Offering
Period.
(c) Automatic Re-enrollment for Subsequent Offering Periods. A
Participant whose enrollment in and payroll
contributions under the Plan
continues throughout an Offering Period
will automatically be reenrolled in the
Plan for the next Offering Period unless
(i) the Participant terminates
enrollment before the Enrollment Date for
the next Offering Period in accordance
with Section 7(a) or (ii) on such
Enrollment Date he or she is ineligible to
participate under Section 5(a). The rate of
payroll contributions for a
Participant who is automatically
re-enrolled for an Offering Period will be the
same as what was in effect at the end of
the preceding Offering Period, unless
the Participant files a new enrollment form
at least 15 days before the
Enrollment Date for the Offering Period
designating a different rate of payroll
contribution.
(d) Payroll Contributions. A Participant will make
contributions
under the Plan by means of payroll
deductions from each payroll period which
ends during the Offering Period, at the
rate elected by the Participant in his
or her enrollment form filed nearest to,
but not later than, 15 days before the
Enrollment Date for the Offering Period
(except that such rate may be changed
during the Offering Period to the extent
permitted below). The rate of payroll
contributions elected by a Participant may
not be less than one percent of the
Participant's Earnings for each payroll
period ending during an Offering Period,
nor more than the greater of (A) 10 percent
of the Participant's year-to-date
Earnings, or (B) $3,000 during any full or
partial calendar year during which an
individual is eligible to participate in
the Plan, and only whole percentages
may be elected; provided, however, that the
Board may specify a lower minimum
rate and higher maximum rate or dollar
amount. The foregoing and any election of
a Participant notwithstanding, a
Participant's rate of payroll contributions
will be adjusted downward by the Company at
any time or from time to time as
necessary to ensure that the limit on the
amount of Stock purchased with respect
to an Offering Period set forth in Section
6(a)(iii) is not exceeded. A
Participant may elect to increase,
decrease, or discontinue payroll
contributions for future Offering Periods
by filing a new enrollment form at
least 15 days before the Enrollment Date
for the Offering Period designating a
different rate of payroll contributions. In
addition, a
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Participant may elect to decrease or
discontinue payroll contributions during an
Offering Period by filing a new enrollment
form, such change to be effective for
any payroll period beginning at least 15
days after such filing.
(e) Crediting Payroll Contributions to Cash Accounts. All
payroll
contributions by a Participant under the
Plan will be credited to a Cash Account
maintained by the Custodian on behalf of
the Participant. The C
