EXHIBIT 10.3
Restricted Stock Unit Agreement
2024 Performance-Based, Stock Settled
PERDOCEO EDUCATION CORPORATION
2016 INCENTIVE COMPENSATION PLAN
RESTRICTED STOCK UNIT AGREEMENT
This RESTRICTED STOCK UNIT AGREEMENT (this “Agreement”), dated [________] (the “Grant Date”), is by and between Perdoceo Education Corporation, a Delaware corporation (the “Company”), and [_______] (the “Participant”).
To evidence such award and to set forth its terms, the Company and the Participant agree as follows. All capitalized terms not otherwise defined in this Agreement shall have the meaning set forth in the Perdoceo Education Corporation Amended and Restated 2016 Incentive Compensation Plan, as amended from time to time (the “Plan”).
(a) First, an adjusted number of RSUs (the “Adjusted RSUs”) shall be determined by multiplying (i) the number of RSUs set forth in Section 1, by (ii) the Performance Multiplier.
(b) If LTI adjusted Operating Income (“LTI AOI”) for the year ending [__________] is equal to or greater than Targeted [____] LTI AOI, then 100% of the Adjusted RSUs shall become Vested Shares on the Vesting Date.
(c) If LTI AOI for the year ending [__________], is less than Targeted [____] LTI AOI, then 50% of the Adjusted RSUs shall become Vested Shares on the Vesting Date.
“LTI AOI,” “Targeted [__________] LTI AOI,” “Targeted [___] LTI AOI” and “Performance Multiplier” are defined on Exhibit A. Notwithstanding the foregoing, and subject to Sections 5 and 6 below, in the event that (x) the Participant incurs a Termination of Service prior to the Vesting Date, or (y) the Performance Multiplier is determined to be 0.00, then in either case the unvested RSUs shall be forfeited to the Company.
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During the Participant’s employment with the Company and/or any of its subsidiaries and Affiliates and continuing thereafter for the post-termination periods specified below, the Participant will not, in any way, directly or indirectly, either for the Participant or any other person or entity, whether paid or unpaid:
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Should the Participant breach the terms of these Restrictive Covenants, the Company reserves the right to enforce the terms herein in court and seek any and all remedies available to it in equity and law, and the Participant agrees to pay the Company’s attorneys’ fees and costs should it succeed on its claim(s). Further, should the Participant breach the terms of these Restrictive Covenants, the Participant will forfeit any right to the RSUs or Shares issued hereunder, subject to the terms and conditions of the Plan. If the Participant has previously sold any Shares derived from the RSUs, the Company shall also have the right to recover from the Participant the economic value thereof. The Participant agrees to pay the Company’s attorneys’ fees and costs incurred in recovering such RSUs or Shares issued, or the economic value of the Shares, pursuant hereto.
It is the intention of the Participant and the Company that in the event any of the covenants contained in these Restrictive Covenants are determined to be unreasonable and/or unenforceable with respect to scope, time or geographical coverage, the Participant and the Company agree that such covenants may be modified and narrowed by a court, so as to provide the maximum legally enforceable protection of the Company’s and any of its subsidiaries’ or Affiliates’ interests as described in this Agreement.
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[Signature Page Follows]
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IN WITNESS WHEREOF, this Agreement has been duly executed as of the day and year first written above.
PERDOCEO EDUCATION CORPORATION
Todd S. Nelson
President and Chief Executive Officer
ACCEPTANCE (OR REJECTION) OF AWARD BY PARTICIPANT
The undersigned, the Participant, hereby: (select one of the options below)
____ ACCEPTS the award of the RSUs as set forth in this Agreement and agrees to be bound by the terms and conditions of this Agreement and the Plan.
_____ REJECTS the award of the RSUs contemplated by this Agreement and forfeits all rights relating thereto. Please note that a rejection of this Award has no impact on any other award of options, restricted stock or restricted stock units you have previously received, including any restrictive covenants you are subject to pursuant to the agreement(s) governing your previous awards.
Date: _____________________ _________________________________
(Signature of Participant)
Print Name: ______________________
Please sign and return a fully executed .pdf of this Restricted Stock Unit Agreement by [_______] to Catherine Andersen at PEC corporate via DocuSign electronic signature. Failure to do so will result in forfeiture of the Award. Please retain a copy of this signed Restricted Stock Unit Agreement for your records.
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Exhibit A
“LTI ADJUSTED OPERATING INCOME (‘LTI AOI’)” means, with respect to any year, consolidated operating income of the total Company (and its affiliates) for such year, determined before (a) depreciation, amortization and asset impairments, and (b) legal settlements and any expenses incurred in connection with or as a result of a legal settlement or other resolution of a legal, regulatory or governmental dispute, investigation or inquiry (collectively, “Legal Costs”), including without limitation reimbursement or payment of third party legal fees, costs of any compliance monitor retained in accordance with the terms thereof, restitution or other payments to students (current, former or prospective), fines and penalties (but excluding legal fees of the Company, which are addressed in clause (c and d) below); (c) legal fee expense associated with (i) responses to the Department of Education relating to borrower defense to repayment applications from former students, and (ii) acquisition efforts; and (d) legal fee expenses excluding amounts addressed in clause (c) above, as adjusted (i.e., neutralized) for the difference between actual legal fees and the estimated amounts used in determining Targeted [__________] LTI AOI. Notwithstanding the foregoing, Legal Costs for purposes of clause (b) shall not include any amount that was included in determining Targeted [__________] LTI AOI or Targeted [____] LTI AOI. When determining LTI AOI for the year ended [__________], 50% of the aggregate estimated amounts used in determining Targeted [__________] LTI AOI shall be used for purposes of calculating any adjustment pursuant to clause (d) above. The amount for each of the items in clause (a) shall be as reported on the consolidated statement of income (loss) and comprehensive income (loss) within the Company’s Form 10-K for the years ended [__________], [__________] and [__________], as applicable (which are prepared in accordance with the generally accepted accounting principles in the U.S. and filed with the U.S. Securities and Exchange Commission). The amount for each of the actual items in clauses (b), (c) and (d) shall be as reported within such Form 10-K; provided, however, that if the information reported in such Form 10-K is not sufficiently specific to provide data for a specific amount, then the data will be obtained from the Company’s Finance Department and will be based on the underlying accounting records upon which information in the Form 10-K is based. In addition, LTI AOI for [__________] and [__________] shall be determined assuming 100% vesting of the RSUs pursuant to Section 3 and 100% vesting of the performance-based restricted stock units which (i) were granted to other participants pursuant to the Plan on the Grant Date and subject to and upon the same terms and conditions as set forth in this Agreement, and (ii) remain outstanding at the time of such determination.
“Performance Multiplier” means the applicable amount set forth in the “Performance Multiplier” column below, determined based on the aggregate LTI AOI for the years ended [__________] and [__________] according to the following chart:
Aggregate LTI AOI for the years ended [__________] and [__________] | Performance Multiplier |
If less than Targeted [__________] LTI AOI | 0.00 (the RSUs shall be forfeited) |
If equal to or greater than Targeted [_______] LTI AOI (but less than $[___] above Targeted [_______] LTI AOI) | 1.00 |
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If equal to or greater than $[_______] above Targeted [_______] LTI AOI (but less than $[_______] above Targeted [_______] LTI AOI) | 1.25 |
If equal to or greater than $[_______] above Targeted [_______] LTI AOI (but less than $[_______] above Targeted [_______] LTI AOI) | 1.50 |
If equal to or greater than $[_______] above Targeted [_______] LTI AOI (but less than $[_______] above Targeted [_______] LTI AOI) | 1.75 |
If equal to or greater than $[_______] above Targeted [_______] LTI AOI | 2.00 |
For the avoidance of doubt, the Performance Multiplier (and the resulting number of Adjusted RSUs) shall not be interpolated between the amounts set forth in the chart above, and the Performance Multiplier shall not be greater than 2.00.
“Targeted [_______] LTI AOI” means the aggregate targeted LTI AOI for [____] and [____] as approved by the Committee on or prior to the Grant Date. In the event of the sale, disposition, acquisition, restructuring, discontinuance of operations or other extraordinary corporate event in respect of a material business on or prior [_______], the Committee shall review and adjust Targeted [_______] LTI AOI so that the achievement of the performance conditions set forth in Section 3(a) and 3(b) following such event is no more or less probable than the achievement prior to such event.
“Targeted [____] LTI AOI” means the targeted LTI AOI for [____] as approved by the Committee on or prior to the Grant Date. In the event of the sale, disposition, acquisition, restructuring, discontinuance of operations or other extraordinary corporate event in respect of a material business on or prior to [_______], the Committee shall review and adjust Targeted [____] LTI AOI so that the achievement of the performance conditions set forth in Section 3(b) following such event is no more or less probable than the achievement prior to such event.
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