APOLLO GROUP INC
EX-10.5
<DOCUMENT>
<TYPE>EX-10.5
<SEQUENCE>2
<FILENAME>p71469exv10w5.txt
<DESCRIPTION>EX-10.5
<TEXT>
<PAGE>

                                                                    EXHIBIT 10.5

                               APOLLO GROUP, INC.

                           THIRD AMENDED AND RESTATED

                        1994 EMPLOYEE STOCK PURCHASE PLAN

      WHEREAS, Apollo Group, Inc. (the "Company") previously adopted the Apollo
Group, Inc. 1994 Employee Stock Purchase Plan ("Prior Plan");

      WHEREAS, the Plan has subsequently been amended on three separate
occasions;

      WHEREAS, the Company wishes to amend and restate the Prior Plan because of
changes to the financial accounting reporting requirements applicable to
employee stock purchase plans that offer employer stock at more than a five
percent discount and provide a look-back feature in which the purchase price of
the stock is determined by reference to the stock's market value as of the first
or last day of an offering period, whichever is less;

      NOW THEREFORE, the Company hereby adopts the Apollo Group, Inc. Amended
and Restated 1994 Employee Stock Purchase Plan (the "Plan") effective as of the
Offering Period beginning on October 1, 2005 ("Effective Date"), as set forth
below.

      1. Purpose. The purpose of the Plan 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 which shall be a subaccount in the
Company's general cash account, maintained on behalf of a Participant by the
Company for the purpose of holding cash contributions withheld from payroll
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 or its delegate under Section 3(a).

         (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

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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.

         (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 or terminate 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 refer
to 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

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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, Participant 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 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 a
current 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 in accordance with Code Section 423(b)(5).

      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. 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. If at the end of any Offering Period, the number of shares
of Stock with respect to which Purchase Rights are to be exercised exceeds the
number of shares of Stock then available under the Plan, the Board shall make a
pro rata allocation of the shares of Stock remaining available for purchase in
as uniform a manner as shall be practicable and as it shall determine to be
equitable.

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      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.

      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 properly executed enrollment form must be filed at least
15 days (or such other period determined by the Board, or its delegate under
Section (3a)) 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

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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 the rate of payroll contribution in effect at the end
of the preceding Offering Period, unless the Participant files a new properly
executed enrollment form at least 15 days (or such other period determined by
the Board, or its delegate under Section (3a)) 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 only by means of payroll deductions from Earnings for each payroll
period that ends during the Offering Period, at the rate elected by the
Participant in his or her enrollment form in effect for that 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, subject to Section 8(c). Notwithstanding the above, a
Participant's payroll contributions will be adjusted downward by the Company 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 a future Offering Period by filing a new properly executed
enrollment form at least 15 days (or such other period determined by the Board,
or its delegate under Section (3a)) before the Enrollment Date for the Offering
Period designating a different rate of payroll contributions. In addition, a
Participant may elect to decrease or discontinue payroll contributions during an
Offering Period by filing a new properly executed enrollment form, such change
to be effective for the next 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 Company on behalf of the Participant. The Company will credit
payroll contributions to each Participant's Cash Account as soon as practicable
after the contributions are withheld from the Participant's Earnings..

         (f) No Interest on Cash Accounts. No amounts of interest will be
credited or payable by the Company on payroll contributions or by the Custodian
on cash balances in Participant's Cash Accounts pending investment in Stock.

         (g) Effect of Rehiring. If an individual terminates employment with, or
ceases to perform services for, the Company and is later rehired by, or again
commences performing services for, the Company, the individual will be eligible
to participate in the Plan as of the Offering Period next following the date the
individual is rehired by, or again commences providing services for, the Company
if the period that the individual was separated from employment with, or ceased
providing services for, the Company is less than one full calendar year. If the
period that the individual was separated from employment with, or ceased
providing

                                     - 5 -
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services for, the Company is equal to or greater than one full calendar year,
the individual will be eligible to participate in the Plan only after the
individual has again satisfied the eligibility requirements set forth in Section
5(a).

      6. Purchases of Stock

         (a) Purchase Rights. Enrollment in the Plan for any Offering Period by
a Participant will constitute a grant by the Company of a Purchase Right to such
Participant for such Offering Period. Each Purchase Right will be subject to the
following terms:

            (i)   The Purchase prices at which Stock will be purchased under a
                  Purchase Right will be as specified in Section 6(c).

            (ii)  Except as limited in (iii) below, the number of shares of
                  Stock that may be purchased upon exercise of the Purchase
                  Right for an Offering Period will equal the number of shares
                  (including fractional shares) that can be purchased at the
                  purchase price specified in Section 6(c) with the aggregate
                  amount credited to the Participant's Cash Account as of the
                  Purchase Date.

            (iii) The number of shares of Stock subject to a Participant's
                  Purchase Right for any Offering Period will not exceed the
                  number derived by dividing $6,250 by 100% of the Fair Market
                  Value of one share of Stock on the Enrollment Date for the
                  Offering Period.

            (iv)  The Purchase Right will be automatically exercised on the
                  Purchase Date for the Offering Period.

            (v)   Payments by a Participant for Stock purchased under a Purchase
                  Right will be made only through payroll deduction in
                  accordance with Section 5(d) and (e).

            (vi)  The Purchase Right will expire on the earlier of the Purchase
                  Date for the Offering Period or the date on which the
                  Participant's enrollment in the Plan terminates.

         (b) Purchase of Stock. At or as promptly as practicable after the
Purchase Date for an Offering Period, amounts credited to each Participant's
Cash Account as of such Purchase Date will be applied by the Custodian to the
purchase of shares of Stock, in accordance with the terms of the Plan. Shares of
Stock will be purchased by the Custodian from the Company. The Shares sold by
the Company to the Custodian may be authorized but unissued shares or treasury
shares, as permitted under Section 4 hereof. The Custodian will aggregate the
amounts in all Cash Accounts when purchasing Stock, and shares so purchased will
be allocated to each Participant's Stock Account in proportion to the cash
amounts withdrawn from such Participant's Cash Account. Upon completion of
purchases in respect of a Purchase Date (which will be completed in not more
than 30 days after the Purchase Date), all shares of Stock so purchased for a
Participant will be credited to the Participant's Stock Account.

                                     - 6 -
<PAGE>

         (c) Purchase Price. The purchase price of each share of Stock purchased
in respect of a Purchase Date will equal 95% of the Fair Market Value of a share
of Stock on the Purchase Date.

         (d) Dividend Reinvestment; Other Distributions. Cash dividends on any
Stock credited to a Participant's Stock Account will be automatically reinvested
in additional shares of Stock; such amounts will not be available in the form of
cash to Participants. All cash dividends paid on Stock credited to Participants'
Stock Accounts will be paid over by the Company to the Custodian at the dividend
payment date. The Custodian will aggregate all purchase of Stock in connection
with dividend reinvestment for a given dividend payment date. Purchases of Stock
for purposes of dividend reinvestment will be made as promptly as practicable
(but not more than 30 days) after a dividend payment date. The Custodian will
make such purchases, as directed by the Board, either (i) in transactions on the
Nasdaq National Market System, any securities exchange upon which Stock is
traded, otherwise in the over-the-counter market, or in negotiated transactions,
or (ii) directly from the Company at 100% of the Fair Market Value of a share of
Stock on the dividend payment date. Any shares of Stock distributed as a
dividend or other distribution in respect of shares of Stock or in connection
with a split of the Stock credited to a Participant's Stock Account will be
credited to such Account.

         (e) Withdrawals and Transfers. Shares of Stock may be withdrawn from a
Participant's Stock Account, in which case one or more certificates for whole
shares may be issued in the name of, and delivered to, the Participant, with
such Participant receiving cash in lieu of fractional shares based on the Fair
Market Value of a share of Stock on the date of withdrawal. Alternatively, whole
shares of Stock may be withdrawn from a Participant's Stock Account by means of
a transfer to a broker-dealer or financial institution that maintains an account
for the Participant, together with the transfer of cash in lieu of fractional
shares based on the Fair Market Value of a share of Stock on the date of
withdrawal. Participants may not designate any other person to receive shares of
Stock withdrawn or transferred under the Plan. A Participant seeking to withdraw
or transfer shares of Stock must give instructions to the Custodian in such
manner and form as may be prescribed by the Custodian, which instructions will
be acted upon as promptly as practicable. Withdrawals and transfers will be
subject to any fees imposed in accordance with Section 8(a) hereof.

         (f) Excess Account Balances. If any amounts remain in a Cash Account
following a Purchase Date as a result of the limitation set forth in Section
6(a)(iii), or for any other reason, such amounts which resulted from payroll
contributions will be returned to the Participant as promptly as practicable.

      7. Termination and Distributions.

         (a) Termination of Enrollment. A Participant's enrollment in the Plan
will terminate upon (i) the beginning of any payroll period or Offering Period
that begins after he or she files a written notice of termination of enrollment
with the Company, provided that such Participant will continue to be deemed to
be enrolled with respect to any completed Offering Period for which purchases
have not been completed; or (ii) such time as the Participant becomes ineligible
to participate under Section 5(a) of the Plan. An employee who files a written
notice of termination of enrollment with the Company may again enroll in the
Plan as of any

                                     - 7 -
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subsequent Enrollment Date that is at least 90 days after such termination of
enrollment if he or she satisfies the eligibility requirements of Section 5(a)
as of such Enrollment Date. A Participant's election to discontinue payroll
contributions will not constitute a termination of enrollment.

         (b) Distribution. As soon as practicable after a Participant's
enrollment in the Plan terminates, amounts in the Participant's Cash Account
which resulted from payroll contributions will be repaid to the Participant. If
amounts credited to the Participant's Cash Account have not yet been deposited
by the Company with the Custodian, the Company rather than the Custodian will
make the repayment to the Participant. The Custodian will continue to maintain
the Participant's Stock Account for the Participant until the earlier of such
time as the Participant directs the sale of all Stock in the Account, withdraws,
or transfers all Stock in the Account, or one year after the Participant ceases
to be employed by the Company and its Subsidiaries. If a Participant's
termination of enrollment results from his or her death, all amounts payable
will be paid to his or her estate.

      8. General.

         (a) Costs. Costs and expenses incurred in the administration of the
Plan and maintenance of Accounts will be paid by the Company, to the extent
provided in this Section 8(a). Any brokerage fees and commissions for the
purchase of Stock under the Plan (including Stock purchased upon reinvestment of
dividends and distributions) will be paid by the Company, but any brokerage fees
and commissions for the sale of Stock under the Plan by a Participant will be
borne by such Participant. The rate at which such fees and commissions will be
charged to Participants will be determined by the Custodian or any broker-dealer
used by the Custodian (including an affiliate of the Custodian), and
communicated from time to time to Participants. In addition, the Custodian may
impose or pass through a reasonable fee for the withdrawal of Stock in the form
of stock certificates (as permitted under Section 6(f)), and reasonable fees for
other services unrelated to the purchase of Stock under the Plan, to the extent
approved in writing by the Company and communicated to Participants.

         (b) Statements to Participants. The Custodian will reflect payroll
contributions, matching allocations (if any), purchases, sales, and withdrawals
and transfers of shares of Common Stock and other Plan transactions by
appropriate adjustments to the Participant's Accounts. The Custodian will, not
less frequently than quarterly, provide or cause to be provided a written
statement to the Participant showing the transactions in his or her Accounts and
the date thereof, the number of shares of Stock purchased or sold, the aggregate
purchase price paid or sales price received, the purchase or sales price per
share, the brokerage fees and commissions paid (if any), the total shares held
for the Participant's Stock Account (computed to at least three decimal places),
and other information.

         (c) Compliance with Section 423. It is the intent of the Company that
this Plan comply in all respects with applicable requirements of Section 423 of
the Code and regulations thereunder. Accordingly, if any provision of this Plan
does not comply with such requirements, such provision will be construed or
deemed amended to the extent necessary to conform to such requirements.

                                     - 8 -
<PAGE>

      9. General Provisions.

         (a) Compliance With Legal and Other Requirements. The Plan, the
granting and exercising of Purchase Rights hereunder, and the other obligations
of the Company and the Custodian under the Plan will be subject to all
applicable federal and state laws, rules, and regulations, and to such approvals
by any regulatory or governmental agency as may be required. The Company may, in
its discretion, postpone the issuance or delivery of Stock upon exercise of
Purchase Rights until completion of such registration or qualification of such
Stock or other required action under any federal or state law, rule, or
regulation, or the listing or other required action with respect to any
automated quotation system or stock exchange upon which the Stock or other
Company securities are designated or listed, or compliance with any other
contractual obligation of the Company, as the Company may consider appropriate,
and may require any Participant to make such representations and furnish such
information as it may consider appropriate in connection with the issuance or
delivery of Stock in compliance with applicable laws, rules, and regulations,
designation or listing requirements, or other contractual obligations. The
Company may, in its discretion, postpone the issuance or delivery of Stock upon
exercise of Purchase Rights until completion of such registration or
qualification of such Stock or other required action under any federal or state
law, rule, or regulation, or the laws of any country in which employees of the
Company and a Subsidiary who are nonresident aliens and who arc eligible to
participate reside, or other required action with respect to any automated
quotation system or stock exchange upon which the Stock or other Company
securities are designated or listed, or compliance with any other contractual
obligation of the Company, as the Company may consider appropriate.

         (b) Limits on Encumbering Rights. No right or interest of a Participant
under the Plan, including any Purchase Right, may be pledged, encumbered, or
hypothecated to or in favor of any party, subject to any lien, obligation, or
liability of such Participant, or otherwise assigned, transferred, or disposed
of except pursuant to the laws of descent or distribution, and any right of a
Participant under the Plan will be exercisable during the Participant's lifetime
only by the Participant.

         (c) No Right to Continued Employment. Neither the Plan nor any action
taken hereunder, including the grant of a Purchase Right, will be construed as
giving any employee the right to be retained in the employ of the Company or any
of its Subsidiaries, nor will it interfere in any way with the right of the
Company or any of its Subsidiaries to terminate any employee's employment at any
time.

         (d) Taxes. The Company or any Subsidiary is authorized to withhold from
any payment to be made to a Participant, including any payroll and other
payments not related to the Plan, amounts of withholding and other taxes due in
connection with any transaction under the Plan, and a Participant's enrollment
in the Plan will be deemed to constitute his or her consent to such withholding.
In addition, Participants may be required to advise the Company of sales and
other dispositions of Stock acquired under the plan in order to permit the
Company to comply with tax laws and to claim any tax deductions to which the
Company may be entitled with respect to the Plan. (This provision and other Plan
provisions do not set forth an explanation of the tax consequences to
Participants under the Plan.)

                                     - 9 -
<PAGE>

         (e) Changes to the Plan. The Board may amend, alter, suspend,
discontinue, or terminate the Plan without the consent of shareholders or
Participants, except that any such action will be subject to the approval of the
Company's shareholders within one year after such Board action if such
shareholder approval is required by any federal or state law or regulation or
the rules of any automated quotation system or stock exchange on which the Stock
may then be quoted or listed, or if such shareholder approval is necessary in
order for the Plan to continue to meet the requirements of Section 423 of the
Code, and the Board may otherwise, in its discretion, determine to submit other
such actions to shareholders for approval; provided, however, that, without the
consent of an affected Participant, no amendment, alteration, suspension,
discontinuation, or termination of the Plan may materially and adversely affect
the rights of such Participant with respect to outstanding Purchase Rights
relating to any Offering Period that has been completed prior to such Board
action. The foregoing notwithstanding, upon termination of the Plan the Board
may (i) elect to terminate all outstanding Purchase Rights at such time as the
Board may designate; in the event of such termination of any Purchase Right
prior to its exercise, all amounts contributed to the Plan which remain in a
Participant's Cash Account will be returned to the Participant (without
interest) as promptly as practicable, or (ii) shorten the Offering Period to
such period determined by the Board and use amounts credited to a Participant
Cash Account to purchase Stock.

         (f) No Rights to Participate; No Shareholder Rights. No Participant or
employee will have any claim to participate in the Plan with respect to Offering
Periods that have not commenced, and the Company will have no obligation to
continue the Plan. No Purchase Right will confer on any Participant any of the
rights of a shareholder of the Company unless and until Stock is duly issued or
transferred and delivered to the Participant (or credited to the Participant's
Stock Account).

         (g) Fractional Shares. Unless otherwise determined by the Board,
purchases of Stock under the Plan executed by the Custodian may result in the
crediting of fractional shares of Stock to the Participant's Stock Account. Such
fractional shares will be computed to at least three decimal places. Fractional
shares will not, however, be issued by the Company, and certificates
representing fractional shares will not be delivered to Participants under any
circumstances.

         (h) Nonexclusivity of the Plan. Neither the adoption of the Plan by the
Board nor its submission to the shareholders of the Company for approval will be
construed as creating any limitations on the power of the Board to adopt such
other compensatory arrangements as it may deem desirable, including, without
limitation, the granting of stock options otherwise than under the Plan, and
such arrangements may be either applicable generally or only in specific cases.

         (i) Plan Year. The Plan will operate on a plan year which ends December
31 in each year.

         (j) Governing Law. The validity, construction, and effect of the Plan
and any rules and regulations relating to the Plan will be determined in
accordance with the laws of the State of Arizona, without giving effect to
principles of conflicts of laws, and applicable federal law.

                                     - 10 -
<PAGE>

         (k) Effective Date. The Plan, as amended and restated, is effective as
of the Effective Date, which is the Offering Period beginning on October 1,
2005.

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</DOCUMENT>
