SC TO-I

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

SCHEDULE TO

(Rule 13e-4)

TENDER OFFER STATEMENT UNDER SECTION 14(d)(1) OR 13(e)(1)
OF THE SECURITIES EXCHANGE ACT OF 1934

APOLLO GROUP, INC.

(Name of Subject Company (Issuer) and Filing Person (Offeror))

Options to Purchase Shares of Class A Common Stock, no Par Value
(Title of Class of Securities)

037604105
(CUSIP Number of Class of Securities)
(Underlying Common Stock)

Joseph L. D’Amico
Chief Financial Officer
Apollo Group, Inc.
4615 East Elwood Street
Phoenix, Arizona 85040
(480) 966-5394
(Name, address and telephone number of person authorized to receive notices and communications on behalf of filing person)
Copy to:
S. James DiBernardo, Esq.
Jill Mather Bartow, Esq.
Morgan, Lewis, & Bockius LLP
Two Palo Alto Square
Palo Alto, California 94306
(650) 843-4000

CALCULATION OF FILING FEE

Transaction valuation*	Amount of filing fee**
$53,745,480.00	$1,649.99

* The “transaction valuation” set forth above is based on the Black-Scholes option valuation model, and assumes that all outstanding options eligible for tender covering an aggregate of 2,068,679 shares of Class A common stock of Apollo Group, Inc. will be amended pursuant to this offer, which may not occur.

** The amount of the filing fee, calculated in accordance with Rule 0-11 under the Securities Exchange Act of 1934, as amended, as modified by Fee Advisory No. 5 for fiscal year 2007, equals $30.70 per $1,000,000 of transaction valuation. The transaction valuation set forth above was calculated for the sole purpose of determining the filing fee, and should not be used or relied upon for any other purpose.

o Check box if any part of the fee is offset as provided by Rule 0-11(a)(2) and identify the filing with which the offsetting fee was previously paid. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

Amount Previously Paid:	Not applicable.
Form or Registration No.:	Not applicable.
Filing party:	Not applicable.
Date filed:	Not applicable.

o Check the box if the filing relates solely to preliminary communications made before the commencement of a tender offer.

     Check the appropriate boxes below to designate any transactions to which the statement relates:

o third party tender offer subject to Rule 14d-1.

þ issuer tender offer subject to Rule 13e-4.

o going-private transaction subject to Rule 13e-3.

o amendment to Schedule 13D under Rule 13d-2.

     Check the following box if the filing is a final amendment reporting the results of the tender offer. o

TABLE OF CONTENTS

	ITEM 1. SUMMARY TERM SHEET
	ITEM 2. SUBJECT COMPANY INFORMATION
	ITEM 3. IDENTITY AND BACKGROUND OF FILING PERSON
	ITEM 4. TERMS OF THE TRANSACTION
	ITEM 5. PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND ARRANGEMENTS
	ITEM 6. PURPOSES OF THE TRANSACTION AND PLANS OR PROPOSALS
	ITEM 7. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION
	ITEM 8. INTEREST IN SECURITIES OF THE SUBJECT COMPANY
	ITEM 9. PERSONS/ASSETS, RETAINED, EMPLOYED, COMPENSATED OR USED
	ITEM 10. FINANCIAL STATEMENTS
	ITEM 11. ADDITIONAL INFORMATION
	ITEM 12. EXHIBITS
	ITEM 13. INFORMATION REQUIRED BY SCHEDULE 13E-3
SIGNATURE
INDEX OF EXHIBITS
EX-99.(A)(1)
EX-99.(A)(3)
EX-99.(A)(4)
EX-99.(A)(5)
EX-99.(A)(6)
EX-99.(A)(7)
EX-99.(A)(8)
EX-99.(A)(9)
EX-99.(A)(10)
EX-99.(A)(11)
EX-99.(A)(12)
EX-99.(A)(13)
EX-99.(A)(14)
EX-99.(A)(15)
EX-99.(A)(16)
EX-99.(A)(17)
EX-99.(A)(18)
EX-99.(A)(19)
EX-99.(A)(20)
EX-99.(D)(2)

ITEM 1. SUMMARY TERM SHEET.

The information set forth under “Summary Term Sheet” in the Offer to Amend or Replace Eligible Options, dated June 13, 2007 (the “Offer to Amend or Replace”), attached hereto as Exhibit (a)(1), is incorporated herein by reference.

ITEM 2. SUBJECT COMPANY INFORMATION.

(a) The name of the issuer is Apollo Group, Inc., an Arizona corporation (the “Company”); the address of its principal executive offices is 4615 East Elwood Street, Phoenix, Arizona 85040; and its telephone number is (480) 966-5394. The information set forth in the Offer to Amend or Replace under Section 11 (“Information Concerning Apollo Group”) is incorporated herein by reference.

(b) This Tender Offer Statement on Schedule TO relates to an offer by the Company to amend or replace outstanding “Eligible Options” (as defined in the Offer to Amend or Replace attached hereto as Exhibit (a)(1)) held by current employees subject to taxation in the United States so that those options will not be subject to adverse tax consequences under Internal Revenue Code Section 409A. Each eligible participant may elect to amend his or her Eligible Options to increase the exercise price per share of the Company’s Class A common stock, no par value, purchasable thereunder and become eligible to receive a special Cash Bonus (as defined in the Offer to Amend or Replace) from the Company, all upon the terms and subject to the conditions set forth in the Offer to Amend or Replace and the related Election Form attached hereto as Exhibit (a)(18) (the “Election Form”) and the Stock Option Amendment and Special Bonus Agreement (the “Amendment Agreement” and, together with the Offer to Amend or Replace and the Election Form, as they may each be amended or supplemented from time to time, the “Offer”). Certain tendered Eligible Options may, in lieu of such amendment, be canceled and replaced with new options that will be exactly the same as the canceled options but will avoid adverse tax consequences under Section 409A. The Offer is currently set to expire at 11:59 p.m. Eastern Daylight Time on July 12, 2007 but may be extended (the “Expiration Date”). As of June 12, 2007, Eligible Options to purchase 2,068,679 shares of the Company’s Class A common stock were outstanding.

The information set forth in the Offer to Amend or Replace on the introductory pages and under “Summary Term Sheet,” Section 1 (“Eligible Optionees; Eligible Options; Amendment of Eligible Options and Cash Bonus; New Options; Expiration Date; Additional Considerations”), Section 3 (“Status of Eligible Options Not Amended or Replaced”), Section 6 (“Acceptance of Eligible Options for Amendment or Replacement and Commitment to Pay Cash Bonus With Respect to Amended Options”) and Section 9 (“Source and Amount of Consideration; Terms of Amended Options or New Options”) is incorporated herein by reference.

(c) The information set forth in the Offer to Amend or Replace under Section 8 (“Price Range of Common Stock Underlying the Options”) is incorporated herein by reference.

ITEM 3. IDENTITY AND BACKGROUND OF FILING PERSON.

(a) The Company is the filing person. The information set forth under Item 2(a) above is incorporated herein by reference. The information set forth in Schedule I to the Offer to Amend or Replace (“Information Concerning the Directors and Executive Officers of Apollo Group, Inc.”) is incorporated herein by reference.

ITEM 4. TERMS OF THE TRANSACTION.

(a) The information set forth in the Offer to Amend or Replace on the introductory pages and under “Summary Term Sheet,” Section 1 (“Eligible Optionees; Eligible Options; Amendment of Eligible Options and Cash Bonus; New Options; Expiration Date; Additional Considerations”), Section 3 (“Status of Eligible Options Not Amended or Replaced”), Section 4 (“Procedures for Tendering Eligible Options”), Section 5 (“Withdrawal Rights”), Section 6 (“Acceptance of Eligible Options for Amendment or Replacement and Commitment to Pay Cash Bonus With Respect to Amended Options”), Section 7 (“Conditions of the Offer”), Section 9 (“Source and Amount of Consideration; Terms of Amended Options or New Options”), Section 10 (“Amended Options and New Options Will Not Differ from Eligible Options”), Section 13 (“Status of Options Accepted by Us in the Offer; Accounting Consequences of the Offer”), Section 14 (“Legal Matters; Regulatory Approvals”), Section 15 (“Material U.S. Federal Income Tax Consequences”), Section 16 (“Extension of the Offer; Termination; Amendment”) and Section 19 (“Forward-Looking Statements; Miscellaneous”), is incorporated herein by reference.

(b) The information set forth in the Offer to Amend or Replace under Section 12 (“Interests of Directors and Officers; Transactions and Arrangements Concerning the Options; and Material Agreements with Directors and Officers”) is incorporated herein by reference.

ITEM 5. PAST CONTACTS, TRANSACTIONS, NEGOTIATIONS AND ARRANGEMENTS.

(a) The information set forth in the Offer to Amend or Replace under Section 12 (“Interests of Directors and Officers; Transactions and Arrangements Concerning the Options; and Material Agreements with Directors and Officers”) is incorporated herein by reference. The Apollo Group, Inc. Long Term Incentive Plan and the Apollo Group, Inc. Amended and Restated 2000 Stock Incentive Plan, pursuant to which the Eligible Options have been granted are attached hereto as Exhibits (d)(1) and (d)(2), respectively, and contain information regarding the subject securities.

ITEM 6. PURPOSES OF THE TRANSACTION AND PLANS OR PROPOSALS.

(a) The information set forth in the Offer to Amend or Replace under Section 2 (“Purpose of the Offer”) is incorporated herein by reference.

(b) The information set forth in the Offer to Amend or Replace under Section 6 (“Acceptance of Eligible Options for Amendment or Replacement and Commitment to Pay Cash Bonus With Respect to Amended Options”) and Section 13 (“Status of Options Accepted by Us in the Offer; Accounting Consequences of the Offer”) is incorporated herein by reference.

(c) The information set forth in the Offer to Amend or Replace under “Section 1 (“Eligible Optionees; Eligible Options; Amendment of Eligible Options and Cash Bonus; New Options; Expiration Date; Additional Considerations”) is incorporated herein by reference.

ITEM 7. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.

(a) The information set forth in the Offer to Amend or Replace under Section 9 (“Source and Amount of Consideration; Terms of Amended Options or New Options”) and Section 17 (“Fees and Expenses”) is incorporated herein by reference.

(b) The information set forth in the Offer to Amend or Replace under Section 7 (“Conditions of the Offer”) is incorporated herein by reference.

(d) Not applicable.

ITEM 8. INTEREST IN SECURITIES OF THE SUBJECT COMPANY.

(a) The information set forth in the Offer to Amend or Replace under Section 12 (“Interests of Directors and Officers; Transactions and Arrangements Concerning the Options; and Material Agreements with Directors and Officers”) is incorporated herein by reference.

(b) The information set forth in the Offer to Amend or Replace under Section 12 (“Interests of Directors and Officers; Transactions and Arrangements Concerning the Options; and Material Agreements with Directors and Officers”) is incorporated herein by reference.

ITEM 9. PERSONS/ASSETS, RETAINED, EMPLOYED, COMPENSATED OR USED.

(a) Not applicable.

ITEM 10. FINANCIAL STATEMENTS.

(a) The information set forth in the Offer to Amend or Replace under Section 11 (“Information Concerning Apollo Group”) and Section 18 (“Additional Information”) is incorporated herein by reference. Item 8 (“Financial Statements and Supplementary Data”) of the Company’s Annual Report on Form 10-K for its fiscal year ended August 31, 2006 is incorporated herein by reference. Item 1 (“Financial Statements (Unaudited)”) of the Company’s Quarterly Report on Form 10-Q/A for its fiscal quarter ended February 28, 2007 is incorporated herein by reference.

(b) Not applicable.

(c) Summary Information. The information set forth in the Offer to Amend or Replace under Section 11 (“Information Concerning Apollo Group”) is incorporated herein by reference.

ITEM 11. ADDITIONAL INFORMATION.

(a) The information set forth in the Offer to Amend or Replace under Section 12 (“Interests of Directors and Officers; Transactions and Arrangements Concerning the Options; and Material Agreements with Directors and Officers”) and Section 14 (“Legal Matters; Regulatory Approvals”) is incorporated herein by reference.

(b) Not applicable.

ITEM 12. EXHIBITS.

(a)(1)	Offer to Amend or Replace Eligible Options, dated June 13, 2007.
(a)(2)	Email to Current Employees dated May 17, 2007, re Resumption of Stock Option Exercises and Possible Tender Offer for Post-2004 Vested Options.*
(a)(3)	Email Announcement of Offer to Amend or Replace Eligible Options, dated June 13, 2007.
(a)(4)	Employee Webcast.
(a)(5)	Frequently Asked Questions.
(a)(6)	Screenshot of Login Page to Offer website at https://apol.equitybenefits.com.
(a)(7)	Screenshot of Welcome Page to Offer website at https://apol.equitybenefits.com (screenshots 1-4).
(a)(8)	Screenshot of Electronic Election Form (screenshots 1-2).
(a)(9)	Screenshot of Election Amendment Review.
(a)(10)	Screenshot of Agreement to Terms of Election (screenshots 1-3).
(a)(11)	Screenshot of Print Confirmation (screenshots 1-2).
(a)(12)	Screenshot of Election Confirmation Statement.
(a)(13)	Instructions to Electronic Election Form.
(a)(14)	Form of Stock Option Amendment and Special Bonus Agreement.
(a)(15)	Form of Option Cancellation and Regrant Agreement.
(a)(16)	Form of Acknowledgement of Receipt of Paper Election Form.
(a)(17)	Form of Email Reminder of Expiration Date.
(a)(18)	Paper Election Form.
(a)(19)	Email to Individuals Choosing Not to Tender Eligible Options.
(a)(20)	Form of Notice of Expiration of Offer, Amendment of Eligible Options and Commitment to Pay Cash Bonus.
(a)(21)	Material Income Tax Consequences for Eligible Optionees Subject to Taxation Outside of the United States.**
(a)(22)	Apollo Group, Inc. Annual Report on Form 10-K for the fiscal year ended August 31, 2006, filed with the Securities and Exchange Commission (the “SEC”) on May 22, 2007, is incorporated herein by reference.
(a)(23)	Apollo Group, Inc. Quarterly Report on Form 10-Q/A for the fiscal quarter ended February 28, 2007, filed with the SEC on May 25, 2007, is incorporated herein by reference.
(b)	Not applicable.
(d)(1)	Apollo Group, Inc. Long Term Incentive Plan is incorporated herein by reference from Exhibit 10.3 to Form S-1, filed with the SEC on March 7, 1997.
(d)(2)	Apollo Group, Inc. Amended and Restated 2000 Stock Incentive Plan.
(g)	Not applicable.
(h)	Not applicable.
*	Previously filed with the Schedule TO-C filed with the SEC on May 17, 2007, and incorporated herein by reference.
**	To be filed by amendment.

ITEM 13. INFORMATION REQUIRED BY SCHEDULE 13E-3.

     (a) Not applicable.

SIGNATURE

After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this Schedule TO is true, complete and correct.

APOLLO GROUP, INC.
By:	/s/ Joseph L. D’Amico
		Joseph L. D’Amico
	Chief Financial Officer
Date:	June 13, 2007

INDEX OF EXHIBITS

EXHIBIT
NUMBER	DESCRIPTION
(a)(1)	Offer to Amend or Replace Eligible Options, dated June 13, 2007.
(a)(2)	Email to Current Employees dated May 17, 2007, re Resumption of Stock Option Exercises and Possible Tender Offer for Post-2004 Vested Options.*
(a)(3)	Email Announcement of Offer to Amend or Replace Eligible Options, dated June 13, 2007.
(a)(4)	Employee Webcast.
(a)(5)	Frequently Asked Questions.
(a)(6)	Screenshot of Login Page to Offer website at https://apol.equitybenefits.com.
(a)(7)	Screenshot of Welcome Page to Offer website at https://apol.equitybenefits.com (screenshots 1-4).
(a)(8)	Screenshot of Electronic Election Form (screenshots 1-2).
(a)(9)	Screenshot of Election Amendment Review.
(a)(10)	Screenshot of Agreement to Terms of Election (screenshots 1-3).
(a)(11)	Screenshot of Print Confirmation (screenshots 1-2).
(a)(12)	Screenshot of Election Confirmation Statement.
(a)(13)	Instructions to Electronic Election Form.
(a)(14)	Form of Stock Option Amendment and Special Bonus Agreement.
(a)(15)	Form of Option Cancellation and Regrant Agreement.
(a)(16)	Form of Acknowledgement of Receipt of Paper Election Form.
(a)(17)	Form of Email Reminder of Expiration Date.
(a)(18)	Paper Election Form.
(a)(19)	Email to Individuals Choosing Not to Tender Eligible Options.
(a)(20)	Form of Notice of Expiration of Offer, Amendment of Eligible Options and Commitment to Pay Cash Bonus.
(a)(21)	Material Income Tax Consequences for Eligible Optionees Subject to Taxation Outside of the United States.**
(a)(22)	Apollo Group, Inc. Annual Report on Form 10-K for the fiscal year ended August 31, 2006, filed with the Securities and Exchange Commission (the “SEC”) on May 22, 2007, is incorporated herein by reference.
(a)(23)	Apollo Group, Inc. Quarterly Report on Form 10-Q/A for the fiscal quarter ended February 28, 2007, filed with the SEC on May 25, 2007, is incorporated herein by reference.
(b)	Not applicable.
(d)(1)	Apollo Group, Inc. Long Term Incentive Plan is incorporated herein by reference from Exhibit 10.3 to Form S-1, filed with the SEC on March 7, 1997.
(d)(2)	Apollo Group, Inc. Amended and Restated 2000 Stock Incentive Plan.
(g)	Not applicable.
(h)	Not Applicable.

*	Previously filed with the Schedule TO-C filed with the SEC on May 17, 2007, and incorporated herein by reference.
**	To be filed by amendment.

EX-99.(A)(1)

APOLLO GROUP, INC.

OFFER TO AMEND OR REPLACE ELIGIBLE OPTIONS

JUNE 13, 2007

THE OFFER AND WITHDRAWAL RIGHTS EXPIRE
AT 11:59 P.M., EASTERN DAYLIGHT TIME, ON JULY 12, 2007,
UNLESS THE OFFER IS EXTENDED

Apollo Group, Inc. (“Apollo Group”, the “Company”, “us” or “we”) is making this offer to certain individuals to amend or replace certain outstanding stock options to purchase the Company’s Class A common stock previously granted to them under the following stock incentive plans (collectively, the “Plans”):

- the Long Term Incentive Plan, and

- the Amended and Restated 2000 Stock Incentive Plan.

A stock option will be subject to this offer only to the extent that option meets each of the following conditions:

(i) The option was granted under one of the Plans.

(ii) The option was incorrectly priced in that the exercise price per share currently in effect for that option is based on the fair market value per share of the Company’s Class A common stock on a date earlier than the date which has now been determined to be the correct measurement date for that option for financial accounting purposes.

(iii) The option was unvested as of December 31, 2004.

(iv) The option is held by an individual who is, on the expiration of this offer, a current employee of the Company (or any Apollo Group subsidiary) and subject to income taxation in the United States with respect to that option (an “Eligible Optionee”). However, executive officers of the Company and members of the Company’s Board of Directors are not eligible to participate.

(iv) The option is outstanding on the expiration date of this offer.

An option that satisfies each of the foregoing conditions is designated an Eligible Option for purposes of this offer. If only a portion of the option meets the foregoing conditions, then only that portion will be an Eligible Option, and the balance of that option will not be eligible for amendment or replacement pursuant to this offer.

From 2000 through 2004 the Company granted options to purchase shares of UPX Online common stock, a class of common stock reflecting the separate financial performance of the University of Phoenix, Inc., one of the Company’s subsidiaries. On August 27, 2004, the outstanding UPX options were converted into options to purchase shares of the Company’s Class A common stock at a ratio of 1 share of UPX Online common stock to 1.0766 shares of Apollo Group Class A common stock. This conversion ratio was also used to adjust the exercise price for the converted UPX options. To the extent an option to acquire the Company’s Class A common stock was originally granted as an option to acquire shares of UPX Online common stock at an exercise price per share based on the fair market value per share of that stock on a date earlier than the date on which the option was actually deemed to be granted for financial accounting purposes, such option will constitute an Eligible Option, provided it meets each of the foregoing conditions for an Eligible Option.

Unless remedial action is taken to adjust the exercise price of an Eligible Option, that option may be treated as a below-market grant subject to adverse tax consequences under Section 409A of the Internal Revenue Code.

i

Accordingly, the Company is making this offer so that each Eligible Optionee holding one or more Eligible Options will have the opportunity to amend or replace those options to the extent necessary to avoid such adverse taxation. The amendment will adjust the exercise price per share currently in effect for the Eligible Option to the lower of (i) the fair market value per share of the Company’s Class A common stock on the revised measurement date determined for that option for financial accounting purposes or (ii) the closing price per share of such common stock on the date on which the option is amended. The new exercise price per share will be designated the “Adjusted Exercise Price” and will become effective on the first business day following the expiration of the offer (the “Amendment Date”). The option as so amended for the Adjusted Exercise Price will be designated an “Amended Option.” However, if the Adjusted Exercise Price as so determined would be the same or lower than the exercise price per share currently in effect for the Eligible Option, then that option will, on the Amendment Date, be canceled and immediately replaced with a new option that is exactly the same as the canceled option, including the same exercise price per share and no loss of vesting or change to the expiration date of the option term, but with a new grant date. That replacement option will be designated a “New Option.” Such cancellation and re-grant is necessary to evidence the remedial action required under Section 409A with respect to an Eligible Option whose current exercise price is not increased.

If only a portion of an outstanding option is an Eligible Option (i.e., the portion of such option that was unvested as of December 31, 2004), then only that portion may be amended or replaced pursuant to this offer. The balance of such option will not be subject to this offer and will not constitute an Eligible Option for purposes of this offer. That portion (i.e., the portion that was vested as of December 31, 2004) will retain its current exercise price and will not be subject to adverse tax consequences under Section 409A of the Internal Revenue Code.

Each Eligible Optionee whose Eligible Option is amended to increase the exercise price pursuant to this offer will become entitled to receive a special cash bonus (the “Cash Bonus”) with respect to that option. The amount of the Cash Bonus payable with respect to each Eligible Option that is amended to increase the exercise price to the Adjusted Exercise Price will be determined by multiplying (i) the amount by which the Adjusted Exercise Price exceeds the exercise price per share currently in effect for that Eligible Option by (ii) the number of shares of the Company’s Class A common stock purchasable under that option at the Adjusted Exercise Price. The Cash Bonus will be paid on the Company’s first regularly scheduled payroll date after January 1, 2008, which will not be later than January 15, 2008. Such a delayed payment is required by applicable Internal Revenue Service (“IRS”) regulations. The payment when made will be subject to the Company’s collection of all applicable withholding taxes and other amounts required to be withheld by the Company. Such Cash Bonus will be paid whether or not you continue in the Company’s employ through the payment date.

If you are not in the employ of the Company (or any Apollo Group subsidiary) on the expiration date of the offer or on the Amendment Date, then none of your tendered Eligible Options will be amended or replaced, and you will not become entitled to any Cash Bonus with respect to those options. The tendered options will be returned to you and will remain exercisable in accordance with the terms in effect for them at the time of tender, including the current exercise price per share. You will incur Section 409A tax penalties upon your subsequent exercise of those options, unless you bring those options into compliance with Section 409A prior to such exercise.

The offer set forth in this document and the related Election Form and Stock Option Amendment and Special Bonus Agreement (collectively, as they may each be amended or supplemented from time to time, constitute the “Offer”) will expire on the expiration date, currently set for July 12, 2007, unless extended (the “Expiration Date”).

If you are an Eligible Optionee, then you will receive an email on the commencement date of the Offer announcing the Offer and containing a link to the Offer website. Once you have logged onto the Offer website and clicked on the “Make An Election” button, you will be directed to your Election Form that contains the following personalized information with respect to each Eligible Option you hold:

- the grant date indicated for that option on the applicable option agreement or grant notice,

- the current exercise price per share in effect for that option,

ii

- the number of shares of the Company’s Class A common stock purchasable under that option,

- the revised measurement date determined for that option for financial accounting purposes, and

- the fair market value per share of the Company’s Class A common stock on the revised measurement date.

As of June 12, 2007, options to purchase approximately 9,343,311 shares of our Class A common stock were issued and outstanding under the Plans, including Eligible Options to purchase up to approximately 2,068,679 shares of our Class A common stock.

We are making this Offer upon the terms and subject to the conditions set forth in this Offer, including the conditions described in Section 7. Participation in the Offer is voluntary, and you are not required to tender any of your Eligible Options for amendment or replacement. The Offer is not conditioned upon the tender of any minimum number of Eligible Options for amendment or replacement.

Although our Board of Directors has approved this Offer, neither we nor our Board of Directors will make any recommendation as to whether you should tender your Eligible Options for amendment or replacement. You must make your own decision whether to tender your Eligible Options after taking into account your own personal circumstances and preferences. You should be aware that adverse tax consequences under Section 409A may apply to your Eligible Options if they are not amended or replaced pursuant to this Offer, and you will be solely responsible for any taxes, interest or penalties you may incur under Section 409A. For that reason, we recommend that you consult with your personal tax advisor to determine the consequences of tendering or not tendering your Eligible Options pursuant to the Offer.

Shares of our Class A common stock are quoted on the Nasdaq Global Select Market under the symbol “APOL.” On June 12, 2007, the last reported sale price of our Class A common stock on the Nasdaq Global Select Market was $47.47 per share. The Class A common stock is one of two classes of our outstanding common stock. The second class is our Class B common stock and is not publicly traded. The Class A common stock is not a voting stock, and the Class B common stock is the sole outstanding voting stock of the Company. The two classes of common stock generally have the same dividend and liquidation rights; however, our Board of Directors, in its discretion, has the authority to declare dividends on either or both classes of such common stock at any one time.

The Adjusted Exercise Price to be in effect for each Eligible Option amended pursuant to the Offer will represent the lower of (i) the fair market value of the Company’s Class A common stock on the revised measurement date determined for that option for financial accounting purposes or (ii) the closing price of the Company’s Class A common stock on the Amendment Date. If the Adjusted Exercise Price would otherwise be the same or lower than the exercise price per share currently in effect for a tendered Eligible Option, then that option will be replaced with a New Option. Neither the exercise price currently in effect for each Eligible Option nor the Adjusted Exercise Price for each such option is meant to reflect our view of what the trading price of our Class A common stock will be in the short, medium or long-term.

You should direct questions about the Offer or requests for assistance or for additional copies of this document, the related Tender Offer Statement on Schedule TO or the Election Form and accompanying Stock Option Amendment and Special Bonus Agreement to the Apollo Group Tender Offer Hotline at 1-800-398-1278 or stockoptions@apollogrp.edu.

We have not authorized anyone to give you any information or to make any representation in connection with this Offer other than the information and representations contained in this document, the related Tender Offer Statement on Schedule TO or in the related Election Form and Stock Option Amendment and Special Bonus Agreement. If anyone makes any representation or gives you any information that is different from the representations and information contained in this Offer, the related Tender Offer Statement on Schedule TO or in the related Election

iii

Form and Stock Option Amendment and Special Bonus Agreement, you must not rely upon that representation or information as having been authorized by us. We have not authorized any person to make any recommendation on our behalf as to whether you should tender or refrain from tendering your Eligible Options pursuant to the Offer.

The Offer has not been approved or disapproved by the United States Securities and Exchange Commission (the “SEC”) or any state or foreign securities commission, nor has the SEC or any state or foreign securities commission passed upon the accuracy or adequacy of the information contained in this Offer. Any representation to the contrary is a criminal offense. We recommend that you consult with your tax advisor to determine the tax consequences of electing or not electing to participate in the Offer.

IMPORTANT INFORMATION

If you wish to tender one or more of your Eligible Options for amendment or replacement, you must properly complete and sign the Election Form in accordance with the applicable instructions for that form. You can complete this process by accessing the Offer website at https://apol.equitybenefits.com.

As soon as administratively practicable following the Amendment Date, we will return to you a final and complete Stock Option Amendment and Special Bonus Agreement in which the Adjusted Exercise Price for each of your Amended Options and the related Cash Bonus will be set forth in Schedule I to that agreement. You will also receive at that time an Option Cancellation and Regrant Agreement for any New Option granted to you in replacement of a tendered Eligible Option with a current exercise price per share that is the same or higher than the closing price per share of our Class A common stock on the Amendment Date. The terms of the Option Cancellation and Regrant Agreement will be the same as the option agreement in effect for the canceled option, including the same exercise price per share and no loss of vesting or change to the expiration date of the option term, but will have a new grant date.

The key dates to remember in connection with the Offer are as follows:

The commencement date of the Offer is June 13, 2007.

The Offer will expire at 11:59 pm Eastern Daylight Time on July 12, 2007 (unless we extend it).

The Eligible Options will be amended or replaced on July 13, 2007 (unless we extend the Offer). Please be aware that your option account at your broker may not accurately reflect the amendment or replacement for one to two business days following the Amendment Date.

The Cash Bonus for the Amended Options will become payable on the Company’s first regularly scheduled payroll date after January 1, 2008, which will not be later than January 15, 2008. Such a delayed payment is required by applicable IRS regulations.

We are not making the Offer to, nor will we accept any tender of Eligible Options on behalf of, option holders in any jurisdiction in which the Offer or the acceptance of any option tender would not be in compliance with the laws of such jurisdiction. However, we may, at our discretion, take any actions necessary for us to legally make the Offer to option holders in any such jurisdiction.

iv

TABLE OF CONTENTS

		PAGE
INDEX TO SUMMARY TERM SHEET			1
SUMMARY TERM SHEET			3
CERTAIN RISKS OF PARTICIPATING IN THE OFFER			14
THE OFFER			15
1.	ELIGIBLE OPTIONEES; ELIGIBILE OPTIONS; AMENDMENT OF ELIGIBLE OPTIONS AND CASH BONUS; NEW OPTIONS; EXPIRATION DATE; ADDITIONAL CONSIDERATIONS		15
2.	PURPOSE OF THE OFFER		20
3.	STATUS OF ELIGIBLE OPTIONS NOT AMENDED OR REPLACED		24
4.	PROCEDURES FOR TENDERING ELIGIBLE OPTIONS		24
5.	WITHDRAWAL RIGHTS		26
6.	ACCEPTANCE OF ELIGIBLE OPTIONS FOR AMENDMENT OR REPLACEMENT AND COMMITMENT TO PAY CASH BONUS WITH RESPECT TO AMENDED OPTIONS		26
7.	CONDITIONS OF THE OFFER		27
8.	PRICE RANGE OF COMMON STOCK UNDERLYING THE OPTIONS		29
9.	SOURCE AND AMOUNT OF CONSIDERATION; TERMS OF AMENDED OPTIONS OR NEW OPTIONS		29
10.	AMENDED OPTIONS AND NEW OPTIONS WILL NOT DIFFER FROM ELIGIBLE OPTIONS		33
11.	INFORMATION CONCERNING APOLLO GROUP		33
12.	INTERESTS OF DIRECTORS AND OFFICERS; TRANSACTIONS AND ARRANGEMENTS CONCERNING THE OPTIONS; AND MATERIAL AGREEMENTS WITH DIRECTORS AND OFFICERS		35
13.	STATUS OF OPTIONS ACCEPTED BY US IN THE OFFER; ACCOUNTING CONSEQUENCES OF THE OFFER		37
14.	LEGAL MATTERS; REGULATORY APPROVALS		38
15.	MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES		38
16.	EXTENSION OF THE OFFER; TERMINATION; AMENDMENT		39
17.	FEES AND EXPENSES		39
18.	ADDITIONAL INFORMATION		39
19.	FORWARD-LOOKING STATEMENTS; MISCELLANEOUS		41

SCHEDULE I	INFORMATION CONCERNING THE DIRECTORS AND EXECUTIVE OFFICERS OF APOLLO GROUP, INC.
SCHEDULE II	INFORMATION CONCERNING REMEDIAL ACTION TAKEN BY APOLLO GROUP DIRECTORS AND EXECUTIVE OFFICERS TO OPTIONS WITH REVISED MEASUREMENT DATES
SCHEDULE III	BENEFICIAL OWNERSHIP OF SECURITIES BY APOLLO GROUP DIRECTORS AND EXECUTIVE OFFICERS

INDEX TO SUMMARY TERM SHEET

QUESTION		PAGE
1.	WHAT OPTIONS ARE ELIGIBLE FOR AMENDMENT OR REPLACEMENT PURSUANT TO THE OFFER?		3
2.	WILL OPTIONS THAT WERE ORIGINALLY GRANTED TO PURCHASE UPX ONLINE COMMON STOCK BE ELIGIBLE FOR AMENDMENT OR REPLACEMENT PURSUANT TO THE OFFER?		3
3.	WHAT IF THE VESTING OF ONE OR MORE OF MY OPTIONS WAS ACCELERATED?		4
4.	WHAT OTHER DEFINED TERMS ARE IMPORTANT TO UNDERSTAND THE OFFER?		4
5.	WHY IS APOLLO GROUP MAKING THE OFFER?		5
6.	ARE APOLLO GROUP EXECUTIVE OFFICERS AND NON-EMPLOYEE BOARD MEMBERS ELIGIBLE TO PARTICIPATE IN THE OFFER?		5
7.	ARE OPTIONEES RESIDENT OUTSIDE THE UNITED STATES ELIGIBLE TO PARTICIPATE IN THE OFFER?		6
8.	WHAT ARE THE COMPONENTS OF THE OFFER?		6
9.	WHAT HAPPENS IF I AM NOT A CURRENT EMPLOYEE ON THE EXPIRATION DATE?		6
10.	WHAT HAPPENS IF MY EMPLOYMENT TERMINATES ON OR AFTER THE EXPIRATION DATE BUT BEFORE THE AMENDMENT DATE?		7
11.	WHAT ARE THE TAX CONSEQUENCES OF AN OPTION SUBJECT TO CODE SECTION 409A?		7
12.	WHAT ARE THE TAX CONSEQUENCES IF I TENDER MY OPTIONS FOR AMENDMENT OR REPLACEMENT PURSUANT TO THE OFFER?		8
13.	HOW WILL MY CASH BONUS BE TAXED?		9
14.	WHAT ARE THE TAX CONSEQUENCES IF I DO NOT TENDER MY OPTIONS FOR AMENDMENT OR REPLACEMENT PURSUANT TO THE OFFER?		9
15.	WHAT SECURITIES ARE SUBJECT TO THE OFFER?		9
16.	AM I REQUIRED TO PARTICIPATE IN THE OFFER?		9
17.	DO I HAVE TO ACCEPT THE OFFER WITH RESPECT TO ALL OF MY ELIGIBLE OPTIONS OR MAY I DECIDE TO ACCEPT THE OFFER WITH RESPECT TO ONLY A PORTION OF THE ELIGIBLE OPTIONS?		9
18.	WILL THE TERMS AND CONDITIONS OF MY AMENDED OPTIONS OR NEW OPTIONS BE THE SAME AS THOSE CURRENTLY IN EFFECT FOR MY ELIGIBLE OPTIONS?		9
19.	WHEN WILL MY ELIGIBLE OPTIONS BE AMENDED OR REPLACED?		10
20.	WHAT HAPPENS IF THE FAIR MARKET VALUE OF THE APOLLO GROUP CLASS A COMMON STOCK ON THE AMENDMENT DATE IS LESS THAN THE FAIR MARKET VALUE PER SHARE OF SUCH COMMON STOCK ON THE REVISED MEASUREMENT DATE OF THE ELIGIBLE OPTION?		10
21.	WHEN CAN I EXERCISE MY AMENDED OPTIONS OR NEW OPTIONS?		10
22.	CAN I EXERCISE MY ELIGIBLE OPTIONS AFTER I TENDER MY ELIGIBLE OPTION BUT BEFORE AMENDMENT OR REPLACEMENT?		10
23.	WILL MY AMENDED OR REPLACED OPTIONS BE INCENTIVE STOCK OPTIONS OR NON-STATUTORY OPTIONS?		11

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QUESTION		PAGE
24.	WHEN MAY I EXERCISE THE PORTION OF MY OPTIONS THAT WAS VESTED AS OF DECEMBER 31, 2004?		11
25.	WHAT ARE THE CONDITIONS TO THE OFFER?		11
26.	WHEN DOES THE OFFER EXPIRE? CAN THE OFFER BE EXTENDED, AND IF SO, HOW WILL I BE NOTIFIED IF IT IS EXTENDED?		11
27.	HOW AND WHEN DO I TENDER MY ELIGIBLE OPTIONS?		11
28.	DURING WHAT PERIOD OF TIME MAY I CHANGE MY ELECTION WITH RESPECT TO MY ELIGIBLE OPTIONS?		12
29.	DOES APOLLO GROUP MAKE ANY RECOMMENDATIONS AS TO WHETHER I SHOULD TENDER MY ELIGIBLE OPTIONS FOR AMENDMENT OR REPLACEMENT PURSUANT TO THE OFFER?		12
30.	WHAT ARE SOME OF THE KEY DATES TO REMEMBER?		12
31.	TO WHOM CAN I TALK IF I HAVE QUESTIONS ABOUT THE OFFER?		13

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SUMMARY TERM SHEET

The following are answers to some of the questions that you may have about the Offer. We urge you to read carefully the remainder of this document and the accompanying Election Form and Stock Option Amendment and Special Bonus Agreement (which when taken together, as they may each be amended or supplemented from time to time, constitute the “Offer”) because the information in this summary and in the introductory pages preceding this summary is not complete and may not contain all of the information that is important to you. Additional important information is contained in the remainder of this document and the Election Form and accompanying Stock Option Amendment and Special Bonus Agreement. We have included page references to the relevant sections of the document where you can find a more complete description of the topics in this summary term sheet.

1. WHAT OPTIONS ARE ELIGIBLE FOR AMENDMENT OR REPLACEMENT PURSUANT TO THE OFFER?

Section 409A to the Internal Revenue Code (the “Code”) provides that an option granted with a below-market exercise price, to the extent it was not vested as of December 31, 2004, will be subject to adverse income taxation (as described below), unless that option is brought into compliance with Section 409A before exercise. Apollo Group has decided to offer eligible persons holding such options the opportunity to amend or replace each such option to avoid adverse taxation under Section 409A.

An outstanding option to purchase shares of the Company’s Class A common stock will be eligible for amendment or replacement pursuant to the Offer if that option meets each of the following conditions:

(i) The option was granted under one of the following stock incentive plans of the Company (the “Plans”):

- the Long Term Incentive Plan; or

- the Amended and Restated 2000 Stock Incentive Plan.

(ii) The option was incorrectly priced in that the exercise price per share currently in effect for that option is based on the fair market value per share of the Company’s Class A common stock on a date earlier than the date which has been determined to be the correct measurement date for that option for financial accounting purposes.

(iii) The option was unvested as of December 31, 2004.

(iv) The option is held by an individual who is, on the expiration of this offer, an Eligible Optionee.

(iv) The option is outstanding on the expiration date of this offer.

An option that meets each of the foregoing conditions will constitute an “Eligible Option” for purposes of the Offer. If only a portion of the option meets those conditions, then only that portion will be an Eligible Option, and the balance of that option will not be eligible for amendment or replacement pursuant to this offer. (Page 15)

2. WILL OPTIONS THAT WERE ORIGINALLY GRANTED TO PURCHASE UPX ONLINE COMMON STOCK BE ELIGIBLE FOR AMENDMENT OR REPLACEMENT PURSUANT TO THE OFFER?

One or more of your option grants may have originally been granted to acquire shares of UPX Online common stock (“UPX Options”). Such common stock was a separate class of the Company’s common stock which was used to track the separate financial performance of the University of Phoenix, Inc., one of the Company’s subsidiaries. On August 27, 2004, the outstanding UPX Options were converted into options to purchase shares of the Company’s Class A common stock at a ratio of 1 share of UPX Online common stock to 1.0766 shares of Apollo Group Class A

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common stock. This conversion ratio was also used to adjust the exercise price for the converted UPX Options.

To the extent one or more of your options to acquire the Company’s Class A common stock was originally granted as an option to acquire shares of UPX Online common stock at an exercise price per share based on the fair market value per share of that stock on a date earlier than the date on which the option was actually deemed to be granted for financial accounting purposes, such option will constitute an Eligible Option, provided it meets each of the conditions for an Eligible Option listed in Question 1 above. (Page 15)

3. WHAT IF THE VESTING OF ONE OR MORE OF MY OPTIONS WAS ACCELERATED?

If the vesting schedule of your option was accelerated prior to December 31, 2004, so that all of it vested as of December 31, 2004, the accelerated option will not be subject to Section 409A and will not constitute an Eligible Option for purposes of the Offer. That option will not be included on your personalized Election Form that you access on the Offer website.

4. WHAT OTHER DEFINED TERMS ARE IMPORTANT TO UNDERSTAND THE OFFER?

For purposes of this Offer, you also should be familiar with the following additional definitions.

     “Adjusted Exercise Price” is the new exercise price per share that will be in effect for any tendered Eligible Option that is amended pursuant to the Offer and will be equal to the lower of (i) the fair market value per share of the Company’s Class A common stock on the revised measurement date determined for that option for financial accounting purposes or (ii) the closing price per share of such common stock on the date on which the option is amended. However, if the Adjusted Exercise Price as so determined would be the same or lower than the exercise price per share currently in effect for the Eligible Option, then that option will, on the Amendment Date, be canceled and immediately replaced with a new option that is exactly the same as the canceled option, including the same exercise price per share and with no loss of vesting or change to the expiration date of the option term, but with a new grant date.

     Accordingly, the exercise price for a tendered Eligible Option that we amend or replace pursuant to the Offer will fall within one of the three following categories:

          (i) Full Increase: increased to the fair market value per share of the Company’s Class A common stock on the revised measurement date determined for that option for financial accounting purposes,

          (ii) Partial Increase: increased to the lower closing price per share of such common stock on the date such option is amended, or

          (iii) No Increase: retained as the exercise price per share for any New Option issued in replacement of that option.

     “Amended Option” will mean an Eligible Option that has been amended pursuant to the Offer to increase the exercise price per share for the Class A common stock purchasable under that option to the Adjusted Exercise Price determined for such option.

     “Amendment Agreement” will mean the Stock Option Amendment and Special Bonus Agreement that will document the Adjusted Exercise Price for each of your Amended Options and set forth the terms of the Cash Bonus payable with respect to those Amended Options.

     “Amendment Date” will mean the date on which each Eligible Option is amended to increase the exercise price of that option to the Adjusted Exercise Price and will be July 12, 2007 or, if the Offer is extended, the first business day following the extended expiration date of the Offer.

     “Cash Bonus” is the special cash bonus to which each Eligible Optionee will become entitled if the current exercise price of one or more of his or her Eligible Options is increased pursuant to the Offer.

     “Class A common stock” is one of two classes of the Company’s outstanding common stock. The Class A common stock is publicly traded on the Nasdaq Global Select Market. The second class is our Class B common stock which is not publicly traded, and substantially all of the outstanding Class B common stock is beneficially owned by John V. Sperling and Peter G. Sperling, each of whom is an executive officer of the Company and a member of the Board of Directors. The Class A common stock is not a voting stock, and the Class B common stock

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is the sole outstanding voting stock of the Company. The two classes of common stock generally have the same dividend and liquidation rights; however, our Board of Directors, in its discretion, has the authority to declare dividends on either or both classes of such common stock at any one time.

     “Election Form” is the form that an Eligible Optionee must use to notify the Company as to the particular Eligible Options he or she has elected to tender for amendment or replacement pursuant to the terms of the Offer.

     “Eligible Optionee” is each person who is, on the expiration date of the Offer, a current employee of the Company (or any Apollo Group subsidiary) and subject to income taxation in the United States with respect to his or her tendered Eligible Options. However, executive offers of the Company and Board members are not eligible to participate in the Offer.

     “Fair Market Value” per share of the Company’s Class A common stock on any relevant date will be deemed to be equal to the closing price per share of such stock on that date on the Nasdaq Global Select Market.

     “New Option” will mean the option granted on the Amendment Date in replacement of a tendered Eligible Option with a current exercise price per share at or above the closing price per share of our Class A common stock on the Amendment Date. The New Option will be exactly the same as the canceled option, including the same exercise price per share and no loss of vesting or change to the expiration date of the option term, but will have a new grant date. The New Option will be evidenced by the Option Cancellation and Regrant Agreement that replaces the option agreement in effect for the canceled option.

5. WHY IS APOLLO GROUP MAKING THE OFFER?

We are making this Offer to amend or replace the Eligible Options because of potential adverse tax consequences that may apply to those options. As a result of a thorough investigation of the Company’s past option grant practices, the Company has determined that each Eligible Option was incorrectly priced in that the exercise price per share currently in effect for that option was based on the fair market value per share of the Company’s Class A common stock on a date earlier than the date which has now been determined to be the correct measurement date for financial accounting purposes. Section 409A of the Internal Revenue Code provides that an option granted with a below-market exercise price, to the extent unvested as of December 31, 2004, will be subject to adverse income taxation unless that option is brought into compliance with Section 409A. By reason of their revised measurement dates, the Eligible Options may be deemed to be below-market options under Section 409A. Accordingly, Apollo Group has decided to provide Eligible Optionees with the opportunity to bring the Eligible Options into compliance either by amending the exercise price per share to the Adjusted Exercise Price determined for each such option or by replacing that option with a New Option. By taking such remedial action, Eligible Optionees can avoid the adverse tax consequences summarized in Section 2 of the Offer. (Page 20)

Your individualized Eligible Option chart in the Election Form accessible on the Offer website at https://apol.equitybenefits.com will set forth the revised measurement date for each Eligible Option you hold, the fair market value per share of our Class A common stock on that date and the number of shares of Class A common stock subject to each Eligible Option.

6. ARE APOLLO GROUP EXECUTIVE OFFICERS AND NON-EMPLOYEE BOARD MEMBERS ELIGIBLE TO PARTICIPATE IN THE OFFER?

Our executive officers and the non-employee members of our Board of Directors are not eligible to participate in the Offer.

However, in December 2006, our executive officers and Board members entered into irrevocable agreements with the Company to take appropriate remedial action to bring certain of their options with revised measurement dates into compliance with Section 409A. Most of the executive officers and Board members agreed to have the exercise price of each of those options, to the extent each such option vested after December 31, 2004, amended to the higher fair market value per share of the Class A common stock on the date that option was subsequently determined to

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have been granted for financial accounting purposes. The exercise prices in effect for such options were amended and increased on May 22, 2007 pursuant to those December 2006 agreements. The Company has not agreed to pay any special cash bonuses to those individuals to compensate them for the increased exercise prices now in effect under their amended options. Ms. Kenda Gonzales, the Company’s former Chief Financial Officer, Mr. Daniel Bachus, the Company’s former Chief Accounting Officer and Controller, and Mr. John Norton, a former member of the Board of Directors, each decided to bring their Section 409A-covered options into compliance with Section 409A by electing in December 2006 to exercise those options during the 2007 calendar year. (Page 35)

7. ARE OPTIONEES RESIDENT OUTSIDE THE UNITED STATES ELIGIBLE TO PARTICIPATE IN THE OFFER?

Yes. If you are a current employee of the Company (or any Apollo Group subsidiary) holding an Eligible Option and subject to taxation in the United States with respect to that option, then you are eligible to participate in the Offer even if you are not currently residing in the United States. (Page 17)

8. WHAT ARE THE COMPONENTS OF THE OFFER?

If an Eligible Option is amended pursuant to the Offer, then the exercise price of that option will be increased to the lower of (i) the fair market value per share of the Company’s Class A common stock on the revised measurement date determined for the option for financial accounting purposes or (ii) the closing price per share of the Company’s Class A common stock on the Amendment Date. The adjusted exercise price will avoid the potential taxation of that option under Section 409A. The new exercise price in effect for each tendered Eligible Option will be designated the “Adjusted Exercise Price.” In addition, each Eligible Optionee whose Eligible Options are so amended will become entitled to a special cash bonus from the Company (the “Cash Bonus”). The amount of the Cash Bonus payable with respect to each Amended Option will be determined by multiplying (i) the amount by which the Adjusted Exercise Price exceeds the exercise price per share currently in effect for that Eligible Option by (ii) the number of shares of the Company’s Class A common stock purchasable under that option at the Adjusted Exercise Price. The Cash Bonus will be paid on the Company’s first regularly scheduled payroll date after January 1, 2008, which will not be later than January 15, 2008. Such a delayed payment is required by applicable Internal Revenue Service (“IRS”) regulations. The payment when made will be subject to the Company’s collection of all applicable withholding taxes and other amounts required to be withheld by the Company. Such Cash Bonus will be paid whether or not the Eligible Optionee continues in the Company’s employ through the payment date. (Pages 17-18)

However, if the Adjusted Exercise Price determined for any tendered Eligible Option would be the same or lower than the exercise price per share currently in effect for that option, then that option will, on the Amendment Date, be canceled and immediately replaced with a New Option that is exactly the same as the canceled option, including the same exercise price per share and no loss of vesting or change to the expiration date of the option term, but with a new grant date. Such cancellation and re-grant is necessary to evidence the remedial action required under Section 409A with respect to an Eligible Option whose current exercise price is not increased. (Page 18)

9. WHAT HAPPENS IF I AM NOT A CURRENT EMPLOYEE ON THE EXPIRATION DATE?

If you are not in the employ of the Company (or any Apollo Group subsidiary) on the Expiration Date, then none of your tendered Eligible Options will be amended or replaced, and you will not be entitled to any Cash Bonus with respect to those options. The tendered options will be returned to you and will remain exercisable in accordance with the terms in effect for them at the time of tender, including the current exercise price per share. You will incur Section 409A tax penalties upon your subsequent exercise of those options, unless you bring those options into compliance with Section 409A prior to such exercise. You will be solely responsible for any taxes, penalties or interest you may incur under Section 409A. (Page 19)

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10. WHAT HAPPENS IF MY EMPLOYMENT TERMINATES ON OR AFTER THE EXPIRATION DATE BUT BEFORE THE AMENDMENT DATE?

If your employment with Apollo Group (or any Apollo Group subsidiary) terminates on or after the Expiration Date but prior to the Amendment Date, none of your tendered Eligible Options will be amended or replaced pursuant to the Offer, and you will not be entitled to any Cash Bonus with respect to those options. The tendered options will be returned to you and will remain exercisable in accordance with the terms in effect for them at the time of the tender, including the current exercise price per share. If you take no other action to bring those options into compliance with Section 409A, you may be subject to adverse taxation in the manner discussed below. You will be solely responsible for any taxes, penalties or interest you may incur under Section 409A.

11. WHAT ARE THE TAX CONSEQUENCES OF AN OPTION SUBJECT TO SECTION 409A?

Section 409A and the U.S. Treasury regulations issued thereunder provide that a stock option granted with an exercise price per share below the fair market value of the underlying shares on the grant date will, to the extent that option was not vested as of December 31, 2004, be subject to the adverse tax consequences. Unless certain remedial action is taken before the earlier of (i) December 31, 2007 or (ii) the date the optionee exercises his or her Eligible Options, Section 409A will subject the optionee to the following adverse tax consequences.

     Taxation in Calendar Year 2008. To the extent the optionee continues to hold in the 2008 calendar year unexercised Eligible Options for shares of the Company’s Class A common stock that vested prior to that year or that vest during such year, the optionee will recognize taxable income for the 2008 calendar year in an amount equal to the fair market value of those shares on the applicable tax measurement date less the exercise price payable for those shares. The optionee will have to report that income in his or her tax return filed for the 2008 calendar year, even though the Eligible Option is not exercised for those shares during that year. The IRS has not yet provided guidance as to the applicable tax measurement date for determining an optionee’s taxable income, but it is possible that such date will be the earlier of (i) the date the optionee exercises the Eligible Option during the 2008 calendar year or (ii) December 31, 2008.

     Tax Penalty. In addition to normal income taxes payable on the spread in effect under each of the optionee’s Eligible Options on the applicable tax measurement date for the 2008 calendar year, the optionee would also be subject to an additional tax penalty equal to 20% of that spread.

     Note: California has adopted Section 409A, and for optionees subject to California income taxation, the total penalty tax is 40%. Other states have also adopted Section 409A with penalty taxes at rates different from the 20% rate under Section 409A.

     Interest Penalty Measured From Year of Vesting. To the extent the Eligible Option outstanding in the 2008 calendar year vested as to one or more shares during the 2005 calendar year, the optionee will incur an interest penalty payable with his or her tax return for the 2008 calendar year. The interest penalty will be based on the income taxes the optionee would have incurred for the 2005 calendar year had he or she been taxed on the spread which existed on those vested shares on December 31, 2005 (the amount by which the December 31, 2005 fair market value of the shares which vested under the Eligible Option during the 2005 calendar year exceeded the exercise price payable for those shares). For purposes of such calculation, the optionee’s tax rate will be deemed to be 35%, and that tax rate will be applied to the December 31, 2005 option spread on the shares which vested under the Eligible Option during the 2005 calendar year. The tax amount resulting from such calculation is not actually payable for the 2005 calendar year, but will trigger an interest penalty under Section 409A for the period beginning April 15, 2006 and continuing until the date the optionee pays the accrued interest with his or her taxes for the 2008 calendar year. To the extent the Eligible Option vested as to one or more shares during the 2006 calendar year, the optionee would perform the same calculation based on the December 31, 2006 fair market value of the shares which vested during that year, and the interest penalty would accrue over the period beginning April 15, 2007 and continuing until the optionee pays the accrued interest with his or her taxes for the 2008 calendar year. The same calculation would also be applicable for any shares which vested under the Eligible Option during the 2007 calendar year based on the option spread which existed on those particular shares on December 31, 2007, and the interest penalty would accrue from April 15, 2008 until the optionee pays the accrued interest with his or her 2008 calendar

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year taxes. Finally, there would also be an additional interest penalty with respect to the shares which vested under the Eligible Option during the 2005, 2006 and 2007 calendar years but remain unexercised in the 2008 calendar year, to the extent their year-end fair market value in each calendar year subsequent to the calendar year of vesting is higher than their year-end fair market value in the immediately preceding calendar year. The interest penalty would accrue until paid with the optionee’s 2008 calendar year taxes.

     Vesting in Subsequent Calendar Years. To the extent an Eligible Option first vests in a calendar year after the 2008 calendar year, the optionee will be subject to income taxation and penalty taxes on the spread which exists between the fair market value of the shares which vest during that year and the exercise price payable for those shares. Such spread will be calculated on the applicable tax measurement date for such year.

     Continued Taxation of Vested Shares. The optionee will be subject to additional income taxation and penalty taxes on any subsequent increases to the fair market value of his or her vested option shares which occur in calendar years after the calendar year in which those shares are first taxed under Section 409A. Such taxation will continue until the optionee exercises the options or those options terminate.

     Note: The IRS has not yet provided any guidance as to how the additional taxable income is to be measured over the period the options remain outstanding after the 2007 calendar year.

     Exercise in 2007 Calendar Year. If the optionee exercises an Eligible Option in the 2007 calendar year for the covered shares without first bringing that option into compliance with Section 409A, then the 20% penalty tax under Section 409A with respect to that exercised option will be based on the amount by which the fair market value of the purchased shares at the time of exercise exceeds the current exercise price, and the interest penalties will be based on the spread (the excess of the fair market value per share over the exercise price) which existed at the close of the 2005 and 2006 calendar years on the option shares initially vesting in those years and any additional increase to the 2005 option spread which existed at the end of the 2006 calendar year.

12. WHAT ARE THE TAX CONSEQUENCES IF I TENDER MY OPTIONS FOR AMENDMENT OR REPLACEMENT PURSUANT TO THE OFFER?

If you tender your Eligible Options, you will not recognize any taxable income for U.S. federal income tax purposes at the time of the tender or at the time your Eligible Options are amended to adjust the exercise price or replaced with a New Option.

By amending the exercise prices of your Eligible Options to the applicable Adjusted Exercise Prices or replacing those options with New Options, you will also avoid the adverse taxation of those options under Section 409A. Accordingly, you will not be subject to taxation under Section 409A on your vested Eligible Options in the 2008 calendar year or upon their exercise in the 2007 calendar year, and as your Amended Options or New Options vest in one or more subsequent calendar years, you will not recognize taxable income with respect to the option shares that vest in those years, and you will not be subject to any 20% penalty tax or any interest penalty under Section 409A. You will only be taxed with respect to your Amended Options or New Options when you exercise those options. However, you will recognize taxable income when you receive the Cash Bonus paid with respect to your Amended Options. (Page 38)

If you are subject to the tax laws of other jurisdictions in addition to the United States, there may be additional consequences of participation in the Offer. We will distribute short summaries of some of those consequences with respect to some of the countries where Eligible Optionees are located. If you are subject to the tax laws of jurisdictions outside of the United States, you should also review the summary applicable to such foreign jurisdiction.

All Eligible Optionees, including those who are subject to taxation in foreign jurisdictions, should consult with their own personal tax advisor as to the tax consequences of accepting the Offer.

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13. HOW WILL MY CASH BONUS BE TAXED?

You will be taxed upon your receipt of the Cash Bonus. The payment will constitute wages for tax withholding purposes. Accordingly, the Company must withhold all applicable U.S. federal, state and local income and employment withholding taxes as well as all applicable foreign taxes and payments required to be withheld with respect to such payment. You will receive only the portion of the payment remaining after all those taxes and other amounts have been withheld. (Page 38)

If your Eligible Options are not amended pursuant to the Offer, you will not receive any Cash Bonus with respect to those options. No Cash Bonus will be paid with respect to a New Option because the exercise price for that option will be the same as the exercise price in effect for the tendered Eligible Option it replaces. (Page 19)

14. WHAT ARE THE TAX CONSEQUENCES IF I DO NOT TENDER MY OPTIONS FOR AMENDMENT OR REPLACEMENT PURSUANT TO THE OFFER?

If you choose not to tender your Eligible Options and take no other action to bring those options into compliance with Section 409A, then you will be subject to the adverse taxation under Section 409A in the manner discussed above. You will be solely responsible for any taxes, penalties or interest you may incur under Section 409A. An example illustrating the applicable tax consequences may be found on Page 21 of this document.

15. WHAT SECURITIES ARE SUBJECT TO THE OFFER?

The Offer covers only Eligible Options. Your Election Form accessible on the Offer website at https://apol.equitybenefits.com will contain a personal summary of the Eligible Options that you currently hold, including information relating to the number of shares subject to each Eligible Option, the current exercise price per share in effect for that option, the revised measurement date determined for each Eligible Option for financial accounting purposes and the fair market value per share of the Company’s Class A common stock on that date. (Page 15)

16. AM I REQUIRED TO PARTICIPATE IN THE OFFER?

No. Participation in the Offer is voluntary. You may choose either to tender your Eligible Options for amendment or replacement pursuant to the Offer or to retain those options and seek another alternative to bring those options into compliance with Section 409A. If you decide to accept the Offer, you must submit a properly completed Election Form for your tendered Eligible Options. (Page 23)

If you choose not to tender your Eligible Options and take no other action to bring those options into compliance with Section 409A, then you will be subject to the adverse taxation under Section 409A. You will be solely responsible for any taxes, penalties or interest payable under Section 409A. (Page 24)

17. DO I HAVE TO ACCEPT THE OFFER WITH RESPECT TO ALL OF MY ELIGIBLE OPTIONS OR MAY I DECIDE TO ACCEPT THE OFFER WITH RESPECT TO ONLY A PORTION OF THE ELIGIBLE OPTIONS?

If you wish to tender a particular Eligible Option for amendment or replacement pursuant to the Offer, you must tender all of that option for amendment or replacement. If you hold more than one Eligible Option, then you may elect to tender one or more of those options and retain the balance. Please remember that not all of a particular outstanding option grant may be an Eligible Option. Only the portion of that grant that was not vested as of December 31, 2004 may constitute an Eligible Option. (Page 25)

18. WILL THE TERMS AND CONDITIONS OF MY AMENDED OPTIONS OR NEW OPTIONS BE THE SAME AS THOSE CURRENTLY IN EFFECT FOR MY ELIGIBLE OPTIONS?

Except for the adjustment to the exercise price per share, each Eligible Option that is amended pursuant to this Offer will continue to remain subject to the same terms and conditions as in effect for such option immediately before the

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amendment. Accordingly, each Amended Option will vest in accordance with the same vesting schedule measured from the same vesting commencement date and will have the same exercise period, option term and other conditions currently in effect for that option. (Page 33)

Each New Option granted pursuant to this Offer will be exactly the same as the tendered Eligible Option it replaces, including the same exercise price per share and no loss of vesting or change to the expiration date of the option term, but with a new grant date. (Page 33)

19. WHEN WILL MY ELIGIBLE OPTIONS BE AMENDED OR REPLACED?

The exercise price for each Eligible Option tendered pursuant to this Offer will be amended to the applicable Adjusted Exercise Price on July 13, 2007, or if the Offer is extended, the first business day following the extended expiration date. The date the exercise price for an Eligible Option is increased to the applicable Adjusted Exercise Price will constitute the Amendment Date, and each Eligible Option that is so amended will be designated an Amended Option. However, tendered Eligible Options with current exercise prices at or above the fair market value per share of our Class A common stock on July 13, 2007 or, if the Offer is extended, the first business day following the extended expiration date will be canceled at that time and immediately replaced with a new option that is exactly the same as the canceled option, including the same exercise price per share and no loss of vesting or change to the expiration date of the option term, but with a new grant date. That replacement option will be designated a New Option.

As soon as administratively practicable after the Amendment Date, we will deliver to you a final and complete Amendment Agreement that will reflect the adjustment to the exercise price of each of your Amended Options and the Company’s unconditional obligation to pay you on its first regularly scheduled payroll date after January 1, 2008 the Cash Bonus calculated for each Amended Option. You will also receive at that time an Option Cancellation and Regrant Agreement for any New Option granted in replacement of a tendered Eligible Option with a current exercise price per share that is the same or higher than the closing price per share of our Class A common stock on the Amendment Date. (Page 25)

20. WHAT HAPPENS IF THE FAIR MARKET VALUE OF THE APOLLO GROUP CLASS A COMMON STOCK ON THE AMENDMENT DATE IS LESS THAN THE FAIR MARKET VALUE PER SHARE OF SUCH COMMON STOCK ON THE REVISED MEASUREMENT DATE OF THE ELIGIBLE OPTION?

If the fair market value per share of the Company’s Class A common stock on the Amendment Date is less than the fair market value of such common stock on the Eligible Option’s revised measurement date for financial accounting purposes, then the Adjusted Exercise Price for that option will be set at the fair market value per share of the Company’s Class A common stock on the Amendment Date. However, if that Adjusted Exercise Price would be the same or lower than the exercise price per share currently in effect for the Eligible Option, then that option will, on the Amendment Date, be canceled and immediately replaced with a New Option with the same exercise price as the canceled option. (Page 18)

21. WHEN CAN I EXERCISE MY AMENDED OPTIONS OR NEW OPTIONS?

You may exercise an Amended Option for vested option shares at any time following its amendment to the Adjusted Exercise Price and before its termination. You may exercise a New Option for vested option shares at any time after grant and before termination. Neither an Amended Option nor a New Option may be exercised for more than the number of vested shares for which it is at the time exercisable.

22. CAN I EXERCISE MY ELIGIBLE OPTIONS AFTER I TENDER MY ELIGIBLE OPTIONS BUT BEFORE AMENDMENT OR REPLACEMENT?

You cannot exercise your Eligible Options before the Amendment Date without voiding your participation in the Offer. You may exercise your Eligible Options before the Amendment Date, provided such exercise complies with the existing terms of your Eligible Options, the Company’s insider trading policy and any interim blackout periods during which cashless exercises and sales to cover are prohibited. However, if you exercise your Eligible Options before the Amendment Date, any election you have made to tender your exercised option for amendment or

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replacement pursuant to the Offer will be null and void. Consequently, you may personally incur adverse tax consequences under Section 409A with respect to any Eligible Options you exercise before the Amendment Date. You will be solely responsible for any taxes, penalties or interest payable under Section 409A.

23. WILL MY AMENDED OPTIONS OR NEW OPTIONS BE INCENTIVE STOCK OPTIONS OR NON-STATUTORY OPTIONS?

Your Eligible Options were granted as non-statutory options under the U.S. federal income tax laws, and they will remain non-statutory options after the amendment to the applicable Adjusted Exercise Prices. Therefore, when you subsequently exercise your Amended Options, you will recognize immediate taxable income equal to the excess of (i) the fair market value of the purchased shares at the time of exercise over (ii) the Adjusted Exercise Price paid for those shares, and the Company must collect the applicable withholding taxes with respect to such income. All New Options will also be taxable as non-statutory options. (Page 38)

If you are subject to the tax laws of other jurisdictions in addition to the United States, there may be additional or different consequences in that jurisdiction with respect to the exercise of your options. We will distribute short summaries of some of those consequences with respect to several of the countries where Eligible Optionees are subject to taxation. If you are subject to the tax laws of jurisdictions outside of the United States, you should also review the summary applicable to such foreign jurisdictions.

24. WHEN MAY I EXERCISE THE PORTION OF MY OPTIONS THAT WAS VESTED AS OF DECEMBER 31, 2004?

You may exercise the portion of each of your options that was vested as of December 31, 2004 at any time before the termination or expiration of that option. Such portion is not subject to the Offer and will not be subject to adverse taxation under Section 409A. Thus, such portion of your options that was vested as of December 31, 2004 will not be amended or replaced, and you will not be eligible to receive any Cash Bonus with respect to such portion.

25. WHAT ARE THE CONDITIONS TO THE OFFER?

The Offer is subject to a number of conditions, including the conditions described in Section 7. The Offer is not conditioned upon the tender of a minimum number of Eligible Options for amendment or replacement. (Page 27)

26. WHEN DOES THE OFFER EXPIRE? CAN THE OFFER BE EXTENDED, AND IF SO, HOW WILL I BE NOTIFIED IF IT IS EXTENDED?

The Offer will expire on July 12, 2007, at 11:59 p.m. Eastern Daylight Time, unless we extend the Offer.

Although we do not currently intend to do so, we may, in our discretion, extend the Offer at any time. If the Offer is extended, we will send you an email or other communication informing you of the extension no later than 9:00 a.m. Eastern Time on the next business day following the previously scheduled expiration of the Offer period. (Page 19; Page 39)

27. HOW AND WHEN DO I TENDER MY ELIGIBLE OPTIONS?

In order to tender one or more of your Eligible Options for amendment or replacement pursuant to the Offer, you must log on to the Offer website at https://apol.equitybenefits.com and click on the “Make an Election” button to proceed with your election. You will be redirected to the first page of the Election Form. You will need to check the appropriate boxes next to each of your Eligible Options to indicate whether you elect to tender your Eligible Options in accordance with the terms of the Offer. After completing the Election Form, you will be allowed to review your elections you have made with respect to your Eligible Options. If you are satisfied with your elections, you will proceed to the Agreement to Terms of Election page. Only after you agree to the Agreement to the Terms of Election will you be directed to the Election Confirmation Statement Page. Please print and keep a copy of the Election Confirmation Statement for your records. You will then be deemed to have completed the election process for tendering your Eligible Options.

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If you are not able to submit your Election Form electronically via the Offer website as a result of technical failures inherent to the website, such as the website being unavailable or the website not accepting your election, or if you do not otherwise have access to the Offer website for any reason (including lack of internet services), you must complete a paper Election Form and return it to the Company via facsimile to 1-800-420-4799. To obtain a paper Election Form, please contact the Apollo Group Tender Offer Hotline at 1-800-398-1278 or email us at stockoptions@apollogrp.edu.

You must complete the tender and election process in the foregoing manner by 11:59 p.m. Eastern Daylight Time on July 12, 2007. If we extend the Offer beyond that time, you must complete the process before the extended expiration date of the Offer. (Page 24)

We will not accept delivery of any Election Form after expiration of the Offer. If we do not receive a properly completed Election Form from you before the expiration of the Offer, we will not accept your Eligible Options for amendment or replacement. Those options will not be amended or replaced pursuant to this Offer, and no Cash Bonus will be paid with respect to those options.

We reserve the right to reject any or all tenders of Eligible Options that we determine are not in appropriate form or that we determine are unlawful to accept. Otherwise, we intend to accept all properly and timely tendered Eligible Options that are not validly withdrawn. Subject to our rights to extend, terminate or amend the Offer, we currently expect that we will accept all properly tendered Eligible Options upon the expiration of the Offer, and we will amend or replace those options on the next business day thereafter. (Page 25)

28. DURING WHAT PERIOD OF TIME MAY I CHANGE MY ELECTION WITH RESPECT TO MY ELIGIBLE OPTIONS?

You may change your previously submitted election at any time before 11:59 p.m. Eastern Daylight Time on July 12, 2007 (or any extended expiration date of the Offer). If you would like to change your election, you must log on to the Offer website at https://apol.equitybenefits.com, complete and submit a new Election Form. You should print a copy of your revised Election Form and updated Election Confirmation Statement and keep those documents with your other records for this Offer.

Alternatively, you may change you existing election by completing a new paper Election Form and returning it to the Company via facsimile to 1-800-420-4799. To obtain a paper Election Form, please contact the Apollo Group Tender Offer Hotline at 1-800-398-1278 or email us at stockoptions@apollogrp.edu.

You may change your previously submitted elections as many times as you would like before the expiration of the Offer. (Page 26)

29. DOES APOLLO GROUP MAKE ANY RECOMMENDATIONS AS TO WHETHER I SHOULD TENDER MY ELIGIBLE OPTIONS FOR AMENDMENT OR REPLACEMENT PURSUANT TO THE OFFER?

Although our Board of Directors has approved the Offer, neither we nor our Board of Directors make any recommendation as to whether you should tender your Eligible Options for amendment or replacement. You must make your own decision whether to tender your Eligible Options, after taking into account your own personal circumstances and preferences. (Page 23) The Company recommends that you consult with your personal tax advisor when deciding whether or not you should tender your Eligible Options.

30. WHAT ARE SOME OF THE KEY DATES TO REMEMBER?

The commencement date of the Offer is June 13, 2007.

The Offer will expire at 11:59 pm Eastern Daylight Time on July 12, 2007 (unless we extend it).

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The Eligible Options will be amended or replaced on July 13, 2007 (unless we extend the Offer). Please be aware that your option account at your broker may not accurately reflect the amendment or replacement for one to two business days following the Amendment Date.

The Cash Bonus for the Amended Options will be paid on the Company’s first regularly scheduled payroll date after January 1, 2008, which will not be later than January 15, 2008.

31. TO WHOM CAN I TALK IF I HAVE QUESTIONS ABOUT THE OFFER?

For additional information or assistance, you should contact the Apollo Group Tender Offer Hotline at 1-800-398-1278 or email us at stockoptions@apollogrp.edu.

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CERTAIN RISKS OF PARTICIPATING IN THE OFFER

Participating in the Offer involves risks discussed in this Offer and described below. In addition, information concerning risk factors included in our Annual Report on Form 10-K for the year ended August 31, 2006 is incorporated by reference herein and may be inspected at, and copies may be obtained from, the places and in the manner described in Section 18 “Additional Information.” You should carefully consider these risks and are encouraged to consult your investment, tax and legal advisor before deciding to participate in the Offer.

Tax-Related Risks.

Tax-related Risks for Residents of Multiple Countries. If you are subject to the tax laws in more than one jurisdiction, you should be aware that tax consequences of more than one country may apply to you as a result of your participation in the Offer. You should be certain to consult your personal tax advisor to discuss those consequences. We will distribute short summaries of some of those consequences with respect to several of the countries where Eligible Optionees are located. If you are subject to the tax laws of jurisdictions outside of the United States, you should also review the summary applicable to such foreign jurisdiction.

State and Local Taxes. The discussion in Section 2 and Section 15 of the Offer describes the material U.S. federal income tax consequences if you participate in the Offer or if you elect not to participate. State and local laws may provide different tax treatment. In addition, certain states, including California, have adopted provisions similar to Section 409A. If you are subject to income taxation in those states, you may incur additional taxes, interest and penalties under such provisions if you do not bring your Eligible Options into compliance.

Eligible Optionees should consult with their own personal tax advisors as to the tax consequences of their participation in the Offer.

Procedural Risks.

You are responsible for making sure that your initial Election Form and any subsequent changes to your Election Form pursuant to which you withdraw or re-tender your Eligible Options are received by us before the Expiration Date. We intend to confirm the receipt of your initial Election Form and any subsequent changes to your Election Form by emailing an Election Confirmation Statement to your Apollo Group email address within one business day after receipt. If you have not received an Electronic Confirmation Statement in the timeframe prescribed, it is your responsibility to confirm that we have received your complete submissions by contacting the Apollo Group Tender Offer Hotline at 1-800-398-1278 or emailing to us at stockoptions@apollogrp.edu a copy of the Confirmation Statement that you will have printed from the Offer website at the time you submit your Election Form online.

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THE OFFER

1. ELIGIBLE OPTIONEES; ELIGIBILE OPTIONS; AMENDMENT OF ELIGIBLE OPTIONS AND CASH BONUS; NEW OPTIONS; EXPIRATION DATE; ADDITIONAL CONSIDERATIONS.

Section 409A (“Section 409A”) to the Internal Revenue Code (the “Code”) provides that an option granted with a below-market exercise price, to the extent it was not vested as of December 31, 2004, will be subject to adverse income taxation (as described below), unless that option is brought into compliance with Section 409A before exercise. Apollo Group, Inc. (“Apollo Group”, the “Company”, “we” or “us”) has decided to offer Eligible Optionees holding Eligible Options the opportunity to amend or replace each such option and thereby avoid taxation of that option under Section 409A.

Eligible Options

An outstanding option to purchase shares of the Company’s Class A common stock will be eligible for amendment or replacement pursuant to the Offer if that option meets each of the following conditions:

(i) The option was granted under one of the following stock incentive plans of the Company (the “Plans”):

- the Long Term Incentive Plan, or

- the Amended and Restated 2000 Stock Incentive Plan.

(ii) The option was incorrectly priced in that the exercise price per share currently in effect for that option is based on the fair market value per share of the Company’s Class A common stock on a date earlier than the date which has now been determined to be the correct measurement date for that option for financial accounting purposes.

(iii) The option was unvested as of December 31, 2004.

(iv) The option is held by an individual who is, on the expiration of this Offer, an Eligible Optionee.

(iv) The option is outstanding on the expiration date of this Offer.

An option that meets each of the foregoing conditions will constitute an “Eligible Option” for purposes of the Offer. If only a portion of the option meets those conditions, then only that portion will be an Eligible Option, and the balance of that option will not be eligible for amendment pursuant to this Offer.

From 2000 through 2004 the Company granted options to purchase shares of UPX Online common stock, a class of common stock reflecting the separate financial performance of the University of Phoenix, Inc., one of the Company’s subsidiaries. On August 27, 2004, the outstanding UPX options were converted into options to purchase shares of the Company’s Class A common stock at a ratio of 1 share of UPX Online common stock to 1.0766 shares of Apollo Group Class A common stock. This conversion ratio was also used to adjust the exercise price for the converted UPX options. To the extent an option to acquire the Company’s Class A common stock was originally granted as an option to acquire shares of UPX Online common stock at an exercise price per share based on the fair market value per share of that stock on a date earlier than the date on which the option was actually deemed to be granted for financial accounting purposes, such option will constitute an Eligible Option, provided it meets each of the foregoing conditions for an Eligible Option.

Your individualized Eligible Option chart in the Election Form accessible on the Offer website at https://apol.equitybenefits.com will also set forth the revised measurement date determined for financial accounting

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purposes for each Eligible Option you hold, the fair market value per share of our Class A common sock on that date and the number of shares of our Class A common stock subject to each Eligible Option.

Additional Definitions

You should also be familiar with the following additional definitions that are important to the understanding of the terms of the Offer.

     “Adjusted Exercise Price” is the new exercise price per share that will be in effect for any tendered Eligible Option that is amended pursuant to the Offer and will be equal to the lower of (i) the fair market value per share of the Company’s Class A common stock on the revised measurement date determined for that option for financial accounting purposes or (ii) the closing price per share of such Class A common stock on the date on which the option is amended. However, if the Adjusted Exercise Price as so determined would be the same or lower than the exercise price per share currently in effect for the Eligible Option, then that option will, on the Amendment Date, be canceled and immediately replaced with a new option that is exactly the same as the canceled option, including the same exercise price per share and with no loss of vesting or change to the expiration date of the option term, but with a new grant date.

     Accordingly, the exercise price for a tendered Eligible Option that we amend or replace pursuant to the Offer will fall within one of the three following categories:

          (i) Full Increase: increased to the fair market value per share of the Company’s Class A common stock on the revised measurement date determined for that option for financial accounting purposes,

          (ii) Partial Increase: increased to the lower closing price per share of such Class A common stock on the date such option is amended, or

          (iii) No Increase: retained as the exercise price per share for any New Option issued in replacement of that option.

     For example, if the current exercise price of a tendered Eligible Option is $60.00 per share and the fair market value per share of the Company’s Class A common stock on the revised measurement date for that option was $62.00 per share, then the Adjusted Exercise Price for that option would be fully increased to $62.00. However, if the fair market value per share of the Company’s Class A common stock is $61.00 on the Amendment Date, then the Adjusted Exercise Price would be set at $61.00. If the fair market value per share on the Amendment Date is $55.00, then that Eligible Option would be canceled on the Amendment Date and the New Option would be immediately granted with the same terms as the canceled option, including the current $60.00 exercise price, but with the Amendment Date as the new grant date.

     “Amended Option” will mean an Eligible Option that has been amended pursuant to the Offer to increase the exercise price per share for the Class A common stock purchasable under that option to the Adjusted Exercise Price determined for such option.

     “Amendment Agreement” will mean the Stock Option Amendment and Special Bonus Agreement that will evidence the Adjusted Exercise Price for each of your Amended Options and set forth the terms of the Cash Bonus payable with respect to those Amended Options. A form of the Amendment Agreement is filed as an exhibit to the Offer and is available for your review on the Offer website.

     “Amendment Date” will mean the date on which the Eligible Option is amended to increase the exercise price of that option to the Adjusted Exercise Price and will be July 13, 2007 or, if the Offer is extended, the first business day following the extended expiration date of the Offer.

     “Cash Bonus” is the special cash bonus to which each Eligible Optionee will become entitled if the current exercise price of one or more of his or her Eligible Options is increased pursuant to the Offer.

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     “Class A common stock” is one of two classes of the Company’s outstanding common stock. The Class A common stock is publicly traded on the Nasdaq Global Select Market. The second class is our Class B common stock which is not publicly traded, and substantially all of the outstanding Class B common stock is beneficially owned by John V. Sperling and Peter G. Sperling, each of whom is an executive officer of the Company and a member of the Board of Directors. The Class A common stock is not a voting stock, and the Class B common stock is the sole outstanding voting stock of the Company. The two classes of common stock generally have the same dividend and liquidation rights; however, our Board of Directors, in its discretion, has the authority to declare dividends on either or both classes of such common stock at any one time.

     “Election Form” is the form that the Eligible Optionee must use to notify the Company as to the particular Eligible Options he or she has elected to tender for amendment or replacement pursuant to the Offer.

     “Fair Market Value” per share of the Company’s Class A common stock on any relevant date will be deemed to be equal to the closing price per share of such stock on that date on the Nasdaq Global Select Market.

     “New Option” will mean the option granted on the Amendment Date in replacement of a tendered Eligible Option with a current exercise price per share at or above the closing price per share of our Class A common stock on the Amendment Date. The New Option will be exactly the same as the canceled option, including the same exercise price per share and no loss of vesting or change to the expiration date of the option term, but will have a new grant date. The New Option will be evidenced by an Option Cancellation and Regrant Agreement that replaces the option documentation in effect for the canceled option.

Upon the terms and subject to the conditions of the Offer, we will amend or replace all Eligible Options tendered by Eligible Optionees in accordance with Section 4 that are not otherwise validly withdrawn in accordance with Section 5 before the Expiration Date. For each Amended Option, the exercise price per share will be increased to the applicable Adjusted Exercise Price, and that option will thereby avoid taxation under Section 409A. If the tendered Eligible Option is canceled and replaced with a New Option, the New Option will not be not subject to taxation under Section 409A.

Eligible Optionees

Individuals to whom Eligible Options have been granted by the Company will be Eligible Optionees for purposes of the Offer if they are, on the expiration date of the Offer, a current employee of the Company (or any Apollo Group subsidiary) and subject to income taxation in the United States with respect to those options. However, our executive officers and the non-employee members of our Board of Directors are not eligible to participate in the Offer.

Amendment of Eligible Options and Cash Bonus

Upon the terms and subject to the conditions of the Offer, we will amend or replace each Eligible Option that is properly tendered by an Eligible Optionee in accordance with Section 4, and not validly withdrawn in accordance with Section 5, before the Expiration Date (as defined below). The exercise price of each Eligible Option that is amended pursuant to the Offer will be increased to the Adjusted Exercise Price determined for that option. To the extent an option with a revised measurement date for financial accounting purposes was vested as of December 31, 2004, that portion of the option would not be subject to taxation under Section 409A and will not be an Eligible Option for purposes of the Offer. Accordingly, the Adjusted Exercise Price would not be in effect for the portion of an option with a revised measurement date that was vested as of December 31, 2004. The Adjusted Exercise Price will apply only to the portion of an option with a revised measurement date that was not vested as of December 31, 2004.

Each Amended Option will continue to vest in accordance with the same vesting schedule measured from the same vesting commencement date currently in effect for that option. No change to the vesting schedule will occur by reason of the amendment. In addition, except for the Adjusted Exercise Price, the other terms and provisions of

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each Amended Option will be identical to the terms and provisions in effect for each such Eligible Option immediately before the amendment to the exercise price.

Each Eligible Optionee whose Eligible Options are amended pursuant to the Offer will become entitled to a special Cash Bonus from the Company. The amount of the Cash Bonus payable with respect to each Amended Option will be determined by multiplying (i) the amount by which the Adjusted Exercise Price exceeds the exercise price per share currently in effect for that Eligible Option by (ii) the number of shares of the Company’s Class A common stock purchasable under that option at the Adjusted Exercise Price. The Cash Bonus will be paid on the Company’s first regularly scheduled payroll date after January 1, 2008, which will not be later than January 15, 2008. Such a delayed payment is required by applicable Internal Revenue Service (“IRS”) regulations. The payment when made will be subject to the Company’s collection of all taxes and amounts required to be withheld by the Company. Such Cash Bonus will be paid whether or not the Eligible Optionee continues in the Company’s employ through the payment date.

EXAMPLE: Assume that (1) you were granted an option to purchase 500 shares that had a recorded grant date of January 2, 2002 and an exercise price per share of $29.33, (2) that option vests in four successive equal annual installments over the four-year period measured from January 2, 2002, so there were 250 shares unvested as of December 31, 2004, and (3) it was determined that the correct measurement date of that option for financial accounting purposes was February 25, 2002 when the fair market value per share was $32.53. Further assume that (1) you were also granted an option to purchase 1,000 shares that had a recorded grant date of November 4, 2002 and an exercise price per share of $38.11, (2) that option vests in four successive equal annual installments over the four-year period measured from November 4, 2002, so there were 500 shares unvested as of December 31, 2004, and (3) it was determined that the correct measurement date of that option for financial accounting purposes was December 2, 2002, when the fair market value per share was $41.30. Further assume that the fair market value of the Company’s Class A common stock on the Amendment Date is $50.00 per share.

The portions of your January 2, 2002 and November 4, 2002 grants that were unvested as of December 31, 2004 constitute Eligible Options for purposes of this Offer. No other portions of those options may be tendered pursuant to this Offer. If you tender the portions constituting your Eligible Options, then those Eligible Options will be amended to increase the exercise prices to $32.53 per share for the 250 shares eligible under the January 2, 2002 grant and to $41.30 per share for the 500 shares eligible under the November 4, 2002 grant. No other changes will be made to your January 2, 2002 and November 4, 2002 options. In addition, you will be eligible to receive a Cash Bonus in an amount of $2,395.00 determined as follows:

     - multiplying (i) the 250 shares eligible under the January 2, 2002 option by (ii) $3.20 (the amount by which the $32.53 Adjusted Exercise Price for that option exceeds the $29.33 per share exercise price previously in effect for that option), yielding $800.00;

     - multiplying (i) the 500 shares eligible under the November 4, 2002 option by (ii) $3.19 (the amount by which the $41.30 Adjusted Exercise Price for that option exceeds the $38.11 per share exercise price previously in effect for that option, yielding $1,595.00; and

     - adding the two amounts resulting from the above calculations, yielding $2,395.00.

Your Cash Bonus will be paid on the Company’s first regularly scheduled payroll date after January 1, 2008, subject to the Company’s collection of all applicable withholding taxes.

Cancellation of Eligible Options and Grant of New Options.

If the Adjusted Exercise Price determined for any tendered Eligible Option would be the same or lower than the exercise price per share currently in effect for that option, then that option will, on the Amendment Date, be canceled and immediately replaced with a New Option that is exactly the same as the canceled option, including the same exercise price per share and no loss of vesting or change to the expiration date of the option term, but with a new grant date. Such cancellation and re-grant is necessary to evidence the remedial action required under Section

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409A with respect to an Eligible Option whose current exercise price is not increased. No Cash Bonus will be paid with respect to a New Option because there will be no change to the exercise price.

EXAMPLE: Assume that (1) you were granted an option to purchase 1,000 shares that had an indicated grant date of October 20, 2003 and an exercise price per share of $60.90, (2) that option vests in four successive equal annual installments over the four-year period measured from October 20, 2003, so there were 750 shares unvested as of December 31, 2004, and (3) it was determined that the correct measurement date of that option for financial accounting purposes was October 4, 2004, when the fair market value per share was $74.43. Further assume that (1) you were also granted an option to purchase 2,000 shares that had an indicated grant date of December 10, 2003 and an exercise price per share of $66.73, (2) that option vests in four successive equal annual installments over the four-year period measured from December 10, 2003, so there were 1,500 shares unvested as of December 31, 2004, and (3) it was determined that the correct measurement date of that option for financial accounting purposes was March 3, 2004, when the fair market value per share was $77.82. Further assume that the fair market value of Apollo Group’s common stock on the Amendment Date is $50.00 per share.

The portions of your October 20, 2003 and December 10, 2003 grants that were unvested as of December 31, 2004 constitute Eligible Options for purposes of this Offer. No other portions of those options may be tendered pursuant to this Offer. If you tender the portions constituting your Eligible Options then your tendered Eligible Options will be canceled on the Amendment Date, and you will be immediately issued two New Options: one New Option with an exercise price of $60.90 per share for the 750 shares eligible under the October 20, 2003 grant; and a second New Option with an exercise price of $66.73 per share for the 1,500 shares eligible under the December 10, 2003 grant. Except for the new grant date, each of the New Options will be the same as the canceled Eligible Option it replaces, with no loss of vesting or change to the expiration date of the option term. Because the exercise prices under the New Options will be the same as under the canceled options, no Cash Bonus will be payable to you with respect to your New Options.

Former Employees

If you are not in the employ of the Company (or any Apollo Group subsidiary) on the Expiration Date or on the Amendment Date, then none of your tendered Eligible Options will be amended or replaced, and you will not be entitled to any Cash Bonus with respect to those options. The tendered options will be returned to you and will remain exercisable in accordance with the terms in effect for them at the time of tender, including the current exercise price per share. You will incur Section 409A tax upon your subsequent exercise of those options, unless you bring those options into compliance with Section 409A prior to such exercise. You will be solely responsible for any taxes, penalties or interest you may incur under Section 409A.

Expiration Date

The term “Expiration Date” means 11:59 p.m. Eastern Daylight Time on July 12, 2007, unless we decide to extend the period of time during which the Offer will remain open, in which event the term “Expiration Date” will refer to the latest time and date at which the Offer, as so extended, expires. See Section 16 for a description of our rights to extend, delay, terminate or amend the Offer, and Section 7 for a description of conditions to the Offer.

Additional Considerations

In deciding whether to tender one or more Eligible Options pursuant to the Offer, you should know that the Company continually evaluates and explores strategic opportunities as they arise, including business combination transactions, strategic partnerships, capital infusions, and the purchase or sale of assets. At any given time, we may be engaged in discussions or negotiations with respect to various corporate transactions. We also grant options, restricted stock units and other equity awards in the ordinary course of business to our current and new employees, including our executive officers. Our employees, including our executive officers, from time to time acquire or dispose of our securities. Subject to the foregoing, and except as otherwise disclosed in the Offer or in our filings with the Securities and Exchange Commission (“SEC”), we presently have no plans or proposals that relate to or would result in:

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     (a) any extraordinary corporate transaction, such as a material merger, reorganization or liquidation, involving us or any of our subsidiaries;

     (b) any purchase, sale or transfer of a material amount of our assets or the assets of any of our subsidiaries;

     (c) any material change in our present dividend policy or our indebtedness or capitalization;

     (d) any change in our present Board of Directors or executive management team, including any plans to change the number or term of our directors or to fill any existing board vacancies or to change the material terms of any executive officer’s employment, except that we may add one or two new independent members to our Board while the Offer is outstanding;

     (e) any other material change in our corporate structure or business;

     (f) our Class A common stock not being authorized for quotation in an automated quotation system operated by a national securities association;

     (g) our Class A common stock becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Securities Exchange Act of 1934, as amended (the “1934 Act”);

     (h) the suspension of our obligation to file reports pursuant to Section 15(d) of the 1934 Act;

     (i) the acquisition by any person of any of our securities or the disposition of any of our securities, other than in the ordinary course or pursuant to existing options or other rights; or

     (j) any change in our articles of incorporation or bylaws, or any actions that may impede the acquisition of control of us by any person.

2. PURPOSE OF THE OFFER.

We are making this Offer to amend or replace the Eligible Options because of potential adverse tax consequences that may apply. As a result of a thorough investigation of the Company’s past option grant practices, we have determined that each Eligible Option was incorrectly priced in that the exercise price per share currently in effect for that option was based on the fair market value per share of our Class A common stock on a date earlier than the date which we have now determined to be the correct measurement date of that option for financial accounting purposes.

Section 409A provides that an option granted with a below-market exercise price, to the extent unvested as of December 31, 2004, will be subject to adverse income taxation unless that option is brought into compliance with Section 409A. By reason of their revised measurement dates, the Eligible Options may be deemed to be below-market options under Section 409A. Accordingly, the Company has decided to provide Eligible Optionees with the opportunity to bring their Eligible Options into compliance either by amending the exercise price per share to the Adjusted Exercise Price determined for each such option or by replacing that option with a New Option.

Unless certain remedial action is taken before the earlier of (i) December 31, 2007 or (ii) the date the optionee exercises his or her Eligible Options, the optionee will be subject to the following adverse tax consequences under Section 409A.

     Taxation in Calendar Year 2008. To the extent the optionee continues to hold in the 2008 calendar year unexercised Eligible Options for shares of the Company’s Class A common stock that vested prior to that year or vest during that year, the optionee will recognize taxable income for the 2008 calendar year in an amount equal to the fair market value of those shares on the applicable tax measurement date less the exercise price payable for those shares. The optionee will have to report that income in his or her tax return filed for the 2008 calendar year, even though the Eligible Option has not been exercised for those shares during that year. The IRS has not yet provided

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guidance as to the applicable tax measurement date for determining an optionee’s taxable income, but it is possible that such date will be the earlier of (i) the date the optionee exercises the Eligible Option during the 2008 calendar year or (ii) December 31, 2008.

     Tax Penalty. In addition to normal income taxes payable on the spread in effect under each of the optionee’s Eligible Options on the applicable tax measurement date for the 2008 calendar year, the optionee would also be subject to an additional tax penalty equal to 20% of that spread.

     Note: California has adopted Section 409A, and for optionees subject to California income taxation, the total penalty tax is 40%. Other states have also adopted Section 409A with penalty taxes at rates different from the 20% rate under Section 409A.

     Interest Penalty Measured From Year of Vesting. To the extent the Eligible Option outstanding in the 2008 calendar year vested as to one or more shares during the 2005 calendar year, the optionee will incur an interest penalty payable with his or her tax return for the 2008 calendar year. The interest penalty will be based on the income taxes the optionee would have incurred for the 2005 calendar year had he or she been taxed on the spread which existed on those vested shares on December 31, 2005 (the amount by which the December 31, 2005 fair market value of the shares which vested under the Eligible Option during the 2005 calendar year exceeded the exercise price payable for those shares). For purposes of such calculation, the optionee’s tax rate will be deemed to be 35%, and that tax rate will be applied to the December 31, 2005 option spread on the shares which vested under the Eligible Option during the 2005 calendar year. The tax amount resulting from such calculation is not actually payable for the 2005 calendar year, but will trigger an interest penalty under Section 409A for the period beginning April 15, 2006 and continuing until the date the optionee pays the accrued interest with his or her taxes for the 2008 calendar year. To the extent the Eligible Option vested as to one or more shares during the 2006 calendar year, the optionee would perform the same calculation based on the December 31, 2006 fair market value of the shares which vested during that year, and the interest penalty would accrue over the period beginning April 15, 2007 and continuing until the optionee pays the accrued interest with his or her taxes for the 2008 calendar year. The same calculation would also be applicable for any shares which vested under the Eligible Option during the 2007 calendar year based on the option spread which existed on those particular shares on December 31, 2007, and the interest penalty would accrue from April 15, 2008 until the optionee pays the accrued interest with his or her 2008 calendar year taxes. Finally, there would also be an additional interest penalty with respect to the shares which vested under the Eligible Option during the 2005, 2006 and 2007 calendar years but remain unexercised in the 2008 calendar year, to the extent their year-end fair market value in each calendar year subsequent to the calendar year of vesting is higher than their year-end fair market value in the immediately preceding calendar year. The interest penalty would accrue until paid with the optionee’s 2008 calendar year taxes.

     Vesting in Subsequent Calendar Years. To the extent an Eligible Option first vests in a calendar year after the 2008 calendar year, the optionee will be subject to income taxation and penalty taxes on the spread which exists between the fair market value of the shares which vest during that year and the exercise price payable for those shares. Such spread will be calculated on the applicable tax measurement date for such year.

     Continued Taxation of Vested Shares. The optionee will be subject to additional income taxation and penalty taxes on any subsequent increases to the fair market value of his or her vested option shares which occur in calendar years after the calendar year in which those shares are first taxed under Section 409A. Such taxation will continue until the optionee exercises the options.

     Note: The IRS has not yet provided any guidance as to how the additional taxable income is to be measured over the period the options remain outstanding after the 2007 calendar year.

The following is an example of the adverse U.S. federal income taxes that may occur under Section 409A if remedial action is not taken to bring the below-market options into compliance with Section 409A:

EXAMPLE. Assume that (1) an optionee was granted an option to purchase 2,000 shares that had a recorded grant date of January 2, 2003 with an exercise price per share of $29.33, (2) that option vests in four successive equal annual installments over the four-year period measured from January 2, 2003, and (3) it was determined that the

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correct measurement date of that option for financial accounting purposes was February 5, 2003, when the fair market value per share was $32.53. Unless remedial action under Section 409A is taken before December 31, 2007 (or before any earlier exercise of the option for the shares vesting after December 31, 2004), the 1,500 option shares that vested during the 2005, 2006 and 2007 calendar years would be taxed as follows under Section 409A:

     Taxation in Calendar Year 2008: On the applicable tax measurement date in the 2008 calendar year, the optionee would recognize taxable income equal to the amount by which the fair market value of the 1,500 shares exceeded the exercise price payable for those shares. If we assume that the option is exercised for those 1,500 shares on September 5, 2008, when the fair market value is $55.00 per share, and that such date is the applicable tax measurement date for Section 409A purposes, then the optionee will recognize $38,505.00 of taxable wages (1,500 x ($55.00 - $29.33)) in 2008. In addition, the optionee would incur a 20% penalty tax in the amount of $7,701.00. There would also be an interest penalty assessed with respect to the 500 shares which vested in 2005. That interest penalty would be based on the taxes that would have been due on April 15, 2006 had the optionee been taxed at the rate of 35% on the spread which existed on those 500 shares on December 31, 2005 (the amount by which the market price of those 500 shares on December 31, 2005 exceeded the $14,665.00 aggregate exercise price payable for those shares). The interest penalty on those particular shares would accrue until the optionee pays that interest penalty with his or her 2008 calendar year taxes. In addition, there would be an interest penalty assessed with respect to the 500 shares which vested in 2006. That interest penalty would be based on the taxes that would have been due on April 15, 2007 had the optionee been taxed at the rate of 35% on the spread which existed on those 500 shares on December 31, 2006 (the amount by which the market price of those 500 shares on December 31, 2006 exceeded the $14,665.00 aggregate exercise price payable for those shares). There would also be an interest penalty assessed with respect to the 500 shares which vested in 2007. That interest penalty would be based on the taxes that would have been due on April 15, 2008 had the optionee been taxed at the rate of 35% on the spread which existed on those 500 shares on December 31, 2007 (the amount by which the market price of those 500 shares on December 31, 2007 exceeded the $14,665.00 aggregate exercise price payable for those shares). The interest penalty on those particular shares would also accrue until the optionee pays that interest penalty with his or her 2008 calendar year taxes. Finally, there would be an additional interest penalty with respect to the shares which vested during the 2005 and 2006 calendar years, to the extent their year-end fair market value in each calendar year subsequent to the calendar year of vesting is greater than their year-end fair market value in the immediately preceding year. That interest penalty would accrue until the date it is paid with the optionee’s 2008 calendar year taxes. There will also be the possibility of adverse taxation under the tax laws of the state in which the optionee resides.

     Continued Taxation: If the option is not exercised in the 2008 calendar year, the optionee will still recognize taxable income in that year. It is likely that the amount of taxable income and the 20% penalty tax will be based on the option spread which exists on the 1,500 shares as of December 31, 2008; however, there is at present no actual IRS guidance on the appropriate tax measurement date. In addition, the optionee would continue to be subject to income taxation and the 20% penalty tax in each subsequent calendar year the option remains outstanding after the 2008 calendar year, and the amount of such taxation would be based on any subsequent appreciation in the value of the shares since the last tax measurement date for those shares under Section 409A.

     Exercise in 2007 Calendar Year. If you exercise an Eligible Option in the 2007 calendar year for the covered shares without first bringing that option into compliance with Section 409A, then the 20% penalty tax under Section 409A with respect to that exercised option will be based on the amount by which the fair market value of the purchased shares at the time of exercise exceeds the current exercise price, and the interest penalties will be based on the spread (the excess of the fair market value per share over the exercise price) which existed at the close of the 2005 and 2006 calendar years on the option shares initially vesting in those years and any additional increase to the 2005 option spread which existed at the end of the 2006 calendar year.

If you elect not to tender your Eligible Options for amendment or replacement pursuant to the Offer, then you will be solely responsible for any taxes, penalties or interest payable under Section 409A and comparable state tax laws.

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Section 409A applies only to below-market options that were not vested as of December 31, 2004. The portion of any below-market option granted before October 4, 2004 that was vested as of December 31, 2004 is not subject to Section 409A.

Pursuant to the U.S. Treasury regulations provided under Section 409A, if you exercised the portion of your stock options that vested in the 2005 calendar year before the end of that year, you would have avoided any adverse tax consequences under Section 409A with respect to that portion. To avoid any adverse tax consequences under Section 409A with respect to the portion of your stock options that vested after December 31, 2004 (but were not exercised in 2005), you must take remedial action to bring that portion of your options (the “409A Portion”) into compliance with the requirements of Section 409A. Basically, two courses of remedial action are available as described below. The Company is now offering you the opportunity to bring the 409A Portion of your stock options into compliance with Section 409A only through the amendment alternative described in paragraph (ii) below.

     (i) You could designate a specific schedule for the exercise of the 409A Portion of each of your stock options. Accordingly, you would have to designate the particular calendar year or years (beginning with the 2008 calendar year) in which that portion is to be exercised and the number of shares to be exercised in each such year. As part of your designated exercise schedule, you could provide for an earlier exercise of the vested shares subject to the 409A Portion of your options upon your termination of employment with the Company or a change in control or ownership of the Company after the 2007 calendar year. However, this alternative will not be available if you exercised any Section 409A Portion of your options during the 2006 calendar year.

     (ii) The 409A Portion of each of your stock options could be amended to increase the exercise price to the Adjusted Exercise Price determined for that portion. Such an amendment to the exercise price would bring the 409A Portion of each option into compliance with Section 409A, and you could exercise that 409A-compliant portion as you choose, subject only to the existing exercise provisions and option term in effect for each such option. A New Option granted in replacement of the 409A Portion of any Eligible Option will also avoid taxation under Section 409A.

Accordingly, pursuant to the Offer, you may tender each of your Eligible Options to the Company for amendment or replacement. The exercise price per share for each Amended Option will be increased to the Adjusted Exercise Price determined for that option, and that Amended Option would not be subject to the adverse tax consequences under Section 409A described above. Each New Option granted in replacement of a tendered Eligible Option with a current exercise price at or above the fair market value of the Company’s Class A common stock on the Amendment Date will also avoid taxation under Section 409A.

If you are subject to the tax laws in more than one jurisdiction, you should be aware that tax consequences of more than one country may apply to you as a result of your participation in the Offer. You should be certain to consult your personal tax advisor to discuss these consequences. We will distribute short summaries of some of those consequences with respect to several of the countries where Eligible Optionees are located. If you are subject to the tax laws of jurisdictions outside of the United States, you should also review the summary applicable to such foreign jurisdiction.

Neither we nor our Board of Directors will make any recommendation as to whether you should tender your Eligible Options for amendment or replacement, nor have we authorized any person to make any such recommendation. You must make your own decision whether or not to tender your Eligible Options, after taking into account your own personal circumstances and preferences. You should be aware that adverse tax consequences under Section 409A may apply to your Eligible Options if they are not amended or replaced pursuant to the Offer, and you will be solely responsible for any taxes, interest or penalties you may incur under Section 409A. You are urged to evaluate carefully all of the information in the Offer, and we recommend that you consult your own tax advisor.

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3. STATUS OF ELIGIBLE OPTIONS NOT AMENDED OR REPLACED.

If you choose not to tender your Eligible Options for amendment or replacement, those options will continue to remain outstanding in accordance with their existing terms, including the below-market exercise price component that may violate Section 409A. Accordingly, if you take no other action to bring those options into compliance with Section 409A, you may be subject to the adverse U.S. federal tax consequences described in Section 2 above. You will be solely responsible for any taxes, penalties or interest you may incur under Section 409A.

4. PROCEDURES FOR TENDERING ELIGIBLE OPTIONS.

Proper Tender of Options

If you are an Eligible Optionee, you will receive on the commencement of the Offer an email announcing the Offer with a link to the Offer website. Once you have logged onto the Offer website and clicked on the “Make An Election” button, you will be directed to your Election Form that contains the following personalized information with respect to each Eligible Option you hold:

- the grant date indicated for that option on the applicable option agreement,

- the current exercise price per share in effect for that option,

- the number of shares of the Company’s Class A common stock purchasable under that option,

- the revised measurement date determined for that option for financial accounting purposes, and

- the fair market value per share of the Company’s Class A common stock on the revised measurement date.

You will need to check the appropriate box next to each of your Eligible Options to indicate whether you elect to tender that option for amendment or replacement in accordance with the terms of the Offer. After completing the Election Form, you will be allowed to review the elections you have made with respect to your Eligible Options. If you are satisfied with your elections you will proceed to the Agreement to Terms of Election page. Only after you agree to the Agreement to the Terms of Election will you be directed to the Election Confirmation Statement page. Please print and keep a copy of the Election Confirmation Statement for your records. You will then be deemed to have completed the election process.

If you are not able to submit your election electronically via the Offer website as a result of technical failures inherent to the website, such as the website being unavailable or the website not accepting your election, or if you do not otherwise have access to the Offer website for any reason (including lack of internet services), you must complete a paper Election Form and return it to the Company via facsimile to 1-800-420-4799. To obtain a paper Election Form, please contact the Apollo Group Tender Offer Hotline at 1-800-398-1278 or stockoptions@apollogrp.edu.

If you decide to elect to tender one or more of your Eligible Options for amendment or replacement pursuant to the Offer, you must properly complete and submit the Election Form by logging onto the Offer website at https://apol.equitybenefits.com by 11:59 p.m. Eastern Daylight Time on July 12, 2007. If we extend the Offer beyond July 12, 2007, you must deliver those documents before the extended expiration date of the Offer.

We will not accept any Election Form after the expiration of the Offer. If you do not complete and submit the Election Form on the Offer website or return it by facsimile, your Eligible Options will not be amended or replaced pursuant to the Offer, and you will not be eligible for any Cash Bonus.

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You cannot tender only a portion of an Eligible Option, and we will not accept such a partial tender for amendment or replacement. If you hold more than one Eligible Option, you may elect to tender one or more of those options and retain the remaining options. Please remember that not all of a particular option grant may be an Eligible Option. Only the portion of that grant that was not vested as of December 31, 2004 may constitute an Eligible Option.

If your Election Form includes any option that is not an Eligible Option or includes only a portion of your outstanding Eligible Option, we will not accept the tendered option or portion for amendment or replacement, but we do intend to accept for amendment or replacement each Eligible Option properly designated for tender in the Election Form.

Determination of Validity; Rejection of Option Shares; Waiver of Defects; No Obligation to Give Notice of Defects. We will determine, in our discretion, all questions as to the form of documents and the validity, form, eligibility (including time of receipt), and acceptance of any option tender, and we will decide, in our sole discretion, all questions as to (i) the portion of each outstanding option that comprises an Eligible Option for purposes of this Offer; (ii) the Adjusted Exercise Price to be in effect under each Amended Option, (iii) the number of shares of our Class A common stock purchasable under the Amended Option at the Adjusted Exercise Price, (iv) the amount of the Cash Bonus payable with respect to each Amended Option and (v) the cancellation of tendered Eligible Options with exercise prices at or above the fair market value of our Class A common stock on the Amendment Date and the replacement of those canceled options with New Options. Our determination as to those matters will be final and binding on all parties. We reserve the right to reject any or all option tenders that we determine do not comply with the conditions of the Offer, that we determine are not in appropriate form or that we determine are unlawful to accept. Otherwise, we intend to accept for amendment or replacement each properly and timely tendered Eligible Option that is not validly withdrawn. We also reserve the right to waive any of the conditions of the Offer or any defect or irregularity in any tender with respect to any particular Eligible Option or any particular Eligible Optionee. No tender of an Eligible Option will be deemed to have been properly made until all defects or irregularities have been cured by the tendering Eligible Optionee or waived by us. Neither we nor any other person is obligated to give notice of any defects or irregularities in tenders, nor will anyone incur any liability for failure to give any such notice.

Our Acceptance Constitutes an Agreement. Your tender of an Eligible Option pursuant to the procedures described above constitutes your acceptance of the terms and conditions of the Offer. Subject to our rights to extend, terminate or amend the Offer, we currently expect that we will, promptly upon the expiration of the Offer, accept for amendment all properly tendered Eligible Options that have not been validly withdrawn, and on the next business day we will increase the exercise price per share to the Adjusted Exercise Price determined for that option. However, if the Adjusted Exercise Price determined for any tendered Eligible Option would be the same or lower than the exercise price per share currently in effect for that option, then that option will, on the Amendment Date, be canceled and immediately replaced with a New Option that is exactly the same as the canceled option, including the same exercise price per share and no loss of vesting or change to the expiration date of the option term, but with a new grant date.

Our acceptance of your tendered Eligible Options for amendment or replacement pursuant to the Offer will constitute a binding agreement between us and you upon the terms and subject to the conditions of the Offer. Accordingly, as soon as administratively practicable after the Amendment Date, we will deliver to you a final and complete Amendment Agreement, a form of which is filed as an exhibit to the Offer and is available for review on the Offer website. Schedule I to that final agreement will indicate the Adjusted Exercise Price in effect for each of your Amended Options and the Company’s unconditional obligation to pay you on the Company’s first regularly scheduled payroll date after January 1, 2008 the Cash Bonus calculated for each Amended Option. You will also receive an Option Cancellation and Regrant Agreement for any New Option granted in replacement of a tendered Eligible Option with a current exercise price per share at or above the fair market value per share of our Class A common stock on the Amendment Date.

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5. WITHDRAWAL RIGHTS.

You may only withdraw your tendered Eligible Options in accordance with the provisions of this Section 5.

     (i) You may withdraw your tendered Eligible Options at any time before 11:59 p.m., Eastern Daylight Time, on the Expiration Date of the Offer. In addition, unless we accept and amend or replace your Eligible Options before 12:00 midnight, Eastern Daylight Time, on August 9, 2007 (the 40th business day after the June 13, 2007 commencement date of the Offer), you may withdraw your tendered options at any time thereafter.

     (ii) To validly withdraw your tendered Eligible Options, you must use the Offer website at https://apol.equitybenefits.com to revise your Election Form to indicate the Eligible Options that you no longer wish to tender for amendment or replacement. Alternatively, you may change your existing election by completing a new paper Election Form and returning it to the Company via facsimile to 1-800-420-4799. To obtain a paper Election Form, please contact the Apollo Group Tender Offer Hotline at 1-800-398-1278 or stockoptions@apollogrp.edu.

You may only revise your Election Form to withdraw your Eligible Options from the Offer while you still have the right to withdraw the tendered options in accordance with the requirements of subparagraph (i) above.

YOU MAY NOT WITHDRAW ONLY A PORTION OF A TENDERED ELIGIBLE OPTION. IF YOU CHOOSE TO WITHDRAW A TENDERED ELIGIBLE OPTION, YOU MUST WITHDRAW THE ENTIRE OPTION.

You may not rescind any withdrawal, and any Eligible Option you withdraw will no longer be deemed tendered for amendment or replacement pursuant to the Offer, unless you properly re-tender that option before the Expiration Date by following the election and tender procedures described in Section 4.

Neither the Company nor any other person is obligated to give notice of any defects or irregularities in any revised Election Form submitted to us for purposes of withdrawing tendered Eligible Options from the Offer, nor will anyone incur any liability for failure to give any such notice. We will determine, in our sole discretion, all questions as to the form and validity, including time of receipt, of revised Election Forms purporting to withdraw tendered Eligible Options from the Offer. Our determination of those matters will be final and binding.

6. ACCEPTANCE OF ELIGIBLE OPTIONS FOR AMENDMENT OR REPLACEMENT AND COMMITMENT TO PAY CASH BONUS WITH RESPECT TO AMENDED OPTIONS.

Upon the terms and subject to the conditions of the Offer, we will, upon the Expiration Date, accept for amendment or replacement all Eligible Options that have been properly tendered and not validly withdrawn before the Expiration Date. For each Amended Option, we will increase the exercise price per share to the applicable Adjusted Exercise Price on the next business day, currently scheduled to be July 13, 2007. For each tendered Eligible Option that is canceled pursuant to the Offer, we will grant a New Option in replacement on July 13, 2007. If we extend the Expiration Date, then the accepted Eligible Option will be amended or replaced on the next business day following the extended Expiration Date.

We will provide written or electronic notice of our acceptance to each Eligible Optionee whose tendered Eligible Options we have accepted for amendment or replacement. Such notice may be by email, press release or other means. In addition, we will, as soon as administratively practicable after the Amendment Date, deliver electronically a final and complete Amendment Agreement to each Eligible Optionee whose Eligible Options have been amended pursuant to the Offer. Schedule I to that agreement will reflect the increases to the exercise prices of the Amended Options and the Company’s unconditional obligation to pay such Eligible Optionee the applicable Cash Bonus for each of his or her Amended Options on the Company’s first regularly scheduled payroll date after January 1, 2008, which will not be later than January 15, 2008. Such Cash Bonus will be paid whether or not an Eligible Optionee continues in the Company’s employ through the payment date. For each New Option to which a tendering Eligible Optionee becomes entitled, we will deliver an Option Cancellation and Regrant Agreement to that person as soon as administratively practicable after the grant date.

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However, if you are not in the employ of the Company (or any Apollo Group subsidiary) on the Expiration Date or on the Amendment Date, then none of your tendered Eligible Options will be amended or replaced, and you will not be entitled to any Cash Bonus with respect to those options. The tendered options will be returned to you and will remain exercisable in accordance with the terms in effect for them at the time of tender, including the current exercise price per share. You will incur Section 409A tax penalties upon your subsequent exercise of those options, unless you bring the options into compliance with Section 409A prior to such exercise.

7. CONDITIONS OF THE OFFER.

We will not accept any Eligible Options tendered to us for amendment or replacement, and we may terminate or amend the Offer or postpone our acceptance of any Eligible Options tendered to us for amendment or replacement, in each case, subject to Rule 13e-4(f)(5) under the 1934 Act, if at any time on or after June 13, 2007, and before the Expiration Date, any of the following events has occurred, or has been reasonably determined by us to have occurred and, in our reasonable judgment in any such case and regardless of the circumstances giving rise thereto (including any action or omission by us), the occurrence of such event or events makes it inadvisable for us to proceed with the Offer or with our acceptance of the Eligible Options tendered to us for amendment or replacement:

     (a) there shall have been threatened or instituted or be pending any action or proceeding by any government or governmental, regulatory or administrative agency, authority or tribunal or by any other person, domestic or foreign, before any court, authority, agency or tribunal that directly or indirectly challenges the making of the Offer, the amendment of the existing exercise price in effect for some or all of the tendered Eligible Options pursuant to the Offer, the payment of the applicable Cash Bonuses, the cancellation of tendered options and the grant of New Options in replacement or otherwise relates in any manner to the Offer or that, in our reasonable judgment, could materially and adversely affect our business, condition (financial or other), operating results, operations or prospects, or otherwise materially impair in any way the contemplated future conduct of our business or the business of any of our subsidiaries or materially impair the contemplated benefits of the Offer to us;

     (b) there shall have been any action threatened, pending or taken, or approval withheld, or any statute, rule, regulation, judgment, order or injunction threatened, proposed, sought, promulgated, enacted, entered, amended, enforced or deemed to be applicable to the Offer or us or any of our subsidiaries, by any court or any authority, agency or tribunal that, in our reasonable judgment, would or might directly or indirectly:

          • make the amendment of the tendered Eligible Options or payment of the Cash Bonuses or the cancellation of tendered options and the grant of New Options in replacement thereof illegal or otherwise restrict or prohibit consummation of the Offer or otherwise relates in any manner to the Offer;

          • delay or restrict our ability, or render us unable, to accept for amendment or replacement some or all of the tendered Eligible Options;

          • materially impair the benefits we hope to convey as a result of the Offer, that we believe would occur only as a result of further changes to Section 409A, the regulations thereunder or other tax laws that would affect the Offer or the Eligible Options; or

          • materially and adversely affect our business, condition (financial or other), operating results, operations or prospects or otherwise materially impair in any way the contemplated future conduct of our business or the business of any of our subsidiaries;

     (c) there shall have occurred:

          • any general suspension of trading in, or limitation on prices for, securities on any national securities exchange or in the over-the-counter market;

          • any significant change in the market price of the shares of our Class A common

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stock or any change in the general political, market, economic or financial conditions in the United States or abroad that could, in our reasonable judgment, have a material adverse effect on our business, condition (financial or other), operating results, operations or prospects or on the trading in our common stock, or that, in our reasonable judgment, makes it inadvisable to proceed with the Offer;

          • in the case of any of the foregoing existing at the time of the commencement of the Offer, a material acceleration or worsening thereof; or

          • any decline in either the Dow Jones Industrial Average, the Nasdaq Global Select Market or the Standard and Poor’s Index of 500 Companies by an amount in excess of 10% measured during any time period after the close of business on June 13, 2007;

     (d) there shall have occurred any change in generally accepted accounting standards or the application or interpretation thereof that could or would require us for financial reporting purposes to record compensation expenses against our operating results in connection with the Offer that would be in excess of any compensation expenses that we would be required to record under generally accepted accounting standards in effect at the time we commence the Offer;

     (e) a tender or exchange offer with respect to some or all of our outstanding Class A common stock, or a merger or acquisition proposal for us, shall have been proposed, announced or made by another person or entity or shall have been publicly disclosed, or we shall have learned that:

          • any person, entity or “group,” within the meaning of Section 13(d)(3) of the 1934 Act, shall have acquired or proposed to acquire beneficial ownership of more than 5% of the outstanding shares of our Class A common stock, or any new group shall have been formed that beneficially owns more than 5% of the outstanding shares of our Class A common stock, other than any such person, entity or group that has filed a Schedule 13D or Schedule 13G with the SEC before June 13, 2007;

          • any such person, entity or group that has filed a Schedule 13D or Schedule 13G with the SEC before June 13, 2007 shall have acquired or proposed to acquire beneficial ownership of an additional 2% or more of the outstanding shares of our Class A common stock; or

          • any person, entity or group shall have filed a Notification and Report Form under the Hart-Scott-Rodino Antitrust Improvements Act of 1976 or made a public announcement reflecting an intent to acquire us or any of our subsidiaries or any of the assets or securities of us or any of our subsidiaries;

     (f) any change or changes shall have occurred in our business, condition (financial or other), assets, operating results, operations, prospects or stock ownership or that of our subsidiaries as a result of unforeseen, extraordinary events beyond our control that, in our reasonable judgment, is or may be material to us or our subsidiaries or otherwise makes it inadvisable for us to proceed with the Offer; or

     (g) any rules, regulations or actions by any governmental authority, the Nasdaq Global Select Market, or other regulatory or administrative authority of any national securities exchange have been enacted, enforced or deemed applicable to the Company that makes it inadvisable for us to proceed with the Offer.

The conditions to the Offer are for our benefit. We may assert them in our discretion, regardless of the circumstances giving rise to them, at any time before the Expiration Date. We may waive them, in whole or in part, at any time and from time to time before the Expiration Date, in our discretion, whether or not we waive any other condition to the Offer. Our failure at any time to exercise any of these rights will not be deemed a waiver of any such rights. The waiver of any of these rights with respect to particular facts and circumstances will not be deemed a waiver with respect to any other facts and circumstances. Should we decide to waive any of the material conditions of the Offer, the Offer will remain open for the five (5) business days following the date we announce the

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waiver. Any determination we make concerning the events described in this Section 7 may be challenged by an Eligible Optionee only in a court of competent jurisdiction. A non-appealable determination with respect to such matter by a court of competent jurisdiction will be final and binding upon all persons.

8. PRICE RANGE OF COMMON STOCK UNDERLYING THE OPTIONS.

There is no established trading market for the Eligible Options or any other options granted under our Plans.

Our Class A common stock is quoted on the Nasdaq Global Select Market under the symbol “APOL.” The following table shows, for the periods indicated, the high and low sales prices per share of our Class A common stock on the Nasdaq Global Select Market.

Quarter Ended	High		Low
May 31, 2007	$	49.22	$	42.92
February 28, 2007	$	48.56	$	38.26
November 30, 2006	$	52.89	$	33.70
August 31, 2006	$	55.47	$	43.12
May 31, 2006	$	56.02	$	47.94
February 28, 2006	$	72.61	$	49.38
November 30, 2005	$	78.19	$	58.87
August 31, 2005	$	81.21	$	71.58
May 31, 2005	$	78.43	$	68.64
February 28, 2005	$	85.33	$	73.64

On June 12, 2007 the last reported sale price of our Class A common stock on the Nasdaq Global Select Market was $47.47 per share.

The price of our Class A common stock has been, and in the future may be, volatile and could decline. The trading price of our Class A common stock has fluctuated in the past and is expected to continue to do so in the future, as a result of a number of factors, many of which are outside our control. In addition, the stock market has experienced extreme price and volume fluctuations that have affected the market prices of many companies, and that have often been unrelated or disproportionate to the operating performance of those companies.

9. SOURCE AND AMOUNT OF CONSIDERATION; TERMS OF AMENDED OPTIONS OR NEW OPTIONS.

Consideration. If we accept the tender of your Eligible Options for amendment, the exercise price per share will be increased to the Adjusted Exercise Price determined for each such option. Except for such Adjusted Exercise Price, all the terms and provisions in effect for the Eligible Option at the time of tender will continue in effect after the amendment. Accordingly, each Amended Option will continue to vest in accordance with the same vesting schedule measured from the same vesting commencement date currently in effect for each such option, and the exercise period and expiration date for each option will also remain unchanged. However, if the Adjusted Exercise Price as so determined would be the same or lower than the exercise price per share currently in effect for the Eligible Option, then that option will, on the Amendment Date, be canceled and immediately replaced with a new option that is exactly the same as the canceled option, including the current exercise price per share and no loss of vesting or change to the expiration date of the option term, but with a new grant date.

If you are not in the employ of the Company (or any Apollo Group subsidiary) on the Expiration Date or on the Amendment Date, then none of your tendered Eligible Options will be accepted for amendment or replacement. The tendered options will be returned to you and will remain exercisable in accordance with the terms in effect for them at the time of tender, including the current exercise price per share. You will incur Section 409A tax penalties upon your subsequent exercise of those options, unless you bring those options into compliance with Section 409A prior to such exercise.

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Should you participate in this Offer, then with respect to each of your Eligible Options that is amended to increase the exercise price per share to the Adjusted Exercise Price determined for that option, you will be eligible to receive the special Cash Bonus. The Cash Bonus will be paid from the Company’s general assets on the Company’s first regularly scheduled payroll date after January 1, 2008, and you will be a general creditor of the Company with respect to the Cash Bonus. No Cash Bonuses will be paid with respect to New Options granted in replacement of tendered Eligible Options, because the exercise price will be the same as in effect for the canceled option it replaces.

If all Eligible Options tendered pursuant to the Offer are amended, the resulting Amended Options and New Options will cover approximately 2,068,679 shares of our Class A common stock in the aggregate, which represents approximately 1.2% of the total shares of our Class A common stock outstanding as of May 15, 2007. The amount of the Cash Bonuses payable pursuant to this Offer will depend upon the fair market value of the Class A common stock on the Amendment Date. The table below indicates the total maximum dollar amount payable as Cash Bonuses based upon assumed fair market values of the Company’s Class A common stock on the Amendment Date:

Assumed Fair Market Value of
Class A Common Stock on	Estimated Resulting
Amendment Date	Cash Bonus
$45.00	$	406,683
$50.00	$	406,683
$55.00	$	406,683
$60.00	$	412,943
$65.00	$	2,763,292
$70.00	$	8,214,372
$75.00	$	11,165,926
$80.00	$	11,187,933
$85.00	$	11,188,497

Terms of Amended Options or New Options. The amendment or replacement of the tendered Eligible Options pursuant to the Offer will not create any contractual or other right of the tendering Eligible Optionees to receive any future grants of stock options, restricted stock units or other stock-based compensation. This Offer does not change the “at-will” nature of an Eligible Optionee’s employment with us, and an Eligible Optionee’s employment may be terminated by us or by the optionee at any time, for any reason, with or without cause. The employment of Eligible Optionees outside the United States may be terminated subject to the requirements of local law and the terms of any employment agreement.

The Eligible Options have all been granted pursuant to the Plans. Each Amended Option will continue to remain outstanding under the Plan under which it was originally granted, and each New Option will be granted under the Plan under which the canceled option was granted.

The following is a description of the principal features of the Plans that apply to option grants made under such Plans. The description of each Plan is subject to, and qualified in its entirety by reference to, the actual provisions of the applicable Plan and the form of stock option agreement in effect for the Eligible Options granted under that Plan. The Long Term Incentive Plan has been filed as Exhibit 10.3 to our Form S-1 filed with the Securities and Exchange Commission (the “SEC”) on March 7, 1997, and the Amended and Restated 2000 Stock Incentive Plan has been filed as an exhibit to the Schedule TO. Please contact the Apollo Group Tender Offer Hotline at 1-800-398-1278 or stockoptions@apollogrp.edu, to receive a copy of each Plan document and the form of stock option agreement for each Plan. We will promptly furnish you copies of those documents at our expense. Both the Amendment Agreement to be used to evidence the increase to the exercise price of each Eligible Option amended pursuant to the Offer and the Option Cancellation and Regrant Agreement to be used to evidence each New Option granted in replacement of an Eligible Option canceled pursuant to the Offer have been filed with the SEC as exhibits to the Schedule TO.

Long Term Incentive Plan.

The following is a description of the principal provisions of the Long Term Incentive Plan that apply to option grants made under that Plan, including the Eligible Options.

Administration. The Compensation Committee of our Board of Directors has the authority to administer the Long Term Incentive Plan (the “LTIP”).

Share Reserve. As of May 15, 2007, options to purchase 812,279 shares of our Class A common stock were outstanding under the LTIP and an additional 974,356 shares remained available for future grant. The shares of our Class A common stock issuable under the LTIP may be drawn from shares of our authorized but unissued Class A common stock, from shares of our Class A common stock that we reacquire or purchase on the open market, or a combination thereof.

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Eligibility. Officers or other key employees (including those employees who are also directors of officers) of the Company or any of our subsidiaries are eligible to receive option grants under the LTIP.

Option Terms. Each granted option has an exercise price per share and option term determined by the Compensation Committee. The shares subject to that option will generally vest in one or more installments over a specified period of service measured from the grant date. No granted option will have a term in excess of ten years measured from the grant date, and each outstanding option will be subject to earlier termination following the optionee’s cessation of service with the Company.

Vesting Acceleration. In the event the Company should undergo a change in control without the prior approval of its Board of Directors, each option outstanding under the LTIP will vest and become exercisable on an accelerated basis for all of the option shares.

A change in control will be deemed to occur upon (i) any consolidation or merger in which the Company is not the continuing or surviving corporation or pursuant to which our Class A common stock would be converted into cash, securities or other property, (ii) a stockholder-approved plan or proposal for the liquidation or dissolution of the Company, or (iii) sale or other transfer of substantially all of the Company’s assets.

Stockholder Rights and Option Transferability. No optionee will have any stockholder rights with respect to the option shares until such optionee has exercised the option and paid the exercise price for the purchased shares. Options are not assignable or transferable other than by will or the laws of inheritance following optionee’s death.

Changes in Capitalization. In the event of any merger, reorganization, consolidation, recapitalization, separation, liquidation, stock dividend, stock split-up, combination of shares or other change in the Company’s corporate structure affecting our Class A common stock, equitable adjustments will be made by the Compensation Committee to the number and class of our Class A common stock issuable under the LTIP and to the number and class and/or the exercise price per share in effect under each outstanding option. Such adjustments will be made in the sole discretion of the Compensation Committee to preserve an optionee’s proportionate interest in an option and to prevent dilution or enlargement of rights.

Amendment. Our Board of Directors may amend, modify or terminate the LTIP and any outstanding options thereunder, but any amendment, modification or termination that would adversely affect the rights of the option holder will require the consent of that person.

Amended and Restated 2000 Stock Incentive Plan.

The following is a description of the principal provisions of the Amended and Restated 2000 Stock Incentive Plan (the “2ISP”) that apply to option grants made under that Plan, including the Eligible Options.

Administration. The Compensation Committee of our Board of Directors has the exclusive authority to administer the 2ISP.

Share Reserve. As of May 15, 2007, options to purchase 8,609,985 shares of our Class A common stock were outstanding under the 2ISP and an additional 6,326,362 shares remained available for future grant. The shares of our Class A common stock issuable under the 2ISP may be drawn from shares of our authorized but unissued Class A common stock, from shares of our Class A common stock that we reacquire or purchase on the open market, or a combination thereof.

Eligibility. Officers, employees, non-employee members of our Board of Directors, executives of and consultants and advisors to the Company or any of our subsidiaries are eligible to receive option grants under the 2ISP.

Option Terms. Each granted option has an exercise price per share determined by the Compensation Committee, but that price may not be less than 100% of the fair market value of the option shares on the grant date. The shares subject to each option will generally vest over a specified period of service measured from the grant date. No

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granted option will have a term in excess of ten years measured from the grant date, and each outstanding option will be subject to earlier termination following the optionee’s cessation of service with the Company.

Vesting Acceleration. In the event the Company should undergo a change in control, each option outstanding under the 2ISP will vest and become exercisable on an accelerated basis for all of the option shares. In addition, upon or in anticipation of a change in control, the Compensation Committee may cause each option outstanding under the 2ISP to terminate at a specific time and will give each option holder the right to exercise his or her options during a period of time determined by the Compensation Committee.

A change in control will be deemed to occur upon (i) any consolidation or merger in which the Company is not the continuing or surviving corporation or pursuant to which our Class A common stock would be converted into cash, securities or other property, (ii) a sale, lease, exchange or other transfer of assets aggregating more than 80% of the Company’s assets, (iii) a stockholder-approved plan or proposal for liquidation or dissolution the Company, (iv) the acquisition of any party or group of securities possessing 50% or more of the Company’s Class A common stock, or (v) a hostile take-over of the Company by proxy contest for the election of our Board of Directors.

Stockholder Rights and Option Transferability. No optionee will have any stockholder rights with respect to the option shares until such optionee has exercised the option and paid the exercise price for the purchased shares. Options are not assignable or transferable other than by will or the laws of inheritance following optionee’s death.

Changes in Capitalization. In the event a stock dividend is declared upon the Class A common stock, the number of shares of our Class A common stock subject to each option will be increased proportionately, and the exercise price in effect will also be equitably adjusted to reflect the stock dividend; provided, however, that the aggregate exercise price will remain the same. Should any change be made to the outstanding Class A common stock by reason of any stock split or split-up, recapitalization, combination of shares, exchange of shares, spin-off transaction, extraordinary dividend or distribution or other change affecting our outstanding Class A common stock as a class without the Company’s receipt of consideration, or should there occur any merger, consolidation or other reorganization, then equitable adjustments will be made to the maximum number and/or class of securities and the exercise price per share in effect under each outstanding option. All such adjustments will be made in such manner as the Compensation Committee deems appropriate to preclude the dilution or enlargement of rights under the 2ISP and the options outstanding thereunder.

Amendment. Our Board of Directors may amend, modify or terminate the 2ISP and any outstanding options thereunder, but any amendment, modification or termination that would adversely affect the rights of the option holder will require the consent of that person.

Taxation of Non-Statutory Stock Options.

An optionee will not recognize taxable income for U.S. federal income tax purposes upon the grant of a non-statutory option. In general, an optionee will recognize ordinary income, in the year in which the option is exercised, equal to the excess of the fair market value of the purchased shares on the exercise date over the exercise price paid for the shares, and the optionee will be required to satisfy the tax withholding requirements applicable to such income.

We will be entitled to an income tax deduction equal to the amount of ordinary income recognized by the optionee with respect to the exercised non-statutory option. The deduction will in general be allowed for our taxable year in which such ordinary income is recognized by the optionee.

If you are subject to the tax laws in more than one jurisdiction, you should be aware that consequences of more than one country may apply to you as a result of your receipt, vesting or exercise of an option grant for our Class A common stock. You should be certain to consult your personal tax advisor to discuss those consequences. We will distribute short summaries of some of those consequences with respect to several of the countries where Eligible Optionees are subject to taxation. If you are subject to the tax laws of jurisdictions outside of the United States, you should also review the summary applicable to such foreign jurisdiction.

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Accounting Treatment.

On September 1, 2005, the Company adopted the provisions of SFAS No. 123 (revised 2004), “Share-Based Payment” (“SFAS 123(R)”). In March 2005, the SEC issued Staff Accounting Bulletin No. 107 (“SAB 107”) relating to SFAS 123(R), which the Company applied in its adoption of SFAS 123(R). SFAS 123(R) requires the measurement and recognition of compensation expense for all share based awards issued to employees and directors, based on estimated fair values of the share award on the date of grant. The Company adopted the fair value recognition provisions of SFAS 123(R) using the modified prospective transition method, which requires compensation expense to be recorded for all share based awards granted after September 1, 2005 and for all unvested stock options outstanding as of September 1, 2005. For all unvested options outstanding as of September 1, 2005, the remaining unrecognized compensation expense, based on the fair value as determined under the provisions of SFAS 123, will be recognized as share based compensation in the Consolidated Statements of Income over the remaining vesting period. For share based awards granted subsequent to September 1, 2005, compensation expense is based on the fair value as determined under the provisions of SFAS 123(R) and will be recognized in the Consolidated Statements of Income over the vesting period. Under the modified prospective transition method, prior periods are not restated for the effect of SFAS 123(R).

SFAS 123(R) requires the Company to calculate the fair value of share based awards on the date of grant. The Company uses the Black-Scholes-Merton option pricing model (“BSM”) to estimate fair value. The BSM requires the Company to estimate key assumptions such as expected life, volatility, risk-free interest rates and dividend yield to determine the fair value of share based awards, based on both historical information and management judgment regarding market factors and trends. The Company amortizes the share based compensation expense over the period that the awards are expected to vest, net of estimated forfeiture rates. If the actual forfeitures differ from management estimates, additional adjustments to compensation expense may be required in future periods.

Please see Section 13 for a discussion of the accounting treatment of the Offer.

10. AMENDED OPTIONS AND NEW OPTIONS WILL NOT DIFFER FROM ELIGIBLE OPTIONS.

Except for the Adjusted Exercise Price, all the terms and provisions in effect for the Eligible Option at the time of tender will continue in effect if that option is amended pursuant to the Offer. Accordingly, each Amended Option will continue to vest in accordance with the vesting schedule currently in effect for that option at the time of the amendment, and the exercise period and option term for that Amended Option will also remain unchanged.

Each New Option will be exactly the same as the canceled Eligible Option it replaces, including the current exercise price for the canceled option and no loss of vesting or change to the expiration date of the option term, but it will have a new grant date.

11. INFORMATION CONCERNING APOLLO GROUP.

Apollo Group has been an education provider for more than 30 years, operating University of Phoenix, Inc. (“UPX”), Institute for Professional Development (“IPD”), The College for Financial Planning Institutes Corporation (“CFP”), Western International University, Inc. (“WIU”) and Insight Schools, Inc., all of which are wholly-owned subsidiaries of the Company. The Company offers innovative and distinctive educational programs and services from high school through college-level at 99 campuses and 163 learning centers in 39 states, Puerto Rico, Alberta, British Columbia, The Netherlands and Mexico, as well as online, throughout the world. Our combined Degreed Enrollment for UPX and Axia College as of August 31, 2006, was approximately 282,300. In addition, students are enrolled in WIU, CFP and IPD Client Institutions (as defined below), and additional non-degreed students are enrolled in UPX. Degreed Enrollments represent individual students enrolled in our degree programs who attended a course during the quarter and did not graduate as of the end of the quarter (including Axia students enrolled in UPX and WIU).

UPX is accredited by The Higher Learning Commission (“The HLC”) and has been a member of the North Central Association of Colleges and Schools since 1978. UPX has successfully replicated its teaching/learning model while maintaining educational quality at 75 local campuses and 123 learning centers in 37 states, Puerto Rico, Alberta,

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British Columbia, The Netherlands and Mexico. In Canada, we operate under Canadian subsidiary corporations. UPX also offers its educational programs worldwide through its computerized educational delivery system. UPX has customized computer programs for student tracking, marketing, faculty recruitment and training and academic quality management. These computer programs are intended to provide uniformity among UPX’s campuses and learning centers, which enhances UPX’s ability to expand into new markets while still maintaining academic quality. UPX’s tuition revenues represented approximately 84% of the Company’s consolidated revenues for the year ended August 31, 2006. Axia College, which has been a part of UPX since March 2006 (previously it was part of WIU), offers associate’s degrees in business, criminal justice, general studies, health administration and information technology worldwide through its computerized educational delivery system. Axia College is designed for students with little or no college experience and offers small classes of less than 20 students and dedicated faculty who are specially trained in facilitating the online learning experience.

WIU is accredited by The HLC and currently offers undergraduate and graduate degree programs at local campuses in Arizona and through joint educational agreements with educational institutions in China and India.

IPD provides program development and management consulting services to regionally accredited private colleges and universities (“Client Institutions”) that are interested in expanding or developing their programs for working students. These services typically include degree program design, curriculum development, market research, student recruitment, accounting and administrative services. IPD provides these services at 22 campuses and 36 learning centers in 24 states in exchange for a contractual share of the tuition revenues generated from these programs. IPD’s contracts with its Client Institutions generally range in length from five to ten years with provisions for renewal. IPD typically works with institutions that:

• are interested in developing or expanding degree programs for working students;

• recognize that working students require a different teaching/learning model than the typical 18- to 24-year-old student;

• desire to increase enrollments with a limited investment in institutional capital; and

• recognize the unmet educational needs of the working students in their market.

CFP, located near Denver, Colorado, provides financial planning education programs, including the Certified Financial Planner Professional Education Program^™ Certification, as well as regionally accredited graduate degree programs in financial planning, financial analysis and finance. CFP also offers some of its non-degree programs at UPX campuses.

On October 20, 2006, the Company completed the acquisition of Insight Schools (“Insight”). Insight operates an online high school and engages in the business of servicing cyber high schools and other online education. The Company acquired all of the outstanding common stock of Insight for $15.5 million. The Company believes this acquisition allows it to expand into the online charter high school market.

We incorporated in Arizona in 1981 and maintain our principal executive offices at 4615 East Elwood Street, Phoenix, Arizona 85040. Our telephone number is (480) 966-5394. Our website addresses are as follows:

•	Apollo Group	www.apollogrp.edu
•	UPX	www.phoenix.edu
•	IPD	www.ipd.org
•	WIU	www.wintu.edu
•	Axia College	www.axia.phoenix.edu
•	CFP	www.cffp.edu

Financial Information. The following table sets forth selected consolidated financial operating data for Apollo Group. The selected historical statement of operations data for the fiscal years ended August 31, 2006 and 2005 and the selected historical balance sheet data as of August 31, 2006 and 2005 have been derived from the consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended August 31, 2006 that have been audited by Deloitte & Touche LLP, independent registered public accounting firm, and our Quarterly Report on Form 10-Q/A for the fiscal quarter ended February 28, 2007.

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The information presented below should be read together with the complete financial statements and notes related thereto as well as the section of these reports entitled Management’s Discussion and Analysis of Financial Condition and Results of Operations. We have presented the following data in thousands, except per share data.

	YEAR ENDED				THREE MONTHS ENDED
	AUGUST 31,				FEBRUARY 28,
	2006		2005		2007		2006
(in thousands, except per share data)					(unaudited)
CONSOLIDATED STATEMENT OF OPERATIONS DATA:
Tuition and other revenue, net	$	2,477,533	$	2,251,114	$	606,693	$	570,550
Income from operations		650,034		697,652		91,800		124,703
Net income		414,833		427,933		60,338		79,089
Net income per share (basic)	$	2.38	$	2.34	$	0.35	$	0.46
Net income per share (diluted)	$	2.35	$	2.30	$	0.35	$	0.45
Weighted average shares (basic)		174,351		182,928		173,185		173,496
Weighted average shares (diluted)		176,205		186,066		174,624		175,435
CONSOLIDATED BALANCE SHEET DATA (AT PERIOD END):
Cash and cash equivalents	$	309,058	$	137,184	$	424,088	$	12,498
Current assets, non cash		802,932		809,149		992,675		561,218
Non-current assets		480,073		472,399		513,177		466,781
Current liabilities		595,756		566,745		624,980		580,433
Non-current liabilities		82,876		80,583		77,218		87,089
Total shareholders’ equity		604,373		634,220		803,654		360,477
Book value per common share	$	0.01	$	0.01	$	0.01	$	0.01

See Section 18 for instructions on how you can obtain copies of our SEC reports that contain the audited financial statements we have summarized above.

12. INTERESTS OF DIRECTORS AND OFFICERS; TRANSACTIONS AND ARRANGEMENTS CONCERNING THE OPTIONS; AND MATERIAL AGREEMENTS WITH DIRECTORS AND OFFICERS.

A list of the members of our Board of Directors and executive officers as of June 12, 2007 is attached as Schedule I to this document. As of March 31, 2007 our current executive officers and members of our board of directors as a group beneficially owned outstanding options under all Apollo Group equity compensation plans to purchase a total of 3,240,435 shares of our Class A common stock in the aggregate, which represented approximately 1.8% of the shares of Class A our common stock subject to all options outstanding under all Apollo Group equity compensation plans as of that date.

Our executive officers and the non-employee members of our Board of Directors are not eligible to participate in the Offer.

However, in December 2006, our executive officers and Board members entered into irrevocable agreements with the Company to take appropriate remedial action to bring certain of their options with revised measurement dates into compliance with Section 409A. Most of the executive officers and Board members agreed to have the exercise price of each of those options, to the extent each such option vested after December 31, 2004, amended to the higher fair market value per share of the Class A common stock on the date that option was subsequently determined to have been granted for financial accounting purposes. The exercise prices in effect for such options were amended and increased on May 22, 2007 pursuant to those December 2006 agreements. The Company has not agreed to pay

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any special cash bonuses to those individuals to compensate them for the increased exercise prices now in effect under their amended options.

The individuals whose options were so amended and the increased exercise prices now in effect for those options are set forth in Schedule II attached to this document.

Ms. Kenda Gonzales, the Company’s former Chief Financial Officer, Mr. Daniel Bachus, the Company’s former Chief Accounting Officer and Controller, and Mr. John Norton, a former member of the Board of Directors, each decided to bring their Section 409A-covered options into compliance with Section 409A by electing in December 2006 to exercise those options during the 2007 calendar year. The number of shares of Class A common stock subject to such specified exercise schedule is 235,000 shares for Ms. Gonzales, 82,500 shares for Mr. Bachus and 40,500 shares for Mr. Norton.

Schedule III attached to this document sets forth a table indicating the beneficial ownership of our Class A common stock by our executive officers and non-employee members of our Board of Directors as of March 31, 2007.

During the 60-day period ended June 12, 2007:

• we granted options under all of our various equity compensation plans to purchase 1,000,000 shares of our Class A common stock, of which options to purchase 1,000,000 shares were granted to our directors and executive officers;

• individuals exercised options to acquire 63,853 shares of our Class A common stock with exercise prices per share ranging from $6.50 to $41.92, of which zero shares were acquired by our directors and executive officers;

• options to purchase an aggregate of 49,093 shares of our Class A common stock under all of our various equity compensation plans were canceled, none of which were held by our directors and executive officers; and

• our directors and executive officers sold an aggregate of zero shares of our Class A common stock.

The following executive officers and non-employee Board members were parties to the foregoing transactions involving our Class A common stock conducted during the 60-day period ended June 12, 2007:

• On May 25, 2007, Mr. Capelli received an option grant to purchase 1,000,000 shares of our Class A common stock at an exercise price per share of $48.47.

• On May 22, 2007, options to purchase shares of our Class A common stock previously granted to Messrs. Mueller, Kline, Pepicello, Fleischer and Meyer, Ms. Bishop and Ms. Thompson on November 1, 2005 were amended pursuant to an amendment agreement which each of those individuals entered into with us in December 2006. In accordance with that agreement, the $63.79 exercise price per share in effect under each such option was increased to the fair market value of our Class A common stock on the date which has now been determined to be the correct measurement date of each such option for financial accounting purposes. Such amendment was intended to avoid adverse tax consequences under Section 409A for Messrs. Mueller, Kline, Pepicello, Fleischer and Meyer, Ms. Bishop and Ms. Thompson. The following chart contains the revised grant date, revised exercise prices and the number of shares of Class A common stock subject to their amended options:

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	Original		Revised		Original		Revised		Number of
	Grant		Grant		Exercise		Exercise		Shares
Name	Date		Date		Price		Price		Affected
Terri C. Bishop		11/1/2005		12/3/2005	$	63.79	$	71.21		4,000
Larry A. Fleischer		11/1/2005		12/3/2005	$	63.79	$	71.21		16,000
John R. Kline		11/1/2005		12/3/2005	$	63.79	$	71.21		15,000
W. Stan Meyer		11/1/2005		12/3/2005	$	63.79	$	71.21		9,600
Brian E. Mueller		11/1/2005		12/1/2005	$	63.79	$	72.61		40,000
William J. Pepicello		11/1/2005		12/3/2005	$	63.79	$	71.21		4,000
Diane L. Thompson		11/1/2005		12/3/2005	$	63.79	$	71.21		12,000

We are a “Controlled Company” as defined in Rule 4350(c) of the Marketplace Rules of the NASDAQ Stock Market LLC because more than 50% of the voting power of Apollo Group is held by the John Sperling Voting Stock Trust. As a consequence, we are exempt from certain requirements of Marketplace Rule 4350, including that (a) our Board of Directors be composed of a majority of Independent Directors (as defined in Marketplace Rule 4200), (b) the compensation of our executive officers be determined by a majority of the independent directors or a compensation committee composed solely of independent directors and (c) nominations to the Board of Directors be made by a majority of the independent directors or a nominations committee comprised solely of independent directors. However, Marketplace Rule 4350(c) does require that our independent directors have regularly scheduled meetings at which only independent directors are present (“executive sessions”), and Code Section 162(m) does require a compensation committee of outside directors (within the meaning of Section 162(m)) to approve stock option grants to executive officers in order for us to be able to deduct the stock option grants as an expense. Notwithstanding the foregoing exemptions, we do have a majority of independent directors on our Board of Directors, and we do have a Compensation Committee and a Nominating and Governance Committee composed of independent directors.

Except as otherwise described above and other than stock option grants, restricted stock unit awards and other stock-based awards in the ordinary course to employees who are not executive officers, there have been no transactions in any outstanding options to purchase our Class A common stock or in our Class A common stock that were effected during the 60-day period ended June 12, 2007 by the Company or by any current executive officer, director, affiliate or subsidiary of the Company.

13. STATUS OF OPTIONS ACCEPTED BY US IN THE OFFER; ACCOUNTING CONSEQUENCES OF THE OFFER.

The terms and provisions of each Amended Option will not differ from the terms and provisions in effect for that option at the time of tender, except that the Amended Option will have an exercise price equal to the Adjusted Exercise Price determined for that option. Accordingly, each Amended Option will continue to remain an outstanding option under the particular Plan under which it was originally granted. Each New Option will be exactly the same as the canceled Eligible Option it replaces, including the current exercise price for the canceled option and no loss of vesting or change to the expiration date of the option term, but will have a new grant date.

Pursuant to the accounting standards in effect under SFAS 123R, we will recognize additional compensation expense for financial reporting purposes with respect to the amendment of the Eligible Options to increase the current exercise prices in effect for those options to the applicable Adjusted Exercise Prices based on the incremental fair value of those options as so modified. Both the change in exercise price and the offsetting Cash Bonus are taken into account in determining the incremental fair value of those options. We will not recognize any additional compensation expense for financial reporting purposes with respect to the cancellation of tendered Eligible Options and the grant of New Options in replacement thereof because there will be no change in the exercise price or any other assumptions affecting the fair value of those options.

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14. LEGAL MATTERS; REGULATORY APPROVALS.

We are not aware of any license or regulatory permit that appears to be material to our business that might be adversely affected by our increasing the exercise prices of the Eligible Options to the applicable Adjusted Exercise Prices, paying the applicable Cash Bonuses or canceling tendered options and granting New Options in replacement, or of any approval or other action by any government or governmental, administrative or regulatory authority or agency, domestic or foreign, that would be required for such amendment to those options, the payment of the Cash Bonuses or the cancellation of tendered options and grant of New Options as contemplated herein. Should any such approval or other action be required, we presently contemplate that we will seek such approval or take such other action. We are unable to predict whether we may be required to delay the acceptance of the tendered Eligible Options for amendment or replacement or the payment of the applicable Cash Bonuses pending the outcome of any such matter. We cannot assure you that any such approval or other action, if needed, would be obtained or would be obtained without substantial conditions or that the failure to obtain any such approval or other action might not result in adverse consequences to our business. Our obligation to amend or replace Eligible Options is subject to certain conditions, including the conditions described in Section 7.

15. MATERIAL U.S. FEDERAL INCOME TAX CONSEQUENCES.

The following is a general summary of the material U.S. federal income tax consequences applicable to the amendment of the Eligible Options and the payment of the Cash Bonuses or the cancellation of tendered options and the grant of New Options in replacement. Foreign, state and local tax consequences are not addressed.

Acceptance of Offer. If you tender your Eligible Options, you will not recognize any taxable income for U.S. federal income tax purposes at the time of your tender.

Amendment of Option. The amendment of your Eligible Option to increase the exercise price per share to the Adjusted Exercise Price determined for that option is not a taxable event for U.S. federal income tax purposes.

Cancellation and Grant of New Options. The cancellation of a tendered Eligible Option and the grant of a New Option in replacement will not be a taxable event for U.S. federal income tax purposes.

Exercise of Amended Option or New Option. Your Amended Option or New Option will be taxable as a non-statutory stock option for U.S. federal income tax purposes. Accordingly, upon each exercise of such option, you will recognize immediate taxable income equal to the excess of (i) the fair market value of the purchased shares at the time of exercise over (ii) the exercise price paid for those shares, and the Company must collect the applicable withholding taxes with respect to such income.

Sale of Acquired Shares. The subsequent sale of the shares acquired upon the exercise of your Amended Option or New Option will give rise to a capital gain to the extent the amount realized upon that sale exceeds the sum of the (i) exercise price paid for the shares plus (ii) the taxable income recognized in connection with the exercise of the option for those shares. A capital loss will result to the extent the amount realized upon such sale is less than such sum. The gain or loss will be long-term if the shares are not sold until more than one (1) year after the date the Amended Option or New Option is exercised for those shares.

Cash Bonus. You will be immediately taxed upon receipt of the Cash Bonus. The payment will constitute wages for tax withholding purposes. Accordingly, the Company must withhold all applicable federal, state and local income and employment withholding taxes, and you will receive only the portion of the payment remaining after those taxes have been withheld.

Foreign Taxation. If you are subject to the tax laws of jurisdictions in addition to the Untied States, you should be aware that tax consequences of more than one country may apply to you as a result of your receipt, vesting or exercise of an option grant for our Class A common stock and/or your participation in the Offer. You should consult your personal tax advisor to discuss these consequences. We will distribute short summaries of some of those consequences with respect to several of the countries where Eligible Optionees are located. If you are subject to the

38

tax laws of jurisdictions outside of the United States, you should review the summary applicable to such foreign jurisdiction.

WE RECOMMEND THAT YOU CONSULT YOUR OWN TAX ADVISOR WITH RESPECT TO THE FOREIGN AND U.S. FEDERAL, STATE AND LOCAL TAX CONSEQUENCES OF PARTICIPATING IN THE OFFER.

16. EXTENSION OF THE OFFER; TERMINATION; AMENDMENT.

We expressly reserve the right, in our discretion, at any time and from time to time, and regardless of whether or not any event set forth in Section 7 has occurred or is deemed by us to have occurred, to extend the period of time during which the Offer is open and thereby delay the acceptance of any Eligible Options for amendment or replacement by giving notice of such extension to the tendering Eligible Optionees and making a public announcement thereof.

We also expressly reserve the right, in our judgment, at any time before the Expiration Date, to terminate or amend the Offer and to postpone our acceptance of any tendered Eligible Options for amendment or replacement upon the occurrence of any of the conditions specified in Section 7, by giving written or electronic notice of such termination or postponement to the tendering Eligible Optionees and making a public announcement thereof. Our reservation of the right to delay our acceptance of the tendered Eligible Options for amendment or replacement is limited by Rule 13e-4(f)(5) promulgated under the 1934 Act, which requires that we must pay the consideration offered or return the tendered Eligible Options promptly after termination or withdrawal of the Offer.

Amendments to the Offer may be made at any time and from time to time by public announcement of the amendment. In the case of an extension, notice of such extension will be issued no later than 9:00 a.m. Eastern Daylight Time on the next business day after the last previously scheduled or announced Expiration Date. Any public announcement made pursuant to the Offer will be disseminated promptly to Eligible Optionees in a manner reasonably designated to inform option holders of such change.

If we materially change the terms of the Offer or the information concerning the Offer, or if we waive a material condition of the Offer, we will extend the Offer to the extent required by Rules 13e-4(d)(2) and 13e-4(e)(3) under the 1934 Act. Those rules require that the minimum period during which an Offer must remain open following material changes in the terms of the Offer or information concerning the Offer, other than a change in price or a change in percentage of securities sought, will depend on the facts and circumstances, including the relative materiality of such terms or information.

If we decide to take any of the following actions, we will give notice of such action and keep the Offer open for at least ten business days after the date of such notification:

(1)	we increase or decrease the amount of consideration offered for the Eligible Options, or
(2)	we decrease the number of Eligible Options eligible to be tendered in the Offer.

17. FEES AND EXPENSES.

We will not pay any fees or commissions to any broker, dealer or other person for soliciting submissions of Eligible Options for amendment or replacement pursuant to this Offer.

18. ADDITIONAL INFORMATION.

We have filed with the SEC a Tender Offer Statement on Schedule TO, of which this document is a part, with respect to the Offer. This document does not contain all of the information contained in the Schedule TO and the exhibits to the Schedule TO. We recommend that you review the Schedule TO, including its exhibits, and the

39

following materials that we have filed with the SEC before making a decision on whether to tender your Eligible Options for amendment or replacement:

     (a) our Annual Report on Form 10-K for our fiscal year ended August 31, 2006, filed with the SEC on May 22, 2007;

     (b) Our Quarterly Report on Form 10-Q/A for our fiscal quarter ended February 28, 2007, filed with the SEC on May 25, 2007;

     (c) our Current Report on Form 8-K filed with the SEC on September 25, 2006; our Current Report on Form 8-K filed with the SEC on October 2, 2006; our Current Report on Form 8-K filed with the SEC on October 18, 2006; our Current Report on Form 8-K filed with the SEC on November 3, 2006; our Current Report on Form 8-K filed with the SEC on November 6, 2006; our Current Report on Form 8-K filed with the SEC on November 9, 2006; our Current Report on Form 8-K filed with the SEC on November 20, 2006; our Current Report on Form 8-K filed with the SEC on December 15, 2006; our Current Report on Form 8-K filed with the SEC on December 27, 2006; our Current Report on Form 8-K filed with the SEC on January 18, 2007; our Current Report on Form 8-K filed with the SEC on February 7, 2007; our Current Report on Form 8-K filed with the SEC on February 12, 2007; our Current Report on Form 8-K filed with the SEC on March 15, 2007; our Current Report on Form 8-K filed with the SEC on April 2, 2007; our Current Report on Form 8-K filed with the SEC on April 4, 2007; our Current Report on Form 8-K filed with the SEC on April 16, 2007; our Current Report on Form 8-K filed with the SEC on April 25, 2007; our Current Report on Form 8-K filed with the SEC on May 4, 2007; and our Current Report on Form 8-K filed with the SEC on May 22, 2007;

     (d) the description of our Class A common stock included in our prospectus filed with the SEC on September 28, 2000 pursuant to Rule 424(b) promulgated under the Securities Act of 1933, as amended (the “1933 Act”), in connection with the Company’s Registration Statement No. 333-33370, including any amendments or reports we file for the purpose of updating that description.

The SEC file number for these filings is 000-0929887. These filings, our other annual, quarterly and current reports, our proxy statements and our other SEC filings are available to the public on the SEC’s website at www.sec.gov. These filings may also be examined, and copies may be obtained, at the following SEC public reference room:

100 F Street, N.E.
Washington, D.C. 20549

You may obtain information on the operation of the public reference rooms by calling the SEC at 1-800-SEC-0330.

We will also provide without charge to each person to whom a copy of this document is delivered, upon the written or oral request of any such person, a copy of any or all of the documents to which we have referred you, other than exhibits to such documents (unless such exhibits are specifically incorporated by reference into such documents). Requests should be directed to:

Apollo Group, Inc.
4615 East Elwood Street
Phoenix, Arizona 85040
Attn: Janess Pasinski

or contact the Apollo Group Tender Offer Hotline at 1-800-398-1278 or stockoptions@apollogrp.edu.

As you read the foregoing documents, you may find some inconsistencies in information from one document to another. If you find inconsistencies between the documents, or between a document and this document, you should rely on the statements made in the most recent document.

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The information relating to Apollo Group in this document should be read together with the information contained in the documents to which we have referred you.

19. FORWARD-LOOKING STATEMENTS; MISCELLANEOUS.

This document and our SEC reports referred to above contain certain forward-looking statements within the meaning of Section 27A of the 1933 Act and Section 21E of the 1934 Act. All statements other than statements of historical fact may be forward-looking statements. Such forward-looking statements include, among others, those statements regarding future events and future results of the Company that are based on current expectations, estimates, forecasts, and the beliefs and assumptions of us and our management, and speak only as of the date made and are not guarantees of future performance. The words “believes,” “expects,” “anticipates,” “estimates,” “plans,” “objectives,” and other similar statements of expectation identify forward-looking statements. Forward-looking statements are inherently uncertain and subject to risks. Such statements should be viewed with caution. Factors that might cause or contribute to such differences include, but are not limited to, those discussed in our Annual Report on Form 10-K, including those set forth in Item 1 under the sections titled “Regulatory Environment,” “Accreditation,” “Federal Financial Aid Programs,” and “State Authorization,” those factors set forth in Item 7 and those factors set forth in other reports that we file with the SEC. We undertake no obligation to publicly update or revise any forward-looking statements, or any facts, events, or circumstances after the date hereof that may bear upon forward-looking statements.

We are not aware of any jurisdiction where the making of the Offer is not in compliance with applicable law. If we become aware of any jurisdiction where the making of the Offer is not in compliance with any valid applicable law, we intend to make a good faith effort to comply with such law. If, after such good faith effort, we cannot comply with such law or we determine that further efforts to comply are not advisable, the Offer will not be made to, nor will tenders be accepted from or on behalf of, the holders of Eligible Options residing in such jurisdiction.

We have not authorized anyone to give you any information or to make any representations in connection with the Offer other than the information and representations contained in this document, the related Tender Offer Statement on Schedule TO or in the related Election Form and accompanying Stock Option Amendment and Special Bonus Agreement. If anyone makes any representation to you or gives you any information different from the representations and information contained in this document, the related Tender Offer Statement on Schedule TO or in the related Election Form and accompanying Stock Option Amendment and Special Bonus Agreement, you must not rely upon that representation or information as having been authorized by us.

We have not authorized any person to make any recommendation on our behalf as to whether you should tender or refrain from tendering your Eligible Options pursuant to the Offer. You should rely only on the representations and information contained in this document, the related Tender Offer Statement on Schedule TO or in the related Election Form and accompanying Stock Option Amendment and Special Bonus Agreement or to which we have referred you.

Apollo Group, Inc. June 13, 2007     

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SCHEDULE I

INFORMATION CONCERNING THE DIRECTORS AND EXECUTIVE OFFICERS OF APOLLO
GROUP, INC.

     The members of the Apollo Group board of directors and the Apollo Group executive officers and their respective positions and offices as of June 12, 2007, are set forth in the following table:

NAME	POSITION AND OFFICES HELD
John G. Sperling, Ph.D.	Founder, Acting Executive Chairman of the Board and Director
Brian E. Mueller	President and Director
Gregory W. Capelli	Executive Vice President Global Strategy, Assistant to Executive Chairman
Joseph L. D’Amico	Chief Financial Officer
John R. Kline	Executive Vice President and Chief Administrative Officer
William J. Pepicello	President, University of Phoenix
Dianne M. Pusch	Executive Vice President
Diane L. Thompson	Chief Human Resources Officer
Terri C. Bishop	Senior Vice President and Chief Communications Officer
Joseph N. Mildenhall	Chief Information Officer
Peter V. Sperling	Senior Vice President, Secretary and Director
Larry A. Fleischer	Vice President of Finance
W. Stan Meyer	Vice President of Marketing
Brian L. Swartz	Vice President, Corporate Controller and Chief Accounting Officer
Dino J. DeConcini	Director
K. Sue Redman	Director
James R. Reis	Director
George A. Zimmer	Director

     The address of each board member and executive officer is c/o Apollo Group, Inc., 4615 East Elwood Street, Phoenix, Arizona 85040.

SCHEDULE II

INFORMATION CONCERNING REMEDIAL ACTION TAKEN BY APOLLO GROUP DIRECTORS
AND EXECUTIVE OFFICERS TO OPTIONS WITH REVISED MEASUREMENT DATES

The following table illustrates the remedial actions taken by each executive officer of Apollo Group to bring certain of his or her options with revised measurement dates into compliance with Section 409A by increasing the exercise price.

		Original	Revised	Original		Revised		Number of
		Grant	Grant	Exercise		Exercise		Shares
Name	Position	Date	Date	Price		Price		Affected
Terri C. Bishop	Senior Vice President and Chief Communications Officer	11/1/2005	12/3/2005	$	63.79	$	71.21		4,000
Larry A. Fleischer	Vice President of Finance	11/1/2005	12/3/2005	$	63.79	$	71.21		16,000
John R. Kline	Executive Vice President and Chief Administrative Officer	11/1/2005	12/3/2005	$	63.79	$	71.21		15,000
W. Stan Meyer	Vice President of Marketing	11/1/2005	12/3/2005	$	63.79	$	71.21		9,600
Brian E. Mueller	President and Director	11/1/2005	12/1/2005	$	63.79	$	72.61		40,000
William J. Pepicello	President, University of Phoenix	11/1/2005	12/3/2005	$	63.79	$	71.21		4,000
Diane L. Thompson	Chief Human Resources Officer	11/1/2005	12/3/2005	$	63.79	$	71.21	12,000

None of the non-employee Board members were determined to hold options with revised measurement dates.

SCHEDULE III

BENEFICIAL OWNERSHIP OF APOLLO GROUP SECURITIES BY APOLLO GROUP DIRECTORS
AND EXECUTIVE OFFICERS

The following table shows the holdings of our common stock as of March 31, 2007 by each director and each executive officer of Apollo Group.

	Apollo						Apollo
	Group Class A		Percent				Group Class B		Percent
Name and Address of Beneficial Owner	Common Stock		Owned				Common Stock		Owned
Directors and Officers:
John G. Sperling, Ph.D.		21,695,615		12.1	%	(1)		243,081		51.2	%
Peter V. Sperling		13,926,757		7.8	%	(2)		232,068		48.8	%
Brian E. Mueller		238,047			*	(3)
Gregory W. Cappelli		—		—
Joseph L. D’Amico		—		—
John R. Kline		44,240			*	(4)
William J. Pepicello		16,267			*	(5)
Dianne M. Pusch		57,278			*	(6)
Diane L. Thompson		105,056			*	(7)
Terri C. Bishop		37,834			*	(8)
Joseph N. Mildenhall		11,580			*	(9)
Larry A. Fleischer		109,908			*	(10)
W. Stan Meyer		19,765			*	(11)
Brian L. Swartz		—		—
John M. Blair		69,750			*	(12)
Dino J. DeConcini		103,179			*	(13)
Hedy F. Govenar		125,268			*	(14)
K. Sue Redman		—		—
James R. Reis		—		—
George A. Zimmer		—		—
All Executive Officers and Directors (20 persons)		36,560,544		20.4	%	(15)
Total Shares Outstanding		179,113,696		100.0	%	(16)		475,149		100.0%

*

Represents beneficial ownership of less than 1%.

(1)

Includes (a) 1,357,339 shares held by the John Sperling 1994 Irrevocable Trust, for which Dr. Sperling and Mr. Sperling are the co-trustees (also included in the shares being reported as beneficially owned by Mr. Sperling); (b) 2,348,886 shares held by The Aurora Foundation, for which Dr. Sperling is the trustee; (c) 1,355,867 shares that Dr. Sperling has the right to acquire within 60 days of the date of the table set forth above; (d) 243,080 shares that the John Sperling Voting Stock Trust has the right to acquire at any time, subject to certain limitations under the Shareholder Agreement as amended, upon conversion of its Class B common stock, for which Dr. Sperling is the trustee; and (e) one share that Dr. Sperling has the right to acquire at any time upon conversion of his share of Class B common stock. Of the shares held by Dr. Sperling, 500,000 shares are subject to a forward sale agreement maturing April 24, 2009. Of the shares held by the Aurora Foundation, 100,000 shares are subject to a forward sale agreement maturing April 24, 2009.

(2)	Includes (a) 1,357,339 shares held by the John Sperling 1994 Irrevocable Trust, for which Dr. Sperling and Mr. Sperling are the co-trustees (also included in the shares being reported as beneficially owned by Dr. Sperling); (b) 596,961 shares that Mr. Sperling has the right to acquire within 60 days of the date of the table set forth above; (c) 232,067 shares that the Peter Sperling Voting Stock Trust has the right to acquire at any time, subject to certain limitations under the Shareholder Agreement as amended, upon conversion of its Class B common stock, for which Mr. Sperling is the trustee; and (d) one share that Mr. Sperling has the right to acquire at any time upon conversion of his share of Class B common stock. Of the shares held by Mr. Sperling, 250,000 shares are subject to a forward sale agreement maturing November 5, 2007; 500,000 shares are subject to a forward sale agreement maturing January 2, 2008; 250,000 shares are subject to a forward sale agreement maturing January 31, 2008; 500,000 shares are subject to a forward sale agreement maturing April 11, 2008; 500,000 shares are subject to a forward sale agreement maturing April 25, 2008; 500,000 shares are subject to a forward sale agreement maturing July 28, 2008; 315,000 shares are subject to a forward sale agreement maturing January 20, 2009; and 500,000 shares are subject to a forward sale agreement maturing April 24, 2009.
(3)	Includes 236,720 shares that Mr. Mueller has the right to acquire within 60 days of the date of the table set forth above.
(4)	Includes 43,084 shares that Mr. Kline has the right to acquire within 60 days of the date of the table set forth above.
(5)	Includes 16,000 shares that Dr. Pepicello has the right to acquire within 60 days of the date of the table set forth above.
(6)	Includes 40,297 shares that Ms. Pusch has the right to acquire within 60 days of the date of the table set forth above.
(7)	Includes 103,592 shares that Ms. Thompson has the right to acquire within 60 days of the date of the table set forth above.
(8)	Includes 1,684 shares held by a living trust and 36,150 shares that Ms. Bishop has the right to acquire within 60 days of the date of the table set forth above.
(9)	Includes 11,580 shares that Mr. Mildenhall has the right to acquire within 60 days of the date of the table set forth above.
(10)	Includes 108,504 shares that Mr. Fleischer has the right to acquire within 60 days of the date of the table set forth above.
(11)	Includes 19,438 shares that Mr. Meyer has the right to acquire within 60 days of the date of the table set forth above.
(12)	Includes 69,750 shares that Mr. Blair has the right to acquire within 60 days of the date of the table set forth above.
(13)	Includes 103,021 shares that Mr. DeConcini has the right to acquire within 60 days of the date of the table set forth above.
(14)	Includes 2,362 shares held by the Governmental Advocates Money Pension Plan and Trust, for which Ms. Govenar is trustee and beneficiary, and 122,906 shares that Ms. Govenar has the right to acquire within 60 days of the date of the table set forth above.
(15)	Includes 2,863,870 shares that all directors and executive officers as a group have the right to acquire within 60 days of the date of the table set forth above.
(16)	Includes 6,403,399 shares that all directors and employees have the right to acquire within 60 days of the date of the table set forth above.

EX-99.(A)(3)

Exhibit (a)(3)

FORM OF ANNOUNCEMENT REGARDING COMMENCEMENT OF OFFER

June 13, 2007

As previously mentioned in the email to you dated May 17, 2007, we are pleased to announce that the Apollo Group, Inc. Stock Options Tender Offer (“Tender Offer”) to amend or replace your Eligible Options (as defined below) is officially launching today, June 13, 2007 and will remain open until July 12, 2007 at 11:59 p.m. Eastern Daylight Time (unless we extend it).

A stock option will be deemed to be an “Eligible Option” if it meets each of the following conditions:

(i) The option was granted under either the Company’s Long Term Incentive Plan or the Amended and Restated 2000 Stock Incentive Plan.

(ii) The option was “misdated” in that the exercise price per share currently in effect for that option is based on the fair market value per share of the Company’s Class A common stock on a date earlier than the date which has now been determined to be the correct measurement date for that option for financial accounting purposes.

(iii) The option was unvested as of December 31, 2004.

(iv) The option is held by an individual who is, on the expiration of the Tender Offer, a current employee of the Company (or any Apollo Group subsidiary) and subject to income taxation in the United States with respect to that option. However, executive officers of the Company and members of the Company’s Board of Directors are not eligible to participate.

(v) The option is outstanding on the expiration date of the Tender Offer.

The Tender Offer will provide you with the opportunity to avoid the unfavorable tax consequences under Section 409A of the Internal Revenue Code you may otherwise incur with respect to your Eligible Options. See below for the Key Steps you should perform related to the Tender Offer.

The specifics of the program are described in the “Schedule TO – Tender Offer Statement Filed with the SEC” and the exhibits thereto. The “Schedule TO Offer to Amend or Replace Eligible Options” is available by clicking on this hyperlink: https://apol.equitybenefits.com/Documents/OfferToAmend.pdf. We urge you to read the “Schedule TO – Tender Offer Statement Filed with the SEC” and the exhibits thereto very carefully.

Stock options will remain subject to adverse tax consequences under Section 409A until the close of the Tender Offer and the official amendment or replacement of such options on the first business day following the expiration of the Tender Offer. Therefore, we remind you that should you exercise your tendered stock options prior to the amendment or replacement of your those stock options, you will be solely responsible for any taxes, penalties or interest you may incur under Section 409A.

We will be conducting several educational webinar sessions to provide you with additional information regarding the Tender Offer. Topics covered include highlights of the Tender Offer, along with a general overview of stock options, a summary of the Eligible Options, and tax issues affecting the Eligible Options.

You are encouraged to attend this webinar which will be offered on the following dates:

Friday, June 15, 2007, 12:00 – 1:00 pm Eastern Daylight Time
Tuesday, June 19, 2007, 5:00 – 6:00 pm Eastern Daylight Time
Thursday, June 21, 2007, 12:00 – 1:00 pm Eastern Daylight Time

You may register for any of the webinar sessions by clicking on: http://www2.eventsvc.com/apollogrp/.

If you are unable to attend one of the above sessions, a recording of the webinar will be available at http://www2.eventsvc.com/apollogrp/ from June 15, 2007 through July 12, 2007.

KEY STEPS RELATED TO TENDER OFFER

Below is an easy checklist that outlines how to tender your Eligible Options in the Tender Offer.

1.

You must log on to the Tender Offer website at https://apol.equitybenefits.com. To access the Tender Offer website, use your Employee ID and password. Your Employee ID is located on your most recent pay check. Your password is the last four digits of your Social Security Number. If the site does not recognize you, please contact the Apollo Group Tender Offer Hotline at 1-800-398-1278 or stockoptions@apollogrp.edu.

2.

Review the following important documents:

1. Schedule TO – Tender Offer Statement Filed With the SEC
2. Instructions to Election Form
3. Stock Option Amendment and Special Bonus Agreement
4. Option Cancellation and Regrant Agreement
5. FAQ

3.	Click on the MAKE AN ELECTION button to proceed with your election. You will be redirected to the first page of the Election Form. You will need to check the appropriate boxes next to each of your Eligible Options to indicate whether or not you are tendering your Eligible Options for amendment or replacement in accordance with the terms of the Offer.
4.	After completing the Election Form, you will be allowed to review the elections you have made with respect to your Eligible Options. If you are satisfied with your elections, you will proceed to the Agreement to Terms of Election page. Only after you agree to the Agreement to the Terms of Election will you be directed to the Election Confirmation Statement page.
5.	Please print and keep a copy of the Election Confirmation Statement for your records. You will then be deemed to have completed the election process.

KEY DATES TO REMEMBER

The commencement date of the Tender Offer is June 13, 2007.

Informational webinars will be conducted on the following dates:

Friday, June 15, 2007, 12:00 – 1:00 pm Eastern Daylight Time
Tuesday, June 19, 2007, 5:00 – 6:00 pm Eastern Daylight Time
Thursday, June 21, 2007, 12:00 – 1:00 pm Eastern Daylight Time

The Offer will expire at 11:59 pm Eastern Daylight Time on July 12, 2007, unless the Tender Offer is extended. Your Eligible Options that have been tendered will be amended or replaced on July 13, 2007, or, if the Tender Offer is extended, the first business day following the extended expiration date of the Tender Offer (the “Amendment Date”). Please be aware that your option account at Smith Barney may not accurately reflect the amendment or replacement for one to two business days following the Amendment Date.

The cash bonus will be paid on Apollo Group’s first regularly scheduled payroll date in January 2008, which will not be later than January 15, 2008.

If you have any questions, please contact the Apollo Group Tender Offer Hotline at 1-800-398-1278 or email us at stockoptions@apollogrp.edu.

2

EX-99.(A)(4)

Exhibit (a)(4)

Guide to Employee Stock Options and Apollo Group's Tender Offer June 2007

Meeting Objectives Overview of Stock Options Apollo Misdated Options Tax Issues Apollo Tender Offer Highlights Q&A Session

OVERVIEW OF STOCK OPTIONS

Overview of Stock Options Apollo Group grants stock options at its discretion to help retain and reward valued employees A stock option is your right to purchase a fixed number of shares of Apollo stock at a pre-determined price (the "grant price" or the "exercise" or "strike" price) through a fixed period of time in the future You are not under any obligation to purchase any of the stock subject to your option

Overview of Stock Options The option usually vests (becomes exercisable on a specified schedule) over time You do not own Apollo stock until you exercise your option to purchase it The Company must follow strict accounting guidelines when issuing stock options

Overview of Stock Options Stock Option Plan - The Company's legal document that governs the terms and conditions of the Company's stock option grants Grant Agreement - Contract that details the specifics of an individual option grant. This is the document Apollo posts and you acknowledge electronically Grant Date - Date the stock option grant was approved by Apollo's Compensation Committee Expiration Date - The latest date the option will remain available for exercise, typically 10 years from grant date. However, the option will terminate earlier should your employment with the Company terminate for any reason

Overview of Stock Options Grant Price - Price employee pays to purchase Apollo stock In the future Also known as exercise price or strike price Shares Granted - Total number of shares available to exercise once the option is fully vested Fair Market Value (FMV) - Closing market price of Apollo common stock (APOL) as quoted on NASDAQ on a particular date Exercise - Act of using the stock option to purchase Apollo stock once the options are vested Vesting Schedule - Rate at which options become exercisable

Overview of Stock Options LIFE OF A STOCK OPTION Grant Vest Exercise Expiration Date Date Date Date Option Able to Purchase Right to purchase awarded buy shares shares expires Example: 1/1/06 8/31/07 10/4/07 12/31/15 or 8/31/08 generally 90 days 8/31/09 after employment 8/31/10 terminates

Overview of Stock Options If you terminate due to: Death Generally, unvested options cancel immediately and vested options will be exercisable for 15 months from date of death or, if sooner, the grant expiration date Other reasons Generally, unvested options cancel immediately and vested options will generally be exercisable for 90 days For Cause All options immediately canceled

Overview of Stock Options Find stock option account summary on the Smith Barney website: www.benefitaccess.com Review Option Documents Grant Agreement (on My HR) Plan Document (available from Company) Review the Vest Schedule Detailed in Grant Agreement Identify the Expiration Date Detailed in Grant Agreement

Overview of Stock Options Overview of Stock Options

Overview of Stock Options You may exercise online, via phone, or in-person at a Smith Barney branch office Exercise Methods Same Day Sale: purchase and sale Sell To Cover: sell part of shares of stock to cover cost of exercise, including any applicable taxes, and hold part for future sale Cash: purchase stock and hold for future sale If you want to do a cash exercise, you must go to a Smith Barney branch office Make sure there are adequate funds in your Smith Barney brokerage account to cover the option price and the applicable taxes

Overview of Stock Options Log in to your account at Smith Barney www.benefitaccess.com A PIN reminder was emailed to you If you have options and previously participated in the Employee Stock Purchase Plan, select "Options" from the pull-down menu to view your Apollo grant listing Select the grant date to exercise Enter the details of the requested exercise (number of shares, market or limit order, proceeds delivery method) Approve the order

APOLLO MISDATED OPTIONS

Apollo Misdated Options Apollo has historically granted stock options with a grant price equal to the fair market value on the grant date The Company has recently determined that the original grant dates for certain grants were misdated for accounting purposes ("Misdated Options") Per a previous email to you, the Company has corrected the grant dates for the Misdated Options ("Revised Grant Date")

Apollo Misdated Options Revised Grant Dates

TAX ISSUES

Tax Issues Apollo stock options are taxed as follows: No tax event occurs at either the grant or vest dates Tax event occurs on the exercise date Exercise creates a taxable gain for the employee that is taxed at ordinary income tax rates

Example-Tax on Stock Option Exercise Facts: Date of Grant = August 31, 2003 Grant price = $40 25% of options vest each year on 8/31/2004; 2005; 2006; 2007 Exercise: Employee exercises 5 shares when stock price = $50 Employee Gain = FMV of Apollo stock on exercise date - grant price Gain = $50 - $40 = $10 per share Total Taxable Gain = Gain x shares exercised = $10 x 5 = $50

Example-Tax on Stock Option Exercise Income tax = Total taxable gain x ordinary income tax % Statutory Federal Income Tax rate = 25% Federal Income Tax = $50 x 25% = $12.50 Total tax paid on gain of $50 = $12.50 + applicable state income tax

Tax Issues It is not the Company's policy to issue stock option grants at a discount from FMV on the grant date However, because the Company has had to change the grant date of certain of its stock option grants for financial accounting purposes (the Misdated Options), some of those stock option grants may now be deemed to have been granted at a discount

Tax Issues Discounted stock options are those with a grant price below the stock's fair market value (FMV) on the revised grant date Example Original Grant Date: May 3, 2004 FMV of stock: $ 40 Grant price: $ 40 Revised Grant Date: August 31, 2004 FMV of stock $ 45 Grant price is still $ 40 Discount $ 5 All other terms and conditions of grant are preserved

Tax Issues Section 409A was enacted in 2004. The statute requires that if stock options are granted at a discount, the gain must be recognized by the employee when the options vest, even if they are never exercised Only stock options granted at a discount that vest AFTER 12/31/04 are subject to Section 409A The portions of grants that vested ON or BEFORE 12/31/04 are not subject to Section 409A taxation

Example Original Grant Date = January 2, 2002 Grant Price = $29 Fair Market Value = $29 Revised Grant Date = January 11, 2002 Revised Grant Price = $30 Fair Market Value = $30 Shares = 10,000 Vesting: 2,500 on August 31, 2003 2,500 on August 31, 2004 2,500 on August 31, 2005 2,500 on August 31, 2006 Because of the Revised Grant Date, THE OPTIONS ARE NOW GRANTED AT A DISCOUNT equal to $1 ($30 -$29)

Example CONCLUSION: The 5,000 options that vested on 8/31/03 and 8/31/04 are NOT subject to Section 409A since they vested PRIOR to 12/31/04 The 5,000 options that vest on 8/31/05 and 8/31/06 are subject to Section 409A because they vest after 12/31/04

Tax Issues For exercises of Section 409A discounted options in calendar year 2005, there is no tax penalty due For exercises of Section 409A discounted options in calendar year 2006, Apollo is participating in a special IRS program Company will pay any Section 409A tax penalties due If you are affected, more information will be sent to you regarding this program

Tax Issues Tax impact of Section 409A discounted options not tendered: For exercises in calendar year 2007: Income tax on the option spread at time of exercise 20% additional federal tax applied on the option spread Additional state penalty tax on option spread, varies by state California = 20% state penalty tax rate Federal Tax + State Tax in CA = 40% Interest penalty, as applicable For options still outstanding at start of 2008: Income tax in 2008 for unexercised Section 409A options that vest from calendar year 2005 through calendar year 2008 based on vest date Additional 20% federal tax plus state tax as above Continued taxation each year until exercise of option Interest penalty, as applicable

APOLLO TENDER OFFER HIGHLIGHTS

Apollo Tender Offer Highlights Many other companies have launched Tender Offers to correct misdated stock options, including: KLA-Tencor Brocade Communications Apple, Inc. Mercury Interactive NVIDIA Corporation Adobe Systems Broadcom Corporation The Clorox Company Sanmina-SCI Corporation

Apollo Tender Offer Highlights Tender offer is a one-time offer to prevent future adverse tax consequences under Section 409A Section 409A Tax impact includes Federal income tax for shares exercised in calendar year 2007 and in calendar year 2008 for unexercised option shares that vest in calendar years 2005 to 2008 20% additional federal tax on spread at time of vesting (or year- end spread) Up to 20% additional state tax in certain states Interest penalty Taxation will occur each year after vesting, on future appreciation in FMV, until exercise or expiration of the discounted options

Apollo Tender Offer Highlights Only "Eligible Options" may be corrected in the Tender Offer An option will be deemed to be an "Eligible Option" if it meets each of the following conditions: The option was granted under either the Company's Long Term Incentive Plan or the Amended and Restated 2000 Stock Incentive Plan The option was "misdated" The option was unvested as of December 31, 2004 The option is held by an individual who is, on the expiration of the Tender Offer, a current employee of Apollo Group (or any Apollo Group subsidiary) and subject to income taxation in the U.S with respect to that option. However, executive officers of the Company and members of the Company's Board of Directors are not eligible to participate The option is outstanding on the expiration date of the Tender Offer

Apollo Tender Offer Highlights The Tender Offer "corrects" your Eligible Options in one of two ways: Amend option to increase grant price AND provide a cash bonus payment to employee ("Amended Option") - See Example 1.1 OR Replace option with new option; grant price is not amended, grant date is revised ("New Option") - See Example 2.1

Apollo Tender Offer Highlights Amended Option Adjusted Grant Price will be the lower of Fair market value on the Revised Grant Date, or Closing price of Apollo Group's stock the day after the Tender Offer closes ("Amendment Date"), July 13, 2007 BUT in no case lower than original grant price (see "New Option" section below) All other terms will remain the same (including the number of shares, vesting schedule, and expiration date) Cash bonus payment Equal to the difference between the adjusted grant price and original grant price x the number of shares Will be made on your first regular payroll date in January 2008 (IRS regulations prevent any earlier payment date)

Example 1.1 - Amended Option Option for 1,000 shares Original grant price = $29 FMV on revised grant date= $40 Closing price of APOL on the Amendment Date (7/13/07) = $33 Vesting 250 vest on 8/31/03 - not subject to Section 409A 250 vest on 8/31/04 - not subject to Section 409A 250 vest on 8/31/05 - subject to Section 409A 250 vest on 8/31/06 - subject to Section 409A 1,000 Option Amendment 500 options vested on or before 12/31/04 - NO CHANGE 500 options vesting after 12/31/04 - amended via Tender Offer with increase in grant price to $33 No change to expiration date or vesting schedule Cash Bonus Payment Employee receives cash bonus payment equal to the increase in the grant price of 500 options x ($33 - $29) = $2,000, paid in January 2008, subject to applicable withholding taxes

Apollo Tender Offer Highlights New Option If Adjusted Grant Price would be the same or less than the original grant price, the outstanding portion of that option which vested after 12/31/04 will be: Canceled, and Replaced with a new option with a new grant date of July 13, 2007 All other terms remain the same (including the grant price, number of shares, vesting schedule and expiration date) No cash bonus payment because same grant price The portion of that option that vested before 1/1/05, or has been exercised, is not eligible for the Tender Offer

Example 2.1 - New Option Option for 1,000 shares Original grant price = $29 FMV on Revised Grant Date= $40 Closing price of APOL on Amendment Date (7/13/07) = $25 Vesting 250 vest on 10/20/04 - not subject to Section 409A 250 vest on 10/20/05 - subject to Section 409A 250 vest on 10/20/06 - subject to Section 409A 250 vest on 10/20/07 - subject to Section 409A Option Replacement 250 options vested as of 12/31/04 - NO CHANGE 750 options vested after 12/31/04 - option canceled; employee receives new option for 750 shares with same grant price = $29 No change to expiration date or vesting schedule No cash bonus payment to employee because no increase in grant price

Apollo Tender Offer Highlights Tender Offer Begins: June 13, 2007 Tender Offer Ends: July 12, 2007, 11:59 PM, EDT All elections MUST be received by 11:59 PM EDT on July 12, 2007 Late submissions will not be accepted Option Amendment Date: July 13, 2007 An email confirming receipt of your Election Form will be sent to you within one business day after receipt

Apollo Tender Offer Highlights Must be an employee as of the Option Amendment date (July 13, 2007) Employees who leave the Company or are terminated prior to July 13, 2007 ARE NOT ELIGIBLE TO PARTICIPATE Must hold unexercised options that are considered Eligible Options Options must be subject to U.S. taxation Only the portions that are unexercised and outstanding at the close of the Tender Offer will be eligible for the Tender Offer and visible on the Tender Offer website

Apollo Tender Offer - Process The Apollo Stock Option hotline will be administering the Tender Offer process Processing employee elections (via Web and FAX) Responding to telephone and email inquiries Email sent to employees includes links to: The Tender Offer document filed with the SEC The Tender Offer website where you can access your personalized election form and FAQs https://apol.equitybenefits.com This presentation will be available at: https://apol.equitybenefits.com

Apollo Tender Offer - Online Process Log into Tender Offer website using your employee ID and password https://apol.equitybenefits.com Click the button to "Make an Election" Review your personalized Election Form listing your Eligible Options Check the boxes next to each option to indicate whether or not you elect to tender each option Review and agree to the Terms of Election Print and save your Election Confirmation Statement

Apollo Tender Offer Website Login page

Apollo Tender Offer Website Election Form

Apollo Tender Offer Website Election Amendment Review

Apollo Tender Offer Website Election Confirmation

Apollo Tender Offer - Paper Process If you are not able to submit your Election Form electronically, or you do not have access to the internet, you may submit a paper Election Form Request a paper Election Form from the Apollo Stock Option Hotline at 1-800-398-1278 or stockoptions@apollogrp.edu Review the Terms of Election Make your elections and sign the Election Form FAX the signed Election Form to 1-800-420-4799 Keep a copy for your records

Apollo Tender Offer Highlights What Next? You received on June 13, 2007 an email with a link to the Tender Offer document and the Tender Offer website Log in to Tender Offer website to review your personalized election form listing your Eligible Options Consider terms carefully Consult your independent tax advisor if necessary If you want to tender your Eligible Options you must make your election by submitting an election form before the expiration of the Tender Offer on July 12, 2007 (unless extended) If you want to change your election with respect to your Eligible Options, you must submit a new election form before the expiration of the Tender Offer

Apollo Tender Offer Highlights Key Dates Activity Date Launch Tender Offer June 13, 2007 Close Tender Offer July 12, 2007 Option Amendment Date July 13, 2007 New/Adjusted Options to Smith Barney July 16, 2007 Payment of Cash Bonus First regularly scheduled payroll date in January 2008, but not later than January 15, 2008

Apollo Tender Offer Highlights If you choose NOT to participate Your options will NOT be amended or replaced You will NOT be eligible to receive a cash bonus payment Your affected options will remain subject to adverse tax consequences You will NOT be reimbursed for adverse tax consequences

Q&A SESSION

Q&A Any future questions should be directed to the Apollo Stock Option Hotline at: 1-800-398-1278 or stockoptions@apollogrp.edu

Tax Advice The taxation of stock option transactions can be very complicated This presentation is general and you should consult with your personal tax advisor for advice relevant to your specific situation Apollo Group policy prohibits any employees from providing personal income tax advice to any other employee

Circular 230 Disclaimer Notice Any tax advice included in this presentation was not intended or written to be used, and it cannot be used by the taxpayer, for the purpose of avoiding any penalties that may be imposed by any governmental taxing authority or agency; This tax advice was written to support the promotion of the matter addressed by the presentation; and The taxpayer should seek advice based on the taxpayer's particular circumstances from an independent tax advisor.

TENDER OFFER DEADLINE IS 11:59 PM EDT JULY 12, 2007

EX-99.(A)(5)

Exhibit (a)(5)

APOLLO GROUP, INC.
OFFER TO AMEND OR REPLACE ELIGIBLE OPTIONS

FREQUENTLY ASKED QUESTIONS

The following are answers to some of the questions that you may have about the Offer to Amend or Replace and the accompanying Election Form (which, together with the Stock Option Amendment and Special Bonus Agreement, as they may each be amended or supplemented from time to time, constitute the “Offer”). We urge you to read carefully the Offer because the information in this summary is not complete and does not contain all of the information that is important to you.

1. WHEN DOES THE OFFER COMMENCE?

The commencement date of the Offer is June 13, 2007.

2. WHEN DOES THE OFFER EXPIRE?

The Offer will expire on July 12, 2007, at 11:59 p.m. Eastern Daylight Time, unless we extend the Offer. If the Offer is extended, we will make a public announcement of the extension no later than 9:00 a.m. Eastern Daylight Time on the next business day following the previously-scheduled expiration date of the Offer.

3. HOW AND WHEN DO I TENDER MY ELIGIBLE OPTIONS?

Using your employee ID and password, you must log on to the Offer website at https://apol.equitybenefits.com and click on the “Make an Election” button to proceed with your election. You will be redirected to the first page of the Election Form. You will need to check the appropriate boxes next to each of your Eligible Options to indicate whether or not you are tendering your Eligible Options for amendment or replacement in accordance with the terms of the Offer. After completing the Election Form, you will be allowed to review the elections you have made with respect to your Eligible Options. If you are satisfied with your elections, you will proceed to the Agreement to Terms of Election page. Only after you agree to the Agreement to the Terms of Election will you be directed to the Election Confirmation Statement page. Please print and keep a copy of the Election Confirmation Statement for your records. You will then be deemed to have completed the election process.

If you are not able to submit your election electronically via the Offer website as a result of technical failures inherent to the website, such as the website being unavailable or the website not accepting your election, or if you do not otherwise have access to the Offer website for any reason (including lack of internet services), you must complete a paper Election Form and return it to the Company via facsimile to 1-800-420-4799.

If you decide to participate in the Offer, you must complete the election process in the foregoing manner by 11:59 p.m. Eastern Daylight Time on July 12, 2007. If we extend the Offer beyond July 12, 2007, you must complete the process before the extended expiration date of the Offer.

4. DURING WHAT PERIOD OF TIME MAY I CHANGE MY ELECTION WITH RESPECT TO MY ELIGIBLE OPTIONS?

You may change your previously submitted election at any time prior to 11:59 p.m. Eastern Daylight Time on July 12, 2007 (or any extended expiration date of the Offer). If you would like to change your election, you must log on to the Offer website at https://apol.equitybenefits.com, complete and submit a new Election Form. You should print a copy of your revised Election Form and updated Election Confirmation Statement and keep those documents with your other records for this Offer. Alternatively, you may change your existing election by completing a new paper Election Form and returning it to the Company via facsimile to 1-800-420-4799.

You may change your previously submitted elections as many times as you would like prior to the expiration of the Offer.

5. WHAT DO I DO IF I FIND AN ERROR REGARDING MY ELIGIBLE OPTIONS IN THE ELECTION FORM?

If you think there is an error in the information contained on your Election Form, please contact the Apollo Group Tender Offer Hotline at 1-800-398-1278 or stockoptions@apollogrp.edu.

6. WHERE CAN I OBTAIN A COPY OF THE ELECTION FORM, STOCK OPTION AMENDMENT AND SPECIAL BONUS AGREEMENT AND OPTION CANCELLATION AND REGRANT AGREEMENT?

To obtain a copy of the Election Form, Stock Option Amendment and Special Bonus Agreement and Option Cancellation and Regrant Agreement, please log onto the Offer website at https://apol.equitybenefits.com. If you would like paper copies of the Election Form, Stock Option Amendment and Special Bonus Agreement and Option Cancellation and Regrant Agreement, please contact the Apollo Group Tender Offer Hotline at 1-800-398-1278 or stockoptions@apollogrp.edu.

7. WHAT WILL HAPPEN TO MY TENDERED OPTIONS?

If Apollo Group accepts your tendered options pursuant to the terms of the Offer, then each of those options will be amended to increase the exercise price per share to the lower of (i) the fair market value per share of Apollo Group Class A common stock on the revised measurement date determined for that option for financial accounting purposes and (ii) the closing price per share of such common stock on the date on which the option is amended.

However, if an Eligible Option you tender for amendment has an exercise price per share at or above the closing price per share of Apollo Group Class A common stock on the amendment date, that option will be canceled on that date and immediately replaced with a new option that is exactly the same as the canceled option, including the same exercise price per share and no loss of vesting or change to the expiration date, but with a new grant date. Such cancellation and re-grant is necessary in order to avoid adverse taxation of that option under IRC Section 409A.

8. WHERE CAN I FIND MY EMPLOYEE ID AND PASSWORD?

You can locate your employee ID on your most recent pay check. Alternatively, you can obtain your employee ID by contacting the Apollo Group Tender Offer Hotline at 1-800-398-1278 or stockoptions@apollogrp.edu. Your password is the last four digits of your Social Security Number.

9. WHAT ARE SOME OF THE KEY DATES TO REMEMBER?

The commencement date of the Offer is June 13, 2007.

The Offer will expire at 11:59 pm Eastern Daylight Time on July 12, 2007 (unless we extend it).

The Eligible Options will be amended or replaced on July 13, 2007 (unless we extend the Offer).

The cash bonus will be paid on Apollo Group’s first regularly scheduled payroll date following January 1, 2008, which will not be later than January 15, 2008.

10. WHO CAN I TALK TO IF I HAVE QUESTIONS ABOUT THE OFFER?

For additional information or assistance, you should contact the Apollo Group Tender Offer Hotline at 1-800-398-1278 or stockoptions@apollogrp.edu.

2

EX-99.(A)(6)

Exhibit (a)(6)

Screenshot of Login Page to Offer website:

APOLLO GROP INC.

EMAIL stockoptions@apolloQFp.edu

Welcome to the Apollo Group, Inc. (“Apollo Group”) Stock Options Tender Offer website. Please enter your Employee ID and Password [last four digits of your Social Security Number] If you have misplaced or did not receive your Employee ID, click here.

Employee ID: (Case Sensitive) Password: (Case Sensitive)

EX-99.(A)(7)

Exhibit (a)(7)

Screenshot of Welcome Page to Offer website (screenshots 1-4)

APOLLO GROUP INC,

EMAIL stockoptions@)apollogrp.edu

Welcome to the Apollo Group, Inc. Stock Options Tender Offer Website

ADMIN            USER

We are pleased to announce that Apollo Group’s Stock Options Tender Offer (“Tender Offer”) has officially launched on June 13, 2007 and will remain open until 11:59 p.m. Eastern Daylight Time on July 12, 2007 (unless we extend it).

A stock option will be deemed to be an “Eligible Option” if it meets each of the following conditions:

(i) The option was granted under either the Company’s Long Term Incentive Plan or the Amended and Restated 2000 Stock Incentive Plan.

(ii) The option was “misdated” in that the exercise price per share currently in effect for that option is based on the fair market value per share of the Company’s Class A common stock on a date earlier than the date which has now been determined to be the correct measurement date for that option for financial accounting purposes.

(iii) The option was unvested as of December 31, 2004.

(iv) The option is held by an individual who is, on the expiration of the Tender Offer, a current employee of the Company (or any Apollo Group subsidiary) and subject to income taxation in the United States with respect to that option. However, executive officers of the Company and members of the Company’s Board of Directors are not eligible to participate.

(v) The option is outstanding on the expiration date of the Tender Offer.

The Tender Offer will provide you with the opportunity to avoid the unfavorable tax

The Tender Offer will provide you with the opportunity to avoid the unfavorable tax
consequences under Section 409A of the Internal Revenue Code you may otherwise incur with respect to your Eligible Options. See below for the Key Steps you should perform related to the Tender Offer.

The specifics of the program are described in the “Schedule TO — Tender Offer Statement Filed with the SEC” and the exhibits thereto. We urge you to read the “Schedule TO — Tender Offer Statement Filed with the SEC” and the exhibits thereto very carefully.

Stock options will remain subject to adverse tax consequences under Section 409A until the close of the Tender Offer and the official amendment or replacement of such options on the first business day following the expiration of the Tender Offer. Therefore, we remind you that should you exercise your tendered stock options prior to the amendment or replacement of your those stock options, you will be solely responsible for any taxes, penalties or interest you may incur under Section 4Q9A.

We will be conducting three educational webinar sessions to provide you with additional information regarding the Tender Offer. Topics covered include highlights of the Tender Offer, along with a general overview of stock options, a summary of Eligible Options, and tax issues affecting the Eligible Options,

You are encouraged to attend this webinar which will be offered on the following dates:

Friday, June 15, 2007, 12:00 — 1:00 PM Eastern Daylight Time Tuesday, June 19, 2007, 5:00 — 6:00 PM Eastern Daylight Time Thursday, June 21, 2007, 12:00 — 1:00 PM Eastern Daylight Time

You may register for any of the webinar sessions by clicking on http://www2.eventsvc,com/apollogrp/.

If you are unable to attend one of the above sessions, a recording of the webinar will be available at http://www2.eventsvc.com/apollogrp/ from June 15, 2007 through July 12, 2007,

KEY STEPS RELATED TO TENDER OFFER

KEY STEPS RELATED TO TENDER OFFER

Below is an easy checklist that outlines how and when to tender your Eligible Options in the Tender Offer.

1. Review the following important documents:

1. SCHEDULE TO — TENDER OFFER STATEMENT FILED WITH THE SEC

2. INSTRUCTIONS TO ELECTION FORM 3. STOCK OPTION AMENDMENT AND SPECIAL BONUS AGREEMENT 4. OPTION CANCELLATION AND REGRANT AGREEMENT 5. FAQ

2. Click on the MAKE AN ELECTION button below to proceed with your election. You

will be redirected to the first page of the Election Form, You will need to check the appropriate boxes next to each of your Eligible Options to indicate whether or not you are tendering your Eligible Options for amendment or replacement in accordance with the terms of the Tender Offer.

3. After completing the Election Form, you will be allowed to review the elections you have made with respect to your Eligible Options. If you are satisfied with your elections, you will proceed to the Agreement to Terms of Election page. Only after you agree to the Agreement to Terms of Election will you be directed to the Election Confirmation Statement page,

4. Please print and keep a copy of the Election Confirmation Statement for your records, You will then be deemed to have completed the election process,

KEY DATES TO REMEMBER
The commencement date of the Tender Offer is June 13, 2007. Informational webinars will be conducted on the following dates:

2. Click on the MAKE AN ELECTION button below to proceed with your election. You

will be redirected to the first page of the Election Form, You will need to check the appropriate boxes next to each of your Eligible Options to indicate whether or not you are tendering your Eligible Options for amendment or replacement in accordance with the terms of the Tender Offer.

3. After completing the Election Form, you will be allowed to review the elections you have made with respect to your Eligible Options. If you are satisfied with your elections, you will proceed to the Agreement to Terms of Election page. Only after you agree to the Agreement to Terms of Election will you be directed to the Election Confirmation Statement page,

4. Please print and keep a copy of the Election Confirmation Statement for your records, You will then be deemed to have completed the election process,

KEY DATES TO REMEMBER The commencement date of the Tender Offer is June 13, 2007. Informational webinars will be conducted on the following dates:

Friday, June 15, 2007, 12:00 — 1:00 PM Eastern Daylight Time Tuesday, June 15, 2007, 5:00 — 6:00 PM Eastern Daylight Time Thursday, June 21, 2007, 12:00 — 1:00 PM Eastern Daylight Time

The Tender Offer will expire at 11:59 PM Eastern Daylight Time on July 12, 2007, unless the Tender Offer is extended. Your Eligible Options that have been tendered will be amended or replaced on July 13, 2007, or, if the Tender Offer is extended, the first business day following the extended expiration date of the Tender Offer (the “Amendment Date”). Please be aware that your option account at Citigroup Smith Barney may not accurately reflect the amendment or replacement for one to two business days following the Amendment Date.

The cash bonus will be paid on Apollo Group’s first regularly scheduled payroll date in January 2000 which will not be later than January 15, 2000.

Make An Election

EX-99.(A)(8)

Exhibit (a)(8)

Screenshot of Electronic Election Form (screenshots 1-2)

APOLLO GROUP INC,

EMAIL stockoptions@apollogrp.edu

APOLLO GROUP, INC.

ELECTION FORM RE: TENDER OF ELIGIBLE STOCK OPTIONS PURSUANT TO THE OFFER TO AMEND OR REPLACE ELIGIBLE STOCK OPTIONS DATED JUNE 13, 2007

THE OFFER EXPIRES AT 11:59 P.M., EASTERN DAYLIGHT TIME, ON JULY 12. 2007, UNLESS THE OFFER IS EXTENDED.

Name : ADMIN USER

Employee ID : 123

Address : ADDRESS1 ADDRESS2 ADDRESS3 CITY CA 12345 USA

Important: Read the instructions to this Election Form before completing and signing this page.

Indicate your decision to tender your Eligible Options identified below for amendment or replacement by checking the “Yes” box under the “Amend Entire Eligible Portion” column. If you do not want to tender one or more of your Eligible Options for amendment or replacement, check the “No” box under the “Amend Entire Eligible Portion” column for those particular options. If you do not clearly mark the “Yes” box with respect to an Eligible Option, your election with respect to that option will default to “Amend None.” In that event, such Eligible Option will not be amended or replaced, and you will not become entitled to the special cash bonus payable with respect to that Eligible Option. In addition, you will be solely responsible for bringing such Eligible Option into compliance with IRC Section 409A in order to avoid adverse tax consequences with respect to that option. You may not tender only a portion of an Eligible Option.

Fair Market Value of Apollo Numher of            Group Class Total            Option Shares            A Common —

Indicate your decision to tender your Eligible Options identified below for amendment or replacement by checking the “Yes” box under the “Amend Entire Eligible Portion” column. If you do not want to tender one or more of your Eligible Options for amendment or replacement, check the “No” box under the “Amend Entire Eligible Portion” column for those particular options. If you do not clearly mark the “Yes” box with respect to an Eligible Option, your election with respect to that option will default to “Amend None.” In that event, such Eligible Option will not be amended or replaced, and you will not become entitled to the special cash bonus payable with respect to that Eligible Option. In addition, you will be solely responsible for bringing such Eligible Option into compliance with IRC Section 409A in order to avoid adverse tax consequences with respect to that option. You may not tender only a portion of an Eligible Option.

Fair Market Value of Apollo Number ofGroup Class Total            Option SharesA Common Exercise Number of            Eligible forStock on            Amend Entire Original            Option Price Per Exercisable Tender Offer            Revised            Revised            Eligible

Grant Date Number            Share            Shares            Amendment Grant Date Grant Date            Portion? ^{Sep 21,} 001856 $23.33 1,000 500 Dec 31,’ $30.01 Yes            No

Jan 02, 004571 $29.32 500 100 $29.41 Yes No 009568 171.25 250 10 Sep 23, $72.48 Yes            No

Please note that if an Eligible Option you tender for amendment has an exercise price per share at or above the closing price per share of Apollo Group Class A common stock on the amendment date, that option will be canceled on that date and immediately replaced with a new option that is exactly the same as the canceled option, including the same exercise price per share and no loss of vesting or change to the expiration date, but with a new grant date. Such cancellation and re-grant is necessary in order to avoid

EX-99.(A)(9)

Exhibit (a)(9)

Screenshot of Election Amendment Review

APOLLO GROUP INC, EMAIL stockoptions@apol!ogrp.edu — Election Amendment Review You have made the following elections with respect to your Eligible Options: Fair Market Value of Apollo Number of            Group Class Total            Option Shares            A Common Exercise Number of            Eligible for            Stock on            Amend Entire Original            Option Price Pet Exercisable            Tender Offer            Revised            Revised            Eligible Grant Date Number            Share            Shares            Amendment            Grant Date            Grant Date            Portion? Sep 21, 2001 001856 $23.33 1,000 500 Dec 31,200 8130.01 —— —— —— — Jan 02, 2002 004571 $29.32 500 100 Jan 23,2002 $29.41 Aug 06, 2004 009568 $71.25 250 10 Sep 23,2004 $72.48

Is this information correct? If yes, click PROCEED TO CONFIRMATION to continue. If no, click RETURN TO PREVIOUS SCREEN

EX-99.(A)(10)

Exhibit (a)(10)

Screenshot of Agreement to Terms of Election (screenshots 1-3)

APOLLO GROUP INC,

EMAIL stockoptions@apollogrp.edu

Agreement to Terms of Election

1. As soon as practicable after the Amendment Date, Apollo Group will return to me a final and

completed Stock Option Amendment and Special Bonus Agreement in which there is indicated

the Adjusted Exercise Price for each Amended Option and the dollar amount of the Cash Bonus

to which I will be entitled with respect to that option. Should an Eligible Option I tender for

amendment have an exercise price per share at or above the closing price per share of Apollo

Group Class A common stock on the Amendment Date, that option will be canceled on that date

and immediately replaced with a New Option that is exactly the same as the canceled option,

including the same exercise price per share and no loss of vesting or change to the expiration

date, but with a new grant date. An Option Cancellation and Regrant Agreement for the New

Option will be delivered to me as soon as administratively practicable following the Amendment

Date.

2. If I cease to remain employed by Apollo Group or any affiliated entity after I tender my Eligible Options but before Apollo Group accepts those options for amendment or replacement, my Eligible Options will not be amended or replaced, and I will not become entitled to any Cash Bonus.

3. Until the Expiration Date, I will have the right to change my election with respect to my Eligible Options. However, after that date I will have no further right to change my election with respect to my Eligible Options, unless Apollo Group does not accept my tendered Eligible Options before August 9, 2007, the 40th business day after commencement of the Offer. In that event, I may revoke my elections with respect to my tendered Eligible Options at anytime prior to Apollo Group’s acceptance of those options for amendment or replacement pursuant to the Offer.

4. The tender of my Eligible Options pursuant to the procedure described in Section 4 of the Offer

and the instructions to this Election Form will constitute my acceptance of all of the terms and

conditions of the Offer. Apollo Group’s acceptance of my tendered Eligible Options for

amendment or replacement pursuant to the Offer will constitute a binding agreement between

Apollo Group and me in accordance with the terms and subject to the conditions of the Offer.

5. I am the registered holder of the Eligible Options tendered hereby, and my name, employee

identification number and other information appearing on the cover page of this Election Form are true and correct.

6. I am not required to tender my Eligible Options pursuant to the Offer. However, if I do not tender such options or if those options are not otherwise amended or replaced pursuant to the Offer, then I must take other action on my own with respect to those options in order to bring those options into compliance with Section 409 A of the Internal Revenue Code and thereby avoid adverse tax consequences.

7. Apollo Group cannot give me legal, tax or investment advice with respect to the Offer and has advised me to consult with my own legal, tax and investment advisor as to the consequences of participating or not participating in the Offer.

8. Under certain circumstances set forth in the Offer document, Apollo Group may terminate or amend the Offer and postpone its acceptance and amendment or replacement of the tendered Eligible Options. In the event the Eligible Options tendered herewith are not accepted for amendment or replacement, those options will be returned to me promptly following the expiration or termination of the Offer.

9. I understand that neither Apollo Group nor Apollo Group ‘s Board of Directors is making any

recommendation as to whether I should tender my Eligible Options for amendment or

replacement, and that I must make my own decision whether to tender my Eligible Options, taking

into account my own personal circumstances and preferences. I understand that the Amended

Options resulting from the amendment of my tendered Eligible Options may decline in value and

may be “out of the money” when I decide to exercise those options. I further understand that past

and current market prices of Apollo Group Class A common stock may provide little or no basis

for predicting what the market price of Apollo Group Class A common stock will be when Apollo

Group amends or replaces my tendered option or at any other time in the future.

10. I hereby acknowledge that I have read the documents related to the Offer listed below:

1. Offer To Amend or Replace Eligible Options 2. Instructions to this Election Form 3. Stock Option Amendment and Special Bonus Agreement 4. Option Cancellation and Reqrant Agreement

11.1 hereby elect to participate in the Offer with respect to my Eligible Options as previously identified, and I hereby tender such Eligible Options for amendment or replacement in accordance with the Offer to Amend or Replace Eligible Options. I agree that the options identified are the Eligible Options I hold. I agree and understand that each of the Eligible Options which I have tendered pursuant to the Offer will be amended or replaced, unless I submit a new, properly completed Election Form prior to the expiration of the Offer.

12. I further understand that I will receive an Election Confirmation Statement via email at mv

with the Offer to Amend or Replace Eligible Options. I agree that the options identified are the Eligible Options I hold. I agree and understand that each of the Eligible Options which I have tendered pursuant to the Offer will be amended or replaced, unless I submit a new, properly completed Election Form prior to the expiration of the Offer.

12. I further understand that I will receive an Election Confirmation Statement via email at my Apollo Group email address listed below within one business day after the submission of my Election Form on the Offer website. If I have not received an Election Confirmation Statement in the timeframe prescribed, I agree that it is my responsibility to confirm that Apollo Group has received my complete submission by emailing to stockoptions@apollogrp.edu a copy of the Confirmation Statement that I will have printed from this Offer website at the time I submit my Election Form online.

13. I acknowledge that the Offer and the other documents and communications regarding the Offer are being delivered to me electronically. Such means of electronic delivery may include, but does not necessarily include, the delivery of a link to a Apollo Group intranet site, the delivery of a document via email or such other means of delivery specified by Apollo Group. By executing this Election Form, I acknowledge that I have read this provision and consent to the electronic delivery of the documents. I acknowledge that I may receive from Apollo Group a paper copy of any documents delivered electronically at no cost to me by contacting Apollo Group by telephone or in writing using the contact information on the Instructions to this Election Form. I further acknowledge that I will be provided with a paper copy of any documents if the attempted electronic delivery of such documents fails or I do not otherwise have access to the Offer website. Similarly, I understand that I must provide Apollo Group with a paper copy of any documents if my attempted delivery of such documents electronically fails or I do not otherwise have access to the Offer website.

14. My electronic signature is required in order to participate in this Offer. By clicking on the I AGREE button below I am agreeing to the terms of the Election Form and to the use of an electronic signature which will make my election a binding agreement between Apollo Group and me in accordance with the terms and conditions of the Offer.

Email Address:WEBDEV@S0S-TEAM.COM Employee ID number: 123

EX-99.(A)(11)

Exhibit (a)(11)

Screenshot of Print Confirmation (screenshots 1-2)

APOLLO GROUP INC,

EMAIL: stock options@apollogrp. edu

Print Confirmation

Name : ADMIN USER            Employee ID : 123 Address            ADDRESSI ADDRESS2 ADDRESS3 CITY CA Date : 6 12/2007 4:27:35 PH 12345 USA            PST Your Apollo Group, Inc. Stock Options Tender Offer election has been recorded as follows: Fair Market! Value of Apollo Number of            Group Class Total            Option Shares            A Common Exercise Number of            Eligible for            Stock on            Amend Entire Original            Option Price Per Exercisable Tender Offer            Revised            Revised            Eligible Grant Date Number            Share            Shares            Amendment Grant Date Grant Date            Portion 2006 004571 $29.32 500 100 Jan 23, 2002 $29,41

2004

PRINT THIS PAGE by clicking the PRINT A CONFIRMATION button below and save a copy. This will serve as the Election Confirmation Statement in the event our system does not register your election or provide you with an emailed “Election Confirmation Statement” within one business day after your submission. If you do not receive a confirmation email within one business day after your submission, please forward a copy of your printed Electronic Confirmation Statement via e-mail to stockoptions@apollogrp.edu.

Print Confirmation Name : ADMIN USER Employee ID : 123 Address: ADDRESS1 ADDRESS2 ADDRESS3 CITY CA Date : 6/12/2007 4:27:35 PM 12345 USA            PST Your Apollo Group, Inc. Stock Options Tender Offer election has been recorded as follows: Fair Market Value of Apollo Number of            Group Class Total            Option Shares            A Common Exercise Number of            Eligible for            Stock on            Amend Entire Original            Option Price Per Exercisable Tender Offer            Revised            Revised            Eligible Grant Date Number            ShareShares            Amendment            Grant Date Giant Date            Portion? 2001 001856 $23.331,000 500 $30.01 Jan 02, 004571 $29.325D0 100 Jan 23,’ $29.41 Aug 06, 00956B 009568 250 10 Sep 23,’ $72.48

PRINT THIS PAGE by clicking the PRINT A CONFIRMATION button below and save a copy. This will serve as the Election Confirmation Statement in the event our system does not register your election or provide you with an emailed “Election Confirmation Statement” within one business day after your submission. If you do not receive a confirmation email within one business day after your submission, please forward a copy of your printed Electronic Confirmation Statement via e-mail to stockoptions@apollogrp.edu.

Done Local intranet

EX-99.(A)(12)

Exhibit (a)(12)

Screenshot of Election Confirmation Statement

Apollo Group. Inc. Election Confirmation Statement Date 06/12/2007 04:28:04 PM PST Dear            ADMIN USER

Employee ID 123 Your Apollo Group, Inc. Stock Options Tender Offer election has been recorded as follows : Fair Market Value of Apollo Number of            Group Class TotalOption Shares            A Common            Amend Exercise Number of            Eligible for            Stock on            Entire

Original            Option Price Per Exercisable            Tender Offer            Revised Revised            Eligible

Grant Date Number             Share Shares Amendment            Grant Date Grant Date Portion

Sep 21, 2001 001856 $23.331,000 500 Dec 31, 2001 $3001 —— -— — Jan 02,2002 004571 $23.32500 100 Jan 23, 2002 $29.41 —— -— — Aug 06, 20041 009568 $71.25 250 10 sep 23, 2004 $72.40 —— -— —

If you have submitted your election electronically, we strongly encourage you to print this page and keep it lor your records.

EX-99.(A)(13)

Exhibit (a)(13)

INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER

1. Delivery of Election Form. A properly completed and duly executed Election Form must be received by Apollo Group by 11:59 p.m. Eastern Daylight Time on the Expiration Date.

Apollo Group intends to disseminate an Election Confirmation Statement via email to your Apollo Group email address within one business day after your submission of your Election Form on the Offer website at https://apol.equitybenefits.com. If you have not received an Election Confirmation Statement in the timeframe prescribed, Apollo Group recommends you email a copy of your Election Confirmation Statement to the Apollo Group Tender Offer Hotline at stockoptions@apollogrp.edu prior to the expiration of the Offer.

You may change your election with respect to your Eligible Options at any time up to 11:59 p.m. Eastern Daylight Time on the Expiration Date. If the Offer is extended by Apollo Group beyond that time, you may change your election with respect to your tendered Eligible Options at any time until the extended expiration date of the Offer. In addition, if Apollo Group does not accept your tendered options by 11:59 p.m. Eastern Daylight Time on August 9, 2007, you may revoke your election with respect to your tendered options at any time thereafter until those options are accepted for amendment or replacement. To validly change or revoke your election, you must access the Offer website at https://apol.equitybenefits.com and complete and deliver a new Election Form to Apollo Group prior to the expiration of the Offer. You should print a copy of your revised Election Form and updated Election Confirmation Statement and keep those documents with your other records for the Offer. You may change your previously submitted elections as many times as you would like prior to the expiration of the Offer.

Apollo Group will not accept any alternative, conditional or contingent tenders. All persons tendering Eligible Options will, by completing and executing the Election Form, waive any right to receive any notice of the acceptance of their tender, except as provided for in the Offer.

2. Tenders. If you intend to tender your Eligible Options for amendment or replacement pursuant to the Offer, you must access your account at the Offer website at https://apol.equitybenefits.com, properly complete and duly execute the Election Form. If you decide to tender a particular Eligible Option, you must tender all of that option for amendment or replacement. If you hold more than one Eligible Option, you may elect to tender one or more of those options and retain the balance.

3. Signatures on This Election Form. You must electronically sign this Election Form.

4. Requests for Assistance or Additional Copies. Any questions or requests for assistance, as well as requests for paper copies of the Offer document, this Election Form, the Stock Option Amendment and Special Bonus Agreement or the Option Cancellation and Regrant Agreement, may be directed to the Apollo Group Tender Offer Hotline at 1-800-398-1278 or stockoptions@apollogrp.edu. Copies will be furnished promptly at Apollo Group’s expense.

5. Irregularities. Apollo Group will determine, in its discretion, all questions as to the form of documents and the validity, form, eligibility (including time of receipt) and acceptance of any tendered option. Apollo Group will also decide, in its discretion, all questions as to (i) the portion of each incorrectly priced option which comprises an Eligible Option for purposes of the Offer; (ii) the Adjusted Exercise Price to be in effect under each Amended Option, (iii) the number of shares of Apollo Group Class A common stock purchasable under each Amended Option at the Adjusted Exercise Price, (iv) the amount of the Cash Bonus payable with respect to each Amended Option with an Adjusted Exercise Price and (v) the cancellation of tendered Eligible Options with exercise prices at or above the fair market value of Apollo Group Class A common stock on the Amendment Date and the replacement of those canceled options with New Options. Apollo Group’s determination of such matters will be final and binding on all parties. Apollo Group reserves the right to reject any or all tenders which it determines do not comply with the conditions of the Offer, are not in proper form or the acceptance of which would be unlawful. Apollo Group also reserves the right to waive any of the conditions of the Offer or any defect or irregularity in the tender with respect to any particular Eligible Option or any particular Eligible Optionee, and Apollo Group’s interpretation of the terms of the Offer (including these instructions) will be final and binding on all parties. No tender of an Eligible Option will be deemed to be properly made until all defects and irregularities have been cured by the tendering Eligible Optionee or waived by Apollo Group. Unless waived, any defects or irregularities in

connection with the tender of an Eligible Option must be cured within such time as Apollo Group shall determine. Neither Apollo Group nor any other person is or will be obligated to give notice of any defects or irregularities with respect to the tendered options, and no person will incur any liability for failure to give any such notice. If the table on the cover page of the Election Form includes options that are not eligible for the Offer, Apollo Group will not accept those options for amendment or replacement, but Apollo Group does intend to accept for amendment or replacement any properly tendered Eligible Option set forth in that table.

6. Important Tax Information. You should refer to Section 15 of the Offer, which contains important U.S. federal tax information concerning the Offer. All Eligible Optionees with Eligible Options are strongly encouraged to consult with their own tax advisors as to the consequences of their participation in the Offer.

7. Copies. You should print a copy of this Election Form, after you have completed and electronically signed it, and retain it for your records.

8. Paper Delivery. If you are not able to submit your election electronically via the Offer website as a result of technical failures inherent to the website, such as the website being unavailable or the website not accepting your election, or if you do not otherwise have access to the Offer website for any reason (including lack of internet services), you must complete a paper Election Form and return it to Apollo Group via facsimile to 1-800-420-4799. To obtain a paper Election Form, please contact the Apollo Group Tender Offer Hotline at 1-800-398-1278 or stockoptions@apollogrp.edu.

IMPORTANT: THE COMPLETED AND SIGNED ELECTION FORM MUST BE RECEIVED BY APOLLO GROUP BY 11:59 P.M. EASTERN DAYLIGHT TIME ON THE EXPIRATION DATE.

EX-99.(A)(14)

Exhibit (a)(14)

STOCK OPTION AMENDMENT
AND
SPECIAL BONUS AGREEMENT

     AGREEMENT made by Apollo Group, Inc. (the “Company”) which shall be effective on the date executed by a validly-authorized officer of the Company.

     WHEREAS, the Company previously granted to                                          (the “Optionee”) the options identified on attached Schedule I (the “Options”) to purchase shares of the Company’s Class A common stock under one or more of the Company’s employee stock incentive plans (individually, a “Plan”).

     WHEREAS, the Company and Optionee entered into a formal Stock Option Agreement (the “Option Agreement”) evidencing each such Option.

     WHEREAS, in order to avoid adverse tax consequences under section 409A of the Internal Revenue Code, Optionee desires to amend each of the Options to increase the exercise price per share to be in effect for the unexercised portion of that Option which is subject to section 409A and identified as such on Schedule I (the “Covered Portion”) to the higher exercise price per share indicated for that portion of such Option on Schedule I.

     WHEREAS, in order to compensate Optionee for the increased exercise prices to be in effect for the Covered Portions of the Options, the Company is willing to pay Optionee a special cash bonus in a dollar amount equal to the aggregate increase in the exercise prices for the Covered Portions of the Options listed on Schedule I, with the actual dollar of that bonus indicated as the Total Special Bonus on Schedule I.

     NOW THEREFORE, the parties hereby agree as follows:

     1. Increased Exercise Price. The exercise price per share set forth in the Option Agreement for each of the Options listed on Schedule I is hereby increased, with respect to the shares subject to the Covered Portion of that Option, to the higher exercise price per share set forth for that Option on Schedule I.

     2. Special Bonus. Optionee shall become entitled to receive a cash bonus from the Company (the “Special Bonus”) in the gross dollar amount indicated as his or her Total Special Bonus on attached Schedule I. Payment shall be made on the Company’s first regularly-scheduled payroll date after January 1, 2008, which will not be later than January 15, 2008. However, the Special Bonus shall be subject to the Company’s collection of all applicable federal, state and local income and employment withholding taxes, and Optionee shall be paid only the net amount of such bonus remaining after such taxes have been collected. Optionee need not remain in the Company’s employ to receive the Special Bonus.

     3. Entire Agreement. This Agreement, together with the Option Agreements (to the extent not expressly amended hereby) and the applicable Plan under which each Option is outstanding, represents the entire agreement of the parties with respect to the Options, the Covered Portions thereof and the Special Bonus and supersedes any and all previous contracts, arrangements or understandings between the parties with respect to such Options and the Special Bonus. This Agreement may be amended at any time only by means of a writing signed by Optionee and an authorized officer of the Company.

     4. Continuation of Option Agreements. Except for the foregoing increases to the exercise prices per share for the Covered Portions of the Options, no other terms or provisions of the Option Agreements for such Options or the applicable Plans have been modified as a result of this Agreement, and those terms and provisions shall continue in full force and effect.

IN WITNESS WHEREOF, this Agreement has been executed on behalf of Apollo Group, Inc. by a duly-authorized officer on the date indicated below.

APOLLO GROUP, INC.

BY:                                                             

TITLE:                                                      

DATED:                                         , 2007

SCHEDULE I

AMENDED OPTION AND SPECIAL BONUS

								Special Bonus
								Payable on
						Number of	Number of	first regularly
				New Exercise		Outstanding	Outstanding	scheduled
		Exercise Price		Price Per		Option Shares	Option Shares	payroll date
	Total Number	Per Share		Share		Subject to	Not Subject to	following
Original	of Exercisable	Prior to		Following		Amended	Amended	January 1,
Grant Date	Shares	Amendment		Amendment		Exercise Price	Exercise Price	2008
			$		$				$

Total Special Bonus: $                                        

Note: This schedule will be completed by the Company and sent to you at your Apollo Group email address as soon as practicable following the Amendment Date.

EX-99.(A)(15)

NON-QUALIFIED STOCK OPTION AGREEMENT
CANCELLATION AND REGRANT

     This Agreement is made and entered into by and between APOLLO GROUP, INC., an Arizona corporation (hereinafter referred to as the “Company”) and «Name» (hereinafter referred to as “Employee”), on this                      day of July 2007 (which date is hereinafter referred to as the “Date of Grant”). If Employee is presently or subsequently becomes employed by a subsidiary of the Company, the term “Company” shall be deemed to refer collectively to Apollo Group, Inc. and the subsidiary or subsidiaries, which employ the Employee.

     For purposes of this Agreement, the term “Committee” shall the Compensation Committee of the Company’s Board of Directors.

RECITALS

     A. The Company previously granted Employee an option to acquire shares of the Company’s Class A common stock under either the Apollo Group, Inc. Long-Term Incentive Plan or the Apollo Group, Inc. 2000 Stock Incentive Plan (the “Applicable Plan”). The recorded grant date of that option, the grant number and the Applicable Plan under which such option was granted are indicated on attached Schedule I.

     B. It has been determined that such option was misdated in that the recorded grant date for that option is earlier than the date on which that option was actually granted for financial accounting purposes. As a result, the exercise price established for that option, as set forth in attached Schedule I, is less than the fair market value of the underlying shares of the Company’s Class A common stock on the date now determined to be the actual grant date for financial accounting purposes.

     C. Such exercise price may be deemed to result in a below-market option grant subject to adverse tax consequences under Section 409A of the Internal Revenue Code (the “Code”), to the extent the option was not vested and exercisable on December 31, 2004.

     D. In order to avoid such adverse tax consequences, the Company implemented a tender offer which allowed Employee and other holders of options to purchase shares of the Company’s Class A common stock which may be subject to Section 409A the opportunity to submit those options to the Company for amendment or cancellation and replacement (the “Offer”).

     E. The portion of Employee’s option which was not vested as of December 31, 2004 was tendered pursuant to the Offer, and that portion of the option was accordingly canceled, and a new option evidenced by this Agreement was immediately granted in replacement of that portion.

     NOW, THEREFORE, in consideration of the mutual covenants and conditions hereinafter set forth and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Company and Employee agree as follows:

     1. Cancellation and Regrant of Option.

          (a) The option evidenced by this Agreement (the “Option”) is hereby granted to Employee in cancellation and replacement of the option identified as the Prior Option in attached Schedule I, which represents the portion of a previous option grant made to Employee under the Applicable Plan which was not vested as of December 31, 2004. This Option is granted under the same Applicable Plan under which the Prior Option was granted. Employee hereby acknowledges and agrees that Employee has no further right, title or interest in or to the Prior Option hereby canceled and that Employee no longer has any right or entitlement to purchase any shares of the Company’s Class A common stock or other capital stock of the Company under the canceled Prior Option.

          (b) The number of shares of the Company’s Class A common stock subject to this Option (the “Stock”), the exercise price payable per share and the expiration date of the term of this Option are as set forth in the New Option section of attached Schedule I. Such elements of this Option are exactly the same as in effect for the Prior Option at the time of its cancellation pursuant to this Agreement.

          (c) The vesting schedule pursuant to which this Option shall become exercisable for the Stock in one or more periodic installments over the Employee’s period of employment with the Company and/or upon the Company’s attainment of certain specified performance goals shall be the same as the vesting schedule in effect for the Prior Option at the time of its cancellation pursuant to this Agreement.

          (d) Accordingly, it is the intent of the Company that the Option evidenced by this Agreement shall have exactly the same terms and conditions as the canceled Prior Option, including (without limitation), the exercise price payable per share of Stock, the vesting provisions and expiration date, but with the new Date of Grant and new capital adjustment provisions as set forth in paragraph 10 hereof. The cancellation and regrant is effected solely to evidence the cancellation and regrant procedure required under Code Section 409A for any option (or portion thereof) which was not vested as of December 31, 2004 and which may be deemed to have been granted with an exercise price below the fair market value of the option shares on the grant date.

     2. Term of Option. The Option hereby granted shall remain in force and effect until the Expiration Date specified for this option in attached Schedule I, subject to earlier termination as provided in paragraphs 6 and 7 hereof.

     3. Exercise of Option. This Option may be exercised by Employee, at any time and from time to time on or after the six (6) month and one day period measured from the Recorded Grant Date of the Prior Option specified in attached Schedule I and through the Expiration Date, as to all or any part of the Stock then vested by delivery to the Company of written notice of exercise and payment of the exercise price as provided in paragraph 4 hereof and satisfaction of the applicable withholding taxes in accordance with paragraph 13. Notwithstanding the preceding provisions of this paragraph 2, in the event of a Change of Control (as such term is defined in the Applicable Plan) the Option shall become 100% vested and fully exercisable. As this Option vests and becomes exercisable for one or more shares of Stock pursuant to the applicable vesting schedule for this Option, this Option shall remain exercisable for such shares until the Expiration Date or any

2

earlier termination of the Option under paragraph 6 or 7 hereof.

     4. Method of Exercising Option. Subject to the terms and conditions of this Option Agreement, the Option may be exercised by timely delivery to the Company of written notice, which notice shall be effective on the date received by the Company (the “Effective Date”). The notice shall state Employee’s election to exercise the Option, the number of shares of Stock in respect of which the election to exercise has been made, the method of payment elected (see paragraph 5 hereof), the exact name or names in which the purchased shares of Stock will be registered and the Social Security Number of Employee. Such notice shall be signed by the Employee and shall be accompanied by payment of the exercise price for such shares. In the event the Option shall be exercised by a person or persons other than Employee pursuant to paragraph 7 hereof, such notice shall be signed by such other person or persons and shall be accompanied by proof acceptable to the Company of the legal right of such person or persons to exercise the Option. All shares delivered by the Company upon exercise of the Option as provided herein shall be fully paid and nonassessable upon delivery.

     5. Method of Payment. Payment of the exercise price for the shares purchased upon the exercise of this Option shall be made by Employee (i) in cash, (ii) through a broker-assisted same day exercise and sale procedure pursuant to which the broker shall immediately sell, on behalf of the Employee or such other person exercising the Option, all or a portion of the shares of Stock acquired upon exercise of the Option and remit to the Company, on the settlement date for such sale, a sufficient amount of the sale proceeds to cover the exercise price payable for all the shares acquired through such exercise and the applicable withholding taxes, (iii) through such other method permitted by the Committee or (iv) through any combination of the above.

     6. Termination of Employment. In the event that Employee terminates employment on account of retirement or for any other reason than for cause, then Employee may at any time within three (3) months next succeeding the effective date of termination of employment exercise the Option to the extent that Employee was entitled to exercise the Option at the date of termination, provided that in no event shall the Option, or any part thereof, be exercisable after the Expiration Date. If Employee terminates employment for cause, the Option shall lapse at the time of the Employee’s termination of employment. If the recorded date of grant specified for the Prior Grant in attached Schedule I is after January 2, 2002 and Employee received the Prior Grant in an employment capacity other than (or in addition to) a faculty member, then the Employee shall be deemed for purposes of this paragraph 6 to have terminated employment upon the earlier of (i) the date he or she ceases for any reason to be employed by the Company or any Subsidiary or (ii) the first date on which Employee remains employed by the Company or any Subsidiary solely in the capacity of a faculty member.

     7. Death of Employee. In the event of the death of Employee within a period during which the Option, or any part thereof, could have been exercised by Employee, including three (3) months after termination of employment other than for cause, this Option shall remain exercisable for an additional period (the Post-Death Period) ending upon the earlier of (i) the expiration of the fifteen (15) month period measured from the date of Employee’s death or (ii) the Expiration Date. During the Post-Death Period, this Option may be exercised by the Employee’s legal representative or representatives or by the person or persons entitled to do so under Employee’s last will and

3

testament or if the Employee fails to make a testamentary disposition of this Option or shall die in testate, by the person or persons entitled to receive this Option under the applicable laws of descent and distribution. However, this Option may be exercised during the Post-Death Period only to the extent the Option was exercisable by Employee immediately prior to his or her death. The Company shall have the right to require evidence satisfactory to it of the rights of any person or persons seeking to exercise the Option under this paragraph 7 to exercise the Option.

     8. Transfer of Employee. Except as otherwise provided in the last sentence of paragraph 6 hereof, in the event Employee ceases to be an employee of the Company and becomes an employee of one of the Company’s subsidiaries as the result of a transfer, promotion or otherwise, the Option shall remain unchanged.

     9. Nontransferability. The Option evidenced by this Agreement shall be exercisable only during the term of the Option provided in paragraph 2 hereof and, except as provided in paragraph 6 or 7 above, only by Employee during his lifetime and while an Employee of the Company. The Option granted by this Option Agreement shall be subject to the restrictions on transfer as set forth in section 13. 5 of the Applicable Plan.

     10. Adjustments in Number of Shares and Exercise Price. In the event a stock dividend is declared upon the Stock after the Date of Grant, the remaining shares of Stock then subject to this Option shall be increased proportionately and the exercise price per share of Stock shall be equitably adjusted to reflect such stock dividend without any change in the aggregate exercise price therefor. Should any change be made to the Class A Common Stock by reason of any stock split, recapitalization, combination of shares, exchange of shares, spin-off transaction, extraordinary dividend or distribution or other change affecting the outstanding Class A Common Stock as a class without the Company’s receipt of consideration, or should the value of the outstanding shares of Class A Common Stock be substantially reduced as a result of a spin-off transaction or an extraordinary dividend or distribution, or should there occur any merger, consolidation or other reorganization, then equitable adjustments shall be made by the Committee to (i) the total number and/or class of securities subject to this Option and (ii) the exercise price payable per share, but without any change in the aggregate exercise price therefor. The adjustments shall be made in such manner as the Committee deems appropriate in order to reflect such change and thereby prevent the dilution or enlargement of benefits hereunder, and those adjustments shall be final, binding and conclusive upon Employee and any other person or persons having an interest in this Option. In the event of any Change in Control transaction, the adjustment provisions of the Applicable Plan shall be controlling.

     11. Delivery of Shares. No shares of Stock shall be delivered upon exercise of the Option until (i) the exercise price for those shares shall have been paid in full in the manner herein provided; (ii) all applicable taxes required to be withheld have been paid or withheld in full; (iii) the approval of any governmental authority required in connection with the Option, or the issuance of shares hereunder, has been received by the Company; and (iv) if required by the Committee, Employee has delivered to the Committee an Investment Letter in form and content satisfactory to the Company as provided in paragraph 12 hereof.

     12. Securities Act. The Company shall not be required to deliver any shares of Stock pursuant to the exercise of all or any part of the Option if, in the opinion of counsel for the

4

Company, such issuance would violate the Securities Act of 1933 or any other applicable federal or state securities laws or regulations. The Committee may require that Employee, prior to the issuance of any such shares pursuant to exercise of the Option, sign and deliver to the Company a written statement (“Investment Letter”) stating (i) that Employee is purchasing the shares for investment and not with a view to the sale or distribution thereof; (ii) that Employee will not sell any shares acquired upon exercise of the Option or any other shares of the Company that Employee may then own or thereafter acquire except either (a) through a broker on a national securities exchange or (b) with the prior written approval of the Company; and (iii) containing such other terms and conditions as counsel for the Company may reasonably require to assure compliance with the Securities Act of 1933 or other applicable federal or state securities laws and regulations. Such Investment Letter shall be in form and content acceptable to the Committee in its sole discretion.

     13. Federal and State Taxes. Upon exercise of this Option, or any part thereof, Employee may incur certain liabilities for federal, state or local taxes and the Company may be required by law to withhold such taxes for payment to the applicable taxing authorities. Employee may satisfy the payment of any federal, state, or local tax withholding amounts due as a result of the exercise of this Option by (i) delivering to the Company that number of shares of Stock then owned by the Employee, duly endorsed for transfer to the Company and free and clear of any liens, claims, security interests, or encumbrances (based on the fair market value of the Common Stock on the date this Option is exercised), that are required to satisfy such tax withholding amount, (ii) delivering to the Company cash, a check or other form of payment permitted by the Committee in the aggregate amount required to satisfy such tax withholding amount or (iii) using a portion of the sale proceeds of the purchased shares to satisfy such tax withholding amount, to the extent Employee exercises the Option pursuant to the sale and remittance procedure set forth in paragraph 5 hereof.

     14. Definitions; Copy of Applicable Plan. To the extent not specifically provided herein, all capitalized terms used in this Agreement shall have the same meanings ascribed to them in the Applicable Plan under which this Option is granted. By the execution of this Agreement, Employee acknowledges receipt of a copy of the Applicable Plan.

     15. Administration. This Agreement shall at all times be subject to the terms and conditions of the Applicable under this Option is granted and such Applicable Plan shall in all respects be administered by the Committee in accordance with the terms of and as provided in the Applicable Plan. The Committee shall have the sole and complete discretion with respect to all matters reserved to it by the Applicable Plan and decisions of the Committee with respect thereto and to this Agreement shall be final and binding upon Employee and the Company. In the event of any conflict between the terms and conditions of this Agreement and the Applicable Plan under which this Option is granted, the provisions of such Applicable Plan shall control.

     16. Continuation of Employment. This Agreement shall not be construed to confer upon Employee any right to continue in the employ of the Company and shall not limit the right of the Company, in its sole discretion, to terminate the employment of Employee at any time.

     17. Obligation to Exercise. Employee shall have no obligation to exercise this Option in whole or in part.

5

     18. Governing Law. This Agreement shall be interpreted and administered under the laws of the State of Arizona.

     19. Amendments. This Agreement may be amended only by a written agreement executed by the Company and Employee. The Company and Employee acknowledge that changes in federal tax laws enacted subsequent to the Date of Grant, and applicable to stock options, may provide for tax benefits to the Company or Employee. In any such event, the Company and Employee agree that this Agreement may be amended as necessary to secure for the Company and Employee any benefits that may result from such legislation. Any such amendment shall be made only upon the mutual consent of the parties, which consent (of either party) may be withheld for any reason.

          IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by its officers thereunto duly authorized and Employee has hereunto set his or her hand as of the date first written above.

APOLLO GROUP, INC.	EMPLOYEE
	«Name»
Title:

6

SCHEDULE I

OPTION INFORMATION

PRIOR OPTION:

GRANT NUMBER

RECORDED DATE OF GRANT:

NUMBER OF CURRENTLY UNEXERCISED
     SHARES VESTING AFTER 12/31/2004:

EXPIRATION DATE:

PLAN UNDER WHICH GRANTED:

NEW OPTION:

GRANT NUMBER:

DATE OF GRANT:      JULY                     , 2007

NUMBER OF SHARES SUBJECT
     TO OPTION ON GRANT DATE:

EXPIRATION DATE:

PLAN UNDER WHICH GRANTED:

EX-99.(A)(16)

Exhibit (a)(16)

FORM OF ACKNOWLEDGEMENT OF RECEIPT OF PAPER ELECTION FORM

     Apollo Group has received your Election Form dated ___, 2007, by which you made the following elections with respect to your Eligible Options:

Fair Market

Number of

Value of

Option

Apollo Group

Total

Shares

Class A

Original

Exercise

Number of

Eligible for

Revised

Common

Grant

Option

Price Per

Exercisable

Tender Offer

Grant

Stock on

Amend Entire

Date

Number

Share

Shares

Amendment

Date

Revised Grant Date

Eligible Portion?

[$     ]

[     ]

[     ]

[     ]

[$     ]

o Yes

o No

     If you change your mind, you may change your elections with respect to your Eligible Options by accessing the Offer website at https://apol.equitybenefits.com and completing a new Election Form before 11:59 p.m., Eastern Daylight Time on July 12, 2007. Alternatively, you may submit a new paper Election Form by facsimile to 1-800-420-4799 before such expiration date. If we extend the offer beyond July 12, 2007, you may change your election before the extended expiration date of the Offer. Any questions or requests for assistance should be directed to the Apollo Group Tender Offer Hotline at 1-800-398-1278 or stockoptions@apollogrp.edu.

     Please note that our receipt of your Election Form is not by itself an acceptance of the Eligible Option. For purposes of the Offer, Apollo Group will be deemed to have accepted those Eligible Options properly tendered pursuant to the Offer and not otherwise withdrawn only when Apollo Group gives written or electronic notice to the option holders generally of its acceptance of such options. Such notice may be made by press release, email or other method of communication. Apollo Group’s formal acceptance is expected to take place immediately following the expiration date of the Offer.

EX-99.(A)(17)

Exhibit (a)(17)

FORM OF REMINDER OF EXPIRATION DATE

REMINDER

DEADLINE: 11:59 P.M. (EASTERN DAYLIGHT TIME) JULY 12, 2007

To all Option Holders Eligible to Participate in the Option Amendment Program:

The Offer to Amend or Replace your Eligible Options will expire at 11:59 p.m. Eastern Daylight Time on July 12, 2007 unless we extend the Offer.

According to our records you have not yet submitted an Election Form for any of your Eligible Options. Participation in the Offer is voluntary. However, all individuals holding Eligible Options who wish to tender them for amendment or replacement must access the Offer website at https://apol.equitybenefits.com to complete the required Election Form in accordance with the instructions posted on that website or you may submit a paper Election Form by facsimile to 1-800-420-4799. The submission of those required documents must be made by the deadline indicated above. We cannot accept late submissions, and we therefore urge you to respond early to avoid any last minute problems.

If you do not want to accept the Offer with respect to your Eligible Options, please disregard this reminder. However, you will have to take other action on your own to bring your Eligible Options into compliance with Section 409A of the Internal Revenue Code if you are to avoid adverse tax consequences.

EX-99.(A)(18)

Exhibit (a)(18)

APOLLO GROUP, INC.

ELECTION FORM

RE: TENDER OF ELIGIBLE OPTIONS PURSUANT TO THE OFFER TO AMEND OR REPLACE ELIGIBLE OPTIONS

DATED JUNE 13, 2007

THE OFFER EXPIRES AT 11:59 P.M., EASTERN DAYLIGHT TIME, ON JULY 12, 2007,

UNLESS THE OFFER IS EXTENDED.

Name:	Employee ID:
Address:

Important: Read the instructions to this Election Form before completing and signing this page.

Indicate your decision to tender your Eligible Options identified below for amendment or replacement by checking the “Yes” box under the “Amend Entire Eligible Portion” column. If you do not want to tender one or more of your Eligible Options for amendment or replacement, check the “No” box under the “Amend Entire Eligible Portion” column for those particular options. If you do not clearly mark the “Yes” box with respect to an Eligible Option, your election with respect to that option will default to “Amend None.” In that event, such Eligible Option will not be amended, and you will not become entitled to the special cash bonus payable with respect to that Eligible Option. In addition, you will be solely responsible for bringing such Eligible Option into compliance with IRC Section 409A in order to avoid adverse tax consequences with respect to that option. You may not tender only a portion of an Eligible Option.

Fair Market

Number of

Value of

Option

Apollo Group

Shares

Class A

Total

Eligible for

Common

Amend

Original

Exercise

Number of

Tender

Revised

Stock on

Entire

Grant

Option

Price Per

Exercisable

Offer

Grant

Revised Grant

Eligible

Date

Number

Share

Shares

Amendment

Date

Date

Portion?

[$     ]

[     ]

[     ]

[     ]

[$     ]

o Yes

o No

Please note that if an Eligible Option you tender for amendment has an exercise price per share at or above the closing price per share of Apollo Group Class A common stock on the amendment date, that option will be canceled on that date and immediately replaced with a new option that is exactly the same as the canceled option, including the same exercise price per share and no loss of vesting or change to the expiration date, but with a new grant date. Such cancellation and re-grant is necessary in order to avoid adverse taxation of that option under IRC Section 409A.

Agreement to Terms of Election

1. As soon as practicable after the Amendment Date, Apollo Group will return to me a final and completed Stock Option Amendment and Special Bonus Agreement in which there is indicated the Adjusted Exercise Price for each Amended Option and the dollar amount of the Cash Bonus to which I will be entitled with respect to that option. Should an Eligible Option I tender for amendment have an exercise price per share at or above the closing price per share of Apollo Group Class A common stock on the Amendment Date, that option will be canceled on that date and immediately replaced with a New Option that is exactly the same as the canceled option, including the same exercise price per share and no loss of vesting or change to the expiration date, but with a new grant date. An Option Cancellation and Regrant Agreement for the New Option will be delivered to me as soon as administratively practicable following the Amendment Date.

2. If I cease to remain employed by Apollo Group or any affiliated entity after I tender my Eligible Options but before Apollo Group accepts those options for amendment or replacement, my Eligible Options will not be amended or replaced, and I will not become entitled to any Cash Bonus.

3. Until the Expiration Date, I will have the right to change my election with respect to my Eligible Options. However, after that date I will have no further right to change my election with respect to my Eligible Options, unless Apollo Group does not accept my tendered Eligible Options before August 9, 2007, the 40th business day after commencement of the Offer. In that event, I may revoke my elections with respect to my tendered Eligible Options at any time prior to Apollo Group’s acceptance of those options for amendment or replacement pursuant to the Offer.

4. The tender of my Eligible Options pursuant to the procedure described in Section 4 of the Offer and the instructions to this Election Form will constitute my acceptance of all of the terms and conditions of the Offer. Apollo Group’s acceptance of my tendered Eligible Options for amendment or replacement pursuant to the Offer will constitute a binding agreement between Apollo Group and me in accordance with the terms and subject to the conditions of the Offer.

5. I am the registered holder of the Eligible Options tendered hereby, and my name, employee identification number and other information appearing on the cover page of this Election Form are true and correct.

6. I am not required to tender my Eligible Options pursuant to the Offer. However, if I do not tender such options or if those options are not otherwise amended or replaced pursuant to the Offer, then I must take other action on my own with respect to those options in order to bring those options into compliance with Section 409A of the Internal Revenue Code and thereby avoid adverse tax consequences.

7. Apollo Group cannot give me legal, tax or investment advice with respect to the Offer and has advised me to consult with my own legal, tax and investment advisor as to the consequences of participating or not participating in the Offer.

8. Under certain circumstances set forth in the Offer document, Apollo Group may terminate or amend the Offer and postpone its acceptance and amendment or replacement of the tendered Eligible Options. In the event the Eligible Options tendered herewith are not accepted for amendment or replacement, those options will be returned to me promptly following the expiration or termination of the Offer.

9. I understand that neither Apollo Group nor Apollo Group’s Board of Directors is making any recommendation as to whether I should tender my Eligible Options for amendment or replacement, and that I must make my own decision whether to tender my Eligible Options, taking into account my own personal circumstances and preferences. I understand that the Amended Options resulting from the amendment of my tendered Eligible Options may decline in value and may be “out of the money” when I decide to exercise those options. I further understand that past and current market prices of Apollo Group Class A common stock may provide little or no basis for predicting what the market price of Apollo Group Class A common stock will be when Apollo Group amends or replaces my tendered option or at any other time in the future.

10. I hereby acknowledge that I have read the documents related to the Offer listed below:

Offer to Amend or Replace

Instructions to this Election Form

Stock Option Amendment and Special Bonus Agreement

Option Cancellation and Regrant Agreement

11. I hereby elect to participate in the Offer with respect to my Eligible Options as previously identified, and I hereby tender such Eligible Options for amendment or replacement in accordance with the Offer to Amend or Replace Eligible Options. I agree that the options identified are the Eligible Options I hold. I agree and understand that each of the Eligible Options which I have tendered pursuant to the Offer will be amended or replaced, unless I submit a new, properly completed Election Form prior to the expiration of the Offer.

12. I understand that I must fully complete, sign and deliver this Election Form and return it to Apollo Group via facsimile 1-800-420-4799 prior to the expiration of the Offer.

13. I further understand that I will receive an Election Confirmation Statement via email at my Apollo Group email address listed below within one business day after the delivery of my Election Form via facsimile to 1-800-420-4799. If I have not received an Election Confirmation Statement in the timeframe prescribed, I agree that it is my responsibility to confirm that Apollo Group has received my complete submission by contacting the Apollo Group Tender Offer Hotline at 1-800-398-1278 or stockoptions@apollogrp.edu. If Apollo Group does not have a record of my submissions, Apollo Group may request that I provide evidence of those submissions or submit additional copies thereof. I acknowledge that Apollo Group recommends that I keep a copy of my submissions and proof of transmittal by facsimile in case I am requested to provide evidence of timely submission.

Email address:

Employee ID number:

Signature Date

INSTRUCTIONS
FORMING PART OF THE TERMS AND CONDITIONS OF THE OFFER

1. Delivery of Election Form. A properly completed and duly executed Election Form must be received by Apollo Group by 11:59 p.m. Eastern Daylight Time on the Expiration Date.

Apollo Group intends to disseminate an Election Confirmation Statement via email to your Apollo Group email address within one business day after your submission of your Election Form via facsimile to 1-800-420-4799. If you have not received an Election Confirmation Statement in the timeframe prescribed, Apollo Group recommends you confirm that Apollo Group’s receipt of your submissions by contacting the Apollo Group Tender Offer Hotline at 1-800-398-1278 or stockoptions@apollogrp.edu. If Apollo Group does not have a record of receipt of your submissions, we may request that you show us evidence of those submissions or submit additional copies thereof. Apollo Group recommends you keep a copy of your submissions and proof of transmittal by facsimile in case you are asked to provide evidence of timely submission.

You may change your election with respect to your Eligible Options at any time up to 11:59 p.m. Eastern Daylight Time on the Expiration Date. If the Offer is extended by Apollo Group beyond that time, you may change your election with respect to your tendered Eligible Options at any time until the extended expiration of the Offer. In addition, if Apollo Group does not accept your tendered option by 11:59 p.m. Eastern Daylight Time on August 9, 2007, you may revoke your election with respect to your tendered options at any time thereafter until those options are accepted for amendment or replacement. To validly change or revoke your election, you must access the Offer website at https://apol.equitybenefits.com and complete and deliver a new Election Form to Apollo Group prior to the expiration of the Offer. You should print a copy of your revised Election Form and updated Election Confirmation Statement and keep those documents with your other records for the Offer. Alternatively, you may submit a new paper Election Form by facsimile to 1-800-420-4799 before the expiration date. You may change your previously submitted elections as many times as you would like prior to the expiration of the Offer.

Apollo Group will not accept any alternative, conditional or contingent tenders. All persons tendering Eligible Options will, by completing and executing the Election Form, waive any right to receive any notice of the acceptance of their tender, except as provided for in the Offer.

2. Tenders. If you intend to tender your Eligible Options for amendment or replacement pursuant to the Offer, you must complete the table on the cover page of this Election Form and follow the procedures described in Instruction 1. If you decide to tender a particular Eligible Option, you must tender all of that option for amendment or replacement. If you hold more than one Eligible Option, you may elect to tender one or more of those options and retain the balance.

3. Signatures on This Election Form. You must sign this Election Form.

4. Requests for Assistance or Additional Copies. Any questions or requests for assistance, as well as requests for paper copies of the Offer document, this Election Form, the Stock Option Amendment and Special Bonus Agreement or the Option Cancellation and Regrant Agreement, may be directed the Apollo Group Tender Offer Hotline at 1-800-398-1278 or stockoptions@apollogrp.edu. Copies will be furnished promptly at Apollo Group’s expense.

5. Irregularities. Apollo Group will determine, in its discretion, all questions as to the form of documents and the validity, form, eligibility (including time of receipt) and acceptance of any tendered option. Apollo Group will also decide, in its discretion, all questions as to (i) the portion of each incorrectly priced option which comprises an Eligible Option for purposes of the Offer; (ii) the Adjusted Exercise Price to be in effect under each Amended Option, (iii) the number of shares of Apollo Group Class A common stock purchasable under each Amended Option at the Adjusted Exercise Price, (iv) the amount of the Cash Bonus payable with respect to each Amended Option with an Adjusted Exercise Price and (v) the cancellation of tendered Eligible Options with exercise prices at or above the fair market value of Apollo Group Class A common stock on the Amendment Date and the replacement of those canceled options with New Options. Apollo Group’s determination of such matters will be final and binding on all parties. Apollo Group reserves the right to reject any or all tenders which it determines do not comply with the conditions of the Offer, are not in proper form or the acceptance of which would be unlawful. Apollo Group also reserves the right to waive any of the conditions of the Offer or any defect or irregularity in the tender with respect to any particular Eligible Option or any particular Eligible Optionee, and Apollo Group’s interpretation of the

terms of the Offer (including these instructions) will be final and binding on all parties. No tender of an Eligible Option will be deemed to be properly made until all defects and irregularities have been cured by the tendering Eligible Optionee or waived by Apollo Group. Unless waived, any defects or irregularities in connection with the tender of an Eligible Option must be cured within such time as Apollo Group shall determine. Neither Apollo Group nor any other person is or will be obligated to give notice of any defects or irregularities with respect to the tendered options, and no person will incur any liability for failure to give any such notice. If the table on the cover page of this Election Form includes options that are not eligible for the Offer, Apollo Group will not accept those options for amendment or replacement, but Apollo Group does intend to accept for amendment or replacement any properly tendered Eligible Option set forth in that table.

6. Important Tax Information. You should refer to Section 15 of the Offer, which contains important U.S. federal tax information concerning the Offer. All Eligible Optionees with Eligible Options are strongly encouraged to consult with their own tax advisors as to the consequences of their participation in the Offer.

7. Copies. You should print a copy of this Election Form, after you have completed and signed it, and retain it for your records.

IMPORTANT: THE COMPLETED AND SIGNED ELECTION FORM MUST BE RECEIVED BY APOLLO GROUP BY 11:59 P.M. EASTERN DAYLIGHT TIME ON THE EXPIRATION DATE.

EX-99.(A)(19)

Exhibit (a)(19)

EMAIL TO INDIVIDUALS CHOOSING NOT TO TENDER ELIGIBLE OPTIONS

We show that you have elected not to tender one or more of your Eligible Options pursuant to the Tender Offer.

Number of

Option

Fair Market

Shares

Value of Apollo

Total

Eligible for

Group Class A

Amend

Original

Exercise

Number of

Tender

Revised

Common Stock on

Entire

Grant

Option

Price Per

Exercisable

Offer

Grant

Revised Grant

Eligible

Date

Number

Share

Shares

Amendment

Date

Date

Portion?

¨        þ

[$    ]

[      ]

[      ]

[      ]

[$    ]

Yes     No

We want to make sure that you understand that your election not to tender means:

1. You agree that you will pay all additional Federal and State tax penalties with respect to the non-tendered options;

2. You decline the amendment or replacement of the non-tendered options; and

3. You decline the cash bonus payment, if applicable, in January of 2008.

If the above is not your intent, we encourage you to log back into the Tender Offer website to change your election before July 12, 2007. Alternatively, you may submit a new paper Election Form by facsimile to 1-800-420-4799. If we extend the Offer beyond July 12, 2007, you must change your election before the extended expiration date of the Offer. To access the Tender Offer website, elect the following hyperlink: https://apol.equitybenefits.com.

Log into the Tender Offer website using your employee ID and password.

Should you have any questions, please feel free to contact the Apollo Group Tender Offer Hotline at 1-800-398-1278 or stockoptions@apollogrp.edu.

EX-99.(A)(20)

Exhibit (a)(20)

FORM OF NOTICE OF EXPIRATION OF OFFER, AMENDMENT OR REPLACEMENT

OF ELIGIBLE OPTIONS AND COMMITMENT TO PAY CASH BONUS

To:

We are pleased to announce that we have completed our Offer to Amend or Replace Eligible Options. As a result of the Offer, we have amended outstanding Eligible Options covering                      shares of Apollo Group Class A common stock to increase the exercise price of each such option to the lower of (i) the fair market value per share of Apollo Group Class A common stock on the revised measurement date determined for that option for financial accounting purposes or (ii) $___, the closing price per share of such common stock on the July _, 2007 amendment date. In addition, the participants whose Eligible Options have been so amended are now eligible for special cash bonuses in the aggregate amount of up to $                     to compensate them for the higher exercise prices per share in effect for their amended options.

In addition, we canceled tendered Eligible Options covering                      shares of Apollo Group Class A common stock because the adjusted exercise price would have been the same or lower than the exercise price in effect for those options prior to the amendment. In replacement of each such canceled option, we immediately granted a New Option that is exactly the same, including the same exercise price per share, but with a new grant date of July _, 2007.

The chart below lists each of your tendered Eligible Options that have been amended. The information in the chart confirms that the listed Eligible Options were validly submitted for amendment pursuant to the Offer and not otherwise withdrawn prior to the expiration date of the Offer. Accordingly, the adjusted exercise price per share now in effect for each of your amended Eligible Options is indicated below. Each of your amended options will continue to vest in accordance with the same vesting schedule measured from the same vesting commencement date currently in effect for that option. The amendment has no effect on the option’s vesting schedule, exercise period, option term or any other term or provision of the option.

				Number of	Number of
				Outstanding	Outstanding
			New	Option	Option
		Exercise	Exercise	Shares	Shares Not
	Total	Price Per	Price Per	Subject to	Subject to	Special
	Number of	Share Prior	Share	Amended	Amended	Bonus
Original	Exercisable	to	Following	Exercise	Exercise	Payable in
Grant Date	Shares	Amendment	Amendment	Price	Price	2008
		$	$			$
						Total Special Bonus Amount: $

In exchange for your agreement to amend your outstanding Eligible Option to the Adjusted Exercise Prices determined for those options, Apollo Group hereby irrevocably commits to pay you a special cash bonus in the amount of $___. The applicable provisions under Section 409A of the Internal Revenue Code do not permit the cash bonus to be paid in the same year in which the Eligible Options are amended. Therefore, the cash bonus will be paid on Apollo Group’s first regularly scheduled payroll date following January 1, 2008, which will not be later than January 15, 2008. Apollo Group must withhold all applicable U.S. federal, state and local income and employment withholding taxes and other required payments, and you will receive only the portion of the payment remaining after

those taxes and payments have been withheld. You will receive your cash bonus even if your employment with Apollo Group terminates prior to the date on which the cash bonus is paid.

This commitment to pay you the special cash bonus is governed by the terms and conditions of the Offer as set forth in the Offer to Amend or Replace Eligible Options, the Election Form and the Stock Option Amendment and Special Bonus Agreement (collectively, the “Offer Documents”), all of which are incorporated herein by reference. Accordingly, this commitment and the Offer Documents reflect the entire agreement between you and Apollo Group with respect to the amendment of your tendered Eligible Options.

Each New Option granted pursuant to you pursuant to the Offer is exactly the same as the tendered Eligible Option it replaced, including the same exercise price per share and no loss of vesting or change to the expiration date, but with a new grant date of July _, 2007. The chart below indicates which tendered Eligible Options were canceled and replaced with a New Option:

	Total Number
Original	of Shares	Total Number	Exercise Price	Same Exercise
Grant Date of	Subject to	of Shares	Per Share	Price Per
Canceled	Canceled	Subject to	Prior to	Share under
Option	Option	New Option	Cancellation	New Option
			$	$

APOLLO GROUP, INC.

By:

Title:

Date:

EX-99.(D)(2)

APOLLO GROUP, INC.

AMENDED AND RESTATED
2000 STOCK INCENTIVE PLAN

ARTICLE 1

PURPOSE

     1.1 GENERAL. The Apollo Group, Inc. 2000 Stock Incentive Plan (the “Plan”) was previously approved by the Board and the Company’s shareholders. The Plan’s purpose is to promote the success and enhance the value of Apollo Group, Inc. (the “Company”) by linking the personal interests of its directors, employees, officers, and executives of, and consultants and advisors to, the Company to those of Company shareholders and by providing such individuals with an incentive for outstanding performance in order to generate superior returns to shareholders of the Company. The Plan is further intended to provide flexibility to the Company in its ability to motivate, attract, and retain the services of directors, employees, officers, and executives of, and consultants and advisors to, the Company upon whose judgment, interest, and special effort the successful conduct of the Company’s operation is largely dependent.

ARTICLE 2

EFFECTIVE DATE

     2.1 EFFECTIVE DATE. The Plan was originally effective as of August 29, 2000 (the “Effective Date”). The Plan has been amended and restated on several occasions since the Effective Date. The effective date of this amended and restated Plan is May 15, 2007.

ARTICLE 3

DEFINITIONS AND CONSTRUCTION

     3.1 DEFINITIONS. When a word or phrase appears in this Plan with the initial letter capitalized, and the word or phrase does not commence a sentence, the word or phrase shall generally be given the meaning ascribed to it in this Section or in Sections 1.1 or 2.1 unless a clearly different meaning is required by the context. The following words and phrases shall have the following meanings:

          (a) “Award” means any Option, Stock Appreciation Right, Restricted Stock Award, Restricted Stock Unit Award, Performance Share Award, or Performance-Based Award granted to a Participant under the Plan.

          (b) “Award Agreement” means any written agreement, contract, or other instrument or document evidencing an Award.

          (c) “Board” means the Board of Directors of the Company.

          (d) “Cause” means (except as otherwise provided in an Award Agreement) if the Committee, in its reasonable and good faith discretion, determines that the employee, consultant, or advisor (i) fails to substantially perform his duties (other than as a result of Disability), after the Board or the executive to which the Participant reports delivers to the Participant a written demand for substantial performance that specifically identifies the manner in which the Participant has not substantially performed his duties; (ii) engages in willful misconduct or gross negligence that is materially injurious to the Company or a Subsidiary; (iii) breaches his duty of loyalty to the Company or a Subsidiary; (iv) unauthorized removal from the premises of the Company or a Subsidiary of a document (of any media or form) relating to the Company or a Subsidiary or the customers of the Company or a Subsidiary; or (v) has committed a felony or a serious crime involving moral turpitude.

          (e) “Change of Control” means and includes each of the following (except as otherwise provided in an Award Agreement):

               (1) there shall be consummated any consolidation or merger of the Company in which the Company is not the continuing or surviving entity, or pursuant to which Stock would be converted into cash, securities or other property, other than a merger of the Company in which the holders of the Company’s Stock immediately prior to the merger have the same proportionate ownership of beneficial interest of common stock or interests of the surviving entity immediately after the merger;

               (2) there shall be consummated any sale, lease, exchange or other transfer (in one transaction or a series of related transactions) of assets aggregating more than 80% of the assets of the Company;

               (3) the shareholders of the Company shall approve any plan or proposal for liquidation or dissolution of the Company;

               (4) any person (as such term is used in Section 13(d) and 14(d)(2) of the Exchange Act), other than (A) an employee benefit plan of the Company or any Subsidiary or any entity holding shares of capital stock of the Company for or pursuant to the terms of any such employee benefit plan in its role as an agent or trustee for such plan, or (B) any affiliate of the Company as of the Effective Date becomes the beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act) of 50% or more of the Stock; or

               (5) during any two-year period, individuals who at the beginning of the period do not constitute a majority of the Board at the end of such period, unless the appointment or the nomination for election by the Company’s shareholders of each new director was approved by a vote of at least two-thirds of the directors then still in office who were directors at the beginning of the period.

          (f) “Code” means the Internal Revenue Code of 1986, as amended.

          (g) “Committee” means the committee of the Board described in Article 4.

          (h) “Covered Employee” means an Employee who is a “covered employee” within the meaning of Section 162(m) of the Code.

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          (i) “Disability” shall mean any illness or other physical or mental condition of a Participant which renders the Participant incapable of performing his customary and usual duties for the Company, or any medically determinable illness or other physical or mental condition resulting from a bodily injury, disease, or mental disorder that in the judgment of the Committee is permanent and continuous in nature. The Committee may require such medical or other evidence as it deems necessary to judge the nature and permanency of the Participant’s condition.

          (j) “Exchange Act” means the Securities Exchange Act of 1934, as amended.

          (k) “Fair Market Value” means, as of any relevant date, the closing price of the Stock on that date as reported on the Nasdaq Global Market (or on any other national securities exchange on which the Stock is at the time listed for trading) or, if no closing price is reported for that date, the closing price per share of Stock on the next preceding date for which a closing price was reported.

          (l) “Incentive Stock Option” means an Option that is intended to meet the requirements of Section 422 of the Code or any successor provision thereto.

          (m) “Non-Employee Director” means a member of the Board who qualifies as a “NonEmployee Director” as defined in Rule 16b-3 (b)(3) of the Exchange Act, or any successor definition adopted by the Board.

          (n) “Non-Qualified Stock Option” means an Option that is not intended to be an Incentive Stock Option.

          (o) “Option” means a right granted to a Participant under Article 7 of the Plan to purchase Stock at a specified price during specified time periods. An Option may be either an Incentive Stock Option or a Non-Qualified Stock Option.

          (p) “Participant” means a person who, as a director, employee, officer, or executive of, or consultant or advisor providing services to, the Company or any Subsidiary, has been granted an Award under the Plan.

          (q) “Performance-Based Awards” means the Performance Share Awards, Restricted Stock Awards and Restricted Stock Unit Awards granted to selected Covered Employees pursuant to Articles 9, 10 and 11, but which are subject to the terms and conditions set forth in Article 12. All Performance-Based Awards are intended to qualify as “performance-based compensation” under Section 162(m) of the Code.

          (r) “Performance Criteria” means the criteria that the Committee selects for purposes of establishing the Performance Goals for a Participant for a Performance Period. The Performance Criteria that will be used to establish Performance Goals are limited to the following: pre- or after-tax net earnings, sales growth, operating earnings, operating cash flows, return on net assets, return on stockholders’ equity, return on assets, return on capital, Stock price growth, stockholder returns, gross or net profit margin, earnings per share, price per share of Stock, and market share, any of which may be measured either in absolute terms or as compared to any incremental increase or as compared to results of a peer group. The Committee

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shall, within the time prescribed by Section 162(m) of the Code, define in an objective fashion the manner of calculating the Performance Criteria it selects to use for such Performance Period for such Participant.

          (s) “Performance Goals” means, for a Performance Period, the goals established in writing by the Committee for the Performance Period based upon the Performance Criteria. Depending on the Performance Criteria used to establish such Performance Goals the Performance Goals may be expressed in terms of overall Company performance or the performance of a division, business unit, or an individual. The Committee, in its discretion, may, within the time prescribed by Section 162(m) of the Code, adjust or modify the calculation of Performance Goals for such Performance Period in order to prevent the dilution or enlargement of the rights of Participants (i) in the event of, or in anticipation of, any unusual or extraordinary corporate item, transaction, event, or development, or (ii) in recognition of, or in anticipation of, any other unusual or nonrecurring events affecting the Company, or the financial statements of the Company, or in response to, or in anticipation of, changes in applicable laws, regulations, accounting principles, or business conditions.

          (t) “Performance Period” means the one or more periods of time, which may be of varying and overlapping durations, as the Committee may select, over which the attainment of one or more Performance Goals will be measured for the purpose of determining a Participant’s right to, and the payment of, a Performance-Based Award.

          (u) “Performance Share” means a right granted to a Participant under Article 9, to receive cash, Stock, or other Awards, the payment of which is contingent upon achieving certain Performance Goals established by the Committee.

          (v) “Plan” means the Apollo Group, Inc. 2000 Stock Incentive Plan, as amended and restated.

          (w) “Restricted Stock Award” means Stock granted to a Participant under Article 10 that is subject to certain restrictions and to risk of forfeiture.

          (x) “Restricted Stock Unit Award” means restricted stock units awarded to a Participant under Article 11 which will entitle the Participant to receive the             shares of Stock underlying such Award upon the attainment of designated performance objectives (which may, but need not, include one or more Performance Goals) or the satisfaction of specified employment or service requirements or upon the expiration of a designated time period following the vesting of such Award.

          (y) “Stock” means Apollo Education Group Class A common stock and such other securities of the Company that may be substituted for such stock, pursuant to Article 14.

          (z) “Stock Appreciation Right” or “SAR” means a right granted to a Participant under Article 8 to receive a payment equal to the difference between the Fair Market Value of a share of Stock as of the date of exercise of the SAR over the grant price of the SAR, all as determined pursuant to Article 8.

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          (aa) “Subsidiary” means any corporation or other entity of which a majority of the outstanding voting stock or voting power is beneficially owned directly or indirectly by the Company.

ARTICLE 4

ADMINISTRATION

     4.1 COMMITTEE. The Plan shall be administered solely and exclusively by a Committee appointed by, and serving at the discretion of, the Board. The Committee shall consist of at least three (3) members, each of whom shall qualify as (i) a Non-Employee Director) and (ii) an “outside director” under Code Section 162(m) and the regulations issued thereunder.

     4.2 ACTION BY THE COMMITTEE. A majority of the Committee shall constitute a quorum. The acts of a majority of the members present at any meeting at which a quorum is present, and acts approved in writing by a majority of the Committee in lieu of a meeting, shall be deemed the acts of the Committee. Each member of the Committee is entitled to, in good faith, rely or act upon any report or other information furnished to that member by any officer or other employee of the Company or any Subsidiary, the Company’s independent certified public accountants, or any executive compensation consultant or other professional retained by the Company to assist in the administration of the Plan.

     4.3 AUTHORITY OF COMMITTEE. Subject to any specific designation in the Plan, the Committee has the exclusive power, authority and discretion to:

          (a) Designate Participants to receive Awards;

          (b) Determine the type or types of Awards to be granted to each Participant;

          (c) Determine the number of Awards to be granted and the number of shares of Stock to which an Award will relate;

          (d) Determine the terms and conditions of any Award granted under the Plan including but not limited to, the exercise price, grant price, or purchase price, any restrictions or limitations on the Award, any schedule for lapse of forfeiture restrictions or restrictions on the exercisability of an Award, and accelerations or waivers thereof, based in each case on such considerations as the Committee in its sole discretion determines; provided, however, that the Committee shall not have the authority to accelerate the vesting or waive the forfeiture of any Performance-Based Awards;

          (e) Amend, modify, or terminate any outstanding Award, with the Participant’s consent unless the Committee has the authority to amend, modify, or terminate an Award without the Participant’s consent under any other provision of the Plan.

          (f) Determine whether, to what extent, and under what circumstances an Award may be settled in, or the exercise price of an Award may be paid in, cash, Stock, other Awards, or other property, or an Award may be canceled, forfeited, or surrendered;

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          (g) Prescribe the form of each Award Agreement, which need not be identical for each Participant;

          (h) Decide all other matters that must be determined in connection with an Award;

          (i) Establish, adopt, or revise any rules and regulations as it may deem necessary or advisable to administer the Plan; and

          (j) Make all other decisions and determinations that may be required under the Plan or as the Committee deems necessary or advisable to administer the Plan.

     4.4 DECISIONS BINDING. The Committee’s interpretation of the Plan, any Awards granted under the Plan, any Award Agreement and all decisions and determinations by the Committee with respect to the Plan are final, binding, and conclusive on all parties.

ARTICLE 5

SHARES SUBJECT TO THE PLAN

     5.1 NUMBER OF SHARES. Subject to adjustment as provided in Section 13.1, the aggregate number of shares of Stock reserved and available for grant under the Plan shall be 19,079,228 (which number takes into account all stock splits from the Effective Date through May 15, 2007 and after the conversion of the University of Phoenix Online common stock into the Stock). Such authorized share reserve includes an increase of 5,000,000 shares authorized by the Board on May 15, 2007 and approved by the holders of the Company’s Class B common stock, the Company’s only outstanding voting stock, on May 15, 2007.

     5.2 LAPSED AWARDS. To the extent that an Award terminates, expires, or lapses for any reason, any shares of Stock subject to the Award will again be available for the grant of an Award under the Plan.

     5.3 STOCK DISTRIBUTED. Any Stock distributed pursuant to an Award may consist, in whole or in part, of authorized and unissued Stock, treasury Stock or Stock purchased on the open market.

     5.4 LIMITATION ON NUMBER OF SHARES SUBJECT TO AWARDS. Notwithstanding any provision in the Plan to the contrary, and subject to the adjustment in Section 14.1, the maximum aggregate number of shares of Stock with respect to one or more Awards that may be granted to any one Participant during the Company’s fiscal year shall be one million (1,000,000).

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ARTICLE 6

ELIGIBILITY AND PARTICIPATION

     6.1 ELIGIBILITY.

          (a) GENERAL. Persons eligible to participate in this Plan include all directors, employees, officers, and executives of, and consultants and advisors to, the Company or a Subsidiary, as determined by the Committee.

          (b) FOREIGN PARTICIPANTS. In order to assure the viability of Awards granted to Participants employed in foreign countries, the Committee may provide for such special terms as it may consider necessary or appropriate to accommodate differences in local law, tax policy, or custom. Moreover, the Committee may approve such supplements to, or amendments, restatements, or alternative versions of the Plan as it may consider necessary or appropriate for such purposes without thereby affecting the terms of the Plan as in effect for any other purpose; provided, however, that no such supplements, amendments, restatements, or alternative versions shall increase the share limitations contained in Section 5.1 of the Plan.

     6.2 ACTUAL PARTICIPATION. Subject to the provisions of the Plan, the Committee may, from time to time, select from among all eligible individuals, those to whom Awards shall be granted and shall determine the nature and amount of each Award. No individual shall have any right to be granted an Award under this Plan.

ARTICLE 7

STOCK OPTIONS

     7.1 GENERAL. The Committee is authorized to grant Options to Participants on the following terms and conditions:

          (a) EXERCISE PRICE. The exercise price per share of Stock under an Option shall be determined by the Committee and set forth in the Award Agreement; provided, however, that in no event shall the exercise price per share for any Option be less than the Fair Market Value per share of Stock on the actual grant date of that Option.

          (b) TIME AND CONDITIONS OF EXERCISE. The Committee shall determine the time or times at which an Option may be exercised in whole or in part. The Committee shall also determine the performance or other conditions, if any, that must be satisfied before all or part of an Option may be exercised. Unless otherwise provided in an Award Agreement, an Option will lapse immediately if a Participant’s employment or services are terminated for Cause.

          (c) PAYMENT. The Committee shall determine the methods by which the exercise price of an Option may be paid, the form of payment, including, without limitation, cash, promissory note, shares of Stock (through actual tender or by attestation), or other property (including broker-assisted “cashless exercise” arrangements), and the methods by which shares of Stock shall be delivered or deemed to be delivered to Participants.

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          (d) EVIDENCE OF GRANT. All Options shall be evidenced by a written Award Agreement between the Company and the Participant. The Award Agreement shall include such additional provisions as may be specified by the Committee.

     7.2 INCENTIVE STOCK OPTIONS. Incentive Stock Options shall be granted only to employees and the terms of any Incentive Stock Options granted under the Plan must comply with the following additional rules:

          (a) EXERCISE PRICE. The exercise price per share of Stock shall be set by the Committee, provided that the exercise price for any Incentive Stock Option may not be less than the Fair Market Value as of the date of the grant.

          (b) EXERCISE. In no event may any Incentive Stock Option be exercisable for more than ten years from the date of its grant.

          (c) LAPSE OF OPTION. An Incentive Stock Option shall lapse under the following circumstances.

               (1) The Incentive Stock Option shall lapse ten years from the date it is granted, unless an earlier time is set in the Award Agreement.

               (2) The Incentive Stock Option shall lapse upon termination of employment for Cause or for any other reason, other than the Participant’s death or Disability, unless otherwise provided in the Award Agreement.

               (3) If the Participant terminates employment on account of Disability or death before the Option lapses pursuant to paragraph (1) or (2) above, the Incentive Stock Option shall lapse, unless it is previously exercised, on the earlier of (i) the date on which the Option would have lapsed had the Participant not become Disabled or lived and had his employment status (i.e., whether the Participant was employed by the Company on the date of his Disability or death or had previously terminated employment) remained unchanged; or (ii) 12 months after the date of the Participant’s termination of employment on account of Disability or death. Upon the Participant’s Disability or death, any Incentive Stock Options exercisable at the Participant’s Disability or death may be exercised by the Participant’s legal representative or representatives, by the person or persons entitled to do so under the Participant’s last will and testament, or, if the Participant fails to make testamentary disposition of such Incentive Stock Option or dies intestate, by the person or persons entitled to receive the Incentive Stock Option under the applicable laws of descent and distribution.

          (d) INDIVIDUAL DOLLAR LIMITATION. The aggregate Fair Market Value (determined as of the time an Award is made) of all shares of Stock with respect to which Incentive Stock Options are first exercisable by a Participant in any calendar year may not exceed $100,000.00 or such other limitation as imposed by Section 422(d) of the Code, or any successor provision. To the extent that Incentive Stock Options are first exercisable by a Participant in excess of such limitation, the excess shall be considered Non-Qualified Stock Options.

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          (e) TEN PERCENT OWNERS. An Incentive Stock Option shall be granted to any individual who, at the date of grant, owns stock possessing more than ten percent of the total combined voting power of all classes of Stock of the Company only if such Option is granted at a price that is not less than 110% of Fair Market Value on the date of grant and the Option is exercisable for no more than five years from the date of grant.

          (f) EXPIRATION OF INCENTIVE STOCK OPTIONS. No Award of an Incentive Stock Option may be made pursuant to this Plan after the tenth anniversary of the Effective Date.

          (g) RIGHT TO EXERCISE. During a Participant’s lifetime, an Incentive Stock Option may be exercised only by the Participant.

ARTICLE 8

STOCK APPRECIATION RIGHTS

     8.1 GRANT OF SARS. The Committee is authorized to grant SARs to Participants on the following terms and conditions:

          (a) RIGHT TO PAYMENT. Upon the exercise of a Stock Appreciation Right, the Participant to whom it is granted has the right to receive the excess, if any, of:

               (1) The Fair Market Value of a share of Stock on the date of exercise; over

               (2) The exercise price per share of the Stock Appreciation Right as determined by the Committee, which shall in no event be less than the Fair Market Value per share of Stock on the actual grant date of that Stock Appreciation Right.

          (b) OTHER TERMS. All awards of Stock Appreciation Rights shall be evidenced by an Award Agreement. The terms, methods of exercise, methods of settlement, form of consideration payable in settlement, and any other terms and conditions of any Stock Appreciation Right shall be determined by the Committee at the time of the grant of the Award and shall be reflected in the Award Agreement.

ARTICLE 9

PERFORMANCE SHARES

     9.1 GRANT OF PERFORMANCE SHARES. The Committee is authorized to grant Performance Shares to Participants on such terms and conditions as may be selected by the Committee. The Committee shall have the complete discretion to determine the number of Performance Shares granted to each Participant. All Awards of Performance Shares shall be evidenced by an Award Agreement.

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     9.2 RIGHT TO PAYMENT. A grant of Performance Shares gives the Participant rights, valued as determined by the Committee, and payable to, or exercisable by, the Participant to whom the Performance Shares are granted, in whole or in part, as the Committee shall establish at grant or thereafter. The Committee shall set performance goals and other terms or conditions to payment of the Performance Shares in its discretion which, depending on the extent to which they are met, will determine the number and value of Performance Shares that will be paid to the Participant.

     9.3 OTHER TERMS. Performance Shares may be payable in cash, Stock, or other property, and have such other terms and conditions as determined by the Committee and reflected in the Award Agreement.

ARTICLE 10

RESTRICTED STOCK AWARDS

     10.1 GRANT OF RESTRICTED STOCK. The Committee is authorized to make Awards of Restricted Stock to Participants in such amounts and subject to such terms and conditions as determined by the Committee. All Awards of Restricted Stock shall be evidenced by a Restricted Stock Award Agreement.

     10.2 ISSUANCE AND RESTRICTIONS. Restricted Stock shall be subject to such restrictions on transferability and other restrictions as the Committee may impose (including, without limitation, limitations on the right to vote Restricted Stock or the right to receive dividends on the Restricted Stock). These restrictions may lapse separately or in combination at such times, under such circumstances, in such installments, or otherwise, as the Committee determines at the time of the grant of the Award or thereafter.

     10.3 FORFEITURE. Except as otherwise determined by the Committee at the time of the grant of the Award or thereafter, upon termination of employment during the applicable restriction period, Restricted Stock that is at that time subject to restrictions shall be forfeited, provided, however, that the Committee may provide in any Restricted Stock Award Agreement that restrictions or forfeiture conditions relating to Restricted Stock will be waived in whole or in part in the event of terminations resulting from specified causes, and the Committee may in other cases waive in whole or in part restrictions or forfeiture conditions relating to Restricted Stock.

     10.4 CERTIFICATES FOR RESTRICTED STOCK. Restricted Stock granted under the Plan may be evidenced in such manner as the Committee shall determine, if certificates representing shares of Restricted Stock are registered in the name of the Participant, certificates must bear an appropriate legend referring to the terms, conditions, and restrictions applicable to such Restricted Stock, and the Company may, at its discretion, retain physical possession of the certificate until such time as all applicable restrictions lapse.

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ARTICLE 11

RESTRICTED STOCK UNIT AWARDS

     11.1 GRANT OF RESTRICTED STOCK UNIT AWARDS. The Committee is authorized to grant Restricted Stock Unit Awards to Participants on such terms and conditions as may be selected by the Committee. The Committee shall have the complete discretion to determine the number of restricted stock units subject to each such Award. All Restricted Stock Unit Awards shall be evidenced by an Award Agreement.

     11.2 VESTING AND ISSUANCE PROVISIONS.

          (a) Shares of Stock issued pursuant to Restricted Stock Unit Awards may, in the discretion of the Committee, entitle the Participants to receive the shares of Stock underlying those Awards upon the attainment of designated performance objectives (which may, but need not, include one or more Performance Goals) or the satisfaction of specified employment or service requirements or upon the expiration of a designated time period or the occurrence of a designated event following the vesting of the Award , including (without limitation) a deferred distribution date following the termination of the Participant’s employment or service. The vesting and issuance provisions applicable to each Restricted Stock Unit Award shall be set forth in the Award Agreement.

          (b) The Committee shall also have the discretionary authority, consistent with Code Section 162(m), to structure one or more Restricted Stock Unit Awards so that the shares of Common Stock subject to those Awards shall vest upon the achievement of pre-established corporate performance objectives based on one or more Performance Goals and measured over the performance period specified by the Committee at the time of the Award.

          (c) The Participant shall not have any stockholder rights with respect to the shares of Stock subject to a Restricted Stock Unit Award until that Award vests and the shares of Stock are actually issued thereunder. However, dividend-equivalent units may be paid or credited, either in cash or in actual or phantom shares of Stock, on outstanding Restricted Stock Unit Awards, subject to such terms and conditions as the Committee may deem appropriate.

          (d) Outstanding Restricted Stock Unit Awards shall automatically terminate, and no shares of Stock shall actually be issued in satisfaction of those Awards, if the performance goals or employment or service requirements established for those Awards are not attained or satisfied. The Committee, however, shall have the discretionary authority to issue vested shares of Common Stock under one or more outstanding Restricted Stock Unit Awards as to which the designated performance goals or employment or service requirements have not been attained or satisfied. However, no vesting requirements tied to the attainment of Performance Goals may be waived with respect to Awards which were intended, at the time those Awards were made, to qualify as performance-based compensation under Code Section 162(m), except as otherwise provided in Section 11.2(e) or Section 13.8.

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          (e) Each Restricted Stock Unit Award outstanding at the time of a Change in Control shall vest at that time, and the shares of Stock subject to those restricted stock units shall be issued as soon as administratively practicable following the closing of the Change in Control transaction, subject to the Company’s collection of all applicable withholding taxes, or shall otherwise be converted into the right to receive the same consideration per share of Stock payable to the actual holders of the Stock in consummation of the Changer in Control and distributed at the same time as those stockholder payments. Such automatic vesting of the Restricted Stock Unit Awards shall occur pursuant to this Section 11.(e), even though such acceleration may result in their loss of performance-based status under Code Section 162(m).

ARTICLE 12

PERFORMANCE-BASED AWARDS

     12.1 PURPOSE. The purpose of this Article 12 is to provide the Committee the ability to qualify the Performance Share Awards under Article 9, the Restricted Stock Awards under Article 10 and the Restricted Stock Unit Awards under Article 11 as “performance-based compensation” under Section 162(m) of the Code. If the Committee, in its discretion, decides to grant a Performance-Based Award to a Covered Employee, the provisions of this Article 12 shall control over any contrary provision contained in Articles 9, 10 or 11.

     12.2 APPLICABILITY. This Article 12 shall apply only to those Covered Employees selected by the Committee to receive Performance-Based Awards. The Committee may, in its discretion, grant Restricted Stock Awards, Performance Share Awards or Restricted Stock Unit Awards to Covered Employees that do not satisfy the requirements of this Article 12. The designation of a Covered Employee as a Participant for a Performance Period shall not in any manner entitle the Participant to receive an Award for the period. Moreover, designation of a Covered Employee as a Participant for a particular Performance Period shall not require designation of such Covered Employee as a Participant in any subsequent Performance Period and designation of one Covered Employee as a Participant shall not require designation of any other Covered Employees as a Participant in such period or in any other period.

     12.3 DISCRETION OF COMMITTEE WITH RESPECT TO PERFORMANCE AWARDS. With regard to a particular Performance Period, the Committee shall have full discretion to select the length of such Performance Period, the type of Performance-Based Awards to be issued, the kind and/or level of the Performance Goal, and whether the Performance Goal is to apply to the Company, a Subsidiary or any division or business unit thereof.

     12.4 PAYMENT OF PERFORMANCE AWARDS. Unless otherwise provided in the relevant Award Agreement, a Participant must be employed by the Company or a Subsidiary on the last day of the Performance Period to be eligible for a Performance Award for such Performance Period. Furthermore, a Participant shall be eligible to receive payment under a Performance-Based Award for a Performance Period only if the Performance Goals for such

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period are achieved. In determining the actual size of an individual Performance-Based Award, the Committee may reduce or eliminate the amount of the Performance-Based Award earned for the Performance Period, if in its sole and absolute discretion, such reduction or elimination is appropriate.

     12.5 MAXIMUM AWARD PAYABLE. The aggregate maximum Performance-Based Award payable to any one Participant under the Plan for Performance Period is one million (1,000,000) shares of Stock. In the event the Performance-Based Award is paid in cash, such maximum Performance-Based Award shall be determined by multiplying one million (1,000,000) by the Fair Market Value of one share of the applicable Stock as of the date of grant of the Performance-Based Award.

ARTICLE 13

PROVISIONS APPLICABLE TO AWARDS

     13.1 STAND-ALONE AND TANDEM AWARDS. Awards granted under the Plan may, in the discretion of the Committee, be granted either alone, in addition to, or in tandem with, any other Award granted under the Plan. Awards granted in addition to or in tandem with other Awards may be granted either at the same time as or at a different time from the grant of such other Awards.

     13.2 EXCHANGE PROVISIONS. The Committee may at any time offer to exchange or buy out any previously granted Award for a payment in cash, Stock, or another Award, based on the terms and conditions the Committee determines and communicates to the Participant at the time the offer is made.

     13.3 TERM OF AWARD. The term of each Award shall be for the period as determined by the Committee, provided that in no event shall the term of any Incentive Stock Option or a Stock Appreciation Right granted in tandem with the Incentive Stock Option exceed a period of ten years from the date of its grant.

     13.4 FORM OF PAYMENT FOR AWARDS. Subject to the terms of the Plan and any applicable law or Award Agreement, payments or transfers to be made by the Company or a Subsidiary on the grant or exercise of an Award may be made in such forms as the Committee determines at or after the time of grant, including without limitation, cash, promissory note, Stock, other Awards, or other property, or any combination, and may be made in a single payment or transfer, in installments, or on a deferred basis, in each case determined in accordance with rules adopted by and at the discretion of, the Committee

     13.5 LIMITS ON TRANSFER. No right or interest of a Participant in any Award may be pledged, encumbered, or hypothecated to or in favor of any party other than the Company or a Subsidiary, or shall be subject to any lien, obligation, or liability of such Participant to any other party other than the Company or a Subsidiary. Except as otherwise provided by the Committee, no Award shall be assignable or transferable by a Participant other than by will or the laws of descent and distribution.

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     13.6 BENEFICIARIES. Notwithstanding Section 13.5, a Participant may, in the manner determined by the Committee, designate a beneficiary to exercise the rights of the Participant and to receive any distribution with respect to any Award upon the Participant’s death. A beneficiary, legal guardian, legal representative, or other person claiming any rights under the Plan is subject to all terms and conditions of the Plan and any Award Agreement applicable to the Participant, except to the extent the Plan and Award Agreement otherwise provide, and to any additional restrictions deemed necessary or appropriate by the Committee. If the Participant is married, a designation of a person other than the Participant’s spouse as his beneficiary with respect to more than 50% of the Participant’s interest in the Award shall not be effective without the written consent of the Participant’s spouse. If no beneficiary has been designated or survives the Participant, payment shall be made to the person entitled thereto under the Participant’s will or the laws of descent and distribution. Subject to the foregoing, a beneficiary designation may be changed or revoked by a Participant at any time provided the change or revocation is filed with the Committee.

     13.7 STOCK CERTIFICATES. All Stock certificates delivered under the Plan are subject to any stop-transfer orders and other restrictions as the Committee deems necessary or advisable to comply with Federal or state securities laws, rules and regulations and the rules of any national securities exchange or automated quotation system on with the Stock is listed, quoted, or traded. The Committee may place legends on any Stock certificate to reference restrictions applicable to the Stock.

     13.8 ACCELERATION UPON A CHANGE OF CONTROL. If a Change of Control occurs, all outstanding Options, Stock Appreciation Rights, and other Awards that relate to the grant of Stock shall become fully exercisable and all restrictions on such outstanding Awards shall lapse. Shares subject to outstanding Restricted Stock Unit Awards or Performance Share Awards shall vest and become immediately issuable at the closing of such Change in Control (or shall otherwise be converted into the right to receive the same consideration per share of Stock payable to the actual holders of the Stock in consummation of the Changer in Control and distributed at the same time as those stockholder payments). To the extent that this provision causes Incentive Stock Options to exceed the dollar limitation set forth in Section 7.2(d), the excess Options shall be deemed to be Non-Qualified Stock Options. Upon, or in anticipation of, such an event, the Committee may cause every Award outstanding hereunder to terminate at a specific time in the future and shall give each Participant the right to exercise such Awards during a period of time as the Committee, in its sole and absolute discretion, shall determine.

ARTICLE 14

CHANGES IN CAPITAL STRUCTURE

     14.1 GENERAL. In the event stock dividend is declared upon the Stock, the number of shares of Stock then subject to each Award shall be increased proportionately, and the exercise price or issue price per share (if any) in effect for that Award shall also be equitably adjusted to reflect such stock dividend: provided, however, that that the aggregate exercise price or issue price shall remain the same. Should any change be made to the outstanding Stock by reason of any stock split or split-up, recapitalization, combination of shares, exchange of shares, spin-off transaction, extraordinary dividend or distribution or other change affecting the

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outstanding Stock as a class effected without the Company’s receipt of consideration, or should there occur any merger, consolidation or other reorganization, then equitable adjustments shall be made by the Committee to the number and/or class of securities subject to each Award and the exercise price or issue per share (if any) in effect for that Award in such manner as the Committee deems appropriate to preclude the dilution or enlargement of rights under such Award, and such adjustments shall be final, binding and conclusive; provided, however, that in the event of a Change of Control, the adjustments (if any) shall be made solely in accordance with the applicable provisions of Section 13.8 the Plan governing Change of Control transactions. Notwithstanding the above, the conversion of any convertible securities of the Company shall not be deemed to have been “effected without the Company’s receipt of consideration.

ARTICLE 15

AMENDMENT, MODIFICATION, AND TERMINATION

     15.1 AMENDMENT, MODIFICATION, AND TERMINATION. With the approval of the Board, at any time and from time to time, the Committee may terminate, amend or modify the Plan; provided, however, that to the extent necessary and desirable to comply with any applicable law, regulation, or stock exchange rule, the Company shall obtain shareholder approval of any Plan amendment in such a manner and to such a degree as required.

     15.2 AWARDS PREVIOUSLY GRANTED. No termination, amendment, or modification of the Plan shall adversely affect in any material way any Award previously granted under the Plan, without the written consent of the Participant.

ARTICLE 16

GENERAL PROVISIONS

     16.1 NO RIGHTS TO AWARDS. No Participant, employee, or other person shall have any claim to be granted any Award under the Plan, and neither the Company nor the Committee is obligated to treat Participants, employees, and other persons uniformly.

     16.2 NO SHAREHOLDER RIGHTS. No Award gives the Participant any of the rights of a shareholder of the Company unless and until shares of Stock are in fact issued to such person in connection with such Award.

     16.3 WITHHOLDING. The Company or any Subsidiary shall have the authority and the right to deduct or withhold, or require a Participant to remit to the Company, an amount sufficient to satisfy Federal, state, and local taxes (including the Participant’s FICA obligation) required by law to be withheld with respect to any taxable event arising as a result of this Plan. With the Committee’s consent, a Participant may elect to have the Company withhold from the Stock that would otherwise be received upon the exercise of any Option or Stock Appreciation Right or the issuance of Stock pursuant to any vested Restricted Stock Unit Award, a number of shares of Stock having a Fair Market Value equal to the minimum statutory amount necessary to

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satisfy the Participant’s applicable federal, state, local and foreign income and employment tax withholding obligations with respect to such exercise or issuance.

     16.4 NO RIGHT TO EMPLOYMENT OR SERVICES. Nothing in the Plan or any Award Agreement shall interfere with or limit in any way the right of the Company or any Subsidiary to terminate any Participant’s employment or services at any time, nor confer upon any Participant any right to continue in the employ of the Company or any Subsidiary.

     16.5 UNFUNDED STATUS OF AWARDS. The Plan is intended to be an “unfunded” plan for incentive compensation. With respect to any payments not yet made to a Participant pursuant to an Award, nothing contained in the Plan or any Award Agreement shall give the Participant any rights that are greater than those of a general creditor of the Company or any Subsidiary.

     16.6 INDEMNIFICATION. To the extent allowable under applicable law, each member of the Committee or of the Board shall be indemnified and held harmless by the Company from any loss, cost, liability, or expense that may be imposed upon or reasonably incurred by such member in connection with or resulting from any claim, action, suit, or proceeding to which he or she may be a party or in which he or she may be involved by reason of any action or failure to act under the Plan and against and from any and all amounts paid by him or her in satisfaction of judgment in such action, suit, or proceeding against him or her provided he or she gives the Company an opportunity, at its own expense, to handle and defend the same before he or she undertakes to handle and defend it on his or her own behalf. The foregoing right of indemnification shall not be exclusive of any other rights of indemnification to which such persons may be entitled under the Company’s Articles of Incorporation or Bylaws, as a matter of law, or otherwise, or any power that the Company may have to indemnify them or hold them harmless.

     16.7 RELATIONSHIP TO OTHER BENEFITS. No payment under the Plan shall be taken into account in determining any benefits under any pension, retirement, savings, profit sharing, group insurance, welfare or other benefit plan of the Company or any Subsidiary.

     16.8 EXPENSES. The expenses of administering the Plan shall be borne by the Company and its Subsidiaries.

     16.9 TITLES AND HEADINGS. The titles and headings of the Sections in the Plan are for convenience of reference only, and in the event of any conflict, the text of the Plan, rather than such titles or headings, shall control.

     16.10 FRACTIONAL SHARES. No fractional shares of stock shall be issued and the Committee shall determine, in its discretion, whether cash shall be given in lieu of fractional shares or whether such fractional shares shall be eliminated by rounding up or down as appropriate.

     16.11 SECURITIES LAW COMPLIANCE. With respect to any person who is, on the relevant date, obligated to file reports under Section 16 of the Exchange Act, transactions under this Plan are intended to comply with all applicable conditions of Rule 16b-3 or its successors under the Exchange Act. To the extent any provision of the Plan or action by the Committee

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fails to so comply, it shall be void to the extent permitted by law and voidable as deemed advisable by the Committee.

     16.12 GOVERNMENT AND OTHER REGULATIONS. The obligation of the Company to make payment of awards in Stock or otherwise shall be subject to all applicable laws, rules, and regulations, and to such approvals by government agencies as may be required. The Company shall be under no obligation to register under the Securities Act of 1933, as amended, any of the shares of Stock paid under the Plan. If the shares paid under the Plan may in certain circumstances be exempt from registration under the Securities Act of 1933, as amended, the Company may restrict the transfer of such shares in such manner as it deems advisable to ensure the availability of any such exemption.

     16.13 GOVERNING LAW. The Plan and all Award Agreements shall be construed in accordance with and governed by the laws of the State of Arizona.

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