SEC FORM 3

SEC Form 3

FORM 3

UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

INITIAL STATEMENT OF BENEFICIAL OWNERSHIP OF SECURITIES

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934
or Section 30(h) of the Investment Company Act of 1940

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1. Name and Address of Reporting Person^*

SHANK STEPHEN G

(Last)

(First)

(Middle)

225 SOUTH 6TH STREET, 9TH FLOOR

(Street)

MINNEAPOLIS

55402

(City)

(State)

(Zip)

2. Date of Event Requiring Statement (Month/Day/Year)
11/09/2006

3. Issuer Name and Ticker or Trading Symbol
CAPELLA EDUCATION CO [ CPLA ]

4. Relationship of Reporting Person(s) to Issuer
(Check all applicable)

X	Director	10% Owner
X	Officer (give title below)	Other (specify below)
	Chairman & CEO

5. If Amendment, Date of Original Filed (Month/Day/Year)

6. Individual or Joint/Group Filing (Check Applicable Line)

X	Form filed by One Reporting Person
	Form filed by More than One Reporting Person

Table I - Non-Derivative Securities Beneficially Owned
1. Title of Security (Instr. 4)	2. Amount of Securities Beneficially Owned (Instr. 4)	3. Ownership Form: Direct (D) or Indirect (I) (Instr. 5)	4. Nature of Indirect Beneficial Ownership (Instr. 5)
Common Stock	635,892	D
Common Stock	75,202	I	By Trust⁽¹⁾
Common Stock	39,798	I	By Spouse⁽²⁾
Common Stock	75,202	I	By Spouse's Trust⁽³⁾
Common Stock	3,028	I	By ESOP

Table II - Derivative Securities Beneficially Owned (e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security (Instr. 4)	2. Date Exercisable and Expiration Date (Month/Day/Year)		3. Title and Amount of Securities Underlying Derivative Security (Instr. 4)		4. Conversion or Exercise Price of Derivative Security	5. Ownership Form: Direct (D) or Indirect (I) (Instr. 5)	6. Nature of Indirect Beneficial Ownership (Instr. 5)
1. Title of Derivative Security (Instr. 4)	Date Exercisable	Expiration Date	Title	Amount or Number of Shares	4. Conversion or Exercise Price of Derivative Security	5. Ownership Form: Direct (D) or Indirect (I) (Instr. 5)	6. Nature of Indirect Beneficial Ownership (Instr. 5)
Stock Option (right to buy)	⁽⁴⁾	10/23/2010	Common Stock	4,746	$14.25	D
Stock Option (right to buy)	⁽⁴⁾	10/23/2010	Common Stock	28,070	$14.25	D
Stock Option (right to buy)	⁽⁴⁾	07/25/2011	Common Stock	33,254	$14.25	D
Stock Option (right to buy)	⁽⁴⁾	08/26/2012	Common Stock	25,592	$11.71	D
Stock Option (right to buy)	⁽⁴⁾	08/25/2012	Common Stock	17,078	$11.71	D
Stock Option (right to buy)	⁽⁵⁾	10/22/2008	Common Stock	33,556	$13.11	D
Stock Option (right to buy)	⁽⁶⁾	10/22/2013	Common Stock	10,103	$11.92	D
Stock Option (right to buy)	⁽⁷⁾	07/28/2014	Common Stock	19,973	$17.72	D
Stock Option (right to buy)	⁽⁸⁾	07/28/2009	Common Stock	5,643	$19.49	D
Stock Option (right to buy)	⁽⁹⁾	08/12/2015	Common Stock	26,971	$20	D
Stock Option (right to buy)	⁽¹⁰⁾	08/01/2013	Common Stock	29,461	$20	D
Class A Preferred Stock	⁽¹¹⁾	⁽¹¹⁾	Common Stock	1,290,000	⁽¹¹⁾	D
Class B Preferred Stock	⁽¹²⁾	⁽¹²⁾	Common Stock	90,188	⁽¹²⁾	D
Class B Preferred Stock	⁽¹²⁾	⁽¹²⁾	Common Stock	85,397	⁽¹²⁾	I	By Spouse

Explanation of Responses:

1. These shares are directly owned by the Stephen G. Shank 2004 Grantor Retained Annuity Trust, the trustee of which is Mary Shank Retzlaff, the reporting person's daughter.

2. These shares are owned by Judith F. Shank, the reporting person's spouse.

3. These shares are owned by the Judith F. Shank 2004 Grantor Retained Annuity Trust, the trustee of which is Susan Shank, the reporting person's daughter.

4. Immediately.

5. The option vests as to 25% of the shares annually beginning on October 23, 2004.

6. The option vests as to 25% of the shares annually beginning on October 23, 2004.

7. The option vests as to 6,404 of the shares annually for three years beginning on July 28, 2005 with the remaining 761 shares to vest on July 28, 2008.

8. The option vests 100% on July 28, 2008.

9. The option vests as to 9,008 shares on August 12, 2006; 8,981 shares vest on August 12, 2007 and the remaining 8,982 shares vest on August 12, 2008.

10. The option becomes exercisable as to 14,731 shares on August 2, 2007 and becomes exercisable as to the remaining 14,7300 shares on August 2, 2008.

11. The Class A Preferred Stock is immediately convertible into Company common stock on a one-for-one basis and has no expiration date. The Class A Preferred Stock of the Company shall automatically convert into common stock of the Company upon the closing of the Company's initial public offering.

12. The Class B Preferred Stock is immediately convertible into Company common stock on a one-for-one basis and has no expiration date. The Class B Preferred Stock of the Company shall automatically convert into common stock of the Company upon the closing of the Company's initial public offering.

Remarks:

	Michael K. Coddington, Attorney-in-Fact for Stephen G. Shank	11/08/2006
	** Signature of Reporting Person	Date
Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
* If the form is filed by more than one reporting person, see Instruction 5 (b)(v).
** Intentional misstatements or omissions of facts constitute Federal Criminal Violations See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
Note: File three copies of this Form, one of which must be manually signed. If space is insufficient, see Instruction 6 for procedure.
Persons who respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB Number.