Exhibit 10.3

 

STOCK OPTION AGREEMENT

 

THIS AGREEMENT (the “Agreement”), dated as of January 31, 2017 (the “Grant
Date”), is made by and between Laureate Education, Inc., a Delaware public
benefit corporation (hereinafter referred to as “Laureate”), and the individual
whose name is set forth on the signature page hereof, who is an Eligible
Individual, hereinafter referred to as the “Optionee”.  Any capitalized terms
herein not otherwise defined in Article I shall have the meaning set forth in
the Laureate Education, Inc. 2013 Long-Term Incentive Plan, as it may be amended
from time to time (the “Plan”).

 

WHEREAS, Laureate wishes to carry out the Plan, the terms of which are hereby
incorporated by reference and made a part of this Agreement;

 

WHEREAS, the Administrator has determined that it would be to the advantage and
best interest of Laureate and its shareholders to grant the Option provided for
herein to the Optionee as an incentive for increased efforts during the
Optionee’s service relationship with the Company, and has advised Laureate
thereof and instructed the undersigned officers to issue said Option; and

 

WHEREAS, the Administrator now finds it desirable and in the best interest of
Laureate to satisfy all obligations to grant stock options to the Optionee
pursuant to the letter agreement dated January 30, 2017, by and between the
Optionee and Wengen Alberta, Limited Partnership (the “Letter Agreement”).

 

NOW, THEREFORE, in consideration of the mutual covenants herein contained and
other good and valuable consideration, receipt of which is hereby acknowledged,
the parties hereto do hereby agree as follows:

 

ARTICLE I

DEFINITIONS

 

Whenever the following terms are used in this Agreement, they shall have the
meaning specified below unless the context clearly indicates to the contrary.

 

Section 1.1.   Company

 

“Company” shall mean Laureate and its Subsidiaries.

 

Section 1.2.   Eligible Individual

 

“Eligible Individual” shall mean an officer or employee of, and other
individual, including a non-employee director, who is a natural person providing
bona fide services to or for, Laureate or any of its Subsidiaries, provided that
such services are not in connection with the offer or sale of securities in a
capital-raising transaction and do not directly or indirectly promote or
maintain a market for Laureate’s securities.

 

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Section 1.3.   Option

 

“Option” shall mean the option granted under Section 2.1 of this Agreement.

 

Section 1.4.   Secretary

 

“Secretary” shall mean the Secretary of Laureate.

 

Section 1.5.   Share

 

“Share” shall mean a share of Class B common stock, par value $0.004 per share,
of Laureate.

 

ARTICLE II

GRANT OF OPTION

 

Section 2.1.   Grant of Option

 

For good and valuable consideration, on and as of the Grant Date, Laureate
grants to the Optionee an Option to purchase the number of Shares set forth on
the signature page hereof, on the terms and conditions set forth in this
Agreement.

 

Section 2.2.   Exercise Price

 

Subject to Section 2.5, the exercise price per Share covered by the Option (the
“Exercise Price”) shall be as set forth on the signature page hereof.

 

Section 2.3.   No Guarantee of Employment or Service Relationship

 

Nothing in this Agreement or in the Plan shall confer upon the Optionee any
right to continue in the employ or service of the Company or shall interfere
with or restrict in any way the rights of the Company, which are hereby
expressly reserved, to terminate the employment or service of the Optionee at
any time for any reason whatsoever, with or without cause or notice, subject to
the applicable provisions of, if any, the Optionee’s employment or service
agreement with or offer letter provided by the Company to the Optionee and
subject to applicable law.  Nothing in this Agreement or in the Plan shall serve
as a limitation of the right of the Company to discharge the Optionee at any
time with or without cause or notice, subject to applicable law.

 

Section 2.4.   Nonqualified Nature of the Option

 

The Option is not intended to qualify as an incentive stock option within the
meaning of Code section 422, and this Agreement shall be so construed.

 

Section 2.5.   Adjustments to Option

 

The Option shall be subject to the adjustment provisions of Sections 10, 11 and
12 of the Plan.

 

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ARTICLE III

PERIOD OF EXERCISABILITY

 

Section 3.1.   Commencement of Exercisability

 

The Option shall be fully vested and exercisable upon the closing of the initial
public offering of shares of Laureate’s Class A common stock, par value $0.004
per share, (the “Closing”) that is effected pursuant to a Registration Statement
on Form S-1 (File No. 333-207243) that was filed with, and has been declared
effective by, the Securities and Exchange Commission under the Securities Act of
1933, as amended (the “Act”), provided that the Optionee remains an Eligible
Individual from the Grant Date through such Closing.  The Option shall be
entirely unvested and unexercisable before the Closing.

 

Section 3.2.   Expiration of Option

 

The Option will expire and be of no further effect on the thirtieth (30th) day
after the Grant Date (the “IPO Deadline”) if the Closing does not occur on or
before the IPO Deadline, and no consideration shall be paid in connection with
such expiration.  If the Option remains in effect after the IPO Deadline, the
Option will expire on the Expiration Date of the Option set forth on the
signature page hereof, and the Optionee may not exercise any portion of the
Option after such Expiration Date.  The Administrator may terminate the Option
earlier in its discretion under Section 11 of the Plan.

 

ARTICLE IV

EXERCISE OF OPTION

 

Section 4.1.   Person Eligible to Exercise

 

During the lifetime of the Optionee, only the Optionee (or his or her duly
authorized legal representative) may exercise the Option or any portion
thereof.  After the death of the Optionee, any exercisable portion of the Option
may, prior to the time when the Option becomes unexercisable under Section 3.2,
be exercised by his personal representative or by any person empowered to do so
under the Optionee’s last will and testament or under the then applicable laws
of descent and distribution.  Notwithstanding the foregoing, any exercisable
portion of the Option may be exercised by a permitted transferee of the Optionee
under Section 5.2 hereof and Section 9(b) of the Plan.

 

Section 4.2.   Partial Exercise

 

Any exercisable portion of the Option or the entire Option, if then wholly
exercisable, may be exercised in whole or in part at any time prior to the time
when the Option or portion thereof becomes unexercisable under Section 3.2;
provided, however, that any partial exercise shall be for whole Shares only.

 

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Section 4.3.   Manner of Exercise

 

The Option, or any exercisable portion thereof, may be exercised solely by
delivering to the Secretary all of the following prior to the time when the
Option or such portion becomes unexercisable under Section 3.2:

 

(a)                            Notice in writing signed by the Optionee or the
other person then entitled to exercise the Option or portion thereof, stating
that the Option or portion thereof is thereby exercised, such notice complying
with all applicable rules established by the Administrator;

 

(b)                            (i) Full payment (in cash, by check or by a
combination thereof) for the Shares with respect to which such Option or portion
thereof is exercised, (ii) to the extent permitted by the Administrator in a
manner that is compliant with the terms of the Plan, indication that the
Optionee elects to have the number of Shares that would otherwise be issued to
the Optionee reduced by a number of Shares having an equivalent Fair Market
Value to the payment that would otherwise be made by the Optionee to Laureate
pursuant to clause (i) of this subsection (b), or (iii) a broker-assisted
cashless exercise through a brokerage firm designated or approved by the
Administrator;

 

(c)                             (i) Full payment (in cash, by check or by a
combination thereof) to satisfy the withholding tax obligation with respect to
which such Option or portion thereof is exercised or (ii) to the extent
permitted by the Administrator in a manner that is compliant with the terms of
the Plan, indication that the Optionee elects to have the number of Shares that
would otherwise be issued to the Optionee upon exercise of such Option (or
portion thereof) reduced by a number of Shares having an aggregate Fair Market
Value, on the date of such exercise, equal to the payment to satisfy the minimum
withholding tax obligation that would otherwise be required to be made by the
Optionee to Laureate pursuant to clause (i) of this subsection (c);

 

(d)                            A bona fide written representation and agreement,
in a form satisfactory to the Administrator, signed by the Optionee or other
person then entitled to exercise such Option or portion thereof, stating that
the Shares are being acquired for his or her own account, for investment and
without any present intention of distributing or reselling said shares or any of
them except as may be permitted under the Act, and then applicable rules and
regulations thereunder, and that the Optionee or other person then entitled to
exercise such Option or portion thereof will indemnify the Company against and
hold it free and harmless from any loss, damage, expense or liability resulting
to the Company if any sale or distribution of the Shares by such person is
contrary to the representation and agreement referred to above; provided,
however, that the Administrator may, in its reasonable discretion, take whatever
additional actions it deems reasonably necessary to ensure the observance and
performance of such representation and agreement and to effect compliance with
the Act and any other federal or state securities laws or regulations; and

 

(e)                             In the event the Option or portion thereof shall
be exercised pursuant to Section 4.1 by any person or persons other than the
Optionee, appropriate proof of the right of such person or persons to exercise
the Option.

 

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Without limiting the generality of the foregoing, the Administrator may require
an opinion of counsel acceptable to it to the effect that any subsequent
transfer of Shares acquired on exercise of the Option does not violate the Act,
and may issue stop-transfer orders covering such Shares.  The written
representation and agreement referred to in subsection (d) above shall, however,
not be required if the Shares to be issued pursuant to such exercise have been
registered under the Act, and such registration is then effective in respect of
such Shares.

 

(f)                              At the time the Option is exercised, in whole
or in part, or at any time thereafter as requested by the Company, the Optionee
hereby authorizes withholding from payroll or any other payment of any kind due
to the Optionee and otherwise agrees to make adequate provision for foreign
(non-US), federal, state and local taxes required by law to be withheld, if any,
which arise in connection with the Option.  The Company may require the Optionee
to make a cash payment to cover any withholding tax obligation as a condition of
exercise of the Option or issuance of Shares upon exercise.

 

Section 4.4.   Conditions to Issuance of Stock Certificates

 

The Shares deliverable upon the exercise of the Option, or any portion thereof,
may be either previously authorized but unissued Shares or issued Shares, which
have then been reacquired by Laureate.  Such Shares shall be fully paid and
nonassessable.  In its discretion, Laureate may deliver share certificates or
may retain such Shares in uncertificated book-entry form.  Laureate shall not be
required to issue Shares or deliver any certificate or certificates for shares
of stock purchased upon the exercise of an Option or portion thereof prior to
fulfillment of all of the following conditions:

 

(a)                            The obtaining of approval or other clearance from
any state or federal governmental agency which the Administrator shall, in its
reasonable and good faith discretion, determine to be necessary or advisable;
and

 

(b)                            The lapse of such reasonable period of time
following the exercise of the Option as the Administrator may from time to time
establish for reasons of administrative convenience or as may otherwise be
required by applicable law.

 

Section 4.5.   Rights as Stockholder

 

The holder of an Option shall not be, nor have any of the rights or privileges
of, a stockholder of Laureate in respect of any Shares purchasable upon the
exercise of the Option or any portion thereof unless and until certificates
representing such Shares shall have been issued by Laureate to such holder upon
satisfaction of the conditions set forth in Section 4.4 or unless book entry
representing such Shares has been made and such Shares have been deposited with
the appropriate registered book-entry custodian.  Upon fulfillment of such
conditions, Laureate shall be required to issue and deliver such certificate or
certificates, unless book entry representing such Shares has been made and such
Shares have been deposited with the appropriate registered book-entry
custodian.  The Optionee hereby authorizes Laureate, in its sole discretion, to
deposit for the benefit of the Optionee with any broker with which the Optionee
has an account relationship of which Laureate has notice any or all Shares
acquired by the Optionee pursuant to the exercise of the Option.

 

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ARTICLE V

MISCELLANEOUS

 

Section 5.1.   Administration

 

The Administrator shall have the power to interpret the Plan and this Agreement
and to adopt such rules for the administration, interpretation and application
of the Plan as are consistent therewith and to interpret or revoke any such
rules.  All actions taken and all interpretations and determinations made by the
Administrator shall be final and binding upon the Optionee, the Company and all
other interested persons.  No member of the Administrator shall be personally
liable for any action, determination or interpretation made in good faith with
respect to the Plan or the Option.  In its absolute discretion, the Board may at
any time and from time to time exercise any and all rights and duties of the
Administrator under the Plan and this Agreement.

 

Section 5.2.   Option Not Transferable

 

Neither the Option nor any interest or right therein or part thereof shall be
liable for the debts, contracts or engagements of the Optionee or his successors
in interest or shall be subject to disposition by transfer, alienation,
anticipation, pledge, encumbrance, assignment or any other means whether such
disposition be voluntary or involuntary or by operation of law by judgment,
levy, attachment, garnishment or any other legal or equitable proceedings
(including bankruptcy), and any attempted disposition thereof shall be null and
void and of no effect; provided, however, that this Section 5.2 shall not
prevent transfers by will or by the applicable laws of descent and distribution
or transfers for estate planning purposes pursuant to Section 9(b) of the Plan.

 

Section 5.3.   Notices

 

Any notice to be given under the terms of this Agreement to Laureate shall be
addressed to Laureate in care of its Secretary, and any notice to be given to
the Optionee shall be addressed to the Secretary at the physical or electronic
address given beneath the Secretary’s signature hereto.  By a notice given
pursuant to this Section 5.3, either party may hereafter designate a different
address for notices to be given to it.  Any notice, which is required to be
given to the Optionee, shall, if the Optionee is then deceased, be given to the
Optionee’s personal representative if such representative has previously
informed the Company of his status and address by written notice under this
Section 5.3.  Any notice shall have been deemed duly given when (i) delivered in
person, (ii) enclosed in a properly sealed envelope or wrapper addressed as
aforesaid, deposited (with postage prepaid) in a post office or branch post
office regularly maintained by the United States Postal Service, (iii) enclosed
in a properly sealed envelope or wrapper addressed as aforesaid, deposited (with
fees prepaid) in an office regularly maintained by FedEx, UPS, or comparable
non-public mail carrier, or (iv) delivered by email to an electronic mail
address provided by the Optionee.

 

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Section 5.4.   Titles; Pronouns

 

Titles are provided herein for convenience only and are not to serve as a basis
for interpretation or construction of this Agreement.  The masculine pronoun
shall include the feminine and neuter, and the singular the plural, where the
context so indicates.

 

Section 5.5.   Applicability of Plan

 

The Option and the Shares issued to the Optionee (or other proper holder of the
Option) upon exercise of the Option shall be subject to all of the terms and
provisions of the Plan.  In the event of any conflict between this Agreement and
the Plan, the terms of the Plan shall control.

 

Section 5.6.   Service and Employment Acknowledgments.

 

By accepting the Option and signing this Agreement, the Optionee acknowledges
and agrees that:  (i) the Plan is established voluntarily by the Company, is
discretionary in nature and may be modified, amended, suspended or terminated by
the Company at any time, unless otherwise provided in the Plan or this
Agreement; (ii) the Optionee is voluntarily participating in the Plan; (iii) the
award of an Option is a one-time benefit which does not create any contractual
or other right to receive future awards of Options, or compensation or benefits
in lieu of Options, even if Options have been awarded repeatedly in the past;
(iv) all determinations with respect to any such future awards, including, but
not limited to, the times when Options shall be awarded or shall become vested
or exercisable and the number of Options subject to each award, will be at the
sole discretion of the Administrator; (v) the value of the Option is an
extraordinary item of compensation which is outside the scope of the Optionee’s
employment or service contract, if any; (vi) the value of the Option is not part
of normal or expected compensation or salary for any purpose, including, but not
limited to, calculating any termination, severance, resignation, redundancy, end
of service payments or similar payments, or bonuses, long-service awards,
pension, welfare or retirement benefits; (vii) the value of the Options and the
underlying Shares cannot be predicted with certainty and will change over time
and the Company does not guarantee any future value; (viii) nothing in this
Agreement shall confer upon the Optionee any right to continue in the service of
the Company or interfere in any way with any right of the Company to terminate
the Optionee’s service as a director, an employee or consultant, as the case may
be, at any time, subject to applicable law; the Company is not providing any
tax, legal or financial advice, nor is the Company making any recommendations
regarding the Optionee’s participation in the Plan or the Optionee’s acquisition
or sale of the Shares underlying the Option; and (ix) no claim or entitlement to
compensation or damages arises if the value of the Option or the underlying
Shares decreases and in consideration for the grant of the Option the Optionee
irrevocably releases the Company from any claim or entitlement to compensation
or damages that does arise in connection with the Option.

 

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Section 5.7.   Personal Data.

 

For purposes of the implementation, administration and management of the Option
and the Plan or the effectuation of any acquisition, equity or debt financing,
joint venture, merger, reorganization, consolidation, recapitalization, business
combination, liquidation, dissolution, share exchange, sale of stock, sale of
material assets or other similar corporate transaction involving the Company (a
“Corporate Transaction”), the Optionee explicitly and unambiguously consents, by
accepting this Agreement, to the collection, receipt, use, retention and
transfer, in electronic or other form, of the Optionee’s personal data by and
among the Company and its third party vendors or any potential party to a
potential Corporate Transaction.  The Optionee understands that personal data
(including but not limited to, name, home address, telephone number, employee
number, employment status, social insurance number, tax identification number,
date of birth, nationality, job title or duties, salary and payroll location,
data for tax withholding purposes and Options awarded, cancelled, vested and
unvested) is held by the Company and may be transferred to any broker designated
by the Administrator or third parties assisting in the implementation,
administration and management of the Options or the Plan or the effectuation of
a Corporate Transaction and the Optionee expressly authorizes such transfer as
well as the retention, use, and the subsequent transfer of the data, in
electronic or other form, by the recipient(s) for these purposes.  The Optionee
understands that these recipients may be located in the Optionee’s country or
elsewhere, and that the recipient’s country may have different data privacy laws
and protections than the Optionee’s country.  The Optionee understands that
personal data will be held only as long as is necessary to implement, administer
and manage the Option or Plan or effect a Corporate Transaction.  The Optionee
understands that, to the extent required by applicable law, the Optionee may, at
any time, request a list with the names and addresses of any potential
recipients of the personal data, view data, request additional information about
the storage and processing of data, require any necessary amendments to data or
refuse or withdraw the consents herein, in any case without cost, by contacting
in writing the Company’s Secretary.  The Optionee understands, however, that
refusing or withdrawing the Optionee’s consent may affect the Optionee’s ability
to accept an award of Options or otherwise participate in the Plan.

 

Section 5.8.   Electronic Delivery of Documents.

 

(a)                            Methods of Delivery.  The Company may from time
to time electronically deliver, via e-mail or posting on the Company’s website,
this Agreement, information with respect to the Plan or the Option, any
amendments to the Agreement, and any reports of the Company provided generally
to the Company’s stockholders.  The Optionee may receive from the Company, at no
cost, a paper copy of any electronically delivered documents by contacting the
Secretary.

 

(b)                            Consent and Acknowledgment.  By signing this
Agreement, the Optionee (i) consents to the electronic delivery of this
Agreement, all information with respect to the Plan and the Option and any
reports of the Company provided generally to the Company’s stockholders;
(ii) acknowledges that the Optionee may receive from the Company a paper copy of
any documents delivered electronically at no cost to the Optionee by contacting
the Company by telephone or in writing; (iii) further acknowledges that the
Optionee may revoke the Optionee’s consent to the electronic delivery of
documents at any time by notifying the

 

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Company of such revoked consent by telephone, postal service or electronic mail;
and (iv) further acknowledges that the Optionee understands that the Optionee is
not required to consent to electronic delivery of documents.

 

Section 5.9.   Amendment; Entire Agreement

 

This Agreement may be amended from time to time only by written agreement
between the Optionee and the Company.  This Agreement constitutes the entire
agreement among the parties with respect to any agreements regarding the
equity-based incentive awards referenced on the Optionee’s signature page hereto
and supersedes all prior and contemporaneous agreements (including the Letter
Agreement and any change in control, executive retention, employment or other
agreements regarding the vesting of the equity-based incentive awards referenced
on the Optionee’s signature page hereto, or payment of cash or Shares in respect
of these equity-based awards upon a termination of the Optionee’s employment
with the Company or other termination of status as an Eligible Individual),
discussions, understandings and negotiations, whether written or oral, with
respect to any of the foregoing.

 

Section 5.10.   Governing Law

 

The laws of the State of Delaware shall govern the interpretation, validity and
performance of the terms of this Agreement regardless of the law that might be
applied under principles of conflicts of laws.

 

Section 5.11.   Resolution of Disputes

 

Any dispute or disagreement which shall arise under, or as a result of, or
pursuant to or relating to, this Agreement shall be determined by the
Administrator in good faith in its absolute and uncontrolled discretion, and any
such determination or any other determination by the Administrator under or
pursuant to this Agreement and any interpretation by the Administrator of the
terms of this Agreement, will be final, binding and conclusive on all persons
affected thereby.  The Optionee agrees that before the Optionee may bring any
legal action arising under, as a result of, pursuant to or relating to, this
Agreement the Optionee will first exhaust his administrative remedies before the
Administrator.  The Optionee further agrees that in the event that the
Administrator does not resolve any dispute or disagreement arising under, as a
result of, pursuant to or relating to, this Agreement to the Optionee’s
satisfaction, no legal action may be commenced or maintained relating to this
Agreement more than twenty-four (24) months after the Administrator’s decision.

 

Section 5.12.   Section 409A

 

This Agreement and the Option granted hereunder are intended to be exempt from
Section 409A of the Code.  This Agreement and the Option shall be administered,
interpreted and construed in a manner consistent with this intent.  Nothing in
the Plan or this Agreement shall be construed as including any feature for the
deferral of compensation other than the deferral of recognition of income until
the exercise of the Option.  Should any provision of the Plan or this Agreement
be found not to comply with, or otherwise be exempt from, the provisions of
Section 409A of the Code, it may be modified and given effect, in the sole
discretion of the Administrator and without requiring the Optionee’s consent, in
such manner as

 

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the Administrator determines to be necessary or appropriate to comply with, or
to effectuate an exemption from, Section 409A of the Code.  The foregoing,
however, shall not be construed as a guarantee or warranty by the Company of any
particular tax effect to the Optionee.

 

Section 5.13.   Counterparts

 

This Agreement may be executed in any number of counterparts, each of which
shall be deemed to be an original and all of which together shall constitute one
and the same instrument.  Counterpart signature pages to this Agreement
transmitted by facsimile transmission, by electronic mail in portable document
format (.pdf), or by any other electronic means intended to preserve the
original graphic and pictorial appearance of a document, will have the same
effect as physical delivery of the paper document bearing an original signature.

 

Signature Pages to follow.

 

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IN WITNESS WHEREOF, this Agreement has been executed and delivered by the
parties hereto.

 

 

LAUREATE EDUCATION, INC.

 

 

 

 

 

By:

/s/Eilif Serck-Hanssen

 

Name:

Eilif Serck-Hanssen

 

Title:

Executive Vice President and Chief Financial Officer

 

[signature page to the Stock Option Agreement]

 

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OPTIONEE NAME:  Douglas L. Becker

 

I acknowledge that I have carefully read the Agreement and the Plan and agree to
be bound by all of the provisions set forth in these documents.

 

OPTIONEE SIGNATURE:

/s/ Douglas L. Becker

 

 

 

Address: (to be completed by Optionee:)

 

 

 

 

 

 

 

 

Shares subject to Option:  1,386,549 Shares

 

Grant Date:  January 31, 2017

 

Exercise Price:  $17.00 per share

 

Expiration Date:  December 31, 2019

 

[signature page to the Stock Option Agreement]

 

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