Exhibit 10.1

 

April 20, 2018

 

Re: Amendment to Employment Agreement of Nathaniel A. Davis

 

 

Dear Mr. Davis:

 

Reference is made to that certain Second Amended and Restated Employment
Agreement (the “Agreement”), dated as of January 27, 2016, by and between you
and K12 Inc., a Delaware corporation (“K12”), which sets forth the terms and
conditions of your employment with K12. Capitalized terms not defined in this
letter shall have the meanings assigned to them in the Agreement.

 

This letter (the “Letter”) confirms the agreement between you and K12 to modify
the terms of the Agreement as follows:

 

1.

The Term of the Agreement is extended until September 30, 2019 (the “Extension
Date”), subject to earlier termination as provided in Article 4 of the
Agreement, provided, however, that notwithstanding anything herein or any
provision of the Agreement to the contrary, in the event the Company hires a
replacement Chief Executive Officer and your employment with the Company is
terminated prior to the Extension Date, or the Company elects not to renew the
Agreement as of the Extension Date (a “Qualifying Termination”), then (i) you
will not be entitled to receive the severance payments and benefits specified in
Section 4.5(b) of the Agreement, and (ii) the provisions of Section 7 below
shall apply.

 

2.

Effective March 3, 2018, you assumed the position of Chief Executive Officer and
your title was changed to Chairman of the Board and Chief Executive Officer. You
shall have the duties, responsibilities and authorities customarily associated
with such position.  In this position, you shall have primary responsibility for
leading the organization on a day to day basis and shall report to the Board.  
 

 

3.

Effective as of March 3, 2018, in recognition of your increased role and
responsibilities your Base Salary is increased to $735,000. Any portion of your
Base Salary attributable to this increase that has not yet been paid will be
paid to you during the next payroll period occurring after the date of this
Letter.

 

4.

As provided in the Agreement, your target annual Performance Bonus will remain
at 150% of Base Salary (and not more than 300% of Base Salary). For the Fiscal
Year ending June 30, 2018, your Performance Bonus will be calculated based on a
base salary of $735,000.

 

5.

As soon as practicable upon execution of this Letter, you will receive a
one-time grant of performance-based restricted K12 stock having a value equal to
$2,205,000 (based on K12’s closing stock price on the date of grant).  These
shares will vest as follows, subject to your continued employment through
vesting:

o

50% of these shares will vest upon the hiring and commencement of employment of
a new Chief Executive Officer; and

o

50% of these shares will vest upon your submission to the Board of a strategic
plan for K12 and the Board’s acceptance of the same.

 

 

 

 

 

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6.

Beginning with Fiscal Year 2019, your target level for awards under K12’s equity
incentive award plan will be in a range of $2,700,000 to $3,300,000, subject to
such performance and other vesting criteria as may be determined at the time of
grant upon mutually agreeable terms between you and the Board or the
Compensation Committee.

 

7.

Upon a Qualifying Termination, the severance payments under Section 4.5 of the
Agreement shall not apply and the special vesting provisions under Section
3.7(d) of the Agreement shall not apply, provided, however, that (i) all of your
outstanding equity incentive awards in K12 will continue to vest for so long as
you continue to serve as a member of the Board, and (ii)  if, upon your
Qualifying Termination or at any time thereafter, you are asked to leave the
Board and you execute within 30 days following your departure from the Board,
and do not revoke, a Release, then (A) all of your outstanding equity incentive
awards in K12 shall immediately and automatically vest, provided that, unless a
provision more favorable to you is included in an applicable award agreement,
any such awards that are subject to performance-based vesting conditions shall
only be payable subject to the attainment of the performance measures for the
applicable performance period as provided under the terms of the applicable
award agreement, and (B) your vested options will remain exercisable for 365
days following your departure from the Board (subject to the regular expiration
date(s) of the options and the EIA Plan).    

 

8.

The reference in Section 4.5(c) of the Agreement to Section 3.7(i) is hereby
corrected to refer to Section 3.7(d).

 

9.

K12 will reimburse you for your documented legal expenses incurred in calendar
year 2018 in connection with entering into this letter, up to a maximum of
$5,000.

 

Except as modified by this Letter, the Agreement shall remain unchanged and
shall continue in full force and effect according to its terms. For the
avoidance of doubt, you agree that none of the changes to your terms and
conditions of employment as provided by this Letter shall constitute “Good
Reason” under the Agreement.  You also agree that the hiring of a new Chief
Executive Officer during the Term of the Agreement will not constitute “Good
Reason,” provided that you continue to hold the position of Chairman of the
Board until the end of the Term

 

This Letter, together with the Agreement (to the extent not amended by this
letter), constitutes the entire agreement between you and K12, and expressly
supersedes all prior oral or written agreements, commitments or understandings
with respect to the matters provided for herein.  

 

Thank you for your continued service to K12.

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Sincerely,

/s/ John M. Engler

Name: John M. Engler

Chairman of the Compensation Committee

 

 

Agreed and Accepted:

 

 

 

/s/ Nathaniel A. Davis

Nathaniel A. Davis

Chairman and Chief Executive Officer 

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