Exhibit 10.2

 

AMENDED AND RESTATED

EMPLOYMENT AGREEMENT

 

THIS AMENDED AND RESTATED EMPLOYMENT AGREEMENT (“Agreement”) was originally
entered into effective as of September 27, 2010 (the “Effective Date”) between
K12 INC., a Delaware corporation (“Company”), and RONALD J. PACKARD
(“Executive”), on the following terms and conditions and is hereby further
amended effective as of January 7, 2013.

 

SECTION 1.                            EMPLOYMENT.

 

1.1                               Responsibilities.  Company hereby employs
Executive on the terms and conditions set forth in this Agreement and Executive
hereby accepts such employment.  Executive shall serve as the Chief Executive
Officer of Company.  Executive also shall serve as a member of the Board of
Directors of Company (the “Board of Directors” or the “Board”) and agrees to
hold such other executive position(s) with Company and/or its affiliates as the
Board of Directors shall from time to time designate.  Executive shall perform
such duties and responsibilities commensurate with Executive’s position(s) as
may be required by Company from time to time, and Executive further recognizes
that he will be required to travel in the ordinary course of performing his
responsibilities.  Executive shall carry out all of his employment
responsibilities in an efficient, trustworthy, effective and businesslike
manner.

 

1.2                               Exclusive Employment.  Executive shall devote
Executive’s full business time to Executive’s responsibilities under this
Agreement.  Without limiting the generality of the foregoing, Executive shall
not render services of a business, professional or commercial nature to any
other person, firm or corporation, whether for compensation or otherwise, except
that Executive may engage in the following activities so long as such activities
do not interfere with Executive’s ability to comply with this Agreement
(including Section 4) and are not otherwise in conflict with the policies or
interests of Company: (a) serving on civic, industry, or charitable boards or
committees and engaging or participating in civic, philanthropic and community
service activities, (b) serving as a director or advisory board member of two
outside for profit companies, (c) publishing, solely on Executive’s personal
time, screen plays, novels and other writings for which Executive may receive
and retain separate compensation, (d) accepting and fulfilling a reasonable
number of speaking engagements for which Executive may receive and retain
separate compensation and (e) managing Executive’s personal, financial,
investment, and legal affairs and/or family-owned businesses.  Executive may not
serve on any other outside boards of directors of for profit companies without
prior approval of the Board.

 

SECTION 2.                            COMPENSATION AND OTHER BENEFITS.

 

2.1                               Compensation/Deductions.  In consideration of
Executive’s employment, Executive shall receive from Company while Executive is
employed with Company the compensation and benefits described in this Section 2
as full and complete satisfaction of all of Company’s obligations to Executive
arising from Executive’s employment.  The compensation and employee benefits
made available to Executive pursuant to this Agreement may be changed only by
the written agreement of the parties.  Executive authorizes Company to deduct
and

 

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withhold from all compensation to be paid to Executive any and all sums required
to be deducted or withheld by Company (including, but not limited to, income tax
withholding and payroll taxes) pursuant to the provisions of all applicable
laws, regulations, rulings or ordinances of the United States and any other
applicable jurisdiction.

 

2.2                               Base Salary.  Executive shall receive, as a
fixed base salary for the full time employment referred to in Section 1 hereof
and all other obligations of Executive hereunder, compensation at the rate of
Six-Hundred Seventy-Five Thousand Dollars ($675,000) per year payable not less
frequently than monthly in accordance with Company’s standard payroll practices
as in effect from time to time (“Base Salary”).  The Compensation Committee of
the Board of Directors (the “Compensation Committee”) shall review the
Executive’s Base Salary annually and may recommend to the Board of Directors
that Executive’s Base Salary be adjusted at that time, in its sole discretion,
based upon a market study that the Compensation Committee may in its discretion
commission.

 

2.3                               Bonus.  Executive may receive a bonus in the
sole and absolute discretion of the Board of Directors of Company, which bonus
shall have a target of one hundred (100) percent of Base Salary (the “Target
Bonus”) and shall not exceed an amount equal to two hundred (200) percent of
Base Salary (the “Maximum Bonus”) and shall be paid in accordance with the terms
of the Company’s bonus policy, but in any event no later than the 15th day of
the third month following the end of the calendar year or fiscal year with
respect to which such bonus relates or otherwise within the period required by
Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) such
that it qualifies as a “short-term deferral” pursuant to Treasury Regulation
Section 1.409A-1(b)(4).  The Executive’s performance goals related to any fiscal
year of the Company shall be based on financial, operational, human capital or
other defined metrics approved by the Board of Directors.

 

2.4                               Restricted Stock Grants.

 

(a)                                 In consideration for Executive’s entering
into this Agreement, on the Effective Date, the Company shall grant to Executive
an award of One Hundred Forty Five Thousand Five Hundred Thirty (145,530) shares
of Restricted Stock (as defined in the Plan (as defined below)) (the “Initial
Restricted Stock Award”).  Seventy Two Thousand Seven Hundred Sixty Five
(72,765) of the shares subject to the Initial Restricted Stock Award shall be
fully vested as of the Effective Date and the remaining portion shall vest in
twelve (12) equal quarterly installments, with the first such quarterly
installment vesting on September 30, 2011, provided that Executive remains
employed by Company on each applicable vesting date.

 

(b)                                 At the Company’s next regular stockholders
meeting following the Effective Date (the “Stockholders Meeting”), the Company
shall submit for approval by the Company’s stockholders the list of performance
criteria in the Plan (as such list may be revised by the Board prior to the
Stockholders Meeting) that may be used for purposes of granting awards that are
intended to qualify as performance-based compensation under Section 162(m) of
the Code.  Subject to stockholder approval of such performance criteria, the
Executive shall be eligible to receive an annual award of Restricted Stock as
soon as practicable following the completion of each of the Company’s fiscal
years 2011, 2012 and 2013 (each an “Annual

 

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Restricted Stock Award”), with the Annual Restricted Stock Award for 2013
performance made in the ordinary course and in no event later than December 31,
2013.  The number of shares subject to each Annual Restricted Stock Award shall
have a Fair Market Value (as of the date of grant of each such Annual Restricted
Stock Award) equal to between zero ($0) dollars and One Million Two Hundred
Fifty Thousand ($1,250,000) dollars, and the actual amount of each Annual
Restricted Stock Award shall be determined based upon the Company’s attainment
of one or more pre-established, objective performance goals, with the intent
that each such Annual Restricted Stock Award shall be treated as qualified
performance based compensation for purposes of Section 162(m) of the Code.  Each
Annual Restricted Stock Award, if any, shall vest in twelve equal quarterly
installments, with the first installment for each Annual Restricted Stock Award
vesting on September 30 of the calendar year in which such Annual Restricted
Stock Award is granted, provided that Executive remains employed by Company on
each applicable vesting date.

 

(c)                                  Notwithstanding the foregoing, if (i) the
Executive’s employment is terminated by the Company without Cause (as defined
below) or as a result of Executive’s Disability (as defined in the Plan)
(including in the event such termination occurs following the expiration of the
Employment Term), (ii) the Executive’s employment is terminated as a result of
Constructive Termination (as defined below) (iii) the Executive’s employment
terminates due to the Executive’s death (including in the event such termination
occurs following the expiration of the Employment Term), or (iv) a Change in
Control (as defined in the Plan) occurs, then in each such event,
notwithstanding the terms of any award agreement to the contrary: (A) any
unvested portion of any stock option award, (B) any unvested portion of the
Initial Restricted Stock Award, (C) any unvested portion of an Annual Restricted
Stock Award and (D) any other equity-based compensation award (which includes
the right to receive the Annual Restricted Stock Awards pursuant to
Section 2.4(b)), as applicable, shall become fully vested effective as of
immediately prior to the Executive’s date of termination of employment, the date
of grant, or the date of the Change in Control, as applicable.  Except as set
forth in this Section 2.4, the Initial Restricted Stock Award and Annual
Restricted Stock Awards, including the rights to receive the Annual Restricted
Stock Awards, shall be subject to the terms of Company’s 2007 Equity Incentive
Award Plan, as such plan may be amended from time to time (the “Plan”) and
Company’s form of Restricted Stock Agreement under the Plan (the “Restricted
Stock Agreement”).

 

2.5                               Expense Reimbursement.  Company shall
reimburse Executive for reasonable and necessary out-of-pocket business expenses
incurred by Executive in the performance of Executive’s responsibilities
hereunder and within the operating budget of Company, subject to Company’s
business expense reimbursement policies in effect from time to time, including
submission to Company of a written accounting of such expenses, which accounting
shall include an itemized list of the expenses incurred, the business purposes
for which such expenses were incurred, and appropriate receipts and supporting
documentation.

 

2.6                               Vacation.  Executive shall be entitled to paid
vacation for each full year of Executive’s employment with Company (prorated for
any partial year) in accordance with Company vacation policy in effect from time
to time (which as applied to Executive shall not be less than 5 weeks of
vacation for each full year of employment with 2 weeks of carryover

 

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permitted).  Said vacation time shall be taken by the Executive in a manner that
is consistent with Executive’s duties and obligations hereunder.

 

2.7                               Other Benefits.  Executive shall be entitled
to participate in all group employment benefits that are offered by Company to
Company’s employees in general, subject to the terms and conditions of such
benefit plans including any eligibility requirements.  In addition, Executive
shall be entitled to reasonable legal fees incurred by Executive in calendar
year 2013 in connection with the negotiation of this Agreement, up to a maximum
of $5,000.

 

SECTION 3.                            EMPLOYMENT TERM AND TERMINATION.

 

3.1                               Term.  The term of this Agreement shall
commence as of the Effective Date and shall expire on September 30, 2014 (the
“Initial Term”), unless terminated earlier as provided in Section 3.2, 3.3, 3.4,
3.5, 3.7 or 3.8 below.  Following the expiration of the Initial Term, the
employment term hereunder shall automatically be extended for successive
one-year periods (“Extension Terms” and, collectively with the Initial Term, the
“Employment Term”) unless either party gives notice of non-extension to the
other no later than three (3) months prior to the expiration of the
then-applicable Term.  In the event that such notice is given, Executive’s
employment shall terminate at the close of business on the last day of the
Employment Term.  Upon termination of employment, Executive shall not be
entitled to receive any compensation, payments or benefits of any nature
whatsoever, except as specifically provided in Section 2.4 or in Sections 3.2,
3.3, 3.4, 3.5, 3.7 or 3.8 below.

 

3.2                               Termination Upon Death.  Executive’s
employment with Company shall terminate upon the death of Executive.  In the
event of such termination, Company shall continue to pay to the estate of
Executive (i) the Accrued Rights (as defined below), (ii) Executive’s Base
Salary in equal installments in accordance with Section 2.2 for a period of one
hundred eighty (180) days after the date of such termination, commencing with
the first regularly scheduled payroll date following the date of such
termination and (iii) a lump sum cash payment in an amount equal to a pro-rated
portion of Executive’s Target Bonus for the year in which the termination occurs
(based upon the number of days during the applicable fiscal year that Executive
was employed by Company), payable promptly but in all events within thirty (30)
days following the date of such termination.

 

3.3                               Termination Upon Disability.  Executive’s
employment with Company shall terminate upon the “disability” of Executive.  In
the event of such termination, Company shall pay to Executive the Accrued Rights
and a lump sum cash payment in an amount equal to a pro-rated portion of
Executive’s Target Bonus for the year in which the termination occurs (based
upon the number of days during the applicable fiscal year that Executive was
employed by Company), payable promptly but in all events within thirty (30) days
following the date of such termination.  As used in this Section 3.3 and in
Section 3.5, the term “disability” shall mean a physical or mental disability
that renders Executive unable to perform Executive’s normal duties for Company
for a period of 90 or more days as determined in the good faith judgment of the
Board of Directors of Company.

 

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3.4                               Termination for Cause.  Company shall have the
right to terminate Executive’s employment for “Cause” by written notice to
Executive.  In the event of such termination, Company shall pay to Executive the
Accrued Rights.  For purposes of this Agreement, a termination shall be for
Cause if Executive shall: (i) commit a material act of fraud, embezzlement or
misappropriation involving Company or any of its affiliates, (ii) be convicted
of, or enter a plea of guilty or no contest to, any felony, (iii) materially
breach this Agreement or any material written policy of the Company, or
(iv) willfully fail or continually neglect to perform Executive’s material
responsibilities under this Agreement, in each case, that causes material and
demonstrable damage to the Company.  Notwithstanding the foregoing, Company may
not terminate Executive’s employment for Cause unless (a)  Executive is provided
with a period of at least than thirty (30) days to remedy such condition (if
such condition is curable) and Executive does not remedy the condition within
such thirty (30) day period and (b) Executive’s termination of employment occurs
no later than one hundred eighty (180) days after the initial existence of the
condition constituting Cause; provided, that Company is only required to provide
Executive with the opportunity to remedy any such condition one time in any six
(6) month period.

 

3.5                               Termination Without Cause.  In the event
Company terminates Executive’s employment prior to the expiration of the
Employment Term for other than death, disability or Cause, which Company shall
have the absolute right to do, provided that such termination of employment
constitutes a “separation from service” with Company as such term is defined in
Treasury Regulation Section 1.409A-1(h) and any successor provision thereto (a
“Separation from Service”), and subject to Executive’s execution within 30 days
following the date of Executive’s Separation from Service, and non-revocation,
of a general release of all claims against the Company and its affiliates in the
form provided to the Executive by the Company no later than 8 days following the
date of Executive’s Separation from Service (a “Release”), Company shall pay to
Executive the Accrued Rights, plus, as severance pay, three times Executive’s
Base Salary (the “Severance Amount”).  Fifty (50) percent of the Severance
Amount shall be payable in a lump sum within 40 days following the date of
Executive’s Separation from Service.  The remaining portion of the Severance
Amount (the “Remaining Severance”) shall be payable in equal installments in
accordance with Section 2.2 over the 18-month period following date of
Executive’s Separation from Service.  In addition, notwithstanding the terms of
any stock option agreement to the contrary, upon a termination without Cause,
Executive shall be afforded an extended exercise period for all stock options
held by Executive as of the date of termination of employment, subject to
earlier termination in the event of a Change in Control, until the earlier of
(a) the date that is three-hundred sixty five (365) days after the later of
(i) the date of such termination, or (ii) the date Executive is no longer a
member of the Board, or (b) the expiration of the term of such stock options. 
For purposes of Section 409A of the Code (including, without limitation, for
purposes of Treasury Regulation Section 1.409A-2(b)(2)(iii)), each payment that
Executive may be eligible to receive under this Agreement shall be treated as a
separate and distinct payment.  Notwithstanding anything to the contrary in this
Agreement, no portion of the Remaining Severance shall be payable to Executive
before the Company’s first regular payroll payment date occurring on or after
the 40th day following the date of Executive’s Separation from Service (the
“First Pay Date”).  Any Remaining Severance payments that would otherwise be
made prior to the First Pay Date shall

 

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be paid to Executive on the First Pay Date and the rest of the Remaining
Severance payments shall be made as provided in this Agreement.

 

3.6                               Termination Upon Expiration of Employment
Term.  In the event either party elects not to extend the Initial Term or any
Extension Term, Executive’s employment terminates upon the expiration of the
Employment Term, which either party shall have the absolute right to do, Company
shall pay to Executive the Accrued Rights.  Notwithstanding the foregoing, if
Company elects not to extend the Initial Term or any Extension Term, such
election shall have the same consequences as a termination of Executive’s
employment without Cause pursuant to Section 3.5, effective as of the last day
Employment Term, unless Executive’s employment is otherwise terminated prior to
the last day of the then Employment Term, in which case the consequences of such
termination of employment shall be dependent upon the basis for such termination
of employment as provided in this Agreement.

 

3.7                               Constructive Termination.  If there is (a) a
material reduction by the Company in Executive’s authority, duties,
responsibilities or title as provided in Section 1.1 of this Agreement, (b) a
material reduction by the Company in the Executive’s Base Salary as provided in
Section 2.2, (c) a material breach by the Company of any material provision of
this Agreement, and/or (d) the relocation by the Company of Executive’s
principal place of employment more than thirty (30) miles from its location as
of the Effective Date (a “Constructive Termination”), such an action will be
deemed to be a termination of Executive’s employment by the Company without
Cause and, provided that Executive resigns his employment as a result of such
action and such resignation constitutes a Separation from Service, and subject
to Executive’s execution within 30 days following the date of Executive’s
Separation from Service, and non-revocation, of a Release, Executive shall be
entitled to the Accrued Rights, severance pay as provided in Section 3.5 and all
other benefits he is entitled to under this Agreement upon a termination of
employment without Cause (including accelerated vesting as provided in
Section 2.4(c)).  In the event Executive becomes entitled to severance pay under
this Section 3.7 as a result of Executive’s Separation from Service prior to the
fiscal year ending June 30, 2013, Executive shall be entitled to receive a
pro-rata portion of the bonus (up to the Maximum Bonus) provided under
Section 2.3, subject to the determination by the Board that Executive has
achieved the corporate and individual performance management objectives approved
by the Board for such fiscal year, and provided that the Executive performs his
responsibilities as Chief Executive Officer of the Company as determined by the
Board in its discretion, including his cooperation with the members of the Board
and the Company officers in the Company’s day-to-day business and affairs.  Any
pro-rata bonus determined to be given to the Executive shall in no event be paid
later than December 31, 2013.  Notwithstanding the foregoing, Executive may not
resign his employment for Constructive Termination unless (i) Executive provides
Company prior written notice of his intent to resign due to Constructive
Termination within one hundred fifty (150) days of the initial existence of any
condition constituting Constructive Termination, (ii) Company is provided with a
period of at least thirty (30) days to remedy such condition and does not remedy
the condition within such thirty (30) day period and (iii) Executive’s
termination of employment occurs no later than one hundred eighty (180) days
after the initial existence of the condition constituting Constructive
Termination.  The Board may, in its sole and absolute discretion, extend the
time periods in clauses (i) and (iii) of the previous sentence.

 

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3.8                               Termination by Executive.  If Executive
voluntarily elects to terminate his employment with the Company by resignation
for any reason other than a Constructive Termination prior to the end of the
Employment Term, Executive shall not be entitled to any severance pay or
benefits, except Executive shall be entitled to any unpaid salary, reimbursable
expenses, and accrued vacation time until the date of termination, plus any
vested amount arising from Executive’s participation in, or vested benefits
under, any employee benefit plans, programs or arrangements (including without
limitation, any disability or life insurance benefit plans, programs or
arrangements), which amounts shall be payable in accordance with the terms and
conditions of such employee benefit plans, programs or arrangements
(collectively, the “Accrued Rights”).

 

SECTION 4.                            COVENANTS OF EXECUTIVE.

 

4.1                               Confidential Information.  Executive
acknowledges that Executive’s services previously rendered to Company and to be
rendered to Company place Executive in a position of confidence and trust with
Company and have allowed and will continue to allow Executive access to
Confidential Information (as defined below).  Executive agrees that at all times
during which Executive is receiving any compensation from Company (including any
severance pay) and for a period of three (3) years thereafter, Executive will
maintain the Confidential Information in strictest confidence and will not,
unless required to do so in the ordinary course of Company’s operations or
required by law or ordered by a court or in connection with governmental
investigation, disclose to any person, or use for Executive’s own personal use
or financial gain, whether individually or on behalf of another person, any
Confidential Information.  Without limiting the generality of the foregoing,
Executive acknowledges that Company’s agreements and/or relationships with other
persons may impose obligations or restrictions regarding the confidential nature
of work or information relating to such persons, and Executive agrees to be
bound by all such obligations and restrictions.  As used herein, “Confidential
Information” shall mean information and compilations of information relating to
Company and/or its business including, but not limited to, information regarding
any trade secrets, proprietary knowledge, operating procedures, finances,
financial condition, ownership, organization, employees, customers, clients,
suppliers, distributors, agents, and other personnel, business activities,
budgets, strategic or financial plans, objectives, marketing plans, products,
services, price and price lists, operating and training materials, data bases
and analyses and all other documents relating thereto or strategies of Company;
provided, however, that Confidential Information shall not include information
that is or becomes generally known to the public through no act or omission of
Executive.

 

4.2                               Intellectual Property Rights.  Executive shall
assign and transfer to Company, and does hereby assign and transfer to Company,
all right, title and interest in and to all Company IP (as defined below).  All
Company IP is and shall be the sole property of Company.  Executive shall
disclose all Company IP promptly in writing to Company.  Upon the request of
Company, Executive shall promptly execute a written assignment of title to
Company for all Company IP, and Executive will preserve all such Company IP as
Confidential Information.  As used herein, “Company IP” shall mean all
inventions and intellectual property rights (including, but not limited to,
designs, discoveries, inventions, improvements, ideas,

 

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devices, techniques, processes, writings, trade secrets, trademarks, patents,
copyrights and all other intellectual property rights including, without
limitation, notes, records, reports, software, plans, memoranda and other
tangible information relating to such intellectual property, whether or not
subject to protection under applicable laws) that Executive solely or jointly
with others conceives, makes, acquires, suggests or participates in at any time
during Executive’s employment with Company and that relate to the actual or
demonstrably anticipated business, products, processes, work, operations,
research and development or other activities of Company.

 

4.3                               Non-Interference.  During the Restricted
Period (as defined below), Executive shall not directly or indirectly,
individually, or together with, or through any other person: (i) in any manner
discourage any person which is or has been a customer or supplier of Company
from continuing its relationship with Company, (ii) approach, counsel, or
attempt to induce any person who is then in the employ of or an independent
contractor of Company, to leave their employment or engagement, or employ,
engage or attempt to employ or engage any such person, or (iii) aid or counsel
any other person to do any of the above.  As used herein, the “Restricted
Period” means the period during which Executive is employed by the Company and
for a period of eighteen (18) months thereafter.

 

4.4                               Exclusivity.  During the Restricted Period
Executive shall not directly or indirectly on Executive’s own behalf or on
behalf of any other person: (a) personally own greater than twenty (20) percent
of or control; (b) act as an officer, manager, employee, of or be obligated to,
or be connected in any advisory, business or ownership capacity with; (c) lend
credit or money of more than twenty (20) percent of total capital raised for the
purpose of the establishing or operating; or (d) allow Executive’s name or
reputation to be used by or in, any business, venture, activity or organization
(including any non-profit organization) that directly competes with the Company
or its business (collectively, the “Restricted Business”).

 

4.5                               Return of Records, Equipment and Confidential
Information.  Upon the earlier of termination of Executive’s employment
hereunder or request by Company, Executive shall promptly return to Company:
(i) all Confidential Information and all documents, records, procedures, books,
notebooks, and any other documentation in any form whatsoever (including, but
not limited to, written, audio, video or electronic) containing any information
pertaining to Company which includes Confidential Information, including any and
all copies of such documentation then in Executive’s possession or control
regardless of whether such documentation was prepared or compiled by Executive,
Company, other employees of Company, representatives, agents, or independent
contractors, and (ii) all equipment or tangible personal property entrusted to
Executive by Company.  Executive will not retain any original, copy,
description, document, data base or other form of media that contains or relates
to any Confidential Information whether produced by Executive or otherwise. 
Without limiting the generality of the foregoing, Executive shall permanently
delete all Confidential Information from all computers, disks, CD-ROMS, tapes,
and other media owned or used by or accessible to Executive, other than from any
of the foregoing owned, used or controlled by Company.  Executive acknowledges
that all Confidential Information and all such documentation, copies of such
documentation, equipment, and tangible personal property are and shall at all
times remain the sole and exclusive property of Company.

 

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4.6                               Post-Employment Cooperation.  Executive agrees
that following Executive’s termination of employment with Company, Executive
shall, to the extent reasonably requested by Company, cooperate and assist
Company at Company’s expense in any dispute, controversy, or litigation in which
Company may be involved and with respect to which Executive obtained knowledge
while employed by Company or any of its affiliates, successors, or assigns,
including, but not limited to, Executive’s participation in any court or
arbitration proceedings, giving of testimony, signing of affidavits, or such
other personal cooperation as counsel for Company shall reasonably request.

 

SECTION 5.                            REPRESENTATIONS BY EXECUTIVE.  Executive
represents and warrants that:

 

(a)                                 Executive is free to enter into and perform
each of the terms and conditions of this Agreement.  Executive is not subject to
any agreement, judgment, order or restriction that would be violated by
Executive being employed by Company or that in any way restricts the services
that may be rendered by Executive for Company.  Executive’s execution of this
Agreement and performance of Executive’s obligations under this Agreement does
not and will not violate or breach any other agreement between Executive and any
other person or entity.

 

(b)                                 Executive has carefully considered the
nature and extent of the restrictions and covenants in this Agreement and
Executive agrees that they will not prevent Executive from earning a livelihood
after employment with Company and that they are fair, reasonable and necessary
to protect and maintain the proprietary interests, goodwill and other legitimate
business interests of Company in view of the following facts: (i) Executive will
hold a position of confidence and trust with Company as a result of Executive’s
employment with Company, access to confidential financial and other information,
and relationship with the customers, suppliers and other employees of Company,
(ii) it would be impossible for Executive to be employed or engaged in the
Restricted Business without inevitably using Company’s proprietary information,
and (iii) Executive has broad skills that will permit gainful employment in many
areas and businesses outside the scope of Company’s business.

 

(c)                                  Executive acknowledges that but for the
above representations and warranties of Executive, Company would not employ
Executive or enter into this Agreement.

 

SECTION 6.                            ASSIGNABILITY.

 

This Agreement is binding upon and inures to the benefit of the parties and
their respective heirs, executors, administrators, personal representatives,
successors, and permitted assigns.  Company may assign its rights or delegate
its duties under this Agreement at any time and from time to time.  The parties
acknowledge that this Agreement is personal to Executive and that the
availability of Executive to perform services and the covenants provided by
Executive hereunder have been a material consideration for Company to enter into
this Agreement.  Accordingly, Executive may not assign any of Executive’s rights
or delegate any of Executive’s duties under this Agreement, either voluntarily
or by operation of law, without the prior written consent of Company, which may
be given or withheld by Company in its sole and absolute discretion.

 

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SECTION 7.                            NOTICES.

 

All notices, requests, demands or other communications hereunder shall be deemed
to have been duly given when delivered, addressed as follows (or at such other
address as the addressed party may have substituted by notice pursuant to this
Section 7):

 

If to Executive:

At Executive’s address as it appears

 

in the records of Company

 

 

If to Company:

K12 INC.

 

2300 Corporate Park Drive, Suite 200

 

Herndon, Virginia 22102

 

Attention: Compensation Committee

 

 

 

with a copy (not itself constituting notice) to:

 

 

 

K12 INC.

 

2300 Corporate Park Drive, Suite 200

 

Herndon, Virginia 22102

 

Attention: Office of the General Counsel

 

Fax: (703) 483-7496

 

SECTION 8.                            MISCELLANEOUS.

 

8.1                               Entire Agreement.  This Agreement supersedes
the Employment Agreement, dated as of July 1, 2007 between the Company and the
Executive and any amendments made to this Agreement on January 7, 2013 shall
only be effective as of January 7, 2013 and thereafter.  This Agreement,
together with the Plan, each Restricted Stock Agreement, each stock option
agreement between Executive and Company, and that certain agreement Executive
and Company relating to relocation assistance embodies the entire
representations, warranties, covenants and agreements in relation to the subject
matter hereof.  No other representations, warranties, covenants, understandings
or agreements in relation hereto exist between the parties except as otherwise
expressly provided herein.

 

8.2                               Amendment.  This Agreement may not be amended
except by an instrument in writing duly executed by the parties hereto.

 

8.3                               Applicable Law.  This Agreement has been made
and executed under, and will be construed and interpreted in accordance with,
the laws of the State of Delaware excluding conflict of law principles.

 

8.4                               Provisions Severable.  Every provision of this
Agreement is intended to be severable from every other provision of this
Agreement.  If any provision of this Agreement is

 

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held to be void or unenforceable, in whole or in part, or unreasonable or
excessive in scope or duration with the result that such provision (or portion
thereof) as drafted is void or unenforceable, such provision shall be deemed to
be reformed to the minimum extent necessary so that such provision as reformed
may and shall be legally enforceable.  If any provision of this Agreement is
held to be void or unenforceable, in whole or in part, and cannot be reformed
and made enforceable as provided in the immediately preceding sentence, the
remaining provisions will remain in full force and effect.

 

8.5                               Non-Waiver of Rights and Breaches.  Any waiver
by a party of any breach of any provision of this Agreement will not be deemed
to be a waiver of any subsequent breach of that provision, or of any breach of
any other provision of this Agreement.  Except as otherwise provided in
Section 8.6 below, no failure or delay in exercising any right, power, or
privilege granted to a party under any provision of this Agreement will be
deemed a waiver of that or any other right, power, or privilege.  No single or
partial exercise of any right, power, or privilege granted to a party under any
provision of this Agreement will preclude any other or further exercise of that
or any other right, power, or privilege.

 

8.6                               Expiration of Claims.  All claims that any
party has against the other must be presented in writing within one year of the
date the claiming party knew or should have known of the facts giving rise to
the claim, or, with respect to claims related to termination of Executive’s
employment, within one year of the date of termination of employment.  Any claim
not brought within said time period shall be waived and forever barred unless
the party against whom such claim is made agrees to waive such time period.

 

8.7                               Remedies.  Executive agrees that in the event
of any actual or threatened material breach of this Agreement by Executive,
Company shall be entitled to specific performance, injunctive relief and other
similar equitable remedies.

 

8.8                               Interpretation of Agreement.  Each of the
parties has had the opportunity to be represented by counsel in the negotiation
and preparation of this Agreement.  The parties agree that this Agreement is to
be construed as jointly drafted.  Accordingly, this Agreement will be construed
according to the fair meaning of its language, and the rule of construction that
ambiguities are to be resolved against the drafting party will not be employed
in the interpretation of this Agreement.

 

8.9                               Survival of Provisions.  The provisions of
Sections 3, 4, 5, 6, 7 and 8 of this Agreement shall survive the Employment Term
and any termination of this Agreement in accordance with their respective terms.

 

8.10                        Gender and Number.  Concerning the words used in
this Agreement, the singular form shall include the plural form, the masculine
gender shall include the feminine or neuter gender, and vice versa, as the
context requires, and the word “person” shall include any natural person,
partnership, corporation, limited liability company, association, trust, estate
or other legal entity.

 

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8.11                        Headings.  The headings of the Sections and
Paragraphs of this Agreement are inserted for ease of reference only, and will
have no effect in the construction or interpretation of this Agreement.

 

8.12                        Counterparts.  This Agreement and any amendment or
supplement to this Agreement may be executed in two or more counterparts, each
of which will constitute an original but all of which will together constitute a
single instrument.  Transmission by facsimile of an executed counterpart
signature page hereof by a party hereto shall constitute due execution and
delivery of this Agreement by such party.

 

8.13                        Section 409A.

 

(a)                                 Compliance.  In the event that following the
date hereof Company or Executive reasonably determines that any compensation or
benefits payable under this Agreement may be subject to Section 409A of the
Code, Company and Executive shall work together to adopt such amendments to this
Agreement or adopt other policies or procedures (including amendments, policies
and procedures with retroactive effect), or take any other commercially
reasonable actions necessary or appropriate to (x) exempt the compensation and
benefits payable under this Agreement from Section 409A of the Code and/or
preserve the intended tax treatment of the compensation and benefits provided
with respect to this Agreement or (y) comply with the requirements of
Section 409A of the Code and related Department of Treasury guidance.  No
payments under this Agreement that are subject to the requirements of
Section 409A shall be accelerated, except in compliance with Treasury Regulation
Section 1.409A-3(j)(4).

 

(b)                                 In-Kind Benefits and Reimbursements. 
Notwithstanding anything to the contrary in this Agreement, in-kind benefits and
reimbursements provided under this Agreement shall be provided in accordance
with the requirements of Treasury Regulation Section 1.409A-3(i)(iv), such that
any in-kind benefits and reimbursements provided under this Agreement during any
calendar year shall not affect in-kind benefits or reimbursements to be provided
in any other calendar year, other than an arrangement providing for the
reimbursement of medical expenses referred to in Section 105(b) of the Code, and
any in-kind benefits and reimbursements shall not be subject to liquidation or
exchange for another benefit.  Notwithstanding anything to the contrary in this
Agreement, reimbursement requests must be timely submitted by Executive and, if
timely submitted, reimbursement payments shall be promptly made to Executive
following such submission, but in no event later than December 31st of the
calendar year following the calendar year in which the expense was incurred.  In
no event shall Executive be entitled to any reimbursement payments after
December 31st of the calendar year following the calendar year in which the
expense was incurred.  This paragraph shall only apply to in-kind benefits and
reimbursements that would result in taxable compensation income to Executive.

 

(c)                                  Distribution.  Notwithstanding anything to
the contrary in this Agreement, to the maximum extent permitted by applicable
law, amounts payable to Executive pursuant to Sections 3.5 and 3.7 shall be made
in reliance upon Treas. Reg. Section 1.409A-1(b)(9) (Separation Pay Plans) or
Treas. Reg. Section 1.409A-1(b)(4) (Short-Term Deferrals).  However, to the
extent any such payments are treated as non-qualified deferred compensation
subject to

 

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Section 409A of the Code, then if Executive is deemed at the time of his
Separation from Service to be a “specified employee” for purposes of
Section 409A(a)(2)(B)(i) of the Code, then to the extent delayed commencement of
any portion of the benefits to which Executive is entitled under this Agreement
is required in order to avoid a prohibited distribution under
Section 409A(a)(2)(B)(i) of the Code, such portion of Executive’s termination
benefits shall not be provided to Executive prior to the earlier of (i) the
expiration of the six-month period measured from the date of Executive’s
Separation from Service or (ii) the date of Executive’s death.  Upon the earlier
of such dates, all payments deferred pursuant to this Section 8.13(c) shall be
paid in a lump sum to Executive.  Thereafter, payments will resume in accordance
with this Agreement.  The determination of whether Executive is a “specified
employee” for purposes of Section 409A(a)(2)(B)(i) of the Code as of the time of
his Separation from Service shall be made by Company in accordance with the
terms of Section 409A of the Code and applicable guidance thereunder (including
without limitation Treas. Reg. Section 1.409A-1(i)).  This Agreement is intended
to be written, administered, interpreted and construed in a manner such that no
payment or benefits provided under the Agreement become subject to (a) the gross
income inclusion set forth within Section 409A(a)(1)(A) of the Code or (b) the
interest and additional tax set forth within Section 409A(a)(1)(B) of the Code
(together, referred to herein as the “Section 409A Penalties”), including, where
appropriate, the construction of defined terms to have meanings that would not
cause the imposition of Section 409A Penalties.  In no event shall Company be
required to provide a tax gross-up payment to Executive or otherwise reimburse
Executive with respect to Section 409A Penalties.

 

8.14                        Signatures

 

This Agreement may be executed in two or more counterparts all of which shall be
considered one and the same Agreement and shall become effective when one or
more counterparts have been signed by each of the parties and delivered to the
other party, it being understood that all parties need not sign the same
counterpart.

 

[signature page follows]

 

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed and delivered as of the date first above written.

 

 

“Company”

 

 

 

 

 

K12 INC.

 

a Delaware corporation

 

 

 

 

 

By:

/s/ Nathaniel A. Davis

 

 

Nathaniel A. Davis

 

 

Executive Chairman

 

 

 

 

 

 

 

/s/ Ronald J. Packard

 

Ronald J. Packard

 

Chief Executive Officer

 

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