EXHIBIT 10.1

 

CORINTHIAN COLLEGES, INC.

2004 NEW-HIRE AWARD PLAN

STOCK OPTION AGREEMENT

 

THIS STOCK OPTION AGREEMENT (this “Option Agreement”) by and between CORINTHIAN
COLLEGES, INC., a Delaware corporation (the “Corporation”), and
                             (the “Participant”) evidences the stock option (the
“Option”) granted by the Corporation to the Participant as to the number of
shares of the Corporation’s Common Stock first set forth below.

 

Number of Shares of Common Stock:1

                                                          Award Date:   
                                                    

Exercise Price per Share:1

   $                Expiration Date:1, 2   
                                                      Vesting1,2  The Option
shall become vested as to 25% of the total number of shares of Common Stock
subject to the Option on the first anniversary of the Award Date. The remaining
75% of the total number of shares of Common Stock subject to the Option shall
vest in three substantially equal installments on each of second, third and
fourth anniversaries of the Award Date.

 

The Option is granted under the Corinthian Colleges, Inc. 2004 New-Hire Award
Plan (the “Plan”) and subject to the Terms and Conditions of Management Stock
Option (the “Terms”) attached to this Option Agreement (incorporated herein by
this reference) and to the Plan. The Option was approved by the Corporation’s
Compensation Committee (the “Committee”) as an inducement material to the
Participant’s entering into employment with the Corporation or one of its
Subsidiaries. The Option has been granted to the Participant in addition to, and
not in lieu of, any other form of compensation otherwise payable or to be paid
to the Participant. Capitalized terms are defined in the Plan if not defined
herein. The parties agree to the terms of the Option set forth herein. The
Participant acknowledges receipt of a copy of the Terms and the Plan.

 

“PARTICIPANT”      CORINTHIAN COLLEGES, INC.,
a Delaware corporation

 

       By:      Signature      Its:                    Print Name            

 

 

 

 

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1 Subject to adjustment under Section 6.3 of the Plan.

2 Subject to earlier termination as provided in Section 4 of the Terms.

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CORINTHIAN COLLEGES, INC.

2004 NEW-HIRE AWARD PLAN

TERMS AND CONDITIONS OF MANAGEMENT STOCK OPTION

 

1. Vesting; Limits on Exercise.

 

As set forth on the cover page of this Option Agreement, the Option shall vest
and become exercisable in percentage installments of the aggregate number of
shares of Common Stock subject to the Option. The Option may be exercised only
to the extent the Option is vested and exercisable.

 

  •   Cumulative Exercisability. To the extent that the Option is vested and
exercisable, the Participant has the right to exercise the Option (to the extent
not previously exercised), and such right shall continue until the expiration or
earlier termination of the Option.

 

  •   No Fractional Shares. Fractional share interests shall be disregarded, but
may be cumulated.

 

  •   Minimum Exercise. No fewer than 1001 shares of Common Stock may be
purchased at any one time, unless the number purchased is the total number at
the time exercisable under the Option.

 

  •   Incentive Stock Option Status. The Option is not and shall not be deemed
to be an incentive stock option within the meaning of Section 422 of the Code.

 

2. Continuance of Employment/Service Required; No Employment/Service Commitment.

 

Except as expressly provided in Section 4 below, the vesting schedule requires
continued employment or service through each applicable vesting date as a
condition to the vesting of the applicable installment of the Option and the
rights and benefits under this Option Agreement. Employment or service for only
a portion of the vesting period, even if a substantial portion, will not entitle
the Participant to any proportionate vesting or avoid or mitigate a termination
of rights and benefits upon or following a termination of employment or services
as provided in Section 4 below or under the Plan.

 

Nothing contained in this Option Agreement or the Plan constitutes an employment
or service commitment by the Corporation or any of its Subsidiaries, affects the
Participant’s status as an employee at will who is subject to termination
without cause, confers upon the Participant any right to remain employed by or
in service to the Corporation or any Subsidiary, interferes in any way with the
right of the Corporation or any Subsidiary at any time to terminate such
employment or service, or affects the right of the Corporation or any Subsidiary
to increase or decrease the Participant’s other compensation.

 

3. Method of Exercise of Option.

 

The Option shall be exercisable by the delivery to the Secretary of the
Corporation (or such other person as the Committee may require pursuant to such
administrative exercise procedures as the Committee may implement from time to
time) of:

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  •   a written notice stating the number of shares of Common Stock to be
purchased pursuant to the Option or by the completion of such other
administrative exercise procedures as the Committee may require from time to
time,

 

  •   payment in full for the Exercise Price of the shares to be purchased in
cash, check or by electronic funds transfer to the Corporation, or (subject to
compliance with all applicable laws, rules, regulations and listing
requirements) in shares of Common Stock already owned by the Participant, valued
at their Fair Market Value on the exercise date, provided, however, that any
shares initially acquired upon exercise of a stock option or otherwise from the
Corporation must have been owned by the Participant for at least six (6) months
before the date of such exercise;

 

  •   any written statements or agreements required pursuant to Section 6.4 of
the Plan; and

 

  •   satisfaction of the tax withholding provisions of Section 6.5 of the Plan.

 

The Committee also may, but is not required to, authorize a non-cash payment
alternative by notice and third party payment in such manner as may be
authorized by the Committee.

 

4. Early Termination of Option; Change in Control Event.

 

4.1 General. The Option, to the extent not previously exercised, and all other
rights hereunder, whether vested and exercisable or not, shall terminate and
become null and void prior to the Expiration Date in the event of:

 

  •   the termination of the Participant’s employment or services as provided in
Section 6.2 of the Plan, or

 

  •   the termination of the Option pursuant to Section 6.3 of the Plan.

 

4.2 Possible Acceleration upon Certain Terminations. Notwithstanding any other
provision of this Option Agreement or of the Plan, if a Change in Control Event
(as defined in the Plan) occurs and the Option does not accelerate and become
fully vested in connection with such event as contemplated by Section 6.3.2 of
the Plan, the Option shall automatically accelerate and become fully vested upon
a termination of the Participant’s employment or services with the Corporation
and its Subsidiaries if such termination of employment or services (a) is by the
Corporation or a Subsidiary for any reason other than for Cause (as defined
below) or by the Participant for Good Reason (as defined below), and (b) occurs
in anticipation of (but in no event more than three months prior to) the date of
the Change in Control Event or within two years following the date of the Change
in Control Event. (In the event that the Participant’s employment occurs prior
to the date of the Change in Control Event and it is subsequently determined
that a Change in Control Event requires an acceleration of vesting pursuant to
the preceding sentence, the Option shall be deemed to have been fully vested on
the date that the Participant’s employment terminated.) The following
definitions shall apply solely for purposes of this Section 4.2:

 

  •   Cause. “Cause” means that the Participant has been convicted of a felony
(other than drunk driving), or has engaged in gross misconduct materially and
demonstrably injurious to the Corporation or a Subsidiary. However, no act or
failure to act, on the Participant’s part shall be considered “willful” unless
done, or omitted to be done, by the Participant not in good faith and without
reasonable belief that his action or omission was in the best interest of the
Corporation and its Subsidiaries.

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  •   Good Reason. “Good Reason” means that, without the Participant’s express
written consent, the occurrence of any one or more of the following: (a) the
assignment of the Participant to duties materially inconsistent with the
Participant’s authorities, duties, responsibilities, and status (including
titles and reporting requirements) as an employee of the Corporation or one of
its Subsidiaries, or a material reduction or alteration in the nature or status
of the Participant’s authorities, duties, or responsibilities, other than an
insubstantial and inadvertent act that is remedied by the Company promptly after
receipt of notice thereof given by the Participant; (b) a reduction by the
Corporation or a Subsidiary in the Participant’s base salary; (c) a material
reduction in the Participant’s level of participation in any of the Company’s
short and/or long-term incentive compensation plans, employee benefit or
retirement plans, or policies, practices, or arrangements in which the
Participant participates (provided, however, that reductions in the levels of
participation in any such plan, policy, practice or arrangement shall not be
deemed to be “Good Reason” if the Participant’s reduced level of participation
in each such plan, policy, practice or arrangement remains substantially
consistent with the average level of participation of other employees who have
positions commensurate with the Participant’s position); or (d) the relocation
of the Participant’s offices, as assigned to him by the Company, by more than
fifty (50) miles.

 

5. Non-Transferability.

 

The Option and any other rights of the Participant under this Option Agreement
or the Plan are nontransferable and exercisable only by the Participant, except
as set forth in Section 1.8 of the Plan.

 

6. Notices.

 

Any notice to be given under the terms of this Option Agreement shall be in
writing and addressed to the Corporation at its principal office to the
attention of the Secretary, and to the Participant at the address given beneath
the Participant’s signature hereto, or at such other address as either party may
hereafter designate in writing to the other. Any such notice shall be delivered
in person or shall be enclosed in a properly sealed envelope, addressed as
aforesaid, registered or certified, and deposited (postage and registry or
certification fee prepaid) in a post office or branch post office regularly
maintained by the United States Government. Any such notice shall be given only
when received, but if the Participant is no longer an Eligible Employee, shall
be deemed to have been duly given as of the date mailed in accordance with the
foregoing provisions of this Section 6.

 

7. Plan.

 

The Option and all rights of the Participant under this Option Agreement are
subject to, and the Participant agrees to be bound by, all of the terms and
conditions of the Plan, incorporated herein by this reference. In the event of a
conflict or inconsistency between the terms and conditions of this Option
Agreement and of the Plan, the terms and conditions of the Plan shall govern.
The Participant acknowledges receipt of a copy of the Plan and agrees to be
bound by the terms thereof and of this Option Agreement. The Participant
acknowledges reading and understanding the Plan and this Option Agreement.
Unless otherwise expressly provided in other sections of this Option Agreement,
provisions of the Plan that confer discretionary authority on the Board or the
Committee do not and shall not be deemed to create any rights in the Participant
unless such rights are expressly set forth herein or are otherwise in

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the sole discretion of the Board or the Committee so conferred by appropriate
action of the Board or the Committee under the Plan after the date hereof.

 

8. Entire Agreement.

 

This Option Agreement (including these Terms) and the Plan together constitute
the entire agreement and supersede all prior understandings and agreements,
written or oral, of the parties hereto with respect to the subject matter
hereof. The Plan and this Option Agreement may be amended pursuant to Section
6.6 of the Plan. Such amendment must be in writing and signed by the
Corporation. The Corporation may, however, unilaterally waive any provision
hereof in writing to the extent such waiver does not adversely affect the
interests of the Participant hereunder, but no such waiver shall operate as or
be construed to be a subsequent waiver of the same provision or a waiver of any
other provision hereof.

 

9. Governing Law; Limited Rights.

 

9.1. Delaware Law. This Option Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware without regard to
conflict of law principles thereunder.

 

9.2. Limited Rights. The Participant has no rights as a stockholder of the
Corporation with respect to the Option as set forth in Section 6.7 of the Plan.

 

10. Effect of this Agreement.

 

Subject to the Corporation’s right to terminate the Option pursuant to Section
6.3 of the Plan, this Option Agreement shall be assumed by, be binding upon and
inure to the benefit of any successor or successors to the Corporation.

 

11. Counterparts.

 

This Option Agreement may be executed simultaneously in any number of
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.

 

12. Section Headings.

 

The section headings of this Option Agreement are for convenience of reference
only and shall not be deemed to alter or affect any provision hereof.

 

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