exv10w1






Exhibit 10.1



April 8, 2010




Mr. Harry T. Hawks

[Redacted]



Dear Harry:



It gives me great pleasure to confirm your employment with K12 Services Inc., a Delaware
corporation (the “Company”), beginning May 5, 2010 (the “Start Date”). Once countersigned by you,
this letter shall constitute a binding agreement (the “Agreement”) between you (the “Executive”)
and the Company, effective as of the date of this letter set forth above (the “Effective Date”).
This Agreement is contingent upon successful completion of our standard background check(s).





	1.	 	Employment. The Company hereby employs Executive on the terms and conditions set forth in
this Agreement and Executive hereby accepts such employment.
Executive shall be employed as Executive Vice President of the Company as of the Start Date and
will be appointed by the Board of Directors at its first meeting
after Executive’s start date to serve as
Chief Financial Officer reporting to the Chief Executive
Officer, Ronald J. Packard. Executive shall perform such duties and have such responsibilities
as are normally commensurate with Executive’s position, including such other duties as are
reasonably assigned to Executive from time to time. Executive agrees that the Company shall be
his exclusive employer and Executive shall devote his full business time to performing
Executive’s responsibilities under this Agreement.
	 
	2.	 	Salary. Executive’s semi-monthly salary during the first year of employment from the Start
Date shall be $16,666.67, which equates to $400,000.00 annually (the “Base Salary”), subject
to standard payroll deductions. The Base Salary shall be paid on the Company’s regular
payroll dates in accordance with the Company’s normal payroll practices. Executive’s Base
Salary shall be reviewed annually, and the Compensation Committee and principal executive
officer shall determine, in their sole and absolute discretion, whether to grant Executive any
increases to the Base Salary based on the performance of Executive and the Company.
	 
	3.	 	Performance Bonus. Executive will be eligible to receive an annual end of year bonus (the
“Performance Bonus”) equal to fifty percent (50%), pro-rated in the first year based on the
Start Date, of Executive’s Base Salary for the fiscal year ending June 30, 2010, and for each
year thereafter during Executive’s tenure at the Company, and subject to the sole and absolute
discretion of the Compensation Committee. Executive’s annual bonus shall be determined under
the same incentive compensation plans applicable to all senior executives. Any Performance
Bonus shall be paid in accordance with the terms of the Company’s bonus plan, but in any event
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).
	 
	4.	 	Stock Options. The Company hereby agrees to enter into a Stock Option Agreement with
Executive following the Start Date which shall grant to Executive (subject to certain
conditions) an option to purchase up to one hundred thousand (100,000) shares of the Common
Stock of the Company at an exercise price equal to the closing price for a share of Common
Stock of the Company on the New York Stock Exchange on the date the Compensation Committee
approves the grant, and which shall be made pursuant to the K12 Inc. 2007 Equity Incentive
Award Plan (the “Option”). The Compensation Committee shall meet no later than its next
regular meeting, scheduled for May 19, 2010, to grant the Option.
	 
	 	 	The Option is time-based and will vest and become exercisable over four (4) years, with
twenty-five percent (25%) of the shares covered by the Option vesting and becoming exercisable
on the one-year anniversary of the Start Date and the remaining seventy-five percent (75%) of
the shares covered by the Option vesting and
becoming exercisable in twelve (12) equal quarterly installments thereafter. The Stock Option
Agreement shall provide further that, in the event of a “Change in Control” of the Company, as
defined therein, Executive shall be







 









 







	 	 	entitled to accelerated vesting of one hundred percent
(100%) of the options that have not yet vested during the installment period as of the date of
such event.
	 
	5.	 	Restricted Stock Award. The Company hereby agrees to enter into a Restricted Stock Award
(“RSA”) Agreement with Executive following the Start Date, which shall grant to Executive
twenty-five thousand (25,000) shares of the Common Stock of the Company. The Compensation
Committee shall meet no later than its next regular meeting, scheduled for May 19, 2010, to
grant the RSA. . Upon approval, you will receive an RSA Agreement which sets forth the terms
and conditions applicable to your grant, including the vesting schedule for your RSAs.
	 
	6.	 	Personal Time Off. Executive shall be entitled to twenty (20) days of paid vacation time off
and two (2) days of paid personal time off during each year of your employment. The number of
personal days off will be pro-rated in the first year of employment based on the Start Date.
Executive will accrue vacation time throughout the calendar year and will receive the two (2)
personal days on the first day of January of each year of employment. Executive will be able
to use vacation and personal time off in accordance with the Company’s policy, which is
subject to change or deletion at the discretion of the Company.
	 
	7.	 	Expenses. During Executive’s employment, the Company shall reimburse Executive for
reasonable travel, business entertainment, and other business expenses incurred in the
performance of Executive’s duties, upon presentation of supporting documentation.
	 
	8.	 	Lodging. Commencing on your Start Date and during your first eighteen (18) months of
employment, the Company will provide you with an apartment in Herndon and will reimburse your
expenses to commute to and from your home in Connecticut.
	 
	9.	 	Relocation Assistance. You will be eligible for full reimbursement upon receipts for
physically moving all belongings from Connecticut to a residence in the Washington, DC Metro
area. K12 will also reimburse you in calendar year 2011 for all closing costs associated with
the purchase of a home in the Washington, DC Metro area, provided that the closing costs are
incurred prior to the end of calendar year 2011. In the event a closing does not occur in
calendar year 2011, Company shall work with Executive to ensure reimbursement consistent with
the requirements of Section 409A of the Internal Revenue Code.
	 
	10.	 	Benefits (Health and Welfare Plans). Executive will be eligible to participate in such
benefit plans as may be adopted from time to time by the Company on the same basis as
similarly situated employees, including participation in any senior-level executive benefit
plans that may be adopted by the Company. Executive’s participation shall be subject to: (i)
the terms of the applicable plan documents; (ii) generally applicable Company policies; and
(iii) the discretion of the Board of Directors of the Company or any administrative or other
committee provided for in, or contemplated by, such plan or programs. These plans and
programs are subject to change or deletion at the discretion of the Company.




 









 






	11.	 	Retirement Benefits. K12 Services Inc. offers a 401(k) retirement plan, with a Company match of
twenty-five percent (25%) up to four percent (4%) percent of Executive’s contribution, annually.
Executive will be automatically enrolled at a rate of three percent (3%) of Executive’s monthly
paycheck, to be withheld, pretax, and deposited into Executive’s 401(k) retirement plan account.
Executive may increase, decrease, or opt-out of 401(k) retirement plan withholding at any time.
Please contact your assigned HR Generalist for the documentation needed to make a change.
	 
	12.	 	Holidays. Executive will be eligible for paid holidays in accordance with the Company’s
holiday policy and schedule, as may be amended by the Company from time to time at the sole
discretion of the Company.
	 
	13.	 	Employment at Will: Termination.






	 	13.1.	 	Employment at Will. Executive’s employment with the Company will be on an “at will”
basis, meaning that Executive’s employment is not for a specified period of time and can be
terminated by Executive or the Company at any time, with or without cause, and with or
without notice.
	 
	 	13.2.	 	Termination by Company for Cause. The Company may terminate this Agreement at any
time, effective immediately, for Cause, which shall be defined as: (i) a Willful and
continued material failure to perform Executive’s duties under this Agreement in a
satisfactory manner (other than as a result of total or partial incapacity due to physical
or mental illness or Disability, as defined in Section 13.3 below), where Willful means,
when applied to any action or omission made by Executive, that Executive did so without a
good faith belief that such action or omission was in, or was not contrary to, the best
interests of the Company; (ii) acts of dishonesty, fraud, embezzlement, misrepresentation,
and misappropriation involving the Company or any of its affiliates; (iii) unprofessional
conduct which may adversely affect the reputation of the Company and/or its relationship
with its customers, employees or suppliers ; and (iv) a conviction of, or entry of a guilty
plea or no contest to, any crime involving moral turpitude or dishonesty (collectively
“Cause”). In the event of termination of this Agreement for Cause, Executive shall
immediately be paid all accrued Base Salary, all accrued but unused PTO and any reasonable
and necessary business expenses properly incurred by Executive in connection with the
duties hereunder, all through the date of termination. All stock options covered by the
Option shall expire at the date of termination for any of the above-enumerated reasons to
terminate for Cause. In addition, the parties’ obligations hereunder, except as set forth
in the attached K12 Employee Confidentiality, Proprietary Rights and
Non-Solicitation Agreement, K12 Agreement to Arbitrate, and Sections 13 and 15 of this
Agreement, shall terminate.
	 
	 	13.3.	 	Termination upon Disability. Executive’s employment with the Company shall terminate
upon the Disability of Executive. In the event of such termination, the Company shall pay
to Executive any unpaid compensation to the extent earned and payable as of the date of
termination. As used herein, the term “Disability” means a physical or mental disability
that renders Executive unable to perform Executive’s normal duties for the Company for a
period of ninety (90) or more days as determined in the good faith judgment of the
Compensation Committee or the Board of Directors of the Company. If Executive disagrees
with the good faith determination of Disability, the matter shall be submitted to
arbitration pursuant to the K12 Agreement to Arbitrate, which is incorporated herein by
reference as provided in Section 15.1 of this Agreement.
	 
	 	13.4.	 	Termination by Company without Cause. The Company may terminate Executive’s
employment and this Agreement at any time, effective immediately, without Cause. In the
event that the Company terminates Executive’s employment and this Agreement without Cause,
Executive shall be paid immediately (except as noted) all accrued Base Salary, all accrued
but unused PTO, and any reasonable and necessary business expenses properly incurred by
Executive in connection with Executive’s duties hereunder, all through the date of
termination, as well as, provided that such termination of employment constitutes a
“separation from service” with the Company as such term is defined in Treasury Regulation




 









 






	 	 	 	Section 1.409A-1(h) and any successor provision thereto (a “Separation from Service”), the
severance pay set forth in Section 13.5.2 below. In addition, the parties’ obligations
hereunder, except as set forth in the attached K12 Employee Confidentiality, Proprietary
Rights and Non-Solicitation Agreement, K12 Agreement to Arbitrate and Sections 13 and 15 of
this Agreement, shall terminate.
	 
	 	13.5.	 	Termination by Employee. In the event of termination of this Agreement by Executive
other than for Good Reason (as defined in Section 13.5.1 below), Executive shall not be
entitled to any salary, bonus, benefits, severance pay or other remuneration after the
effective date of termination, other than the payment for accrued but unused PTO. In
addition, the parties’ obligations hereunder, except as set forth in the attached K12
Employee Confidentiality, Proprietary Rights and Non-Solicitation Agreement, K12
Agreement to Arbitrate and Sections 13 and 15 of this Agreement, shall terminate.






	 	13.5.1.	 	In the event that Executive resigns his or her employment and terminates this
Agreement for Good Reason, then, provided that such resignation constitutes a
Separation from Service, Executive shall be entitled to the severance pay set forth in
Section 13.5.2 below. In addition, the parties’ obligations hereunder, except as set
forth in the attached K12 Employee Confidentiality, Proprietary Rights and
Non-Solicitation Agreement, K12 Agreement to Arbitrate and Sections 13 and
15 of this Agreement, shall terminate. Good Reason shall be defined as any material
breach of this Agreement by the Company which is not cured within sixty (60) days after
written notice thereof from Executive in the manner provided in Section 15.6 of this
Agreement. Notwithstanding the foregoing, Executive may not resign his or her
employment for Good Reason unless (i) Executive provides the Company prior written
notice of his or her intent to resign for Good Reason within ninety (90) days of the
initial existence of any condition constituting Good Reason, (ii) the Company is
provided with a period of at least sixty (60) days to remedy such condition and does
not remedy the condition within such sixty (60) day period and (iii) Executive’s
termination of employment occurs no later than one hundred and eighty (180) days after
the initial existence of the condition constituting Good Reason.
	 
	 	13.5.2.	 	Effect of Termination (Severance Pay). Upon termination of Executive’s employment
and this Agreement by the Company pursuant to Section 13.4 or by Executive pursuant to
Section 13.5.1 above, and provided that such termination constitutes a Separation from
Service and provided further that Executive executes and does not revoke a general
release of claims satisfactory to the Company within thirty (30) days following the
date of termination, Executive shall be entitled to twelve (12) months of severance pay
at the then-existing Base Salary, payable in equal installments at the same time and in
the same manner as such Base Salary had been paid prior to such termination; provided
that any payments required to be made prior to the thirtieth (30th) day
following the date of termination of employment (the “First Pay Date”) shall be paid in
a single lump sum on the first regularly scheduled payroll date on or following the
First Pay Date. For purposes of Section 409A of the Code (including, without
limitation, for purposes of Treasury Regulation Section 1.409A-2(b) (iii)), each
payment that Executive may be eligible to receive under this Agreement shall be treated
as a separation and distinct payment.





 









 






	14.	 	Other Conditions of Employment.






	 	14.1.	 	Employee Confidentiality, Proprietary Rights and Non-Solicitation; Agreement to
Arbitrate; and Non-Competition. Executive’s employment is contingent upon the execution of
the enclosed K12 Employee Confidentiality, Proprietary Rights and Non-Solicitation
Agreement and K12 Agreement to Arbitrate, at or before the Start Date. In addition, during
the period in which Executive is receiving any compensation from the Company (including and
no less than the severance period) and for a twelve-month period thereafter, Executive
shall not engage in, or be employed by, a business or organization that renders the same
or similar services as K12 or otherwise competes with the Company or its business. In
applying this non-competition provision, the Company will not unreasonably withhold its
consent for future employment with entities that are not direct competitors or offer
substantially the same or similar services as the Company.
	 
	 	14.2.	 	Immigration Reform and Control Act of 1986. Executive’s employment is contingent upon
satisfying the requirements for employment in the United States. Within three (3) days of
the Start Date, and thereafter if the law requires, Executive shall furnish the Company
with all necessary documentation that will satisfy the requirements of the Immigration
Reform and Control Act of 1986.
	 
	 	14.3.	 	Policies and Procedures. Executive’s employment is subject to the Company’s personnel
policies and procedures as they may be interpreted, adopted, revised or deleted from time
to time in the Company’s sole discretion. Notwithstanding the general applicability of such
policies, the Company hereby agrees that Executive shall be afforded reasonable additional
flexibility regarding the Company’s core business work hours and use of the Company’s
apartment as provided in Section 8 of this Agreement, although Company reserves the right
in its absolute discretion to terminate such use of the Company’s apartment at the time of
relocation, termination of employment or other reason not in conflict with the purpose of
Section 8 of this Agreement.






	15.	 	Miscellaneous.






	 	15.1.	 	Entire Agreement. The terms described in this Agreement, together with the K12
Employee Confidentiality, Proprietary Rights and Non-Solicitation Agreement, and K12
Agreement to Arbitrate, both attached hereto and incorporated herein by reference, set
forth the entire understanding between Executive and the Company, and supersede any prior
representations or agreements, whether written or oral, with respect to the subject matter
hereof. No term or provision of this Agreement or attached exhibits may be amended waived,
released, discharged or modified except in writing, signed by Executive and an authorized
officer of the Company, except as otherwise specifically provided herein.
	 
	 	15.2.	 	Governing Law and Venue. This Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Virginia, without reference to conflict of
law principles. If any legal action is initiated by either party arising from or related
to this Agreement, the parties agree to the exclusive jurisdiction of the courts of Fairfax
County, Virginia.
	 
	 	15.3.	 	Successors. This Agreement shall be binding upon and shall inure to the benefit of
the Company and its successors and assigns. In that this Agreement constitutes a
non-delegable personal services agreement, it may not be assigned by Executive and any
attempted assignment by Executive in violation of this covenant shall be null and void.




 









 






	 	15.4. 	 	Severability. In the event that any one or more of the provisions of this Agreement shall
be or become invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions of this Agreement shall not be affected thereby,
and all such remaining provisions shall remain in full force and effect.
	 
	 	15.5.	 	Waiver. The failure of either party to insist on strict compliance with any of the
terms of this Agreement will not be deemed to be a waiver of any terms of this Agreement or
of the party’s right to require strict compliance with the terms of this Agreement in any
other instance.
	 
	 	15.6.	 	Notices. All notices, demands, or requests provided for or permitted to be given
pursuant to this Agreement must be given in writing, unless otherwise specified, and shall
be deemed to have been properly given, delivered, or served by depositing the same in the
United States mail, postage prepaid, certified or registered mail, with deliveries to be
made to the following addresses:





	 	 	 	 	 

	 

	 	If to Executive:
	 	Harry T. Hawks
	 

	 	 	 	[Redacted]
	 
	 	 	 	 
	 

	 	If to the Company:
	 	Attn: General Counsel
	 

	 	 	 	K12 Services Inc.
	 

	 	 	 	2300 Corporate Park Drive
	 

	 	 	 	Herndon, VA 20171





Either party may change such party’s address for notices as necessary by notice given pursuant to
this Section.





	16.	 	Captions. Section headings used in this Agreement are for convenience of reference only and
shall not be considered a part of this Agreement.






	17.	 	Amendments and Further Assurances. This Agreement may be amended or modified from time to
time, but only by written instrument executed by all the parties hereto. No variations,
modifications, or changes herein or hereof shall be binding upon any party except as set forth
in such a written instrument. The parties will execute such further instruments and take such
further action as may be reasonably necessary to carry out the intent of this Agreement.






	18.	 	Counterparts. This Agreement may be executed in one or more counterparts, each of which
shall be deemed an original, and all of which together shall constitute one instrument.






	19.	 	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 the Company or that in
any way restricts the services that may be rendered by Executive for the 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. In addition, Executive has disclosed to the
Company the educational and religious institutions to which Executive has made
charitable contributions and donated his services prior to entering into this Agreement,
and the Company has determined that a continuation of those activities after execution
of this Agreement, absent a material change in the status of those institutions as they
relate to the Company, is consistent with the Company’s Code of Business Conduct and
Ethics.



 









 






     (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 the Company and that they are
fair, reasonable and necessary to protect and maintain the proprietary interests,
goodwill and other legitimate business interests of the Company in view of the following
facts: (i) Executive will hold a position of confidence and trust with the Company as a
result of Executive’s employment with the Company, access to confidential financial and
other information, and relationship with the customers, suppliers and other employees of
the Company, (ii) it would be impossible for Executive to be employed or engaged in a
directly competitive business to that of the Company as described in Section 14.1 of
this Agreement without inevitably using the Company’s proprietary information, and (iii)
Executive has broad skills that will permit gainful employment in many areas and
businesses outside the scope of the Company’s business.




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




	20.	 	Section 409A.






     (a) Compliance. In the event that following the date hereof the Company or
Executive reasonably determines that any compensation or benefits payable under this
Agreement may be subject to Section 409A of the Code, the 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.




     (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
Section 13.5.2 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 payments are treated as non-qualified deferred compensation
subject to 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 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 the Company
in accordance with the terms of Section 409A of the Code and applicable guidance there
under (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 the Company be required to provide a tax gross-up payment
to Executive or otherwise reimburse Executive with respect to Section 409A Penalties.


Please acknowledge your acceptance of employment by signing the enclosed copy of this letter,
completing the K12 Confidentiality, Proprietary Rights and Non-Solicitation Agreement and K12
Agreement to Arbitrate, and returning them to me as soon as possible. Should you have any
questions, please feel free to contact me. Harry, I am personally pleased to welcome you to the
K12 team and I look forward to working with you toward our mutual success.




	 	 	 

	 

	 	Sincerely,
	 
	 	 
	 

	 	/s/ Howard Allentoff
	 
	 	 
	 

	 	Howard Allentoff
	 

	 	Senior Vice President, Human Resources
	 

	 	K12 Services Inc.





Agreed and Accepted:




	 	 	 	 	 
	/s/ Harry T. Hawks	 	4-08-10	 	 
	Harry T. Hawks

	 	Date
	 	Start Date