exv10w15



 





Exhibit 10.15




8000 Westpark Drive

Suite 500

McLean, va 22102




Ph 703.748.4005

fax 703.288.6740




www.K12.com




March 10, 2006




Celia Stokes

6134 Jefferson Blvd

Frederick, Maryland 21703




Dear Celia:



It gives me great pleasure to confirm your employment with K12 Inc., a Delaware
corporation (the “Company”), beginning March 20, 2006 (the “Start Date”). Once
countersigned by you, this letter shall constitute a binding agreement (“Agreement”)
between you and the Company, effective as of the date of this letter set forth above (the
“Effective Date”).





	 	1.	 	Employment. The Company agrees to initially
employ you and you agree to be initially employed as the Company’s Chief Marketing Officer. This
position will be located at the Company’s headquarters’, currently in McLean, Virginia
(with relocation to Herndon, Virginia scheduled for April, 2006).You shall report
directly to the Company’s Executive Vice President of Operations (“EVP”)
and Chief Financial Officer, and perform such duties and have such
responsibilities as are normally associated with your position and such duties as are
reasonably assigned to you from time to time.
	 
	 	2.	 	Salary. Your salary during the first year
of your employment by the Company
shall be Eighteen Thousand, One Hundred and Sixty Six and 67/100
Dollars ($18,166.67) monthly, which equates to Two Hundred and Eighteen
Thousand Dollars ($218,000.00) on an annualized basis (“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.
	 
	 	3	 	Signing and Other Bonuses.






3.1 Signing Bonus. On the first regularly scheduled pay date after the Start
Date, the Company will pay you a signing bonus of Fifteen Thousand Dollars
($15,000.00) subject to standard payroll deductions.




3.2 End-of-Year Bonus. For July 2005 through June 2006, you shall be
eligible for a bonus based on your and the Company’s achievement of goals and
objectives as mutually agreed upon by you and the EVP (the “Performance
Bonus”) of thirty percent (30%) of your Base Salary (on a prorated basis from
your mid-year start date) but no less than Twelve Thousand Dollars
($12,000.00). Please note that this initial guaranteed performance bonus shall be








					
	CONFIDENTIAL
	 	-1-
	 	 






 









 







applicable only for the first bonus period of your employment by the Company. Going
forward, your end-of-year Performance Bonus for each year during your tenure at the
Company shall be determined by the EVP and the Board of Directors.




3.3 Recovery. If your employment with the Company is terminated either by you or
for “Cause” by the Company prior to September 20, 2006 you agree to pay to the
Company an amount equal to Fifty Percent (50%) of the combined signing and
guaranteed bonus.




	 	4.	 	Stock Options. Subject to approval by the Company’s Board of Directors, the
Company will grant you an option to purchase One Hundred Thousand
(100,000) shares of the Company’s common stock, at a price to be determined
by the Board of Directors, pursuant to the terms of the K12 Inc. Amended and
Restated Stock Option Plan and an applicable stock option agreement between
you and the Company (the “Option”). The Option 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 (75%) of the shares
covered by the Option vesting and becoming exercisable in twelve equal
quarterly installments thereafter.
	 
	 	5. 	 	Personal Time Off. You shall be entitled to fifteen (15) days of paid
personal time off (“PTO”) during each year of your employment. You will accrue all
such PTO on July 1 of each year during your employment. You will be able to
use PTO in accordance with the Company’s PTO policy, which policy is subject
to change or deletion at the discretion of the Company.
	 
	 	6.	 	Expenses. During your employment, the Company shall reimburse you for your
reasonable travel (excluding travel to and from any residence), business
entertainment, and other business expenses incurred in the performance of your
duties, including reasonable and/or required professional dues and fees (e.g.,
professional association dues, continuing education expenses, etc.), subject to
the rules and regulations adopted by the Company for the handling of such
business and professional expenses.
	 
	 	7. 	 	 Benefits (Health and Welfare Plans). You will be eligible to participate in
such benefit plans as may be from time to time adopted by the Company on the
same basis as similarly situated employees. Your 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





-2-









 







contemplated by, such plan or programs. These plans and programs are subject to change
or deletion at the discretion of the Company.




	 	8.	 	Holidays. You 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.
	 
	 	9. 	 	 Employment at Will; Termination.






	 	9.1	 	Employment at Will. Your employment with the Company will be on an
“at-will” basis, meaning that your employment is not for a specified period
of time and can be terminated by you or the Company at any time, with or
without cause and with or without notice.
	 
	 	9.2	 	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 substantially to
perform your duties in a satisfactory manner (other than as a result of total
or partial incapacity due to physical or mental illness or Disability, as
defined below), where Willful means, when applied to any action or
omission made by you, that you, in acting or omitting to act, 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; or (ii) acts of dishonesty, fraud,
embezzlement, misrepresentation, moral turpitude; or (iii) unprofessional
conduct which may adversely affect the reputation of the Company and/or
its relationship with its customers, employees or suppliers , or (iv) a
conviction of, or entry of a guilty plea or no contest to, any crime involving
moral turpitude or dishonesty (collectively, “Cause”); provided that no such
termination for Cause as defined in (i) above shall be deemed to be for
Cause unless the Company shall have given to you at least thirty (14) days’
prior written notice of the actions or omissions giving rise to such
termination for Cause, which written notice shall set forth in reasonable
detail the facts and circumstances claimed to provide a basis for such
termination. In the event of termination of this Agreement for Cause, you
shall immediately be paid all accrued Base Salary, all accrued but unused
PTO and any reasonable and necessary business expenses incurred by you
in connection with your duties hereunder, all to the date of termination.
Consistent with the K12 Inc. Amended and Restated Stock Option Plan, all
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 Employee
Confidentiality, Proprietary Rights, and Non-Solicitation Agreement,






-3-









 






	 	 	 	Agreement to Arbitrate, and Sections 9 and 11 of this Agreement, shall
terminate. “Disability” means physical or mental incapacity resulting in you being
unable for a period of six (6) consecutive months or for an aggregate of six (6)
months in any twenty-four (24) consecutive month period to perform your duties. Any
dispute between you and the Company regarding the existence of your alleged
Disability shall be determined in writing by a qualified independent physician
mutually acceptable to you and the Company. If you and the Company cannot agree as
to a qualified independent physician, each shall appoint such a physician and those
two physicians shall select a third who shall make such determination in writing.
The determination of Disability made in writing to you and the Company shall be
final and conclusive for all purposes of this Agreement.
	 
	 	9.3	 	Termination by Company Without Cause. The Company may terminate
this Agreement at any time, effective immediately, without Cause. In the
event that the Company terminates this Agreement without Cause, you shall
be paid immediately (except as noted) all accrued Base Salary, all accrued
but unused PTO, and any reasonable and necessary business expenses
incurred by you in connection with your duties hereunder, all to the date of
termination, as well as the severance pay set forth in Section 9.5 below. In
addition, the parties’ obligations hereunder, except as set forth in the
attached Employee Confidentiality, Proprietary Rights and Non-Solicitation
Agreement, Agreement to Arbitrate and Sections 9 and 11 of this
Agreement, shall terminate.
	 
	 	9.4	 	Termination by Employee.






(a) In the event of termination of this Agreement by you other than for
Good Reason (as defined in Section 9.4(b) below), you 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 Employee Confidentiality, Proprietary Rights and Non-Solicitation
Agreement, Agreement to Arbitrate and Sections 9 and 11 of
this Agreement, shall terminate




(b) In the event that you terminate this Agreement for Good Reason,
then you shall be entitled to the severance pay set forth in Section 9.5 below.
In addition, the parties’ obligations hereunder, except as set forth in the
attached Employee Confidentiality, Proprietary Rights and Non-Solicitation
Agreement, Agreement to Arbitrate and Sections 9 and 11 of this
Agreement, shall terminate. Good Reason shall be defined as: your



-4-









 






resignation within forty (40) days after your discovery of any material
breach of this agreement by the Company which is not cured within thirty
(30) days after written notice thereof from you.




	 	9.5	 	Effect of Termination. Upon termination of this Agreement by the
Company pursuant to Section 9.3 or by you pursuant to Section 9.4(b)
above, and provided you execute a general release of claims satisfactory to
the Company, you shall be entitled to: (a) one hundred eighty (180) days
severance pay at your then-existing Base Salary, payable at the same time
and in the same manner as such Base Salary had been paid prior to such
termination. You agree to promptly notify Company if you obtain new
employment during the severance period, and any other compensation received
by you from any such employment and/or engagement shall reduce on a
dollar-for-dollar basis the amount of compensation otherwise payable by the
Company during that period
	 
	 	9.6	 	Change of Control Acceleration. In the event of a Change of Control,
your Option shall accelerate such that the entire Option shall be
immediately vested and exercisable consistent with the terms of your stock
option agreement. A Change of Control shall be defined as: (A) the direct
sale or exchange by the stockholders of the Company of all or substantially
all of the stock of the Company( but excluding any sale in connection with
an initial public offering), where the stockholders of the Company before
such sale or exchange do not retain, directly or indirectly, at least a majority
of the beneficial interests in the voting stock of the acquiring or surviving
entity after such sale or exchange; (B) a merger or consolidation to which
the Company is a party where the stockholders of the Company before such
merger or consolidation do not retain, directly or indirectly, at least a
majority of the voting stock of the successor entity after such merger or
consolidation; (C) the sale, exchange, or transfer of all or substantially all of
the assets of the Company to an unrelated third party.






	 	10.	 	Other Conditions of Employment.






10.1 Employee Confidentiality, Proprietary Rights and Non-Solicitation/Agreement
to Arbitrate. Your employment is contingent upon
your execution of the enclosed K12 Employee Confidentiality, Proprietary
Rights and Non-Solicitation Agreement and Agreement to Arbitrate, at or before
the Start Date.




10.2 Immigration Reform and Control Act of 1986. Your employment is
contingent upon you satisfying the requirements for employment in the United



-5-









 






States. Within three (3) days of the Start Date, and thereafter if the law requires,
you will be required to furnish the Company with all necessary documentation that will
satisfy the requirements of the Immigration Reform and Control Act of 1986.




10.3 Policies and Procedures. Your 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.




	 	11.	 	Miscellaneous.






11.1 Entire Agreement. The terms described in this Agreement, together with
the Employee Confidentiality, Proprietary Rights and Non-Solicitation
Agreement, and Agreement to Arbitrate, both attached hereto and incorporated
herein by reference, set forth the entire understanding between us, and supercede
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 you and an authorized officer of the Company, except as
otherwise specifically provided herein.




11.2 Governing Law. 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.




11.3 Successors. The Agreement shall be binding upon and shall inure to the
benefit of the Company and its successors and assigns. In that the Agreement
constitutes a non-delegable personal services agreement, it may not be assigned
by you and any attempted assignment by you in violation of this covenant shall
be null and void.




11.4 Severability. In the event that any one ore 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.




11.5 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 the Agreement in any other instance.




-6-










 






11.6 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 Celia Stokes:
	 	Celia Stokes
	 

	 	 	 	6134 Jefferson Blvd
	 

	 	 	 	Frederick, Maryland 21703
	 

	 	If to Company:
	 	Attn: John Baule, EVP and CFO
	 

	 	 	 	K12 Inc.
	 

	 	 	 	8000 Westpark Dr
	 

	 	 	 	McLean, VA 22102







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




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




11.8 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 the
Agreement.




11.9 Counterparts. The 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.



-7-









 




Please acknowledge your acceptance of employment by signing the enclosed copy of this letter, and
completing the K12 Confidentiality, Proprietary Rights and Non-Solicitation Agreement, and
Agreement to Arbitrate, if you have not already done so and returning them to me as soon as
possible. Should you have any questions, please feel free to contact me. Celia, I am personally
pleased you are a member of the K12 team and I look forward to working with you toward our mutual
success.




Sincerely,






John Baule

EVP Operations and

CFO K12, Inc.




Agreed and Accepted:






Celia Stokes




	 	 	 	 
	3-15-06

	 \ 	3-21-06
	 
	Date

	 	Start Date






-8-








 





Please acknowledge your acceptance of employment by signing the enclosed copy of this letter, and
completing the K12 Confidentiality, Proprietary Rights and Non-Solicitation Agreement, and
Agreement to Arbitrate, if you have not already done so and returning them to me as soon as
possible. Should you have any questions, please feel free to contact me. Celia, I am personally
pleased you are a member of the K12 team and I look forward to working with you toward our mutual
success.




Sincerely,






John Baule

EVP Operations and CFO

K12, Inc.




Agreed and Accepted:






Celia Stokes




	 	 	 	 
	3-15-06

	 \ 	3-21-06
	 
	Date

	 	Start Date







-8-