Document:

exv4w9

 

Exhibit 4.9

K12 INC.

2007 EMPLOYEE STOCK PURCHASE PLAN

ARTICLE I

PURPOSE

     The purposes of this K12 Inc. 2007 Employee Stock Purchase Plan (the “Plan”) are to assist
Eligible Employees of K12 Inc., a Delaware corporation (the “Company”) and its Subsidiaries in
acquiring a stock ownership interest in the Company pursuant to a plan which is intended to qualify
as an “employee stock purchase plan” within the meaning of Section 423(b) of the Code, and to
encourage Eligible Employees to remain in the employment of the Company and its Subsidiaries.

     All share numbers set forth in this Plan give effect to the reverse stock split implemented by
the Company in connection with its initial public offering.

ARTICLE II

DEFINITIONS AND CONSTRUCTION

     Wherever the following terms are used in the Plan they shall have the meanings specified
below, unless the context clearly indicates otherwise. The singular pronoun shall include the
plural where the context so indicates.

     2.1 “Administrator” means the entity that conducts the general administration of the Plan as
provided herein. The term “Administrator” shall refer to the Committee unless the Board has
assumed the authority for administration of the Plan generally as provided in Article 3.

     2.2 “Board” shall mean the Board of Directors of the Company.

     2.3 “Change in Control” means and includes each of the following:

          (a) A transaction or series of transactions (other than an offering of Stock to the general
public through a registration statement filed with the Securities and Exchange Commission) whereby
any “person” or related “group” of “persons” (as such terms are used in Sections 13(d) and 14(d)(2)
of the Exchange Act) (other than the Company, any of its subsidiaries, an employee benefit plan
maintained by the Company or any of its subsidiaries or a “person” that, prior to such transaction,
directly or indirectly controls, is controlled by, or is under common control with, the Company)
directly or indirectly acquires beneficial ownership (within the meaning of Rule 13d-3 under the
Exchange Act) of securities of the Company possessing more than 50% of the total combined voting
power of the Company’s securities outstanding immediately after such acquisition; or

          (b) During any period of two consecutive years, individuals who, at the beginning of such
period, constitute the Board together with any new director(s) (other than a director designated by
a person who shall have entered into an agreement with the Company to effect a transaction
described in Section 2.3(a) or Section 2.3(c)) whose election by the Board or nomination for
election by the Company’s stockholders was approved by a vote of at least two-thirds of the
directors then still in office who either were directors at the beginning of the two year period or
whose election or nomination for election was previously so approved, cease for any reason to
constitute a majority thereof; or

 

 

          (c) The consummation by the Company (whether directly involving the Company or indirectly
involving the Company through one or more intermediaries) of (x) a merger, consolidation,
reorganization, or business combination or (y) a sale or other disposition of all or substantially
all of the Company’s assets in any single transaction or series of related transactions or (z) the
acquisition of assets or stock of another entity, in each case other than a transaction:

               (i) Which results in the Company’s voting securities outstanding immediately before the
transaction continuing to represent (either by remaining outstanding or by being converted into
voting securities of the Company or the person that, as a result of the transaction, controls,
directly or indirectly, the Company or owns, directly or indirectly, all or substantially all of
the Company’s assets or otherwise succeeds to the business of the Company (the Company or such
person, the “Successor Entity”)) directly or indirectly, at least a majority of the combined voting
power of the Successor Entity’s outstanding voting securities immediately after the transaction,
and

               (ii) After which no person or group beneficially owns voting securities representing 50% or
more of the combined voting power of the Successor Entity; provided, however, that no person or
group shall be treated for purposes of this Section 2.4(c)(ii) as beneficially owning 50% or more
of combined voting power of the Successor Entity solely as a result of the voting power held in the
Company prior to the consummation of the transaction.

     The Administrator shall have full and final authority, which shall be exercised in its
discretion, to determine conclusively whether a Change in Control of the Company has occurred
pursuant to the above definition, and the date of the occurrence of such Change in Control and any
incidental matters relating thereto.

     2.4 “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time, and the
regulations issued thereunder.

     2.5 “Committee” means the committee of the Board described in Article 3.

     2.6 “Compensation” of an Eligible Employee shall mean the gross base compensation received by
such Eligible Employee as compensation for services to the Company or any Designated Subsidiary,
excluding overtime payments, sales commissions, incentive compensation, bonuses, expense
reimbursements, fringe benefits and other special payments.

     2.7 “Designated Subsidiary” shall mean any Subsidiary designated by the Administrator in
accordance with Section 3.3(ii).

     2.8 “Eligible Employee” shall mean an Employee of the Company or a Designated Subsidiary: (i)
who does not, immediately after any rights under this Plan are granted, own (directly or through
attribution) stock possessing 5% or more of the total combined voting power or value of all classes
of Stock or other stock of the Company, a Parent or a Subsidiary (as determined under Section
423(b)(3) of the Code); (ii) whose customary employment is for more than twenty hours per week; and
(iii) whose customary employment is for more than five months in any calendar year; provided,
however, that the Administrator may provide in an Offering Document that (x) Employees who are
highly compensated employees within the meaning of Section 423(b)(4)(D) of the Code, and/or (y)
Employees who have not met a service requirement designated by the Administrator pursuant to
Section 423(b)(4)(A) of the Code (which service requirement may not exceed two years), shall not be
eligible to participate in an Offering Period. For purposes of clause (i) above, the rules of
Section 424(d) of the Code with regard to the attribution of stock ownership shall apply in
determining the stock ownership of an individual, and stock which an Employee may purchase under
outstanding options shall be treated as

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stock owned by the Employee. For purposes of the Plan, the employment relationship shall be
treated as continuing intact while the individual is on sick leave or other leave of absence
approved by the Company or a Designated Subsidiary and meeting the requirements of Treasury
Regulation Section 1.421-7(h)(2).

     2.9 “Employee” means any officer or other employee (as defined in accordance with Section
3401(c) of the Code) of the Company or any Designated Subsidiary.

     2.10 “Enrollment Date” shall mean the first day of each Offering Period.

     2.11 “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended from time to
time.

     2.12 “Fair Market Value” means, as of any given date, the fair market value of a share of
Stock on the date determined by such methods or procedures as may be established from time to time
by the Administrator. Unless otherwise determined by the Administrator, the Fair Market Value of a
share of Stock as of any given date shall be (a) if Stock is traded on any established stock
exchange, the closing price of a share of Stock as reported in the Wall Street Journal (or such
other source as the Administrator may deem reliable for such purposes) for such date, or if no sale
occurred on such date, the first trading day immediately prior to such date during which a sale
occurred; or (b) if Stock is not traded on an exchange but is quoted on a national market or other
quotation system, the last sales price on such date, or if no sales occurred on such date, then on
the date immediately prior to such date on which sales price are reported.

     2.13 “First Offering Period Effective Date” shall mean the date determined by the Board in its
sole discretion for the commencement of the first Offering Period, which date shall be no earlier
than the first anniversary, and no later than the fourth anniversary, of the day immediately
preceding the IPO Effective Date.

     2.14 “IPO Effective Date” shall mean the first date upon which Stock is listed (or approved
for listing) upon notice of issuance on any securities exchange or designated (or approved for
designation) upon notice of issuance as a national market security on an interdealer quotation
system.

     2.15 “Offering Document” shall have the meaning given to such term in Section 5.1.

     2.16 “Offering Period” shall mean each Offering Period designated by the Administrator in the
applicable Offering Document pursuant to Section 5.1; provided, however, that the Board shall
determine the commencement of the first Offering Period.

     2.17 “Parent” means any corporation, other than the Company, in an unbroken chain of
corporations ending with the Company if, at the time of the determination, each of the corporations
other than the Company owns stock possessing 50% or more of the total combined voting power of all
classes of stock in one of the other corporations in such chain.

     2.18 “Participant” means any Eligible Employee who has executed a participation agreement and
been granted rights to purchase Stock pursuant to the Plan.

     2.19 “Purchase Date” shall mean the last day of each Purchase Period.

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     2.20 “Purchase Period” shall mean each Purchase Period designated by the Administrator in the
applicable Offering Document pursuant to Section 5.1. A new Purchase Period will begin on the day
immediately following a Purchase Date.

     2.21 “Purchase Price” shall mean the purchase price designated by the Board and set forth in
the applicable Offering Document (which purchase price shall not be less than 85% of the Fair
Market Value of a share of Stock on the Enrollment Date or on the Purchase Date, whichever is
lower); provided, however, that, in the event no purchase price is designated in the applicable
Offering Document, the purchase price for the Offering Periods covered by such Offering Document
shall be 95% of the Fair Market Value of a share of Stock on the Purchase Date); provided, further,
that the Purchase Price may be adjusted by the Administrator pursuant to Article 9; provided,
further, that the Purchase Price shall not be less than the par value of a share of Stock.

     2.22 “Securities Act” shall mean the Securities Act of 1933, as amended from time to time.

     2.23 “Stock” means the common stock of the Company and such other securities of the Company
that may be substituted for Stock pursuant to Article 9.

     2.24 “Subsidiary” shall mean any corporation, other than the Company, in an unbroken chain of
corporations beginning with the Company if, at the time of the determination, each of the
corporations other than the last corporation in an unbroken chain owns stock possessing 50% or more
of the total combined voting power of all classes of stock in one of the other corporations in such
chain.

ARTICLE III

ADMINISTRATION

     3.1 Administrator. The Administrator of the Plan shall be the Compensation Committee
of the Board (or another committee or a subcommittee of the Board to which the Board delegates
administration of the Plan) (such committee, the “Committee”), which Committee shall consist solely
of two or more members of the Board each of whom is a “non-employee director” within the meaning of
Rule 16b-3 which has been adopted by the Securities and Exchange Commission under the Exchange Act
and which Committee is otherwise constituted to comply with applicable law. Appointment of
Committee members shall be effective upon acceptance of appointment. The Board may abolish the
Committee at any time and revest in the Board the administration of the Plan. Committee members
may resign at any time by delivering written notice to the Board. Vacancies in the Committee may
only be filled by the Board.

     3.2 Action by the Administrator. A majority of the Administrator shall constitute a
quorum. The acts of a majority of the members present at any meeting at which a quorum is present,
and, subject to applicable law and the Bylaws of the Company, acts approved in writing by a
majority of the Administrator in lieu of a meeting, shall be deemed the acts of the Administrator.
Each member of the Administrator is entitled to, in good faith, rely or act upon any report or
other information furnished to that member by any officer or other employee of the Company or any
Designated Subsidiary, the Company’s independent certified public accountants, or any executive
compensation consultant or other professional retained by the Company to assist in the
administration of the Plan.

     3.3 Authority of Administrator. The Administrator shall have the power, subject to,
and within the limitations of, the express provisions of the Plan:

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               (i) To determine when and how rights to purchase stock of the Company shall be granted and the
provisions of each offering of such rights (which need not be identical).

               (ii) To designate from time to time which Subsidiaries of the Company shall be Designated
Subsidiaries, which designation may be made without the approval of the stockholders of the
Company.

               (iii) To construe and interpret the Plan and rights granted under it, and to establish, amend
and revoke rules and regulations for its administration. The Administrator, in the exercise of
this power, may correct any defect, omission or inconsistency in the Plan, in a manner and to the
extent it shall deem necessary or expedient to make the Plan fully effective.

               (iv) To amend the Plan as provided in Article 10.

               (v) Generally, to exercise such powers and to perform such acts as the Administrator deems
necessary or expedient to promote the best interests of the Company and its Subsidiaries and to
carry out the intent that the Plan be treated as an “employee stock purchase plan” within the
meaning of Section 423 of the Code.

     3.4 Decisions Binding. The Administrator’s interpretation of the Plan, any rights
granted pursuant to the Plan, any participation agreement and all decisions and determinations by
the Administrator with respect to the Plan are final, binding, and conclusive on all parties.

ARTICLE IV

SHARES SUBJECT TO THE PLAN

     4.1 Number of Shares. Subject to Article 9, the aggregate number of shares of Stock
which may be issued pursuant to rights granted under the Plan shall
be 588,235 shares. In
addition to the foregoing, subject to Article 9, commencing on the first July 1 following the First
Offering Period Effective Date, and on each July 1 thereafter during the term of the Plan, the
number of shares of Stock which shall be made available for sale under the Plan shall be increased
by that number of shares of Stock equal to the least of (a) 2% of the Company’s outstanding shares
on such date, (b) 1,372,549 shares, or (c) a lesser amount determined by the Board. Accordingly,
subject to earlier termination of the Plan, the number of shares of Stock which shall be available
for sale under the Plan shall be subject to increase under the preceding sentence only on the first
July 1 following the First Offering Period Effective Date and on each subsequent July 1 through and
including July 1, 2017 (the “Evergreen”). If any right granted under the Plan shall for any reason
terminate without having been exercised, the Stock not purchased under such right shall again
become available for the Plan. Notwithstanding anything in this Section 4.1 to the contrary, the
number of shares of Stock that may be issued or transferred pursuant to rights granted under the
Plan shall not exceed an aggregate of 588,235 shares plus the share increases as a result of the
Evergreen, subject to Article 9.

     4.2 Stock Distributed. Any Stock distributed pursuant to the Plan may consist, in
whole or in part, of authorized and unissued Stock, treasury stock or Stock purchased on the open
market.

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ARTICLE V

OFFERING PERIODS; OFFERING DOCUMENTS; PURCHASE DATES

     5.1 Offering Periods. The Administrator may from time to time grant or provide for
the grant of rights to purchase Stock of the Company under the Plan to Eligible Employees during
one or more periods (each, an “Offering Period”) selected by the Administrator commencing on such
dates (each, an “Enrollment Date”) selected by the Administrator. Notwithstanding the foregoing,
no Offering Period shall commence prior to the First Offering Period Effective Date, as determined
by the Board in its sole discretion. The terms and conditions applicable to each Offering Period
shall be set forth in an “Offering Document” adopted by the Administrator, which Offering Document
shall be in such form and shall contain such terms and conditions as the Administrator shall deem
appropriate and shall be incorporated by reference into and made part of the Plan and shall be
attached hereto as part of the Plan. The Administrator shall establish in each Offering Document
one or more dates during an Offering Period (the “Purchase Date(s)”) on which rights granted under
the Plan shall be exercised and purchases of Stock carried out during such Offering Period in
accordance with such Offering Document and the Plan. The provisions of separate Offering Periods
under the Plan need not be identical.

     5.2 Offering Documents. Each Offering Document with respect to an Offering Period
shall specify (through incorporation of the provisions of this Plan by reference or otherwise):

               (i) the length of the Offering Period, which period shall not exceed twenty-seven months;

               (ii) the Enrollment Date for such Offering Period;

               (iii) the Purchase Date(s) during such Offering Period;

               (iv) the maximum number of shares that may be purchased by any Eligible Employee during such
Offering Period;

               (v) in connection with each Offering Period that contains more than one Purchase Date, the
maximum aggregate number of shares which may be purchased by any Eligible Employee on any given
Purchase Date during the Offering Period; and

               (vi) such other provisions as the Administrator determines are appropriate, subject to the
Plan.

ARTICLE VI

PARTICIPATION

     6.1 Eligibility. Any Eligible Employee who shall be employed by the Company or a
Designated Subsidiary on the day immediately preceding a given Enrollment Date for an Offering
Period shall be eligible to participate in the Plan during such Offering Period, subject to the
requirements of this Article 6 and the limitations imposed by Section 423(b) of the Code.

     6.2 Enrollment in Plan. Except as otherwise set forth in an Offering Document, an
Eligible Employee may become a Participant in the Plan for an Offering Period by delivering a
participation agreement to the Company prior to the Enrollment Date for such Offering Period (or
such other date specified in the Offering Document), in such form as the Administrator provides.
Each such agreement

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shall designate a whole percentage of such Eligible Employee’s Compensation to be withheld by
the Company or the Designated Subsidiary employing such Eligible Employee on each payday during the
Offering Period as payroll deductions under the Plan. An Eligible Employee may designate any whole
percentage of Compensation which is not less than 1% and not more than the maximum percentage
specified by the Administrator in the applicable Offering Document (which percentage shall be 20%
in the absence of any such designation) as payroll deductions. The payroll deductions made for
each Participant shall be credited to an account for such Participant under the Plan and shall be
deposited with the general funds of the Company. A Participant may change the percentage of
Compensation designated in his or her participation agreement, subject to the limits of this
Section 6.2, or may suspend his or her payroll deductions, or may resume payroll deductions
pursuant to a new participation agreement, at any time during an Offering Period; provided,
however, that the Administrator may limit the number of changes a Participant may make to his or
her payroll deduction elections during each Offering Period and/or Purchase Period in the
applicable Offering Document. Any such change, suspension or resumption of payroll deductions
shall be effective with the first full payroll period following five business days after the
Company’s receipt of the new participation agreement (or such shorter or longer period as may be
specified by the Administrator in the applicable Offering Document). In the event a Participant
suspends his or her payroll deductions, such Participant’s cumulative payroll deductions prior to
the suspension shall remain in his or her account and shall not be paid to such Participant unless
he or she withdraws from participation in the Plan pursuant to Article 8. Except as otherwise set
forth in an Offering Document, a Participant may participate in the Plan only by means of payroll
deduction and may not make contributions by lump sum payment for any Offering Period.

     6.3 Payroll Deductions. Except as otherwise provided in the applicable Offering
Document, payroll deductions for a Participant shall commence on the first payroll following the
Enrollment Date and shall end on the last payroll in the Offering Period to which such
authorization is applicable, unless sooner terminated by the Participant as provided in Article 9.

     6.4 Effect of Enrollment. A Participant’s completion of a participation agreement
will enroll such Participant in the Plan for each successive Purchase Period and each subsequent
Offering Period on the terms contained therein until the Participant either submits a new
participation agreement, withdraws from participation under the Plan as provided in Article 8 or
otherwise becomes ineligible to participate in the Plan.

     6.5 Limitation on Purchase of Stock. An Eligible Employee may be granted rights under
the Plan only if such rights, together with any other rights granted to such Eligible Employee
under “employee stock purchase plans” of the Company, any Parent or any Subsidiary, as specified by
Section 423(b)(8) of the Code, do not permit such employee’s rights to purchase stock of the
Company or any Parent or Subsidiary to accrue at a rate which exceeds $25,000 of fair market value
of such stock (determined as of the first day of the Offering Period during which such rights are
granted) for each calendar year in which such rights are outstanding at any time. This limitation
shall be applied in accordance with Section 423(b)(8) of the Code.

     6.6 Decrease of Payroll Deductions. Notwithstanding the foregoing, to the extent
necessary to comply with Section 423(b)(8) of the Code and Section 6.5, a Participant’s payroll
deductions may be suspended by the Administrator at any time during an Offering Period.

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ARTICLE VII

GRANT AND EXERCISE OF RIGHTS

     7.1 Grant of Rights. On the Enrollment Date of each Offering Period, each Eligible
Employee participating in such Offering Period shall be granted a right to purchase the maximum
number of shares of Stock specified under Section 5.2(iv) and shall have the right to buy, on each
Purchase Date during such Offering Period (at the applicable Purchase Price), such number of shares
of the Company’s Stock as is determined by dividing (a) such Participant’s payroll deductions
accumulated prior to such Purchase Date and retained in the Participant’s account as of the
Purchase Date, by (b) the applicable Purchase Price. The right shall expire on the last day of the
Offering Period.

     7.2 Exercise of Rights. On each Purchase Date, each Participant’s accumulated payroll
deductions and any other additional payments specifically provided for in the applicable Offering
Document will be applied to the purchase of whole shares of Stock of the Company, up to the maximum
number of shares permitted pursuant to the terms of the Plan and the applicable Offering Document,
at the Purchase Price. No fractional shares shall be issued upon the exercise of rights granted
under the Plan, unless the Offering Document specifically provides otherwise. The amount, if any,
of accumulated payroll deductions remaining in each Participant’s account after the purchase of
shares on each Purchase Date shall be distributed in full to the Participant after such Purchase
Date.

     7.3 Pro Rata Allocation of Shares. If the Administrator determines that, on a given
Purchase Date, the number of shares of Stock with respect to which rights are to be exercised may
exceed (i) the number of shares of Stock that were available for issuance under the Plan on the
Enrollment Date of the applicable Offering Period, or (ii) the number of shares of Stock available
for issuance under the Plan on such Purchase Date, the Administrator may in its sole discretion
provide that the Company shall make a pro rata allocation of the shares of Stock available for
purchase on such Enrollment Date or Purchase Date, as applicable, in as uniform a manner as shall
be practicable and as it shall determine in its sole discretion to be equitable among all
Participants for whom rights to purchase Stock are to be exercised pursuant to this Article 7 on
such Purchase Date, and shall either (x) continue all Offering Periods then in effect, or (y)
terminate any or all Offering Periods then in effect pursuant to Article 10. The Company may make
pro rata allocation of the shares available on the Enrollment Date of any applicable Offering
Period pursuant to the preceding sentence, notwithstanding any authorization of additional shares
for issuance under the Plan by the Company’s stockholders subsequent to such Enrollment Date. The
balance of the amount credited to the account of each Participant which has not been applied to the
purchase of shares of stock shall be paid to such Participant in one lump sum in cash as soon as
reasonably practicable after the Purchase Date.

     7.4 Withholding. At the time a Participant’s rights under the Plan are exercised, in
whole or in part, or at the time some or all of the Stock issued under the Plan is disposed of, the
Participant must make adequate provision for the Company’s federal, state, or other tax withholding
obligations, if any, which arise upon the exercise of the right or the disposition of the Stock.
At any time, the Company may, but shall not be obligated to, withhold from the Participant’s
compensation the amount necessary for the Company to meet applicable withholding obligations,
including any withholding required to make available to the Company any tax deductions or benefits
attributable to sale or early disposition of Stock by the Participant. 

     7.5 Conditions to Issuance of Stock. The Company shall not be required to issue or
deliver any certificate or certificates for shares of Stock purchased upon the exercise of rights
under the Plan prior to fulfillment of all of the following conditions:

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          (a) The admission of such shares to listing on all stock exchanges, if any, on which
the Stock is then listed; and

          (b) The completion of any registration or other qualification of such shares under
any state or federal law or under the rulings or regulations of the Securities and Exchange
Commission or any other governmental regulatory body, which the Administrator shall, in its
absolute discretion, deem necessary or advisable; and

          (c) The obtaining of any approval or other clearance from any state or federal
governmental agency which the Administrator shall, in its absolute discretion, determine to be
necessary or advisable; and

          (d) The payment to the Company of all amounts which it is required to withhold under
federal, state or local law upon exercise of the rights, if any; and

          (e) The lapse of such reasonable period of time following the exercise of the rights
as the Administrator may from time to time establish for reasons of administrative convenience.

ARTICLE VIII

WITHDRAWAL; TERMINATION OF EMPLOYMENT OR ELIGIBILITY

     8.1 Withdrawal. A Participant may withdraw all but not less than all of the payroll
deductions credited to his or her account and not yet used to exercise his or her rights under the
Plan at any time by giving written notice to the Company in a form acceptable to the Administrator.
All of the Participant’s payroll deductions credited to his or her account during the Offering
Period shall be paid to such Participant as soon as reasonably practicable after receipt of notice
of withdrawal and such Participant’s rights for the Offering Period shall be automatically
terminated, and no further payroll deductions for the purchase of shares shall be made for such
Offering Period. If a Participant withdraws from an Offering Period, payroll deductions shall not
resume at the beginning of the next Offering Period unless the Participant delivers to the Company
a new participation agreement.

     8.2 Future Participation. A Participant’s withdrawal from an Offering Period shall
not have any effect upon his or her eligibility to participate in any similar plan which may
hereafter be adopted by the Company or a Designated Subsidiary or in subsequent Offering Periods
which commence after the termination of the Offering Period from which the Participant withdraws.

     8.3 Cessation of Eligibility. Upon a Participant’s ceasing to be an Eligible
Employee, for any reason, he or she shall be deemed to have elected to withdraw from the Plan
pursuant to this Article 8 and the payroll deductions credited to such Participant’s account during
the Offering Period shall be paid to such Participant or, in the case of his or her death, to the
person or persons entitled thereto under Section 12.4, as soon as reasonably practicable and such
Participant’s rights for the Offering Period shall be automatically terminated.

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ARTICLE IX

ADJUSTMENTS UPON CHANGES IN STOCK

     9.1 Changes in Capitalization. Subject to Section 9.3, in the event of any stock
dividend, stock split, combination or exchange of shares, merger, consolidation, spin-off,
recapitalization, distribution of Company assets to stockholders (other than normal cash
dividends), or any other corporate event affecting the Stock or the share price of the Stock, the
Administrator may make such proportionate adjustments, if any, as the Administrator in its
discretion may deem appropriate to reflect such change with respect to (i) the aggregate number and
type of shares of Stock (or other securities or property) that may be issued under the Plan
(including, but not limited to, adjustments of the limitations in Section 3.1 and the limitations
established in each Offering Document pursuant to Section 5.2 on the maximum number of shares of
Stock that may be purchased); (ii) the class(es) and number of shares and price per share of Stock
subject to outstanding rights; and (iii) the Purchase Price with respect to any outstanding rights.

     9.2 Other Adjustments. Subject to Section 9.3, in the event of any transaction or
event described in Section 9.1 or any unusual or nonrecurring transactions or events affecting the
Company, any affiliate of the Company, or the financial statements of the Company or any affiliate
(including without limitation any Change in Control), or of changes in applicable laws, regulations
or accounting principles, and whenever the Administrator determines that such action is appropriate
in order to prevent the dilution or enlargement of the benefits or potential benefits intended to
be made available under the Plan or with respect to any right under the Plan, to facilitate such
transactions or events or to give effect to such changes in laws, regulations or principles, the
Administrator, in its sole discretion and on such terms and conditions as it deems appropriate, is
hereby authorized to take any one or more of the following actions:

          (a) To provide for either (i) termination of any outstanding right in exchange for an amount
of cash, if any, equal to the amount that would have been obtained upon the exercise of such right
had such right been currently exercisable or (ii) the replacement of such outstanding right with
other rights or property selected by the Administrator in its sole discretion;

          (b) To provide that the outstanding rights under the Plan be assumed by the successor or
survivor corporation, or a parent or subsidiary thereof, or shall be substituted for by similar
rights covering the stock of the successor or survivor corporation, or a parent or subsidiary
thereof, with appropriate adjustments as to the number and kind of shares and prices;

          (c) To make adjustments in the number and type of shares of Stock (or other securities or
property) subject to outstanding rights under the Plan and/or in the terms and conditions of
outstanding rights and rights which may be granted in the future;

          (d) To provide that Participants’ accumulated payroll deductions may be used to purchase Stock
prior to the next occurring Purchase Date on such date as the Administrator determines in its sole
discretion and the Participants’ rights under the ongoing Offering Period(s) terminated; and

          (e) To provide that all outstanding rights shall terminate without being exercised.

     9.3 No Adjustment Under Certain Circumstances. No adjustment or action described in
this Article 9 or in any other provision of the Plan shall be authorized to the extent that such
adjustment or action would cause the Plan to fail to satisfy the requirements of Section 423 of the
Code.

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     9.4 No Other Rights. Except as expressly provided in the Plan, no Participant shall
have any rights by reason of any subdivision or consolidation of shares of stock of any class, the
payment of any dividend, any increase or decrease in the number of shares of stock of any class or
any dissolution, liquidation, merger, or consolidation of the Company or any other corporation.
Except as expressly provided in the Plan or pursuant to action of the Administrator under the Plan,
no issuance by the Company of shares of stock of any class, or securities convertible into shares
of stock of any class, shall affect, and no adjustment by reason thereof shall be made with respect
to, the number of shares of Stock subject to an Award or the grant or exercise price of any Award.

ARTICLE X

AMENDMENT, MODIFICATION AND TERMINATION

     10.1 Amendment, Modification and Termination. The Administrator may amend, suspend or
terminate the Plan at any time and from time to time; provided, however, that approval by a vote of
the holders of the outstanding shares of the Company’s capital stock entitled to vote shall be
required to amend the Plan to: (a) change the aggregate number of shares that may be sold pursuant
to rights under the Plan under Section 4.1 (other than any adjustment as provided by Article 9);
(b) change the corporations or classes of corporations whose employees may be granted rights under
the Plan; or (c) change the Plan in any manner that would cause the Plan to no longer be an
“employee stock purchase plan” within the meaning of Section 423(b) of the Code. Notwithstanding
the foregoing, the Plan shall automatically terminate and be of no further force or effect on the
fourth anniversary of the day immediately preceding the IPO Effective Date if the Board does not
take action on or prior to such date to establish the First Offering Period Effective Date on or
prior to such date.

     10.2 Rights Previously Granted. Except as provided in Article 9 or this Article 10,
no termination, amendment or modification may make any change in any right theretofore granted
which adversely affects the rights of any Participant without the consent of such Participant,
provided that an Offering Period may be terminated, amended or modified by the Administrator if the
Administrator determines that the termination of the Offering Period or the Plan is in the best
interests of the Company and its stockholders.

     10.3 Certain Changes to Plan. Without stockholder consent and without regard to
whether any Participant rights may be considered to have been adversely affected, to the extent
permitted by Section 423 of the Code, the Administrator shall be entitled to change the Offering
Periods, limit the frequency and/or number of changes in the amount withheld during an Offering
Period, establish the exchange ratio applicable to amounts withheld in a currency other than U.S.
dollars, permit payroll withholding in excess of the amount designated by a Participant in order to
adjust for delays or mistakes in the Company’s processing of properly completed withholding
elections, establish reasonable waiting and adjustment periods and/or accounting and crediting
procedures to ensure that amounts applied toward the purchase of Stock for each Participant
properly correspond with amounts withheld from the Participant’s Compensation, and establish such
other limitations or procedures as the Administrator determines in its sole discretion advisable
which are consistent with the Plan.

ARTICLE XI

TERM OF PLAN

     The Plan shall be effective on November ___, 2007 (the “Effective Date”). The effectiveness of
the Plan shall be subject to approval of the Plan by the stockholders of the Company within twelve
(12) months of the date the Plan is adopted by the Board. No right may be granted under the Plan
prior to such

11

 

stockholder approval. The Plan shall be in effect until the tenth anniversary of the Effective
Date, unless sooner terminated under Article 10. No rights may be granted under the Plan during
any period of suspension of the Plan or after termination of the Plan.

ARTICLE XII

MISCELLANEOUS

     12.1 Restriction upon Assignment. A right granted under the Plan shall not
be transferable other than by will or the laws of descent and distribution, and is exercisable
during the Participant’s lifetime only by the Participant. Except as provided in Section 12.4
hereof, a right under the Plan may not be exercised to any extent except by the Participant. The
Company shall not recognize and shall be under no duty to recognize any assignment or alienation of
the Participant’s interest in the Plan, the Participant’s rights under the Plan or any rights
thereunder.

     12.2 Rights as a Stockholder. With respect to shares of Stock subject to a right
granted under the Plan, a Participant shall not be deemed to be a stockholder of the Company, and
the Participant shall not have any of the rights or privileges of a stockholder, until such shares
have been issued to the Participant or his or her nominee following exercise of the Participant’s
rights under the Plan. No adjustments shall be made for dividends (ordinary or extraordinary,
whether in cash securities, or other property) or distribution or other rights for which the record
date occurs prior to the date of such issuance, except as otherwise expressly provided herein.

     12.3 Interest. No interest shall accrue on the payroll deductions or lump sum
contributions of a Participant under the Plan.

     12.4 Designation of Beneficiary.

          (a) A Participant may, in the manner determined by the Administrator, file a written
designation of a beneficiary who is to receive any shares and cash, if any, from the Participant’s
account under the Plan in the event of such Participant’s death subsequent to a Purchase Date on
which the Participant’s rights are exercised but prior to delivery to such Participant of such
shares and cash. In addition, a Participant may file a written designation of a beneficiary who is
to receive any cash from the Participant’s account under the Plan in the event of such
Participant’s death prior to exercise of the Participant’s rights under the Plan. If the
Participant is married and resides in a community property state, a designation of a person other
than the Participant’s spouse as his or her beneficiary shall not be effective without the prior
written consent of the Participant’s spouse.

          (b) Such designation of beneficiary may be changed by the Participant at any time by written
notice to the Company. In the event of the death of a Participant and in the absence of a
beneficiary validly designated under the Plan who is living at the time of such Participant’s
death, the Company shall deliver such shares and/or cash to the executor or administrator of the
estate of the Participant, or if no such executor or administrator has been appointed (to the
knowledge of the Company), the Company, in its discretion, may deliver such shares and/or cash to
the spouse or to any one or more dependents or relatives of the Participant, or if no spouse,
dependent or relative is known to the Company, then to such other person as the Company may
designate.

     12.5 Notices. All notices or other communications by a Participant to the Company
under or in connection with the Plan shall be deemed to have been duly given when received in the
form specified by the Company at the location, or by the person, designated by the Company for the
receipt thereof.

12

 

     12.6 Equal Rights and Privileges. All Eligible Employees of the Company or any
Designated Subsidiary will have equal rights and privileges under this Plan so that this Plan
qualifies as an “employee stock purchase plan” within the meaning of Section 423 of the Code. Any
provision of this Plan that is inconsistent with Section 423 of the Code will, without further act
or amendment by the Company, the Board or the Administrator, be reformed to comply with the equal
rights and privileges requirement of Section 423 of the Code.

     12.7 Use of Funds. All payroll deductions received or held by the Company under the
Plan may be used by the Company for any corporate purpose, and the Company shall not be obligated
to segregate such payroll deductions.

     12.8 Reports. Statements of account shall be given to participating Employees at
least annually, which statements shall set forth the amounts of payroll deductions, the Purchase
Price, the number of shares purchased and the remaining cash balance, if any.

     12.9 No Employment Rights. Nothing in the Plan shall be construed to give any person
(including any Eligible Employee or Participant) the right to remain in the employ of the Company
or any Parent or Subsidiary or to affect the right of the Company or any Parent or Subsidiary to
terminate the employment of any person (including any Eligible Employee or Participant) at any
time, with or without cause.

     12.10 Notice of Disposition of Shares. Each Participant shall give prompt notice to
the Company of any disposition or other transfer of any shares of stock purchased upon exercise of
a right under the Plan if such disposition or transfer is made: (a) within two years from the
Enrollment Date of the Offering Period in which the shares were purchased or (b) within one year
after the Purchase Date on which such shares were purchased. Such notice shall specify the date of
such disposition or other transfer and the amount realized, in cash, other property, assumption of
indebtedness or other consideration, by the Participant in such disposition or other transfer.

     12.11 Governing Law. The validity and enforceability of this Plan shall be governed
by and construed in accordance with the laws of the State of Delaware without regard to otherwise
governing principles of conflicts of law.

13exv10w18

 

Exhibit  10.18

K12 INC.

FIRST AMENDMENT TO

EMPLOYMENT AGREEMENT

     WHEREAS, K12 Inc., a Delaware corporation (the “Company”) entered into an employment
agreement, dated as of June 1, 2004 (the “Agreement”) with Howard D. Polsky (the
“Executive”); and

     WHEREAS, the Executive and the Company desire to amend the Agreement to recognize Executive’s
subsequent appointment by the Board of Directors to be the Secretary of the Company, and for the
additional duties and responsibilities associated therewith as a public company, and to memorialize
and bring current certain changes to the Executive’s compensation approved by the Compensation
Committee of the Board of Directors:

     NOW, THEREFORE, in consideration of the foregoing, the Executive and the Company hereby agree
that effective as of July 1, 2007 (the “Effective Date”), the Agreement be, and it hereby
is, amended as follows (the “Amendment”):

1. Responsibilities. The second sentence of Section 1.1 of the Agreement is hereby
amended as follows:

          “Executive shall serve as Senior Vice President, General Counsel and Secretary of the
Company.”

2. Compensation. Section 2.2 of the Agreement is hereby deleted in its entirety and the
following is substituted in lieu thereof:

          “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 Two
Hundred Thirty Thousand Dollars( $230,000) per year payable not less frequently than semi-monthly
in accordance with the Company’s standard payroll practices as in effect from time to
time(“Compensation”). Company agrees to review Executive’s Compensation annually for a potential
increase in the sole and absolute discretion of the Company based upon performance of Executive and
Company.”

3. Bonus. The second sentence of Section 2.3 of the Agreement is hereby deleted and the
following substituted in lieu thereof:

          “Depending upon the performance of Executive and Company, the Executive shall be eligible for
a target bonus of forty percent (40%) of Executive’s Compensation.”

 

 

To the extent not expressly amended hereby, the Agreement remains in full force and effect. The
undersigned do hereby consent to the foregoing amendment effective as of July 1, 2007.

	 	 	 	 	 
	 	K12 INC.

 	 
	 	/s/ Andrew Tisch
 	 
	 	Andrew Tisch 	 
	 	Chair, Compensation Committee 	 
	 
	 	EXECUTIVE 

 	 
	 	/s/ Howard D. Polsky
 	 
	 	Howard D. Polsky

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