Document:

exv10w23

 

Exhibit 10.23

STOCK OPTION AGREEMENT

     THIS STOCK OPTION AGREEMENT (“Agreement”) is entered into effective as of June 16, 2005 by and
between K12 INC., a Delaware corporation (the “Company”), and RICHARD RASMUS (the “Optionee”).

RECITALS

     WHEREAS, the Company desires to grant to the Optionee stock options
to purchase shares of Common Stock of the Company to motivate the Optionee to
increase value for the Company’s stockholders.

     NOW THEREFORE, the parties agree as follows:

     1. Grant of Stock Options. Subject to the terms and conditions hereinafter set forth, the
Company, with the approval and at the direction of the Company’s Compensation Committee, hereby
grants to the Optionee an option to purchase up to Eight Hundred Thousand (800,000) shares of
Common Stock of the Company (the “Stock”) at an option exercise price of One Dollar and Thirty Four
Cents ($1.34) per share (the “Options”). The shares of Stock purchasable upon exercise of the
Options are hereinafter sometimes collectively referred to as the “Option Shares.” The Options are
not intended to be, and shall not be treated as, incentive stock options (as such term is defined
under Section 422 of the Internal Revenue Code of 1986, as amended (the “Code”)). Optionee
understands and acknowledges that the Company is granting the Options hereunder outside of, and not
as a part of, the K12 Inc. Amended and Restated Stock Option Plan. The Company shall reserve
sufficient shares of Stock from its authorized but unissued and not outstanding shares of Stock as
set forth in its Certificate of Incorporation, for purposes of issuing Option Shares to the
Optionee upon the exercise of the Options in accordance with the terms set forth herein.

     2. Fully Vested Options. The Options are fully vested and immediately exercisable, subject to the
other terms of this Agreement.

     3. Termination of Options.

     (a) Subject to earlier termination as provided in the other provisions of this Agreement, the
Options and all rights hereunder with respect thereto, to the extent such rights shall not have
been exercised, shall terminate and become null and void on September 21, 2010 (the “Option Term”).

     (b) Upon termination of Optionee’s employment or engagement with the Company by reason of
Optionee’s death, the unexercised Options held by Optionee may be exercised by Optionee’s estate,
provided that such exercise occurs prior to the earlier of: (i) three hundred sixty five (365) days
after the date of Optionee’s death, or (ii)

 

 

the expiration of the Option Term. The Options shall terminate at the end of the earliest of the
periods specified in clauses (i) and (ii) of the immediately preceding sentence.

     (c) Upon termination of Optionee’s employment or engagement with the Company by reason of
“permanent disability” (as determined by the Board of Directors of the Company, or if Optionee has
an employment or engagement agreement with the Company, then as determined pursuant to the
applicable provisions of said agreement, if any), the unexercised Options held by Optionee may be
exercised by Optionee, provided that such exercise occurs prior to the earlier of: (i) three
hundred sixty five (365) days after the date of Optionee’s termination, or (ii) the expiration of
the Option Term. The Options shall terminate at the end of the earliest of the periods specified in
clauses (i) and (ii) of the immediately preceding sentence.

     (d) Upon Optionee’s termination of employment or engagement with the Company either by resignation
(excluding a resignation resulting from the Company’s material breach of Optionee’s employment
agreement) or upon termination of Optionee’s employment or engagement with the Company for “cause”
(as that term is defined in Optionee’s employment agreement), all Options shall terminate on the
date of Optionee’s termination.

     (e) If Optionee’s employment or engagement with the Company terminates for any reason other than as
described in paragraphs (b), (c) or (d) of this Section 3, then the unexercised Options held by
Optionee may be exercised by Optionee, provided that such exercise occurs prior to the earlier of:
(i) ninety (90) days after the date of Optionee’s termination, or (ii) the expiration of the Option
Term. The Options shall terminate at the end of the earliest of the periods specified in clauses
(i) and (ii) of the immediately preceding sentence.

4. Exercise of Options.

     (a) The Optionee may exercise the Options with respect to all or any part of the number of Option
Shares then exercisable hereunder from time to time by giving the Chief Financial Officer of the
Company written notice of exercise. Each such notice of exercise shall specify the number of Option
Shares as to which the Options are to be exercised and the date of exercise thereof, which date
shall be at least five days (but not more than fifteen days) after the giving of such notice unless
an earlier time shall have been mutually agreed upon by Optionee and the Company.

     (b) Full payment of the option price for the Option Shares being purchased by the Optionee shall be
made by the Optionee in cash (in U.S. dollars) on or prior to the date of exercise specified in the
notice of exercise.

     (c) The Company shall cause to be delivered to the Optionee a certificate or certificates for the
Option Shares then being purchased (out of theretofore unissued Stock or reacquired Stock, as the
Company may elect) as soon as is reasonably

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practicable after the full payment for such Option Shares and satisfaction of all other conditions
to exercise set forth in this Agreement.

     (d) If the Optionee fails to pay for any of the Option Shares specified in a notice of exercise or
fails to accept delivery thereof, the Optionee’s right to purchase such Option Shares shall
terminate.

     (e) Notwithstanding any other provision of this Agreement, the Optionee’s right to exercise Options
and be issued Option Shares is subject to the conditions set forth in this Section 4(e) in addition
to any other conditions set forth elsewhere in this Agreement. The Optionee may not exercise any
Options in whole or in part or be issued any Option Shares unless (i) the transaction
is in compliance with all applicable state and Federal securities laws, (ii) the transaction is
exempt from the qualification and registration requirements of applicable state and Federal
securities laws, and (iii) the Company and the Optionee comply with any requirements applicable to
the transaction, if any, that are contained in any credit or loan agreement to which the Company is
a party. In addition, the obligation of the Company to deliver Stock shall be subject
to the condition that if at any time the Company shall determine that the listing, registration, or
qualification of the Options or the Option Shares upon any securities exchange or under any state
or Federal law, or the consent or approval of any governmental regulatory body, is necessary as a
condition of, or in connection with, the Options or the issuance or purchase of Stock thereunder,
the Options may not be exercised in whole or in part unless such listing, registration,
qualification, consent, or approval shall have been effected or obtained free of any conditions not
acceptable to the Board of Directors of the Company.

     5. Adjustment of and Changes in Stock of the Company. In the event of any change in the
outstanding shares of Stock by reason of a stock dividend, recapitalization, merger, consolidation,
split-up, combination, exchange of shares, or the like, the Company’s Compensation Committee shall
appropriately adjust the number and kind of shares subject to the Options and the option price.

     6. No Rights of Stockholders. Neither the Optionee nor any personal representative shall be, or
shall have any of the rights and privileges of, a stockholder of the Company with respect to any
shares of Stock purchasable or issuable upon the exercise of the Options, in whole or in part,
prior to the date certificates for shares of Stock are issued to the Optionee, which certificates
shall be issued without unreasonable delay.

     7. Non-Transferability of Options. During the Optionee’s lifetime, the Options hereunder shall be
exercisable only by the Optionee or any guardian or legal representative of the Optionee, and the
Options shall not be transferable except, in case of the death of the Optionee, by will or the laws
of descent and distribution, nor shall the Options be subject to attachment, execution, or other
similar process. In the event of (a) any attempt by the Optionee to alienate, assign,
pledge, hypothecate, or otherwise dispose of the Options, except as provided for herein, or (b) the
levy of any attachment,

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execution, or similar process upon the rights or interest hereby conferred, the Company may terminate the Options by notice to the Optionee and they shall thereupon become null and void.

     8. Employment/Engagement Not Affected. Neither the granting of the Options nor exercise thereof
shall be construed as granting to the Optionee any right with respect to continuance of employment
or engagement with the Company or affect any right which the Company may have to terminate the
employment or engagement of Optionee.

     9. Amendment of Options. The Options may be amended by the Company’s Compensation Committee at
anytime (i) if the Compensation Committee determines, in its reasonable discretion, that amendment
is necessary or advisable in the light of any addition to or change in the Internal Revenue Code of
1986, as amended, or in the regulations issued thereunder, or any federal or state securities law
or other law or regulation, which change occurs after the date of grant of an Option and by its
terms applies to the Option, or (ii) other than in the circumstances described in clause (i), with
the consent of the Optionee.

     10. Sale, Merger, Consolidation and Liquidation of the Company. In the event of any of the
following (a “Termination Event”): (i) a sale of all or substantially all of the assets of the
Company, or (ii) a sale of all of the outstanding shares of stock of the Company, or (iii) a merger
or consolidation in which the Company is not the surviving corporation, or (iv) a merger or
consolidation in which the Company is the surviving corporation but the shares of the Company’s
Stock outstanding immediately prior to the merger or consolidation are converted into other
property, whether in the form of securities, cash or otherwise, then, if the surviving entity or
purchaser does not assume the Options issued hereunder, all Options which are not exercised prior
to the closing of the applicable Termination Event shall terminate upon the closing of the
applicable Termination Event. In the event of a dissolution or liquidation of the Company, all
Options issued hereunder which are not exercised prior to completion of such dissolution or
liquidation shall terminate. The Company shall give Optionee reasonable prior written notice of any termination of Options pursuant to this Section 10.

11. Restrictions on Transfer of Option Shares and Related Provisions.

     (a) Except as otherwise expressly set forth in Section ll(b) below, Optionee shall not, voluntarily
or involuntarily, directly or indirectly, by operation of law or otherwise, sell, transfer, assign,
hypothecate, pledge or in any way alienate any Option Shares now or hereafter owned by the Optionee
or any right or interest therein (hereinafter, a “Transfer”) without the prior written consent of
the Company’s Compensation Committee, which the Compensation Committee may withhold in its sole
discretion. Any attempt to consummate a Transfer in violation of this Agreement shall be null and
void.

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     (b) Notwithstanding the restrictions contained in Section 11 (a) above, (i) Optionee may Transfer Optionee’s Option Shares to the Company or a designee of the Company, or
(ii) Optionee may contribute Optionee’s Option Shares to a trust formed solely for the benefit of
Optionee and/or Optionee’s immediate family, or (iii) upon the death of Optionee, Optionee’s Option
Shares may be transferred to Optionee’s estate, personal representative or heirs by will or the
laws of descent and distribution; provided, however, that as a condition to any transfer under
clause (i), (ii) or (iii) above, the transferee(s) shall hold the Option Shares subject to the
terms and conditions of this Agreement and the transferee(s) shall execute and deliver to the
Company an agreement in form and substance satisfactory to the Company agreeing to be bound by the
terms and conditions of this Agreement.

     (c) All Option Shares now or hereafter owned by Optionee shall be subject to all of the terms and
conditions of this Agreement. All certificates representing such Option Shares shall contain
legends to the following effect:

	 	 	 	ANY SALE, TRANSFER, PLEDGE, ASSIGNMENT OR ENCUMBRANCE OF THIS SECURITY IS SUBJECT TO THE PROVISIONS
OF A STOCK OPTION AGREEMENT BETWEEN THE CORPORATION AND THE STOCKHOLDER, DATED AS OF JUNE 16, 2005,
A COPY OF WHICH IS ON FILE WITH THE SECRETARY OF THE CORPORATION.
	 
	 	 	 	THE OFFER AND SALE OF THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE NOT BEEN QUALIFIED OR
REGISTERED UNDER ANY STATE OR FEDERAL SECURITIES LAWS. SUCH
SECURITIES HAVE BEEN ACQUIRED FOR INVESTMENT AND MAY
NOT BE OFFERED FOR SALE, SOLD, DELIVERED AFTER SALE,
TRANSFERRED, PLEDGED OR HYPOTHECATED IN THE ABSENCE
OF EITHER QUALIFICATION AND REGISTRATION UNDER STATE
AND FEDERAL SECURITIES LAWS OR AN OPINION OF COUNSEL
SATISFACTORY TO THE ISSUER THAT SUCH QUALIFICATION AND
REGISTRATION IS NOT REQUIRED.

     (d) The provisions of Sections 11(a) and 11(b) shall terminate effective upon the consummation an
underwritten public offering of shares of Stock by the Company that results in such shares being
listed for trading on a national securities exchange or being authorized for trading on the NASDAQ
National Market System.

12. Representations.

     (a) By executing this Stock Option Agreement, Optionee represents and warrants to the Company that
Optionee is acquiring the Options for Optionee’s own account, for investment purposes only and not
with the intent of distributing, transferring or selling all or any part of the Options.

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     (b) In connection with the exercise of any portion of the Options, Optionee represents and warrants
to the Company as of the date of such exercise as follows:

          (i) Optionee is acquiring the Stock for Optionee’s own account, for investment purposes
only and not with the intent of distributing, transferring or selling all or any part
thereof in violation of applicable securities laws.

          (ii) Optionee acknowledges that the Stock has not been registered under any Federal or
state securities laws and is being issued pursuant to one or more exemptions from the
registration and qualification requirements of such securities laws.

          (iii) Optionee acknowledges that the Company is under no obligation to register or qualify the
Stock and that the Stock may not be sold unless it is so registered and qualified or an exemption
from registration and qualification is available.

13. Lock Up In Connection with Public Offering.

     (a) In order to induce the underwriters that may participate in a public offering of the Company’s
equity securities to continue their efforts in connection with such a public offering, the Optionee
during the period commencing 30 days prior to and ending 180 days after the effective date of any
underwritten public offering of the Company’s equity securities (except as part of such
underwritten registration):

          (i) agrees not to (x) offer, pledge, sell, contract to sell, sell any option or contract to
purchase, purchase any option or contract to sell, grant any option, right or warrant to purchase,
or otherwise transfer or dispose of, directly or indirectly, any Stock or any securities
convertible into or exercisable or exchangeable for Stock (including, without limitation, Stock or
securities convertible into or exercisable or exchangeable for Stock which may be deemed to be
beneficially owned by the undersigned in accordance with the rules and regulations of the
Securities and Exchange Commission) or (y) enter into any swap or other arrangement that transfers
all or a portion of the economic consequences associated with the ownership of any Stock
(regardless of whether any of the transactions described in clause (x) or (y) is to be settled by
the delivery of Stock, or such other securities, in cash or otherwise), without prior written
consent of the lead managing underwriter of such public offering;

          (ii) agrees not to make any demand for, or exercise any right with respect to, the registration of
any Stock or any securities convertible into or exercisable or exchangeable for Stock, without the
prior written consent of the lead underwriter; and

          (iii) authorizes the Company to cause the transfer agent to decline to transfer and/or to note stop
transfer restrictions on the transfer books and

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          records of the Company with respect to any Stock and any securities convertible into or exercisable
or exchangeable for Stock for which the Optionee is the record holder and, in the case of any such
shares or securities for which the Optionee is the beneficial but not the record holder, agrees to
cause the record holder to cause the transfer agent to decline to transfer and/or to note stop
transfer restrictions on such books and records with respect to such shares or securities.

Upon the Company’s request, the Optionee agrees to execute any additional documents necessary or
desirable to confirm Optionee’s obligations set forth above and/or in connection with the
enforcement of the foregoing provisions. The foregoing provisions shall survive the death or
incapacity of the Option and any obligations of the Optionee set forth above shall be binding upon
the heirs, personal representatives, successors and assigns of the Optionee.

     14. Notice. Any notice to the Company provided for in this instrument shall be addressed as
follows:

K12 Inc.

8000 Westpark Drive, Suite 500

McLean, Virginia 22102

Attention: Compensation Committee

With a copy to:

Maron & Sandler

1250 Fourth Street, Suite 550

Santa Monica, California 90401

Attention: David S. Kyman, Esq.

And any notice to the Optionee shall be addressed to the Optionee at the current address shown on
the records of the Company.

Any notice shall be deemed to be duly given if and when properly addressed and posted by registered
or certified mail, postage prepaid.

     15. Income Tax Consequences. Optionee acknowledges, represents, and warrants that the
Company has made no representations whatsoever to Optionee concerning the specific Federal and/or
state income tax and alternative minimum tax consequences to Optionee of the Options granted
hereunder or the exercise thereof, and Optionee shall be responsible for consulting with Optionee’s
personal tax advisor regarding such matters.

     16. Withholding Taxes. Whenever the Company issues or transfers shares of Stock
hereunder, the Company shall have the right to require the Optionee to remit to the Company an
amount sufficient to satisfy any Federal, state, and/or local withholding tax requirements prior to
the delivery of any certificate or certificates for such shares.

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Alternatively, the Company may (but shall not be obligated to) issue or transfer such shares of
Stock net of the number of shares sufficient to satisfy the withholding tax requirements. For
withholding tax purposes, the shares of Stock shall be valued on the date the withholding
obligation is incurred.

     17. Governing Law. The validity, construction, interpretation, and effect of this
Agreement shall exclusively be governed by and determined in accordance with the laws of the State
of Delaware (without regard to conflicts of law principles), except to the extent preempted by
Federal law, which shall to such extent govern.

     18. Entire Agreement. This Agreement sets forth the entire understanding and agreement
between the Company and the Optionee relating to the subject matter hereof and supercedes all prior
understandings and agreements between the Company and the Optionee relating to the subject matter
hereof. Without limiting the foregoing,

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this Agreement supercedes and replaces all other stock option agreements between the Company and
the Optionee dated prior to the date of this agreement, except for the Stock Option Agreement dated
September 6, 2003 which shall remain in full force and effect in accordance with its terms.

     IN WITNESS WHEREOF, the Company and Optionee have executed this Agreement effective as of the date
first set forth above.

	 	 	 	 	 
	 	“Company”

K12 INC. 

a Delaware corporation 

 	 
	 	By:  	/s/ Andrew Tisch
 	 
	 

	 	 	 	 	 
	 	“Optionee” 

 	 
	 	/s/ Richard Rasmus
 	 
	 	RICHARD RASMUS      	 
	 	 	 	 
	 

9AMENDMENT NO. 4

TO

EMPLOYMENT AGREEMENT

This AMENDMENT NO. 4 TO EMPLOYMENT AGREEMENT executed this 6th day of December, 2007 by and between Proliance International, Inc. (formerly known as Transpro, Inc.), a Delaware corporation (the “Company”) and Charles E. Johnson (the “Employee”)

W I T N E S S E T H:

WHEREAS, the Company and the Employee are parties to an Employment Agreement dated as of March 12, 2001, and amended as of October 28, 2004, May 4, 2006 and March 26, 2007 (collectively, the “Agreement”) under which the Company retained the Employee to serve as President and Chief Executive Officer of the Company; and

WHEREAS, in light of changes to the law, including the issuance of final regulations relating to Internal Revenue Code §409A, the Company and the Employee wish to further amend the Agreement to revise certain provisions relating to deferred compensation.

NOW, THEREFORE, in consideration of the mutual covenants herein contained and for other good and valuable consideration, receipt of which is hereby acknowledged, the Company and the Employee hereby agree as follows:

1. Section 11(b) of the Agreement is hereby deleted in its entirety and shall now read as follows: 

“(b) Termination by Employee for Good Reason. The Employee may terminate his employment and the Term of Employment in the event of Good Reason. Good Reason shall mean one of the following conditions arising without the Employee’s consent:

(i) a material reduction in the Employee’s base compensation (excluding an across-the-board reduction affecting all members of senior management);

(ii) a material reduction of the Employee’s duties and significant responsibilities (not including reasonable changes in title or in corporate structure); 

(iii) a material breach of this Agreement by the Company;

(iv) the relocation of the Employee’s place of work employment more than thirty-five (35) miles from its present location;

 

 

 

(v) the Company’s failure to renew this Agreement for any reason other than for Serious Cause or the death or Disability of the Employee;

provided, in each case, that a prior written notice specifying the condition shall be provided to the Company in accordance with Section 21 within ninety (90) after the initial existence of the condition, and an opportunity to cure such condition (if curable) shall be afforded the Company. Good Reason shall exist only if the Company shall fail to cure such condition within 31 days after its receipt of such prior written notice.”

2. Section 11(e) of the Agreement, as amended, is hereby deleted in its entirety and shall now read as follows:

“(e) Effect of Termination Without Serious Cause or With Good Reason. If (i) the Company terminates the Term of Employment and the Employee’s employment herein without Serious Cause and under circumstances which constitute a Separation from Service (as defined in the Proliance International, Inc. Supplemental Executive Retirement Plan), or (ii) the Employee terminates the Term of Employment and his employment hereunder for Good Reason and under circumstances which constitute a Separation from Service within one year following the initial existence of the condition constituting the basis for the termination for Good Reason, the Employee will be eligible for severance benefits (including certain health and welfare benefits) in accordance with the terms of the Proliance
International, Inc. Supplemental Executive Retirement Plan. In addition, the Employee will be entitled to prompt payment of (1) any accrued but unpaid salary and vacation, (2) any earned but unpaid bonus from a prior fiscal year (subject, if applicable, to the terms of any deferred compensation arrangements), and (3) reimbursement of business expenses incurred prior to the date of termination.”

3. Section 12(a) of the Agreement, as amended, is hereby deleted in its entirety and shall now read as follows:

“(a) Effect of Termination. If within the period commencing on the date that a Change of Control is formally proposed to the Company’s Board of Directors and ending on the second anniversary of the date on which such Change of Control occurs (i) the employment of the Employee is terminated by the Company (or successor thereto) without Serious Cause and under circumstances which constitute a Separation from Service or (ii) the Employee terminates employment with the Company (or successor thereto) for Good Reason and under circumstances which constitute a Separation from Service within one year following the initial existence of the condition constituting the basis for the termination for Good Reason, then the Employee will be entitled to receive, in lieu of the benefits
described in Section 11: (1) any accrued but unpaid salary and vacation, (2) severance benefits (including health and welfare benefits) in accordance with the terms of the Proliance International, Inc. Supplemental Executive Retirement Plan, (3) any earned but unpaid bonus from a prior fiscal year (subject, if applicable, to the terms of any deferred compensation arrangements), (4) reimbursement of business expenses incurred prior to the date of termination and (5) immediate vesting in, and the

 

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right to exercise, each outstanding stock option or restricted stock grant held by the Employee on the date of termination of the Employee’s employment.

If any portion of the payments which the Employee has the right to receive from the Company, or any affiliated entity or successor, hereunder would constitute “excess parachute payments” (as defined in Section 280G of the Internal Revenue Code) subject to the excise tax imposed by Section 4999 of the Internal Revenue Code, such excess parachute payments shall be reduced to the largest amount that will result in no portion of such excess parachute payments being subject to the excise tax imposed by Section 4999 of the Internal Revenue Code.

The Employee will not be entitled to any benefits or other entitlements under this section unless a Change of Control actually occurs.”

4.  Section 12(b) of the Agreement, as amended, is hereby deleted in its entirety and shall now read as follows:

“(b) Change of Control. “Change of Control” shall mean a Change of Control as defined in the Proliance International, Inc. Supplemental Executive Retirement Plan.”

5. The foregoing amendments shall be deemed to be effective as of January 1, 2008. Except as expressly amended hereby, the Agreement remains unchanged and in full force and effect.

IN WITNESS WHEREOF, the parties hereto have executed this Amendment No. 4 on the year and date first above written.

 

	
                         
 	
                         
 	
                        PROLIANCE INTERNATIONAL, INC.
 
	
                          
 	
                         
 	
      

      By: 
 	
                        /s/ Barry R. Banducci
 
	
                         
 	
                         
 	
                        Name: Barry R. Banducci
 
	
                         
 	
                         
 	
                        Title: Chairman of the Board
 

 

	
                         
 	
                         
 	
                         
 
	
                          
 	
                         
 	
      By: 
 	
                        /s/ Charles E. Johnson
 
	
                         
 	
                         
 	
                        Charles E. Johnson
 

 

 

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