Document:

exv4w2

 

Exhibit 4.2

K12 INC.

AMENDED AND RESTATED STOCK OPTION PLAN

ARTICLE I

GENERAL

1.1 Purpose.

     The purposes of this Stock Option Plan (the “Plan”) are to: (1) closely associate the
interests of the directors, officers, employees and independent contractors of K12 Inc. (the
“Company”) and Affiliates of the Company with the shareholders of the Company by reinforcing the
relationship between participants’ rewards and shareholder gains; (2) provide to certain of such
individuals the opportunity to acquire equity ownership in the Company commensurate with Company
performance, as reflected in increased shareholder value; (3) maintain competitive compensation
levels; and (4) provide an incentive for continuous employment with the Company.

1.2 Administration.

     (a) The Plan shall be administered by the Board of Directors of the Company or, at the option
of the Board of Directors, a compensation committee of the Board of Directors (the Board of
Directors or such compensation committee being hereafter referred to as the “Board”).

	 	(b)	 	The Board shall have the authority, in its sole discretion and from time to
time to:

	 	(i)	 	designate the directors, officers, employees and independent
contractors and classes of such individuals eligible to participate in the
Plan;
	 
	 	(ii)	 	grant awards provided in the Plan in such form and amount as
the Board shall determine;
	 
	 	(iii)	 	impose such limitations, restrictions and conditions upon
any such award as the Board shall deem appropriate; and
	 
	 	(iv)	 	interpret the Plan, adopt, amend, and rescind rules and
regulations relating to the Plan, and make all other determinations and take
all other action necessary or advisable for the implementation and
administration of the Plan.

 

 

     (c) Decisions and determinations of the Board on all matters relating to the Plan shall be in
its reasonable discretion and shall be conclusive. No member of the Board shall be liable for any
action taken or decision made in good faith relating to the Plan or any award thereunder.

1.3 Eligibility for Participation.

     Participants in the Plan shall be selected by the Board from the directors, officers,
employees and independent contractors of the Company and/or its Affiliates who have the capability
of making a substantial contribution to the success of the Company and/or its Affiliates. In
making this selection and in determining the form and amount of awards, the Board shall consider
any factors deemed relevant, including the individual’s functions, responsibilities, value of
services to the Company and/or its Affiliates, and past and potential contributions to the
profitability and sound growth of the Company and/or its Affiliates.

1.4 Aggregate Limitation on Awards.

     Shares of stock which may be issued under the Plan shall be authorized and unissued or
treasury shares of Common Stock of the Company (the “Common Stock”). The maximum number of shares
which may be issued under the Plan shall be Eight Million (8,000,000). If any Stock Option shall
for any reason expire or otherwise terminate in whole or in part, without having been exercised in
full, the Common Stock not purchased under such Stock Option shall revert to and again become
available for issuance under the Plan.

1.5 Effective Date and Term of Plan.

     (a) The Plan shall become effective on the date approved by the shareholders and the Board of
the Company.

     (b) No awards shall be made under the Plan after December 31, 2009; provided,
however, that the Plan and all awards made under the Plan prior to such date shall remain
in effect until such awards have been satisfied or terminated in accordance with the Plan and the
terms of such awards.

ARTICLE II

STOCK OPTIONS

2.1 Award of Stock Options.

     The Board may from time to time, and subject to the provisions of the Plan and such other
terms and conditions as the Board may prescribe, grant to any participant in the Plan one or more
options to purchase for cash the number of shares of Common Stock allotted by the Board (“Stock
Options”). The date a Stock Option is granted shall mean

 

 

the date selected by the Board as of which the Board allots a specific number of shares to a
participant pursuant to the Plan. The Stock Options are not intended to qualify as incentive stock
options under the provisions of Section 422 of the Internal Revenue Code of 1986 as amended.

2.2 Stock Option Agreements.

     The grant of a Stock Option shall be evidenced by a written Stock Option Agreement, executed
by the Company and the holder of a Stock Option (the “optionee”), stating the number of shares of
Common Stock subject to the Stock Option evidenced thereby, and in such form as the Board may from
time to time determine.

2.3 Stock Option Price.

     The option price per share of Common Stock deliverable upon the exercise of a Stock Option
shall be not less than 100% of the fair market value of a share of Common Stock on the date the
Stock Option is granted, unless otherwise determined by the Board or pursuant to an employment or
engagement agreement.

2.4 Term and Exercise.

     Each Stock Option shall be exercisable pursuant to the vesting schedule set forth in the Stock
Option Agreement granting such Stock Option. Unless a shorter period is provided by the Board, by
another Section of this Plan, or a Stock Option Agreement, each Stock Option may be exercised until
the tenth anniversary of the date of grant (the “Option Term”). No Stock Option shall be
exercisable after the expiration of its option term.

2.5 Payment.

     Each Stock Option Agreement shall set forth the procedure governing the exercise of the Stock
Option granted thereunder, and shall provide that, upon such exercise in respect of any shares of
Common Stock subject thereto, the optionee shall pay to the Company, in full, the option price for
such shares in cash.

2.6 Issuance of Shares.

     As soon as reasonably practicable after receipt of payment, the Company shall deliver to the
optionee a certificate or certificates for such shares of Common Stock. The optionee shall become
a shareholder of the Company with respect to Common Stock represented by share certificates so
issued and as such shall be fully entitled to all rights of a shareholder holding Common Stock,
subject to any restrictions contained in the optionee’s Stock Option Agreement.

 

 

2.7 Death of Optionee.

     Except as provided in a Stock Option Agreement or an applicable employment or engagement
agreement, upon the death of the optionee, any Stock Options held by optionee and exercisable on
the date of death may be exercised by the optionee’s estate, or by a person who acquires the right
to exercise such Stock Option by bequest or inheritance or by reason of the death of the optionee,
provided that such exercise occurs within both the remaining Option Term of the Stock Option and
six months after the optionee’s death. Except as provided in a Stock Option Agreement or an
applicable employment or engagement agreement, any Stock Options which were exercisable on the date
of optionee’s death shall terminate at the end of the Option Term or six months after optionee’s
death, whichever is earlier. Any Stock Options held by optionee which are not exercisable on the
date of optionee’s death shall terminate upon optionee’s death.

2.8 Disability of Optionee.

     Except as provided in a Stock Option Agreement or an applicable employment or engagement
agreement, upon termination of the optionee’s employment or engagement by reason of permanent
disability (as determined by the Board, or if such optionee has an employment or engagement
agreement with the Company, then as determined pursuant to the applicable provisions of said
agreement if any), any Stock Options held by optionee and exercisable on the date of such
termination may be exercised by optionee, provided that such exercise occurs within both the
remaining Option Term of the Stock Option and within six months from the date of termination.
Except as provided in a Stock Option Agreement or an applicable employment or engagement agreement,
any Stock Options held by optionee which were exercisable on the date of optionee’s termination
shall terminate at the end of the Option Term or six months after optionee’s termination, whichever
is earlier. Any Stock Options held by optionee which are not exercisable on the date of optionee’s
termination shall terminate on the date of optionee’s termination.

2.9 Resignation; Termination for Cause.

     Except as provided in a Stock Option Agreement or an applicable employment or engagement
agreement, all Stock Options granted to an optionee shall terminate upon the termination of the
optionee’s employment or engagement with the Company by resignation or for “cause,” as that term is
defined herein.

2.10 Termination for Other Reasons.

     Except as provided in Sections 2.7, 2.8, and 2.9 or except as otherwise determined by the
Board or as provided in a Stock Option Agreement or an applicable employment or engagement
agreement, upon termination of the optionee’s employment or engagement:

     Any Stock Options held by optionee and exercisable on the date of such termination may be
exercised by optionee, provided that such exercise occurs within both

 

 

the remaining Option Term of the Stock Option and within three months from the date of termination.
Any Stock Options held by optionee which are not exercisable on the date of optionee’s termination
shall terminate on the date of optionee’s termination. Any Stock Options held by optionee which
were exercisable on the date of optionee’s termination shall terminate at the end of the Option
Term or three months after optionee’s termination, whichever is earlier. Notwithstanding the
foregoing, if the exercise of a Stock Option following termination of the optionee’s employment or
engagement would result in liability under Section 16(b) of the Securities Exchange Act of 1934,
then, unless a longer period for exercise is already provided above, the period for exercise shall
be extended to the tenth day after the last date on which such exercise would result in such
liability under Section 16(b) of the Securities Exchange Act of 1934 but in no event later than the
end of the Option Term of the Stock Option. In addition, if the exercise of a Stock Option
following termination of optionee’s employment or engagement would be prohibited solely because the
issuance of shares would violate the registration requirements under the Securities Act of 1933,
then, unless a longer period for exercise is already provided above, the period for exercise shall
be extended to the tenth day after the day on which such registration requirements would no longer
be violated by the issuance of such shares but in no event later than the end of the Option Term of
the Stock Option.

ARTICLE III

MISCELLANEOUS

3.1 General Restriction.

     Each award under the Plan shall be subject to the requirement that, if at any time the Board
shall determine that the listing, registration, or qualification of the shares of Common Stock
subject or related thereto upon any securities exchange or under any state or Federal law, or the
consent or approval of any government regulatory body, is necessary as a condition of, or in
connection with, the granting of such award or the issue or purchase of shares of Common Stock
thereunder, such award may not be consummated 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.

3.2 Non-Assignability.

     No award under the Plan shall be assignable or transferable by the recipient thereof, except
by will or by the laws of descent and distribution. During the life of the recipient, such award
shall be exercisable only by such person or by such person’s guardian or legal representative.

 

 

3.3 Withholding Taxes.

     Whenever the Company proposes or is required to issue or transfer shares of Common Stock under
the Plan, the Company shall have the right to require the issuee/transferee 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. Alternatively, the Company may
issue or transfer such shares of Common Stock net of the number of shares sufficient to satisfy the
withholding tax requirements. For withholding tax purposes, the shares of Common Stock shall be
valued on the date the withholding obligation is incurred.

3.4 Right to Terminate Employment/Engagement.

     Nothing in the Plan or in any agreement entered into pursuant to the Plan shall confer upon
any participant the right to continue in the employment or engagement of the Company of any
Affiliate of the Company or effect any right which the Company or any Affiliate of the Company may
have to terminate the employment or engagement of such participant.

3.5 Non-Uniform Determinations.

     The Board’s determinations under the Plan (including without limitation determinations of the
persons to receive awards, the form, amount, and timing of such awards, the terms and provisions of
such awards, and the agreements evidencing same) need not be uniform and may be made by it
selectively among persons who receive, or are eligible to receive, awards under the Plan, whether
or not such persons are similarly situated.

3.6 Rights as a Shareholder.

     The recipient of any award under the Plan shall have no rights as a shareholder with respect
thereto unless and until certificates for shares of Common Stock are issued to the recipient.

3.7 No Obligation to Exercise Stock Option.

     The granting of a Stock Option shall impose no obligation upon the participant to exercise
such Stock Option.

3.8 Definitions.

     In this Plan the following definitions shall apply:

          (a) “Affiliate” means any parent corporation or subsidiary corporation, whether now or
hereafter existing, as those terms are defined in Sections 424(e) and (f) respectively, of the
Code.

 

 

          (b) “Cause” shall have the meaning assigned to it in any relevant employment or engagement
agreement between the Company (or an Affiliate of the Company) and the optionee, otherwise a
termination shall be for “cause” if the optionee shall: (i) commit an act of fraud, dishonesty,
embezzlement or misappropriation, (ii) be convicted of, or enter a plea of guilty or no contest to,
any crime involving moral turpitude or dishonesty, (iii) breach optionee’s employment or engagement
agreement, (iv) commit an act which amounts to willful misconduct, wanton misconduct, or gross
negligence, (v) willfully fail or habitually neglect to perform optionee’s employment or engagement
responsibilities, or (vi) engage in any illegal or unprofessional conduct which may adversely
affect the reputation of the Company and/or its relationship with its employees, customers, or
suppliers.

          (c) “Code” means the Internal Revenue Code of 1986, as amended.

          (d) “Fair market value” as of any date and in respect of any share of Common Stock means (i)
the average closing price of a share of Common Stock on the principal exchange on which such shares
are then trading, if any (or as reported on any composite index which includes such principal
exchange), on the ten most recent trading days immediately prior to such date, or (ii) if such
shares are not traded on an exchange but are quoted on NASDAQ or a successor quotation system, the
average mean between the closing representative bid and asked prices for such shares on the ten
most recent trading days immediately prior to such date as reported by NASDAQ or such successor
quotation system; or (iii) in the event that clauses (i) and (ii) above are inapplicable, the “fair
market value” shall be determined in good faith by the Board.

          (e) “Option price” means the purchase price per share of Common Stock deliverable upon the
exercise of a Stock Option.

          (f) “Participant” means a person to whom a Stock Option is granted under the Plan.

3.9 Leaves of Absence.

     The Board shall be entitled to make such rules, regulations, and determinations as it deems
appropriate under the Plan in respect of any leave of absence taken by the recipient of any award.
Without limiting the generality of the foregoing, the Board shall be entitled to determine (i)
whether or not any such leave of absence shall constitute a termination of employment or engagement
within the meaning of the Plan, and (ii) the impact, if any, of any such leave of absence on awards
under the Plan theretofore made to any recipient who takes such leave of absence.

3.10 Adjustments.

     In any event of any change in the outstanding shares of Common Stock by reason of a stock
dividend or distribution, recapitalization, merger, consolidation, split-up, combination, exchange
of shares, or the like, the Board shall in its discretion

 

 

appropriately adjust the number of shares of Common Stock which may be issued under the Plan, the
number of shares of Common Stock subject to Stock Options theretofore granted under the Plan, the
option price of Stock Options theretofore granted under the Plan, and any and all other matters
deemed appropriate by the Board.

3.11 Termination of Stock Options.

     In the event of: (i) a sale of all or substantially all of the assets of the Company, (ii) a
merger or consolidation in which the Company is not the surviving corporation, or (iii) a reverse
merger in which the Company is the surviving corporation but the shares of the Company’s Common
Stock outstanding immediately preceding the merger are converted by virtue of the merger into other
property, whether in the form of securities, cash, or otherwise, then, if the surviving corporation
does not assume the Stock Options outstanding under the Plan or substitute similar options for
those outstanding under the Plan, all outstanding Stock Options which are not exercised prior to
such event shall be terminated unless otherwise provided in an optionee’s Stock Option Agreement.
In the event of a dissolution or liquidation of the Company, all outstanding Stock Options shall
terminate if not exercised prior to such dissolution or liquidation unless otherwise provided in an
optionee’s Stock Option Agreement.

3.12 Amendment of the Plan.

     (a) The Board may, without further action by the shareholders and without receiving further
consideration from the participants, amend this Plan or condition or modify awards under this Plan
in response to changes in securities or other laws or rules, regulations or regulatory
interpretations thereof applicable to this Plan or to comply with stock exchange rules or
requirements.

     (b) The Board may at any time and from time to time terminate or modify or amend the Plan in
any respect, except that without shareholder approval the Board may not (i) increase the maximum
number of shares of Common Stock which may be issued under the Plan (other than increases pursuant
to Section 3.10), (ii) extend the period during which any award may be granted or exercised, or
(iii) extend the term of the Plan. The termination or any modification or amendment of the Plan,
except as provided in subsection (a), shall not without the consent of a participant, affect his or
her rights under an award previously granted to him or her or under an employment or engagement
agreement.

3.13 Termination Or Suspension Of The Plan.

     (a) The Board may suspend or terminate the Plan at any time. Unless sooner terminated, the
Plan shall terminate on December 31, 2009. No Stock Options may be granted under the Plan while
the Plan is suspended or after it is terminated.

 

 

     (b) Rights and obligations under any Stock Option granted while the Plan is in effect shall
not be impaired by suspension or termination of the Plan, except with the written consent of the
person to whom the Stock Option was granted.

3.14 Effective Date Of Plan.

     The Plan shall become effective upon adoption by the Board and approval by the stockholders of
the Company.

 

 

K12 INC.

AMENDMENT NO. 1 TO AMENDED AND RESTATED STOCK OPTION PLAN

     Pursuant to Resolution of the Board of Directors of K12 Inc. on December 18, 2003 and a
Written Consent of the Stockholders of K12 Inc., effective as of February 13, 2004, the second
sentence of Section 1.4, Article I of the Kl2 Inc. Amended and Restated Stock Option Plan is
amended and restated to read in full as follows:

“The maximum number of shares which may be issued under the Plan shall be Thirteen Million
(13,000,000).”exv4w3

 

Exhibit 4.3

STOCK OPTION AGREEMENT

Pursuant To

K12 INC.

STOCK OPTION PLAN

          THIS STOCK OPTION AGREEMENT (“Agreement”), is entered into as of Grant Date by and between K12
INC., a Delaware corporation (the “Company”), and FULL NAME (the “Optionee”).

RECITALS

          WHEREAS, the Company has adopted, with stockholder approval, the K12 Inc. Stock Option Plan
(as amended from time to time, the “Plan”); and

          WHEREAS, the Plan provides for the granting of Stock Options by the Board to directors,
officers, employees and independent contractors of the Company to purchase shares of Common Stock
of the Company (the “Stock”) in accordance with the terms and provisions thereof; and

          WHEREAS, the Board considers the Optionee to be a person who is eligible for a grant of Stock
Options under the Plan, and has determined that it would be in the best interests of the Company to
grant the Stock Options documented herein.

          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 Board, hereby grants to the Optionee, as of
the date hereof, an option to purchase up to Written Shares (Number of Shares) shares of Stock at
an option exercise price of Written Grant Price (Grant Price) 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”)).

     2. Vesting Schedule. Subject to the provisions of Section 3 below, the Options shall vest and
become exercisable over four (4) years in installments as provided below. The Optionee shall have
the right hereunder to purchase from the Company the following number of Option Shares upon
exercise of the Options, on and after the following dates, in cumulative fashion:

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          (a) One-Fourth (1/4th) of Option Shares on Start Date + 1 Year, the “First Vesting
Date” (which is the first anniversary of the start date of Optionee’s employment with the Company);
and

          (b) An additional One-Sixteenth (1/16th) of the Option Shares every three (3)
months following the First Vesting Date for the remainder of the Vesting Schedule. (For example, if
the first vesting date is January 15 then 1/16th will vest on April 15, July 15, Oct 15,
etc. If the first vesting date is the last day of a month, then 1/16th will vest the
last day of each three month period. For example if the first vesting date is November 30, then
1/16th will vest on February 28, May 31, August 31, etc).

          Notwithstanding the foregoing, upon the occurrence of a Vesting Acceleration Event all
unvested Options shall automatically accelerate and become immediately vested as of the date of the
Vesting Acceleration Event. As used herein, a “Vesting Acceleration Event” means the occurrence of
any of the following events while Optionee is employed with the Company: (i) a sale of all or
substantially all of the assets of the Company, or (ii) a merger or consolidation of the Company
into or with another corporation which results in the Company’s stockholders immediately prior to
such transaction owning less than fifty percent (50%) of the Company’s voting power immediately
after such transaction, or (iii) a sale of outstanding securities of the Company by stockholders of
the Company (but excluding any sale in connection with an initial public offering) which results in
the Company’s stockholders immediately prior to such transaction owning less than fifty percent
(50%) of the Company’s voting power immediately after such transaction.

     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 Start Date + 8 Years (the “Option
Term”).

          (b) Upon the death of Optionee, the Options may be exercised, but only to the extent that the
Options were outstanding and exercisable on the date of death, by Optionee’s estate, provided that
such exercise occurs within both the remaining Option Term and six months after Optionee’s death.
The Options held by Optionee to the extent exercisable on the date of Optionee’s death shall
terminate at the end of the Option Term or six months after Optionee’s death, whichever is earlier.
The Options held by Optionee to the extent not exercisable on the date of Optionee’s death shall
terminate upon Optionee’s death.

          (c) Upon termination of Optionee’s employment or engagement with the Company by reason of
permanent disability (as determined by the Board, 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 Options may be exercised by Optionee, but only to the extent that the
Options were outstanding

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and exercisable on the date of Optionee’s termination, provided that such exercise occurs
within both the remaining Option Term and within six months from the date of Optionee’s
termination. The Options held by Optionee to the extent exercisable on the date of Optionee’s
termination shall terminate at the end of the Option Term or six months after Optionee’s
termination, whichever is earlier. The Options held by Optionee to the extent not exercisable on
the date of Optionee’s termination shall terminate on the date of Optionee’s termination.

          (d) Upon Optionee’s termination of employment or engagement with the Company by resignation or
upon termination of Optionee’s employment or engagement with the Company for cause (as that term is
defined in the Plan), all Options granted to Optionee shall terminate on the date of termination of
employment or engagement.

          (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 Options held by
Optionee to the extent not exercisable on the date of Optionee’s termination shall terminate on the
date of Optionee’s termination. The Options, to the extent exercisable on the date of Optionee’s
termination, may be exercised by Optionee, provided that such exercise occurs within both the
remaining Option Term and within three months from the date of Optionee’s termination. The Options
held by Optionee to the extent exercisable on the date of Optionee’s termination shall terminate at
the end of the Option Term or three months after Optionee’s termination, whichever is earlier.

     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 by giving the Chief Financial Officer of the Company
written notice of exercise. The 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) 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 practicable after the full payment for such Option
Shares and satisfaction of all other conditions to exercise set forth in this Agreement.

3

 

          (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.

     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 Board shall appropriately adjust the
number and kind of shares of Stock 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.

     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, 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.

4

 

     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 Board at any time (i) if the Board
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 a sale of the
Company (whether by merger, consolidation, sale of assets, sale of stock or otherwise), if the
surviving or acquiring entity or purchaser does not expressly agree to assume the Options issued
hereunder, all Options issued hereunder which are unvested shall terminate and all Options issued
hereunder which are vested (including all Options that become vested as a result of a Vesting
Acceleration Event) but not exercised prior to or as of the closing of such event shall terminate.
In the event of a dissolution or liquidation of the Company, all Options issued hereunder which are
unvested shall terminate and all Options issued hereunder which are vested but not exercised prior
to such dissolution or liquidation shall terminate.

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

          (a) Except as otherwise expressly set forth in this Section 11, 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 Board, which the Board may withhold in its sole discretion. Any
attempt to consummate a Transfer in violation of this Agreement shall be null and void.

          (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 tranferee(s) shall hold the Option Shares subject to the terms
and conditions of this Agreement and the tranferee(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.

5

 

          (c) The Company shall have the option (the “Repurchase Option”) exercisable at any time after
six (6) months and one (1) day after the date of termination of Optionee’s employment or engagement
with the Company for any reason, including, but not limited to, termination with or without cause,
death, permanent disability or voluntary termination, to repurchase all or any portion of the
Option Shares held by Optionee (or by a permitted transferee or Optionee’s estate or legal
representative, if applicable). If the Company elects to exercise the Repurchase Option in whole
or in part, it shall give written notice of such election (the “Repurchase Notice”) to Optionee (or
permitted transferee or Optionee’s estate or legal representative, if applicable). The Company
shall pay to Optionee (or permitted transferee or Optionee’s estate or legal representative, if
applicable) in cash the fair market value of the Option Shares being purchased within thirty (30)
days after the later of: (i) the date of the Repurchase Notice, or (ii) the final determination of
fair market value. For purposes hereof, fair market value of the Option Shares shall be determined
as of the last day of the Company’s fiscal quarter ended immediately preceding the date of the
Repurchase Notice. Fair market value of the Option Shares shall be determined as provided in the
Plan. Optionee agrees to execute (and directs Optionee’s permitted transferee or estate or legal
representative to execute, if applicable) such documents and instruments as are reasonably
necessary to effectuate such purchase. The Company may exercise the Repurchase Option as many
times as the Company may decide.

          (d) Anything contained in this Agreement to the contrary notwithstanding, the Option Shares
with respect to which the Company’s Repurchase Option has been exercised shall be deemed to have
been repurchased by the Company effective as of the date of exercise of such option and such Option
Shares shall be deemed to be canceled, retired and no longer issued or outstanding effective as of
such date without further act of the parties.

          (e) 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 GRANT DATE, 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

6

 

AND FEDERAL SECURITIES LAWS OR AN OPINION OF COUNSEL SATISFACTORY TO THE ISSUER THAT SUCH
QUALIFICATION AND REGISTRATION IS NOT REQUIRED.

          (f) The provisions of Sections 11(a) through 11(d) 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.

          (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

7

 

(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 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.

2300 Corporate Park Drive, Suite 200

Herndon, Virginia 20171

Attention: Chief Financial Officer

With a copy to:

Maron & Sandler

1250 Fourth Street, Suite 550

Santa Monica, CA 90401

Attention: David S. Kyman, Esq.

8

 

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. Incorporation of Plan by Reference. The Options are granted pursuant to the terms of the
Plan, the terms of which are incorporated herein by reference, and the Options shall in all
respects be interpreted in accordance with the Plan. Unless the context otherwise requires, any
terms used herein without definition shall have the meanings as defined in the Plan. The Board
shall interpret and construe the Plan and this instrument, and its interpretations and
determinations shall be conclusive and binding on the parties hereto and any other person claiming
an interest hereunder, with respect to any issue arising hereunder or thereunder.

     16. 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. Without limiting the generality of the foregoing, Optionee
acknowledges that pursuant to Code Section 409A, an option that is granted with a per share
exercise price that is determined by the Internal Revenue Service (the “IRS”) to be less than the
fair market value of a share of Stock on the date of grant (a “discount option”) may be considered
“deferred compensation.” An option that is a “discount option” may result in (i) income
recognition by the Optionee prior to the exercise of the option, (ii) an additional twenty percent
(20%) tax payable by Optionee, and (iii) potential penalty and interest charges payable by
Optionee. Optionee acknowledges that the Company cannot and has not guaranteed that in the event
of an examination the IRS will agree that the per share exercise price of the Stock that is subject
to this Option equals or exceeds the fair market value of a share of Stock on the date of grant.
Optionee agrees that if the IRS determines that the Option was granted with a per share exercise
price that was less than the fair market value of a share of Stock on the date of grant, Optionee
will be solely responsible for all consequences to Optionee related to such a determination.

     17. 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. 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.

9

 

     18. 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.

          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/ John Baule
	 

	 	 	 	 
	 

	 	 	 	John Baule
	 

	 	 	 	Executive Vice President and CFO
	 
	 	 	 	 
	 
	 	 	 	 
	 	 	“Optionee”
	 
	 	 	 	 
	 
	 	 	 	 
	 	 	 
	 	 	Full Name

10

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