STOCK OPTION AGREEMENT Pursuant To K12 INC. STOCK OPTION PLAN
Exhibit 4.4
Pursuant To
K12 INC.
STOCK OPTION PLAN
STOCK OPTION PLAN
THIS STOCK OPTION AGREEMENT (“Agreement”) is entered into effective as of by
and between K12 INC., a Delaware corporation (the “Company”), and «BOARD_MEMBER» (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 Company 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 of Directors of the Company 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 hereby grants to the Optionee, as of the date hereof, an option to purchase up to
(
) shares of Stock at an option exercise price of
($___)
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 sixteen (16) quarterly installments. 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) ( )
Option Shares on March 31, ___;
(b) An
additional ( ) Option Shares on the last day of
each calendar quarter after March 31, ___through
September 30, ___; and
(c) An
additional ( ) Option Shares on December 31,___.
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 serving as a director of 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 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 December 31, ___(the “Option Term”).
(b) Upon termination of Optionee’s service as a director of the Company by reason of
Optionee’s death, the Options held by Optionee to the extent not exercisable on the date of
Optionee’s death shall terminate on the date of Optionee’s death. The Options, to the extent
exercisable on the date of Optionee’s death, may be exercised by Optionee’s estate, provided that
such exercise occurs prior to the earlier of: (i) ninety (90) days after the expiration of any
“lock-up” period applicable to the Company’s initial underwritten public offering of Common Stock,
or (ii) the expiration of the Option Term. The Options held by Optionee to the extent exercisable
on the date of Optionee’s death 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 service as a director of the Company by reason of
“permanent disability” (as determined by the Board), 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 the Optionee (or the
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Optionee’s guardian or legal representative), provided that such exercise occurs prior to the
earlier of: (i) ninety (90) days after the expiration of any “lock-up” period applicable to the
Company’s initial underwritten public offering of Common Stock, or (ii) the expiration of the
Option Term. The Options held by Optionee to the extent exercisable on the date of Optionee’s
termination 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 service as a director of the Company by resignation or upon
removal of Optionee as a director of the Company for cause, the Options may be exercised by
Optionee, but only to the extent that the Options were outstanding and exercisable on the date of
Optionee’s termination, provided that such exercise occurs within both the remaining Option Term
and within ninety (90) days 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 ninety (90) days 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.
(e) Upon termination of Optionee’s service as a director of the Company for any reason other
than as provided in paragraphs (b) through (d) above, 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 prior to the earlier of: (i) ninety (90)
days after the expiration of any “lock-up” period applicable to the Company’s initial underwritten
public offering of Common Stock, or (ii) the expiration of the Option Term. The Options held by
Optionee to the extent exercisable on the date of Optionee’s termination 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 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
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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.
(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. The date specified in the Optionee’s notice as the date of exercise shall be
deemed the date of exercise of the Options, provided that payment in full for the Option Shares to
be purchased upon such exercise shall have been received by such date and all other conditions to
exercise set forth in this Agreement shall have been satisfied.
(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 Compensation Committee 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
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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.
8. Service 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 service as a member
of the Board of Directors of the Company or affect any right which the Company, its stockholders or
Board of Directors may have to terminate such service.
9. Amendment of Options. The Board shall have the right in its sole and absolute discretion
to accelerate the vesting of any and all of the Options at any time or from time to time. In
addition, the Options may be amended by the Compensation Committee at any time (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: (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 of the Company into or with
another corporation which results in the Company’s stockholders immediately prior to such
transaction not owning stock of the surviving corporation, then, if the surviving entity or
purchaser does not 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 are vested as a result of a Vesting Acceleration Event) but not exercised prior to 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. 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 11(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 Compensation
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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.
(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.
(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 ,___, 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.
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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 (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;
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(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.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Compensation Committee
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Compensation Committee
With a copy to:
K12 Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Office of General Counsel
▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Office of General Counsel
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
8
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.
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.
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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: | ||||||
| Executive Vice President | ||||||
| “Optionee” | ||||||
| «BOARD_MEMBER» | ||||||
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