INDEMNIFICATION
AGREEMENT
This
Indemnification Agreement (this “ Agreement ”)
is made as of
(the “ Effective Date ”) by and between K12
Inc., a Delaware corporation (the “ Company ”),
and
who serves as a director and/or officer of the Company (“
Indemnitee ”).
WHEREAS,
highly competent persons have become more reluctant to serve
corporations as directors or officers unless they are provided with
adequate protection through insurance and/or indemnification
against the risks of claims being asserted against them arising out
of their service to and activities on behalf of such
corporations;
WHEREAS,
the board of directors of the Company (the “ Board
”) has determined that, in order to help attract and retain
qualified individuals as directors and officers, the best interests
of the Company and its investors will be served by attempting to
maintain, on an ongoing basis, at the Company’s sole expense,
insurance to protect persons serving the Company and its
subsidiaries as directors or officers from certain liabilities.
Although the furnishing of such insurance has been a customary and
widespread practice among United States-based corporations and
other business enterprises for many years, the Company believes
that, given current market conditions and trends, such insurance
may be available to it in the future only at higher premiums and
with more exclusions. At the same time, directors and officers in
service to corporations or business enterprises are being
increasingly subjected to expensive and time-consuming
litigation;
WHEREAS,
the Board has determined that, in order to help attract and retain
qualified individuals as directors and officers, the best interests
of the Company and its investors will be served by assuring such
individuals that the Company will indemnify them to the maximum
extent permitted by law;
WHEREAS,
the Third Amended and Restated Certificate of Incorporation (the
“ Certificate of Incorporation ”) of the Company
permit, and the Amended and Restated Bylaws (the “
Bylaws ”) of the Company require, indemnification of
the officers and directors of the Company, and Indemnitee may also
be entitled to indemnification pursuant to the Delaware General
Corporation Law (“ DGCL ”); and
WHEREAS,
the Certificate of Incorporation, the Bylaws and the DGCL expressly
provide that the indemnification provisions set forth therein are
not exclusive, and thereby contemplate that contracts may be
entered into between the Company and its directors and officers
with respect to indemnification and the advancement of defense
costs;
WHEREAS,
the Board has determined that the increased difficulty in
attracting and retaining such persons is detrimental to the best
interests of the Company’s investors and that the Company
should act to assure such persons that there will be increased
certainty of such protection in the future;
WHEREAS,
it therefore is reasonable, prudent and necessary for the Company
contractually to obligate itself to indemnify, and to advance
defense costs on behalf of, such
persons to the fullest
extent permitted by applicable law so that they will serve or
continue to serve the Company free from undue concern that they
will not be so indemnified;
WHEREAS,
this Agreement is a supplement to and in furtherance of the
Certificate of Incorporation, Bylaws and any resolutions adopted
pursuant thereto, and shall not be deemed a substitute therefor,
nor shall it be deemed to diminish or abrogate any rights of
Indemnitee thereunder;
WHEREAS,
the Board recognizes that the Indemnitee does not regard the
protection available under the Company’s Certificate of
Incorporation, the Bylaws and insurance program as adequate in the
present circumstances, and may not be willing to serve or continue
to serve as a director, officer or in such other capacity as the
Company may request without adequate protection, and the Company
desires Indemnitee to serve in such capacity; and
WHEREAS,
Indemnitee is willing to serve, and continue to serve, as a member
of the Board (and any committee thereof) or as an officer of the
Company, on the condition that he or she be indemnified as provided
for herein.
NOW,
THEREFORE, in consideration of the premises and the covenants
contained herein, the Company and Indemnitee do hereby covenant and
agree as follows:
1. Services to the
Company. Indemnitee will serve or continue to serve, at the
will of the Company, as a director or officer of the Company for so
long as Indemnitee is duly elected or appointed or until Indemnitee
tenders his or her resignation. This Agreement shall not serve as a
binding commitment on the part of Indemnitee to continue to serve
in such capacity, or on the part of the Company to cause him or her
to be nominated to successive terms as a director or officer or to
not otherwise be removed for cause or without cause, as permitted
under law.
2. Definitions. As
used in this Agreement:
(a) “
Beneficial Owner ” shall have the meaning given to
such term in Rule 13d-3 issued under the Exchange Act (as
defined below); provided, however, that Beneficial Owner shall
exclude any Person becoming a Beneficial Owner by reason of the
stockholders of the Company approving a merger of the Company with
another entity.
(b) A
“ Change in Control ” shall be deemed to occur
upon the earliest to occur after the date of this Agreement of any
of the following events:
(i)
Acquisition of Stock by Third Party . Any Person (as defined
below, but excluding any subsidiary or employee benefit plan of the
Company), subsequent to the date of this Agreement, becomes the
Beneficial Owner, directly or indirectly, of securities of the
Company representing fifty percent (50%) or more of the combined
voting power of the Company’s then outstanding securities
entitled to vote generally in the election of directors, unless
(1) the change in the relative Beneficial Ownership of the
Company’s securities by any Person results solely from a
reduction in the aggregate number of outstanding shares of
securities entitled to vote generally in the election of directors,
or (2) such acquisition was approved in advance by the
Continuing Directors (as defined below) and such acquisition would
not constitute a Change in Control under part (iii) of this
definition;
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(ii)
Change in Board of Directors . Individuals who, as of the
date hereof, constitute the Board, and any new director whose
election by the Board or nomination for election by the
Company’s stockholders was approved by a vote of at least two
thirds of the directors then still in office who were directors on
the date hereof or whose election for nomination for election was
previously so approved (collectively, the “ Continuing
Directors ”), cease for any reason to constitute at least
a majority of the members of the Board;
(iii)
Corporate Transactions . The effective date of a
reorganization, merger or consolidation of the Company (a “
Business Combination ”), in each case, unless,
following such Business Combination: (1) all or substantially
all of the individuals and entities who were the Beneficial Owners
of securities entitled to vote generally in the election of
directors immediately prior to such Business Combination
beneficially own, directly or indirectly, more than fifty one
percent (51%) of the combined voting power of the then outstanding
securities entitled to vote generally in the election of directors
of the Company resulting from such Business Combination (including,
without limitation, a corporation which as a result of such
transaction owns the Company or all or substantially all of the
Company’s assets either directly or through one or more
Subsidiaries) in substantially the same proportions as their
ownership, immediately prior to such Business Combination, of the
securities entitled to vote generally in the election of directors;
(2) no Person (excluding any corporation resulting from such
Business Combination) is the Beneficial Owner, directly or
indirectly, of fifteen percent (15%) or more of the combined voting
power of the then outstanding securities entitled to vote generally
in the election of directors of such corporation except to the
extent that such ownership existed prior to the Business
Combination; and (3) at least a majority of the Board
resulting from such Business Combination were Continuing Directors
at the time of the execution of the initial agreement, or of the
action of the Board, providing for such Business
Combination;
(iv)
Liquidation . The approval by the stockholders of the
Company of a complete liquidation of the Company or an agreement or
series of agreements for the sale or disposition by the Company of
all or substantially all of the Company’s assets, other than
factoring the Company’s current receivables or escrows due
(or, if such approval is not required, the decision by the Board to
proceed with such a liquidation, sale, or disposition in one
transaction or a series of related transactions); or
(v)
Other Events . There occurs any other event of a nature that
would be required to be reported in response to Item 6(e) of
Schedule 14A of Regulation 14A (or a response to any
similar item on any similar schedule or form) promulgated under the
Exchange Act, whether or not the Company is then subject to such
reporting requirement.
(c) “
Corporate Status ” shall describe the status of a
person who is or was a director, officer, trustee, partner, member,
fiduciary, employee or agent of the Company or of any other
Enterprise (as defined below), which such person is or was serving
at the request of the Company.
(d) “
Disinterested Director ” shall mean a director of the
Company who is not and was not a party to the Proceeding (as
defined below) in respect of which indemnification is sought by
Indemnitee.
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(e) “
Enterprise ” shall mean any corporation, limited
liability company, partnership, joint venture, trust, employee
benefit plan or other enterprise of which Indemnitee is or was
serving at the request of the Company as a director, officer,
trustee, administrator, partner, member, fiduciary, employee or
agent.
(f) “
Exchange Act ” shall mean the Securities Exchange Act
of 1934, as amended.
(g) “
Expenses ” shall include all reasonable
attorneys’ fees, retainers, court costs, transcript costs,
fees of experts and accountants, witness fees, travel expenses,
duplicating costs, printing and binding costs, telephone charges,
postage, delivery service fees, and all other disbursements or
expenses of the types and amounts customarily incurred in
connection with prosecuting, defending, preparing to prosecute or
defend, investigating, being or preparing to be a witness in, or
otherwise participating in, a Proceeding. Expenses also shall
include costs incurred in connection with any appeal resulting from
any Proceeding, including, without limitation, the premium,
security for, and other costs relating to any bond, supersedeas
bond, or other appeal bond or its equivalent. Expenses, however,
shall not include amounts paid in settlement by Indemnitee or the
amount of judgments or fines against Indemnitee.
(h) “
Independent Counsel ” shall mean a law firm, or a
member of a law firm, that is experienced in matters of corporation
law and neither presently is, nor in the past five (5) years
has been, retained to represent: (i) the Company or Indemnitee
in any matter material to either such party (other than with
respect to matters concerning the Indemnitee under this Agreement,
or other indemnitees under similar indemnification agreements), or
(ii) any other party to the Proceeding giving rise to a claim
for indemnification hereunder. Notwithstanding the foregoing, the
term “Independent Counsel” shall not include any person
who, under the applicable standards of professional conduct then
prevailing, would have a conflict of interest in representing
either the Company or Indemnitee in an action to determine
Indemnitee’s rights under this Agreement.
(i) References
to “ fines ” shall include any excise tax
assessed on a person with respect to any employee benefit plan
pursuant to applicable law.
(j) References
to “ serving at the request of the Company ”
shall include any service provided at the request of the Company as
a director, officer, trustee, administrator, partner, member,
fiduciary, employee or agent of the Company which imposes duties
on, or involves services by, such director, officer, trustee,
administrator, partner, member, fiduciary, employee or agent with
respect to an employee benefit plan, its participants or
beneficiaries.
(k) “
Person ” shall have the meaning set forth in Sections
13(d) and 14(d) of the Exchange Act; provided, however, that Person
shall exclude (i) the Company and (ii) any trustee or
other fiduciary holding securities under an employee benefit plan
of the Company or a subsidiary of the Company.
(l) Any
action taken or omitted to be taken by a person for a purpose which
he or she reasonably believed to be in the interests of the
participants and beneficiaries of an employee benefit plan shall be
deemed to have been taken in “ good faith ” and
for a purpose
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which is “ not
opposed to the best interests of the Company ”, as such
terms are referred to in this Agreement and used in the
DGCL.
(m) The
term “ Proceeding ” shall include any
threatened, pending or completed action, suit, arbitration,
alternate dispute resolution mechanism, investigation, inquiry,
administrative hearing or any other actual, threatened or completed
proceeding, whether brought in the right of the Company or
otherwise and whether of a civil, criminal, administrative or
investigative nature, including any related appeal, in which
Indemnitee was, is or will be involved as a party or witness or
otherwise by reason of the fact that Indemnitee is or was a
director, officer, trustee, administrator, partner, member,
fiduciary, employee or agent of the Company, by reason of any
action taken or not taken by him or her while acting as director,
officer, trustee, administrator, partner, member, fiduciary,
employee or agent of the Company, or by reason of the fact that he
or she is or was serving at the request of the Company as a
director, officer, trustee, administrator, partner, member,
fiduciary, employee or agent of any other Enterprise, in each case
whether or not serving in such capacity at the time any liability
or expense is incurred for which indemnification, reimbursement, or
advancement of expenses can be provided under this
Agreement.
3. Indemnity in
Third-Party Proceedings. The Company shall indemnify and hold
harmless Indemnitee in accordance with the provisions of this
Section 3 if Indemnitee is made, or is threatened to be made,
a party to or a participant in (as a witness or otherwise) any
Proceeding, other than a Proceeding by or in the right of the
Company to procure a judgment in its favor. Pursuant to this
Section 3, Indemnitee shall be indemnified and held harmless
against all judgments, fines, penalties, amounts paid in
settlement, if such settlement is approved in writing in advance by
the Company, which approval shall not be unreasonably withheld,
(including, without limitation, all interest, assessments and other
charges paid or payable in connection with or in respect of any of
the foregoing) (collectively, “Losses”) and Expenses
actually and reasonably incurred by Indemnitee or on his or her
behalf in connection with such Proceeding or any action, discovery
event, claim, issue or matter therein or related thereto, if
Indemnitee acted in good faith, for a purpose which he or she
reasonably believed to be in or not opposed to the best interests
of the Company and, in the case of a criminal Proceeding, in
addition, had no reasonable cause to believe that his or her
conduct was unlawful.
4. Indemnity in
Proceedings by or in the Right of the Company. The Company
shall indemnify Indemnitee in accordance with the provisions of
this Section 4 if Indemnitee is made, or is threatened to be
made, a party to or a participant in (as a witness or otherwise)
any Proceeding by or in the right of the Company to procure a
judgment in its favor. Pursuant to this Section 4, Indemnitee
shall be indemnified and held harmless against all Expenses
actually and reasonably incurred by him or her or on his or her
behalf in connection with the defense or settlement of such
Proceeding or any action, discovery event, claim, issue or matter
therein or related thereto, if Indemnitee acted in good faith, for
a purpose which he or she reasonably believed to be in or not
opposed to the best interests of the Company. No indemnification,
however, shall be made under this Section 4 in respect of any
claim, issue or matter as to which Indemnitee shall have been
adjudged to be liable to the Company, unless and only to the extent
that the court in which the Proceeding was brought or, if no
Proceeding was brought in a court, any court of competent
jurisdiction, determines upon application that, in view of all
the
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circumstances of the case,
Indemnitee fairly and reasonably is entitled to indemnification for
such portion of the Expenses as the court deems proper.
5. Indemnification for
Expenses Where Indemnitee is Wholly or Partly Successful.
Notwithstanding and in addition to the provisions of Section 3
and 4 of this Agreement, to the extent that Indemnitee is a party
to a Proceeding and is successful, on the merits or otherwise, in
the defense of any claim, issue or matter therein, the Company
shall indemnify and hold harmless Indemnitee against all Expenses
actually and reasonably incurred by him or her or on his or her
behalf in connection with such successful defense. For the
avoidance of doubt, if Indemnitee is not wholly successful in such
Proceeding but is successful, on the merits or otherwise, as to one
or more but less than all claims, issues or matters in such
Proceeding, the Company shall indemnify Indemnitee against all
Expenses actually and reasonably incurred by him or her or on his
or her behalf in connection with each successfully resolved claim,
issue or matter. For purposes of this Section 5, and without
limitation, the termination of any claim, issue or matter in such a
Proceeding by withdrawal or dismissal, with or without prejudice,
shall be deemed to be a successful result as to such claim, issue
or matter.
6. Indemnification for
Expenses of a Witness. To the extent that Indemnitee is, by
reason of his or her Corporate Status, a witness in or otherwise
incurs Expenses in connection with any Proceeding to which
Indemnitee is not a party, he or she shall be indemnified and held
harmless by the Company against all Expenses actually and
reasonably incurred by him or her or on his or her behalf in
connection therewith.
7. Additional
Indemnification.
(a) Notwithstanding
any limitation in Sections 3, 4, or 5 hereof or in
Section 145 of the DGCL or other applicable statutory
provision, the Company shall indemnify Indemnitee to the fullest
extent permitted by law if Indemnitee is made, or is threatened to
be made, a party to any Proceeding (including a Proceeding by or in
the right of the Company to procure a judgment in its favor)
against all Losses and Expenses actually and reasonably incurred by
Indemnitee in connection with the Proceeding, provided that no
indemnification shall be made under this Section 7(a) on account of
Indemnitee’s conduct which constitutes a breach of
Indemnitee’s duty of loyalty to the Company or its investors
or is an act or omission not in good faith or which involves
intentional misconduct or a knowing violation of the
law.
(b) For
purposes of Sections 7(a), the meaning of the phrase “
to the fullest extent permitted by law ” shall
include, but not be limited to:
(i) to
the fullest extent authorized or permitted by the then-applicable
provisions of the DGCL or other applicable statutory provision,
that authorize or contemplate indemnification by agreement, or the
corresponding provision of any amendment to or replacement of the
DGCL or other applicable statutory provision, and
(ii) to
the fullest extent authorized or permitted by any amendments to or
replacements of the DGCL or other applicable statutory provision,
adopted after the date of this Agreement that increase the extent
to which a corporation limited liability company or
6
partnership, as
applicable, may indemnify its officers, directors or persons
holding similar fiduciary responsibilities.
(c) Indemnitee
shall be entitled to the prompt payment of all Expenses reasonably
incurred in enforcing successfully (fully or partially) this
Agreement.
8. Contribution. To
the fullest extent permissible under applicable law, if the
indemnification provided for in this Agreement is unavailable to
Indemnitee in whole or in part for any reason whatsoever, the
Company, in lieu of indemnifying Indemnitee, shall contribute to
the amount incurred by Indemnitee, whether for judgments, fines,
penalties, excise taxes, amounts paid or to be paid in settlement
and/or for Expenses, in connection with any claim relating to an
indemnifiable event under this Agreement, in such proportion as is
deemed fair and reasonable in light of all of the circumstances of
such Proceeding in order to reflect (i) the relative benefits
received by the Company, on the one hand, and Indemnitee, on the
other, as a result of the event(s) and/or transaction(s) giving
cause t
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